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Business Engages Top International Tax Officials at OECD Conference in Washington

Published on June 5, 2007
Assistant Treasury Secretary Eric Solomon spoke at the OECD tax conference.
Assistant Treasury Secretary Eric Solomon spoke at the OECD tax conference.

Washington, DC, June 5, 2007 – Nearly 300 U.S. and international executives, government officials and other tax experts convened at the Ronald Reagan Building and International Trade Center in Washington, D.C., for a major two-day conference, concluding today, which highlighted the work of the Organization for Economic Cooperation and Development (OECD) in the development of national tax policy and international tax arrangements governing cross-border trade and investment.

Organized by the OECD, the United States Council for International Business (USCIB), and the Business and Industry Advisory Committee (BIAC) to the OECD, the conference, titled “New OECD International Tax Initiatives: Looking Ahead,” sought to provide American business with the opportunity to interact directly with key representatives from the OECD and its Center for Tax Policy and Administration.  Also on the program were senior representatives of the U.S. Treasury/Internal Revenue Service and private industry.

The 30-nation OECD seeks to promote growth through coordination of economic and regulatory policies between its members, all of which are democratic market economies.  BIAC, composed of major business federations from all OECD countries, provides policy guidance to OECD members.  USCIB is BIAC’s representative in the United States and regularly fields American industry experts for BIAC and OECD activities.

Constance A. Morella, U.S. ambassador to the OECD, opened the influential annual conference, now in its fourth year.  “Thomas Friedman has said the world is flat, but it’s worth noting that there are still some bumps, including in tax policy,” she commented.  “The OECD tries, with strong business support, to flatten some of those bumps.”

Thelma Askey, deputy secretary general of the OECD, also addressed the gathering.  “The U.S. government plays a leading role at the OECD in getting agreement on international tax rules,” she said.  “Without clear, transparent rules that have the support of governments around the world, business often finds itself tied up in uncertainty, intractable disputes and double taxation.”

In a keynote address today, Eric Solomon, the Treasury Department’s assistant secretary for tax policy, presented an overview of the U.S. tax system and its effects on American competitiveness.  He noted that, since the last major overhaul of the U.S. tax code in 1986, other developed countries had lowered corporate tax rates to spur investment and boost employment.

“As the global economy continues to expand and markets become more open to investment, developed economies such as those within the OECD continue to adapt their corporate tax systems to compete in the global marketplace,” Mr. Solomon stated.  “However, since 1993, the federal statutory corporate tax rate has remained 35 percent.”

Also speaking at the conference were Jeffrey Owens, head of the OECD’s Center for Tax Policy & Administration; Patrick J. Ellingsworth, executive vice president, Royal Dutch Shell and chairman of BIAC’s Taxation Committee; Peter M. Robinson, president of USCIB; and numerous tax experts from the OECD secretariat, U.S. government and major multinational companies.

The event drew representatives from more than a hundred top companies, testifying to the broad importance of the OECD’s work and its influence on international taxation policies.  The full conference agenda is available at www.uscibtax.org.  Among the topics up for discussion were:

  • attribution of profits to permanent establishments
  • the application of the transfer pricing guidelines
  • issues arising from business restructurings
  • cooperation and information exchange in international tax administration
  • other tax treaty topics, such as the non-discrimination principle and collective investment vehicles
  • current OECD work on cross-border services, and the OECD’s dispute resolution report.

“As we move forward on these issues, it is essential that U.S. business provide ongoing input,” said the OECD’s Mr. Owens.  “Conferences like these, and input from USCIB, ensures that the solutions we adopt work for American firms operating in the global marketplace.”

Lynda K. Walker, USCIB’s vice president and international tax counsel, commented that the annual conferences have become a highlight of the U.S. tax calendar.  “By bringing together the main U.S.-based organizations that work on international tax policy, these events enable American business to more effectively follow and provide input to the OECD’s work.”

Supporting sponsors of the event included the International Fiscal Association-USA Branch, the International Tax Policy Forum, the National Foreign Trade Council, the Organization for International Investment, the Tax Council Policy Institute and the Tax Foundation.

