Head, Responsible Business Conduct Unit, OECD The OECD Guidelines FOR MNEs and the effective implementation of responsible business conduct standards Cristina Tébar Less Head, Responsible Business Conduct Unit, OECD Brussels, 11 April 2018

OECD’s mission and functions To promote policies that will improve the economic and social well-being of people around the world. OECD work covers a broad range of topics to help governments foster prosperity and fight poverty through economic growth and financial stability. Provides a forum in which governments share experiences and seek solutions to common problems. Develops international standards

OECD: key figures €575 Million Today the OECD has 35 member countries, with the European Commission taking part in the work of the OECD (Protocol 1 to the OECD Convention) and currently three countries in the process of accession Colombia, Lithuania and Costa Rica. Together OECD countries cover 45% of world GDP, 2/3 of world trade, 95% of ODA and 18% of the world population The total budget of the Organisation in 2017 was 575 Million€ (383 M€ regular budget + 192 M€ accepted voluntary contributions.) [If asked - OECD Budget 2016: 554 MEUR (384 MEUR for Part I & Part II + 170 for VC spending) – previously 523 MEUR for 2015] There are 3300 people working for the OECD. Each year approximately 115.000 delegates from governments attend meetings of the more than 300 committees, working parties and expert groups, which generate the substantive work of the Organization in each of its fields of activity. The OECD produces around 250 publications a year A particular feature, which distinguishes the OECD from other international organisations is its committee structure. This has allowed to bring together technical experts from government and to move forward the multilateral agenda in specific areas. At the same time, due to the wide coverage of topics covered by the OECD (covering a large range of areas such as tax, environment, migration, education, investment and macro economic policies) the OECD has the ability to tackle multi-disciplinary issues (such as RBC) €575 Million Budget (2017)

Oecd work on responsible business conduct

What is Responsible Business Conduct? Business practices that contribute to sustainable development while avoiding causing harm Maximise positive impact while minimising negative impact Moves away from traditional vision of CSR: goes beyond philanthropy or voluntary action- but also beyond “just” complying with domestic law Focuses on company’s impact – both negative and positive RBC is part of core business and risk management, including in the supply chain and other business relationships Applies to all businesses: MNEs, SMEs, SOEs

OECD Guidelines for Multinational Enterprises The most comprehensive international standard on responsible business conduct Recommendations from governments to businesses operating in or from adhering countries Reflect evolving expectations Endorsed by business, trade unions and civil society Include implementation mechanism : National Contact Points Open to non-OECD members

Scope and themes of the OECD Guidelines Disclosure Employment & Industrial Relations Human Rights Environment Consumer interests Science & Technology Combating Bribery, Bribe Solicitation and Extortion Competition Taxation Expect that companies behave responsibly by identifying, avoiding and addressing negative impacts that they cause, contribute to or are directly linked to through a business relation Key tool: supply chain due diligence GLS cover the entire spectrum of issues where business operations intersect with society A major strength of the OECD Guidelines is how comprehensive they are. This is unique among other international RBC instruments. Beyond labour and human rights, the OECD Guidelines promote RBC across the entire spectrum of issues where business operations intersect with society, including also corruption, environment, consumer protection, taxation, etc. Additionally, the Guidelines have also extended the supply chain responsibility to these other areas.   This approach incentivises companies toward finding complete solutions of problems on the ground – e.g. quality of working conditions is not only a matter of implementing the labour law; e.g. in garment sector hazardous chemicals can be a significant risk and how companies handle hazardous chemicals can have a lasting effect on occupational health and safety of the workers as well as environmental impacts of company operations. All Adherents commit to establishing an NCP to promote the Guidelines and to contribute to the resolution of issues relating to the implementation of the Guidelines in specific instances. This unique implementation mechanism distinguishes the Guidelines from other international RBC instruments.

Alignment with other international standards OECD Guidelines for Multinational Enterprises UN Guiding Principles on Business and Human Rights ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy + environmental, anti-bribery, corporate governance conventions and instruments

Concepts, principles general policies Disclosure Human Rights Employment and Industrial Relations Environment Bribery, extortion Consumer interests Science and technology Competition Taxation

The OECD Guidelines in the global governance universe National Action Plans National legislation Sector Agreements EU regulation Trade and Investment Agreements International Instruments Global agendas (G7/G20 SDGs) OECD instruments Export credits

working with governments Our work with governments is rooted in the following: 1) Major strength of the GLS is that they are comprehensive and that governments make a commitment to promote them 2) The OECD is a unique place among international organisations due to the wide number of policy areas that its committees work on THIS IS WHY OECD is a great place for promoting policy coherence on RBC 3) As a result, we also view the government role in promoting and enabling RBC comprehensively  ---- Slides 12-end 4) We approach working with governments on these assumptions, and also taking full advantage of OECD added values 5) Present The Slides And Examples Starting From Slide On Multi-dimensional Approach To RBC

Governments’ role in promoting and enabling RBC Regulating – establishing and enforcing an adequate legal framework that protects the public interest and underpins RBC, monitoring business performance and compliance with regulatory frameworks Facilitating – clearly communicating expectations on what constitutes RBC, providing guidance with respect to specific practices and enabling enterprises to meet those expectations Co-operating – working with stakeholders (business, worker organisations, civil society), across internal government structures, with other governments to establish coherence with regard to RBC Promoting – demonstrating support for best practices in RBC Exemplifying – acting responsibly in the context of the government’s role as an economic actor. We base our work with governments on this idea

