22 February 2023

Accountability Counsel Comments on Proposed Updates to the OECD Guidelines

The OECD Guidelines for Multinational Enterprises have been a strong tool for promoting responsible business conduct and environmental, social, and human rights due diligence, but they are now due for an update to ensure alignment with other international normative and legal instruments. Developments since the Guidelines were last revised in 2011 include the 2030 UN Sustainable Development Goals, the ILO Guidelines for a just transition towards environmentally sustainable economies and societies for all, the OHCHR UNGP+10 Roadmap for the next decade of Business and Human Rights, requirements for ESG- and human rights-based disclosures in reporting standards, and legislative initiatives to enforce due diligence.

Even though the OECD Guidelines are not legally binding on companies, they advance due diligence by requiring each signatory State to provide a non-judicial grievance mechanism, known as a National Contact Point (NCP), to help stakeholders resolve conflicts concerning alleged corporate misconduct and due diligence shortcomings. That said, the effectiveness of the Guidelines are largely contingent on the independence, resources, expertise, and political will of NCPs.

In February 2023, Accountability Counsel submitted comments to urge updating the Guidelines to maintain their relevance and improve their overall effectiveness in three critical ways:

  • The duty to respond. MNEs must meaningfully respond to allegations of human rights, environmental, or social impacts raised through NCPs responsible for overseeing implementation of the Guidelines.
  • Standardized NCP Functions and Practices. There must be clear baseline expectations for effective NCPs.
  • Enhanced due diligence standards for MNEs marketing themselves as ESG/SDG/impact investors and operating in the space of privatized development finance. The OECD-UNDP Impact Standards for Financing Sustainable Development must guide these actors and NCP assessments.

Our comments also call for improving international business standards concerning, among other things, the disclosure of environmental and social impacts, human rights due diligence for technology companies, anti-reprisal policies, and respecting the rights of Indigenous Peoples.

Read the full submission here.