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership includes more than 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion.  As the exclusive American affiliate of three key global business groups – the International Chamber of Commerce, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD –  USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade.  More information is available at www.uscib.org.

Contact:

Jonathan Huneke, VP communications, USCIB

+1 212.703.5043 (office), +1 917.420.0039 (mobile) or jhuneke@uscib.org

Conference agenda

Remarks by Assistant Treasury Secretary Solomon (Treasury Department website)

OECD website

BIAC website

More on USCIB’s Taxation Committee

U.S. Business Welcomes OECD Report on Countefeiting and Piracy

Published on June 4, 2007

New York, N.Y, June 4, 2007 – Representatives of America’s top global companies applauded today’s release of a landmark report from the 30-nation Organization for Economic Cooperation and Development (OECD) on the economic costs of counterfeiting and piracy.  Release of the report’s summary was timed to coincide with this week’s G8 summit in Germany, where the issue is on the agenda for leaders of the world’s leading economies.  The full report will be released this summer.

The United States Council for International Business welcomed the OECD report, “The Economic Impact of Counterfeiting and Piracy.”  The report includes new figures on the scope of international trade in fake goods, and concludes that the magnitude and effects of the problem are “of such significance that they compel strong and sustained action” from governments, business and consumers.  The report recommends increased enforcement of existing laws and tighter cooperation between governments and industry to make current policies more effective.

“Policy makers need to pay close attention to what the OECD is saying,” according to USCIB President Peter M. Robinson.  “Counterfeiting and piracy take a heavy toll on governments, businesses of all sizes and of course consumers.   It’s wholesale theft, by well organized criminal networks, that endangers consumer health and safety, harms the reputation of companies, cuts into tax revenues and discourages much-needed foreign investment.”

The OECD report says the flow of illicit cross-border trade in so-called “hard goods,” i.e., tangible counterfeit and pirated products, could be up to  $200 billion, a figure greater than the national GDP of some 150 countries.  But it concedes that this represents just the tip of the iceberg, since the OECD did not tally the cost of domestically produced and consumed counterfeit and pirated products, or the economic costs of online piracy.  The report concludes that, if these factors were included, “the magnitude could be several hundred billion dollars more.”

The report provides clear indications that product counterfeiting and piracy are growing – and affect virtually every country, industry and product category.  The OECD notes that, while governments are increasingly acknowledging the problem and putting laws and regulations in place, more effective enforcement is critical.

For the past several years, business representatives and others have been pushing the G8 to more forcefully address the growing tide of counterfeiting and piracy. Last week, a group of top executives from around the world wrote to G8 leaders under the umbrella of Business Action to Stop Counterfeiting and Piracy (BASCAP), an initiative of the International Chamber of Commerce, urging them to take bigger, bolder steps to beat back counterfeiting and piracy.

The private sector contributed data and analysis to the authors of the report, working through the Business and Industry Advisory Committee (BIAC) to the OECD, and it wants to see the OECD do more to assess the scope of the problem and explore solutions.

“The OECD report points out that these illegal activities have significant effects on governments, industry, consumers and society at large from lost innovation, creativity, investment, jobs and overall economic growth and development, especially in developing markets,” said Richard Johnson of the law firm Arnold & Porter, who chairs the BIAC counterfeiting task force.  “We support the OECD’s conclusion that more work is needed in this area, and we stand ready to help find ways to do this.  We hope the upcoming G8 summit will endorse the findings of the OECD report and its recommendations for future government actions.”

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership includes more than 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion.  As the exclusive American affiliate of three key global business groups – the International Chamber of Commerce, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD – USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade.  More information is available at www.uscib.org.

Contact:

Jonathan Huneke, VP communications, USCIB

+1 212.703.5043 (office), +1 917.420.0039 (mobile) or jhuneke@uscib.org

OECD Report on Counterfeiting and Piracy

BIAC website

BASCAP website

More on USCIB’s Intellectual Property Committee

US Executives to Engage Top International Tax Officials at OECD Conference in Washington

Published on May 10, 2007

3695_image002Washington, D.C., May 10, 2007 – U.S. executives and tax counsel will have unparalleled access to key tax officials from the Organization for Economic Cooperation and Development, as well as United States and other OECD member nations, at a major conference, “New OECD International Tax Initiatives: Looking Ahead,” June 4 and 5 at the Ronald Reagan Building and International Trade Center in Washington, D.C.

