INTERNATIONAL CO-ORDINATING COMMITTEE OF NATIONAL INSTITUTIONS FOR THE PROMOTION AND PROTECTION OF HUMAN RIGHTS (ICC)
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1 Review of OECD Guidelines for Multinational Enterprises: 2nd Submission of International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights March 2011 EXECUTIVE SUMMARY The International Coordinating Committee (ICC) of National Human Rights Institutions (NHRIs) regards the current process to revise, update and upgrade the OECD Guidelines for Multinational Enterprises as a critical opportunity to ensure the OECD Guidelines are given the scope and institutional authority to make them an effective corporate accountability tool. Further to our initial submission to the OECD Guidelines review of November 2010, this submission: 1. Calls for greater transparency and inclusiveness in the OECD Guidelines review process, including publication of negotiating texts 2. Highlights key human rights issues that still need to be addressed 3. Proposes additional measures to strengthen future implementation of the OECD Guidelines. 1. OECD Guidelines Review Process: Transparency The ICC is concerned at the level of transparency of the process to review and update the OECD Guidelines for Multinational Enterprises. Apart from the original Terms of Reference for the Review, 1 key documents have not been put promptly in the public domain. This appears inconsistent with the OECD s core value of openness, and its policy-making practice in other areas. 2 It restricts the ability of stakeholders with relevant expertise and experiences to contribute constructively to review. The ICC notes that low visibility and poor knowledge of the OECD Guidelines by stakeholders has been acknowledged by the OECD itself as one of the key obstacles to the Guidelines effectiveness as a corporate governance tool. In the interests of a more visible, inclusive and therefore more credible and legitimate process and set of outcomes, the ICC urges the OECD to ensure:
2 Negotiating texts and stakeholder submissions to the OECD Guidelines review are put promptly into the public domain These materials are published using media and formats that permit full engagement by all stakeholders in discussion of their contents Timelines for the remainder of the Guidelines review process, including public comment periods on draft texts, are adequate to allow all stakeholders to respond in an appropriate and meaningful way. 2. Outstanding human rights issues in OECD Guidelines review This section highlights key human rights issues that still need to be addressed in the review. The following comments and proposals should be read in conjunction with those contained in the ICC s first submission to the Guidelines Review. 3 Part Issue Submission - References to role of NHRIs in supporting implementation of Guidelines NHRIs are primary actors at national level for the promotion and protection of human rights. NHRIs mandate under the UN General Assembly s Paris Principles extends to business and human rights as a core element. The UN Human Rights Council, UN treaty monitoring bodies and UPR process regularly affirm the important role of NHRIs in securing effective implementation of states international human rights commitments at national level. 4 The UN Special Representative on Business and Human Rights Draft Guiding Principles and paper on follow-up measures to the mandate make clear the role of NHRIs across all three pillars of the protect, respect and remedy framework. 5 Thirty-five of the forty-two adhering countries to the OECD Guidelines have established NHRIs and half of the remainder are engaged in plans to do so. NHRIs thus embody key institutional capacity, in home and host states of MNEs, to support and contribute to effective implementation of human rights in the corporate sector, and of the OECD Guidelines, for instance, through dissemination, advice and training to business, E.g. UN Committee on Economic and Social Rights, General Comment No.10, The role of national human rights institutions in the protection of economic, social and cultural rights (1998); UN Committee on the Rights of the Child, General Comment No.2, The role of independent human rights institutions (2002). 5 Available at 2
3 Ch I Ch III Ch IV Preface Supply and value chains Disclosure Definition of human rights public actors, victims and other stakeholders. Adhering countries to the OECD Guidelines should therefore clearly acknowledge NHRIs as a distinct category of institutional actor in the OECD Guidelines, so that NHRIs and other stakeholders can become mutually aware, and aware of the role and potential of NHRIs to contribute to the OECD Guidelines effective implementation. The current draft OECD Guidelines variously list stakeholders as including e.g. business, NGOs and interested parties. However, the current language does not include and without explicit clarification, could serve to exclude - NHRIs. NHRIs should be expressly included by the OECD Guidelines wherever other stakeholder categories are mentioned, including: 1. The Commentary to the proposed Human Rights Chapter 2. Part II: Implementation Procedures, Procedural Guidance and relevant Commentaries (e.g. in lists of stakeholder categories under Information and Promotion, para.14, p49, and para.16, p.50; with reference to the Proactive Positive Agenda; and under Procedural Guidance for Investment Committee, para. 48, p.56). In line with the international human rights commitments of countries adhering to the OECD Guidelines, 6 the general statement of objectives of the Guidelines should be amended to explicitly include human rights, e.g. Preface, para.9: The common aim of the governments adhering to the Guidelines is to encourage the