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Decent Work in Global Supply Chains

Chapter 5.3 The OECD Guidelines on Multinational Enterprises

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I have selected the case IHC CALAND (Burma) V FNV and CNV.
http://www.tuacoecdmneguidelines.org/CaseDescription.asp?id=89
In July 2001, two Dutch unions (FNV and CNV) requested the Dutch NCP to look into the association of the Dutch dredging company IHC Caland with the use of forced labour in Burma. When the issue was raised, IHC CALAND was active as a subcontractor for Premier Oil Myanmar (an affiliate of Premier Oil UK) in an offshore project in the territorial waters of Burma. FNV and CNV asked the Dutch National Contact Point to see whether IHC CALAND’s behaviour in this specific instance was in accordance with the Guidelines. Specifically the Dutch Unions were concerned about two provisions of the OECD Guidelines on Multinational Enterprises:

  • II.2- Respect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments.

  • IV.1-c - Contribute to the elimination of all forms of forced or compulsory labour

FNV and CNV based their submission on the ILO resolution of June 2000 on Burma and authoritative reports of human rights abuses in the country. From their point of view, companies that have activities in Burma would contribute to keep the junta-regime and its oppressive way to work with forced labour in place. By raising this specific instance at the NCP, FNV and CNV intended to establish a constructive dialogue with IHC CALAND.
Following an initial meeting, the Unions and IHC CALAND agreed that:

  • Taking into account the contractual obligations of IHC CALAND in the project and the relevant text of the OECD-guidelines, FNV and CNV accept that a withdrawal from the project is not an option for IHC CALAND.
  • With regard to the implementation of the guidelines, IHC CALAND could take a more active role and strengthen external communication addressing the human rights situation in Burma.

A series of negotiations took place and the following key conclusions were reached:

  1. After being encouraged by the Dutch Minister of Foreign Trade IHC CALAND announced in April 2002 that it would not undertake any new activities in Burma.
  2. On June 11th, 2003 IHC CALAND and FNV (representing also CNV) visited the Burmese ambassador in London.
  3. In September 2002 the main contractor, Premier Oil, announced that it would sell its subsidiary Premier Oil Myanmar to the Malaysian company Petronas. The contract between Premier Oil and Petronas was concluded on September, 12th 2003. On 7 November 2003 IHC CALAND wrote Petronas a letter requesting the company to abide by the OECD-Guidelines. Petronas replied as followed: “On 12th November 2003 the subsidiary of Petronas called PC Myanmar (Hong Kong) (which was named Premier Oil Myanmar before the takeover by Petronas) replied that it would be continuing with the majority of policies established by Premier Oil for their operation in Myanmar and that their human resources strategy and policy regard to the above captioned would reflect this understanding”.
  4. Parties agreed to inform each other about future action with regard to Burma issues related to this specific instance.

In my opinion this is a very good example because it combines an engagement from the corporation (stopping new activities in Burma due to generalized human rights violations) whilst maintaining a pragmatic approach (understanding the contractual agreement that would not allow IHC CALAND to discontinue operations without completing its contract). It also extended the engagement beyond what can be considered as direct responsibility of IHC CALAND by engaging with the main contractor Petronas even once their contractual relation had expired.

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