Did you miss it? Whether you’re working on mandatory due diligence law, development finance sustainability standards, procurement, export credits, community engagement, or other corporate accountability issues, the OECD’s Recommendation on the Role of Government in Promoting Responsible Business Conduct may be a useful advocacy tool for you.
In 2022, following over a year of advocacy by OECD Watch, the OECD Investment Committee adopted a high-level Recommendation urging governments to promote responsible business conduct.
While the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (Guidelines) address businesses, this Recommendation speaks to states. It’s authored by and directed to the 52 countries that adhere to the Guidelines – but the standards apply to all governments, including especially those acceding to the OECD.
The Recommendation urges key actions for governments to advance corporate accountability, covering six topics ranging from establishing binding corporate accountability laws, to ensuring access to remedy, to meaningfully engaging Indigenous Peoples and other (marginalised) rightsholders in responsible business policymaking.
A number of the topics align with civil society priorities. Here’s how you can use the Recommendation in your advocacy.
Mandatory human rights due diligence
The Recommendation notes the increase in states adopting corporate accountability laws and recommends that Adherents put in place a legal and regulatory framework to enable responsible business conduct in the areas covered by the OECD Guidelines. Governments should “align with the OECD’s RBC standards and in particular OECD Due Diligence Guidance when developing new policies, laws, or regulations, including secondary rules, legislative guidance, or sectoral policies.” The Recommendation lists the many areas covered by the Guidelines that legislation should address, including human rights (including indigenous peoples’ rights, gender equality, and non-discrimination), employment and industrial relations, environment, anti-corruption, science and technology, competition, and taxation among others.
How to use this? Remind governments they themselves have recommended binding law aligning with the high standards of the Guidelines. Critique them for breaching their own recommendations.
Development finance policy
The Recommendation encourages responsible business conduct in development cooperation efforts, in particular development finance instruments at the national and international levels. The Recommendation calls for “collaborating internationally, for example through…multi-lateral development banks, to promote policy coherence on responsible business conduct at the international level in line with the OECD Guidelines and other international RBC standards.” The Recommendation asserts that “policies of development finance institutions, as well as sustainable and blended finance instruments should be based on RBC standards, including [the] OECD Due Diligence Guidance.”
How to use this? Many civil society organisations are working to strengthen the sustainability standards of development banks such as the International Finance Corporation. The same 52 governments that have authored this Recommendation play a lead role in shaping those development standards. Where alignment between those development standards and the OECD Guidelines’ 2023 updated text on human rights, due diligence, climate, and environment would be impactful, the Recommendation can be quoted too.
Public procurement
The Recommendation exhorts Adherent governments to “lead by example… particularly by…including RBC in procurement policies” and “promoting due diligence for RBC in public procurement.”
How to use this? Civil society promoting responsible procurement in their country can remind governments that they themselves recommend responsible procurement as good government practice.
State-Owned Enterprises
The Recommendation calls for governments to “establish[] and publically disclos[e] clear expectations for State-Owned Enterprises (SOEs) to observe responsible business conduct standards together with effective mechanisms for their implementation.”
How to use this? Where governments shield state-owned companies from scrutiny or accountability, civil society can point to the Recommendation’s assertion that these companies should be leaders in responsible conduct.
Export credit services
The Recommendation calls on states to exhibit responsible business standards in their role as economic actors, including in relation to export credits. The Recommendation calls on states to integrate “environmental, social, and governance criteria in the provision and management of equity, debt, grants, loans, guarantees, or insurance, including by promoting awareness of responsible business conduct among appropriate parties involved in applications for officially supported export credits.”
How to use this? While this text could be stronger, it’s another tool to urge states to ensure more sustainable export credit services. Meanwhile, OECD Watch is working to strengthen other OECD sustainability standards for export credit agencies.
Community engagement
The Recommendation calls on governments to “promote stakeholder participation in the development and implementation of responsible business conduct policies” including by engaging “workers’ organisations, civil society, affected communities, and academia, as well as the interested public. …In this regard, Adherents should give particular consideration… to vulnerable groups, such as human rights defenders and indigenous peoples, who may face difficulties in participating in the development and implementation of RBC policies.”
How to use this? Are you fighting from the outside for transparency and the right to guide new policymaking on corporate accountability? Well, the 52 governments authoring this Recommendation say that shouldn’t be the case. Critique them if they don’t meet their own recommendations.
Access to remedy
Much like the UN Guiding Principles, the Recommendation expects governments to ensure victims of corporate harm access to effective judicial or non-judicial remedy mechanisms, and also ensure that National Contact Points play an important role in remedy. Of note, the Recommendation recommends governments consider whether a company engaged in good faith or not in an NCP complaint, before allowing it to access government support and services such as trade advocacy, economic diplomacy, or other benefits.
How to use this? Alongside the UNGPs, this Recommendation can help you demand stronger remedial mechanisms. And have you experienced poor faith engagement by a company in an NCP complaint? Use this Recommendation to demand penalties from the government.
Policy coherence
Finally, the Recommendation urges governments to coordinate their policies and activities on responsible business conduct – both domestically, ensuring collaboration and coherence across relevant domestic agencies and policies – and internationally, for example by collaborating through relevant international and regional organisations to promote international policy coherence in line with the OECD Guidelines.
How to use this? Governments are not (yet) driving collectively towards responsible business, and are being pushed by business to align to lower standards than the Guidelines. Use this Recommendation to remind states what they themselves have promoted as best practice.
OECD Watch will work with global civil society to help them sharpen government action to require and advance responsible business conduct.
