The OECD is headquartered around a castle-like building, Le Chateau de la Muette, in western Paris. Around 40,000 representatives from the various Member States travel to Paris each year to attend meetings and negotiations.
Every day a large number of meetings are held on the premises. English and French are the official working languages. On site in Paris, each member state has a permanent delegation, which represents the country and monitors the work of the OECD. Each delegation is led by an ambassador. Under him work administrators who are sent from various ministries in the home country. These have the status of diplomats, as they represent their governments. According to AbbreviationFinder.org, OECD stands for Organisation for Economic Co-operation and Development.
All OECD committees and subgroups use the method of putting pressure on those member states that do not want to follow international agreements and recommendations through review, discussion and follow-up. The pressure method, usually called “peer pressure” or “peer review”, encourages countries to be transparent, ie to provide information, explanations and justifications. The policy pursued by the country is compared with how other industrialized countries have chosen to solve the same problem.
The intention is that it will lead to self-criticism and better judgment. Sometimes the voluntary coordination leads to the preparation of non-binding recommendations. The OECD also conducts certain negotiations of a binding nature and draws up regulations that must be complied with in various areas of activity, for example for free flows of capital and investments.
The consensus rule
In all OECD bodies and sub-groups, decisions are taken by consensus, ie with the approval of all members without a vote. All states have a veto on every issue raised. This decision-making system attaches great importance in principle to some member states. The rule is perceived as good for cohesion within the OECD. The process of reaching a solution that everyone can approve creates a positive pressure on the states to comply with what the group as a whole wants.
For many years, however, the consensus rule has also been considered a problem, as it is enough for a single country to be reluctant to accept a proposal in order to prevent a decision. You then have to look for compromise solutions, which is time consuming and risks diluting the agreement. Especially in times of reform, different priorities in different countries have prevented decisions from being made, and the changes have therefore been slow.
The problem has mainly been that the rule of consensus applies to all decisions, even relatively unimportant ones, such as which topics of discussion are to be put on the agenda before a ministerial meeting. At the Council of Ministers’ meeting in May 2004, a vote was therefore introduced on certain issues during a trial period from July 2004 and two years onwards. Under this order, members must still strive for consensus, but if this fails, a vote must be taken. At least 60% of the Member States must vote in favor of the proposal if the decision is to become valid. If three or more countries that together contribute at least a quarter of the regular budget oppose it, the proposal will not pass. Decisions that can be taken by vote concern, among other things, certain administrative issues, budgetary issues and issues concerning committees and subgroups.
When the trial period is over, a consensus decision is required to introduce the new system permanently. The Member States must therefore reach a consensus before the consensus rule can be changed for the better.
Council and Council of Ministers
The Council is the OECD’s highest decision – making body. It consists of the OECD ambassadors of the member countries and a representative of the European Commission who, however, does not have the right to vote in the Council. Meetings at ambassadorial level are usually held every two weeks and are chaired by the Secretary-General. The Council is responsible for the overall OECD policy. Among other things, it makes decisions about the organization’s budget, adopts new members and observers, and issues recommendations and decisions on various issues. All decisions are made according to the consensus rule.
Once a year, usually in April-May, the Council is held at ministerial level, the so-called Council of Ministers’ meeting. The countries ‘finance and foreign or trade ministers then take part in one of the Member States’ presidencies. Sometimes other ministers also participate. Ministers leave a message, often with a political touch in the form of a negotiated communiqué text. This concerns current problems, the general economic situation and trade issues and states which tasks the OECD must focus on in the coming working year.
The Council is chaired by various administrative committees, such as the Executive Committee which prepares the meetings of the Council, the Committee on Budgets, the Committee on Cooperation with Non-Member States and the Working Groups on Individual Administrative Matters. The member countries are usually represented by people from the permanent delegations. Representatives from the capitals of the member states meet at the Executive Committee in Special Session (ECSS). In practice, these meetings have played a major role in the OECD’s reform efforts.
The OECD has virtually one committee for each subject area. Some of the most prominent are the Economic Policy Committee (EPC), the Economic Development Review Committee (EDRC), the Trade Committee (TC), the Agriculture Committee, the Education, Labor Market and Social Affairs Committee (ELSA), the Environment Committee (EPOC), the Industry Committee and the Development Assistance Committee (DAC).
Each committee has working groups on various issues. The number of committees and sub-bodies is around 200. In addition, there is the Business and Industry Advisory Council (BIAC), which organizes employers in OECD countries and their trade union equivalent, the Trade Union Advisory Council (TUAC). OECD for discussions with these bodies.
Committee meetings are generally held a couple of times a year, but this can vary. For most committee meetings, member states send experts from the capital. In other respects, these meetings are held at the official level. Each committee holds a meeting of ministers within its subject area every few years. The large number of committees and sub-bodies has become a problem, as the organization tries to concentrate its work and create a better overview of the areas of activity. Attempts to abolish subsidiaries in the first place have been stopped by the different priorities of different countries. In 2002, the committees were divided into five major thematic groups in order to make it easier to detect possible duplication of work and those that do not belong to the OECD’s main tasks.
The Secretariat and the Directorate
The Secretariat is headed by a Secretary-General and four Vice-Secretaries-General, usually from different geographical areas. These persons include twelve directorates, departments responsible for various subject areas, such as the Economic Department (ECO), the Department for Development Work (DCD) and the Department for Finance, Taxation and Corporate Affairs (DAFFE). The division into directorates corresponds to the division into committees, and the work mostly consists of investigating and analyzing issues on behalf of the committees or the council.
The Secretariat has 2,500, of which a number of hundreds are experts at managerial and administrative level in an area relevant to the OECD. The experts are recruited from the member countries. To avoid dissatisfaction, management strives to maintain an even balance between nationalities among employees. But the employees do not represent the member country they come from but work for the organization in their capacity as international officials. The senior officials have the status of diplomats.
The Secretariat is also based in Washington, Mexico City, Tokyo and Berlin in an attempt to simplify the dissemination of OECD publications. The work carried out within the directorates and committees results in hundreds of books each year, analysis materials, reports, statistics and more. The organization has become known for its publication of statistics, which have been made uniform in order to serve its purpose in international comparisons. The statistics have a high reputation and are considered a reliable source, widely used by journalists, officials, companies and universities.
The governments of the Member States are only responsible for the reports and documents approved by the committees or the Council. Sometimes the secretariat publishes materials and analyzes that have not been discussed by the representatives of the member states. In these cases, the organization itself is responsible for the content.
To facilitate document management between the Secretariat, delegations and capitals, the OECD has its own electronic network, OLIS (On-line Information System).