WORLD TRADE
ORGANIZATIONWT/WGTI/W/40
11 June 1998
(98-2367)
Working Group on the Relationship
between Trade and InvestmentOriginal:  English
COMMUNICATION FROM THE OECD
The following communication, dated 27 May 1998, has been received from the OECD in
response to a request made by the Working Group at its meeting of 30 and 31 March for information
on the OECD Guidelines for Multinational Enterprises.
_______________
The OECD Guidelines for Multinational Enterprises
I. OVERVIEW
1. The OECD Guidelines for Multinational Enterprises (MNEs) are recommendations to
enterprises, made by the governments of OECD memb er countries.  Their aim is to ensure that MNEs
operate in harmony with the policies of the countries where they operate.  These standards cover the
full range of MNEs' operations.  They are supported by follow-up procedures in the participating
countries, which comprise all 29 OECD member countries, and three non-member countries
(Argentina, Brazil and Chile).
II. FEATURES
2. The Guidelines are a part of the Declaration on International Investment and Multinational
Enterprises.  The Declaration (the text of which is presented in Annex 1) constitutes a political
commitment, adopted by the governments of OECD  member countries in 1976 with the objective of
facilitating direct investment among OECD member s.  The other parts of the Declaration deal with
three related instruments, aimed at:
(a) providing national treatment to foreign-owned enterprises;
(b) promoting cooperation among governments in relation to international investment
incentives and disincentives;
(c) minimizing the imposition of conflicting requirements on MNEs by governments of
different countries.
3. The Guidelines are not legally binding.  However, OECD governments are committed to
promoting their observance.  The OECD Council at Ministerial level, on 27-28 April 1998, reaffirmed
the OECD governments' commitment to the Guidelines  and to continuing to update them in a timelyWT/WGTI/W/40
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manner, to ensure their relevance and effectiveness.   Furthermore, the Guidelines enjoy the support of
both the business and the labour communities.
4. The basic approach of the Guidelines is that internationally agreed guidelines can help to
prevent misunderstandings and build an atmosphere of confidence and predictability between
business, labour and governments.
5. The Guidelines address the MNEs from OECD member countries.  However, reflecting the
worldwide operations of MNEs, member countries support an international cooperation in this area
that extends to all countries, and in particular also to developing countries.  In this way, welfare and
living standards of all people can be improved by encouraging the positive contributions of MNEs and
minimizing and resolving the problems which may arise in connection with their activities.
III. BACKGROUND
6. In 1976, when the Guidelines were adopted, multinational enterprises (MNEs) had come to
play an important part in the economies of member countries and in international economic relations.
Through international direct investment, MNEs were known to bring substantial benefits to home and
host countries by contributing to an efficient use of capital, technology and human resources between
countries.  MNEs could thus fulfil an important role in promoting economic and social welfare.  At
the same time, the ability of MNEs to organize their operations beyond the national framework led to
concerns about possible conflicts with national policies and concentrations of economic power.  The
difficulty of clearly perceiving MNEs' sometimes complex structures, operations and policies gave
rise to concern.
7. Attitudes towards MNEs are different today.  They are widely accepted as an integral part of
the international economy and the agent for beneficial flows of capital and diffusion of technology.As governments have gained experience with MNEs, they have become more confident with them.
MNEs, too, have become more attuned to the needs and sensitivities of governments and mutual
confidence between business, government and labour has gradually built up.  The Guidelines have
contributed to this process by providing a common frame of reference and by assisting MNEs to
ensure that their operating and activities are compatible with the expectations of host countries.
IV. COVERAGE
8. The Guidelines are divided into separate chapters which cover the range of MNE activities.
These chapters deal with:  general policies, information disclosure, competition, financing, taxation,
employment and industrial relations, environment and science and technology.  The following brief
summaries illustrate the content of some of these chapters.
Introduction and general policies
9. Introductory paragraphs explain the purpose, nature and scope of the Guidelines, making
clear that they are addressed to MNEs and their entities, and that these entities should cooperate with
each other to facilitate observance.  The introduction also makes it clear that no different treatment
between MNEs and domestic enterprises is sought.  Wherever relevant, the Guidelines reflect good
practice for all.  The introduction states that enterprises should take full account of countries' general
objectives, cooperate with local community and business interests and refrain from bribery andimproper political activities.WT/WGTI/W/40
Page 3
Disclosure of information
10. The provision of information is an important Gu idelines theme.  For the general public, this
involves having information on the structure, activities and policies of the enterprise as a whole.  For
governments, this means access to information to ensure compliance with policies and regulations on
taxes, competition and environmental standards.  For employees, it means having informationprovided to their representatives for purposes such as meaningful negotiations on conditions of
employment, or the performance of the enterprise or an entity thereof.
