Making Responsible Business Conduct Everyone’s Business
Opening Remarks by Angel Gurría, OECD Secretary-General, delivered at the Global Forum on Responsible Business Conduct
26 June 2013, Paris, France
(As prepared for delivery)
Honourable Minister Moni, Executive Secretary Heyzer, Assistant Secretary Fernández, Ladies and Gentlemen:
Welcome to the Global Forum on Responsible Business Conduct. The OECD is honoured to host the first Global Forum on this topic.
Today’s overwhelming attendance demonstrates that responsible business conduct is no longer an afterthought; it is a key priority on the global economic agenda. We are all committed to placing a greater emphasis on meeting the needs of consumers and on improving the working conditions of employees, while at the same time allowing businesses to thrive.
This forum brings together leaders from government, labour, business, NGOs, and academia from advanced countries and emerging-market economies. It presents a unique opportunity to make a difference and to improve the quality of corporate conduct. Let me share with you the OECD’s perspective on this topic.
Responsible Business Conduct is Everyone’s Responsibility
The 2008 crisis demonstrated clearly that responsible business conduct is a collective duty. Without propriety, integrity, transparency and the engagement of all stakeholders, markets cannot function well. Governments must protect fundamental rights and ensure good governance, fair regulations and transparency, while businesses must acknowledge that operating globally also implies a responsibility for their impact locally.
Labour organisations and NGOs help ensure accountability and international organisations like the OECD can inform and foster efforts overall. We can develop recommendations, collect data, conduct technical analysis and identify best practices. And, as we are seeing here to today, we can provide an open platform for all stakeholders to come together and share their experience.
As we all step up our efforts to improve business conduct, it is essential for us to coordinate our response. This is particularly true as we consider global value chains, which are an important transmission channel for responsible business conduct.
A well-coordinated approach between businesses, governments and other actors is needed to resolve complex challenges, like those involved in the textile sector. We have seen improvements in recent years, and to maintain the momentum, we now need government and private sector leaders ready to champion responsible business conduct.
Momentum is Growing for Improved Corporate Conduct
In recent years, advances have been made to promote responsible business practices. An unprecedented convergence in international standards on what constitutes responsible business conduct has emerged around two core instruments: the 2011 OECD Guidelines for Multinational Enterprises and the 2011 UN Guiding Principles for Business and Human Rights. This convergence represents a better understanding of how business mitigates risk and how governments can support and promote responsible business conduct.
For example, a commitment to include supply chains and business relationships in risk-based due diligence is now an accepted baseline for virtually all areas of business ethics. The result is a more predictable business environment that guides enterprises on how to meet their responsibilities and that creates accountability for all stakeholders.
However, despite all these developments, the Rana Plaza tragedy and the Cambodian factory collapse are reminders that we haven’t done enough! We have to try harder. We have to do better. We have to bridge the gap between theory and practice. We cannot allow these tragedies to repeat themselves on our watch.
That is why I am delighted to have Mrs Dipu Moni, the Minister of Foreign Affairs of Bangladesh, here today to provide us with important insights into just what needs to be done to avoid tragedies such as that experienced at the Rana Plaza in Bangladesh.
The OECD Can Provide Unique Tools for Support
As a “do-tank” with a dedicated team of experts on this issue, and with open, collaborative relationships with governments, businesses and key actors, the OECD can offer powerful tools to raise business standards to more decent and acceptable levels.
Our Guidelines for Multinational Enterprises (MNE), the most comprehensive of its kind, are an open instrument that encourages the positive contribution of business to sustainable development. The MNE Guidelines do not undermine competitiveness and do not justify restrictions in developing markets.
And they are more than just recommendations on paper. Their effectiveness is derived from the obligation of each adhering country to establish a National Contact Point. These National Contact Points promote the Guidelines and provide mediation and conciliation services to resolve issues arising from the alleged non-observance of the Guidelines. No other international instrument provides this facility, and let me tell you, it works.
Furthermore, the multi-stakeholder proactive agenda that is included in their recent update makes them even more effective. The newly established Working Party on Responsible Business Conduct is working with governments, business, civil society and donors to help enterprises, and their suppliers respond to risks associated with particular products, regions, sectors or industries.
One example of this is our work to promote the responsible sourcing of minerals from conflict areas. To help companies respect human rights and avoid contributing to conflict through their mineral purchasing practices, the OECD has developed, through a multi-stakeholder process, a Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. These detailed recommendations intend to cultivate transparent mineral supply chains and sustainable corporate engagement. With these guidelines in hand, we are working with local and international NGOs, businesses, governments and donors in African countries in the Great Lakes Region.
Non-adherent countries also have an interest in the Guidelines, given their worldwide application and the fact that adherents account for around four-fifths of outward FDI and two-thirds of inflows. It is important to remember that last year, half of the issues raised in front of National Contact Points concerned non-adhering countries. By working together, adherents and non-adherents can significantly advance responsible business conduct.
To conclude, I would like to briefly touch on some of the OECD’s other tools to combat poor business practices. We have launched work on due diligence in the financial sector, responsible agriculture investment, and on engagement with local communities in the extractive industries. We are also discussing the possibility of joint work on a multi- stakeholder process with the ILO to strengthen due diligence in textiles.
And to address business conduct more broadly, we have the OECD Anti-Bribery convention, the first and only legally-binding international instrument focusing exclusively on active bribery in business. To ensure that businesses pay their fair share of taxes, we are developing an action plan to help governments tackle Base Erosion and Profit Shifting, or BEPS. These tools, alongside our MNE Guidelines, provide the beginnings of a tool kit to avoid poor corporate conduct becoming a business model.
Ladies and Gentlemen:
Your discussions over the next two days are an essential step in ensuring that tragedies like Rana Plaza do not happen again. I am confident that our work today will make a significant contribution towards eradicating poor business conduct.
We are all committed to this objective, as it is key to rebuilding public trust. As we so aptly witnessed during the greatest economic crisis of our lifetimes, responsible business conduct is a cornerstone of public confidence. I urge everyone here today to use all of their firepower to take action and work to raise business practices, regardless of the country or firm they represent.