OECD Global Forum on Responsible Business Conduct 2017

 

Opening Remarks by Angel Gurría

OECD Secretary-General

Paris, 29 June 2017

(As prepared for delivery) 

 

Dear Ambassadors, Ladies and Gentlemen,


I am delighted to open the 5th edition of the Global Forum on Responsible Business Conduct (RBC), and to welcome so many leaders and experts from all over the world, from the public and private sectors, international organisations and civil society.


Over the next two days, we will be focusing on a wide range of issues, from climate change and the Sustainable Development Goals, to state-owned enterprises, the employment of migrant workers, anti-corruption and responsible finance.


All these issues lie at the heart of our efforts to create fairer, more sustainable and more inclusive economies. And in this respect, RBC – together with our work on investment and trade, tax, competition, corporate governance and anti-corruption – is a key tool to promote a global level playing field and to ensure a fairer globalisation.


Earlier this month, at our Ministerial Council Meeting here in Paris, OECD Ministers reaffirmed their strong support for the OECD Guidelines for Multinational Enterprises as the main global standard on RBC and they also called on the OECD to develop general due diligence guidelines that can be applied to any sector. Ministers also committed to having fully functioning and adequately resourced National Contact Points (NCPs) and agreed that all adhering countries’ NCPs will be peer reviewed by 2023.
 

Making progress strengthening RBC

Let me begin with some good news. Thanks to many of you in this room, in recent months we have made important progress in several areas. The Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector was adopted in February. It is the result of two years of intensive work with major public and private sector stakeholders.


We also continue to work on our general due diligence guidance, helping to provide clarity on the expectations of business and build a level playing field on what’s possible for companies to achieve in their operations and supply chains.


In March we released due diligence recommendations for institutional investors, providing guidance to asset managers and owner on how to prevent human rights violations, environmental and other societal harms linked to their portfolios. Failing to consider these issues is increasingly seen to be a failure of fiduciary duty. It’s about mainstreaming responsible investment and this lies at the heart of our work on RBC for investors. There should be no conflict between fiduciary duty and RBC for investors – in fact, they should reinforce each other!


Moreover, according to the Governance and Accountability Institute, in 2016, socially responsible investing expanded over USD 8 trillion in the United States, a 33% increase from 2014. This means that one out of every five US dollars under professional management in the United States can be classified as an SRI investment – it’s a big increase compared to 2013 when SRI investment accounted for only one out of every nine US dollars.


We are also witnessing increasing efforts to enable responsible supply chains and RBC through policies and regulations. I am pleased to say that in many of these developments, the OECD’s Guidelines have played – and continue to play – a fundamental role.


For example, in the European Union, a regulation on minerals from conflict areas which builds on the OECD Due Diligence Guidance was adopted last month. The European Parliament is pushing for similar measures in the textile and garment sector as well.


Our MNE Guidelines have been referenced also in a number of recent free trade agreements, such as those between the EU and Canada, the EU and Viet Nam, and between the European Free Trade Association states and Georgia.


Moreover, a number of OECD countries, such as Germany, the United States, France, Italy and Switzerland, have adopted National Action Plans on Business and Human Rights on RBC. In all of them our Guidelines and the NCP mechanism play a prominent role.


The dynamic nature of the Guidelines and the critical role played by NCPs are evident in the interesting cases coming through the NCP system, including those involving financial institutions, climate change, sports bodies – the most well-known of which being the case involving FIFA, and even a case against a leading environmental NGO, World Wildlife Fund.

Numerous challenges persist

Despite this progress, however, gaps in approaches and coverage across countries and sectors persist, affecting workers and local communities. Giving a voice to those affected – both positively and negatively – by businesses and providing them with access to solutions continues to be essential. The NCPs are one of the few mechanisms to handle complex cases, often involving multiple entities and jurisdictions.


Here’s an interesting example: just last year, the Norwegian and Swedish NCPs handled a case involving the construction of wind turbines which could interfere with traditional migration routes of the Sami reindeer-herding collective. Clean energy commitments on the one hand, ensuring the protection of indigenous people on the other!


A further challenge we see emerging is how to ensure policy coherence on RBC. How can governments lead by example on RBC as economic actors, in policies and regulations and through the incentives they provide to business?


By its nature RBC cuts across different policy domains so a ‘whole-of-government approach’ is paramount to ensure coherence. How can Governments lead by example on RBC as economic actors, in policies and regulations and through the incentives they provide to business?


This particular challenge was at the core of yesterday’s discussions during the Roundtable for Policy-Makers. Participants focussed upon National Action Plans on Business and Human Rights, as well as fostering corporate responsibility through government procurement practices and economic diplomacy tools to ensure and promote coherence. 

Canada and Germany, for example, have now linked economic diplomacy – such as export credit – to participation in NCP cases. This is a modern approach to policy coherence and towards a whole-of-government approach to RBC!

Taking our work forward

Fortunately, we have a significant amount of support in taking our work forward. In addition to the support shown by Ministers during our MCM, which I mentioned earlier, last month, the G20 Labour and Employment Ministers committed to implement RBC standards, including the MNE Guidelines. They also outlined the responsibility of businesses to address adverse impacts on decent work by exercising due diligence and the importance of providing access to remedy.


Meanwhile, civil society is keeping us on our toes while actively promoting our tools. OECD Watch, along with members of the Business and Human Rights Task Force, called upon the G20 Employment Working Group to better promote supply chain transparency and due diligence. They also called on all G20 countries to adhere to the MNE Guidelines and strengthen their NCPs.


In this sense, it is extremely encouraging to see an increasing number of emerging markets involved in the work on RBC participating at the Global Forum today, as their companies become increasingly global.


Ladies and Gentlemen,


We live in a rapidly changing policy environment, one which is not only defined by emerging threats and opportunities, but also one which creates uncertainty and risk for businesses. This makes our work on RBC ever more challenging, more pressing and more relevant! Today’s Forum is an opportunity to take our work forward and to enhance the role of RBC in helping us to tackle challenges and to deliver better policies for better lives.


Thank you.