The institutional framework of the OECD NCC has been improved

17.08.2020

The Ministry of National Economy of Kazakhstan jointly with Economic Research Institute JSC conducted a large-scale work on the legislative consolidation of activities of National Contact Centers of Organization for Economic Cooperation and Development in Kazakhstan (OECD).

Since recently, Kazakhstan people have been able to file complaints about the actions or omissions of a large company. We are talking about multinational enterprises whose activities go beyond the borders of a single state. For the information of citizens, the work o.organizations of this kind is regulated by National Contact Centers (NCC).

Thus, each resident of the country can report an offense on the part of the enterprise in the following areas:
- information disclosure
- human rights
- labor and industrial relations
- environmental protection
- consumer interest
- science and technology
- competition and taxation
- corruption, bribery and extortion.

Requests are accepted via the following information channels:
- office of the NCC Secretariat
- website of the NCC and the Ministry of National Economy of the Republic of Kazakhstan
- NCC call center

Conclusions, as well as information on the course of consideration of the appeal, are posted on the NCC website, which is located on the economy.kz portal in the OECD section. At the same time, the NCC guarantees the preservation of commercial information and other important aspects for the parties.












On the activities of the NCC

The National Contact Center – (NCC) is a voluntary, non-judicial mechanism for addressing public complaints about businesses that violate the principles of responsible business conduct in accordance with the OECD Guidelines. This is a platform for constructive dialogue between the parties, discussing the problems that have arisen and working out ways to reach a mutual agreement. 

The functions of the NCC in Kazakhstan are assigned to the Ministry of National Economy of the Republic of Kazakhstan. 

At the same time, the NCC is a collegial Advisory Body. The Chairman is the Minister of National Economy of the Republic of Kazakhstan (currently - R. Ye. Dalenov). The remaining members of the NCC are represented at the level of Vice-Ministers of National Economy, Justice, Foreign Affairs, Labor and Social Protection of the Population, as well as the Deputy Chairman of the NCE "Atameken", Directors of non-governmenta.organizations and Deputy Heads of Trade Unions.













Process of interaction of NCC with citizens of Kazakhstan

Economic Research Institute JSC (ERI) serves as the Secretariat of the NCC. In order to reanimate and transform the activity, the Ministry of National Economy together with the Institute improved the institutional framework of the NCC, the algorithm for reviewing applications. Systematic coverage of up-to-date information is provided through webinars and information resources. Technical and automated methods of submitting a request and a question-answer system of the NCC have been developed. 

Thanks to the work done by these agencies, the process of reviewing applications to the NCC has been established. It consists of three stages:

The first stage is a preliminary assessment of the appeal.

At this stage the NCC evaluates the application for compliance with the scope of the NCC Guidelines and competencies: 

- holds separate meetings with each of the parties
- checks for validity,
- communicates with the two parties and decides whether or not to accept the case for consideration. 

The second stage is acceptance of the case for initiation of proceedings

The NCC consults on the case with government authorities, business representatives, labou.organizations, non-governmenta.organizations, experts, and OECD NPOs operating in the countries concerned. 

The third stage is the final evaluation of the appeal.
The NCC proceedings are completed with the preparation and publication of the Final Assessment of the case. 


NCC is a guarantee of openness

International business environment has undergone a number of significant structural changes over the past three decades. Since the beginning of the new Millennium, the world economy has been driven by international investment, through which Governments have opened up markets and businesses have taken advantage of new opportunities that have led to unprecedented economic growth.

In June 2017, Kazakhstan became an associate member of the Investment Committee of the Organization for Economic Cooperation and Development and became the 48th country to join the OECD Declaration on multinational enterprises.  As part of joining the Committee, the Government of Kazakhstan has made a number of commitments, including the dissemination of the principles of responsible business in accordance with the OECD Guidelines.

Guidelines are requirements in the field of responsible business management directed by governments to enterprises whose activities in any way extend beyond the borders of one state. It is a collection of principles and standards in various fields, ranging from human rights, workers' rights and occupational safety, also addressing issues of access to information, taxation and environmental protection. 