Employment and industrial relations
11. Another chapter addresses employment and industrial relations, where enterprises are
encouraged to respect employees' rights to representation, refrain from unfair influence in labour
negotiations or during organizing campaigns, and to negotiate constructively on employment
conditions.  Enterprises are also encouraged to provide reasonable notice of changes in operations thatwould have major effects on employees and to cooperate to mitigate these changes' adverse effects.
In particular, enterprises should:
(a) respect the right of their employees to be represented by trade unions and other
bona fide organizations and engage in constructive negotiations with them on
employment conditions;
(b) provide assistance and information to employee representatives;
(c) provide information for a true and fair view of the performance of the enterprise;
(d) observe standards of employment and industrial relations not less favourable than
those observed by comparable employers in the host country;
(e) utilize, train and prepare for upgrading their labour force;
(f) provide reasonable prior notice of changes in operations, in particular on intended
closures and collective layoffs;
(g) refrain from discriminatory practices in their employment policies;
(h) not exercise unfair influence over bo na fide negotiations with employees'
representatives;
(i) enable authorized representatives of their employees to conduct negotiations on
collective bargaining or labour-management relations with management
representatives authorized to take decisions on the matters at hand.
Competition
12. MNEs are encouraged to conform to countries' rules and policies on competition by, for
example, refraining from forming cartels or restri ctive agreements and from abusing dominant market
positions through anti-competitive acquisitions, predatory behaviour and other practices.
Environment
13. To promote environmental protection, the Guidelines state that enterprises should take due
account of the need to protect the environment and to avoid environmentally related health problems.WT/WGTI/W/40
Page 4
They should provide timely information regarding pot ential impacts of their activities on environment
and health, take appropriate measures to minimize the risk of accidents and damage to health and
environment and cooperate in mitigating any adverse effects of their activities.
V. IMPLEMENTATION OF THE GUIDELINES
Institutional set-up
14. The institutional set-up of the Guidelines consists of three elements:  (i) the National Contact
Points;  (ii) the OECD's Committee on International Investment and Multinational Enterprises
(CIME);  and (iii) the advisory Committees of business and labour federations, BIAC and TUAC.
15. The National Contact Points (typically a government office in a member country) serve to
gather information on experience with the Guidelin es, to promote them, to handle enquiries, discuss
matters related to the Guidelines and assist in solving problems which may arise between business and
labour in matters covered by the Guidelines.
16. The CIME's responsibilities in the field of the Guidelines include:  providing clarifications on
the interpretation of the Guidelines, reviewing and exchanging views on them and responding to
requests from Members, BIAC or T UAC on aspects of the Guidelines.
17. BIAC and TUAC can request consultations with the National Contact Points on issues related
to the Guidelines and can raise such issues at th e CIME. They also have a task in informing their
member federations about the Guidelines' development and in seeking their members' input in
Guidelines follow-up procedures.
Follow-up procedures
18. The Guidelines are drafted in general terms, so as to apply to all participating countries, with
their diversity of legal systems and practices towards MNEs.  Consequently, clarifications may benecessary in individual cases.
19. If a party is under the impression that, in an individual case, the Guidelines have not been
observed, but it is uncertain about the Guidelines' applicability, that party should approach the
National Contact Point.  Member governments and labour and business organizations (through BIAC
and TUAC) may raise such issues.  The National Contact Point should then contact the enterprise,either directly, or through the appropriate business federation, to inform it that a Guidelines issue has
been raised.  The Contact Point and business and labour representatives should try to resolve the issue
at the national level.  If entities of the enterprise in another country are involved, the contact point
should contact its counterparts in that country to exchange information and try and resolve the matter.
The National Contact Point in the country where th e enterprise has its headquarters should also be
informed.
20. If no solution can be found through the National Contact Points, and a clarification seems
necessary, the issue can be submitted to the CIME for consideration.  Final responsibility for
clarifications lies with the Committee, although matters discussed by the National Contact Points may
involve questions of the scope and meaning of the Guidelines in specific circumstances.  Whenever a
Contact Point gives its opinion as to the relevance of the Guidelines to matters at hand, it should keep
in mind the international character of the Guidelines and the overriding necessity of avoidingconflicting national interpretations.  Where there is any doubt or where there are divergent views as to
the consistency of an interpretation under consideration by a Contact Point with clarifications adopted
by the OECD, the matter should be brought to the attention of the Committee before the Contact Point
gives the final answer.WT/WGTI/W/40
Page 5
21. In order to speed up such proceedings, these matters can be referred directly to the CIME's
Working Group on Investment Policies and the Guidelines for preliminary consideration.  After
considering the question, and consulting with BIAC  and TUAC, the CIME may provide a clarification
of how the Guidelines apply in a situation like the one in question.
