Responsible business conduct

OECD Pilot Project on Responsible Agricultural
Supply Chains in Southeast Asia: Final Report
Key learnings from business on implementing
risk-based due diligenceOECD Pilot Project on Responsible Agricultural
Supply Chains in Southeast Asia: Final Report
Key learnings from business on implementing risk-based due diligencePlease cite this publication as:OECD (2020), OECD Pilot Project on Responsible Agricultural Supply Chains in Southeast Asia: Final Report Key learnings from business on implementing risk-based due diligence

With funding by the European Union

This document is published under the responsibility of the Secretary-General of the OECD. The opinions expressed andarguments employed herein do not necessarily reflect the official views of OECD member countries. The document andany map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation ofinternational frontiers and boundaries and to the name of any territory, city or area. The mention of any company names
does not imply endorsement of the said company’s actions.
© OECD 20202

Foreword
To promote the understanding and uptake of supply chain due diligence recommendations per the OECDFAO Guidance for Responsible Agricultural Supply Chains (OECD-FAO Guidance), the Organisation for
Economic Co-operation and Development (OECD) launched an implementation pilot with companies
operating along agricultural and seafood supply chains in Southeast Asia in July 2019 (SEA Pilot). Activitiesof the SEA Pilot included a baseline survey in 2019 and a follow-up survey in 2020 to understand how
companies who took part in this Pilot are carrying out responsible business practices and risk-based due
diligence across agricultural supply chains. The SEA Pilot also included a webinar series on topics identified
as knowledge gaps and of particular interest to the companies. The webinar series allowed candid
discussion between pilot companies and expert speakers, including representatives from peer companies,
civil society organisations and international organisations. Information and resources on responsible
business conduct (RBC) were also shared with pilot participants. This report summarises the key activities
and learnings of the SEA Pilot.
This report has been prepared by the OECD Centre for Responsible Business Conduct. The report wasdrafted by Dr Alison Watson working as a consultant for the OECD Centre for Responsible Business Conduct.
It was undertaken within the framework of the EU-ILO-OECD Responsible Supply Chains in Asia Programmewith funding by the European Union.

3

About the OECD-FAO Guidance Responsible Agricultural Supply Chains
The OECD-FAO Guidance for Responsible Agricultural Supply Chains (the OECD-FAO
Guidance) provides a common framework and global benchmark for the applicationof responsible business practices in agricultural supply chains. It incorporates various
long-standing standards for responsible business conduct (RBC), such as the OECD
Guidelines for Multinational Enterprises (OECD MNE Guidelines), the UN Guiding
Principles on Business and Human Rights (UNGPs), the International Labour
Organisation Tripartite Declaration of Principles Concerning Multinational
Enterprises and Social Policy (ILO MNE Declaration), and the UN Committee on
World Food Security’s Principles for Responsible Investment in Agriculture and Food
Systems (CFS-RAI), amongst others. The OECD-FAO Guidance targets domestic andinternational, small, medium and large enterprises across the entire agriculturalvalue chain, from the farm to the consumer. Find out more athttps://mneguidelines.oecd.org/rbc-agriculture-supply-chains.htm
About the Responsible Supply Chains in Asia (RSCA) Programme
The Responsible Supply Chains in Asia (RSCA) Programme aims to address decent
work and environmental challenges through promoting responsible businesspractices in the operations of enterprises, including multinational enterprises, andtheir supply chains. A partnership between the European Union (EU), theInternational Labour Organization (ILO) and the Organisation for Economic Cooperation and Development (OECD), with funding by the European Union, theprogramme works with partners in Asia to promote respect for human rights,
including labour rights, and responsible business standards in global supply chains.
The three-year programme (2018-2020), carried out in collaboration with Japan,
China, Myanmar, Philippines, Thailand and Vietnam, has two broad objectives to:promote smart, sustainable and inclusive growth by ensuring that investors andbusinesses have a better understanding of corporate social responsibility; create
policy environments conducive to promoting responsible business conduct andincreased
opportunities
fordialogue.
Find
out
more
at
http://mneguidelines.oecd.org/globalpartnerships/responsible-supply-chains-asia/

4

Table of Contents
Foreword......................................................................................................................................................... 3
Executive Summary ......................................................................................................................................... 7
Section I. Introduction ..................................................................................................................................... 9
The OECD-FAO Guidance for Responsible Agricultural Supply Chains ........................................................9
The OECD Pilot on Responsible Agricultural Supply Chains in Southeast Asia .........................................10
Section II. Key Findings from the Follow-up Survey........................................................................................ 14
Structure of the follow-up survey ........................................................................................................ 14
Respondents ......................................................................................................................................... 14
Step 1: Establish strong enterprise management systems for responsible supply chains .......................15
Company policy for responsible business conduct .............................................................................. 15
Relationships with Tier 1 suppliers/business partners......................................................................... 18
Use of international standards and guidance on RBC .......................................................................... 19
Company management practices for RBC ............................................................................................ 20
Step 2: Identify, assess, and prioritise risks in the supply chain ...............................................................21
Supply chain mapping........................................................................................................................... 21
Risk assessment .................................................................................................................................... 21
Step 3: Design and implement a strategy to respond to identified risks in the supply chain ...................22
Training/information sessions with suppliers and business partners .................................................. 22
Impact of COVID-19 pandemic ............................................................................................................. 23
Step 4: Verify supply chain due diligence ..................................................................................................24
Verification efforts on due diligence effectiveness .............................................................................. 24
Step 5: Report on supply chain due diligence ...........................................................................................25
Public reporting on RBC policy and practices ....................................................................................... 25
Section III. Lessons Learned from Peer-learning Sessions .............................................................................. 27
Section IV. Company Case Studies for Illustrative Purposes ........................................................................... 30
Section VI. Recommendations ....................................................................................................................... 32
Recommendations to companies ......................................................................................................... 32
Learnings for policy makers .................................................................................................................. 33
Annex 1: Definitions ...................................................................................................................................... 36
Annex 2: Peer-learning Session Summary Notes and Additional Resources ................................................... 38
Annex 3: Key Findings from the SEA Pilot Baseline Report ............................................................................. 52
Annex 4: The SEA Pilot Online Follow-up Survey ............................................................................................ 54
Annex 5: Participating Companies Feedback on the SEA Pilot........................................................................ 70
5

Understanding of the OECD-FAO Guidance ......................................................................................... 70
Ways to improve the SEA Pilot ............................................................................................................. 70

6

Executive Summary
The OECD Pilot Project on Responsible Agricultural Supply Chains in Southeast Asia (SEA Pilot) 1 focused on
promoting a better understanding among businesses how application of international standards on due
diligence as recommended by the OECD-FAO Guidance for Responsible Agricultural Supply Chains (OECDFAO Guidance) 2 can help strengthen company risk-management practices and meet responsible businessconduct (RBC) expectations including increasing business contribution to the Sustainable Development
Goals (SDGs). 3
This final report presents overall findings of the pilot, including analysis from a follow-up survey tounderstand how knowledge of the OECD-FAO Guidance had increased and/or is translated into changes inpilot company actions. Despite the relatively short timeframe between the baseline and follow-up surveys– approximately ten months – and the impact of the Covid-19 pandemic in 2020, the results of the followup survey show positive changes in RBC policy and practices across many participating companies.
Noteworthy progress has been documented on establishing strong enterprise management systems forresponsible agricultural supply chains (Step 1), identifying, assessing and prioritising risks in the supply
chain (Step 2) and in verifying supply chain due diligence (Step 4).
With regard to establishing strong enterprise management systems (Step 1), 38% of companies responded
that changes had been made to written policy(ies) related to RBC standards over ten months since thebaseline survey was conducted. Encouragingly an additional 50% of companies indicated that changes werebeing considered and would likely lead to new or expanded policy commitments being developed in thenext 12 months. National and export market regulations, as well as business partner requirements were
one of main reasons for these policy changes.
As part of supply chain risk identification, assessment and prioritisation (Step 2), many pilot companies
have increased risk assessments for Tier 1 suppliers (44% increase) and for suppliers and business partners
beyond Tier 1 (38% increase). 63% of companies agreed that Covid-19 had influenced the need to increaselevels of risk assessment along supply chains.
Company efforts in verifying supply chain due diligence (Step 4) have also increased. One-quarter ofcompanies have increased verification of due diligence efforts related to Disclosure – a cross-cutting RBC
standard related to the disclosure of timely, accurate, verifiable and clear information related toforeseeable risk factors at all stages of the investment cycle. Approximately 42% of companies haveenhanced verification efforts related to several issue-specific standards, such as Environmental protection
and sustainable use of natural resources; Food security and nutrition; Health and safety; and Technology
and innovation. These changes in Step 4 correlate to the increased levels of company efforts instrengthening company policies on these standards demonstrated in Step 1.

1

The SEA Pilot ran from October 2019 to October 2020 and included 23 agribusiness companies with operations in Myanmar, thePhilippines, Thailand and Viet Nam. It was one of the activities carried out under the Responsible Supply Chains in Asia
Programme in partnership between the European Union (EU), the International Labour Organization (ILO) and the Organisation
for Economic Co-operation and Development (OECD), with funding by the EU. Find out more about the Programme at
http://mneguidelines.oecd.org/globalpartnerships/responsible-supply-chains-asia/
2
OECD/FAO (2016), OECD-FAO Guidance for Responsible Agricultural Supply Chains, OECD Publishing,Paris, http://dx.doi.org/10.1787/9789264251052-en
3
Read the brochure (2020) OECD-FAO Guidance for Responsible Agricultural Supply Chains: How it can help achieve theSustainable Development Goals at http://mneguidelines.oecd.org/How-the-OECD-FAO-Guidance-can-help-achieve-theSustainable-Development-Goals.pdf

7While the number of risk assessments carried out for designing and implementing a strategy to respond to
identified risks (Step 3) increased, companies could, however, make further efforts in devising
comprehensive strategies to respond to identified risks. Likewise, encouraging the uptake of reporting on
supply chain due diligence (Step 5) to communicate company’s RBC risks and actions to address themremains an area for improvement.
Pilot participants stressed that the peer-learning approach was helpful and was most effective when using
company examples and case studies, and in the demonstration of practical due diligence tools for company
use.
Finally, the role of national and export market regulation was identified as a key motivator for companies
to implement OECD recommended due diligence into their operations and supply chains. Policy makers
should consider steps to support the uptake of international standards and recommendations on RBC suchas the OECD-FAO Guidance to scale-up global implementation of RBC by companies and their supply chains.

8Section I. Introduction
The OECD-FAO Guidance for Responsible Agricultural Supply Chains
The OECD-FAO Guidance for Responsible Agricultural Supply Chains (OECD-FAO Guidance) provides a common framework and benchmark for the implementation of responsible business practices and risk-based
due diligence in agricultural supply chains globally. It is based on standards for responsible business conduct (RBC) 4 and provides a risk management framework to operationalise expectations related to RBC in
day-to-day management systems and operations. The OECD-FAO Guidance is targeted to all companies
along the agricultural value chain including investors, input suppliers, producers, traders, transporters, foodand beverage manufacturers, and retailers. The OECD-FAO Guidance five-step framework on risk-based
due diligence can be adapted for implementation by both large multinationals and small and medium-sizedenterprises (SMEs). 5
The OECD-FAO Guidance is structured around the following sections:
1.

