Content of the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct

The OECD Guidelines comprise 11 chapters and cover the following key subject areas:

I. Concept and Principles
The first chapter explains the most important terms and principles, the scope and the purpose of the Guidelines and defines the nature of the National Contact Points for Responsible Business Conduct.

II. General Policies
This chapter describes the objectives of the Guidelines and the most important, fundamental recommendations for companies, which apply regardless of the subject area. It is intended to give an initial orientation and define principles. The key elements are explained: risk-based due diligence; priorisation; meaning of business relationships; distinction between causing, contributing and being directly linked to an adverse impact; fostering sustainable development; stakeholder engagement; etc.

III. Disclosure
This chapter calls upon companies to ensure transparency in relation to their business activities and to be accountable by providing clear, complete, accurate and accessible information. In particular, information on responsible business conduct, corporate governance, social and environmental aspects and foreseeable risks associated with their business activities should be disclosed. The information should be provided in a timely and regular manner, but without placing an excessive burden on companies. 

IV. Human Rights
Regardless of size, industry, operational context or structure, companies shall respect human rights. Respect for human rights is a global standard expected of companies, regardless of whether it is required by the domestic law of the country in which the companies operate. Respect for human rights should be incorporated into the measures for compliance with due diligence obligations.

V. Employment and Industrial Relations
Chapter IV concerns the fundamental principles in the area of employment and refers to the internationally recognised labour standards of the International Labour Organisation (ILO). These include, e.g., the freedom of association, the right to collective bargaining, constructive cooperation between social partners, the abolition of all forms of forced and child labour and the elimination of all forms of discrimination with regard to employment and the promotion of local workers.

VI. Environment
This chapter largely reflects the principles and objectives resulting from the most important agreements (e.g. Aarhus Convention, Paris Climate Agreement, Agenda 2030 Sustainable Development Goals). Achieving these environmental goals requires a society-wide approach. This chapter describes how companies can contribute to the prevention and mitigation of adverse environmental impacts and continuously improve their environmental performance. For instance, the recommendations include effective environmental management systems, transparent environmental reporting and risk-based due diligence with regard to negative environmental impacts. Chapter VI aims to promote sustainable economies through environment and climate protection, the protection of biodiversity, the transition to net-zero greenhouse gas emissions, a climate-resilient economy and sustainable management of natural resources.

VII. Combating Bribery and Other Forms of Corruption
Corruption is damaging to democratic institutions and the governance of corporations, discourages investment, distorts international competitive conditions, undermines global stability and negatively impacts the areas covered by the other chapters of the Guidelines. Therefore, companies should not engage in any act of corruption, including the offering, promising, giving, requesting, agreeing to or accepting of any undue pecuniary or other advantage. Propriety, transparency and integrity, appropriate corporate governance, internal control mechanisms and compliance programmes are recommended for preventing, detecting and addressing acts of corruption. Furthermore, reporting persons should be protected adequately.

VIII. Consumer Interests:
In relations with consumers, companies shall use fair business, marketing and advertising practices and ensure safety and quality of the goods and services they offer. This includes accurate, verifiable and clear information on products, as well as the protection of customers' privacy and personal data. Companies shall refrain from deceptive, misleading, fraudulent or unfair representations, statements or other practices.

IX. Science, Technology and Innovation:
This chapter encourages multinational enterprises to disseminate the results of their research and development in the host countries while taking into account what is economically feasible, respecting intellectual property and not contravening competition law. In this way, local innovation capacities shall be expanded. Where appropriate, development work in the host country is to be carried out by local personnel and connections to local universities and public research institutions shall be established.

X. Competition:
For the purpose of protection of competition, companies are expected to conduct their business in compliance with all applicable competition laws and regulations and to refrain from anti-competitive agreements. Companies shall comply with the competition laws of the countries in which they operate and train their employees on the importance of complying with competition laws and regulations. The objective of competition policy is to contribute to general welfare and economic growth by promoting market conditions which ensure that nature, quality and prices of goods and services are determined by the competitive forces in the market.

XI. Taxation:
Companies are expected to contribute to the public finances of the host countries, comply with the applicable tax laws and cooperate with the local tax authorities. Thus, companies are expected to pay their tax liability on time. Accordingly, companies shall provide the appropriate or legally required information to the relevant authorities and cooperate with these authorities.
 

The OECD Guidelines include recommendations regarding supply chains of companies. However, this applies only on condition that company has an actual influence on the relevant group of persons.

For years, the OECD is devoted to the development of guidances and handbooks in order to promote and facilitate the implementation of due diligence by companies in accordance with the OECD Guidelines. Initially the focus was on individual sectors. In 2018, the OECD published a Due Diligence Guidance for Responsible Business Conduct which applies to all sectors and serves as an complement to the sectoral guidances. This was another milestone for the further development of due diligence in the supply chain.

OECD Due Diligence Guidances

• OECD Due Diligence Guidance for Responsible Business Conduct
• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
• OECD-FAO Guidance for Responsible Agricultural Supply Chains
• OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector
• OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
• Responsible business conduct for institutional investors
• Due Diligence for Responsible Corporate Lending and Securities Underwriting
• Responsible Business Conduct Due Diligence for Project and Asset finance transactions
• Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains
• OECD Handbook on environmental due diligence in mineral supply chains

EU initiatives for compliance with due diligence obligations

In recent years, compliance with due diligence obligations has been continuously gaining in importance at the EU level. With the EU Conflict Minerals Regulation (2017/821/EU), binding supply chain due diligence obligations for EU importers of certain minerals and ores from high-risk areas were established by the EU legislator for the first time. As of 1 January 2021, these obligations regarding management systems, risk management, third-party audits and disclosure are applicable to EU importers. The Conflict Minerals Regulation is in line with the standards of the OECD in the area of due diligence.

Due Diligence Ready!

The EU has published comprehensive training and educational material called "Due Diligence Ready!" online, in order to support small and medium-sized companies in particular to comply with due diligence obligations. These materials are intended to give companies an understanding of due diligence and enable them to implement it effectively.

The Recommendation on the Role of Government in Promoting Responsible Business Conduct was adopted by the OECD Ministerial Council on 12 December 2022. It lays out a comprehensive set of principles and policy recommendations to assist governments and other public authorities in the design and implementation of standards for responsible business conduct.

By providing an enabling policy environment, creating incentives and exemplifying responsible business conduct in their own activities, governments can significantly promote the effective implementation of responsible business conduct by companies.

The recommendation comprises of 21 principles, which are divided into six subject areas:

• Legal and regulatory framework enabling responsible business conduct
• Policies and measures to encourage responsible business conduct across relevant policy areas
• Governments' role as economic actors and in their commercial activities
• Stakeholder participation in the development and implementation of responsible business conduct policies
• Access to remedy
• Coordination of government policies and activities relevant to responsible business conduct

• OECD Guidelines for Multinational Enterprises on Responsible Business Conduct
• OECD Due Diligence Guidance for Responsible Business Conduct
• Overview of the OECD Guidelines (flyer)