22. However, the Committee's examination of the need for, and eventual provision of, a
clarification refers to how the Guidelines would apply as concerns the issue raised.  It is not a
judgement on the behaviour of an individual enterprise and thus does not refer to it by name.
23. This being said, the enterprise concerned may express its views orally or in writing on
Guidelines issues involving its interests.  Such an  enterprise may, alternatively, use the offices of
BIAC for this purpose.
24. Labour and business organizations may, though BIAC and TUAC, submit cases that raise
issues for clarification, but an attempt should be made first to resolve the issues at the national level.
VI. EXPERIENCE WITH THE GUIDELINES
25. Throughout their existence, the OECD Guidelin es have proved to be a respected point of
reference for enterprises.  They carry the weig ht of a joint Recommendation of OECD governments
and promote responsible behaviour of MNEs.  They have influenced considerably other instruments,
in particular the ILO Tripartite Declaration on MNEs and social policy.
26. As with any internationally negotiated instrument, the Guidelines have sometimes been
criticized, either for being too general or too detailed.  Some have argued, for example, that they do
not go far enough in ensuring that MNEs comply with national law and practice, while others have
suggested that the Guidelines go beyond those standards in some areas.  Another area of debate
involves the follow-up, which some say needs to be made stronger, while others argue that they aretoo juridical.
27. When Guidelines issues arise in specific cases, the onus of attempting a settlement is
particularly on the National Contact Point; hence, the effectiveness of the Guidelines depends to a
large degree on that of the Contact Points.  This effectiveness differs from country to country.  The
functioning of the National Contact Points is crucial in this context.
28. The National Contact Points and TUAC have submitted more than 30 cases throughout the
years that raised issues for clarification by the CIME.  Requests for clarification have been made
regarding specific issues arising in connection with  each of the chapters of the Guidelines, although
most of the requests concerned the chapter on employment and industrial relations.
29. Since their adoption, the OECD has endeavoured  to make the Guidelines widely known.
There have been regular consultations between the social partners - BIAC and TUAC - and the CIME;
the CIME completed a review on the functioning of the National Contact Points;  and a number ofpromotional activities were organized, including in 1991 a Symposium on the promotion of the
Guidelines.  A conference on the Guidelines is pl anned to take place in October 1998, in Hungary.
30. The OECD has issued a publication entitled "The OECD Guidelines for Multinational
Enterprises" (OECD Publications, 1994), which describes the Guidelines' nature and scope and the
way they work.  It also presents a consolidated overview of the clarifications of the Guidelines, asgiven by the CIME over time.  The publication is available via Internet, together with other
documentation about the Guidelines (http://www.oecd.org/daf/cmis/cime/mneguide.htm).WT/WGTI/W/40
Page 6
31. The role of the Guidelines has also been considered in the OECD discussion on trade and
investment and core labour standards.  The recent study on "Trade, employment and labour standards"
(OECD Publications, 1996) concludes that the OECD Guidelines "have a role to play as a voluntary
instrument to promote responsible behaviour of MN Es.  This role would be enhanced if home and
host countries made it known that they expect foreign investors to follow the Guidelines worldwideand if non-member countries were encouraged to endorse the Guidelines.  Consideration could also be
given to revising the Guidelines to include those core standards which are not explicitly covered,
namely prohibition of forced labour, exploitation of child labour and discrimination.  This would send
a clear message of the importance OECD governments attach to the respect of these standards".
VII. ASSOCIATION WITH THE MAI
32. The Guidelines have been one of the important elements considered in the negotiations of a
Multilateral Agreement on Investment (MAI).  Although the modalities of this association have notyet been agreed upon, there is broad support for the following propositions:
(a) the commitment to the Guidelines of OECD countries should be reaffirmed in the
MAI;
(b) non-OECD countries joining the MAI s hould join in the commitment to the
Guidelines and establish National Contact Points to ensure effective follow-up;
(c) the text of the Guidelines should be a nnexed to the MAI without changing their
non-binding status;
(d) arrangements should be put in place to ensure that non-members could participate in
follow-up procedures on an equal footing with OECD members.
VIII. REVIEW OF THE GUIDELINES
33. The reviews of the Guidelines have been aimed primarily at assessing experience and not
necessarily at revising the text.  They have looked at the different elements in the life of the
Guidelines and drawn conclusions on the best way forward.  More specifically, reviews have been
guided by the desire:
(a) to maintain the stability of the Guidelines;
(b) to preserve sufficient flexibility in the instrument, to allow it to meet new
developments and concerns;
(c) to ensure the continuing relevance of the Guidelines;  and
(d) to monitor and promote their implementation.
