OECD Guidelines for Multinational Enterprises for Responsible Business Conduct

The OECD Guidelines comprise eleven chapters on various topics:

I. Concepts and Principles

The first chapter sets out key definitions and principles of the OECD Guidelines, their scope of application and the nature of the National Contact Points.

II. General Policies

This chapter sets out the objectives of the OECD Guidelines and the most important recommendations for business conduct that apply regardless of the subject matter. The chapter explains the basic concepts: risk-based due diligence, prioritisation, relevance of the business relationship, distinction between causing, contributing to and being directly linked to adverse impacts, promotion of sustainable development, involvement of relevant stakehodlers, etc.

III. Disclosure

As an important confidence-building measure, companies are called upon to create transparency and accountability with regard to their business activities by providing comprehensible, complete and accessible information. In addition to business results, this includes, in particular, corporate governance, social and environmental aspects, and foreseeable risks of their business activities. This information should be provided in a timely and regular manner, without placing an excessive burden on companies.

IV. Human Rights

Irrespective of their size, industry, operating environment and ownerhip structure, companies should respoect human rights. Respect for human rights is the global standard for the behaviour expected from companies, regardless of thether it is required by the national legal system of the countries, in which a company is operating. Respect for human rights should be incorporated in the measures taken to comply with due diligence obligations.

V. Employment and Industrial Relations

This chapter concerns fundamental principles in the field of employment and refers to the internationally recognised labour standards of the International Labour Organisation (ILO). These include, for example, respect for freedom of association and the right to collective bargaining, constructive cooperation between the social partners, the abolition of all forms of child and forced labour, the elimination of all forms of discrimination in employment, and the support of local workers.

VI. Environment

Achieving the environmental goals set out in international agreements (e.g. the Paris Agreement, the United Nations Agenda 2030 for Sustainable Development) requires a whole-of-society approach. This chapter outlines how companies can contribute to preventing or mitigating adverse environmental impacts and continually improve their environmental performance. It recommends effective environmental management systems, transparent environmental reporting and risk-based due diligence with regard to negative environmental impacts. The aim is to advance sustainable economies through environmental and climate protection, preservation of biodiversity, transition to greenhouse gas neutrality, climate-resilient economy as well as sustainable use of land and resources.

VII. Combating Bribery and Other Forms of Corruption

Corruption damages democratic institutions and corporate governance, discourages investment, distorts competition, undermines global stability and negatively impacts the objectives of the other chapters of the OECD Guidelines. This chapter encourages companies not to offer, promise, give, demand or accept bribes or other undue advantages, either directly or indirectly, in order to gain an advantage. Corruption should be prevented or detected through transparency and integrity, appropriate corporate governance, internal control mechanisms and compliance programmes.

VIII. Consumer Interests

Consumer satisfaction forms the basis for successful business activity. Consumer markets are changing rapidly and becoming increasingly diverse and complex. Companies are therefore called upon to apply fair business, marketing and advertising practices, to ensure the quality and reliability of their products and services, and to comply with health and safety standards. In order to enable consumers to make informed decisions and directly compare offers, companies should provide appropriate information. In view of conusmers' growing interest in environmental and social issues and sustainable consumption, companies should provide appropriate information.

IX. Science, Technology and Innovation

Scientific research and technological innovation are subject to continuous change, have enormous economic and social benefits, but also harbour far-reaching risks. Companies are important drivers of cross-border knowledge and technology transfer and can thus contribute to development in host countries. Due to the  potential negative effects, companies are called upon to handle data responsibly and to implement risk management measures. Companies should protect personal date and intellectual property and take into account national security concerns. Responsible innovation should be promoted and digital security is a shared responsibility across all stakeholders. Companies should conduct digital securtiy risk management especially concerning children and youth participation.

X. Competition

Competition law and competition policy serve to ensure well-functioning markets and thus contribute to general welfare and economic growth. Market conditions should be promoted in which the nature, quality and price of goods and services are determined by competitive market forces. Cross-border trade and investment have cross-border impact. Companies are therefore expected to take into account the legal provisions of all jurisdictions in which their business activities are likely to have an impact. Furthermore, companies should proactively familiarise themeselves with the applicable competition rules, cooperate with national authorities and avoid breaches of competition law.

XI. Taxation

A company should fulfil its tax obligation properly by complying with relevant regulations of the countries in which it operates, cooperating with the competent authorities and paying its tax liabilities in full and on time. This includes, in particular, the timely providing of the information required to calculate the tax liability. A company's tax resonsibilities should be reflected in its risk management. Tax transparency is particularly important for determining a company's tax liabilities, especially in a multinational context.

For years, the OECD has been working on the development of guidances and practical manuals to promote and facilitate the implementation of due diligence procedures in companies in accordance with the OECD Guidelines. Initially, the focus was on individual sectors, but in 2018 the OECD published a cross-sectoral guidance on the implementation of due diligence obligations. The Due Diligence Guidance is applicable to all companies and complements the sector-specific guidances.

Guidances for Due Diligence:

• Cross-sectoral 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 Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector
• OECD 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
• OECD/FAO Guidance for Responsible Agricultural Supply Chains
• OECD Business Handbook on Due Diligence in the Cocoa Sector
• OECD/FAO Business Handbook on Deforestation and Due Diligence in Agricultural Supply Chains
• OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
• OECD Considerations for Responsible Business Conduct for Institutional Investors
• OECD Considerations for Responsible Coporate Lending and Securities Underwriting

The Recommendation on the Role of the Government in Promoting Responsible Business Conduct was adopted by the OECD Council at ministerial level on 12 December 2022. It contains a comprehensive set of principles and policy recommendations to assist governments and other governmental bodies in designing and implementing a framework to promote corporate responsibility.

Through favourable framework conditions, incentives and exemplary behaviour of their own, governments can significantly promote the implementation of responsible business conduct by companies.

The recommendation comprises 21 guidelines, which are divided into 6 thematic fields:

• Legal and regulatory frameworks facilitating responsible business conduct
• Strategies and measures to promote responsible business conduct in relevant policy areas
• Role of the state as an economic operator
• Involvement of affected stakeholders in the development and implementation of measures for responsible business conduct
• Access to legal remedies
• Coordination of state measures and activities related to responsibles business conduct