CSR for all OECD Guidelines for Multinational Enterprises Recent developments and BIAC contribution Istanbul, 10 October 2013 The Voice of OECD Business 1 Hanni Rosenbaum, Senior Policy Manager Business and Industry Advisory Committee to the OECD

BIAC is the official Business and Industry Advisory Committee to the OECD, advising the Organisation on a wide range of issues (investment, CSR, trade, tax, education, labour, environment, etc.) BIAC members: business and employers’ organisations in OECD countries Observers from 9 non-OECD countries as well as over 30 international sectoral organisations The Voice of OECD Business 2

The OECD Guidelines for Multinational Enterprises (MNEs) The OECD Guidelines for Multinational Enterprises (MNEs) 3 Updated in 2011, the OECD MNE Guidelines are the most comprehensive international CSR instrument and a key international reference. Updated in 2011, the OECD MNE Guidelines are the most comprehensive international CSR instrument and a key international reference. A set of non-binding recommendations on responsible business conduct by governments to multinational enterprises operating in or from adhering countries. A set of non-binding recommendations on responsible business conduct by governments to multinational enterprises operating in or from adhering countries.

Key features 4 Recommendations from governments to business – governments commit to promoting them Recommendations from governments to business – governments commit to promoting them Promote responsible business behaviour in ten different areas Promote responsible business behaviour in ten different areas Voluntary, but expectation to fulfil Voluntary, but expectation to fulfil Supported by a unique implementation mechanism of National Contact Points Supported by a unique implementation mechanism of National Contact Points

The broader context 5 As part of the Declaration on International Investment and MNEs, they aim to balance the promotion of an open investment climate with responsible business conduct. As part of the Declaration on International Investment and MNEs, they aim to balance the promotion of an open investment climate with responsible business conduct. Not only a burden, but should protect against unrealistic expectations and contribute to a level playing field Not only a burden, but should protect against unrealistic expectations and contribute to a level playing field 45 countries adhere to the MNE Guidelines – 45 countries adhere to the MNE Guidelines – BIAC encourages further outreach and global engagement to create a level playing field

Key changes of the 2011 update 6 Avoid adverse impacts of business activities, including a related due diligence provision Avoid adverse impacts of business activities, including a related due diligence provision New provisions on how to promote observance of the Guidelines in the supply chain New provisions on how to promote observance of the Guidelines in the supply chain A new chapter on human rights consistent with the UN Guiding Principles on Business and Human Rights A new chapter on human rights consistent with the UN Guiding Principles on Business and Human Rights Amendments in the thematic chapters Amendments in the thematic chapters Amendments to the NCP procedure Amendments to the NCP procedure A pro-active implementation agenda designed to help enterprises to meet their responsibilities A pro-active implementation agenda designed to help enterprises to meet their responsibilities

National Contact Points Key tasks: Promotional activities, increase awareness Promotional activities, increase awareness Handle inquiries Handle inquiries Mediation and conciliation platform for resolving issues that may arise from alleged non- observance of the Guidelines. Mediation and conciliation platform for resolving issues that may arise from alleged non- observance of the Guidelines. 7

2 BIAC surveys 2 BIAC surveys While the NCP procedure has in a number of cases led to a meaningful stakeholder dialogue and a solution of the disagreement, the fundamental nature of the NCP procedure and certain provisions of the procedural guidance are sometimes disregarded. 8 Key business considerations for NCPs

Key business considerations for NCPs Key business considerations for NCPs A continuous learning process A continuous learning process Recognition of the specific nature of the NCP as a mediation platform (not a semi-legal process) Recognition of the specific nature of the NCP as a mediation platform (not a semi-legal process) The willingness of all parties to enter into meaningful dialogue The willingness of all parties to enter into meaningful dialogue Good faith as an essential element to build trust Good faith as an essential element to build trust Acceptance of a specific instance is not a verdict Acceptance of a specific instance is not a verdict NCP should be a facilitator for solutions NCP should be a facilitator for solutions 9

Key business considerations for NCPs Key business considerations for NCPs Recommendations to Notifiers: Avoid the combination of an NCP procedure with campaigning Avoid the combination of an NCP procedure with campaigning Avoid false allegations, disrespect of confidentiality and procedural rules Avoid false allegations, disrespect of confidentiality and procedural rules Avoid forum shopping and changing the scope of the discussions. Avoid forum shopping and changing the scope of the discussions. 10

Key business considerations for NCPs Key business considerations for NCPs NCP should be a forum for discussion between stakeholders with a view to resolving an issue in a constructive and forward-looking manner. NCP should be a forum for discussion between stakeholders with a view to resolving an issue in a constructive and forward-looking manner. All stakeholders should have an attitude that makes a constructive and future-oriented solution possible, based on an atmosphere of mutual trust and dialogue. All stakeholders should have an attitude that makes a constructive and future-oriented solution possible, based on an atmosphere of mutual trust and dialogue. 11

The Proactive Agenda The proactive agenda aims to promote the effective observance of the Guidelines by helping enterprises identify and respond to risks of adverse impacts associated with particular products, regions, sectors or industries. The proactive agenda aims to promote the effective observance of the Guidelines by helping enterprises identify and respond to risks of adverse impacts associated with particular products, regions, sectors or industries. 12

Proactive Agenda – key business considerations It should be demand-driven, be broadly supported, provide real added value and avoid duplication with other initiatives. It should be demand-driven, be broadly supported, provide real added value and avoid duplication with other initiatives. The active involvement of business, and other key stakeholders, is essential. The active involvement of business, and other key stakeholders, is essential. It should not lead to sector guidance that would go beyond the agreement reached during the 2011 update. It should not lead to sector guidance that would go beyond the agreement reached during the 2011 update. 13

Proactive Agenda – on-going projects Due diligence in the financial sector Due diligence in the financial sector Stakeholder engagement in the extractive sector Stakeholder engagement in the extractive sector Responsible investment in agricultural supply chains Responsible investment in agricultural supply chains Work on Bangladesh and the textiles sector to be further discussed with ILO Work on Bangladesh and the textiles sector to be further discussed with ILO 14

Proactive Agenda – on-going projects The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas is frequently cited as an example of the potential of the proactive agenda. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas is frequently cited as an example of the potential of the proactive agenda. 15

New OECD Working Party on Responsible Business Conduct Communication on the MNE Guidelines Communication on the MNE Guidelines Outreach activities Outreach activities Implementation of the Proactive Agenda Implementation of the Proactive Agenda 16

BIAC outreach efforts BIAC outreach efforts Assist members with the implementation of the Guidelines. Assist members with the implementation of the Guidelines. Help raise awareness of the Guidelines among our members and their member companies. Help raise awareness of the Guidelines among our members and their member companies. Foster closer cooperation with non-adhering countries to promote adherence to the Guidelines to create a truly level playing field. Foster closer cooperation with non-adhering countries to promote adherence to the Guidelines to create a truly level playing field. 17

For further information, please contact