34. Amendments to the text of the Guidelines have been relatively few (in 1979, 1984 and 1991),
because of the Committee's commitment to their stabil ity.  The reviews have, nevertheless, resulted in
modification of the chapters on general policies, disclosure of information, employment and industrialrelations and the addition, in 1991, of a chapter on the environment.
35. A future review of the Guidelines was due in 1997 but was postponed in light of the ongoing
MAI negotiations.  A preliminary exchange of views took place in the CIME in December 1997, on
the basis of proposals by several member countries and TUAC.  The CIME will consider the timing,
scope and procedures of the review at its next meeting, to be held on 26 June 1998.WT/WGTI/W/40
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ANNEX 1
Declaration on International Investment and Multinational Enterprises
(21 June 1976)
The Governments of OECD Member Countries1
CONSIDERING:
- That international investment has assumed increased importance in the world
economy and has considerably contributed to the development of their countries;
- That multinational enterprises play an important role in this investment process;
- That cooperation by Member countries can improve the foreign investment climate,
encourage the positive contribution which multinational enterprises can make to
economic and social progress, and minimise and resolve difficulties which may arisefrom their various operations;
- That, while continuing endeavours within the OECD may lead to further international
arrangements and agreements in this field, it seems appropriate at this stage to
intensify their cooperation and consultation on issue relating to international
investment and multinational enterprises through inter-related instruments each ofwhich deals with a different aspect of the matter and together constitute a framework
within which the OECD will consider these issues;
DECLARE:
Guidelines for
Multinational
EnterprisesI. That they jointly recommend to multinational enterprises
operating their territories the observance of the Guidelines as
set forth [below] having regard to the considerations and
understandings which introduce the Guidelines and are an
integral part of them;
National Treatment II.1. That Member countries should, consistent with their needs to
maintain public order, to protect their essential security interests
and to fulfil commitments relating to international peace and
security, accord to enterprises operating in their territories and
owned or controlled directly or indirectly by nationals of
another Member country (hereinafter referred to as"Foreign-Controlled Enterprises") treatment under their laws,
regulations and administrative practices, consistent with
international law and no less favourable than that accorded in
like situations to domestic enterprises (hereinafter referred to as
"National Treatment");
                                                     
1 On matters falling within its competence, the European Economic Community is associated with the
section on National Treatment.WT/WGTI/W/40
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2. That Member countries will consider applying "National
Treatment" in respect of countries other than Member
countries;
3. That Member countries will endeavour to ensure that their
territorial subdivisions apply "National Treatment";
4. That this Declaration does not deal with the right of Member
countries to regulate the entry of foreign investment or the
conditions of establishment of foreign enterprises;
Conflicting
RequirementsIII. That they will cooperate with a view to avoiding or minimising
the imposition of conflicting requirements on multinational
enterprises and that they will take into account the general
considerations and practical approaches as set forth in Annex 2
[to the Declaration];
International
Investment Incentives
and DisincentivesIV.1. That they  recognise  the  need to strengthen their cooperation
in the field of international direct investment;
2. That they thus recognise the need to give due weight to the
interests of Member countries affected by specific laws,
regulations and administrative practices in this field (hereinafter
called "measures") providing official incentives and
disincentives to international direct investment;
3. That Member countries will endeavour to make such measures
as transparent as possible, so that their importance and purpose
can be ascertained and that information on them can be readily
available;
Consultation
ProceduresV. That they are prepared to consult one another on the above
matters in conformity with the Decisions of the Council on the
Guidelines for Multinational Enterprises, on National
Treatment and on International Investment Incentives and
Disincentives;
Review VI. That they will review the above matters within three years with
a view to improving the effec tiveness of international economic
cooperation among Member countries on issues relating to
international investment and multinational enterprises.2
                                                     
2 The Declaration was reviewed in 1979, 1984 and 1991. Section III on Conflicting Requirements was
added following the 1991 Review.WT/WGTI/W/40
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GUIDELINES FOR MULTINATIONAL ENTERPRISES3
1. Multinational enterprises now play an important part in the economies of Member countries
and in international economic relations, which is of increasing interest to governments.  Through
international direct investment, such enterprises can bring substantial benefits to home and host
countries by contributing to the efficient utilisation of capital, technology and human resources
between countries and can thus fulfil an important role in the promotion of economic and social
welfare.  But the advances made by multinational enterprises in organising their operations beyond
the national framework may lead to abuse of concentrations of economic power and to conflicts with
national policy objectives.  In addition, the complexity of these multinational enterprises and thedifficulty of clearly perceiving their diverse structures, operations and policies sometimes give rise to
concern.
