The finance sector remains the most referred industry by stakeholders to the ‘National Contact Point’ grievance mechanism under the OECD’s business conduct guidelines, the Guidelines for Multinational Enterprises.
Just last month four Dutch-based NGOs made a complaint against ING Bank for violating the guidelines on climate change and the environment. And Credit Suisse is subject to a complaint relating to its links with the controversial North Dakota Access Pipeline (DAPL) in the US.
In March the OECD clarified how institutional investors have a “direct linkage” with investee companies under the guidelines.
“The financial sector continued to be a sector in which most specific instances were raised for the second year in a row, accounting for over 20% of all new submissions,” said the Organisation for Economic Cooperation and Development in its new annual report on the guidelines, covering 2016.
During the year, the OECD said 34 new cases were submitted to NCPs and 38 were closed. Of these, 24 were concluded and 14 were not accepted.
Some form of agreement was reached in nine out of 15 concluded cases where mediation occurred.
Agreements reached often included the development of a remediation plan, or changes to a company’s operations and policies to mitigate impacts, the report said.Nine (37%) of the concluded mediations resulted in some change to company policy or operations to better meet the recommendations of the guidelines, the OECD said. “These changes included strengthening corporate policies on human rights, improving due diligence processes as well as improving reporting processes and transparency standards.”
Last year was the 40th anniversary of the “soft law” Guidelines, and signatory governments have to set up NCPs to handle cases of violations submitted by NGOs and others.
But campaigners complain the system is not effective; Amnesty International has called it “not fit for purpose” while the OECD Watch group issued a report two years ago called ‘Remedy Remains Rare’.
In March this year, OECD Watch, along with members of the Business and Human Rights Task Force, called on the G20 Employment Working Group to do more. They wanted NCPs to be sufficiently resourced and called for “material consequences” for companies that breach the guidelines.
And OECD Watch is working with the Trade Union Advisory Committee to the OECD on developing an Index to rank NCP performance in a bid to “change the status quo by creating pressure for positive change”. This is expected to be launched this year.
The Guidelines are the subject of a high-level event in Paris this week.