Small and medium-sized enterprises may be the flavour of the moment in development policy, but the potential role of large multinational firms, or MNEs, should not be overlooked. After all, there is some evidence of MNEs having a positive effect on employment and wages, as well as plugging local suppliers into international markets, which boosts skills, technology and productivity.

On the other hand, some large corporations are associated with investments in countries where poverty is endemic and human rights are virtually ignored. Some admit they have been unable to improve conditions for workers among their local suppliers.

How can multinationals be encouraged to do more for development and improve the welfare of the countries they invest in, as many believe they should? The crisis has focused particular attention on such questions, prompting policymakers to scrutinise the instruments at their disposal.

Take the OECD Guidelines for Multinational Enterprises, for instance. These government-endorsed standards have been embraced by firms the world over to demonstrate their commitment to corporate responsibility, human rights and sustainable development. However, they were last updated in 2000, and a fresh review could, as OECD ministers suggested in June, "enhance their relevance and clarify the responsibilities of the private sector". All OECD members and a dozen or so other countries adhere to the guidelines; at the time of writing Morocco was expected to become the 42nd country to sign up. A special meeting on the MNE guidelines during the 8th Global Forum on International Investment on 7-8 December will identify areas for action. For John Evans, secretary-general of the Trade Union Advisory Committee to the OECD (TUAC), the priorities are to create jobs in the short term and, in the medium term, "to forge a new global economic model to counter a crisis that has engulfed both the developed and the developing world". As he explains to the OECD Observer, involving MENA countries is key: "Ensuring investment is sustainable and meets social, environmental and economic development goals is a key priority. TUAC believes that one of the most effective instruments for contributing to sustainable investment is the OECD Guidelines for Multinational Enterprises.

The guidelines provide a set of recommendations on good corporate behaviour. They seek not only to protect the rights of workers and the environment in international investment, but also to foster good governance through provisions on anti-corruption, transparency and disclosure. While not legally binding, all multinational enterprises headquartered in adhering countries are bound to comply. And adhering governments are required to deal with allegations of violations.

Trade unions from every region of the world have used the guidelines and recently with some successes. We have reached out to develop partnerships with trade unions in the MENA region. The issue for us now is how to ensure that the OECD Guidelines are better respected by investors in the MENA region." RJC


Hijzen, Alexander and Paul Swaim (2008) "Do multinationals promote better pay and working conditions?" in OECD Observer No 269 October.

Hohnen, Paul (2008), "OECD MNE Guidelines: A responsible business choice" in OECD Observer No 270/271 December 2008-January 2009.

© OECD Observer, No. 275, November 2009

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

To order your own paper editions,email

Online edition
Previous editions

Don't miss

  • MCM logo
  • The following communiqué and Chair’s statement were issued at the close of the OECD Council Meeting at Ministerial level, this year presided by the Slovak Republic.
  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2019