In order to disseminate and ensure compliance with the Guidelines, the OECD National Contact Points (NCPs) were established.

Today, NCPs operate effectively in 49 countries around the world, which account for about 80% of foreign direct investment. The presence of this body in the state guarantees transparency in the consideration of disputes that arise. An effective, transparent and popular mechanism of NCPs activities is an important element of open international investment climate.

Between 2000 and 2019, NCPs have handled more than 500 cases relating to company operations in over 100 countries and territories. The majority of cases (57%) relate to human rights,  employment and worker issues, and the environment.
Between 2011 and 2019, over a third of all cases which were accepted for further examination by NCPs (36%) resulted in some form of agreement between the parties; approximately 33% resulted in an internal policy change by the company in question.












Cases of reviewed cases

World practice testifies to the effectiveness and efficiency of the pre-trial complaints mechanism (there are no precedents considered by the NCC in Kazakhstan at the moment).

1. NCP of Norway considered the application of the Norwegian Society for Nature Conservation in relation to Cermaq ASA and its subsidiary (MainstreamCanada and MainstreamChile).

The alleged non compliance with the requirements of the OECD Guidelines concerned in particular: 

- improper observance of the rights of the local population; 
- inappropriate labour and employment practices (for example, unjustified dismissals, attempts to prevent employees from forming a Trade Union, wage and bonus payment systems that discriminate against women); 
- acute lack of protective measures against environmental damage

The statement resulted in changes to the Code of Conduct on Cermaq's corporate responsibilities, including clearer obligations of suppliers in the area of human rights observance based on the recommendations contained in the Guidelines; a commitment to enter into mutually beneficial agreements with the local population; and a commitment to further develop measures to minimize the risks of significant environmental damage. 

2. In 2017, a case submitted by two labor confederations was sent to the NCP of France regarding the activities of the Cambodian subsidiary of VinciAirports in Cambodia. A labor dispute that began in 2012 when Cambodia's airports introduced a new method o.organizing work under the "multi-taskingscheme". 

The NCP determined that for many of the issues raised, Vinci complied with the recommendations of the OECD Guidelines. However, in its conclusion, it included eight recommendations aimed at strengthening the due diligence process. In addition, the NCP will monitor the implementation of its recommendations for one year. 

3. In 2017, three NGOs submitted a case to the representative of the Dutch NCP, according to which Bresser, as an SME entity specializing in the relocation and maintenance of buildings, was unable to carry out its preliminary work on the relocation of an ancient tomb. The reason for this was a conflict with the local population, which stated a fact that violated the community's right to cultural heritage. All the parties involved in the case agreed to actively participate in the assistance of the Dutch NCC. 

On 20 August 2018, the Dutch NCP issued an opinion concluding that Bresser "does not meet the due diligence criteria of the OECD Guidelines" and that the right to cultural heritage "should be considered as a human right in accordance with the OECD Guidelines". This was the first specific case of recognition of cultural rights as human rights.

4. In April 2014, nine non-governmenta.organizations submitted an application to the Austrian NCP for consideration of a case related to the supply by AndritzHydro of hydroelectric turbines intended for the construction and operation of the Xayaburi hydroelectric power station project in the Lao People's Democratic Republic.

After mediatio.organized by the NCP, the parties came to an agreement in which AndritzHydro is obliged to develop: policies and procedures related to the implementation of human rights and environmental standards; and to exchange information, as well as to involve relevant groups of interested parties in this process. 

The NCP issued a follow-up report in October 2018, noting that four follow-up meetings had been held since February 2018 to discuss mitigation measures for the Xayaburi Project. The cooperation of AndritzHydro with NGOs and experts provided the basis for the development of a new draft code of conduct based on international principles that will apply to all companies that are part of the AndritzGroup.

Reference: 
The OECD Guidelines for multinational enterprises is a document created in 1976 and strengthened by an effective mechanism for dissemination and reporting of violations during subsequent audits. 



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