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Financial Times, May 4, 2005: OECD plea to raise corporate standards

By Alison Maitland in London

Developed countries are coming under pressure to strengthen enforcement of standards that promote responsible behaviour by companies in their international operations.

The standards, drawn up by the Organisation for Economic Co-operation and Development, cover multinationals' handling of a range of issues from industrial relations to human rights, the environment, corruption and taxation.

The voluntary guidelines, which have the formal backing of the 30 members of the OECD and nine non-member governments, must be made more effective, Thomas Ostros, Sweden's minister for industry and trade, told a meeting of government, business and civil society representatives in Paris this week.

"This is a matter of credibility for the international system," he said. "It is high time for the OECD to step up intergovernmental co-operation and dialogue on how we can create an enabling environment for responsible business practices."

In particular, he said that governments should strengthen national contact points, through which trade unions, campaign groups and others can complain about alleged corporate malpractice.

The minister's comments came amid criticism from trade unionists and non-governmental organisations that progress in implementing the guidelines was slow and that complaints procedures were inadequate.

Patricia Feeney, a co-ordinator of OECD Watch, an international network of pressure groups that monitors the guidelines, said there were wide variations in the vigour with which governments promoted them: the US and Italy were laggards, while the Netherlands, Sweden, Australia and Chile were ahead.

"You can tell from this how seriously governments are taking their responsibility to promote corporate citizenship worldwide," she told the forum, held alongside the annual OECD ministerial meeting. "The laggard governments will increasingly feel the pressure from their own civil society."

About 90 complaints have been brought since the 30-year-old guidelines were reinforced in 2000. Most have involved employee relations, but some concern human rights, corruption, environment and companies' involvement in politics.

Fritz Verzetnitsch, president of the Austrian Federation of Trade Unions, said governments, which staff the contact points, must speed up the handling of cases because some were taking years to resolve.

He said national contact points could be strengthened by means of a peer review. Governments could also make the granting of export credit guarantees and other assistance dependent on companies' compliance with the guidelines