Model enterprise policy for responsible agricultural supply chains outlining the standards thatenterprises should observe to build responsible agricultural supply chains. These include nine issuespecific standards such as Human rights, Labour rights, Health and safety, Food security and nutrition,
among others and six cross-cutting standards such as Disclosure, Benefit sharing, Gender andGrievance mechanisms. See Figure 1 (diagram to the left) for the full list of standards and issues
covered by the OECD-FAO Guidance.

2.

Five-step framework for risk-based due diligence which can be tailored to a company’s position andtype of involvement in the supply chain, as well as its size and capacity. The framework is laid out
across five steps, and includes a series of detailed sub-steps which, to the extent possible,
differentiates responsibilities by types of enterprise (on farm, downstream and financial enterprises).
Step 1: Establish strong enterprise management systems for responsible agricultural supply chains
Step 2: Identify, assess, and prioritise risks in the supply chain
Step 3: Design and implement a strategy to respond to identified risks
Step 4: Verify supply chain due diligence
Step 5: Report on supply chain due diligence3.

Recommendations on Measures for risk mitigation and prevention along agricultural supply chains(Annex A) which provide recommended actions companies can take to meet RBC expectations andmitigate risks to prevent harm. A set of recommendations on Engagement with indigenous peoples(Annex B) has also been developed to promote good-faith, effective and meaningful consultations
with communities before initiating operations that may affect them, as well as during and at the endof operations

4 These include: OECD Guidelines for Multinational Enterprises (OECD MNE Guidelines), UN Committee on World Food Security’s

Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI), Voluntary Guidelines on the Responsible
Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security of the Committee on World Food
Security (VGGT), UN Guiding Principles on Business and Human Rights (UNGPs) and the International Labour Organisation Tripartite
Declaration of Principles Concerning Multinational Enterprises and Social Policy (ILO MNE Declaration).
5
The category of micro, small and medium-sized enterprises (SMEs) is defined as an enterprises which employ fewer than 250
persons (EU recommendation 2003/361). For the purposes of this Report company revenue as a consideration of the SME
definition was ignored

9

Human rights
Technology
and innovation

GovernanceLabour rights

Cross-cutting standards
Impact assessment, Disclosure,
Consultations, Benefit-sharing,
Grievance mechanisms, Gender

Environmental
protection andsustainable
use of natural
resources

1. Establish strong
company
management
systems

Health andsafety2. Identify, assess
and prioritise risks
in the supply chain

4. Verify supply
chain duediligence
Food security
and nutrition

Animal welfare

5. Report on supply
chain due diligence

Tenure rights
over andaccess tonaturalresources

Model enterprise policy
for responsible agricultural supply chains

3. Design andimplement a
strategy torespond to
identified risksFive-step framework for risk-based due diligence

Figure 1: Model enterprise policy & five-step framework of the OECD-FAO Guidance for Responsible Agricultural
Supply Chains

The OECD Pilot on Responsible Agricultural Supply Chains in Southeast Asia
The OECD Pilot on Responsible Agricultural Supply Chains in Southeast Asia (SEA Pilot) was launched topromote understanding and awareness of the OECD-FAO Guidance in the region, and to increase
implementation of risk-based due diligence and meet RBC expectations as recommended by the OECD and
FAO. The SEA Pilot was part of the EU-ILO-OECD Responsible Supply Chains in Asia (RSCA) Programme which
is funded by the European Union (EU).
The SEA Pilot is not an evaluation or audit of participants’ existing due diligence practices. It aims to support
participants knowledge about OECD-FAO recommendations on supply chain due diligence, identify gaps
and opportunities to strengthen company due diligence efforts and promote good practices for
implementing the OECD-FAO Guidance and related international standards for RBC in agricultural supply
chains. The SEA Pilot consisted of three parts:
1.

Baseline survey and report which evaluated existing responsible business practices across companies
in comparison to the recommendations of the OECD-FAO Guidance. 6 The baseline report was
published in early 2020.

2.

Peer-learning sessions for companies to share their experiences and learn from others with a focus
on RBC themes and due diligence steps that had been identified as challenging. 7

3.

Follow-up survey and a final report (this document) which provides a summary of key findings fromthe SEA Pilot, changes in due diligence practices over the period, feedback from participants on this

6 OECD (2020), OECD Pilot Project on Responsible Agricultural Supply Chains in Southeast Asia: Baseline

Report, http://mneguidelines.oecd.org/Pilot-on-Responsible-Agricultural-Supply-Chains-in-SEA-Baseline-Report.pdf

7 Annex B of this report includes the summary notes of all the SEA Pilot peer-learning sessions.

10Pilot, as well as recommendations to business and learnings for policy makers to further promote theuptake of the OECD-FAO Guidance in Southeast Asia.
The twenty-three companies participated in the SEA Pilot. Of this group, 16 companies completed both thebaseline and follow-up surveys and this data provides the analysis in Section II. The companies in the pilot
represented a diverse group of agribusiness companies operating across the value chain in the region. 8
Most companies (91%) are involved in cross-border trade within Asia with 17 of this group involved in trade
beyond Asia. This diversity in size, focus, and scope of operations (Figure 3) provided valuable insight into
the challenges and opportunities for improving RBC and supply chain due diligence in the region andbeyond. 9Company location by country
Other, 2

Myanmar, 2Thailand, 8

Philippines, 9Viet Nam, 2Figure 2: Location in which participants in the SEA Pilot are based

Seventeen of the 23 companies in the SEA Pilot agreed to disclose their participation, and they are listed
below:

AGREA

A company in the Philippines that provides multiple commodities tofranchises as well as technical assistance and educational programmes to farmers and communities.



All Coco Group Co., Ltd.

A company in Thailand that processes and trades coconut beverages and products.

Aung Nay Lin Htun Co., Ltd.

A company in Myanmar known for specialty coffee and other commodities that operates in multiple stages of the supply chain fromproduction to retail.

8

Recruitment of pilot participants was supported by the Thai Ministry of Foreign Affairs, the Federation of Thai Industry [under
the Joint Standing Committee on Commerce Industry and Banking (JSCCIB)], the Asian Institute of Management (AIM), Makati
Business Club, Vietnam Chamber of Commerce and Industry (VCCI), Vietnam Tuna Association (Vinatuna), European Chamber ofCommerce (EuroCham) in Vietnam, Chambre de Commerce et d’Industrie (CCI) France-Vietnam, the Asia and Pacific Seed
Association (APSA), CropLife Asia, Inclusive Business Action Network (iBAN), as well as Grow Asia and its Country Partnerships
network.
9 Find out more about the pilot participants at http://mneguidelines.oecd.org/Summary-Note-Pilot-on-Responsible-AgriculturalSupply-Chains-in-Southeast-Asia-November-2019.pdf

11

Bluegrass Partners

A Singapore-based investor with global operations including inSoutheast Asia that invests in and provides advisory services to theagribusiness industry.

CargillCargill is an international food and agriculture company with over
160,000 employees in 70 countries. Cargill is committed to feeding
the world in a responsible way, reducing environmental impact andimproving communities where they live and work. Cargill Philippines and Cargill Asia Pacific in Singapore took part in the SEA Pilot.

Charoen Pokphand Foods

Charoen Pokphand Foods is a company of Charoen PokphandGroup, a leading conglomerate in Thailand, which operates integrated agro-industrial and food business, including livestock and aquaculture, across multiple stages of food and non-food agricultural
supply chains.

East-West Seed

One of the ten largest vegetable seed companies in the world thatis headquartered in Thailand, with a leading position in Southeast
Asian countries, and exports to over 60 countries. East-West Seed
Philippines took part in the SEA Pilot.



Global Max Services PTE Ltd

A management consultancy company fully owned by Max’s Group,
Inc. – the largest casual dining operator in the Philippines.



HM. Clause (Thailand)

HM. Clause is part of Limagrain Group and an international leading
company specialising in the breeding, production, and sales of vegetable seeds with operations in over 30 countries.



Jollibee Foods Corporation /Jollibee Group Foundation

JFC is the largest fast food chain in the Philippines and one of thefastest growing Asian restaurant companies in the world. JGF is thesocial development arm of JFC that implements programmes on agriculture, education, and disaster response with partners nationwide.

K Fresh Co., Ltd.

One of the world’s biggest producers and exporters of aromatic coconuts in Thailand.



Limagrain (Thailand) Co.,Ltd.

Limagrain is an agricultural cooperative owned by French farmers
and an international seed group that has become the 4th largest
seed company worldwide with subsidiaries in 56 countries.

Morination Agricultural
Products

A small and medium-sized enterprise in the Philippines that is specialised in trading and distribution in multiple commodity chains.

Philip Morris International

A leading international tobacco company that is engaged in the
manufacture and sale of cigarettes, as well as smoke-free products.
Philip Morris International sources tobacco from 335,000 farmers
including Southeast Asia markets.

Tanduay Distillers, Inc.

A company that carries one of the biggest distilled spirits brands
with a 99% share in the rum category in the Philippines and is expanding its market reach globally.



TAP Trading Co., Ltd.

A company in Thailand that is specialised in manufacturing and retailing furniture, curtains and home décor.

12

Tin Thinh Co., Ltd

Tin Thinh Co., Ltd. in Viet Nam operates in production and processing of a wide variety of seafood and exports to the USA, Canada,
the EU, Japan, Middle East and Australia.

Stages of the agricultural value chain where pilot participants operate
Upstream
Production

Downstream
Aggregation

Processing

Distribution

70%
48%

61%

39%
26%

39%

30%

Production

Post-harvest

Processing, manufacturing

Transportation

Packaging

Trade, distribution

Retail, hospitality

30%

Input

Cross-cutting
48%

Research and development

17%

Advisory/extension services

13%
Financial services

Figure 3: Stages of the agricultural value chain in which pilot participants have operations

13Section II. Key Findings from the Follow-up Survey
A follow-up survey was launched to capture where and to what degree pilot participants had made changes
or were actively considering changes in their due diligence policies and actions, and to the extent possible,
what their motivations for change were. This second survey was launched in July 2020, ten months after
the baseline survey. Despite the short timeframe, a number of changes had been made in company policies
on RBC as well as across the five steps of the OECD-FAO Guidance due diligence process. The follow-up
survey did not capture the degree or type of modifications made per company nor does it assess the quality
and implementation of any changes.

Structure of the follow-up survey
The follow-up survey contained 31 multiple-choice questions which ascertained information on
improvements and/or changes in RBC policy since the launch of the pilot in 2019. The survey questionnaire
asked questions related to modifications made under each step of the OECD-FAO Guidance five-stepframework. Survey questions also included feedback on the SEA Pilot process. All information wasaggregated and no single company or respondent has been identified in this final report, beyond the casestudies in Section IV.

