International guidelines International guidelines for companies are a useful tool that helps governments and international organizations

to define their expectations for responsible behavior by multinational corporations and to provide a framework for such conduct. They focus directly on corporate behavior. Among the most important international guidelines for corporate social responsibility are the ILO Core Labor Standards, the Millennium Development Goals and the OECD Guidelines for Multinational Enterprises. OECD Guidelines For Multinational Enterprises (1976) The OECD Guidelines for Multinational Enterprises were adopted in 1976 by the Organization for Economic Cooperation and Development (OECD), and contain recommendations for multinational companies issued by the signatory governments. They include principles and standards for good practices in accordance with prevailing law, and refer to such international agreements as the Universal Declaration of Human Rights and the ILO Core Labor Standards. The guidelines were revised in 2000 with the participation of company and employee organizations as well as NGOs. While OECD member states expect companies to adhere to these guidelines, they are not legally binding. The guidelines are intended to promote the concept of sustainable development as well as to create incentives for increasing direct investments in developing countries. They also support multinational enterprises in their role as partners in development. The signatory states agree to establish national contact points to monitor the implementation of the guidelines and respond to complaints. These recommendations are based on ten principles: 1. Disclosing information, including non-financial information, about the company 2. Pursuing a corporate policy of providing comprehensive information, not only about the companys operating results, but also about social and environmental issues as well as foreseeable risks 3. Adhering to internationally recognized core labor standards in the treatment of employees, as well as constructive cooperation between the company and employee organizations 4. Implementing efficient in-company environmental management and transparent reporting on environmental issues, as well as adhering to the precautionary principle 5. Combating corruption 6. Taking into account consumers interests by employing fair business, marketing and advertising practices and ensuring the safety and quality of products and services 7. Encouraging the transfer of technology and expertise (while respecting intellectual property rights) 8. Complying with laws governing competition and generally engaging in fair, monopolyfree competition 9. Complying with the tax laws and regulations in effect in the countries in which companies are active, as well as cooperating with tax authorities

10. Government establishment of national contact points ILO Declarationon Fundamental Principles and Rights at Work (1977) The Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy was adopted in 1977 by the governing body of the International Labor Office (ILO) and reflects a consensus among governments, trade unions and federations of commercial and industrial enterprises. It was revised in 2006. The Declaration contains comprehensive guidelines for multinational enterprises regarding labor and social standards. It also calls upon governments to adhere to the ILO principles when formulating national law. Companies are expected to comply with national labor standards as well as with the ILO principles. The ILO and its activities are based on four fundamental principles (core labor standards): 1. 2. 3. 4. Freedom of association and the right to collective bargaining Elimination of discrimination in respect of employment and occupation Elimination of forced or compulsory labor Abolition of child labor

Business initiatives Joint CSR initiatives offer companies guidance and support in developing their own CSR programs. Dialogue and learning forums introduce examples of best practices and encourage an exchange of views and experiences in this area. Corporate initiatives focus on networking and on creating new partnerships between companies and their stakeholders, for example to improve social and environmental standards. With the help of codes of conduct and voluntary commitments, such initiatives help companies meet their social responsibilities on a day-to-day basis. The instruments used in these initiatives are voluntary and differ in their content, origin and implementation mechanisms. UN GLOBAL COMPACT The United Nations Global Compact is a forum for dialogue and learning, primarily for companies. It promotes an exchange of views and experiences related to corporate social responsibility and encourages the commitment of all participating institutions; it also supports the development of networks. The Global Compact was created in 1999 at the initiative of former UN Secretary-General Kofi Annan. Participation is voluntary and requires a written commitment to uphold the ten principles of the Global Compact. As of May 2008, 3,380 companies from 120 countries as well as more than 1,100 civil-society groups and employee organizations were participating in the Global Compact. Participating institutions are required to compile an annual progress report as evidence of their activities. Since 2005, the consequence of failing to meet this requirement has been removal

from the Global Compact list after two years. The Learning Forum has been introduced as a means of optimizing credibility and transparency, while the Principles for Responsible Investments promote more detailed reporting. The ten principles of the Global Compact are a set of universally accepted core values which call upon businesses to respect and promote:

Human rights (1. Protection of internationally proclaimed human rights within their own sphere of influence, 2. Make sure that they are not complicit in human rights abuses), Labor standards (3. Upholding the freedom of association and the recognition of the right to collective bargaining, 4. Elimination of all forms of forced and compulsory labor, 5. Effective elimination of child labor, 6. Elimination of discrimination in respect of employment and occupation), Environmental protection (7. A precautionary approach to environmental challenges, 8. Promoting greater environmental responsibility, 9. Encouraging the development and diffusion of environmentally friendly technologies) and Anti-corruption (10. Working against corruption in all its form, including extortion and bribery).

