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OECD Watch Discussion Paper Supply Chain Responsibility December 2004

The 2000 review of the OECD Guidelines resulted in a significant expansion of their applicability to the supply chain of Multinational Enterprises (MNE) in both OECD and non adhearing countries. Business representatives opposed it strongly, but the states adhering to the Guidelines recognised the validity of the need to include the supply chain into the scope of the Guidelines. This inclusion signifies one of the most meaningful improvements to the Guidelines. Business experience demonstrates that whilst many OECD enterprises consider themselves good corporate citizens by not, for example, employing child labour or causing serious environmental damage, this can not always be said for the labour and environmental practices of their suppliers, subsidiaries and trading partners.Increasingly the critical aspects of business activities are outsourced. Companies may choose to place ‘riskier’ parts of their activities in separate legal entities for insurance purposes. Or they may aim, through outsourcing, deliberately to isolate themselves from the reputational impacts of risky activities. But while some multinational enterprises have responded to the corporate social responsibility (CSR) issue domestically, many are reluctant to apply standards internationally and particularly amongst their supply chains.
Type Paper
Date December 2004
Theme Guidelines and regulation
Responsible organisation OECD Watch

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