The conference, organized by the OECD, the United States Council for International Business (USCIB), and the Business and Industry Advisory Committee (BIAC) to the OECD, is the third in a series of annual events spotlighting the increasingly important work of the OECD in the area of international taxation.  It is produced in association with the International Fiscal Association-USA Branch, the International Tax Policy Forum, the National Foreign Trade Council, the Organization for International Investment, the Tax Council Policy Institute and the Tax Foundation.

“This conference provides an excellent opportunity to learn more about the important tax policy work being done through the OECD, and for U.S. business to further engage in this process,” said Lynda K. Walker, USCIB’s vice president and international tax counsel.  “It is evidence of the significance of the projects being undertaken by the OECD that such high-level officials are planning to join us for this important event.”

The United States, as a founding member of the OECD, has played an active role in developing the organization’s tax program.  The OECD presently consists of 30 advanced industrialized nations, although in the tax area Argentina, Chile, China, India, Russia and South Africa play an active role in the development of the organization’s work.  It facilitates cooperation through the development of standards for international tax policies affecting multinational business and other taxpayers.

The June conference will feature an impressive line-up of tax policy experts from the U.S. Treasury/Internal Revenue Service, the OECD’s Center for Tax Policy and Administration, and private industry.   Eric Solomon, assistant secretary of the Treasury for tax policy, will be a keynote speaker.  Ambassador Constance A. Morella, the U.S. representative to the OECD, will open the conference, along with OECD Deputy Secretary General Thelma Askey.

The OECD seeks to promote growth through the coordination of economic and regulatory policies between its member nations, which are all democratic market economies.  BIAC is composed of major business federations from the 30 OECD countries, and provides policy guidance to OECD members and its Paris-based secretariat.  USCIB is BIAC’s representative in the United States and regularly fields American industry experts for BIAC and OECD activities.

Ms. Walker noted that the top OECD tax officials have been involved in the planning of the program.  Among those participating from the OECD are Jeffrey Owens, the director of the Center for Tax Policy and Administration, Mary Bennett, head of its division on tax treaties, transfer pricing and financial transactions, Caroline Silberztein, head of its transfer pricing unit, and Jacques Sasseville, head of its tax treaty unit.

Panels at the conference will address:

  • Attribution of Profits to Permanent Establishments
  • Achieving Greater Consensus on the Application of Transfer Pricing Guidelines
  • Issues Arising from Business Restructurings
  • International Tax Administration:  Co-operation and Information Exchange
  • Other Tax Treaty Issues, including: A Re-examination of the Nondiscrimination Principle and Tax Treaty Application to Collective Investment Vehicles
  • Current OECD Work on Cross-Border Services
  • OECD’s Dispute Resolution Report

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership includes some 300 U.S. companies, professional service firms and associations, whose combined annual revenues exceed $3 trillion.  As American affiliate of the leading international business and employers organizations, including BIAC, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.

Contact:

Jonathan Huneke, VP communications, USCIB

(212) 703-5043 or jhuneke@uscib.org.

Conference agenda, registration form and other information

More on USCIB’s Taxation Committee

OECD website

OECD Secretary General Welcomed in New York and Washington

Published on February 22, 2007
USCIB President Peter M. Robinson welcomed Mr. Gurría (center) and unveiled a new brochure on the OECD and business. Also pictured (L-R): BIAC Secretary General Tadahiro Asami, Amb. Connie Morella and BIAC Chairman Charles Heeter (Deloitte).
USCIB President Peter M. Robinson welcomed Mr. Gurría (center) and unveiled a new brochure on the OECD and business. Also pictured (L-R): BIAC Secretary General Tadahiro Asami, Amb. Connie Morella and BIAC Chairman Charles Heeter (Deloitte).

Angel Gurría, the former senior Mexican government official who took over as secretary general of the Organization for Economic Cooperation and Development last year, was warmly welcomed by USCIB members and friends at receptions in Washington, D.C. and New York on February 14 and 15.

