Session by Roel Nieuwenkamp, Chair, OECD Working Party on Responsible Business Conduct This year marks the 40th anniversary of the OECD Guidelines for Multinational Enterprises, the most comprehensive set of recommendations and leading global standard on Responsible Business Conduct (RBC). The Guidelines are unique in that they remain the only government-backed international instrument on RBC with a built-in grievance mechanism that enables stakeholders – trade unions, NGOs, local communities – to raise concerns to National Contact Points (NCPs) in cases where the Guidelines are not observed. NCPs are located in 34 OECD countries and 12 non-OECD countries, actively promoting the Guidelines, handling enquiries, and contributing to the resolution of issues arising from alleged non-observance. As the role of business in society has evolved from the charitable and voluntary endeavours associated with corporate social responsibly to the more stringent expectations of RBC, MNEs are well-placed to take an active leadership role in addressing global social, environmental, developmental and human rights challenges. Since 2011, the Guidelines have included corporate supply chain responsibility and a number of countries have implemented legislation holding businesses accountable for carrying out the necessary due diligence to identify, prevent and mitigate real and potential adverse impacts related to their business operations or relationships, and for how they are addressed. In some countries, improving RBC standards of due diligence extends to human rights requirements, such as reporting sourcing from conflict areas and processes to manage the risks of human trafficking or forced labour.

1. OECD GUIDELINES FOR
RESPONSIBLE BUSINESS
-
40 YEARS EXPERIENCE
OECD GLOBAL PARLIAMENTARY NETWORK
12 OCTOBER 2016
Prof. Dr. Roel Nieuwenkamp
CHAIR of the OECD WORKING PARTY ON RESPONSIBLE BUSINESS
CONDUCT

3. 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

5. - 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

6. 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

7. 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.”

8. 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

9. Due Diligence and Supply Chain Responsibility

10. • 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

11.  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?

12.  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

13. 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
Friends of OECD Guidelines
Blog: https://friendsoftheoecdguidelines.wordpress.com/