1.
PROMOTING RESPONSIBLE
BUSINESS CONDUCT
OECD Guidelines for Multinational Enterprises
and National Contact Points
June 2016
Tihana Bule, Economist and Policy Analyst
Kathryn Dovey, Manager, NCP Coordination

2.
OECD and global standard setting
Scope and importance of responsible business conduct
Responsible business conduct at the OECD
OECD Guidelines for Multinational Enterprises
Implementing the Guidelines
National Contact Points

3.
THE OECD:
GLOBAL STANDARD SETTING

4.
• Global policy network for
standard setting and peer
learning
• Established in 1961
• 34 governments
• 250 committees
• 40 000 senior government
officials
• 2 500 secretariat staff
• Systemic business, trade
union and NGOs engagement
The OECD

5.
Covering a wide range of policy areas

6.
• Policy commitment to an open and transparent investment environment
– OECD Guidelines for Multinational Enterprises
– National Treatment, Conflicting Requirements, and International Investment
Incentives and Disincentives
• Open to non-OECD members, currently 46 adherent governments from all
regions of the world
– 34 OECD members
– 12 non-OECD members
• OECD Investment Committee
– Working Party on Responsible Business Conduct only body of its kind in the
world
– Regular consultations with stakeholders
OECD Declaration on International Investment
and Multinational Enterprises

7.
Adherents to the OECD Declaration
Argentina (1997)
Australia (1976)
Austria (1976)
Belgium (1976)
Brazil (1997)
Canada (1976)
Chile (1997)
Colombia (2011)
Costa Rica (2013)
Czech Republic (1995)
Denmark (1976)
Egypt (2007)
Estonia (2001)
Finland (1976)
France (1976)
Germany (1976)
Greece (1976)
Hungary (1994)
Iceland (1976)
Ireland (1976)
Israel (2002)
Italy (1976)
Japan (1976)
Jordan (2013)
Korea (1996)
Latvia (2004)
Lithuania (2001)
Luxembourg (1976)
Mexico (1994)
Morocco (2009)
Netherlands (1976)
New Zealand (1976)
Norway (1976)
Peru (2008)
Poland (1996)
Portugal (1976)
Romania (2005)
Slovak Republic (2000)
Slovenia (2002)
Spain (1976)
Sweden (1976)
Switzerland (1976)
Tunisia (2012)
Turkey (1981)
United Kingdom (1976)
United States (1976)
Ukraine (2016)
European Union (observer)
ADHERING COUNTRIES SHARE
OF GLOBAL FDI FLOWS
2010-2015
ADHERING COUNTRIES SHARE
OF GLOBAL FDI STOCK
2014

8.
SCOPE AND IMPORTANCE OF
RESPONSIBLE BUSINESS CONDUCT

9.
• Goes beyond philanthropy
• Focuses on addressing environmental and social impacts of
business operations
• Part of core business and risk management, including in the
supply chain and business relationships
• Important for all businesses
RBC – Focus on Impact
ensuring a positive contribution to overall developmentResponsible
Business
Conduct avoiding and addressing negative impacts
1
2

10.
• Convergence and coherence since 2011
• Recognition in the Sustainable Development Goals and Paris Agreement
• Integration in numerous international, regional and domestic
commitments:
– G7 leaders statement
– UNSC Resolutions
– Trade agreements and bilateral investment treaties
– Market access provisions
– EU CSR Strategy and new directives
– National strategies: UK Modern Slavery Act, French legislative
developments, U.S. regulations/National Action Plan, Dutch agreement on
textiles, Chinese guidelines
• Increasing integration in development finance, by investors, stock
exchanges, banks, pension funds, sovereign wealth funds, export credit
agencies
Global attention to RBC

11.
RESPONSIBLE BUSINESS CONDUCT
AT THE OECD

12.
RBC at the OECD
• OECD Guidelines for Multinational
Enterprises
– Clear role for home governments
– Accountability
– Sector Guidances
• RBC in the Policy Framework for
Investment and other policy areas
– Development policy and co-operation;
corporate governance; competition;
taxation; finance
• Outreach and dialogue

13.
Multi-stakeholder approach
Improving the
business
environment
Protecting public
interest and
stakeholder rights
Overcoming country
risk perceptions
Social licence to
operate and risk
management
Compliance/
respecting
stakeholder rights
Competitiveness
and market access
Ensuring
accountability/
respect of rights
Framework to resolve
issues proactively and
constructively
Shared understanding
of responsibilities
Government Businesses Civil Society

