Response from ITfC to the Consultation Draft of the OECD Guidelines for MNEs and their Implementation Procedures

The Organisation for Economic Co-operation and Development (OECD) has invited stakeholders to comment on the ‘Consultation Draft: Targeted update of the OECD Guidelines for Multinational Enterprises and their Implementation Procedures’ (Consultation Draft). The OECD Guidelines for Multinational Enterprises (Guidelines) are recommendations addressed by governments to multinational enterprises (MNEs) to, inter alia, encourage positive contributions and minimize the adverse impacts resulting from their business activities.

In the context of increasing digitalization, the targeted updates sought to be introduced by the Consultation Draft to the chapters of the Guidelines are felicitous. In a detailed submission, IT for Change has provided comments and suggestions concentrated on the challenges that the technology sector brings, as seen through platformization and datafication. The key areas of our submission are outlined below:

1. On the Disclosures Chapter: Incorporation of data transparency measures will ensure reliability and trustworthiness of emerging technologies. There is further a need to ensure that the data pool that tech enterprises or other MNEs in digital value chains collect is available as knowledge commons for public initiatives like health services.

2. On the Human Rights Chapter: The human rights impact of tech enterprises implicates the right to privacy of individuals, which includes aspects of decisional autonomy, bodily integrity, and informational privacy. So targeted advertisements, nudging, and associated data collection needs specific focus in the commentary.

3. On the Employment and Industrial Relations Chapter: The Guidelines should recognize emerging forms of managerial control, especially algorithmic management and the impact of automated decision-making. The commentary should include recognition of workers’ informational privacy, in addition to the rights provided by the ILO Declaration on Fundamental Principles and Rights at Work.

4. On the Environment Chapter: Sustainable development requires recognition of community/collective rights over data – with parallels to genetic resources as in the Nagoya Protocol. The Guidelines must direct MNEs to share data that helps in achieving environmental targets with governments, NGOs, and data originators, and MNEs should deploy solutions minimizing their environmental footprint.

5. On the Consumer Interests Chapter: The Guidelines have not incorporated the cardinal principles of data minimization, purpose limitation, and storage limitation as envisaged under the GDPR. Incorporation of these principles along with a direction to MNEs to provide consumers the right to access their personal data will ensure consumer interests are at the forefront of personal data processing.

6. On the Science, Technology and Innovation Chapter: The language of the text must be oriented towards the impact of tech enterprises, whereas at present the language is focused on how MNEs may benefit from tech and development endeavors. There needs to be an acknowledgment of extractive data practices, the impact of frontier tech should be captured, reference to data governance practices needs explicit examples, and the commentary must recognize the impact of digitalization and Big Tech to emphasize the importance of due diligence.

7. On the Competition Chapter: The Guidelines in the present form do not contain any reference to promotion of competition in the digital economy, which in our view is a shortcoming. In order to ensure fairness in digital markets and data protection, the exigency to counter the anti-competitive practices of Big Tech must be acknowledged, and the Guidelines should caution MNEs against self-preferencing and exploitation of personal data for advertising.

8. On the Taxation Chapter: Explicit recognition in the Guidelines of the intersection of tax implications and digitalization, along with a commitment to move towards destination-based tax rules is essential to address developing countries’ concerns.

Read our full submission here.

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