MULTI-DIMENSIONAL APPROACH TO RBC POLICY 1) COORDINATING POLICY ACTION Working with OECD committees/communities Promoting policy dialogue/engaging with international processes Promoting policy coherence through National Action Plans on RBC/Business & Human Rights 2) SUPPORTING REFORMS IN PRACTICE Enabling framework for RBC Sector-specific or thematic policies 3) STATE AS AN ECONOMIC ACTOR Public procurement, export credits; development finance 4) IMPLEMENTING THE OECD GUIDELINES Working with National Contact Points

COORDINATING POLICY ACTION At the OECD: Taking advantage of expertise of different OECD policy communities (e.g. procurement, export credits, corporate governance, state-owned enterprises, development finance) With partners: Promoting dialogue/engaging with international processes Collaboration with the UN OHCHR and Working Group on Business and Human Rights on National Action Plans, ILO, UNDP, UNICEF Engagement with the G7, G20, EU, ASEAN, APEC processes

Working with business Contents: Drivers for the Proactive Agenda work; Due diligence; Overview of sector guidance and multi-stakeholder process; Examples of sector work:Minerals, Garment, Agriculture and so forth

OECD Due Diligence Guidance Under the OECD Guidelines for MNEs, companies should carry out due diligence to identify, avoid and address adverse impacts that they cause, contribute to or to which they are directly linked through their business operations. Since 2011, OECD has developed due diligence guidance (general and sectoral) for companies, thereby establishing a common framework for due diligence in line with the OECD Guidelines for MNEs Developed in consultation with and endorsed by a multi-stakeholder advisory group of government, business, trade unions and civil society. Approved by governments adhering to the Guidelines, open to all governments

OECD sector–specific due diligence guidance Implementation programmes for each Guidance New in 2018: General Due Diligence Guidance for RBC

RBC AND STAKEHOLDERS: ACCESS TO REMEDY

National Contact Points for RBC All adherents to the Guidelines must establish a National Contact Point Dual mandate: (1) promote the Guidelines and (2) handle issues on implementation of the Guidelines in specific instances through non adversarial means (mediation, good offices) Covers companies operating in or from adhering companies: transnational reach De facto: the only non-judicial grievance mechanism to address complaints related to RBC

NCPs: key data and facts 48 adhering countries required to establish NCPs Core criteria: visibility, accessibility, transparency, accountability Different structures: mostly based in one ministry; many have multi-agency structure and involve stakeholders; some independent NCPs Ca 400 cases Issues in over 100 countries

Number of cases submitted annually 2000-2017

Main themes of cases from 2000-2010 and 2011-2017

Key sectors related to cases Specific instances involving the financial sector have significant increased in terms of submissions of complaints, from about 8% of specific instances from 2000-2010 to around 20% of specific instances from since 2015 It has been the leading sector with respect to specific instance submissions for the past three years.

Submitters of cases 2000-2017

Formula One in Bahrain (2015) NCP: United Kingdom 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 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.

Statkraft/SSVAB (2016) NCP: Norway and Sweden Company: Statkraft/SSVAB Submitter: Jijnjevaerie Saami village Main issues: Risk of impact on reindeer herding from wind power project Mediation was carried out but did not reach an agreement within the NCP. However, a separate agreement was reached which covers compensation and regulates the impact of and the preventive measures in the wind power projects, in order to reduce the negative effects on the Jijnjevaerie Saami village and reindeer herding

Kinross (2016) NCP: Brazil Company: Kinross Submitter: Paracatu Association Main issues: Damage to homes close to a mine site Several mediation sessions were organised by the NCP. The parties agreed that, working with the local authorities, Kinross would finance the renovation of damaged homes or resettlement where necessary. The NCP also recommended that Kinross conduct due diligence processes that assess the effects of its mining activities, and establish a maximum distance between its mining operations and residential areas in Paracatu.

Natixis-NGAM and UNITE HERE NCP: France Company: Natixis-NGAM Submitter: UNITE Here Main issues: The union submitting the complaint noted a social conflict taking place at the Westin Long Beach Hotel, and alleged violations of freedom of association, collective bargaining and working hours. This hotel was operated by an American hospitality conglomerate and owned indirectly by an American institutional investor. AEW capital Management, a US subsidiary of Natixis and NAGM, provided asset management advisory services to the hotel owner. The French NCP offered its good offices and engaged with Natixis, NGAM and the submitters on the issues. In September 2017, the NCP welcomed the results obtained: the hotel has been sold to another owner, a new operator was chosen, and unionisation was agreed to. The parties recognised the NCP’s role in contributing to solving the two-year long labour dispute noting that “as a result of the NCP’s constructive engagement with Natixis, the company changed its approach and carried out effective due diligence measures by engaging with its subsidiary to help resolve the complaint.”

Heineken, Bralima and former employees of Bralima NCP: Netherlands Company: Heineken, Bralima Submitter: Former employees of Bralima Main issues: Three former employees of Bralima, a subsidiary of Heineken operating in the Democratic Republic of Congo (DRC) submitted a specific instance with the Dutch NCP alleging that Bralima had not observed the Guidelines in the dismissals of 168 former employees in the DRC between the year 1999 and 2000. The NCP accepted the specific instance and organised two mediation meetings, one in Uganda and one in Paris , to facilitate the participation of the submitters. The mediation concluded with an agreement between the parties. As part of the agreement Heineken agreed to provide compensation to the workers. Heineken also indicated that it will draw up a policy and guidelines on how to conduct business and operate in volatile and conflict-affected countries. The parties noted that involvement in the specific instance has improved relationships between the company and submitters and also been important in signalling expectations with respect to corporate accountability to other enterprises operating in the region. The NCP will monitor the next steps agreed to the by the parties.

mneguidelines.oecd.org   cristina.tebar-less@oecd.org