OECD GUIDELINES FOR RESPONSIBLE BUSINESS

-40 YEARS EXPERIENCE

OECD GLOBAL PARLIAMENTARY NETWORK

12 OCTOBER 2016

Prof. Dr. Roel NieuwenkampCHAIR of the OECD WORKING PARTY ON RESPONSIBLE BUSINESS CONDUCT

OECD Guidelines for Multinational Enterprises

• Comprehensive, multilateral agreement on corporate responsibility

• Binding legal obligation to set up National Contact Point• Globally active complaints mechanism • Recommendations to Multinational Enterprises operating

in or from adhering countries• ‘Firm expectation’ of company behaviour: ethically

compelling• Not legally binding for business• G7 Heads of State Support

- Approx. half of accepted cases -> agreement between parties

• - Approx. 36% of cases: policy changes company

• - Impacts such as:

• - Ending child labour

• - Health & safety improved

• - No oil exploration in World Heritage Site

• - Improved dialogue with trade unions

• - Better Human Rights Due Diligence, etc.

Impacts NCP System – 15 years

Government Consequences

- ECA, Economic Diplomacy- Canada Model – China Gold Case

Responsible Investors

- Vedanta, Soco, Daewoo, Mylan - AFL CIO Shareholder Resolution- Workers Capital

NCP’s Emerging Trend: Teeth

Adoption by the 2011 Ministerial Council Meeting

US Secretary of State, Ms. Hillary Clinton, at the adoption of the update:“If you look at these guidelines, they will be helping us determine how supply chains can be changed so that it can begin to prevent and eliminate abuses and violence.  We’re going to look at new strategies that will seek to make our case to companies that due diligence, while not always easy, is absolutely essential.”

Core due diligence components

Management Systems

Stakeholder Engagement

Remediation

Identify adverse impacts

- Identify most salient RBC risks in the sector

- Identify impacts within your own operations

- Identify impacts linked to business partners

- Prioritise risks based on severity of impact (i.e. not based on proximity to enterprise)

Prevent & Mitigate adverse impacts

- Take appropriate action when enterprise has caused or contributed to impact

- Continue to source from business partners through measurable prevention/mitigation measures or suspend sourcing

- Improve internal controls & capacity

- Build innovative partnerships

Account- Monitor & track impact over

time- Report on due diligence

processes & salient risks- Indicate what has been

achieved and future plans

Due Diligence and Supply Chain Responsibility

• 2011: Multilateral Agreement on Supply Chain Responsibility concerning Labour Standards, Human Rights, etc.

• Backed Up by Legal Obligation NCP’s• Sectoral Guidance

Extractives

Due Diligence Guidance for Responsible Mineral Supply Chains

Agriculture Financial Services

Textile & Garment

Due Diligence Guidance

- TBD Nov 2016

Due Diligence Guidance

- Institutional Investment

- TBD 2017

Due Diligence Guidance for Agricultural Supply Chains

Due Diligence and Supply Chain Responsibility

MP’s push governments to improve their NCP’s

MP’s push governments to promote supply chains

responsibility

MP’s push governments to promote OECD Due Diligence

Guidance for - Minerals

- Agriculture

- Garment and Footwear

What are Legislators doing?

California: Transparency in the Supply Chain Act

US: Federal Procurement Order President Obama

United Kingdom: Modern Slavery Act

France: Due Diligence Law - proposal

Switzerland: Referendum on Due Diligence Law

EU Non Financial Disclosure Directive

EU Conflict minerals Legislation based on OECD DDG

Due Diligence and Legal Developments

Further information

http://mneguidelines.oecd.org

Contact: Prof dr Roel Nieuwenkamp, Chair of the Working Party on Responsible Business Conduct – roel.nieuwenkamp@minbuza.nl

@Nieuwenkamp_CSR

#OECDrbc

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