Respondents
The survey was conducted between 22 June and 24 July 2020 and several companies noted that they wereunable to complete the follow-up survey in this period due to resource constraints caused by the Covid-19
situation. Many companies prioritised efforts to mitigate fall-out from the pandemic, which in some cases
occurred during peak production season. As a result, data from the follow-up survey concerns 16 of the 23companies in the SEA Pilot.
Respondents to the follow-up survey predominantly represented companies with global operations (75%),
with over 1,000 employees (50% of companies). Nevertheless, a good number of respondents (44%),
represent SMEs. 62.5% of individuals completing the survey were director-level or corporate-executive
level professionals, with significant decision-making authority. The remaining 37.5% of respondents wereat the managerial or supervisor level.

Geographical scope of company
operations
National
12%

WithinAsia
13%Global75%

Size of company by employees

1-49
25%
1001+
50%
50-25019%251-500
6%

Figure 4: Geographical scope of company operations

Figure 5: Size of companies by the number of employees

14

Step 1: Establish strong enterprise management systems for responsible supply chains
Company policy for responsible business conduct
The OECD-FAO Guidance includes a model enterprise policy (Figure 6) that can support agribusiness company commitments related to both cross-cutting issues (e.g. Disclosure, Grievance mechanisms, Gender)and specific issues (e.g. Human rights, Labour rights, Food security and nutrition). Clear policy commitments and strong management systems to translate them into action are fundamental for helping companies articulate their company-wide vision and strategy, assign responsibility, support relevant business
units in strategy implementation and ensure accountability.

Human rights
Technology
and innovation

GovernanceLabour rights

Cross-cutting standards
Impact assessment, Disclosure,
Consultations, Benefit-sharing,
Grievance mechanisms, Gender

Environmental
protection andsustainable
use of natural
resources

Health andsafetyFood security
and nutrition

Animal welfare

Tenure rights
over andaccess tonaturalresources

Figure 6: A model enterprise policy for responsible agricultural supply chains

Fourteen companies (88%) indicated that changes had been made to written policy(ies) related to RBC
cross-cutting and issue-specific standards over the last ten months, or that changes were being considered
and would likely lead to new/expanded policy commitments being developed in the next 12 months.
The baseline report identified policy on cross-cutting issues as a potential weakness for many companies
involved in the SEA Pilot. The follow-up survey found improvements with new policies added, in key areas
such as Disclosure, Impact assessment, Gender and Grievance mechanisms. Further questions clarified
which standards as set out in the OECD-FAO Guidance were being considered, and these are illustrated in
Figures 7 and 8.

15

Policy change related to cross-cutting standards
GenderCross-cutting standards

Grievance mechanisms

No change over the last 10 months

Benefit sharing

Actively considering adopting
new/expanded policy within the next
12 months

Consultations

Expansion of the existing written policy

Disclosure

New policy has been adopted

Impact Assessment
0%

10%

20%

30%

40%

50%

60%

% of companies
Figure 7: Policy change related to cross-cutting standards in the OECD-FAO Guidance since September 2019 (ten months)

Over one-third of companies have expanded written policy on Impact assessment (43%) and Consultation(36%). Companies are also actively considering new/expanded policy over the next 12 months, with over
40% of companies considering a change to areas related to standards on Benefit sharing, Consultation,
Disclosure, and Impact assessment.
Disclosure, or the commitment to disclose timely and accurate information related to foreseeable risk
factors and company response to particular environmental, social and human rights impacts to potentiallyaffected communities, at all stages of the investment cycle, was one cross-cutting standard to which justover 20% of companies had developed a new written policy over the duration of the SEA Pilot. A further
50% of companies are actively considering adopting new policies on Disclosure within the coming year,
indicating significant interest and efforts on this important standard. Disclosure is fundamental to provide
transparency in global supply chains and enable companies to meet growing demands for information frombusiness partners, investors and consumers who seek to make informed decisions.
Grievance mechanisms can enable remediation when company operations have caused or contributed toadverse impacts. The OECD-FAO Guidance recommends that companies cooperate in good faith with
judicial or non-judicial grievance mechanisms and establish legitimate, accessible, predictable, equitable
and transparent operational-level grievance mechanisms. The baseline report found low levels ofcomprehensive written policy on Grievance mechanisms (32%) and Figure 7 shows that adoption or
expansion of this standard still remains limited.
Gender policies to eliminate discrimination against women, enhance their meaningful participation indecision-making and leadership roles, ensure their professional development and advancement, andfacilitate their equal access and control over natural resources and relevant resources is a key cross-cutting
policy in OECD-FAO Guidance. 75% of companies in the baseline report indicated existing commitments to16

gender. However, there over half of the respondent companies in the follow-up survey noted that they
have either recently expanded, adopted new gender policy or are considering new policy in the next 12months.
Figures 8 shows information on policy development related to the nine issue-specific standards. The survey
found considerable expansion of existing written policy related to Environmental protection andsustainable use of natural resources, commitments to public Health and safety, and the development anddiffusion of Technology and innovation. 50% of companies in the follow-up survey indicated that they havemade changes to their written policy on these standards. Considering both expansion and development of
new policy together, approximately 71% of companies had made policy changes concerning Technology
and innovation, and Health and safety. Similarly, a further 64% had made changes over the last ten months
to policies on Environmental protection and sustainable use of natural resources, as well as Food security
and nutrition.
Over 40% of respondents indicated active consideration of new policy on Human rights and Animal welfare,which were identified in the baseline report as standards that were weak in terms of written policy
development.
Policy change related to issue-specific standards
Technology and innovation

Governance

Environmental protection

Issue-specific standards

No change over the last 10 months
Animal welfare
Actively considering adopting
new/expanded policy within the next
12 months

Tenure rights

Expansion of the existing written policy
Food security and nutrition
New policy has been adopted
Health and safety

Labour rights

Human rights
0%

10%

20%

30%

40%

50%

60%

% of companies
Figure 8: Policy change related to issue-specific standards in the OECD-FAO Guidance since September 2019 (ten months)

17Respondents were asked for further information on reasons behind any decision to adopt, expand, orconsider a change to RBC-related policy (Figure 9). A majority of respondents (64%) cited national
regulations and export market regulations as a reason for changing policies. Almost two thirds (57%) citedinternal drivers as having an important role in the decision to develop new or expanded policy. Over onethird of companies also indicated that business partner requirements played a significant role in policychange.

Key drivers for compay's RBC policy development

Other

0%

Increasing pressure from consumers/media/NGOs

14%

Additional requirement/s from business partners, including
investors

36%

New regulation in your company’s export markets

21%

New regulation/s in the country where your company
operates

43%

Increasing interest from senior management and/or theboard of directors

57%
0%

10%

20%

30%

40%

50%

60%

% of companies
Figure 9: Reasons for developing company policy related to RBC

Relationships with Tier 1 suppliers/business partners
Communicating RBC policies to suppliers and business relationships is an important part of supply chain
due diligence. It ensures suppliers are aware of and commit to following company policies and support
implementation and monitoring. The baseline report identified potential areas for improvement related todeveloping stronger relationships with suppliers and the need to clarify expectations on RBC policies anddue diligence practices.
Based on the follow-up survey, 64% of companies stated that they have reinforced or introduced new
requirements with Tier 1 suppliers/business partners related to their RBC policies and due diligence
expectations.
“We have discussed changes with major suppliers/partners and our policies will be enhanced tocapture these enhancements in RBC policies”“We have reinforced expectations around environmental compliance of suppliers.”
An additional 19% of companies stated that, although new changes had not been made over the last ten
months, they had a strong supplier code of conduct in place and/or contractual provisions relating to RBC
as part of contractual agreements.

18

Use of international standards and guidance on RBC
Referencing international standards enables accountability and specificity behind company commitments
and helps signal to stakeholders, including governments, investors and consumers, the global benchmarksthat companies intend to implement. This is particularly relevant for companies, when standards arereferenced in national or regional legislation of export markets.
Relevant international standards include for example the United Nation Guiding Principles for Business andHuman Rights (UNGPs), the OECD Guidelines for Multinational Enterprises, the OECD- FAO Guidance, thePrinciples for Responsible Investment in Agriculture and Food Systems of the Committee on World Food
Security (CFS-RAI Principles), the Voluntary Guidelines on the Responsible Governance of Tenure of Land,
Fisheries and Forests in the Context of National Food Security of the Committee on World Food Security(VGGT), the Principles for Responsible Agricultural Investment (PRAI), the International Labour
Organization Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy,
Convention on Biological Diversity, the ASEAN Guidelines on Responsible Investment in Food, Agriculture
and Forestry (ASEAN RAI), and relevant ISO standards.
The integration of or reference to international standards and guidance on RBC in Southeast Asia company
policies was identified as low in the baseline report. Based on the follow-up survey, 75% of companies
indicated they had made or were considering making, new commitments to reference to and meetinginternational expectations (Figure 10).
Companies that have made or considered making new commitments to comply
with international RBC standards or guidanceNo, 25%

Yes, 75%

Figure 10: New commitments to comply with international RBC standards and guidance since September 2019 (ten months)

Companies gave examples of new commitments on this aspect, including on the OECD-FAO Guidance,
ASEAN RAI, ISO standards, and various industry and reporting standards (e.g. BSCI, Smeta, Global G.A.P.
and SEDEX).
“The company has adapted to UN Guiding Principles for Business and Human Rights, UN Global
Compact's 10 Principles, and ILO Conventions.”“We have considered compliance to international standards on environmental protection andpreservation; compliance to labour law, and we require our suppliers to declare that no minors are
employed by them in the conduct of business and to provide the necessary materials for us tocheck.”
19

“We have adopted the Sustainable Development Goals.” 10

Company management practices for RBC
Strengthening company management practices is fundamental to implement RBC policies as part of theregular business processes. It ensures clear responsibilities and alignment across company senior
management and relevant business units and inform decision-making to improve effectiveness of due
diligence.
Figure 11 shows that 50% of the companies indicated they had made improvements to management
practices around the training of employees an in incentivising employee compliance with responsible
business standards. 50% of companies noted that they have defined clearer responsibilities for RBC
implementation in their company. In addition, increasing support from corporate-level executives (43%)
and improvement in the regularity of conversations within the leadership team on improving RBC policy(63%) was also highlighted.
Where improvements in management practices had not yet been implemented, companies indicated acommitment to doing better. 30% of companies indicated initiating dialogues on how to improve training
and incentives as well as better defining internal responsibility on RBC implementation. Approximately 20%
of companies also emphasised their already strong performance across these RBC policy areas.

Changes in company management practices for RBC% of companies

70%

Improvements have been
made in the past 10 months

60%
50%
40%
30%

No change has been made,but internal conversations for
improvements are being held

20%
10%
0%

Employees are
There is an
There is a
There are regulartrained and are individual or team corporate-level conversations withincentivised toin the company
executive on theseniorcomply with the with well-defined management board management andresponsible
responsibilities for (e.g. CEO, CSO) that the board on how
business standards overseeing the takes an active role our company canand requirements implementation of in RBC policy at my
improve ourset out in company the RBC policy(s).
company.
responsible
policy(s).
business practices.

