Our key takeaway: OECD National Contact Points (NCPs) serve as fora for mediation and conciliation between companies and people who may have been adversely impacted by them. They aim to strengthen and clarify implementation of the OECD Guidelines for Multinational Enterprises. But are NCPs really serving their purpose? The past few years of instances lodged with various country NCPs show that complainants are facing barriers to filing cases before NCPs and that the effectiveness of NCPs as mediation platforms is highly variable. What needs to change for NCPs to become more effective channels for access to remedy? OECD Watch calls on the OECD to continue its stocktaking exercise with a view to potentially updating the Guidelines. This should include improving minimum expectations for NCPs, clarifying the scope and steps of human rights due diligence (HRDD), clarifying expectations for businesses on their climate and other environmental impacts, and ensuring that companies disclose transparently on their HRDD practices.
NGO OECD Watch released State of Remedy 2021 (June 2022), an annual report tracking access to remedy under OECD National Contact Points (NCPs), as provided for under the OECD Guidelines for Multinational Enterprises (Guidelines), based on a review of all community and civil-society-led claims filed during the year:
- The numbers reflect a lack of predictability and effectiveness, and governance gaps: OECD Watch found that, overall, “NCPs have largely failed to facilitate effective remedy outcomes for complainants. These complaints demonstrate many of the problems that OECD Watch has observed and documented year after year in NCP processes and decisions.” As an example, only 2 out of the 22 cases filed with NCPs reached a full agreement between the parties, and around half of all cases submitted were rejected at the initial assessment stage. OECD Watch notes that the Korean NCP was responsible for rejecting the bulk of cases, constituting 8 out of the total 11 cases rejected. Of the 7 cases that moved forward past the initial assessment phase, 6 continued with mediation. Within this cohort, “2 (9%) reached full agreement, both involving commitments by the companies to improve human rights policies and due diligence; 2 (9%) were not fully resolved; 3 (13%) concluded with the NCP making a determination that the company had not acted in accordance with the Guidelines; [and] 0 cases resulted directly in an improved situation on the ground or other tangible form of remedy.” One case was closed after an agreement was reached outside of the NCP process, while 1 case “was closed after over 12 years of inaction by the company and NCP.”
- Recommendations to NCPs: The report issues several recommendations to NCPs. For one, “NCPs’ initial assessments should not place an overly high burden of proof on the complainants’ allegations.” According to the OECD’s Guide for National Contacts Points on the Initial Assessment of Specific Instances, the initial assessment stage “should not be unnecessarily onerous.” Further, the evidentiary requirements for the initial assessment phase “need not be analogous to those required in legal proceedings.” Second, “NCPs should have regard to the nature of HRDD in their final statements. ‘Conclusive’ proof by complainants of their allegations should not be required by NCPs in order to make determinations as to whether a company has complied with the Guidelines.” The role of due diligence per the OECD is focused on companies “knowing and showing” that their HRDD efforts are adequate to address risks to people. In line with this expectation, OECD Watch recommends that “rather than placing the burden on communities and civil society organisations who often lack access to crucial information to prove linkage to an impact, companies should provide adequate evidence to show that they are not in fact linked.” The report also asks NCPs to “have regard to the broad definitions of “direct linkage’ and “business relationships” in the Due Diligence Guidance. Importantly, ‘direct linkage’ is not defined by direct contractual relationships but rather occurs through a series of business relationships in a company’s supply chain (both upstream and downstream).” This means that companies are required to conduct adequate HRDD regardless of the complexity of their operations and value chains. The report also calls on the NCPs to seek to facilitate remedy for harms based on the adequacy of companies’ past HRDD, and that timeframes for the process should be generally shortened.
- Recommendations to the OECD: OECD Watch’s key recommendation to the OECD is “to continue its stocktaking exercise with a view to potentially updating the Guidelines” to enhance standards for business and strengthen the NCP system. “In OECD Watch’s view, the Guidelines are neither up-to-date nor complete, and the minimum expectations for NCPs are too vague. The Guidelines should be updated to ensure their continued relevance and the effectiveness of NCPs.” Specific recommendations include improving minimum expectations for NCPs, clarifying the scope and steps of HRDD, clarifying expectations for businesses on their climate and other environmental impacts, and ensuring that companies disclose transparently on their HRDD practices.
