OECD Forum on Responsible Business Conduct Parts II and III – Remedies, resilience and supply chain due diligence

The 2020 OECD Global Forum on Responsible Business Conduct recently concluded with attention focused on access to remedies and the role of environmental supply chain due diligence in responsible business conduct. This annual event, which brings together stakeholders from businesses, governments, international organisations, trade unions and civil society provides an interesting insight into the main areas of debate and potential reform. We look here at some of the key discussion points arising during the Forum’s second and third sessions on 17 and 25 June. 

As previously reported on this blog, the first session focused on the role of responsible business in building more resilient supply chains in a post Covid-19 world.

Access to remedies: views on the existing landscape 

The OECD General Secretary, Angel Gurría, opened the session by asserting that the international legal framework has not kept pace with the globalisation of business operations. Specifically, he noted, conflicts, global supply chains, complex corporate structures and sub-contracting practices can make it difficult to see where responsibility for the impacts of business activities begins and where it ends.

To address these concerns, the panellists (including Lene Wendlandt, the Chief of Business and Human Rights Unit at the OHCHR) suggested state-based legal forms of redress (such as those in national courts) should be supplemented with alternative, non-judicial grievance mechanisms that may be less expensive for complainants to launch and offer speedier resolutions.

Detley Brauns, Head of Divisions at the German National Contact Point (NCP), noted alternative redress mechanisms such as National Contact Points can produce more innovative, flexible solutions which focus on reaching agreements and building relationships between the parties rather than resulting in binary decisions on liability. He noted that, unlike judicial processes, therefore, they offer companies the opportunity to reduce their financial exposure to formal litigation and better engage with local stakeholders.

In a separate session, Lalanath De Silva (Head of Independent Redress Mechanisms, Green Climate Fund) introduced the Green Climate Fund’s Independent Redress Mechanism (IRM) which allows individuals to bring complaints where they believe they have been affected by projects funded by the Green Climate Fund. As a fairly new mechanism, he recognised that the IRM needed to benefit from lessons learned from more established grievance mechanisms (such as the OECD NCPs) to achieve quick, cheap and fair decisions. According to Frode Elgesem (Chair of the Norwegian NCP), the best results in a NCP procedure are reached through mediation and agreed solutions, however, he noted the success of the NCP procedures does depend on the goodwill of the companies involved.

Considering access to remedy from a company perspective

This session, which was moderated by David Kovick of Shift, focused on the role of multinationals in the grievance mechanisms’ ecosystem and what lessons and insights can be drawn for companies.

Natalie Komatitsch (Head of Human Rights, Total) reiterated the importance of grievance mechanisms as a commitment to access to remedy, as required under the UNGP, and described the challenges of designing and implementing a corporate grievance mechanism applicable to the various affiliates worldwide. Ruben Zandvliet (Advisor at ABN AMRO Bank) emphasized the importance of going beyond sector consultations (such as participations in round tables) and establishing individual mechanisms to comply with the UNGP.

According to Sheila D’Annuzio (CSR and Diversity & Inclusion Director, ST Microelectronis) it is important that the workforce is aware of, and identifies itself with, the values of the company. She advocates for industry wide mechanisms which she believes will serve as a forum for employees who often do not know who the customer further up the supply chain is and may increase leverage to make change.

Where next for remedies? 

The closing panel addressed how to continue strengthening access to remedy in the years ahead with a particular focus on the NCP system. 

Winand Quaedvlieg (Chair of Committee on Investment and Responsible Business Conduct, Business at OECD (BIAC)) pointed out that some OECD member states have not yet embraced the concept of NCPs, which impacts the attitude of businesses. He encouraged companies to engage in the NCP process, which he views as a “safe place” of engagement. In summing up, Christine Kaufmann remarked that the key goal is to provide remedies that work on the ground and ensure the safety of complainants. She emphasized the need for clear procedures and communication about outcomes to ensure the parties do not become frustrated with the process.

Environmental supply chain due diligence

The intersection between environmental protection and human rights continues to gain attention and this was another key area of discussion, with a session at the Forum focused specifically on this topic. Overall, the speakers were in favour of an integrated approach to human rights and environmental due diligence. Christoph Töpfer (Policy and Research Officer, German Environment Agency) stressed that environmental due diligence excluding human rights could lead to silos within companies and impact its effectiveness. Niels Angel (Head of Sustainability, Innovation Management and Cooperation, BMW Group) expressed support for unified global standards instead of national regulations, which may only have limited effect.

On the investors’ side, Helena Viñes Fiestas (Global Head of Stewardship and Policy, BNP Paribas Asset Management) expressed strong support for the creation of EU regulations that would give investors voting rights on the environmental and human rights strategies of companies. Fiestas noted that, when investing, her firm expects that at least one director of the company in which they are investing to have expertise in human rights and environmental protection.

It will be interesting to see how these two topics of access to remedies and the intersection of human rights and environmental protection evolve in the coming year. With legislative proposals in relation to mandatory human rights due diligence being considered at EU level and in other jurisdictions, these topics will no doubt continue to generate a lot of discussion as these proposals take shape.