No changes have been madeor considered

Strong performance alreadywith no current need forchangeFigure 11: Changes in company’s management practices for RBC since September 2019 (ten months)

To discover links between the SDGs and the OECD-FAO Guidance, download the illustrative brochure OECD-FAO
Guidance for Responsible Agricultural Supply Chains: How it can help achieve the Sustainable Development Goals(2020) at http://mneguidelines.oecd.org/How-the-OECD-FAO-Guidance-can-help-achieve-the-Sustainable-Development10

Goals.pdf

20

Step 2: Identify, assess, and prioritise risks in the supply chain
Supply chain mapping
Supply chain mapping is a critical part of the due diligence process. It helps companies develop a complete
picture of their supply chain and business relationships and understand where the risks are. This enables
effective risk assessment and prioritisation based on severity and likelihood.
While 69% of companies continue to partially or fully map their supply chain, an additional 19% indicatedthat they had increased supply chain mapping over the last ten months (Figure 12).
Companies noted several external pressures motivating increased supply chain mapping, including raw
material supply shortages due to climate change; export market impacts from Covid-19, and downstream
supplier demands. One company indicated that the prevalence of African swine fever and avian flu had led
to increased supply chain mapping to ensure that products were sourced from disease-free areas. Anothercompany explained that customer demands for product and health certification requirements before
procurement and movement of products had also led to the need for increased supply chain mapping. Twocompanies responded that they did not currently undertake any supply chain mapping – with lack ofresources (e.g. time, staff) sighted as being the reason for this.

% of companies

Changes in company efforts on supply chain mapping
60%
50%
40%
30%
20%
10%
0%

50%

19%

0%

19%

13%

We have increased
We continue to
We have decreased We have mapped our We don't currently
the number ofpartially or fully map the level of supply supply chain and do map our supply chain
products/services we our supply chain with chain mapping over not need to repeat
map across the supply no change from the the last 10 months
this process yet
chain
previous year
and/or maintain an
ongoing process of
supply chain mapping
Level of supply chain mapping

Figure 12: Changes in level of company’s supply chain mapping since September 2019 (ten months)

Risk assessment
Iterative and increasingly in-depth risk assessments should be undertaken on high-risk operations,
suppliers and other business relationships to complete companies risk identification and assessments. Risk
assessments help companies understand actual and potential adverse impacts in their supply chain. Suchassessments can take a variety of forms, including supplier interviews, site visits, document reviews, market
research and stakeholder consultations.
Many companies increased risk assessments related to RBC risk factors concerning suppliers and business
partners, products and locations. As Figure 13 shows, this is particularly the case for both products andservices in the supply chain and locations, where 56% of companies increased their risk assessments. There21

was also a significant increase in risk assessments for Tier 1 suppliers (44% increase) and importantly of
suppliers and business partners beyond Tier 1 (38% increase).
All companies indicated that they had adopted a risk-based due diligence management plan related to the
Covid-19 situation or had enacted RBC measures in response to the pandemic. 63% of companies agreed
that Covid-19 had influenced the need to increase levels of risk assessment.
“We have increased the level of risk assessment internally due to COVID to ensure and enhancefood safety.”

Changes in level of company risk assessment60%

We have significantly increased
risk assessments% of companies

50%

We have increased risk
assessments

40%
30%
20%
10%
0%

Tier 1 suppliers
and business
partners

Beyond Tier 1 Products/services
suppliers andin your supply
business partners
chain

Locations

RBC-related risk factors

There has been no change inlevels of risk assessments
undertaken
We have decreased levels ofrisk assessments
We don't currently undertake
risk assessments for this yet

Figure 13: Changes in level of risk assessment undertaken since September 2019 (ten months)

Step 3: Design and implement a strategy to respond to identified risks in the supply chain
A risk management strategy should be designed and implemented based on finding of risk assessment andprioritisation. It is also important to detail the actions a company will take, as well as its expectations of its
suppliers, buyers and other business relationships. Such fit-for-purpose strategy is critical for companies toeffectively prevent and mitigate actual or potential adverse impacts on RBC issues.
Designing and implementing a risk management strategy was discussed extensively in the peer-learning
sessions. Key takeaways from those sessions are highlighted in Section III of this report and details areprovided in Annex 2. In addition, three case studies on specific company strategies are outlined in Section
IV of this report.
The Covid-19 pandemic also offered an opportunity to ask companies about strategy decisions in the faceof emerging risks impacting company operations.

Training/information sessions with suppliers and business partners
Training and/or information sessions with suppliers and business partners can be a valuable way to build
relationships, identify risks, and clarify expectations related to RBC performance. It is also an importantpart of implementing the risk management plan.
Since the baseline report, 25% of companies have increased the frequency of RBC training/information
sessions with suppliers and business partners. Companies were also asked about the impact Covid-19 onsuch practices. 50% of companies responded that the pandemic had had an impact on training, although
only 13% of companies had decreased the number of training sessions.
22

“We were focused on our COVID 19 Response Initiatives instead of the RBC external trainings.”“Training is now all delivered virtually, and all updates are available on our websites.”

Impact of COVID-19 pandemic
The follow-up survey provided an opportunity for the SEA Pilot to assess some high-level implications of
the pandemic. The COVID-19 crisis has impacted the economy, people and the planet. Adopting a RBC
approach in business responses to the crisis will generate short and long-term benefits such as increased
resilience, a fairer and more inclusive distribution of benefits from recovery measures, and a stronger
contribution to sustainable development. Many companies are rolling out contingency plans to weather
the economic storm. These measures may in turn have longer-term legal and reputational effects oncompanies. 11
88% of respondents perceived that Covid-19 would make implementing RBC in their company moredifficult over the next 12 months, with the remaining 13% saying that the ease of RBC implementation
would remain the same. However, Figure 14 shows that a high percentage of companies instigated actions
associated with working conditions, health and safety and employee consultations. 75% of companies alsoreached out with support to local communities and additional support to workers. At the same time, Covid19 has had a negative impact on environmental management performance for 31% of companies.

RBC risk management responses to Covid-2019

Actions taken by company

Reduce environmental management performance due toconstraints (e.g. less capacity to monitor, reduced staffing
levels)31%

Assist workers/employees through additional support,
resources and/or care packages

75%

Assist the local community through support, additional
resources and/or care packages

75%

Change working conditions related to working hours or
location (e.g. home-based)

88%

Change working conditions related to health and safety

94%

Impact assessments across the supply chain

63%

Consultations with employees on work-related measures

88%
0%

20%

40%

60%

80%

100%

% of companies
Figure 14: Changes in company’s RBC-related risk management in response to Covid-19

11 Read the OECD Policy note on Covid-19 and RBC and its brief overview at http://www.oecd.org/coronavirus/policy-

responses/covid-19-and-responsible-business-conduct-02150b06/ and https://mneguidelines.oecd.org/COVID-19-andResponsible-Business-Conduct.pdf

23

Step 4: Verify supply chain due diligence
Verification efforts on due diligence effectiveness
Verifying effectiveness of due diligence practices ensures that companies have adequately identified,prevented, mitigated risks and where appropriate, supported remediation of impacts. Such tracking of theimplementation and effectiveness of company due diligence activities can provide the lessons learned andhelp improve these processes in the future.
Companies were asked as to whether they had taken steps to verify the effectiveness of due diligencepractices on the following cross-cutting and issue-specific standards of the OECD-FAO Guidance and how
efforts have changed over the last ten months.
Figure 15 and Figure 16 show that verification efforts have remained the same for the majority ofcompanies. Yet one-quarter of companies have increased such efforts related to disclosure andapproximately 42% of companies have increased efforts related to Technology and innovation;
Environmental protection and sustainable use of natural resources; Food security and nutrition; and Healthand safety. The changes mirror the increase in new policies on these standards over the last ten months(see analysis of Step 1).
There are clearly areas for improvement, as some companies have indicated that verification of due
diligence on cross-cutting standards is not-applicable to their operations (Figure 15). Others have notedthat there is no verification process in place for certain policies such as Gender, Benefit sharing and Impact
assessment. However, implementation of cross-cutting standards supports all companies in strengthening
their due diligence as a whole and verification of due diligence effectiveness of these standards can provide
valuable information to companies to identify, prevent and mitigate risks.
Verification efforts related to cross-cutting standards
GenderCross-cutting standards

Grievance mechanism
N/A

Benefit sharing

No, we don’t have a verification
process in place
Yes, verification efforts havestayed the same
Yes, we have increased ourverification efforts

Consultation

Disclosure

Impact assessment
0%

20%

40%

60%

80%

% of companies
Figure 8: Changes in company’s due diligence verification efforts on cross-cutting standards since September 2019 (ten months)

24Verification efforts related to issue-specific standards
Technology and innovation
Governance

Issue-specific standards

Environmental protection and sustainable
use of natural resources
Animal welfare

N/A

Tenure rights over and access to natural
resources

No, we don’t have a
verification process in place

Food security and nutrition

Yes, verification efforts havestayed the same

Health and safety

Yes, we have increased ourverification efforts

Labour rights
Human rights
0%

20%

40%

60%

80%

% of companies
Figure 16: Changes in company’s due diligence verification efforts on issue-specific standards since September 2019 (ten months)

Step 5: Report on supply chain due diligence
Public reporting on RBC policy and practices
Reporting publicly on company RBC policies, due diligence processes and activities conducted to identify
and address risks, including the findings and outcomes of those activities, is part of the due diligenceprocess itself. It enables companies to build trust in their actions and decision-making, and demonstrate
good faith. Communication of such relevant information needs to be appropriate to the impacts andaudience in terms of its form, frequency, accessibility, and the adequacy of information provided and cantake a variety of forms, including public and formal reporting, in-person meetings, online dialogues, andconsultation with affected stakeholders.
44% of companies will produce a public report on RBC and due diligence actions in 2020/2021 (Figure 17).
This represents no change from the baseline report and considering only those companies represented inboth samples. Around 20% of companies, however, indicate they now report for internal distribution,
whereas they had not previously made any report on RBC at the time of the baseline study.