2. The common aim of the Member countries is to encourage the positive contributions which
multinational enterprises can make to economic and so cial progress and to minimise and resolve the
difficulties to which their various operations may give rise.  In view of the transnational structure ofsuch enterprises, this aim will be furthered by cooperation among the OECD countries where the
headquarters of most of the multinational enterprises are established and which are the location of a
substantial part of their operations.  The Guidelines set out hereafter are designed to assist in the
achievement of this common aim and to contribute to improving the foreign investment climate.
3. Since the operations of multinational enterprises extend throughout the world, including
countries that are not Members of the Organisation, international cooperation in this field should
extend to all States.  Member countries will give their full support to efforts undertaken in cooperation
with non-member countries, and in particular with developing countries, with a view to improving the
welfare and living standards of all people both by encouraging the positive contributions which
multinational enterprises can make and by minimising and resolving the problems which may arise inconnection with their activities.
4. Within the Organisation, the programme of cooperation to attain these ends will be a
continuing, pragmatic and balanced one.  It comes within the general aims of the Convention on the
Organisation for Economic Cooperation and Developm ent (OECD) and makes full use of the various
specialised bodies of the Organisation, whose terms of reference already cover many aspects of the
role of multinational enterprises, notably in matt ers of international trade and payments, competition,
taxation, manpower, industrial development, science and technology.  In these bodies, work is beingcarried out on the identification of issues, the improvement of relevant qualitative and statistical
information and the elaboration of proposals for action designed to strengthen inter-governmental
cooperation.  In some of these areas procedures already exist through which issues related to the
operations of multinational enterprises can be taken up.  This work could result in the conclusion of
further and complementary agreements and arrangements between governments.
5. The initial phase of the cooperation programme is composed of a Declaration and three
Decisions promulgated simultaneously as they are complementary and inter-connected, in respect of
Guidelines for multinational enterprises, National Treatment for foreign-controlled enterprises and
international investment incentives and disincentives.
                                                     
3 The Guidelines were reviewed in 1979, 1984 and 1991.  These reviews resulted in modification of the
General Policies chapter (paragraph 2); the Disclosure of  Information chapter [sub-paragraph b]; a clarification
and modification of the Employment and Industrial Relations chapter (paragraph 8); and the addition of a new
chapter on the Environment.WT/WGTI/W/40
Page 10
6. The Guidelines set out below are recommendations jointly addressed by Member countries to
multinational enterprises operating in their territorie s.  These Guidelines, which take into account the
problems which can arise because of the interna tional structure of these enterprises, lay down
standards for the activities of these enterprises in the different Member countries.  Observance of the
Guidelines is voluntary and not legally enforceable.  However, they should help to ensure that theoperations of these enterprises are in harmony with national policies of the countries where they
operate and to strengthen the basis of mutual confidence between enterprises and States.
7. Every State has the right to prescribe the conditions under which multinational enterprises
operate within its national jurisdiction, subject to in ternational law and to the international agreements
to which it has subscribed.  The entities of a multinational enterprise located in various countries are
subject to the laws of these countries.
8. A precise legal definition of multinational enterprises is not required for the purposes of the
Guidelines.  These usually comprise companies or other entities whose ownership is private, state or
mixed, established in different countries and so linked that one or more of them may be able to
exercise a significant influence over the activities of  others and, in particular, to share knowledge and
resources with the others.  The degrees of autonomy of each entity in relation to the others varies
widely from one multinational enterprise to another, depending on the nature of the links betweensuch entities and the fields of activity concerned.  For these reasons, the Guidelines are addressed to
the various entities within the multinational ente rprise (parent companies and/or local entities)
according to the actual distribution of responsibilities among them on the understanding that they will
cooperate and provide assistance to one another as necessary to facilitate observance of the
Guidelines.  The word "enterprise" as used in these Guidelines refers to these various entities inaccordance with their responsibilities.
9. The Guidelines are not aimed at introducing differences of treatment between multinational
and domestic enterprises; wherever relevant they reflect good practice for all.  Accordingly,
multinational and domestic enterprises are subject to the same expectations in respect of their conduct
wherever the Guidelines are relevant to both.
10. The use of appropriate international dispute settlement mechanisms, including arbitration,
should be encouraged as a means of facilitating the resolution of problems arising between enterprises
and Member countries.
11. Member countries have agreed to establish appropriate review and consultation procedures
concerning issues arising in respect of the Guidelines. When multinational enterprises are made
subject to conflicting requirements by Member countries, the governments concerned will cooperate
in good faith with a view to resolving such problems either within the Committee on InternationalInvestment and Multinational Enterprises established by the OECD Council on 21 January 1975 or
through other mutually acceptable arrangements.