The Paris-based OECD is the main intergovernmental forum for consultation and cooperation on economic and social policy among the United States, Europe, Japan and other advanced industrial economies, and it provides policy guidance to non-member economies such as China, Russia and India.

The Washington reception took place at the offices of Alston & Bird LLP following a meeting of USCIB’s Taxation Committee.  Mr. Gurría, joined by Ambassador Connie Morella, the U.S. representative to the OECD, provided an advance look at USCIB’s upcoming OECD tax conference slated for this June, the third in a highly successful series of annual events focusing on the OECD’s influential work in areas like transfer pricing and reducing double taxation.

Ambassador Morella was also on hand at the Century Association in New York, where she was joined in welcoming Mr. Gurría by Tadahiro Asami of Japan, the new secretary general of the Business and Industry Advisory Committee (BIAC) to the OECD, BIAC Chairman Charles Heeter
(Deloitte), former USCIB President Abraham Katz, now president of the International Organization of Employers (IOE), and USCIB President Peter M. Robinson.  Both BIAC and IOE form essential parts of USCIB’s global network.

In his remarks, Mr. Gurría reminded guests that the OECD’s founding charter mandated consultation with the business community, represented by BIAC, as an essential part of the organization’s structure.  He praised the depth of BIAC’s work and American representation within BIAC, and he singled out USCIB members for their staunch support of the OECD’s funding in the most recent U.S. budgetary cycle.

Mapping out the OECD’s agenda for the coming months and years, Mr. Gurría said that he hoped the organization would continue to play its central role of championing open markets while helping member countries address the challenges of global integration.  He warned that open trade and investment policies are under threat in a number of countries, both within the OECD and outside it.  Mr. Gurría also looked ahead to increased OECD policy guidance to non-member economies such as China and India, and he laid out plans for new work in promoting innovation, including an upcoming OECD ministerial on innovation and growth this May and a ministerial on the Internet in mid-2008.

Mr. Gurría, who served in the 1990s as Mexico’s foreign minister and later finance minister under President Ernesto Zedillo, became head of the OECD in June 2006, the first representative of a developing country to lead the 30-nation group.  He has made a top priority of broadening awareness of the OECD in the United States, especially in the business community and on Capitol Hill.

BIAC’s Mr. Asami, a former banker who became head of the OECD business group in January, also took advantage of the visit to meet with USCIB staff to discuss the range of American business engagement in BIAC and the OECD.  He said that while he was new to BIAC, he was very familiar with the work of the OECD from his work with the Bank of Tokyo and later with Japan’s Institute for International Monetary Affairs.

Mr. Asami noted that BIAC might wish to make a priority of expanding and intensifying the OECD’s engagement with potential members such as Russia, which is actively seeking OECD membership, and eventually China.  He said such a move could help both solidify the reform process and prevent backsliding in key emerging markets.  BIAC is actively working to engage business from non-OECD countries in Latin America and China, to complement current BIAC observer members from Russia, Latvia, Israel and India.

Staff contact: Ronnie Goldberg

More on the Business and Industry Advisory Committee to the OECD

New brochure: “The OECD Means Business” (PDF file)

More on the June conference, “New OECD Initiatives in the International Taxation Area: Looking Ahead”

OECD website

Business Urges Senate Not to Block OECD Funding

Published on October 11, 2006
Senator Orrin Hatch (R.-Utah) addressing an OECD tax conference in Washington earlier this year – the organization’s work on international tax policy has been repeatedly mischaracterized.
Senator Orrin Hatch (R.-Utah) addressing an OECD tax conference in Washington earlier this year – the organization’s work on international tax policy has been repeatedly mischaracterized.

New York, N.Y., October 11, 2006 – America’s top global companies have again urged Congress not to withhold funding for the Organization for Economic Cooperation and Development due to a misunderstanding over the nature of the 30-nation body’s work to coordinate international tax policies.

In a letter to all the members of the Senate, the United States Council for International Business (USCIB) expressed concern about language in Section 577 of H.R. 5522, the Fiscal Year 2007 appropriations for Foreign Operations, Export Financing, and Related Programs. The language would prohibit funding of activities undertaken by the OECD that are “designed to hinder the flow of capital and jobs from high-tax jurisdictions to low-tax jurisdictions or to infringe on the sovereign right of jurisdictions to determine their own domestic policies.”