25

Company annual public reporting on RBC
No

25%

Yes, but for internal distribution only and not publicly
available

31%

Yes, but integrated into our annual report

25%

Yes, as a public separate “stand-alone” report

19%
0%

5%

10%

15%

20%

25%

30%

35%

% of companies
Figure 17: Changes in company’s annual public reporting on RBC policy and actions

26

Section III. Lessons Learned from Peer-learning Sessions
A key element of the SEA Pilot was the organisation of peer-learning sessions to support company
understanding of the OECD-FAO Guidance due diligence recommendations and promote learning on risk
mitigation actions. As companies were located in different countries, all sessions were conducted virtually(i.e. webinar).
Learning topics were chosen based on knowledge gaps and challenges identified in the baseline report aswell as feedback from particular the pilot participants. Topics centred around the due diligence process,such as effective supply chain mapping and designing a strategy to respond to identified risks; as well as
challenging and wide-spread RBC issues in the sector such as promoting human rights, and addressing
labour issues. The sessions also included topics such how financial stakeholders are utilizing due diligencereporting and incentivising companies to implement due diligence per the OECD-FAO Guidance.
These peer-learning sessions allowed for candid discussion between pilot participants and expert speakers.
Speakers included representatives from peer companies as well as relevant stakeholders such as civilsociety organisations, subject-matter experts and international organisations active in the area of supply
chain due diligence and RBC. 12 In addition to what is provided below, Annex 2 provides a summary of all
peer-learning sessions, as well as all resources and tools shared during these sessions. 13
Pilot participants were also invited to the OECD Global Forum on Responsible Business Conduct (GFRBC)
held virtually in 2020.14 Part I of the GFRBC focused on Covid-19 and Responsible Business Conduct andwas held in May. Part II of the GFRBC on Access to Remedy, was held in June and focused on remedy andaccountability to commemorate the 20th anniversary of the National Contact Points for RBC (NCPs).
Webinar 1: Improving human rights and labour rights
Agribusinesses are under intense scrutiny from stakeholder groups concerning performance on
environmental, social (including human rights and labour rights) and governance issues, known as ESG
issues. Understanding the root causes of human rights and labour rights issues is critical for companies. For
example, they need to explore why the issue such as child labour arises or persists at a particular location,commodity and supply chain.
Addressing human rights and workers’ rights in supply chains can be a long and complex journey andspeakers highlighted how it is essential to collaborate and engage with relevant stakeholders in the sector
and work with suppliers and business partners to improve implementation of human rights and labour
rights policies. Sarah Kerrigan (Deloitte) provided an overview of the rapidly changing landscape of humanrights and business. Adeline Lim and Laili Chairiyah (Phillip Morris International) presented a case study
from the company of human and worker rights policy in Southeast Asia. David Camp (allianceHR) provided
a set of resources and knowledge tools that companies could draw on when developing a policy on humanrights and workers’ rights.
Webinar 2: Addressing challenges in supply chain mapping and traceability
A wide variety of stakeholders are demanding more supply chain transparency, as well as expecting
companies to take leading roles in addressing social and environmental problems such as climate change
and social inequality. Defining appropriate metrics and customising them to each supply chain is essential
12 These peer-learning sessions were held from February to May 2020, closed to external participants with the exceptions being

the joint webinar with Grow Asia in April 2020.

13 After each webinar, a summary of key takeaways, as well as a list of tools and resources discussed in the webinar were sharedwith pilot participants. A resource note on grievance mechanisms was also developed to provide essential information and useful
resources on how agribusiness companies can develop grievance mechanism policy.
14 The 2020 GFRBC attracted a wide and diverse audience – over 2,000 people from 130 countries – and generated over 6,000
session views. Find more about the Global Forum on RBC at http://mneguidelines.oecd.org/global-forum/27

to help monitor and manage impacts across the supply chain. This process also helps companies toprioritise risk management. Collaboration and engagement with different stakeholders plays a key role ineffective and efficient supply chain mapping and can help unlock innovative solutions to drive action atscale and speed.
Gregory Bardies (Barry Callebaut), Petra Meekers (Unilever) and Roel van Poppel (AtSource, Olam)presented on challenges and opportunities in traceability and transparency across the supply chain. All
speakers emphasized the benefits of supply chain transparency, as well as its use as a lever to drive stepchange on sustainability. Collaboration at all levels was viewed as critical to effective and efficient supply
chain mapping and can help unlock innovative solutions to drive more sustainable action at scale andspeed.
Webinar 3: Responsible agricultural investment
This webinar was held jointly with Grow Asia, a multi-stakeholder platform in Southeast Asia thatspecialises in partnerships to progress work on improving smallholder farmer productivity, profitability,and environmental sustainability. Grow Asia is also the lead regional agency promoting the ASEAN
Guidelines on Promoting Responsible Investment in Food, Agriculture and Forestry. Speakers discussed therole of the finance sector in driving responsible agribusiness. We heard from Christy Owen (USAID Green
Invest Asia), Jean-Yves Chow (Mizuho Bank), Imke Greven (OXFAM), Erin Sweeney (Grow Asia) and Barbara
Bijelic (OECD).
Responsible financial mechanisms are on the rise as the financial sector faces increasing expectations to be
more responsive to environmental and social issues. More examples to demonstrate the benefits of suchfinancial mechanisms can help mainstream RBC considerations among agribusiness companies. The
financial sector can support responsible agribusiness by giving clear signals, priorities, and incentives for
RBC, for example through investment products and transparent criteria. Due diligence for RBC is becoming
a common approach for business, including investors, in making agriculture-related business decisions.
Webinar 4: Designing and implementing a strategy to respond to risks
Three speakers presented on different strategies taken by companies with regards cross-cutting or issuespecific standards set out in the OECD-FAO Guidance. These included Richa Mittal (Fair Labor Association)
who talked about the lessons learnt on a fair wages project in India in the seed sector, Kate Blaszak (World
Animal Protection) on animal welfare policy with examples of actions taken by Southeast Asian companies,
and Chase Castaño (Cargill Philippines) who outlined Cargill’s work on the Sustainable Certified Coconut Oil
Program.
Robust commitment throughout the company led by senior management levels is essential to respond to
identified risks in the supply chain. Such company-wide commitment strengthens internal processes.
Collaborative efforts are also crucial in designing an appropriate strategy to address identified risks while
it takes time to bring internal and external stakeholders together and work in a sustainable long-termmanner. Demonstrating the benefits of risk management strategies to different stakeholders (e.g. byshowing increased yields, reduced costs) is a powerful means of gaining buy-in.
All the webinar summary notes can be found in Annex 2.
OECD Global Forum on RBC 2020 [Part II]: Access to Remedy “Enhancing access to remedy through multistakeholder initiatives in Southeast Asia”
This session drew from experiences from Asia to explore how multi-stakeholder engagement can help
enhance access to remedy. Bringing the perspective of different actors involved in collaborative initiatives
in the region, the session discussed their approach towards remediation, and aim to identify common
features and good practices that can be replicated to enhance the effectiveness of grievance mechanisms
in global value chains. We heard from Andrey Sawchenko (International Justice Mission), Daw Khine Khine
28

New (UMFCCI), Heather Canon (ELEVATE), Kate Lynch (Australian National Contact Point), Rob Wayss(Stichting Bangladesh Accord Foundation). 15
Having functioning grievance mechanisms in place does have a large impact on labour and human rights
for workers and affected communities, and it is important to involve workers and affected communities in
its design. Businesses are recognising the value in having well-functioning work-placed grievancemechanisms. Common features of grievance mechanisms that work in practice include: accessibility (themechanism is known and accessible to workers and affected communities), predictability (expectation thatgrievance will be followed up), transparency (complainants will be kept informed), and safety(complainants will be protected from reprisals and retaliation). This is important especially given thevulnerability of many workers. Governments operating state-backed grievance mechanisms can makedialogue with organisations representing workers and affected communities a standard procedure, forexample in National Action Plans on Business and Human Rights, and this will help build trust.
Additional resource: Grievance mechanisms
An information note on grievance mechanisms was developed to help companies better understandgrievance mechanisms and support adoption of such mechanisms. The note explains the characteristics ofgrievance mechanisms in plain language and provides illustrative examples of grievance mechanisms aswell as a list of useful tools and resources. This resource note can be found in Annex 2.

15 The session recording is available at https://oecdtv.webtv-

solution.com/6583/or/gfrbc_enhancing_access_to_remedy_through_multi_stakeholder_initiatives_in_southeast_asia.html

29Section IV. Company Case Studies for Illustrative Purposes
Case studies were shared for illustrative purposes as part of the SEA Pilot peer-learning sessions. Below are
three examples from pilot participants which describe how these companies have implemented strategies
related to risk-based due diligence. These case studies are based on the information provided by theparticipating companies and serve as examples of types of actions taken. It is outside the scope of thisreport to confirm or critically evaluate the information provided and should be used for illustrative
purposes only.
Case study 1: Jollibee Group Foundation Farmer Entrepreneurship Program – Five-step framework (Steps 1& 2)/Benefit sharing
Jollibee Group Foundation (JGF), together with its partners, set
up the Farmer Entrepreneurship Program (FEP) in 2008 to help
smallholder farmers earn a higher income by directly supplying
corporate buyers like Jollibee Foods Corporation (JFC). JFC is oneof the fastest-growing Asian restaurant companies in the worldand established JGF in 2004 as its social development arm.
Recognizing the potential of the business growth of JFC to fuel the
success of small-scale farming communities, FEP bridged the gap
between smallholder farmers and large-scale businesses, providing farmers with market opportunities thatwere previously beyond their reach. At the core of FEP is a capacity-building component designed to build
farmers’ business acumen, technical expertise, leadership and organizational skills. The programmealso helped provide farmers with access to markets other than JFC to help create additional economic
opportunities.
This case study demonstrates the power of partnerships with external stakeholders to achieve RBC
objectives. FEP creates partnerships with local government units, financing institutions, and nongovernment organizations to bring together a comprehensive suite of interventions that respond to
farmers’ field and strategic needs. By 2019, 17 farmer groups have become regular vegetable suppliers of
JFC and since 2009, farmer groups have delivered over 7,000 metric tons with more than PHP 300 million(USD 6 million) in sales.
Under this initiative, JFC was also able to map its supply chain and achieve greater transparency ensuringthat it could better manage supply chain risk. It resulted in improved benefit sharing with its suppliers byhelping to increase the capability, market channels and overall revenue of smallholder farmers. Moreinformation
can
be
found
at
https://www.jollibeefoundation.org;
https://annualreport.jollibeefoundation.org; https://facebook.com/JollibeeGroupFoundationInc.
Case Study 2: Cargill and the sustainable certified coconut oil production programme – Five-step framework(Steps 1, 2 & 4)/Benefit sharing/Environmental protection and sustainable use of natural resources
From 2015-2019, Cargill collaborated with BASF, Procter & Gamble,
and the Deutsche Gesellschaft für Internationale Zusammenarbeit(GIZ) GmbH in a development partnership under the develoPPP.de
programme commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ). The goal was to workwith smallholder farmers in the Philippines and Indonesia to establish
a certified coconut oil supply chain and to improve the incomes andeconomic self-sufficiency of smallholder coconut farmers.
30

