5 Key points about the OECD Guidelines on Responsible Business

The Head of the UK National Contact Point for OECD Guidelines on Responsible Business Conduct for Multinational Enterprises, Julia Lewis, recently spoke about her work to the ICAEW Corporate Governance Committee. Here she shares the key points from her talk.

1. What are the OECD Guidelines on Responsible Business Conduct for Multinational Enterprises?

The OECD Guidelines on Responsible Business Conduct for Multinational Enterprises (the OECD Guidelines) set out voluntary principles and standards for multinational enterprises on a range of responsible business conduct topics such as governance, disclosure, human rights, employment, the environment, bribery, consumer interests, competition and taxation.

They were first published in 1976 as part of the OECD Investment Declaration. All 48 countries, including the UK, that are signed up to that declaration have committed to setting up a National Contact Point (NCP) to promote the OECD Guidelines and to provide a non-judicial complaints mechanism for businesses who do not observe them.

2. What is the UK National Contact Point (UK NCP)?

The UK NCP has two main roles. First, to promote the OECD Guidelines to businesses, trade unions and non-governmental organisations (NGO)s, and second to consider complaints brought against multinational enterprises for not observing them.

The UK NCP is based in the Department for International Trade (DIT) and its’ work forms part of the Government’s wider agenda for corporate social responsibility. The team collaborates with other government departments including the:

Department for Business, Energy and Industrial Strategy (BEIS) and the Foreign and Commonwealth Office (FCO) on the UK’s National Action Plan for Business and Human Rights
Home Office on the Modern Slavery Act and transparency in supply chains
Department for International Development on the Sustainable Development Goals

3. How does the UK NCP handle complaints from NGOs and trade unions about businesses about their behaviour?

The UK NCP is responsible for investigating complaints about UK multinational enterprises which are alleged to have breached the voluntary standards of responsible business conduct set out in the OECD Guidelines.

The UK NCP has established procedures for handling complaints. Complaints follow a 3-stage process:

making an initial assessment of the complaint on whether it merits further examination
providing professional mediation to both parties and / or conducting a further examination of the evidence provided
publishing a final statement with recommendations

The UK NCP publishes all its complaint statements on GOV.UK. Most complaints are raised by NGOs or trade unions but they can occasionally come from private citizens.

Complaints have tended to relate to business behaviour in developing countries, in particular in the manufacturing and mining sectors, although the nature of complaints is becoming more diverse, for example in relation to financial services and the ICT sector.

While the Guidelines are voluntary, and the NCP complaints process is non-judicial, most multinational enterprises do engage with the NCP process.

4. What do the OECD Guidelines mean for my sector?

The OECD has developed practical guidance to support businesses in different sectors to implement due diligence as set out in the OECD Guidelines.

Perhaps the most relevant to ICAEW Corporate Governance members is that on the financial sector.

There is also guidance for:

5. How can I find further information to support my organisation to implement the OECD Guidelines?

The UK NCP has a dedicated area on GOV.UK (UK NCP’s website) with further information about the work of the UK NCP.

If you are interested in the complaints handled by all NCPs the OECD website has a database of these (OECD’s website and database of complaints).

Author

Julia Lewis
Head of the UK National Contact Point for OECD Guidelines for Multinational Enterprises
UK.NCP@trade.gov.uk