USCIB said it “strongly disagrees with the thrust and implications of this language and believes that its inclusion in the bill is unwarranted and inadvisable.” The letter was signed by Peter M. Robinson, president of USCIB, and Michael P. Reilly, chair of USCIB’s Taxation Committee.

From time to time, similar language mischaracterizing the work of the OECD has found its way into pending legislation. USCIB has reminded members of Congress on several previous occasions of the valuable work being done by the OECD, both in coordinating tax policies and in other areas critical to U.S. competitiveness.

“Section 577 reflects charges by certain critics of the OECD that have been made repeatedly in recent years and that rely on misunderstanding and mischaracterization of the nature and utility of the OECD and its work,” the USCIB letter stated. Specifically, these critics have sought to portray an OECD effort, aimed at curtailing the abuse of overseas bank secrecy laws by criminal and terrorist groups, as an attempt to encourage ”tax harmonization” and the elimination of tax incentives for investment. “This charge is without factual basis,” USCIB said.

The 30-nation OECD seeks to promote growth through coordination of economic and regulatory policies between its members, all of which are democratic market economies. USCIB serves as the American affiliate of the Business and Industry Advisory Committee (BIAC) to the OECD, a group that provides the official business voice on OECD matters.

For the past few years, USCIB has joined with the OECD and BIAC to hold an annual conference in Washington, D.C., most recently this past June, explaining the OECD’s role in international taxation policy and the importance of engagement by the business community in the OECD process.

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment. Its membership includes some 300 U.S. companies, professional service firms and associations whose combined annual revenues exceed $3 trillion. As American affiliate of the leading international business and employers organizations, including BIAC, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.

Contact:
Carol Doran Klein
202.682.7376or cdklein@uscib.org

USCIB letter to the Senate on H.R. 5522

More on the OECD’s work on taxation (OECD website)

More on USCIB’s Taxation Committee

Interview with OECD Secretary General Angel Gurría

Published on June 1, 2006

June 2006

 

Interview with OECD Secretary General Angel Gurría

 

On June 1, Angel Gurría of Mexico took the reins as secretary general of the 30-nation Organization for Economic Cooperation and Development (OECD).  The Paris-based OECD assesses economic policies and compares economic performance in the United States, the European Union, Japan and many other advanced industrial economies, and it provides policy guidance to non-member economies such as China and Russia.  U.S. business has direct input to the organization through the Business and Industry Advisory Committee (BIAC) to the OECD, part of USCIB’s global network.  Mr. Gurría, who served as Mexico’s foreign affairs minister and finance minister in the 1990s, spoke with USCIB’s Jonathan Huneke just prior to taking office.

 

Angel Gurría

 

USCIB:  What are your priorities for the OECD, both immediate and longer term?

 

GURRíA:  We should address the issue of global imbalances, which is worrying everybody.  Here I think it is a matter of substance as well as coordination – the imbalances between savings and expenditure, the problems with the current-account deficits and the related issue of the exchange rate policy of some of the larger trading countries.  Particularly, here the question of China crops up as very relevant, because to get the balance back, you obviously need both sides to be working.  Not just the trade and fiscal deficits on the U.S.side, and similarly not just the exchange rate on the Chinese side.  Both have to be seen in parallel.

 

Today, there are a few other threats to the world economy out there.  How does one deal with the economic consequences of high prices of energy, of oil in particular?  There is also a risk of rising protectionism.  The Doha Round obviously does not seem to be going very well, and the problem with trade is that normally if you do not make progress, you regress.  Another threat is the deterioration in the climate for international investment.  We do not seem to be making enough progress on this front.  And within the OECD – the house of “best practices,” if you will – we obviously have to practice what we preach.  Our members have to be the shining examples.

 

USCIB:  Could you elaborate?  The upsurge in economic nationalism is very worrisome for our members.