Benefit sharing, a cross-cutting standard of the OECD-FAO Guidance encourages companies to contributeto sustainable and inclusive rural development through the sharing of monetary and non-monetary
benefits of production. In this case, smallholder farming communities were able to access a more profitablerevenue stream, increase production yields and improve the environmental protection and sustainable useof natural resources. From the perspective of the private sector companies involved – the projectcontributed to their aim to achieve a more sustainable and transparent supply chain, in line with theircommitments towards people and nature, as well as meet customer demands for sustainable products.
Another important part of the project was achieving certification through a third-party which verified
actions. This was achieved by partnering with the Rainforest Alliance, with the first Rainforest Alliance
Certified™ coconut oil produced in 2018. Across the four years of the partnership, the programme trained
more than 4,100 coconut farmers in Good Agricultural Practices (GAP), as well as farm management
practices. Some 1,600 farmers received additional training and were certified against the Rainforest
Alliance Sustainable Agriculture Standard. Farmers who were trained and certified received on average a
47% higher income than farmers who did not participate in the programme. This project demonstrates theopportunities (e.g. increased yields, reduced costs, securing new customers, improving environmental
performance, achieving greater supply chain transparency) that can be realised through risk management
strategies which benefit multiple stakeholders. More information on this project can be foundat https://www.cargill.com/2019/project-for-sustainable-certified-coconut-oil-production-improve
Case Study 3: Charoen Pokphand Foods Plc. (CPF) CSR Reporting – Five-step framework (Step 5)
Thai company, Charoen Pokphand Foods
Plc. (CPF), operates an integrated agro-industrial
and food business, including livestock andaquaculture such as swine, broiler, layer, duck,
shrimp and fish. It is one of the largest producersof animal feed and poultry in the world.
CPF provides an example of implementation of
Step 5 of the five-step framework for risk-based
due diligence, “Report on supply chain due
diligence”. The company publishes acomprehensive set of twenty-three policies
related to responsible business conduct. Thesecan be freely downloaded from the CPF website.
CPF’s 2019 publicly available Sustainability
Report outlines how the company performed
relative to the targets it has set itself, as well as
the relevant eleven SDGs it measures
performance against. Its materiality assessment
also helps stakeholders understand how the
Figure 9: Examples of publicly available CPF policy statements
company considers responsible business risk
across its supply chain. Progress on reaching clearly defined commitments is provided, along with further
detailed information on partnerships and other specific issues. For example, a Human Rights Due Diligenceprocess is outlined and CPF reported on grievances received, over the 12 months prior, as well as theirresolution. CPF won several awards at the latest Asia Sustainability Reporting Awards 2019 which is also a
resource on types of company reporting.
31Section VI. Recommendations
The SEA Pilot aimed to support companies operating along agricultural supply chains in the region inincreasing an understanding and application of the recommendations of the OECD-FAO Guidance. The
peer-learning sessions facilitated candid discussions between companies in the pilot and expert speakers
from peer businesses, civil society organisations, and experts related to RBC issues and supply chain due
diligence.
The results of the follow-up survey show positive changes in policy and some practices across many
companies, notably in Step 1 (establishing strong policies), Step 2 (in particular extending supply chain
mapping beyond Tier 1) and in Step 4 (tracking due diligence effectiveness). However, Step 3 (devising astrategy to respond to identified risks) remains an area for improvement. Likewise, major efforts need tobe made to encourage wider public company reporting RBC risks and actions to address them.
Recommendations and takeaways from this Pilot provide a starting point for further discussion and action.

Recommendations to companies
The key recommendations to companies from the SEA Pilot are:
1. Companies should continue to refer to and integrate international recommendations on RBC and due
diligence into company management systems. The OECD-FAO Guidance (A model enterprise policy for
responsible agricultural supply chains), along with other standards such as the Principles for
Responsible Investment in Agriculture and Food Systems of the Committee on World Food Security(CFS-RAI) and the ASEAN Guidelines for Responsible Agricultural Investment (ASEAN RAI) provide clear
direction on what should be included in company policies and practices for RBC. These standards arecomplementary and mutually-reinforcing. Adopting such standards enables accountability andspecificity behind company commitments and helps signal to stakeholders, including governments,
investors and consumers, the global benchmarks that companies intend to implement.
The OECD-FAO Guidance also provides a five-step framework for risk-based due diligence to help
companies operationalise the recommendations on RBC as part of the regular business process.
Companies should carry out due diligence as recommended by the OECD-FAO Guidance to proactively
identify and address the impacts to workers, the community and the environment and to ensure that
actions and inactions are not undermining the SDGs. Effective implementation of due diligence enables
companies to systematically manage risks and demonstrate their contribution to the SDGs in ameasurable way.
2. Companies should expand supply chain mapping and risk assessment of business relationships beyond
Tier 1 suppliers to understand actual and potential adverse impacts in their supply chain. This supports
them in further strengthening strategies to respond to risks identified in the supply chain. In this regard,companies can build upon the business case for mapping the supply chain to meet growing
expectations from business partners, investors and consumers on transparency related to RBC
including Health and safety, Human rights, Environmental protection and sustainable use of natural
resources among others.
Due to the limited visibility and leverage, companies may find it challenging to assess risks related tosuppliers beyond Tier 1 with whom companies do not have a contractual relationship. In such case,companies should identify control point enterprises in their supply chain that likely have greater
visibility and/or leverage over business relationships further up the supply chain. They may assess thedue diligence process at these control points to understand whether risks of adverse impact directly
32linked to suppliers have been identified, prevented and mitigated. Companies may also pursue
collaborative efforts in increasing leverage to influencing their business relationships further up the
supply chain with a view to prevent and address risks identified in the supply chain.
3. Companies are strongly encouraged to commit to reporting publicly on their supply chain risks and due
diligence actions, per Step 5 of the OECD-FAO Guidance with due regard taken of business
confidentiality and other competitive concerns. Business partners (e.g. investors, export markets) andcivil society (e.g. NGOs, consumers) are increasingly looking at these reports to provide clear, accurate
and timely information to assess company performance on RBC. The increasing number of jurisdictions
and stock exchanges are also setting specific reporting requirements with respect to company due
diligence. Communicating relevant information is key to building and maintaining trust in their actions
and decision-making and demonstrating good faith to these relevant stakeholders. Public reporting on
due diligence processes, findings and plans to identify and address risks can help companies protect
existing value and create new value.

Learnings for policy makers
The key takeaways for policy makers from the SEA Pilot are:
1. Policy makers could consider further steps to communicate the benefits of public reporting of company
due diligence actions, including of SMEs, to encourage meaningful and robust reporting and promote
RBC. Examples of good practices and useful resources to clarify their expectations and support
company efforts would be beneficial.
2. The role of national and export markets’ regulation is a key motivator for companies to commit to RBC
policies and implement due diligence. Policy makers could reinforce actions to promote RBC and due
diligence in line with internationally recognised standards and recommendations such as the OECDFAO Guidance. As Southeast Asia has increasingly become a net agro-food exporter 16, policy makers
could boost trade facilitation efforts by supporting and strengthening RBC adaption by exporting
companies. For example, increasing availability of the information on traceability, origin as well as due
diligence of exporters can help create greater confidence in the global markets and an enabling
environment for trade. The ongoing discussion at the EU on mandatory due diligence may be of interest
to policy makers in Southeast Asia.
3. Companies are looking for guidance on how to implement robust RBC policy to meet existing standards
and growing market expectations, as well as practical tools and case studies to help them implement
this in practice. Projects like this SEA Pilot provide learning opportunities for companies and should be
encouraged and extended to widen their reach.
Table 1 presents potential next steps for companies in the region and key stakeholders to consider toencourage due diligence for responsible agricultural supply chains. The SEA Pilot highlighted that certain
challenges in the agricultural sector require close collaboration between companies and key stakeholders
to address effectively, including but not limited to systemic risks related to human rights and labour rights.
Some companies have established such collaboration with local and international partners to improve theeffectiveness of their due diligence efforts, such as supply chain mapping and risk management. As theOECD-FAO Guidance recommends, while companies retain individual responsibility for their due diligence,

16 OECD/FAO (2017), OECD-FAO Agricultural Outlook 2017-2026, OECD Publishing, Paris.

http://dx.doi.org/10.1787/agr_outlook-2017-en

33

collective approaches with stakeholders along and across supply chains can support their due diligence andbuild sustainable and resilient supply chains.
Table 1: Proposed next steps identified in the SEA Pilot to enhance due diligence approach as recommended by theOECD-FAO GuidanceConsiderations for companies operating in Southeast Considerations for policy makers and relevant
Asia
stakeholders
Step 1: Establish strong enterprise management systems for responsible supply chains‒ Enhance a comprehensive understanding of RBC ‒ Support and promote learning and action acrossissues covered by the model enterprise policy in thecompanies in any size on a range of RBC standards.
OECD-FAO Guidance and their potential relevance ‒ Clarify terms and approaches across all RBC
standards and promote the different benefits andto company supply chains, beyond Tier 1.
‒ Increase the use of relevant international andcomplementarity of international and regional
guidance on RBC, providing examples of how
regional standards, guidance and frameworks suchcompanies have incorporated them into their policy
as the OECD-FAO Guidance to address actual andand actions.
potential RBC risks in company supply chains and to‒ Highlight case examples and models of company’s
meet market expectations.
written RBC policy, particularly on the cross-cutting‒ Address gaps in company policy on both crossstandards.
cutting and issue-specific standards recommended
in the OECD-FAO Guidance, with particular focuses ‒ Provide a range of model contract provisions,
supplier code of conduct, tools and resources onon Grievance mechanisms and Human rights.
‒ Expand the use of internal and external-focused
how companies can strengthen RBC management
measures, including incentives, contracts andinternally and with business partners.
trainings to help improve the performance ofcompany management practices for RBC.
Step 2: Identify, assess, and prioritise risks in the supply chain‒ Enhance the capacity and capability to extend ‒ Promote company examples and practical tools
supply chain mapping, particularly in cases
related to supply chain mapping and risk
involving high-risk locations, products and services,
identification.
‒ Provide and increase discoverability of credibleor business partners.
‒ Identify and engage with control point enterprises
information to enable scoping risks and traceability
in the supply chain to improve visibility ofalong supply chains.
company’s business relationships and poolleverage.
Step 3: Design and implement a strategy to respond to identified risks in the supply chain‒ Clarify roles and reporting responsibilities across ‒ Encourage sharing of lessons learnt from thethe company to ensure that identified risks are
adoption and implementation of risk management
adequately reported to senior management and astrategies and emphasise the ‘learning by doing’
strategy is effectively implemented to prevent orapproach.
mitigate these risks.
‒ Enrich stakeholder engagement to devise a strategy
to respond to identified risks while ensuring due
diligence is informed by engagement withstakeholders throughout its process.
Step 4: Verify supply chain due diligence‒ Increase the use of verification processes by ‒ Demonstrate the importance of verification in riskdeveloping a greater understanding of the essential
based due diligence approach and promoterequirements for, and benefits from, tracking thelearning opportunities on different verification
methods that align with international expectation
effectiveness of supply chain due diligence.
‒ Review industry initiatives and certification
on RBC.
programmes with which a company collaborates to ‒ Highlight quality resources, tools and information
to help companies better verify their due diligence
track due diligence effectiveness, including theiralignment with the OECD-FAO Guidance to ensure
performance, in particular on cross-cutting34

their value to the company in helping it identify,
prevent or mitigate adverse impacts.
Step 5: Report on supply chain due diligence‒ Improve public reporting on RBC in a meaningful
and robust way.

standards, and encourage sharing of company
experiences in verification processes.
‒

Demonstrate the benefits of public reporting on
RBC and provide examples of good practice socompanies can learn from peers.

