Social Conduct in Transnational Enterprise Operations: The Role of the International Labour Organization

Abstract

In the context of the exponential growth of globalized business relationships, this paper examines action taken by the International Labour Organization to address the social conduct of enterprises, and explores its relationship to the contemporary globalized models of enterprise social initiatives. It analyzes the existing multilateral frameworks for addressing the social impact of transnational business, including public sector regulation and private sector guidelines. A comparative review including the ILO's Tripartite Declaration of Principles on Multinational Enterprises and Social Policy highlights that, unlike other frameworks, the ILO's Declaration addresses the dynamic relationship between MNEs and governments, and also with employers' organizations including national level enterprises, and workers' organizations representing local or other stakeholders. In contrast, private sector initiatives such as codes of conduct and social labels show a high degree of selectivity in the choice of labour issues covered and variation in their consistency with international labour standards. Implementation of such initiatives, including internal training, assessment and external verification, in practice, manifests more reliability in cases of independent verification or joint initiatives involving trade unions. From a public policy perspective, such self-regulatory initiatives may complement public regulatory efforts, serve a supplementary role in situations where the will or capacity to enforce labour laws or policies is lacking; some even move beyond compliance behavior to serve as catalysts to advance law or policy. Nonetheless, experience confirms that private sector initiatives are also fraught with special challenges arising from their non-state, or private, character and development outside traditional regulatory frameworks.