Dear Madam or Sir,

The StopMAI Coalition of Western Australia was established in January, 1998 to remedy a lack of public information on the Federal Government's multilateral trade and investment treaty negotiations and an absence of cogent consultation, inquiry and criticism by parliamentarians and political parties in such matters.

StopMAI is an apolitical civil-society organisation without restriction on membership. We conduct regular management and public meetings and produce a periodic newsletter, Citizens' Voice (available on the web at http://members.iinet.net.au/~jenks/CV.html ). We are associated with Australia-wide networks having similar objectives, and are active in the international campaign to monitor the progress of the proponents of totalitarian "free trade" doctrine and ensure that civil society retains a strong voice in public policy.

Not enjoying the corporate status, official recognition and public funding obtained by other non-government organisations, StopMAI is staffed by voluntary workers and funds its own publications, public meetings and network communications.

None the less, we assert our valid interest as stakeholders in the national and international trading system, and in the world's ecology. As citizens, we are active players in the economy and are directly affected parties per the behaviour of governments, multinational enterprises and other institutions which assume powers to make rules and set standards. Perhaps even more so than sponsored representative bodies, we can truly claim to represent civil society.

We thank Treasury for the opportunity to contribute to the review of Australia's position in relation to the OECD's Guidelines for Multinational Enterprises.

To the best of our ability, we will cooperate by addressing the framework of issues which has been suggested as the basis for a review of the MNE Guidelines. However, we must begin by expressing our grave reservations about the nature and concept of the Guidelines themselves.

It seems clear to us that the Guidelines have been put in place as a defence against the perceived need for binding regulation of the performance of MNEs.

Just as self-regulation by mass media of their own editorial and advertising standards is a protection and a commercial blessing to those organisations, so have MNEs collectively, with the institutional support of the OECD assented to the Guidelines as a benign alternative to any binding code which might be imposed upon them by a national or international community.

The difference between voluntary guidelines and a binding code is exemplified by the fact that Australian exporters are unavoidably confronted by punitive trade sanctions at this moment because of negotiated binding agreements entered by our Government through the World Trade Organisation. And, as we have frequently been assured, it is essential for our future and, hence, in the national interest, that we embrace a rules-based multilateral trading system.

On the other hand, it is equally a fact that TOTAL, now 14th on the list of the largest multinational enterprises, whose oil is still leaking out of the defective tanker Erika all over the French Atlantic Coast, has a splendidly inspiring Code of Conduct on environment and safety, signed by the CEO. That code is in no way binding and in no way prevents TOTAL from resorting to the full range of legal and commercial techniques to moderate its responsibilities.

StopMAI therefore asserts that it is essential for our future and in the national interest for MNEs to embrace both a rules-based trading system and rules-based responsibilities.

When the ill-fated Multilateral Agreement on Investment was being negotiated, we made the suggestion that the objections of civil society could be answered in part by including suitably amended Guidelines for Multinational Enterprises in the proposed treaty, and thereby answering the valid charge that the MAI protected profits and gave sweeping and binding new powers to corporations without codifying any corresponding binding responsibilities.

We acknowledge, however, that our preferred view is unlikely to be favoured by either the OECD or the national participants in its current review of the Guidelines. We therefore proceed to some pragmatic points on how the review of the guidelines could be conducted, and some ideas for enhancing their scope, structure, substance and implementation.

We see the review as a crucial opportunity to:

• Modernise the implementation process and substance of the guidelines
• Enhance the utility of the guidelines to companies
• Increase the political support and visibility of the guidelines
• Place the guidelines in an evolving framework of binding international regulation

The debate around the MAI brought the issue of MNE rights and responsibilities back on to the public agenda. The guideline review could be a crucial component in producing a balanced set of international regulations in this area. We much prefer the term 'standards' to 'principles'.

Review Process

The OECD is to be congratulated for seeking civil society's inputs to the review process. We make the following suggestions:

• The review process should be transparent, with all papers available to the public
• All stakeholders should be involved in the process and efforts should be made to include representatives of individual organisations --companies, unions and NGOs --in direct dialogue as well as relying on representative organisations such as BIAC and TUAC
• The OECD should direct that consultation at the national level include all stakeholders and affected parties who have signified interest. The process should not be limited to favoured organisations. In Australia, meaningful consultation requires not only an opportunity to make written submissions but also to attend hearings in each State, with at least one hearing in each State and Territory capital city.
• The process should be designed to ensure all stakeholders have an active seat at the table, though this should not allow any one group to veto a broad consensus of agreement