35Annex 1: Definitions
Agricultural supply chains
A system encompassing all the activities, organisations, actors, technology, information, resources and services involved in producing agri-food products for consumer markets
Business partner
Entities with which an enterprise has a business relationship are referred to as ‘business partners’.
Business relationship
The term business relationship includes an enterprise’s relationships with business partners, entities in the
supply chain and any other non-state or state entities directly linked to its business operations, products
or services.
Due diligence
The process through which enterprises can identify, assess, mitigate, prevent and account for how they
address the actual and potential adverse impacts of their activities as an integral part of business decisionmaking and risk management systems. Due diligence concerns adverse impacts caused or contributed toby enterprises as well as those adverse impacts that are directly linked to their operations, products orservices through a business relationship.
Enhanced due diligence
Higher-risk areas such as “red flag” locations, products or business partners should be subject to enhanced
due diligence. Enhanced due diligence may include on-the-ground verification of qualitative circumstances
for “red flag” locations, products, or business partners.
Mitigation“Mitigation” refers to actions taken to diminish or eliminate harm if a negative event occurs. Mitigation
measures may be taken before, during, or after an event with the aim of reducing the degree of harm.
Prevention“Prevention” refers to actions taken to prevent harm from occurring or re-occurring. In other words, prevention measures are taken before harm occurs.
Remediation
The provision of remedy for adverse impacts.
Risk
Likelihood of adverse impacts on people, the environment and society that enterprises cause, contributeto, or to which they are directly linked.
Risk-based due diligence
When the nature and extent of due diligence correspond to the type and level of risk of adverse impacts.
The severity of actual and potential adverse impacts should determine the scale and complexity of thenecessary due diligence.
Risk management
Prevention, mitigation, remediation of potential and actual adverse impacts.
36

Stakeholders
Stakeholders include persons or groups who are or could be directly or indirectly affected by the actions of
the enterprise and its interlocutors.
Supplier
All business relationships that provide a product or service to an enterprise, either directly or indirectly.

37Annex 2: Peer-learning Session Summary Notes and Additional Resources
The following pages include summaries and resources shared after each peer-learning webinar of the SEA
Pilot.

38

OECD SEA Pilot on Responsible Agricultural Supply Chains
Webinar: Improving human rights and labour rights
SUMMARY NOTEWEBINAR DATE: 19 February 2020
SPEAKERS:
 Sarah Kerrigan, Manager, Southeast Asia Sustainability, Deloitte Adeline Lim, Manager, Social Responsibility Asia & Laili Chairiyah, Manager, Social Responsibility, Phillip
Morris International
 David Camp, Chief Executive, allianceHR & the Association of Labour Providers
BACKGROUND:
Human rights and labour rights are issue-specific areas set out in the OECD-FAO Guidance for Responsible
Agricultural Supply Chains. The SEA Pilot Baseline Report found 39% of companies in the survey did nothave a written or partial policy on Human rights. Pilot companies also expressed high interest in the topics
of human rights and labour rights being part of the OECD SEA Pilot webinar series. To address thesedemands, the OECD organised the first webinar “Improving human rights and labour rights” on 19 February
2020.
KEY LEARNINGS FROM THE WEBINAR:
1) Agribusinesses are under intense scrutiny from stakeholder groups concerning performance on environmental, social (including human rights) and governance issues (together known as ESG issues).
 The financial community has seen real growth and escalation in interest towards integrating ESG
factors into financial decision making and this is evidenced across multiple dimensions. For example, as of January 2020, the UN Principles for Responsible Investment had nearly 3,000 signatories
globally, representing over USD 89,000 billion assets under management. Sustainability ratings andrankings are becoming more important in decision-making, along with stock exchange disclosure
requirements. There is also a trend in SEA of governments starting to require listed companies toprovide ESG information.
 Markets are starting to demand more information on human rights performance (e.g. the UK Modern Slavery Act, the Australian Modern Slavery Act, the Dutch Child Labour Due Diligence Law, theEU Non-Financial Reporting Directive). Customers/buyers are seeking more information from upstream suppliers, as well as increasing compliance demands. There is growing research emerging
on human rights and business, including in relation to climate change.
2) Agribusiness companies are at differing levels of maturity on developing and implementing due diligence policies on human rights. The journey is complex and takes time, involving incremental improvements and continuous enhancement. A step by step approach is useful.
 The development of good management systems (e.g. Step 1 of the OECD-FAO Guidance) are criticalto implementation of a robust policy on human rights and worker rights. Management systems
should also always consider the local context.

39

 Getting the commitment at the most senior level in your organisation is critical to implementing
human rights policy, including for example at the board of directors level, with explicit accountability
for human rights.
 Ensuring that the right people in the organisation are included in policy development and implementation is important. Commitment and coordination across the organisation are also necessary. For
example, answering questions on:‒ Who has ownership and accountability of the human rights policy?
‒ Who has day-to-day oversight?
‒ Who is responsible for implementation and reporting?
3) Internal training drives a common understanding within the company, which is vital for communicationand company-wide uptake.
 It is important to encourage and support staff to spot the signs of exploitation and know how toreport any human rights issues. Key consideration: If you ask any staff member randomly today,
would they be able to tell you about the company’s human rights policy, and where to report violations?
4) Understanding the root causes of human rights and labour rights issues is important. Companies needto explore why the issue (e.g. child labour) arises or persists at a particular location/commodity/supply
chain.
5) Supply chain collaboration, and working with supply chain partners towards continuous improvementon human rights and labour rights policy, is essential.
 A key first step in developing your human rights and labour rights policy is to map, assess and prioritize risks across your business operations and supply chain. This includes across your own labour,
but also contractors, and workers working for your business partners and suppliers. It also includes
those organizations that source workers and supply them into your business.
 One high-risk area for human rights and labour rights violation are labour providers that source andsupply the workers into your business.
6) In conjunction with internal verification, third-party verification can be an important component ofverification. It can bring a different set of eyes to how things are working and identify any internal blind
spots. It can also give confidence that systems are working, or provide additional advice on how to
improve systems when policy is lacking or not well-implemented.
7) Follow-up actions are critical – once issues are identified they need to be resolved to ensure that thesame incident does not happen again.
TOOLS AND RESOURCES:
There are many toolkits and guidance documents to help businesses develop and implement human rights
and labour rights policy. Diagnostic tools can also enable the identification of gaps/opportunities andsupport a systematic approach for companies to implement risk-based due diligence.
‒
‒
‒
‒
‒

Stronger Together: Tracking modern slavery in supply chains: Resources and Tools
Responsible Recruitment Toolkit
Clearview: Global Labour Provider Certification Scheme
Global Slavery Index
Institute of Human Rights and Business: Library and Academy

40OECD SEA Pilot on Responsible Agricultural Supply Chains
Webinar: Addressing challenges in supply chain mapping and traceability
SUMMARY NOTEWEBINAR DATE: 18 March 2020
SPEAKERS:
 Gregory Bardies, Asia Pacific Sustainability Manager, Barry Callebaut
 Petra Meekers, Global Head of Sustainable Sourcing, Unilever Roel van Poppel, Chief Executive Officer, AtSource, OlamBACKGROUND:
Mapping the supply chain and assessing risks of adverse impacts of the operations, processes, goods andservices of the enterprise and its business partners over their full life cycles are key actions of Step 2 under
the five-step framework for risk-based due diligence set out in the OECD-FAO Guidance for Responsible
Agricultural Supply Chains.
The SEA Pilot Baseline Report found that 71% of companies currently conduct some degree of supply chain
mapping, with 29% carrying out no mapping. Companies stressed the difficulties in undertaking supply
chain mapping due to the complexity and diversity of agricultural supply chains which often encompassed
multiple stakeholders and activities.
KEY LEARNINGS FROM THE WEBINAR:
1) A wide variety of stakeholders (e.g. consumers, supply chain partners, regulators, civil society organisations) are demanding more supply chain transparency, as well as expecting companies to take leadingroles in addressing social and environmental problems (e.g. climate change, social inequality).
Supply chain transparency can be a lever to drive step-change on sustainability.
2) Collaboration is critical to effective and efficient supply chain mapping and can help unlock innovative
solutions to drive more sustainable action at scale and speed. Collaboration comes in many forms,
including: Pre-competitive collaboration within sectors (e.g. industry workshops, WBSCD)
 Working directly with suppliers
 Sustainability platforms (e.g. SAI Platform, Bonsucro) Research partnerships (e.g. with a university/govt. research organisation)
 Small-holder farmer coalitions or projects
 Technology and data-sharing (e.g. Global Forest Watch)
 Civil society partnerships (e.g. Conservation International)
 Certification schemes (e.g. RSPO Certified Sustainable Palm Oil (CSPO), Rainforest Alliance, ProTerra Foundation, Fairtrade International)
 Government and/or regulatory cooperation including at regional/country levels (e.g. Sustainable
Coconut and Coconut Oil Roundtable)
 Online supply chain platforms and monitoring tools (See TOOLS & RESROUCES below)
 International organisations that engage with different stakeholders (e.g. OECD, FAO, ILO)
41

3) Setting time-bound sustainability targets can improve supply chain performance by making expectations clear to internal (e.g. procurement team) and external stakeholders (e.g. supply chain partners).
 Expectations of supply chain partners to help meet company targets on responsible business can beoutlined in a Supplier Code of Conduct. Embedding responsible business policy in company’s own
system or overall mission is the key first step.
 Monitoring levels of compliance across suppliers with company expectations is important and canbe achieved through various verification measures, including self-assessment surveys, certification
schemes, industry-led initiatives, external verification measures, as well as specific impact assessments at site or product level.
4) Every supply chain is unique with different sustainability risks and issues. Defining appropriate metrics
to help monitor and manage impacts across the supply chain is essential and needs to be customised
to each supply chain. This process also helps companies to prioritise risk management.
 Factors to help identify risk include location, high volume ingredients/products, high risk ingredients(e.g. cocoa, palm oil, cane sugar, soy, vanilla, etc.), and business relationships. Please refer to Box 3.1of the OECD-FAO Guidance on p.35.
 Tools can be also used to identify high-risk products, location or suppliers that might require further
investigation and more detailed supply chain mapping strategies.
5) Technology can drive greater transparency across the supply chain.
 A range of technological solutions can be used, not all technology and tools need to be high cost (e.g.
Excel spreadsheet). The important aspect is that information gathered, however, leads to actionable
plans that achieve impactful interventions.
 Data combined from different sources (e.g. satellite, remote sensing, digital feedback tools, farmer
surveys) can bring multiple perspectives to impact measurement and a deeper understanding ofwhat is happening at any one time in the supply chain. Having “boots on the ground” helps bringfurther insights and facilitate action-oriented collaboration.
 Data integrity is essential – aim for data to be improved over time and updated and verified regularly.
This can be achieved through such actions as auditing, better training for data collectors (e.g. producers, suppliers), randomised checking, working with academic or research institutions.
 Demonstrating the usefulness of data collected, to those stakeholders involved in providing suchinformation (e.g. smallholder farmers), can be a powerful means of gaining buy-in, as well as supporting better outcomes for those stakeholders (e.g. increased yields, reduced costs).
6) Data from different sources combined with artificial intelligence can generate detailed performance
information which in turn can drive a paradigm shift in supply chain management. Highly innovative
information systems using real-time data are now being developed and implemented which can enable
companies to better model and predict supply chain impacts and better inform decision making.
TOOLS AND RESOURCES:
There are many tools and platforms to help businesses improve traceability across the supply chain andidentify risks. Examples of useful tools shared during this webinar and from our research are given below.
Please see 2) above for more information on platforms. All tools need to be assessed for their applicability
to your company needs.
 AtSource Chainpoint IBM Food Trust IFC Global Map of Environmental and Social Risk in Agro-Commodity Production (GMAP)
 Sedex (Sedex Members Ethical Trade Audit (SMETA), Self-Assessment Questionnaire (SAQ))
 Sourcemap
42OECD SEA Pilot on Responsible Agricultural Supply Chain
Webinar: Responsible Agricultural Investment
SUMMARY NOTEWEBINAR DATE: 29 April 2020
Webinar co-hosted by Grow Asia and OECD, open to public
SPEAKERS:






