Launch of the OECD Due Diligence Guidance on Responsible
Business Conduct - TUAC Contribution
20 June 2018
Under the international instruments governing business conduct, the OECD Guidelines forMultinational Enterprises, the UN Guiding Principles on Business and Human Rights and the ILO
Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy,
companies should conduct due diligence to avoid and address adverse impacts in theiroperations, supply chains and business relationships.
In addition, OECD countries are increasingly adopting hard law on due diligence. France has
introduced legislation imposing a “duty of vigilance” on companies, making human rights andenvironmental due diligence mandatory. Just last week, Switzerland’s National Council approveda legislative proposal requiring mandatory due diligence by Swiss-based companies, now to bepassed to the Upper House. And Germany is to consider introducing legislative measures if 50%
of its large enterprises are not conducting human rights due diligence by 2020.
This growing expectation that companies conduct due diligence has been accompanied by anincreasing need for authoritative explanations of how to conduct due diligence. That is why for
TUAC, today’s launch of the OECD’s general Due Diligence Guidance on Responsible BusinessConduct could not come soon enough.
Developed with the support of a multi-stakeholder Advisory Group comprising government,
trade union, business and NGO representatives, and approved by governments, the Guidance has
the legitimacy to allow it to become the authoritative international reference on due diligence.
From here-on, companies, trade unions, NGOs and governments, have a common reference pointon due diligence.
What’s in it for Workers and Trade Unions?
The OECD Guidance sets out a due diligence framework to be used by enterprises of all sizes andin any sector to avoid and address adverse impacts in their operations, supply chains andbusiness relationships. It makes clear that the main purpose of due diligence is to prevent
adverse impacts and that when adverse impacts occur, companies should provide remedy, where
they have caused or contributed to those impacts. There are two aspects of the Guidance that are
particularly noteworthy from a trade union perspective.
The first concerns the role of trade unions. While emphasising that the responsibility for
conducting due diligence lies wholly with the individual company, the Guidance underlines theimportance of engaging with stakeholders and right-holders throughout the due diligenceprocess. Stakeholders are any persons or group affected by an enterprise’s activities and include
workers and their trade unions within the company, as well as workers and trade unions in thecompany’s supply chain. The Guidance explains that some forms of stakeholder engagement,1including the right to form or join a trade union and to bargain collectively, are human rights inthemselves, and that on matters related to these rights, companies should engage with tradeunion representatives, instead of individual workers. The Guidance recognises industrial
relations as a form of stakeholder engagement and identifies company-trade union agreements(collective bargaining agreements, Global Framework Agreements, protocols and Memoranda ofUnderstanding), as a means for companies to conduct due diligence.
The second aspect concerns the expectation that companies conduct due diligence to respect all
rights including the rights of workers to form and join trade unions and to bargain collectively. The
Guidance makes clear that companies cannot ‘pick and choose’ which rights to respect, but havea responsibility to avoid and address all adverse impacts covered by the OECD Guidelines:
information disclosure, human rights, employment and industrial relations, environment,
bribery and consumer affairs. And while the Guidance explains that companies may have toprioritise what impacts and risks to address, on the basis of severity and likelihood, it also
recognises that anti-union behaviour by companies can result in severe adverse impacts.
What Next for Governments?
It is government action that will ultimately determine the extent to which companies conduct
effective due diligence, in line with the OECD Due Diligence Guidance. The OECD Council’s
adoption of a Recommendation, committing adhering governments to promoting, monitoringand disseminating the Due Diligence Guidance is therefore a significant milestone.
In line with these commitments, TUAC is calling all governments to implement the following 5Point Plan:

1. Introduce mandatory due diligence that covers all topics of the OECD Guidelines,
establishes corporate liability and includes binding obligations on stakeholder
engagement;
2. Strengthen policy coherence by introducing binding due diligence clauses in trade andinvestment agreements, export credits, development finance and public procurement;
3. Monitor company compliance with the OECD due diligence framework;
4. Strengthen stakeholder engagement by supporting capacity-building on due diligence fortrade unions and other stakeholders;
5. Disseminate the Guidance, including by ensuring that National Contact Points have thenecessary resources to do so, working with the social partners/stakeholders.
What Next for the OECD?
In addition to governments, the OECD has an essential role to play in implementing the Due
Diligence Guidance. A key lesson from the implementation of the OECD’s sectoral guidance on
minerals, and garments and footwear is the value of OECD follow-up: multi-stakeholder events
to facilitate learning on due diligence and pilot projects involving specific companies/countries.
This will require the allocation of adequate resources. The OECD should involve TUAC, BIAC andOECD Watch in the implementation plan.

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