Having regard to the foregoing considerations, the Member countries set forth the following
Guidelines for multinational enterprises with the unde rstanding that Member countries will fulfil their
responsibilities to treat enterprises equitably and in accordance with international law andinternational agreements as well as contractual obligations to which they have subscribed.WT/WGTI/W/40
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GENERAL POLICIES
Enterprises should:
1. Take fully into account established general policy objectives of the Member countries
in which they operate;
2. In particular, give due consideration to those countries' aims and priorities with regard
to economic and social progress, including industrial and regional development, the
protection of the environment and consumer interests, the creation of employment
opportunities, the promotion of innovation and the transfer of technology4;
3. While observing their legal obligations concerning information, supply their entities
with supplementary information the latter ma y need in order to meet requests by the
authorities of the countries in which those entities are located for information relevant
to the activities of those entities, taking into account legitimate requirements of
business confidentiality;
4. Favour close cooperation with the local community and business interests;
5. Allow their component entities freedom to develop their activities and to exploit their
competitive advantage in domestic and foreig n markets, consistent with the need for
specialisation and sound commercial practice;
6. When filling responsible posts in each country of operation, take due account of
individual qualifications without discrimination as to nationality, subject to particularnational requirements in this respect;
7. Not render and they should not be solicited or expected to render any bribe or other
improper benefit, direct or indirect, to any public servant or holder of public office;
8. Unless legally permissible, not make contributions to candidates for public office or
to political parties or other political organisations;
9. Abstain from any improper involvement in local political activities.
DISCLOSURE OF INFORMATION
Enterprises should, having due regard to their nature and relative size in the economic context
of their operations and to requirements of business confidentiality and to cost, publish in a form suited
to improve public understanding a sufficient body of factual information on the structure, activitiesand policies of the enterprise as a whole, as a supplement, in so far as necessary for this purpose, to
information to be disclosed under the supplement, in so far as necessary for this purpose, to
information to be disclosed under the national law of the individual countries in which they operate.
To this end, they should publish within reasonable time limits, on a regular basis, but at least annually,
                                                     
4 This paragraph includes the additional provision concerning consumer interests, adopted by the
OECD Governments at the meeting of the OECD Council at Ministerial level on 17 and 18 May 1984.WT/WGTI/W/40
Page 12
financial statements and other pertinent information relating to the enterprise as a whole, comprising
in particular:
(a) The structure of the enterprise, showing the name and location of the parent company,
its main affiliates, its percentage ownership, direct and indirect, in these affiliates,including shareholdings between them;
(b) The geographical areas
5 where operations are carried out and the principal activities
carried on therein by the parent company and the main affiliates;
(c) The operating results and sales by geographical area and the sales in the major line of
business for the enterprise as a whole;
(d) Significant new capital investment by geographical area and, as far as practicable, by
major lines of business for the enterprise as a whole;
(e) A statement of the sources and uses of funds by the enterprise as a whole;
(f) The average number of employees in each geographical area;
(g) Research and development expenditure for the enterprise as a whole;
(h) The policies followed in respect of intra-group pricing;
(i) The accounting policies, including those on consolidation, observed in compiling the
published information.
COMPETITION
Enterprises should, while conforming to official competition rules and established policies of
the countries in which they operate:
1. Refrain from actions which would adversely affect competition in the relevant market
by abusing a dominant position of market power, by means of, for example:
(a) Anti-competitive acquisitions;
(b) Predatory behaviour toward competitors;
(c) Unreasonable refusal to deal
(d) Anti-competitive abuse of industrial property rights;
                                                     
5 *For the purposes of the Guideline on Disclosure of  Information, the term "geographical area" means
groups of countries or individual countries as each enterprise determines is appropriate in its particularcircumstances.  While no single method of grouping is appropriate for all enterprises or for all purposes, thefactors to be considered by an enterprise would in clude the significance of geographic proximity, economic
affinity, similarities in business environments and the nature, scale and degree of interrelationship of the
enterprises' operations in the various countries.WT/WGTI/W/40
Page 13
(e) Discriminatory (i.e. unreasonably differentiated) pricing and using such
pricing transactions between affiliated enterprises as a means of affecting
adversely competition outside these enterprises;
2. Allow purchasers, distributors and licensees freedom to resell, export, purchase and
develop their operations consistent with law, trade conditions, the need forspecialisation and sound commercial practice;
3. Refrain from participating in or otherwise purposely strengthening the restrictive
effects of international or domestic cartels or restrictive agreements which adversely
affect or eliminate competition and which are not generally or specifically accepted
under applicable national or international legislation;
4. Be ready to consult and cooperate, including the provision of information, with
competent authorities of countries whose interests are directly affected in regard tocompetition issues or investigations.  Provisions of information should be in
accordance with safeguards normally applicable in this field.