14.
THE OECD GUIDELINES FOR
MULTINATIONAL ENTERPRISES

15.
• Most comprehensive government-backed international instrument for
promoting responsible business conduct
• Recommendations from governments to businesses operating in or
from adhering countries
• Purpose: to ensure business operations are in harmony with
government policies; strengthen the basis of mutual confidence with
the society; help improve foreign investment climate; enhance
contribution to sustainable development
• Unique implementation mechanism
• Endorsed by business, trade unions and civil society organizations
OECD Guidelines for Multinational
Enterprises

16.
Concepts and Principles
General Policies
Disclosure
Human Rights
Employment and Industrial Relations
Environment
Combating Bribery, Bribe Solicitation and Extortion
Consumer Interests
Science and Technology
Competition
Taxation
Scope of the Guidelines

17.
IMPLEMENTING THE GUIDELINES

18.
Implementing the Guidelines:
Shared Responsibility
Implement the Guidelines and
encourage their use by
businesses (domestic and
foreign)
Provide a policy environment
that supports and promotes
responsible business conduct
Set up National Contact Points
for the Guidelines
Maximise positive impacts,
minimise adverse impacts
Carry out due diligence to
identify, prevent and mitigate
actual and potential adverse
impacts
Cover not only impacts related to
own operations; but also in the
supply chain and business
relationships
Responsibilities of
Governments
Responsibilities of
Businesses

19.
• One of the main global non-judicial mechanisms
and a significant contribution to improving access to
remedy in case RBC principles and standards are
not observed
• Mandate:
– Help resolve practical issues through dialogue and
consensus
– Promote RBC and actively engage with stakeholders
– Identify areas where additional guidance for
businesses might be needed (i.e. sectors, regions, etc.)
– Report on activities
Implementing the Guidelines:
National Contact Points

20.
Implementing the Guidelines:
Guidance for Business
OECD Due Diligence Guidance for Responsible
Mineral Supply Chains (2011)
OECD Due Diligence Guidance for Meaningful
Stakeholder Engagement in the Extractive
Sector
OECD-FAO Guidance for Responsible
Agricultural Supply Chains
OECD Due Diligence Guidance for Responsible
Supply Chains in the Garment & Footwear
Sector (forthcoming)
Responsible Business Conduct in the Financial
Sector (forthcoming)

21.
Objective
The aim of the guidance is to offer
practical guidance for the extractive
sector in line with the OECD MNE
Guidelines on due diligence for
stakeholder engagement.
Content
• Process oriented
recommendations for
management and on the
ground stakeholder facing staff.
• Framework to evaluate and
monitor performance.
• Specific guidance for engaging
with women, indigenous
peoples, workers and artisanal
miners.
Approach
• Risk-based framework
• Stakeholder engagement as a
core component of due
diligence
• Government-backed, broadly
supported
Due Diligence Guidance for Meaningful
Stakeholder Engagement in Extractives

22.
Framework
1) Ensure strong understanding of the local
and operating context
2) Ensure that stakeholders and their
interlocutors are appropriately
identified and prioritised
3) Establish the necessary support system
for meaningful stakeholder engagement
4) Design appropriate and effective
stakeholder engagement activities and
processes
5) Ensure follow-through
6) Monitor and evaluate stakeholder
engagement activities and respond to
identified shortcomings

23.
• Unifies and help enterprises
observe the OECD Guidelines
and other major agriculture
standards
• Recognition of financial
enterprises as part of the value
chain
• Developed through a multi-
stakeholder advisory group
• Two main sections:
– What - A model enterprise
policy
– How - A five-step framework for
risk-based due diligence
Building Responsible Agricultural Supply
Chains

24.
What: Model Enterprise Policy

25.
• Establish and maintain, in co-ordination with responsible government agencies
and third parties as appropriate, an environmental and social management
system appropriate to the nature and scale of operations
• Prevent, minimise and remedy pollution and negative impacts on air, land, soil,
water, forests and biodiversity, and reduce greenhouse gas emissions
• Ensure the sustainable use of natural resources and increase the efficiency of
resource use and energy
• Hold good-faith, effective and meaningful consultations with communities
before initiating operations
• Ensure decent wages, benefits and working conditions, that are at least
adequate to satisfy the basic needs of workers and their families
Some examples

