The OECD Center “for” the accession of Russia to the OECD Declaration on International Investment and Multinational Enterprises

Мария Гирич Мария Гирич Expert of Center Russia-OECD published Russia and the OECD · Trade · Economy · Sustainable development

On May 23, 2018, Russia – OECD Centre took part in a meeting at the Ministry of Economic Development on Russia's accession to the OECD Declaration on International Investment and Multinational Enterprises from 1976.

Within the meeting were discussed the risks and benefits for Russia from its accession to the Declaration. The meeting was attended by representatives of the Central Bank, Federal Antimonopoly Service (FAS), Ministry of Economic Development, Ministry of Mnergy, Ministry of Finance, Ministry of Labour, Ministry of transport, etc.

Antonina Levashenko, the Head of the Russia-OECD Center, presented the benefits of joining the Declaration. The Declaration includes several parts, the main of which are responsible for business and national treatment for foreign investments.

Since 2010 the OECD at the initiative of individual countries is also preparing industry guidance on responsible business in the field of textiles, agriculture, mining, conflict minerals and for the regulation of institutional investor's activities.

The accession of Russia to the Declaration will promote the standards of responsible business in the country and hence, will protect Russian companies' interests abroad when entering new markets. It will also increase the competitiveness of Russian goods and services and reduce the risks of expropriation of assets of Russian companies in third countries.

Elena Stoyanova, the Deputy Director of the Department of multilateral cooperation and special projects of the Ministry of economic development, also pointed a number of benefits that Russia can get when joining the Declaration. As for the positions of state bodies,some of them were positively about the accession (FAS, Central Bank, Ministry of Economic Development of the RF), but other (Ministry of Finance, Ministry of Labor, Ministry of Transport) did disagree with it because of certain risks. According to FAS, the Declaration is a good tool for organizing the activities of companies and includes some of the issues on which FAS is currently working, for example, in terms of competitive compliance. The Bank of Russia also supported the accession to the Declaration, but some issues should be agreed with the principles of the common financial market within the EAEU.

The Ministry of Energy warns that the additional requirements for the activities of companies may become burdensome and hamper the development of the energy companies themselves.

As for the position of public authorities, the Ministry of Transport drew attention to the Advisory nature of the Declaration. The Ministry of Labor considers that the accession is premature and points out as risks the vague definition of multinational corporations, as well the risks of violation of the WTO. However, the Ministry of Labor missed taking into account the fact that States that have acceded to the Declaration are also members of the WTO. In addition, the Ministry of Labor considers that Russia is already involved in more than 70 ILO conventions and accession to the Declaration, which already contains part of the principles similar to the ILO, will not benefit.

The representative of the Ministry of Finance was asked the about the cost of Russia's accession to the Declaration. He had a skeptical position on it because of the inconsistency of the activities of national contact points (NCP) with the principles of alternative dispute resolution. Furthermore, he also mentioned the arbitration and the Russia's obligations to the FATF without answering directly the question of the cost of accession.