positive contributions that multinational enterprises can make to economic, environmental and social progress, and enjoyment of human rights and to minimize the difficulties to which their various operations may give rise. In the interests of effectiveness of the Guidelines, an investment nexus between an MNE and a supplier should not be a precondition for the Guidelines to apply. The Commentary to Ch. III should identify human rights issues as potentially within the scope of material risk factors to which company disclosure policies should apply. Para.33 of the Commentary, p.31 undermines the overall intent and effect of the Disclosure chapter and should be deleted. Human rights, for the purposes of the revised Guidelines, must be defined with reference to the full body of international, regional and national human rights instruments, including relevant ILO standards. 6 Annex I: International human rights commitments of countries adhering to the OECD Guidelines. 3
4 Ch IV Ch IV Indigenous peoples rights Vulnerable groups Ch V Subcontracted labour and precarious work: A full list of such instruments should be included in a Technical Annex. Commentary on the Human Rights Chapter should be made clearer, more user-friendly, and to make explicit the primary function of human rights due diligence as being prevention and avoidance of human rights abuses, rather than mitigation and remedy once abuses have occurred. Regarding remediation and reparation for human rights abuses, the Commentary should emphasise the responsibility of MNEs to engage in an appropriate manner with existing state or non-state judicial and non-judicial mechanisms, in addition to establishment of operational level grievance mechanisms. The revised Guidelines must clearly refer to indigenous people s rights, including the principle of free prior and informed consent. They must make the human rights elements of participation of indigenous populations explicit. An outline of what constitutes adequate consultation with local stakeholders would be useful. Explicit references to indigenous peoples should be included throughout the commentary to identify indigenous peoples as a relevant stakeholder group. The relationship between companies and local populations, specifically indigenous peoples, as well as rights and responsibilities in relation to employment, land confiscation, social and environmental damage and health hazard need to be defined. The Guidelines must explicitly refer to ILO Convention No.169 and the UN Declaration on the Rights of Indigenous Peoples as relevant instruments in this context. The current language of vulnerable groups used to refer to e.g. women, children and indigenous peoples should be amended, in line with current practice in international human rights bodies, to reflect their primary status as universal rights-holders. The ICC thus proposes to substitute, for the sentence, Depending on circumstances, enterprises may need to consider rights specific to vulnerable and/or marginalized groups, such as indigenous peoples, women, ethnic and religious minorities, and children. (p.32, para 39), the following: Enterprises should consider the rights of members of groups that may be at risk of discrimination and exclusion in a given context, which can include indigenous and tribal peoples, women, racial, ethnic and other minorities, persons with disabilities and children. Para.53, p.36, concerning training and lifelong training, should be amended in like terms. As highlighted by the ILO, reliance by employers on precarious forms of work, such as home-working arrangements, repeat short-term contracts, and abuse of apprenticeships, is increasingly widespread 4
5 employee and worker Ch V Child labour and forced labour Ch V Nondiscrimination Ch V Living wage Ch V Minimum maternity leave and often undermines basic human rights of workers and their dependents (e.g. related to the right to the highest attainable standard of health and adequate standard of living). 7 In framing the scope of relevant provisions, the OECD Guidelines and Commentary should therefore use language which makes clear the Guidelines application to all workers who are in reality engaged in an ongoing labour relationship with a MNE which constitutes their primary source of income. Using the expression workers in the employment of would be likely to obscure, rather than clarify, the objectives of the Guidelines in this area, and could create difficulty for businesses, NCPs, and stakeholders, in interpreting and applying the Guidelines. In turn, this would have a negative impact on the Guidelines effectiveness. In line with the ILO s 1998 Declaration on Fundamental Principles and Rights at Work and 1977 Tripartite Declaration on Multinational Enterprises, the ICC therefore recommends use of the term worker in the revised Employment and Labour Relations Chapter. Proposed changes strengthening provisions on child and forced labour should be retained. Discrimination on grounds of disability should be explicitly included in the list of prohibited grounds, as clearly foreseen in article 4 of the UN CRPD, and in line with the signature and ratification of UNCRPD by 41 of 42 Adhering countries to the OECD Guidelines. Access to an adequate standard of living is protected under the Universal Declaration of Human Rights and other core human rights conventions, as well as by the ILO Tripartite Declaration on Multinational Enterprises and is essential to and enjoyment and effectiveness of a range of other fundamental human rights. The current proposal that wages, benefits and conditions of work, should be at least adequate to satisfy the basic needs of the workers and their families would significantly strengthen human rights protection within the revised OECD Guidelines and should be retained. In addition to protection against pregnancy-related discrimination, the Guidelines should recommend that MNEs entitle all workers to the ILO minimum of 14 weeks maternity leave, or to the period provided by national law, whichever is greater, with reference to the following standards: ILO Maternity Protection Convention (C183, 2000), Article 4 ILO Workers with Family Responsibilities Conventions (C156, 1981) Articles 1, 3 and 4(b) ILO Workers with Family Recommendation (R165, 1981), Article 22 7 ILO Decent Work Agenda and ILO Declaration on Social Justice for a Fair Globalisation. 5