26.
How: Framework for Due Diligence
• Identify, assess, mitigate, prevent and address actual
and potential adverse impacts
Step 1
• Establish strong company management systems
Step 2
• Identify, assess and prioritise risks in the supply chain
Step 3
• Design and implement a strategy to respond to identified risks
Step 4
• Verify supply chain due diligence
Step 5
• Report on supply chain due diligence

27.
Production Aggregation Processing Distribution
On-farm enterprises
Agricultural production and near-farm
basic processing
Downstream enterprises
Aggregation, processing, distribution and marketing of agri-food
products
Financial enterprises
Corporate and institutional investors less directly involved than above but provide them with capital
Cross-cutting enterprises
Tenure rights
Animal welfare
Animal welfare
Human rights Food security &
nutrition
Labor
rights
Health Governance
Environmental
protection &
sustainable use
of resources
Technology &
innovation
CROSS-
CUTTING
RISKS
STAGES
SPECIFIC
RISKS
ENTER-
PRISES

28.
NATIONAL CONTACT POINTS

29.
• A unique implementation and grievance mechanism for the
Guidelines
• All governments adhering to the OECD Investment Declaration must
set up a National Contact Point (NCP)
What are National Contact Points?

30.
Main responsibilities of NCPs
The NCP mandate:
• Promote RBC
• Help resolve “specific
instances” through
dialogue, mediation and
consensus
In addition:
• Engage with stakeholders
• Identify areas where
additional guidance for
companies is needed (i.e.
sectors, regions, etc.)
• Report annually to OECD

31.
NCP Structure
Structure of NCPs - 2015
Single Ministry
Single Ministry plus other
Ministries
Two or more Ministries
Tripartite
Quadripartite
Independent
19
advisory
6
oversight

32.
Examples of NCP institutional arrangements
Brazil 11 ministries Plus: Central Bank, Human Rights Secretariat,
Lead: Ministry of Finance
Canada 8 government departments
Lead: Foreign Affairs, Trade and Development
Chile Foreign Affairs
Denmark Independent
France Several ministries Plus: Trade unions, Employer association
Lead: Treasury
United Kingdom Department for Business, Innovation & Skills
Steering Board:
2 additional government departments
4 independent members
United States Foreign Affairs
Stakeholder Advisory Board:
business, labour, academia, environmental, and human rights
groups.
NCP Structure

33.
• Different structures are possible
• The structure of the NCP should
enable it to:
– handle the breadth of issues
covered by the Guidelines
– operate impartially and with
accountability
– develop and maintain relationships
with stakeholders
NCP Structure
NCP leadership should be such
that it retains the confidence of
social partners and other
stakeholders, and fosters the
public profile of the
Guidelines.

34.
“Adhering countries shall make available human and financial
resources to their National Contact Points so that they can
effectively fulfil their responsibilities, taking into account internal
budget priorities and practices.”
Human and Financial Resources

35.
VISIBILITY
Ensure that the
NCP and the
availability of its
services are known
to the wider public
and take an active
role in promoting
the Guidelines.
- Host seminars
and events
- Communicate
(e.g. online; in
national language)
- Raise awareness
and make the
Guidelines better
known and
available
ACCESSIBILITY
Facilitate access to
NCP services
- Define and
publish procedures
for dealing with
specific instances
- Be clear about
the requirements
and on indicative
timeframes and
processes
TRANSPARENCY
Be transparent in
all activities, taking
into account the
need for
confidentiality in
offering good
offices.
- Publish reports on
NCP functioning
and its activities
- Proactively share
information
- Respond to
requests for
information and be
reachable
ACCOUNTABILITY
Be accountable,
with the goal to
retain confidence
of stakeholders
and foster the
public profile of the
Guidelines.
- Report to national
authorities and to
the OECD
- Attend NCP
meetings
- Participate in peer
exercises
- Work with
stakeholders
Core criteria for NCPs

36.
Promotion
:
3.Respond to enquiries about the Guidelines from:
a) other National Contact Points;
b) the business community, worker organisations, other
nongovernmental organisations and the public; and
c) governments of non-adhering countries.

37.
Promotion
Adhering countries shall set up NCPs to further the effectiveness
of the Guidelines by undertaking promotional activities…
:
1. Make the Guidelines known and available by appropriate
means, including through on-line information, and in national
languages. Prospective investors (inward and outward) should be
informed about the Guidelines, as appropriate.
:
2. Raise awareness of the Guidelines and their implementation
procedures, including through co-operation, as appropriate, with
the business community, worker organisations, other non-
governmental organisations, and the interested public.

