13 June 2018

OECD Due Diligence Guidance for Responsible Business Conduct
BIAC contribution

Business, as represented by Business at OECD (BIAC), has long recognized the importance ofresponsible business conduct in a globalized world. Today, many companies have integrated
responsible business conduct considerations into their overall business strategy to manage theiractivities in a responsible way. BIAC considers responsible business conduct as promoted by theOECD Guidelines for Multinational Enterprises (MNE Guidelines) to be an essential part of an open
investment climate and in the best interest of business. To that end, BIAC is working in partnershipwith the OECD, national governments, its member organizations and member companies tosupport effective implementation of the MNE Guidelines, ensure a shared understanding of theNCP process and promote them in adhering countries and beyond to support a global level playing
field.
While the MNE Guidelines include more elaborate due diligence recommendations for humanrights due diligence in line with the UN Guiding Principles for Business and Human Rights, they
provide no general procedural guidance for due diligence which applies to the other chapters, withthe exception of science and technology, competition, and taxation. To help companies understandwhat due diligence means in practice and building on previous work on sectoral guidance
documents developed in the framework of the “proactive agenda”, business engaged in OECD
discussions on developing a practical due diligence guidance for companies, underlining that suchguidance should be in line with, but not go beyond the MNE Guidelines.
It was particularly important for business that the flexibility which is an underlying concept in theMNE Guidelines recognizing that the nature and extent of due diligence depend on the precise
circumstances, be reflected in the Guidance. The MNE Guidelines also clearly recognize that theencouragement of business partners to comply with the recommendations is subject to practicallimitations depending on the specific circumstances. It is also recognized that the expectations aredifferent for large MNEs and for small MNEs, due to their different capacities for implementation.
Furthermore, seeking to prevent or mitigate an adverse impact to which an enterprise is onlylinked by a business relationship does not intend to shift the responsibility from the entitycausing the adverse impact to the enterprise with which it has a business relationship.
While business engaged in the discussions with the understanding that the Guidance would not bea basis for future legislation, it is clear that in light of the increasing complexity of national andinternational RBC recommendations, non-prescriptive practical guidance for companies on how tocarry out due diligence on the ground can be of value to companies.

As stated up front, the OECD Guidance, which was endorsed at this year’s OECD Ministerial Council
Meeting, is intended to provide practical support to enterprises on the implementation of theOECD Guidelines for Multinational Enterprises by providing “plain language explanations of its due
diligence recommendations and associated provisions.” It recognizes one of our key requests, i.e.
that the suggested practical actions are not meant to represent an exhaustive “tick box” list fordue diligence and that not every practical action will be appropriate for every situation.
We therefore hope that the Guidance will serve its purpose of providing businesses looking for
information about the Guidelines with a more accessible text than the MNE Guidelinesthemselves, and present to them practical proposals about how they could set up their due
diligence, while recognizing that due diligence needs to be adapted to specific situations andthat there is no one-size-fits-all.
The focus should now be on dissemination and on capacity building to ensure that companies
at large understand and can benefit from the Guidance. Awareness-raising about the Guidance
but also about the MNE Guidelines remains crucial as they are often not yet sufficiently known.
BIAC has widely distributed the Guidance within its membership and will encourage companies
to draw upon the practical tools it provides. We will also continue to support awareness raisingand effective implementation of the MNE Guidelines. To assess how the Guidance has beentaken up by companies, we would be pleased to help organize a dialogue with the OECD andour member companies to take stock of how it has been used and facilitate the sharing ofexperience.
We would like to extend our thanks to the Chair of the OECD Working Party on Responsible
Business Conduct and the OECD Secretariat for having given the institutional stakeholders theopportunity to contribute to the discussions on the development of the Guidance. It is ourhope that the well-organized engagement of institutional stakeholders by the OECD will also be
an inspiration for national governments. BIAC stands ready to continue to engage
constructively in the OECD work on responsible business conduct going forward.
Winand Quaedvlieg
Chair
BIAC Committee on Investment and Responsible Business Conduct2