Public consultation on the update of the OECD Guidelines for Multinational Enterprises
Published 8 March 2023
Category: Impact and ESG
A consultation draft on the OECD Guidelines for Multinational Enterprises (the “Guidelines”) was made available for public consultation by OECD on 13 January 2023. The consultation draft includes potential updates to chapters in the Guidelines as well as the implementation procedure based on discussions by the OECD Working Party on Responsible Business Conduct (the “WPRBC”).
In general, the Guidelines, last updated in 2011, are a set of non-binding recommendations to businesses for ensuring responsible business conduct in all areas where business interacts with society, hereunder:
- Human rights
- Labor Rights
- Environment
- Bribery
- Consumer interest
- Disclosure
- Science & technology
- Competition
- Taxation
Overall, the purpose of the update is to ensure that the Guidelines and implementation procedures are still fit for purpose going forward. The proposed update is, amongst others, guided by the following parameters determined by WPRBC:
- No wholesale revision or full redrafting of the existing Guidelines.
- Potential updates follow from various issues raised in previous stocktaking exercise but also from current practices and understanding.
- Coherence with standards and priorities in the OECD.
The majority of the proposed updates are within the areas of environment and science & technology, including:
Environment
- Enterprises should “carry out a risk-based due diligence […] to identify, prevent and mitigate the adverse environmental, health and safety impacts of their operations, product and services […]”.
- Enterprises should “contribute to environmental remediation as necessary to address adverse environmental impacts the enterprise has caused or contributed to […]”.
Technology
- Enterprises should “carry out risk-based due diligence […] in the context of development, financing, licensing, sale trade and/or use of technology […]”.
- Enterprises should “When collecting, sharing and using data, enhance transparency of data access and sharing arrangements, and encourage the adoption of responsible data governance […]”.
The proposed updated Guidelines will impact multinational enterprises as well as venture funds, institutional investors and startups who often commit to the Guidelines. Each adherent country (38 countries including Denmark) has set up National Contact Points (the “NCPs”), which are responsible for investigating complaints about companies violating the Guidelines. When receiving a complaint, the relevant NCP is responsible for helping the business find a solution to the non-compliance, and the number of complaints has increased in recent years. We therefore recommend companies to stay up to date on the Guidelines.
The consultation draft can be seen here.
Next steps: The public consultation was open until 10 February 2023, and now the WPRBC will review the responses. It is at the moment not clear when an updated text could be implemented.