Vision of the Guidelines

It is important that the review provides a new clear vision of the role and purpose of the guidelines and how they fit in with other international agreements to which OECD members are parties. Essential components of such a vision would be:

• A clear statement of purpose for the guidelines that they are intended to promote a "virtuous spiral" of rising standards of corporate behaviour, by setting an evolving floor for minimum standards of behaviour and concrete guidance on corporate best practice
• Explicit linkage of the guidelines to the Rio Principles, Agenda 21 and other international treaties and agreements. The guidelines would provide an "index" for companies of the international legal obligations of their home countries which, by implication, set the internationally agreed standards companies should follow.
• A restatement of the appropriate roles and responsibilities of MNE's with respect to other major groups, and the countries in which they operate. This should reflect existing OECD policies on development and the necessary conditions for quality inward investment.

Structure of the Guidelines

One of the main weaknesses of the current guidelines is lack of a strong institutional structure to monitor and implement existing commitments and to evolve sections of the guidelines into legally stronger instruments. We suggest the following structural changes:

• The guidelines should be restructured into core standards and best-practice guidelines, though the boundary between these would evolve over time. Core standards would be subject to more rigorous implementation procedures than best practice guidelines.
• The implementation processes must be enhanced with access to contact points available to all groups, signposts to independent mediation processes for disputes and regular reviews of the effectiveness of the guidelines process.
• The revised guidelines should form the core of an evolving framework of binding, international cooperation agreements, along the lines of the OECD corruption treaty. Core provisions would progressively become the subject of inter-governmental negotiations to: harmonise national legal approaches; set and enforce international minimum standards; address transboundary regulation problems and overcome free-rider problems. Initial negotiations could include competition policy, corporate transparency and the accountability of subsidiaries to home country jurisdictions. A timetabled workplan for such negotiations should be agreed by the review process.

Scope of the Guidelines

OECD MNEs account for at least 90% of global overseas investment. This proportion is unlikely to decrease in the coming decades as investment and production becomes more globalised.

The scope of the guidelines should therefore be amended to include:

• Actions in non-OECD countries

• Mechanisms for non-OECD citizens or groups to invoke the guidelines, perhaps through systems similar to those used by the World Bank Inspection Panel.

Substance of the Guidelines

Several existing areas of the guidelines should be updated and additional areas included to match the evolution of other international instruments:

• The environment chapter must be extensively revised to include the Rio principles and emerging international environmental standards and treaties.
• The chapter on science and technology must be revised and expanded.
• Additional chapters should be considered on:

• Finance -including portfolio investment
• Corporate governance and consultation processes
• Human rights -including the rights of indigenous peoples
• Advertising and cultural impacts

Register of corporations

Since the Guidelines are not binding, it is necessary that citizens be given access to public information as to which corporations subscribe to them and which do not.

In the event that a purported subscriber to the Guidelines is shown to be in default of the code, the name of that corporation should be removed and placed on the non-subscribers' register.

The performance and standards of all MNEs should be regularly monitored, especially in relation to registered complaints.

Implementation by National Contact Points

StopMAI's provisional acceptance of the Guidelines depends on a minimum of

• a strong, accountable implementation process by NCPs with a presumption of transparent reporting (and permitting access of all citizens to public hearings)
• effective global application (implemented by all home-country NCPs as necessary)
• clear standing for ordinary citizens to bring complaints to NCPs
• a transparent and verifiable register of companies actively subscribing to the guidelines
• an expert panel at CIME to supplement NCPs in arbitrating disputes and complaints
• a process at CIME to assess and improve performance of poorly functioning NCPs in response to concerns raised by citizens
• the Guidelines remaining "standards"--not being turned into "principles", and with continuing progress towards their eventual conversion into binding obligations.

IN SUMMARY, it is imperative that multinational enterprises be constrained to much higher standards of performance, as evidenced, for instance, by the irresponsible use of unserviceable ships by TOTAL and other exporters, and by the recent spillage of cyanide in Romania.

The 1998 advice of Mme Lalumière to the Government of France, the concomitant furore against the MAI by the world's civil society, and the descent on the WTO Seattle Ministerium by tens of thousands of citizens from every country all demonstrate that the day has passed when the lives of citizens can be loftily directed by remote organs of economic power.

In Western Australia, StopMAI represents a growing body of incensed public opinion which is aware of the manifest deficiencies in the policies of foreign affairs and trade pursued to the loss and detriment of many citizens in the past two decades. It cannot be in the national interest for so many Australians to be impoverished and alienated while giant corporations grow fat with inadequate monitoring and correction of their social and environmental performance standards.

Yours faithfully

Brian Jenkins
for Stop MAI (WA) Coalition