Living up to expectations on Responsible Business Conduct

By Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct

The OECD Guidelines for Multinational Enterprises (OECD Guidelines) and the National Contact Points (NCPs) through which NGOs, unions and communities can submit complaints about corporate behaviour, are often mentioned in the context of the backlash against globalisation and the call for responsible supply chains. They have been considered as a concrete and unique instrument on corporate responsibility to deal with the downsides of globalisation by creating an international level playing field for inclusive and sustainable trade and investment. In this regard, the network of 48 NCPs play an important role to promote responsible business conduct but also as a globally active mechanism to deal with cases of alleged non-observance of the Guidelines. Recently, a number of noteworthy developments have taken place inside and outside the OECD that have created a new momentum on responsible business conduct worldwide, confirming the prominence of the OECD Guidelines and its in-built implementation mechanism, the NCPs.

First of all, on 7-8 June OECD Ministers met in Paris to discuss “Making Globalisation Work: Better Lives for All”. The resulting Ministerial Statement which guides the work of the OECD in the next year, places great emphasis on responsible business conduct as a concrete tool to promote good globalisation. Ministers recognised the OECD Guidelines as the leading international instrument for this purpose. Ministers encouraged the OECD to develop a general due diligence guidance for responsible business conduct to provide practical support to companies on the implementation of the OECD Guidelines. They also committed to “fully functioning and adequately resourced NCPs, and to undertake a peer learning, capacity building exercise or a peer review by 2021, with the aim of having all countries peer reviewed by 2023.” In two years, at the occasion of its Ministerial meeting in 2019, Ministers expect a report on progress made on these commitments. Equally, peer pressure in the OECD Council and the OECD Working Group on Responsible Business Conduct has also increased to ensure that all governments implement the obligations they committed to when adhering to the OECD Guidelines.

On 17 May, the OECD Council decided to incorporate the OECD Due Diligence for Responsible Supply Chains in the Garment and Footwear Sector in an OECD Council Recommendation. While companies themselves are the audience of OECD due diligence guidance, the Recommendation represents a common position by the 47 Government Adherents to the OECD Guidelines expressing their commitment and political will to promote the use and implementation of the due diligence guidance, including through their NCPs. There are now four OECD Council Recommendations on sector-specific due diligence guidance.*

The reach of the Guidelines was further enlarged on 20 June, when Kazakhstan became the 48th Adherent. As such, Kazakhstan has committed to promoting and enabling responsible business conduct and to establish a NCP to function as a problem-solving mechanism to deal with possible adverse impacts of corporate behaviour.

However, beyond the OECD itself, the commitment to responsible business conduct also featured high on the G20 agenda in Germany this year. “In order to achieve sustainable and inclusive supply chains”, the G20 leaders on 7-8 July vowed, “to fostering the implementation of labour, social and environmental standards and human rights”. The G20 recognised the important role of the OECD Guidelines, to promote responsible business conduct, as well as the NCPs as a non-judicial grievance mechanism for access to remedy. The call echoed the Ministerial Declaration by the G20 Labour and Employment Ministers of 18-19 May, which re-affirmed commitments to the OECD Guidelines, the responsibility of business to exercise due diligence, and strengthen and increase the visibility of NCPs.

The impetus provided by the G20 and recent developments in the OECD have further strengthened the position of the OECD Guidelines as a concrete instrument to promote responsible supply chains globally. This heightened recognition comes with expectations. The network of NCPs has a key role to play to realise the full potential of its reach.

*                  The Recommendation of the Council on Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Recommendation of the Council on the OECD-FAO Guidance on Responsible Agricultural Supply Chains, and Recommendation of the Council on the Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector. For the full text of the Recommendations please consult the OECD legal instruments database.