PROACTIVE AGENDA FOR RESPONSIBLE BUSINESS CONDUCT

Barbara Bijelic, Policy Analyst Responsible Business Conduct Unit

OECD Investment Division

Sector–specific due diligence OECD is the only international organisation with instruments and dedicated expertise on RBC due diligence

• OECD Due Diligence Guidance for Responsible Mineral Supply Chains (2011)

• OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector (approved December 2015)

• OECD-FAO Guidance for Responsible Agricultural Supply Chains (approved December 2015)

• OECD Due Diligence Guidance for Responsible Supply Chains in the Garment & Footwear Sector (forthcoming 2016)

• Responsible Business Conduct in the Financial Sector (good

practice papers forthcoming 2016)

OECD Due Diligence Guidance for Responsible

Mineral Supply Chains

What makes it unique? First government supported sector-specific supply chain due diligence

guidance Referenced in legislation in the US, DRC, Rwanda, Burundi, EU

(pending) and Canada (pending). Highly advanced implementation program involving 500+ stakeholders. Where are we now? 10th ICGLR-UN-OECD Minerals Forum, May 10-12th Gold baseline assessments in DRC and Colombia Assessment of implementation efforts Outreach in China, Turkey, India, West Africa, Colombia, DRC Ongoing peer learning and knowledge sharing (ASM, worst forms of

child labour, SMEs, auditor harmonization, 3T commercial risk mitigation)

ASM gold mining sourcing toolkit and implementation program Etc…

OECD Due Diligence Guidance for Meaningful

Stakeholder Engagement in the Extractive

Sector

What makes it unique?

Explains relationship between due diligence and stakeholder engagement

Risk-based approach approach to stakeholder engagement

• Primary objective avoiding adverse impacts to stakeholders

• Managing risks with regard to stakeholder engagement activities themselves

Monitoring and evaluation framework for stakeholder engagement activities

Where are we now?

Guidance approved December 4th

Draft Council Recommendation circulated March 15th.

Official launch May 10th during Minerals Forum at OECD

Fundraising for implementation program.

OECD-FAO Guidance for Responsible

Agricultural Supply Chains

What makes it unique?

Joint OECD-FAO product

Unification of leading international standards on RBC in agriculture (OECD Guidelines, CFS-RAI Principles, PRAI, VGGT, CBD, UNGPs etc.)

Recognition of financial enterprises as part of the value chain

Where are we now?

Guidance approved

Draft Council Recommendation approved by WPRBC, pending approval in IC.

Official launch March 15th

Fundraising for implementation program, beginning outreach activities

OECD Due Diligence Guidance for

Responsible Supply Chains in the Garment &

Footwear Sector

What makes it unique?

Establish a common framework for supply chain due diligence in the garment and footwear sector

Where are we now?

Public consultation ended April 2016, final draft to WPRBC anticipated June 2016.

Advisory Group meeting planned for 7 June 2016.

3rd Roundtable and policy dialogue planned November/December 2016.

Workshop in Cambodia – fall 2016.

Multi-stakeholder “review” of Initiatives for Due Diligence

Responsible Business Conduct and the

Financial Sector

What makes it unique?

Translating the Guidelines for the financial sector

Bridging gaps in understandings of key concepts in the financial sector and OECD Guidelines

Where are we now?

Third draft of paper on RBC and institutional investment anticipated end of April 2016

Finalization of unit on investment anticipated May 2016

Asset-based finance and corporate lending planned for summer/fall 2016

Proactive agenda: What makes it

unique?

Demand driven Endorsed by 46 governments Developed through multi-stakeholder approach Whole of supply-chain approach

How is the proactive agenda used to

promote the guidelines?

• Raising awareness and buy-in of industry – Proactive awareness of Guidelines amongst

industry • Supporting promotional function of NCPs

– Realistic recommendations and credibility

– Ownership and uptake of OECD standards by industry (e.g. independent promotion of OECD tools, incorporation of OECD tools into corporate policy and strategy).

APG‎

ABN AMRO

Barclays

Blackrock

ING

JP Morgan

‎NBIM

‎UBS

USCIB

USS

Manulife Financial

Bank of Tokyo

Union bank

‎ MUFG

Adidas

BIAC

Business Social

Compliance Imitative

(BSCI)

China National Textile

and Apparel Council

(CNTAC)

Confederation of the

German Textile and

Fashion Industry

Decathlon

Euratex

Esquel

Gap

International

Organisation of

Employers (IOE)

International Apparel

Federation

Kering

Li & Fung

MODINT

Primark

Sustainable Apparel

Coalition

Walmart

The Walt Disney

Company

CCCMC

BIAC

ICMM

CAPP

Mining

Association of

Canada

PDAC

World Gold

Council

Anglo American

Cerrejon

CAMECO

Chevron

EUROMETAUX

Euromines

Vale

Aquila Capital Farms

SOMDIAA

EBG Capital AG

Stalwart Management

Consultancy Services

Sustainable Insight Capital

Management

Duxton Asset Management

Monsanto

BNP Paribas Asset

Management

BIAC

Yara

Datalab / Pantheon

Farming

Milltrust International

FoodDrinkEurope

Coca Cola

Ripplewood Advisors

Rabobank

Aquila Capital Farms

ECP International

SMBC Europe Limited

(Sumitomo Mitsui Banking

Corporation Europe)

Cargill

Crédit Suisse

ASEAN CSR network

UBS

Syngenta

How is the proactive agenda used to

promote the Guidelines?