EUROPEAN ALLIANCE FOR CSR (2006) The European Alliance for Corporate Social Responsibility is made up of European companies and business organizations. Its goal is to promote CSR partnerships and encourage an exchange of experiences. All companies are called upon to support this alliance. It is a companys commitment that counts, not the fulfillment of bureaucratic requirements. The Alliance began with a communication on CSR issued by the European Commission on March 22, 2006, entitled Implementing the Partnership for Growth and Jobs: Making Europe a Pole of Excellence on CSR. The CSR Alliance is intended for companies within the European Union, whatever their size or industry. It offers these companies:

Increased public awareness of their CSR activities Support for networking An exchange of ideas and contact with European CSR experts An opportunity for discussion, an exchange of views and the dissemination of good practices Development of new partnerships CSR dialogue with the European Commission at the highest levels

The business community itself determines which topics are to be addressed as well as which should be given priority. The European Commissions communication listed the following areas for action, which could be expanded as necessary:

Fostering innovation and entrepreneurship in sustainable technologies, products and services which address societal needs Helping SMEs to flourish and grow Assisting enterprises to integrate social and environmental considerations in their business operations, especially those in the supply chain Improving and developing skills for employability Better responding to diversity and the challenge of equal opportunities taking into account the demographic changes alongside the rapid aging of the European population Improving working conditions, also in cooperation with the supply chain Innovating in the environment field with a special focus on integrating eco-efficiency and energy savings in the product and service creation process Enhancing proactive dialogue and engagement with all relevant stakeholders Further addressing the transparency and communication challenge to make the nonfinancial performance of companies and organizations more understandable for all stakeholders and better integrated with their financial performance Operating outside the borders of the European Union in a socially and environmentally responsible way as companies do inside the European Union

Interested companies work together in open coalitions of cooperation and hold thematic laboratory meetings. Stakeholders (e.g. selected nongovernmental organizations and trade unions) and external experts may also participate. The European Commission may provide support for these events upon request. Also planned are regular high-level meetings with the EU Commission for the purpose of presenting examples of good practices and taking stock of what has been accomplished. Companies that would like to support the Alliance are welcome to express their interest to the Federation of German Industries [Bundesverband der Deutschen Industrie, BDI] or the German National Union of Employer Associations [Bundesvereinigung der Deutschen Arbeitgeberverbnde, BDA] at any time. BUSINESSEUROPE, The Confederation of European Business and its national member federations coordinate the activities of the CSR Alliance. They constitute a liaison body between the companies in the Alliance and the EU institutions, which seeks to strengthen contacts between businesses and promote cooperation between interested companies. In Germany, BDA and BDI provide information about current developments in the CSR Alliance. AVE SECTOR MODEL FOR SOCIAL RESPONSIBILITY (1999) The Sector Model for Social Responsibility of the Foreign Trade Association of the German Retail Trade [Auenhandelsvereinigung des deutschen Einzelhandels, AVE] is based on the AVE Declaration Concerning a Code of Conduct for the Procurement of Goods to Ensure the Protection of Social Standards, which was issued in 1999. This model was established as a public-private partnership (PPP) within the framework of the program for development partnerships with the business community run by the German Federal Ministry for Economic

