Organisation for Economic Cooperation and Development (OECD)

The Foreign Investment and Trade Policy Division of the Treasury represents Australia on international investment issues in the OECD Investment Committee. The Division previously represented Australia in two OECD Committees, the Committee on International Investment and Multinational Enterprises (CIME) and the Committee on Capital Movements and Invisible Transactions (CMIT). On 22 April 2004, the OECD Council merged CIME and CMIT and created the Investment Committee..

For further information on the OECD please visit the OECD website.

INVESTMENT COMMITTEE

The Committee’s mission is to provide a forum for international cooperation, policy analysis and advice to governments on how best to enhance the positive contribution of investment worldwide.

The Committee provides a well-placed forum for addressing the policy challenges facing OECD and non-OECD countries as they seek to attract investment and maximise its benefits to host societies. The Committee represents the community of policy makers, including treaty negotiators and National Contact Point (NCP) representatives for the OECD Guidelines for Multinational Enterprises (the Guidelines), from countries which are the source of more than 80 per cent of global investment flows. It is responsible for the OECD Codes of Liberalisation of Capital Movements and Current Invisible Operations. The Investment Committee also has primary responsibility for the OECD Declaration on International Investment and Multinational Enterprises (the Declaration). The Declaration was adopted by OECD Governments in 1976 to facilitate direct investment among OECD Members. It represents a broad political commitment to open and transparent investment policies and encourages the positive contribution of multinational enterprises. Since adoption, the Declaration has been the basis for extensive inter-governmental cooperation on developing best policy practices and peer review-based approaches to outreach activities.

The Committee’s work program has five main categories:

• promoting transparent and non-discriminatory investment policies;
• encouraging the positive contribution of multinational enterprises to sustainable development;
• cooperating with non-Members to mobilise investment for development;
• monitoring developments in international investment agreements; and
• monitoring foreign direct investment trends.

As part of its responsibility to oversee Member and non-Member countries’ adherence to the Declaration, the Committee also has broad responsibility for the OECD Guidelines for Multinational Enterprises (the Guidelines) and any work on Guidelines related issues. National Contact Points (NCPs) for the Guidelines are required to report annually to the Investment Committee on their activities relating to the promotion and implementation of the Guidelines. The Investment Committee’s mandate also highlights cooperation with non-Member economies and dialogue with business, labour and other civil society stakeholders as key features of its work.

In addition to the recommendations contained in the OECD Guidelines, the Declaration deals with three related instruments aimed at:

• providing national treatment to foreign-owned enterprises on a best endeavours basis;
• promoting cooperation among governments in relation to international investment incentives and disincentives; and
• minimising the imposition of conflicting requirements on MNEs by governments of different countries.

The Investment Committee meets three times a year (April, September and December).

The Division’s participation in the work of the Investment Committee is important in fulfilling the responsibilities of the ANCP for the Guidelines and in ensuring the effective representation of Australia’s foreign investment policy and position on international investment policy issues. The Division’s involvement in the Investment Committee also ensures it is abreast of current research and emerging issues in the field of international investment.

OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES & THE AUSTRALIAN NATIONAL CONTACT POINT

The Australian Government is a signatory to the OECD Declaration on International Investment and Multinational Enterprises (the Declaration). Contained in the Declaration are guidelines that provide voluntary principles and standards for responsible business conduct consistent with applicable national laws. The Guidelines represent standards of behaviour supplemental to Australian law and, as such, do not override Australian law or create conflicting requirements.

The OECD Guidelines are recommendations by governments to multinational enterprises (MNEs) operating in or from the 30 OECD Member countries and nine non-Member adhering countries (Argentina, Brazil, Chile, Estonia, Israel, Lithuania, Slovenia, Latvia and Romania). They are the only comprehensive and multilaterally-endorsed code of conduct for MNEs that Governments are committed to promoting.

The Guidelines apply to MNEs activities in OECD and non-OECD countries alike. They establish principles covering a broad range of issues including information disclosure, employment and industrial relations, environment, combating bribery, consumer interests, science and technology, competition and taxation. The active participation of the business community, labour federations and other non-governmental organisations is crucial in keeping the Guidelines relevant in changing economic and social circumstances. The Guidelines were last reviewed in June 2000.

Adhering countries to the Declaration are required to establish a National Contact Point (NCP) for the Guidelines to ensure their effective promotion and implementation domestically. The Australian National Contact Point (ANCP) is the Executive Member of the Foreign Investment Review Board (currently Patrick Colmer). The ANCP operates in accordance with the core criteria of visibility, accessibility, transparency and accountability in accordance with the principle of ‘functional equivalence’ between NCPs.

An important aspect of the OECD Guidelines is its formal review mechanism, which provides for an examination of a multinational enterprises’ conduct where that conduct is claimed to be contrary to the Guidelines. Such an examination is termed a ‘specific instance’ and it is conducted by the relevant National Contact point. In accordance with the OECD’s procedural guidelines for National Contact Points, the ANCP has committed to contribute to the resolution of issues relating to the implementation of the Guidelines in any such specific instances.

There is an Annual Meeting of NCPs in June, back-to-back with an Annual Corporate Responsibility Roundtable. The 2005 Roundtable focused on the theme ‘The OECD Guidelines and Developing Countries – Building Trust’.

For further information on the current work programme of the Investment Committee and recent activities of the ANCP please see the Current Issues page of this website.