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ABSTRACT
This article examines statements issued by National Contact Points (NCPs) under the OECD’s Guidelines for Multinational Enterprises. Applying the term ‘risk-based due diligence’, the OECD’s Guidelines have adopted the human rights due diligence concept introduced by the UN Framework and elaborated by the UN Guiding Principles. OECD NCPs de facto serve as remedy institutions for those instruments. The analysis aims to identify and glean insights provided by NCPs on human rights due diligence. It identifies and analyses specific instances that have addressed due diligence in regard to state guidance for companies operating in conflict areas and the identification of a business relationship as ‘directly linked’ in the terms of the UNGPs and the Guidelines. It also considers steps that form part of due diligence, particularly stakeholder engagement, the exercise of influence through leverage, and integrating and acting upon findings on impact. The article finds that final statements and recommendations issued by NCPs can serve as sources of norms for human rights/risk-based due diligence. It also finds that there appears to be scope for a larger number of NCPs to deliver guidance through their final statements.
Acknowledgements
This article has benefited from the comments of two anonymous reviewers.
Notes
1 ‘Protect, Respect and Remedy: a Framework for Business and Human Rights’ (7 April 2008) UN Doc A/HRC/8/5 (hereinafter ‘UN Framework’).
2 ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’ (21 March 2011) UN Doc A/HRC/17/31 (hereinafter, ‘UNGP’ Specific Guiding Principles are referenced ‘GP’).
3 J Ruggie, Just Business (Norton 2013).
4 UN Framework (n 1) para 98.
5 Decision of the Council on the Guidelines for Multinational Enterprises, OECD Decision C(2000)96/FINAL as amended by OECD Decision C/MIN(2011)11/FINAL.
6 OECD Guidelines for Multinational Enterprises, 2011 edition (25 May 2011) (hereinafter ‘Guidelines’).
7 GP, II: Implementation Procedures, I.1.
8 Compare also Başak Bağlayan in this issue; Başak Bağlayan Ceyhan, ‘Corporations and Human Rights: Searching for International Norms for Corporate Conduct in Domestic Case Law’ (PhD thesis, Luxembourg University 2017).
9 Compare DB Spence (2011) ‘Corporate Social Responsibility in the Oil and Gas Industry: The Importance of Reputational Risk’, (2011) 86(1) Chicago-Kent Law Review 59–85; Ruggie (n 3) 10, 17–18, 135–39.
10 OHCHR (2012), The Corporate Responsibility to Respect Human Rights: An Interpretive Guide (Office of the High Commissioner for Human Rights, New York and Geneva). OECD’s general and sector guidances (including on responsible supply chains for several sectors) are available at <www.oecd.org/investment/due-diligence-guidance-for-responsible-business-conduct.htm>.
11 See in particular LC Backer, ‘Rights and Accountability in Development (Raid) vs Das Air and Global Witness v Afrimex: Small Steps Towards an Autonomous Transnational Legal System for the Regulation of Multinational Corporations’ (2009) 10(1) Melbourne Journal of International Law 258; J Ruggie and T Nelson, ‘Human Rights and the OECD Guidelines for Multinational Enterprises: Normative Innovations and Implementation Challenges’ (May 2015) Harvard Kennedy School/Corporate Social Responsibility Initiative Working Paper No 66; Ceyhan, ‘Corporations and Human Rights’ (n 8).
12 e.g. Robert McCorquodale, Lise Smith, Stuart Neely and Robin Brooks, ‘Human Rights Due Diligence in Law and Practice: Good Practices and Challenges for Business Enterprises’ (2017) 3(2) Business and Human Rights Journal, doi:10.1017/bhj.2017.2; J Bonnitcha and R McCorquodale, ‘The Concept of “Due Diligence” in the UN Guiding Principles on Business and Human Rights’ (2017) 28(3) European Journal of International Law <www.ejil.org/article.php?article=2794&issue=137> accessed 11 October 2018; B Fasterling and G Demuijnck, ‘Human Rights in the Void? Due Diligence in the UN Guiding Principles on Business and Human Rights’ (2013) 116(4) Journal of Business Ethics 799; O Martin-Ortega, ‘Human Rights Due Diligence for Corporations: From Voluntary Standards to Hard Law At Last?’ (2014) 32(1) Netherlands Quarterly of Human Rights 44; B Fasterling, ‘Human Rights Due Diligence as Risk Management: Social Risk Versus Human Rights Risk’ (2016) 2(2) Business and Human Rights Journal 225.
13 OECD, Structures and Procedures of National Contact Points for the OECD Guidelines for Multinational Enterprises (OECD 2018).
14 Guidelines, Chapter II, Commentary 14; compare GP 15(b).
15 J Ruggie and John F Sherman III, ‘The Concept of “Due Diligence” in the UN Guiding Principles on Business and Human Rights: A Reply to Jonathan Bonnitcha and Robert McCorquodale’ (2017) 28(3) European Journal of International Law <www.ejil.org/article.php?article=2799&issue=137> (accessed 11 October 2018).