Cooperation and Development [Bundesministerium fr wirtschaftliche Zusammenarbeit und Entwicklung, BMZ]. In this declaration the AVE member companies agreed to make the ILO labor standards an essential component of the terms and conditions of business with their suppliers. The aim was to ensure acceptable working conditions in suppliers production facilities, particularly in developing and emerging economies. The AVE Sector Model for Social Responsibility is a joint monitoring system of the German (and Dutch) retail trade aimed at implementing and/or improving social standards in production facilities all over the world. Over the medium term, the Business Social Compliance Initiative (BSCI) will replace the AVE Sector Model in all of Europe. BUSINESS SOCIAL COMPLIANCE INITIATIVE (BSCI) (2003) BUSINESS SOCIAL COMPLIANCE INITIATIVE (BSCI) (2003) The BSCI is a European initiative of retail companies that seeks to ensure compliance with social standards in all supplier countries. It was launched in March 2003 by the European Foreign Trade Association (FTA). It has since been recognized by the EU Commission and has received active financial support since 2005. The provisions of the BSCI are largely identical to those of the AVE Sector Model for Social Responsibility. CHARTER BY THE SOCIAL PARTNERS IN THE EUROPEAN TEXTILE AND CLOTHING SECTOR (1997) The European Trade Union Federation of Textiles, Clothing and Leather (ETUF-TCL) and the employers group called the European Apparel and Textile Organization (Euratex) agreed on a code of conduct with core labor standards, which applies to 60 to 70 percent of European companies in the European textile and clothing industries. The Charter calls upon companies as well as workers in the European textile and clothing industries to comply with the ILO core labor standards, in particular those involving the elimination of forced labor, freedom of association and the right to collective bargaining, combating child labor and a ban on discrimination with respect to employment and occupation. COMMON CODE FOR THE COFFEE COMMUNITY (4C) (2002 Representatives of industry and trade, coffee producers and civil society in both grower and consumer countries have agreed on a code of conduct to promote sustainability in the coffee sector, called the Common Code for the Coffee Community (4C). The goal of this initiative is to improve social, economic and ecological aspects of coffee production and trade. The initiative is a strategic alliance and has received considerable support from the German Federal Ministry for Economic Cooperation and Development [Bundesministerium fr wirtschaftliche Entwicklung und Zusammenarbeit, BMZ].

EQUATOR PRINCIPLES (2003) The Equator Principles are 15 international guidelines for banks that finance projects. They apply to any bank investment exceeding 50 million. The principles were drawn up in cooperation with the World Bank subsidiary International Finance Corporation (IFC) and essentially correspond to the ecological and social standards of the World Bank. They address such topics as population resettlement, for example when dams are built, the use of dangerous substances such as cyanide in the process of gold extraction, the protection of health, cultural property and endangered species, as well as impacts on indigenous peoples. CHARTER BY INTERNATIONAL COUNCIL ON MINING AND METALS (ICMM) (2001) The primary goal of ICMM is to promote sustainable development in mining. ICMM was founded in 2001 by the industrys market leaders. This initiative seeks to employ scientific expertise to influence governments and creates structures for dialogue with NGOs and political institutions. RESPONSIBLE CARE (1996) The International Council of Chemical Trade Associations (ICCTA) launched the Responsible Care program in 1996. It establishes detailed objectives for the chemical industry regarding product stewardship, plant security and hazard prevention, job safety, environmental protection, transport safety and dialogue. German companies are actively involved in implementing this program. Efforts to achieve the goals of the program are being undertaken in cooperation with the German chemical industry and with the help of the partnership agreement between the German Association of the Chemical Industry [Verband der Chemischen Industrie, VCI], the German Association of Chemical Trade and Distribution [Verband Chemie Handel, VCH] and the European Chemical Industry Council (CEFIC). The participating companies are committed to ongoing progress in promoting safety, health and environmental protection independent of statutory requirements. They monitor improvements and ensure that progress is visible, both internally and externally. CORPORATE SOCIAL RESPONSIBILITY IN THE EUROPEAN SUGAR INDUSTRY: CODE OF CONDUCT (2003) The Confederation of European Sugar Manufacturers [Comit Europen des fabricants de Sucre, CEFS] and the European Federation of Trade Unions in the Food, Agriculture and Tourism sectors and allied branches (EFFAT) have established minimum social standards for the European sugar industry. By accepting the code of conduct, companies in the sugar industry voluntarily commit themselves to certain social standards and respect for fundamental rights. Minimum standards have been set in the areas of human rights, education and training, health and safety, fair pay and working conditions, restructuring, and the relationship between social partners.

In addition, the European sugar industry has positioned itself with respect to various interest groups: employees, consumers, customers, shareholders, suppliers, administrative and financial authorities, the European Commission and the World Trade Organization. INTERNATIONAL COUNCIL OF TOY INDUSTRIES (ICTI) CODE OF BUSINESS PRACTICES (2001) In 2001, the International Council of Toy Industries (ICTI) adopted a Code of Business Practices to ensure the commitment of toy companies to certain minimum social standards. Among other things, it requires respect for laws on working hours, payment of appropriate wages and overtime compensation, a ban on child labor and forced labor, payment of statutory benefits in case of illness, the right to employee representation as provided by local law, as well as adherence to labor and health protection requirements.1

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