FINANCING
Enterprises should, in managing the financial and commercial operations of their activities,
and especially their liquid foreign assets and liabilities, take into consideration the established
objectives of the countries in which they operate regarding balance of payments and credit policies.
TAXATION
Enterprises should:
1. Upon request of the taxation authorities of the countries in which they operate
provide, in accordance with the safeguards and relevant procedures of the national
laws of these countries, the information necessary to determine correctly the taxes tobe assessed in connection with their operations, including relevant information
concerning their operations in other countries;
2. Refrain from making use of the particular facilities available to them, such as transfer
pricing which does not conform to an arm's length standard, for modifying in ways
contrary to national laws the tax base on which members of the group are assessed.
EMPLOYMENT AND INDUSTRIAL RELATIONS
Enterprises should, within the framework of law, regulations and prevailing labour relations
and employment practices, in each of the countries in which they operate:
1. Respect the right of their employees to be represented by trade unions and other bona
fide organisations of employees, and engage in constructive negotiations, eitherindividually or through employers' asso ciations, with such employee organisations
with a view to reaching agreements on employment conditions, which should includeWT/WGTI/W/40
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provisions for dealing with disputes arising over the interpretation of such
agreements, and for ensuring mutually respected rights and responsibilities;
2. (a) Provide such facilities to representatives of the employees as may be
necessary to assist in the development of effective collective agreements;
(b) Provide to representatives of employees information which is needed for
meaningful negotiations on conditions of employment;
3. Provide to representatives of employees where this accords with local law and
practice, information which enables them to obtain a true and fair view of the
performance of the entity or, where appropriate, the enterprise as a whole;
4. Observe standards of employment and industrial relations not less favourable than
those observed by comparable employers in the host country;
5. In their operations, to the greatest extent practicable, utilise, train and prepare for
upgrading members of the local labour force in cooperation with representatives of
their employees and, where appropriate, the relevant governmental authorities;
6. In considering changes in their operations which would have major effects upon the
livelihood of their employees, in particular in the case of the closure of an entity
involving collective lay-offs or dismissals, provide reasonable notice of such changesto representatives of their employees, and where appropriate to the relevant
governmental authorities and cooperate with the employee representatives and
appropriate governmental authorities so as to mitigate to the maximum extent
practicable adverse effects;
7. Implement their employment policies including hiring, discharge, pay, promotion and
training without discrimination unless selectivity in respect of employee
characteristics is in furtherance of established governmental policies which
specifically promote greater equality of employment opportunity;
8. In the context of bona fide negotiations
6 with representatives of employees on
conditions of employment, or while employees are exercising a right to organise, notthreaten to utilise a capacity to transfer the whole or part of an operating unit from the
country concerned nor transfer employees from the enterprises' component entities in
other countries in order to influence unfairly those negotiations or to hinder the
exercise of a right to organise
7;
9. Enable authorised representatives of their employees to conduct negotiations on
collective bargaining or labour management relations issues with representatives of
management who are authorised to take decisions on the matters under negotiation.
                                                     
6 *Bona fide negotiations may include labour disputes as part of the process of negotiation.  Whether or
not labour disputes are so included will be determined by the law and prevailing employment practices ofparticular countries.
7 This paragraph includes the additional provision,  concerning transfer of employees, adopted by
OECD Governments at the meeting of the OECD Council at Ministerial level on 13 and 14 June 1979.WT/WGTI/W/40
Page 15
ENVIRONMENTAL PROTECTION8
Enterprises should, within the framework of laws, regulations and administrative practices in
the countries in which they operate, and recalling the provisions of paragraph 9 of the Introduction to
the Guidelines that, inter alia , multinational and domestic enterprises are subject to the same
expectations in respect of their conduct whenever the Guidelines are relevant to both, take due
account of the need to protect the environment and avoid creating environmentally related health
problems.  In particular, enterprises, whether multinational or domestic, should:
1. Assess, and take into account in decision making, foreseeable environmental and
environmentally related health consequences of their activities, including siting
decisions, impact on indigenous natural resources and foreseeable environmental and
environmentally related health risks of products as well as from the generation,transport and disposal of waste;
2. Cooperate with competent authorities, inter alia , by providing adequate and timely
information regarding the potential impacts on the environment and environmentally
related health aspects of all their activities and by providing the relevant expertiseavailable in the enterprise as a whole;
3. Take appropriate measures in their operations to minimise the risk of accidents and
damage to health and the environment, and to cooperate in mitigating adverse effects,
in particular:
(a) by selecting and adopting those technologies and practices which are
compatible with these objectives;
(b) by introducing a system of environmental protection at the level of the
enterprise as a whole including, where appropriate, the use of environmental
auditing;
(c) by enabling their component entities to be adequately equipped, especially by
providing them with adequate knowledge and assistance;
(d) by implementing education and training programmes for their employees;
(e) by preparing contingency plans;  and
(f) by supporting, in an appropriate manner, public information and community
awareness programmes.
