The ILO’s pioneering Multinational Enterprises Declaration (MNE Declaration), first adopted in November 1977, was an important first step at the time by the international community to bring the social dimension to the forces shaping globalisation. And in the view of ILO Director-General Juan Somavia, it’s an instrument that has actually grown more relevant as the years have passed.
The MNE Declaration has undergone a number of revisions, most recently last year, but the message of 1977 remains substantially the same one today.
The ILO’s Multinational Enterprises Programme works to promote the MNE Declaration. This week’s conference is a valuable opportunity to remind the world of the values and principles on which it is based. The basic message is, after all, not difficult to grasp. As the ILO’s José Manuel Salazar-Xirinachs, Executive Director of the Employment sector of the ILO puts it, for businesses “doing good and doing well are mutually reinforcing”.
Multinational enterprises these days play a vastly more important role in the world economy than they did back then: around 65,000 multinationals between them employ more than 90 million people today, or one in 20 of the global workforce. These are successful businesses which, more and more, are giving attention to issues of corporate social responsibility, including a socially responsible approach to labour relations. As Mr. Somavia points out, companies are increasingly aware of the positive link between economic and social performance.
The MNE Declaration, in other words, is a key tool for today’s issues and concerns. Its relevance is reflected in the line-up of speakers who will be assembling in Geneva later this week for a special “MultiForum 07” to mark its 30th anniversary. Among them will be leading figures from the business community, including Nestle’s Chief Executive Peter Brabeck-Letmathe and AngloGold Ashanti’s Director and former CEO Bobby Godsell. Joining them will be senior international trade unionists, including Philip Jennings and Marcello Malentacchi, the General Secretaries respectively of Union Network International and the International Metalworkers’ Federation.
As the MNE Declaration’s full title – the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy – suggests, this was a document which was drawn up through the ILO’s unique three-way partnership between governments, employers’ bodies and workers’ organisations. It is the element of consensus which lies behind the text which gives it its status and strength.
The MNE Declaration, originally the result of several years’ discussion at a time when multinationals were often viewed with considerable hostility, proposes a code for global good business practice. As the text itself states, the aim is to encourage the positive contribution which multinationals can make and to minimise and resolve any difficulties.
Guidelines are by their nature voluntary, and multinational enterprises are under no obligation to adopt the practices which they propose. Nevertheless, the evidence since the MNE Declaration’s adoption in 1977 is that companies do understand the benefits of socially responsible labour practices. “Progressive enterprises realise the value of being ahead of the curve on corporate responsibility, as social and environmental criteria are increasingly influencing consumer decision-making and investment decisions of individuals and institutions”, says Mr. Salazar-Xirinachs, who will also be addressing this week’s conference.
The MNE Declaration covers a range of issues, and can be seen as complementing the ILO’s Fundamental Principles and Rights at Work adopted in 1998. It includes a section on employment protection and job security, also covering issues of equality of opportunity and treatment. Another part of the MNE Declaration focuses on the need to encourage skills training, whilst there are additional clauses promoting good conditions of work and appropriate action to ensure high occupational safety and health standards.
Finally, the MNE Declaration includes a section encouraging sound industrial relations. The right of workers to freedom of association is spelled out, as are workers’ rights to organise and to negotiate their terms and conditions through collective bargaining. There are clauses on consultation, grievance procedures and dispute resolution.
Although much of the MNE Declaration is addressed to multinational enterprises themselves, there are also suggestions for how governments can maximize the positive contributions of multinational enterprises. The ILO provides a range of services and tools to support companies in putting in place the principles of the MNE Declaration.
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