16 Guidelines, ch 1, para 3.
17 OECD website: Guidelines for Multinational Corporations – National Contact Points: <http://mneguidelines.oecd.org/ncps/> (accessed 11 October 2018).
18 Guidelines, Procedural Guidance, C2d.
19 Vibeke Vindeløv, Konflikt, tvist og mægling: konfliktløsning ved forhandling (Akademisk Forlag 1997).
20 Guidelines, Procedural Guidance, C3.
21 G Demuijnck and Björn Fasterling, ‘The Corporate Social License to Operate’ (2016) 136(4) Journal of Business Ethics 675.
22 Compare Bağlayan (this issue).
23 C Daniel, J Wilde-Ramsing, K Genovese and V Sandjojo, Remedy Remains Rare: An Analysis of 15 Years of NCP Cases and Their Contributions to Improve Access to Remedy for Victims of Corporate Misconduct (OECD Watch 2015).
24 OECD, Cases Handled by the National Contact Points for the OECD Guidelines for Multinational Enterprises (OECD 2015) <https://mneguidelines.oecd.org/Flyer-OECD-National-Contact-Points.pdf> accessed 7 October 2018.
25 Guidelines: Procedural Guidance, I.A.
26 For a detailed discussion of NCP collaboration and relations to the Investment Committee, see Ceyhan, ‘Corporations and Human Rights’ (n 8).
27 This was evidenced by a variation in NCP final statements in three cases concerning the POSCO company, lodged with the NCPs of Korea, Norway and the Netherlands. See discussion in Ceyhan, ‘Corporations and Human Rights’ (n 8) 228–29.
28 OECD, Structures and Procedures of National Contact Points (n 13).
29 GP 17 with commentary.
30 GPs 17–21.
31 GP 18.
32 Guidelines, ch IV, para 45; compare GP 19.
33 Guidelines, ch II.A, paras 11–12 and Commentary 14, ch VI, paras. 2-3; compare GP 17 and 19 with commentaries; OECD Guidelines, ch IV, Commentary 43.
34 This applies in particular to firms owned or controlled by the state as well as firms operating in conflict zones (GP 4 and 7 with commentaries) but may in principle be relevant to other firms as well.
35 As noted by the OHCHR (n 10), human rights due diligence ‘should not be confused with other forms of legal due diligence activities, such as those carried out in preparation for corporate mergers and acquisitions, or those required for compliance monitoring purposes in areas such as banking or anticorruption. The key difference between these concepts is that the latter group is generally concerned with identifying, preventing, and mitigating risks to business; whereas human rights due diligence is concerned with risks to people.’ See also Ruggie and Sherman (n 15); Working Group on Business and Human Rights, Companion note I to the Working Group’s 2018 report to the General Assembly (A/73/163) Corporate human rights due diligence – Background note elaborating on key aspects, 16 October 2018 <www.ohchr.org/Documents/Issues/Business/Session18/CompanionNote1DiligenceReport.pdf> accessed 27 October 2018.
36 e.g. Martin-Ortega (n 12);K Buhmann, ‘Neglecting the Proactive Aspect of Human Rights Due Diligence? A Critical Appraisal of the EU’s Non-Financial Reporting Directive as a Pillar One Avenue for Promoting Pillar Two Action’ (2017) 3(1) Business and Human Rights Journal 23; M Footer, ‘Human Rights Due Diligence and the Responsible Supply of Minerals from Conflict-affected Areas: Towards a Normative Framework?’ in JL Černič and TV Ho (eds), Direct Human Rights Obligations of Corporations (Wolf 2015) 179.
37 E.g. Fasterling and Demuijnck (n 12); Fasterling (n 12), Bonnitcha and McCorquodale (n 12); but compare Ruggie and Sherman (n 15).
38 Ceyhan, ‘Corporations and Human Rights’ (n 8) 249.
39 UN Framework (n 1), para 25 (emphasis added).
40 Daniel and others (n 23).
41 Guidelines, ch II, Commentary 15; compare GP 17(b).
42 Guidelines, ch II, Commentary 16.
43 GP 3, Commentary, and GP 21 with commentary.
44 Guidelines, ch II, Commentary 25; compare GP 3, Commentary, and GP 21 with commentary.
45 GP 19; Guidelines ch II, Commentary on General Principles, para 19.
46 Guidelines, Procedural Guidance, Commentary 25.
47 Lawyers for Palestinian Human Rights vs G4S, UK NCP (27 November 2013).
48 See discussion in Ceyhan, ‘Corporations and Human Rights’ (n 8) 254.
49 e.g. Backer (n 11); Ruggie and Nelson (n 11); Ceyhan, ‘Corporations and Human Rights’ (n 8).
