Since their adoption, the OECD Guidelines for Multinational Enterprises (the Guidelines) have been the most authoritative and wide encompassing international standard on responsible business conduct. Recent global developments, including the Covid-19 pandemic and the rapidly changing regulatory environment on responsible business conduct, have proven the Guidelines to be more relevant than ever.
Extending the scope and focused guidance
In order to ensure future relevance and suitability of the Guidelines, NCP Denmark recommends extending the scope of the Guidelines to also include issues such as climate change, biodiversity, animal welfare and digitalization, including new forms of work and business models such as platform and gig-economy. The chapters on human and labour rights should have more explicit focus on intersectional discrimination, including gender and caste, as well as further clarity and emphasis on crosscutting issues, e.g. climate change and human and labour rights. Such cross-cutting issues could also benefit from further specificity in a separate due diligence guidance.
Moreover, the practicability of the Guidelines could be improved by incorporating more elaborate explanations on risk-based due diligence, and with greater emphasis on the expectation to conduct stakeholder engagement as an integral part of the due diligence process.
Strengthening the NCP-system
While NCP Denmark appreciates the inherent flexibility of the Guidelines, the objective of functional equivalence should not be compromised. Inconsistent interpretation of the Guidelines among the NCPs should be reduced by developing clear provisions on the NCPs role, especially in relation to specific instances. A revision of the Procedural Guidance could include safeguards for impartiality and expectations to issue recommendations in final statements, and preferably also determinations. This will enhance the legitimacy of the NCP-system as well as reducing the tendency of forum shopping by specific instance submitters. In extension hereof, NCP Denmark wishes to emphasize the need for NCPs to be politically independent and able to make critical remarks when handling specific instances.
The OECD Guidelines’ applicability
While the OECD Guidelines are clear on the expectation to SMEs in regard to acting responsibly and implementing risk-based due diligence, the title of the Guidelines does not clearly communicate their applicability and aim. NCP Denmark encourages to also review the name in a potential revision of the Guidelines.
Finally, NCP Denmark encourages the OECD to clarify how the Guidelines relate to the Sustainable Development Goals, other international standards, and regulatory initiatives in order to ensure a harmonized understanding of the Guidelines’ recommendations on sustainable development. Here, NCP Denmark would also like to encourage collaboration with the European Union in regard to forthcoming legislative initiatives on responsible business conduct.
Chair of NCP Denmark
(Sent to the OECD Centre for Responsible Business Conduct on September 14, 2021)