38.
Promotion
Promotional plans
Website
Translations
Leading events
Participating in events
Annual information meetings
Including NCP in national policies

39.
Promotion
What is CSR/RBC/ESG?
What about UN Global
Compact, ISO, UN GPs etc
What is the OECD?
What is an NCP?
What is a specific instance?
General policies Disclosure Human Rights
Labour
Environment
Bribery
Consumer interests
Science and technology Taxation
Due diligence in practice Sector projects/guidance

40.
Specific instances - process

41.
Specific instances – source
NGO
Trade Union
Individual
Multistakeholder
Consortium
Local Community
Company
Government

42.
Calls for improvements

43.
Strengthen the functioning and performance
of National Contact Points (NCPs)
NCP Action Plan
2015: OECD Ministerial
Council Meeting
2015: G7 Leaders Declaration
2016-2018
Action plan
Peer reviews/
Capacity building
Peer learning Building tools

44.
SPECIFIC INSTANCES

45.
Over 360 specific instances, in over 100 countries and territories
No significant increase in number of specific instances
Specific instances at a glance
0
5
10
15
20
25
30
35
40
45
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

46.
Human rights chapter is the fastest growing theme
(4% of specific instances from 2000-2010 to 54% from 2011)
Specific instances at a glance
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2001-2010
2011-2015

47.
• Of all specific instances accepted for further examination between
2011-2015:
– approximately half resulted in an agreement between the parties
– approximately 36% resulted in an internal policy change by the company in
question
Specific instances at a glance

48.
A non-acceptance rate of between 30-40% has been relatively stable
since 2000.
Specific instances at a glance
Non-acceptance of specific instances ( in percentage)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

49.
EXAMPLE CASES

50.
• NCP: United Kingdom - complaint received in October 2013
• Company: SOCO International PLC
• Submitter: WWF International
• Main issues: Environment, general policies, human rights related to oil
exploration
Virunga National Park in the DRC
50
 SOCO agreed to refrain from any exploratory of other drilling
activities within Virunga park as long as UNESCO and DRC
government view such activities as incompatible with the
Park’s World Heritage Status

51.
• NCP: Netherlands – complaint received in
June 2014
• Company: Rabobank (through Bumitama
Agri Ltd)
• Submitter: Friends of the Earth Netherlands
• Major issues: Due diligence, including on
human rights
Palm oil in Indonesia
51

52.
Palm oil in Indonesia - Timeline
52
June 2014 Complaint received by the NCP
August 2014 Separate meetings with each stakeholder
September 2014 Initial assessment and joint meeting
December 2014 Publication of the initial assessment
January-June 2015 Meetings with stakeholders
January 2016 Publication of the final communiqué
End of 2017 Evaluation of the progress made based on the agreed
terms of reference

53.
Palm oil in Indonesia - Conclusions
53
 It was agreed that:
– A critical view of the sustainability of palm oil production
was necessary
– Rabobank maintains a dialogue with external stakeholders
on the basis of concrete evidence of non-observance by
its clients
– Rabobank modifies its approach to handling complaints

54.
• NCP: Norway – complaint received in May
2009
• Company: Cermaq ASA and its subsidiaries
Mainstream Canada and Mainstream Chile
• Submitter: Friends of the Earth Norway and
the Forum for Environment and
Development
• Main issues: Indigenous peoples rights,
employment and labour practices,
environmental impacts
Salmon farming in Canada and Chile
54
 Joint statement with commitments by all parties

55.
• NCP: United Kingdom - complaint received in 2008
• Company: Vedanta Resources
• Submitter: Survival International
• Main issues: Lack of consultation with indigenous peoples, human rights,
environment
Mining in India
55
 Company refused to participate in mediation and rejected all
allegations against it. NCP found that the company had not
taken adequate steps to respect the rights of those impacted
and found the Guidelines had not been observed.

56.
• NCP: United Kingdom - complaint received in 2014
• Company: Formula One Group
• Submitter: Americans for Democracy and Human Rights in Bahrain
• Main issues: Risk of human rights impacts due to hosting in Bahrain
Formula One in Bahrain
56
 The mediated agreement facilitated by the UK NCP included
the first public commitment by Formula One to respect
human rights in all operations and develop a human rights
due diligence policy.

57.
mneguidelines.oecd.org
tihana.bule@oecd.org
kathryn.dovey@oecd.org
Thank you