Business and General Policies

The ILO MNE Declaration emerged out of concerns among the governments and social partners in the ILO member States about the expanding impacts of Multinational Enterprises in their territories. MNEs are important partners to help advance economic and social development in all countries. The MNE Declaration seeks to emphasize the many potential intersections between dynamic enterprise development, economic advancement and social security while addressing the possible negative impacts.

The MNE Declaration promotes harmony between the behaviour of MNEs, and the policies and development priorities of the governments in the countries of operations so that greater social development gains can be derived from these operations of MNEs. The MNE Declaration sets out clearly that Governments are responsible for protecting the rights of workers and coordinating development policies while companies are responsible for respecting the rights of workers within their operations. Employers’ and workers’ organizations can play an important role in promoting the spill-over effects of good MNE practices to local enterprise culture.

Enterprises are encouraged to recognize the autonomy of governments to regulate their societies while governments in turn are urged to comply with the Universal Declaration of Human Rights and apply their principles to the greatest extent possible, as well as those set out in the ILO Declaration of Fundamental Principles and Rights at Work. The provisions of the 1998 ILO Declaration on the Fundamental Principles and Rights at Work, embodied in the eight fundamental ILO Conventions that have been identified as being central to the rights of people at work irrespective of the level of development of the state, represent a global consensus on social and labour issues. These are incorporated within the MNE Declaration. When or where governments fail to uphold their responsibilities, companies need to ensure that they are not contributing to, nor benefiting from, that failure. Where government action in areas covered by the MNE Declaration is weak or absent, companies can nonetheless use its provisions to guide their activities.

National law and compliance with national law is the starting point of the MNE Declaration. This compliance is a prerequisite to any other action. National legislation embodies local traditions and practices, and it is important that MNEs respect these. There may, however, be significant differences between law and practice, which often lead to difficulties in ensuring that workers’ rights are respected. National employers’ and workers’ organizations, are key social partners in dialogues with the government on socio-economic development issues and often they are a good source of information on national law and local practice.
Governments and companies should also honour commitments that they have entered into which are in conformity with national laws and accepted international obligations. For governments this includes fully implementing ratified conventions and other treaty obligations. Companies in turn need to respect collective bargaining agreements at the enterprise, sectoral, national levels, and international framework agreements, and other commitments that they may have undertaken as part of company policy towards their operations.

The roles of governments and enterprises are distinguished as follows in the MNE Declaration

Governments should MNEs should
  • Ratify the core ILO conventions
  • Ensure policy coherence with, and take policy guidance from these international instruments
  • Treat MNEs and national enterprises equally in terms of expectations about their standards and operations.
  • Home country governments should promote good practices among their MNEs
  • Home and host country governments should consult each other
  • Respect the sovereign rights of host countries
  • Obey national laws in the countries in which they operate
  • Give due consideration to local practices
  •  Respect international standards
  • Respect human rights
  • Contribute to the realization of the ILO Declaration on Fundamental Principles and Rights and Work
  • Harmonize activities with policy objectives of host government by engaging in dialogue