15–18 November 1977: The Governing Body of ILO adopts its Multinational Enterprise Declaration

This image of workers in a tire factory in Phnom Penh (Cambodia) was taken in the 1970s. It illustrates the dislocation of major manufacturing processes from Europe and North America to developing countries, which was one result of the spectacular rise of multinational enterprises (MNE) in those years. Internationally operating enterprises existed already at the end of the 19th Century when technological progress lead to a first wave of global economic integration. The importance of these companies increased noticeably after WWII. At the end of the 1970s, 80 per cent of the production in Western societies was in the hands of multinational enterprises (MNEs). With their global reach, vast capital and potential to create or cut millions of jobs around the globe, MNEs started to play a key role in the world economy.

The International Labour Organization's Governing Body reacted to this important trend by adopting in 1977 the ILO's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, known as the MNE Declaration. It inspires good practice and guides the conduct of multinational enterprises and their relationship with host governments and employers' and workers' organizations. The MNE Declaration is recognized as the most comprehensive international instrument on the labour dimension of corporate social responsibility and unique amongst similar international instruments, as it was negotiated and agreed upon by governments and employers' and workers' representatives. The principles of the Declaration, equally applicable to multinational and national enterprises, reflect good policy and labour practice in areas such as employment, training, conditions of work, safety and health, and industrial relations.

Today, around 65,000 multinational enterprises (or transnational enterprises, since they operate less and less along national lines) and their 450,000 affiliates employ more than 200 million people around the world. In the aftermath of the global crisis in 2008, policy makers, companies and consumers alike – concerned with the ethics of business operation – are now looking at a new model for economic growth and development where corporate social responsibility (i.e. considering environmental, social and employment factors) resonates within the marketplace.

The ILO's Multinational Enterprises Declaration, which is regularly revised, remains an important legal instrument, offering guidelines to MNEs, governments, and employers' and workers' organizations.

The prominent role of MNEs in the process of social and economic globalization renders the application of the principles of the MNE Declaration as timely and necessary as they were at the time of adoption.

For more information:

ILO origins and history

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