Responsible Business Conduct

14.08.2020

On August 26, 2020, at 11:00, a workshop on Responsible Business Conduct for multinational companies will be held in accordance with the OECD Guidelines and the role of the National Contact Center in this process.

Th.organizers will be:
The Ministry of National Economy of the Republic of Kazakhstan (MNE RK), being the authority responsible for the implementation of the functions of the National Contact Point (NCP) 
Economic Research Institute JSC, NCP Secretariat 
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 conduct in accordance with the OECD Guidelines.

The Guidelines are requirements for responsible business conduct directed by governments to businesses whose activities in any area extend beyond the borders of a single state. To be more precise, the Guidelines are a collection of principles and standards in various areas, ranging from human rights, employee 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.

Reviewed cases

 The world practice shows the effectiveness and efficiency of the pre-trial mechanism for examination of grievances (there are no precedents considered by the NCPs in Kazakhstan at the moment).

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 local population;  
inappropriate practices in the area of work and employment (for example, unjustified dismissals, attempts to prevent employees from forming a Trade Union, wage and bonus payment systems that discriminate against women); 
severe 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.

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. 
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 mediation of the Dutch NCP. 

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.
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.

For 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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