6 Pt II Pt II Specific instance procedure Consequences and determination Universal Declaration of Human Rights (1948), Article 16; International Covenant on Economic, Social and Cultural Rights (1966), Articles 3 and 10; International Covenant on Civil and Political Rights (1966), Article 23 (1); Elimination of All Forms of Discrimination against Women (1979), Article 11 (2b and 2c), 13 (a) and 16 (1d); Rights of the Child, Articles 5 and 18 (1). Proposed changes to strengthen disclosure in specific instances procedures and regarding adequate resourcing of NCPs should be retained. Statements and reports on the results of NCP proceedings should be made publicly available and readily accessible to stakeholders including but not limited to government authorities. Pt II Peer review A peer review process for NCPs should strengthen NCP capacity, effectiveness and ultimately improve accessibility and value of the specific instances procedure. The proposal to introduce NCP peer review should be retained. However, it would be preferable if peer review was mandatory for NCPs of OECD Guidelines adhering countries. 3. Strengthening future implementation of the OECD Guidelines 3.1 Follow-up work programme The ICC supports the proposal for a programme of work to support more effective dissemination, understanding and implementation of the Guidelines in future, to include the development of a third tier guidance document, and materials focused on small and medium-sized enterprises and the financial sector. 3.2 Memorandum of Understanding In light of the OECD s conclusion of agreements with other stakeholder organizations, the ICC again urges the OECD to explore the scope for conclusion of an ICC-OECD Memorandum of Understanding or similar measure. Such an instrument could usefully address opportunities for cooperation and capacity-building at national level between NHRIs, NCPs and other relevant stakeholders, and issues such as parallel proceedings of NHRIs and NCPs. 6
7 ANNEX I: Human rights commitments of countries adhering to the OECD Guidelines for Multinational Enterprises Countries adhering to OECD Guidelines Signature (S) Ratification (R) International Elimination of All Forms of Racial Discrimination 1965 International Covenant on Economic, Social and Cultural Rights 1966 International Covenant on Civil and Political Rights 1966 Elimination of All Forms of Discrimination against Women 1979 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment 1984 Rights of the Child 20 Nov 1989 International Protection of the Rights of All Migrant Workers and Members of Their Families 1990 International Convention for the Protection of All Persons from Enforced Disappearance 2006 Rights of Persons with Disabilities 2006 CERD ICESCR ICCPR CEDAW CAT CRC CRPD S R S R S R S R S R S R S R S R S R Australia S R S R S R S R S R S R S R Austria S R S R S R S R S R S R - - S - S R Belgium S R S R S R S R S R S R - - S - S R Canada S R - R - R S R S R S R S R Chile S R S R S R S R S R S R S R S R S R Czech Republic - R S R - R - R - R - R S R Denmark S R S R S R S R S R S R - - S R S R Estonia - R - R - R - R - R R S - Finland S R S R S R S R S R S R - - S - S R France - R - R - R S R S R S R - - S R S R Germany S R S R S R S R S R S R - - S R S - Greece S R - R - R S R S R S R - - S - S - Hungary S R S R S R S R S R S R S R Iceland S R S R S R - R S R S R - - S - S - Ireland S R S R S R S R S R S R - S - S - Italy S R S R S R S R S R S R - - S - S R Israel S R S R S R S R S R S R S - Japan S R S R S R S R S R S R - - S R S - Korea S R - R - R S R - R S R S R Luxembourg S R S R S R S R S R S R - - S - S - Mexico S R - R - R S R S R S R S R S R S R 7
8 Netherlands S R S R S R S R S R S R - - S - S - New Zealand S R S R S R S R S R S R S R Norway S R S R S R S R S R S R - - S - S Poland S R S R S R S R S R S R S - Portugal - R S R S R S R S R S R - - S - S R Slovak Republic - R - R - R - R - R - R - - S - S R Slovenia - R - R - R - R - R R - - S - S R Spain - R S R S R S R S R S R - - S R S R Sweden S R S R S R S R S R S R - - S - S R Switzerland - R - R - R S R S R S R Turkey S R S R S R R S R S R S R - - S R United Kingdom S R S R S R S R S R S R S R United States S R S - S R S - S R S S - Sources: 1. Review of OECD Guidelines for Multinational Enterprises: Submission of International Coordinating Committee of National Human Rights Institutions. Annex International Elimination of All Forms of Racial Discrimination 21 Dec 1965: 2&chapter=4&lang=en 3. International Covenant on Economic, Social and Cultural Rights 1966: 4. International Covenant on Civil and Political Rights 1966: 5. Elimination of All Forms of Discrimination against Women: 8&chapter=4&lang=en 6. Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment 10 Dec 1984: 7. Rights of the Child 20 Nov 1989: 8. International Protection of the Rights of All Migrant Workers and Members of Their Families 18 Dec 1990: 9. International Convention for the Protection of All Persons from Enforced Disappearance 20 Dec 2006: Rights of Persons with Disabilities 13 Dec 2006: 15&chapter=4&lang=en. 8
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