 

GURRÍA:  That’s one of my systemic concerns.  We have a number of fairly recent examples, in France, Italy, Spain, Belgium, Luxembourg, and then, of course, in the United States itself.  That is just among OECD countries.  Now, if we look at non-OECD countries as well, we have cases in Russia, Venezuela, and most recently what happened in Bolivia with energy.  Obviously, these are very big issues, very relevant to the good functioning of the world economy and the confidence of foreign investors.  These kinds of developments threaten the more efficient allocation of resources.   Investors will think twice, some may leave countries where they have invested because of fear of changes in attitudes with respect to the investment climate by the local government.  That is not good.  In the OECD, clearly, as I said, we have to be the ones who lead by example.

 

USCIB:  What is the significance of a Mexican taking over as secretary general of the OECD, both for the organization and for Mexico?

 

GURRÍA:  I think it shows that the OECD is a truly global organization.  It also shows the transparency of the process through which the Secretary-General was chosen.  It really was an election where countries were free to choose the candidate they thought  was the best suited to lead the Organisation, given the profile they had defined before the process started.  Of course, at the OECD it is one country, one vote, whereas at the World Bank or the IMF it depends on shareholding.  But I think this process is one that others can learn from.  From the point of view of Mexico, we have been there for 12 or 13 years.  I personally chaired the annual ministerial meetings in 1999.  It is important because we are going to be looking at outreach, at the possibility of bringing in developing country members.  As someone from a developing country, I  think I am well suited to do that job.

 

USCIB:  Does the OECD’s recent addition of countries from Central and Eastern Europe affect the way the organization operates?  Does it change any of the priorities?

 

GURRÍA:  I think it already has.  The need to enlarge the membership, of course, was felt very strongly by the Europeans.  So far, four of the ten new EU countries are now OECD members, and the others keep abreast of the OECD work.  But, also, there are a number of countries that are very large – Brazil, Russia, India, China and South Africa – that are not formal members, but cannot be ignored.  If you really aspire to be a global organization, you have to consider them in everything you do.  So, we have been working with them on this outreach effort.  Whether they will become full members going forward is both a question of their own interest and preparedness, and also the collective political will of today’s members.  Here there are technical issues, economic issues, issues of best practices, but there are also financial and governance issues.

 

Decisions in an institution like the OECD, governed by consensus, are made differently whether there are 15, 30 or 45 members.  There comes a moment when you can no longer rely on consensus or unanimity for practical purposes.  It leads to paralysis rather than democracy.  Actually, the members have just finished working on a new governance system, which would give more weight to qualified majority votes on a broader number of issues than is the case today, so that we can have a smoother decision-making process.  After that, the next step is to look hard at the financing issues, budgetary costs of an enlarged membership.  Then, the third will be to consult on countries which have already expressed an interest and, finally at a later stage, on countries which should be approached to see if they are interested in a closer involvement with the OECD.

 

USCIB:  Why should business, American business in particular, pay attention to the OECD?

 

GURRÍA:  Well, the OECD played a very important role in the time of competing ideologies, when it was the market approach versus the centralized approach.   Now, of course, it’s a question of best practices.  How do you actually spread the best practices for the purpose of having a world economy that works better?  We are the mouthpiece of the market economies.  We are the institution that identifies, analyzes, quantifies and assesses, and then proposes best practices to countries.

 

If we go out to non-members, and get some of these very large economies to adopt some of the same policies, then, of course, we will magnify our own impact.  This is why the OECD deserves support.  In terms of cost-benefit, the OECD is one of the institutions that provides greater returns to its shareholders, because it is not only putting out documents or informed analyses, it is basically connecting with the countries of the world in terms of how to share these best practices.

 

USCIB:  How do you see the relationship with BIAC and the business community in general?

 

GURRÍA:  One of the things that make us unique is the relationship with BIAC.  It makes us not only stronger, but wiser and more sensitive to the issues of the private sector, to enable companies to do what they do best, which is to produce, innovate, create wealth and jobs, and improve the welfare of societies in the world.  And BIAC is our “sounding board,” : not only do we receive input from the private sector but we also receive feedback on our own proposals or ideas.  This is particularly the case with USCIB, which has not only been very supportive but is also a critical source of input in terms of the quality of the policies and the direction of our efforts.