• Raising the profile and capacity of NCPs.

– Convening of relevant stakeholders through AG participation (15 NCPs involved in sector specific.

– Capacity development on substantive issues.

– References to NCP mechanisms (e.g. UNPRI, AFLCIO Stakeholder Resolution)

How is the proactive agenda used to

promote the guidelines?

• Promoting coherent recommendations to challenging issues

– Government-backed, multi-stakeholder developed, whole of supply chain approach

– Avoid a proliferation of standards, provides model for government/industry initiatives

How is the proactive agenda used to

promote the guidelines?

• Proactive agenda a tool for reaching non-adherents.

– Current adherents cover most of the worlds investment flows but include only one of the BRICS countries.

How does the proactive agenda

contribute to outreach?

Textile & Garment Sector Supply Chain

C

h

i

n

a

3

7

.

3

%

Clothing exports of selected economies 1990 (million dollars)

Data Source: World Trade Organisation

Bangladesh

India

Turkey

Indonesia

Mexico Pakistan

China

Textile & Garment Sector Supply Chain

Clothing exports of selected economies 2013 (million dollars)

Data Source: World Trade Organisation

Bangladesh

India

Turkey

Vietnam

Indonesia

Mexico Pakistan

Minerals & Outreach

• In 2012 over 64% of world oil production came from ten countries, adherents (Canada and the US) only comprise 13% of this production.

• Likewise the leading producers of global minerals are non-adhering countries.

Minerals:

Mandarin edition of the Due Diligence Guidance available since May 2014

MOFCOM designated the China Chamber of Commerce Metals, Minerals and Chemicals (CCCMC) as key partner to work with the OECD on responsible business conduct in minerals

OECD and CCCMC signed a Memorandum of Understanding (MOU) on responsible mineral sourcing, to cover due diligence outreach in China and a tool to help Chinese companies operationalise the Guidance

Guidelines for Chinese companies, based on the OECD Guidance, have been approved and published during a dedicated workshop in China in December 2 & 3, 2015

Mineral (3TG) specific guidance / audit protocols will be developed in 2016 through a multi-stakeholder process

Textiles:

Collaboration with CNTAC through Advisory Group

Consultation with Chinese stakeholder on Textiles Guidance, December 2015.

Potential development of Chinese version of Due Diligence Guidance for Responsible Apparel Supply Chains

Cooperation with the People’s Republic of China

18

Responsible Apparel and Footwear Supply Chains:

Cambodia workshop (2016)

Multi-stakeholder consultation process in India

Stakeholder Engagement in the Extractive Sector:

?

Responsible agricultural supply chains:

Workshops on responsible agricultural investment in Tanzania, Mozambique, Ghana and Malawi.

Application to all FAO member countries.

Financial sector

Outreach to Chinese FSPs and exchanges?

How does the proactive agenda contribute to

outreach?

Governments’ uptake

20

• Launch of implementation plans for agriculture, stakeholder engagement.

• Finalization of Responsible Apparel and Footwear Supply Chainsand launch of implementation plan.

• Finalization of RBC in investment, RBC in asset-based finance and corporate lending.

• Continued implementation of the OECD Due Diligence Guidance on Responsible Mineral Supply Chains

• NCP targeted trainings and workshops

What’s next…?

Identify sector work relevant to your

context

• Identify the relevant sectors in your

country & specific stakeholders

(enterprises may be involved in

downstream operations, such as retail, or

upstream operations such as raw material

production)

• Identify risks of adverse impacts of the

relevant sectors in your country

NCPs have a mandate to raise awareness of the Guidelines

and their implementation. One way to do this is by promoting

the application of the OECD Guidelines among relevant

sectors in each adhering country. Work produced through

OECD sector projects can contribute to this aim.

Promote Due Diligence

• Promote adoption of sector due diligence

guidance

• Build capacity of enterprises to conduct

due diligence (e.g. through workshops in

collaboration with OECD Secretariat)

• Provide country-specific information to

enterprises regarding sector work

• Promote recommendations through

handling specific instances

NCP awareness raising of sector work

Stakeholder identification

& engagement

• Identify government &

business representatives, in-

country meetings and training

events, implementation

programs

• Invite stakeholders to OECD

sector events

− Facilitate engagement with 3rd

countries

NCPs play a critical role in connecting the OECD with local

government, business, workers and other experts, and

ensuring that sector work is relevant across contexts and

addresses emerging issues.

Apply sector specific

recommendations in

specific in

• Enable consultation on due

diligence drafts

− E.g. Consultation on the Due

Diligence Guidance for

Responsible Supply Chains in

the Textile and garment Sector

Monitor developments

• Relevant national policy

developments linked to the

OECD Guidelines and sector

work.

• Share practical experiences on

sector-specific challenges

• Notify Secretariat about

information on relevant specific

instances

• Identify emerging issues

NCP contributions to sector projects

What’s‎next?

You tell us! How can the proactive agenda better raise the profile

of NCPs? What should future activities of the proactive agenda

focus on (e.g. capacity building, policy dialogue, research?

How can we work more closely together in the future?

Thank you

Photo credits:

Slides 1, 4 & 6: © Thinkstock/iStock, Slide 3: © Thinkstock/Creatas, Slide 9: © OECD