50 RAID v Das Air, UK NCP, Final Statement, 1 July 2008.
51 Ruggie and Nelson (n 11).
52 RAID vs Das Air (n 50), paras 51, 56.
53 Global Witness vs Afrimex, UK NCP (28 August 2008).
54 Survival International v Vedanta Resources plc, UK NCP (25 September 2009).
55 Complaint from Lok Shakti Abhiyan, Korean Transnational Corporations Watch, Fair Green and Global Alliance, and Forum for Environment and Development vs POSCO/South Korea, ABP/APG (Netherlands) and NBIM (Norway), NCP of Norway (27 May 2013).
56 This was one of several complaints handled by different NCPs in regard to POSCO. As the complaints differed, NCP statements also relate to different issues (cf n 27).
57 OECD, Responsible business conduct for institutional investors: Key considerations for due diligence under the OECD Guidelines for Multinational Enterprises (OECD 2017); See also: Global Forum on Responsible Business Conduct, Scope and application of ‘Business Relationships’ in the financial sector under OECD’s Guidelines for Multinational Enterprises (OECD 2015) <https://mneguidelines.oecd.org/globalforumonresponsiblebusinessconduct/GFRBC-2014-financial-sector-document-2.pdf> accessed 10 October 2018.
58 For details, see Bağlayan (this issue).
59 TUAC’s database: <www.tuacoecdmneguidelines.org/Cases.asp?organisationid=22752&NCP=Y;OECD>; Watch database: <www.oecdwatch.org/cases> both accessed 11 October 2018.
60 GP 19.
61 See <www.oecdwatch.org/search?portal_type=Case&SearchableText=due+diligence> accessed 11 October 2018.
62 See <www.tuacoecdmneguidelines.org/Cases.asp> accessed 11 October 2018.
63 <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_mne_theme%2Fgeneral+policies&r=-f%2Fmne_currentstatus%2Fconcluded&q=!H!all&s=desc(mne_datereceived)> accessed 11 October 2018.
64 <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_currentstatus%2Fconcluded&r=-f%2Fmne_mne_theme%2Fhuman+rights&q=!H!all&s=desc(mne_datereceived)> accessed 11 October 2018)
65 <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_currentstatus%2Fconcluded&r=-f%2Fmne_mne_theme%2Fhuman+rights&r=-f%2Fmne_mne_theme%2Fgeneral+policies&q=!H!all&s=desc(mne_datereceived)> accessed 11 October 2018.
66 E.g. a case on patent violations in Denmark <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_mne_theme%2Fgeneral+policies&r=-f%2Fmne_mne_theme%2Fhuman+rights&r=-f%2Fmne_currentstatus%2Fconcluded&q=!H!all&s=desc(mne_datereceived)> and <http://mneguidelines.oecd.org/database/instances/dk0012.htm> accessed 11 October 2018.
67 <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_currentstatus%2Fconcluded&q=due+diligence> accessed 11 October 2018.
68 <http://mneguidelines.oecd.org/database/searchresults/?hf=10&b=0&r=-f%2Fmne_currentstatus%2Fconcluded&r=-f%2Fmne_mne_theme%2Fhuman+rights&q=due+diligence> accessed 11 October 2018.
69 The hit also excluded PWT Group and the NGOs Clean Clothes Campaign Denmark and Active Consumers, NCP of Denmark (15 October 2016), despite the database summary including ‘due diligence’ and ‘human rights’.
70 Bart Stapert v Mylan, Netherlands NCP (11 April 2016).
71 Norwegian Support Committee for Western Sahara v Sjovik, NCP of Norway (5 May 2011).
72 GP 23 with commentary.
73 GP 7 with commentary.
74 GPs 16 and 18.
75 See n 55.
76 The Cotton Campaign, Anti-Slavery International and KTNC Watch concerning the Government Pension Fund Global’s investments in the Korean companies Daewoo International and POSCO [NBIM/Daewoo/POSCO], NCP of Norway (2 July 2014); United Steel Workers and Birlesik Metal IS concerning the Government Pension Fund Global’s investments in the US company Crown Holdings Inc [NBIM/Crown Investment], NCP of Norway (2 July 2014).
77 Rabobank, Bumitama Agri Group (BGA) and the NGOs Friends of the Earth Europe and Friends of the Earth Netherlands/Milieudefensie, Netherlands NCP (15 January 2016).
78 PWT Group (n 69).
79 G4S (n 47).
80 Karin Buhmann and Line Pedini Rasmussen, Lundbeck’s Pentobarbital Human-Rights Dilemma, or When Good Intentions Turn Lethal: Issue Management in a CSR Context, teaching case (The Case Centre and Copenhagen Business School 2015).
81 EA Zoomers and K Otsuki, ‘Addressing the Impacts of Large-Scale Land Investments: Re-Engaging With Livelihood Research’ 83 Geoforum 164.
82 IAC and WDM v GCM Resources plc, UK NCP (20 November 2014).
83 Jijnjevaerie Saami village and Statkraft, NCP of Sweden and Norway (2 August 2016).
84 OECD, Structures and Procedures of National Contact Points (n 13).
85 Ibid.
86 Karin Buhmann, Changing Sustainability Norms through Communicative Processes: The Emergence of the Business and Human Rights Regime as Transnational Law (Edward Elgar 2017).