 

USCIB:  One of your predecessor’s priorities was exploring ways to engage other elements in civil society, NGOs in particular.  How do you see that relationship developing?

 

GURRÍA:  “Civil society” is a very broad and sweeping expression.  I always hesitate to use it, because I don’t want to use words whose meaning I do not grasp fully.  BIAC is specific – it represents the businesses of the world, the global firms, one of the main engines of the global economy.  They’re the ones who pass around knowledge, capital, technology, etc., and having them as interlocutors fulfills a particular role which cannot be substituted by anybody else.  Just like having TUAC [Trade Union Advisory Committee] as interlocutors gives us the voice of the unions around the world, and of the people who are dealing with workers.  Today there are more groupings than business, or unions, or governments.  They are represented by some of these other organizations whose voices, obviously in many cases, have become very important, and where one has always to keep a close and vigilant eye. And we also have to keep an open ear and an open mind towards them.   But I don’t think they’re exclusive.

 

USCIB:  What are your thoughts on some of the key issues for our members with respect to the OECD – corporate social responsibility, bribery and corruption, corporate governance, counterfeiting and piracy?

 

GURRÍA:  On these issues, the OECD, in a way, already wrote the book.  On corporate governance, we were the ones who first started to work on it, and with the political detonator like Enron it became very newsworthy, and of course it triggered Sarbanes-Oxley and the equivalent in other countries.  But long before that, the OECD was concentrating on good corporate governance.

 

As you know, we got very close to having a treaty on international investment and corporate responsibility, which unfortunately didn’t come to fruition.  But a lot of the work still is there, and a lot of it continues to inspire regulators as well as the companies themselves.  And a lot of institutions are practicing self-restraint as part of their own way of life, and that came from the OECD, and we’ll continue to make progress there.  And by the way, here BIAC was an absolutely indispensable interlocutor, because if you’re not working with BIAC every day on these issues you could go out on a limb and be irrelevant.  BIAC is the one that keeps us close to the ground.

 

USCIB:  What will your profile be in the U.S? And how do you see the relationship with Congress?

 

GURRÍA:  Well the U.S. is our major shareholder.  They pay for about a quarter of our budget.  They are a very, very important player.  They are active in every committee.  If anything, I think, what we need is to work more in the other direction: bring the OECD to the U.S, because the U.S. is very present at the OECD.  How does one drive home the idea that the OECD has been so positive and so useful, with a number of initiatives that provided specific measurable benefits to the U.S.?  The first one being, of course, the fact that the OECD, as I said before, is the institution that is promoting the idea of open markets, of free economies, in fact a promoter of market economic democracy and freedom as translated into practice every day.  This is what the OECD is preaching to all countries, so that they can see for themselves what has worked.  If we didn’t exist, they’d have to create an institution like the OECD.

 

USCIB:  Thank you very much for your time, Mr. Gurría, We wish you much success in Paris.

 

GURRÍA:  Thank you.

 

More on the Business and Industry Advisory Committee to the OECD

 

OECD website

 

 

Business Asks for Realistic Approach on OECD Corporate Governance Principles

Published on February 24, 2004

During February’s meeting of a key steering group of the 30-nation Organization for Economic Cooperation and Development, negotiations on the newly revised OECD Principles on Corporate Governance reached a crucial stage.  The principles are to be finalized for adoption at May’s OECD ministerial meeting in Paris.

Commenting on the negotiations of the government experts, members of the OECD’s Business and Industry Advisory Committee(BIAC) asked their governments to sustain the notion that “one size does not fit all” in corporate governance standards.

Every national regulatory system has to find its own balance between regulation by governments and self-regulation, BIAC members said.  A level of diversity is necessary for the maintenance of an internationally competitive environment, and companies welcome the new emphasis given to the effective enforcement of existing corporate governance rules.  Business believes, however, that having clear, concise and understandable OECD principles is necessary for their effective enforcement.

The 38 business federations from all the OECD countries belonging to BIAC – and the companies they represent – will continue to take the discussions on corporate governance seriously and participate actively in the elaboration and revision of corporate governance laws and codes in their countries.

Staff contact: Ariel Meyerstein 

BIAC website

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