Responsible Business Conduct

in Global Value Chains

Relevance for South East Asia

Prof. Dr. Roel Nieuwenkamp• Chair OECD Working Party on Responsible Business Conduct

• 46 Member governments

Contents

1. OECD Guidelines for Multinationals

2. What are the global trends?

3. NCP cases South East Asia

4. Soft law -> hard law

5. Relevance for business in South East Asia

• Most comprehensive set of guidelines for responsible business conduct

• All areas of corporate responsibility (labour, human rights, environment,

corruption, taxation, etc)

• Government backed, binding for governments, non binding for MNE’s

• Unique grievance mechanism (Mediation by National Contact Points)

• NCPs promote the Guidelines and deal with complaints about company

behaviour in specific instances.

• 46 Members, including non OECD members (Braz, Arg, Col, Tun., etc)

• More non members process of adherence

• Most global supply chains and foreign direct investment covered

1. OECD Guidelines for Multinationals

1. OECD Guidelines for Multinationals

1. Concepts and Principles

2. General policies

3. Disclosure

4. Human Rights

5. Employment and industrial relations

6. Environment

7. Combating bribery

8. Consumer interests

9. Science and technology

10. Competition

11. Taxation

No other corporate

responsibility

instrument covers

these four issues

Adoption by the OECD Ministerial Council Meeting

Fmr US Secretary of State, Ms. Hillary Clinton, at the adoption:

“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.”

2. Global trends: Due Diligence and Supply Chain

• 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.

3. NCP Cases

Philippines (9)

Indonesia (8)

Myanmar (6)

Lao People’s Democratic Republic (4)

Malaysia (4)

NCP’s: e.g. Australia, Denmark, France, Germany, Japan,

Netherlands, Norway, Switzerland, United Kingdom, United

States

3. High risk areas – human rights

• Sugar plantation Cambodja - displacement of people (Australia

NCP)

• Nickel Mine Philppines - Norway NCP - Indigenous people

(stakeholder engagement)

• Dam Laos– Austria, Finland NCP’s

3. High risk areas – labour issues

- restructuring

- freedom of association

• Philippines, Thailand – NCP Sweden – Triumph

• Malaysia – NCP United Kingdom - BAT

• Indonesia – NCP Germany –Heidelberg Cement

3. High risk areas

Garment & textiles - Health and safety

- Wages

- Freedom of association

- Child labor

Mining - Failing stakeholder engagement

- Indigenous peoples

Agriculture - Land rights

4. Relevance for Business in South East Asia

• Soft law with hard consequences

• Investment in and from SE Asia

• Global Supply chains to and from SE Asia

• Serious implementation necessary: due diligence

system!

• Focus on problem prevention

Further information

For further information:

http://mneguidelines.oecd.org

Contact: Prof dr Roel Nieuwenkamp, Chair of the Working Party on

Responsible Business Conduct – roel.nieuwenkamp@minbuza.nl

@Nieuwenkamp_CSR

#OECDrbc

Friends of OECD Guidelines