GLOBAL TRENDS IN RESPONSIBLE BUSINESS CONDUCT

Transcription

1 GLOBAL TRENDS IN RESPONSIBLE BUSINESS CONDUCT COPENHAGEN, SEPTEMBER 9 TH 2016 Prof. Dr. Roel Nieuwenkamp CHAIR of the OECD WORKING PARTY ON RESPONSIBLE BUSINESS CONDUCT

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5 What is Responsible Business Conduct? Positive contribution companies can make to sustainable development Avoiding and addressing negative impacts A core component of business operations: corporate DNA

6 The Business Case for RBC Better financial performance Better risk management

7 The Business Case for RBC

8 THE OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES

9 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

10 OECD Guidelines 46 Government adherents Accounts for a majority of global investment flows and covers global supply chains Representative of all regions of the world Includes 34 OECD countries, 12 non OECD countries Additional countries in process of adherence Responsibilities of adherents: 1 Promote the use the Guidelines as an essential component of open trade and investment policies 2 Establish National Contact Points to further the effectiveness of the Guidelines

11 Areas covered by the Guidelines Disclosure Human Rights Employment and Industrial Relations Environment Bribery, bribe solicitations, extortion Consumer interests Science and technology Competition Taxation

12 NATIONAL CONTACT POINTS

13 G7 Heads of State 2015: We commit to strengthening mechanisms for providing access to remedies including the National Contact Points (NCPs) for the OECD Guidelines for Multinational Enterprises. In order to do so, the G7 will encourage the OECD to promote peer reviews and peer learning on the functioning and performance of NCPs. We will ensure that our own NCPs are effective and lead by example.

14 P RECOMMENDATIONS!

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17 Impacts NCP System 15 years - Approx. half of accepted cases -> agreement between parties - Approx. 36% of accepted cases: policy changes company - Impacts such as - Ending child labor - Health & safety improved - No oil exploration in World Heritage Site - Improved dialogue with trade unions - Better Human Rights Due Diligence, etc

18 NCP s: Emerging Trend: Teeth Government Consequences - ECA, Economic Diplomacy - Canada Model China Gold Case Responsible Investors - Vedanta, Soco, Daewoo, Mylan - AFL CIO Shareholder Resolution - Workers Capital

19 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.

20 Due Diligence and Supply Chain Responsibility Scope of application of the Guidelines extended from investment to business relationships, including suppliers, agents and franchises Risk-based due diligence main tool to prevent adverse impact. Enterprises should: Carry out risk-based due diligence, ( ), to identify, prevent and mitigate actual and potential adverse impacts ( ), and account for how these impacts are addressed. Avoid causing or contributing to adverse impacts on matters covered by the Guidelines, through their own activities, and address such impacts when they occur. Seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship.

21 Due Diligence and Supply Chain Responsibility P

22 Core due diligence components 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) Identify a Management Systems Stakeholder Engagement Remediation s da 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 - Improveinternal 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 22

23 Due Diligence and Supply Chain Responsibility High benchmark, but also protection against unreasonable expectations! Not one layer deep No zero tolerance requirement Nature & extent of DD: size, context, severity impact Prioritising is acceptable Leverage Responses: disengagement at last resort No shift of responsibility!

24 Due Diligence and Supply Chain Responsibility

25 Due Diligence and Supply Chain Responsibility 2011: Multilateral Agreement on Supply Chain Responsibility concerning Labor Standards, Human Rights, etc Backed Up by Legal Obligation NCP s Sectoral Guidance Extractives Agriculture Financial Services Textile & Garment Due Diligence Guidance for Responsible Mineral Supply Chains Due Diligence Guidance for Agricultural Supply Chains Due Diligence Guidance - Institutional Investment Due Diligence Guidance - TBD TBD 2016

26 CONCLUSIONS

27 Further information Contact: Prof dr Roel Nieuwenkamp, Chair of the Working Party on Responsible Business #OECDrbc Friends of OECD Guidelines Blog: