30 May 2018
In May 2018, the OECD Council adopted a Council Recommendation to promote and implement the OECD Due Diligence Guidance for Responsible Business Conduct. The Recommendation was released at the OECD 2018 MCM. The Guidance explains how companies should conduct diligence to avoid and address adverse impacts under the OECD Guidelines for Multinational Enterprises. The Guidance is expected to become the authoritative international reference on due diligence.
The Guidance sets out a due diligence framework to be used by enterprises to avoid and address adverse impacts in their operations, supply chains and business relationships on all relevant topics under the Guidelines: (i) information disclosure; (ii) human rights; (iii) employment and industrial relations; (iv) environment; (v) bribery; and (vi) consumer affairs. Companies cannot ‘pick and choose’ which adverse impacts to avoid and address, even if they have to prioritise on the basis of severity and likelihood.
The adoption of the Council Recommendation promoting the Guidance is a significant milestone. The extent to which companies conduct effective due diligence, in line with the OECD Guidance, will ultimately depend on government action. A number of OECD countries have already taken steps, including introducing binding legislative measures. TUAC calls on adhering governments to implement the following 5-Point Plan:
The OECD also has a central role to play in promoting the Guidance. It should draw up an implementation plan, building on the lessons learnt from its follow-up programmes for promoting the sectoral due diligence guidance, and involve TUAC, BIAC and OECD Watch. Effective implementation of the Guidance will require adequate resources.
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