SCIENCE AND TECHNOLOGY
Enterprises should:
1. Endeavour to ensure that their activities fi t satisfactorily into the scientific and
technological policies and plans of the countries in which they operate, and contribute
                                                     
8 This chapter was added at the meeting of the OECD Council at Ministerial level on 4 and
5 June 1991.WT/WGTI/W/40
Page 16
to the development of national scientific and technological capacities, including as far
as appropriate the establishment and improvement in host countries of their capacity
to innovate;
2. To the fullest extent practicable, adopt in the course of their business activities
practices which permit the rapid diffusion of technologies with due regard to theprotection of industrial and intellectual property rights;
3. When granting licenses for the use of industrial property rights or when otherwise
transferring technology, do so on reasonable terms and conditions.WT/WGTI/W/40
Page 17
ANNEX 2
The Guidelines for Multinational Enterprises:
Second Revised Decision of the Council
Amended June 1991
THE COUNCIL,
Having regard to the Convention on the Organisation for Economic Cooperation and
Development of 14th December 1960 and, in particular, to Articles 2 d), 3 and 5 a) thereof;
Having regard to the Resolution of the Council of 28th November 1979, on the Terms of
Reference of the Committee on International Investment and Multinational Enterprises and, in
particular, to paragraph 2 thereof [C(79)210(Final)];
Taking note of the Declaration by the Governme nts of OECD Member countries of 21st June
1976 in which they jointly recommend to multinational enterprises the observance of Guidelines for
multinational enterprises;
Having regard to the Revised Decision of the Council of 13th June 1979 on
Inter-Governmental Consultation Procedures on the Guidelines for Multinational Enterprises
[C(79)143(Final)];
Recognising the desirability of setting forth procedures by which consultations may take
place on matters related to these Guidelines;
Recognising that, while bilateral and multilateral cooperation should be strengthened when
multinational enterprises are made subject to conflicting requirements, effective cooperation on
problems arising therefrom may best be pursued in most circumstances on a bilateral level, although
there may be cases where the multilateral approach would be more effective;
Considering the Report on the Review of the 1976 Declaration and Decisions on International
Investment and Multinational Enterprises [C(79) 102(Final)] and the Report on the Second Review of
the 1976 Declaration and Decisions on International Investment and Multinational Enterprises
[C/MIN(84)5(Final)], including the particular endorsement of the section in the Second Review
Report relating to conflicting requirements;
On the proposal of the Committee on International Investment and Multinational Enterprises:
DECIDES:
1. Member Governments shall set up National Contact Points for undertaking promotional
activities, handling inquires and for discussions with the parties concerned on all matters related to the
Guidelines so that they can contribute to the solution of problems which may arise in this connection.
The business community, employee organisations and other interested parties shall be informed of the
availability of such facilities.
2. National Contact Points in different countries shall cooperate if such need arises, on any
matter related to the Guidelines relevant to their activities.  As a general procedure, discussions at the
national level should be initiated before contacts with other National Contact Points are undertaken.WT/WGTI/W/40
Page 18
3. The Committee on International Investment and Multinational Enterprises (hereinafter called
"the Committee") shall periodically or at the request of a Member country hold an exchange of views
on matters related to the Guidelines and the experience gained in their application.  The Committee
shall be responsible for clarification of the Guidelines.  Clarification will be provided as required.
The Committee shall periodically report to the Council on these matters.
4. The Committee shall periodically invite the Business and Industry Advisory Committee to
OECD (BIAC) and the Trade Union Advisory Committee to OECD (TUAC) to express their views on
matters related to the Guidelines.  In addition, exchanges of views with the advisory bodies on these
matters may be held upon request by the latter.  The Committee shall take account of such views in its
reports to the Council.
5. If it so wishes, an individual enterprise will be given the opportunity to express its views
either orally or in writing on issues concerning the Guidelines involving its interests.
6. The Committee shall not reach conclusions on the conduct of individual enterprises.
7. This Decision shall be reviewed at the latest in six years.  The Committee shall make
proposals for this purpose as appropriate.
8. This Decision shall replace Decision [C(79)143].
__________
_______________
* These texts are integral parts of the negotiated instruments.