Christy Owen, Chief of Party, USAID Green Invest Asia (PACT)
Jean-Yves (JY) Chow, Senior Vice President, Food, Beverage & Agriculture Sector, Mizuho Bank
Imke Greven, Policy Advisor on Land Rights, OXFAM
Erin Sweeney, Sustainable Business and Investment Manager, Grow Asia
Barbara Bijelic, Financial Sector Lead, OECD Centre for RBC

BACKGROUND:
The financial sector has a key role in increasing investment in agriculture and in driving responsible action
in agricultural supply chains. In particular, the sector can support action by providing signals and incentives
for agribusinesses to implement risk-based due diligence as recommended in the OECD-FAO Guidance for
Responsible Agricultural Supply Chains. Agribusinesses want to know the specific actions and/or signals
they can demonstrate to attract responsible investment. Co-hosting the webinar with Grow Asia provided
the opportunity to show how the OECD Guidelines for Multinational Enterprises (OECD Guidelines), OECDsectoral guidance and the ASEAN Guidelines on Responsible Investment in Food, Agriculture and Forestry(ASEAN RAI Guidelines) are aligned and reinforce good practice across investment decision-making in the
agricultural sector.
KEY LEARNINGS FROM THE WEBINAR:
1) There is a wide variety of financial sector stakeholders (e.g. banks, equity investors, pension funds).
Many of these stakeholders show increasing interest in fully understanding the risks, opportunities andincentives in agriculture including in the sustainability-related investment performance. A wide rangeof expertise is needed to correctly and adequately assess the risks associated with agricultural investment. Due diligence for responsible business conduct (RBC) is becoming an important tool for business,
including investors, in making agriculture-related business decisions.
2) Responsible financial mechanisms are on the rise. There are greater expectations for the financial sector to be more responsive across environmental and social issues. Yet RBC/ESG considerations are still
predominantly viewed as an ‘add-on’ by companies rather than a fundamental part of the business.
More examples to demonstrate the benefits of such financial mechanisms can help mainstream
RBC/ESG considerations among agribusiness companies.
3) The financial sector can support responsible agribusiness by giving clear signals, priorities, and incentives for RBC, for example through investment products and transparent criteria. Correspondingly,
there has been a rise of transformational financial products over the last few years that incentivise
company’s responsible business practices. Several high-profile companies, including Olam, Wilmar, ING
43

and BNP Paribas demonstrate the use of innovative financing partnerships to help improve ESG performance.
4) There has been a positive trend towards the use of sustainability-linked loans where interest rates aretied to performance on ESG indicators and whereby performance is verified by 3rd parties. The goal ofthese loans is to incentivise improvements in sustainability performance with potential cost savings.
5) The ability of the financial sector to drive more responsible investment and behaviour across small andmedium-sized enterprises (SMEs) in the agricultural sector is an area that needs more attention, as
such SMEs are currently underrepresented in sustainable banking. USAID Green Invest Asia has produced Guidance to assist banks to develop sustainability-linked loans for SMEs in Southeast Asia withflexible terms and low-transaction costs.
6) Understanding the GHG emissions of investments is attracting more attention from the financial sector.
The Rabo Foundation is setting greenhouse gas emission benchmarks as part of its strategy to monitor
and assess resources allocated toward climate-smart agriculture investments in Indonesia, in partnership with USAID Green Invest Asia. This signals an increasing interest in the climate performance ofagricultural investments.
7) Legitimate land title/Land rights are becoming a critical component of responsible agricultural investment. A key aspect of this is ensuring that Free and Prior Informed Consent (FPIC) 17 is given by all relevant stakeholders in any investment in land and/or local resources.
8) Agribusinesses and investors need to be aware of a range of responsible business expectations when
considering investments in land, including supply chain due diligence, FPIC, transparency and grievancemechanisms. International standards and guidance can be used to guide investment decision-making
in this area.
Example: In February 2020, the Australian bank, ANZ Bank has agreed to provide a financial package to
Cambodian farmers forcibly displaced by a sugar company that the bank financed in 2011. Thisagreement, the first of its kind by a commercial bank, sets an important human rights precedent for
the financial sector globally. This specific instance was submitted in 2014 to the OECD via the National
Contact Points for RBC. For more details, please visit here.
9) There is a comprehensive range of international and regional standards and guidance that has beendeveloped to support responsible investment (e.g. CFS-RAI, ASEAN RAI Guidelines), as well as to help
agribusinesses improve their risk-based due diligence to attract responsible investment (e.g. OECDFAO Guidance). ASEAN RAI Guidelines published in 2019 are an exciting regional development in Southeast Asia.
TOOLS AND RESOURCES:‒‒

OECD-FAO Guidance for Responsible Agricultural Supply Chains (2016); OECD Due Diligence Guidancefor Responsible Business Conduct for any sector; OECD RBC Centre's website for the financial sector
for more resources on responsible investment
Other useful resources: [International standards] UN Guiding Principles on Business and Human Rights,
International Finance Corporation Performance Standards (1, 5 and 7), Equator Principles, World Bank

17 Please find how to implement FPIC as recommended in OECD-FAO Guidance Annex B. Engagement with indigenous people pp.

78-84.

44

Environmental and Social Framework, Voluntary Guidelines on the Responsible Governance of Tenure,
UN Environment Programme Principles for Responsible Banking; [Regional guidance] ASEAN Responsible Investment in Food, Agriculture and Forestry, Environmental and Social Assessment Guidelines forLand Use Lending in Southeast Asia; [Platforms] UN Global Compact; Soft Commodities Compact.

45

OECD SEA Pilot on Responsible Agricultural Supply Chains
Webinar: Designing and implementing a strategy to respond to risks
SUMMARY NOTEWEBINAR DATE: 20 May 2020
SPEAKERS: Richa Mittal, Director of Supply Chain Innovation and Partnerships, Fair Labor Association (FLA) Kate Blaszak, Global Head of Research and Animal Welfare, World Animal Protection
 Chase Castaño, Lead for Corporate Responsibility, Cargill Philippines
BACKGROUND:The OECD-FAO Guidance for Responsible Agricultural Supply Chains recommends a five-step framework
for risk-based due diligence which companies along the full agricultural value chain can use to promoteresponsible business action and in particular, identify and address harms to people and the planet
associated with their business decisions. This webinar highlighted Step 3 of the five-step framework on
how to design and implement a strategy to respond to identified risks in the supply chain. It focused notably
on risks related to labour, animal welfare, and the environment, including the protection and sustainable
use of natural resources. The webinar also responded to one of the recommendations from the SEA Pilot
Baseline Report to encourage sharing of lessons learnt from the adoption and implementation of risk
management plans and emphasise the ‘learning by doing’ approach.
KEY LEARNINGS FROM THE WEBINAR:
1) In evaluating risks to the business, companies are encouraged to understand the root causes of risk inthe supply chain. For example, a seed company started a collaboration with FLA to look into child labourrisks in India and discovered that a lack of decent wages is strongly linked to an increase in child labourand forced labour. Systemic wage issues were identified in FLA’s procurement price study of the seed
sector in India, and further investigation identified multiple drivers contributing to significant wagerelated issues, including wage gaps between workers and payments below legal wages.
2) Collaborative efforts are crucial in designing an appropriate strategy. Case studies demonstrated thepower of working with internal and external stakeholders.


FLA’s seed project in India (hot pepper seeds in Maharashtra, corn seeds in Andra Pradesh) worked
closely with workers and their communities to develop strategies around fairer wages. Ultimately,
the project also discovered that further collaboration at the industry level with other companies
was necessary to drive change, by helping to provide a level playing field for all companies to engage with workers on. Engagement at national level roundtables, with women associations andgovernment officials, was also important in addressing systemic issues, for example around genderdisparities, sector-wide wage payments, and broader worker rights at regional and/or national
level.

46



Collaboration was critical in the Sustainable Certified Coconut Oil Production (SCNO) – a joint project presented by Cargill Philippines, not only with farmers but with other project partners, including companies, aid agencies and implementing organisations. This created a multi-stakeholder approach in which multiple agencies could bring different incentives and long-term support to farmers. For example, the project involved stakeholders who could provide training and systems implementation (e.g. chain of custody, certification systems) as well as off-taker companies who could
provide financial incentives and guaranteed market conditions, leading to long-term systemchange.

3) Commitment at the senior management level to implementing a risk-based due diligence strategy is
crucial. It takes time to bring internal and external stakeholders together and work to address risks ina sustainable long-term manner. It can also require additional resources allocated, particularly in theearly stages before benefits are recouped.
4) Robust commitment throughout the company led by senior management levels from the beginning of
the project is also essential to respond to identified risks in the supply chain. Such company-wide commitment strengthens internal processes, for example, a revision of procurement price calculation, for
responsible sourcing.
5) Leadership is often needed by a company to take on a major issue and to bring stakeholders together.
Sometimes, this means being the first company to tackle a certain risk. If benefits are seen, such action
can then motivate others in the sector to follow or implement similar initiatives. For example, action
by one company in Brazil to phase out teeth reduction amongst pigs inspired similar actions by someof the world’s biggest meat producers, including a pork producer in Thailand.
6) The procurement department in a company can be very influential and is one of the critical departments to be involved in implementing risk-based due diligence strategies. This is because the procurement department typically has direct contact with suppliers, communicating expectations and measuring performance, on an ongoing basis. It also makes decisions about payments with suppliers which
ultimately act as important signals for company expectations on responsible business.
7) Demonstrating the benefits of risk management strategies to different stakeholders (e.g. by showing
increased yields, reduced costs) is a powerful means of gaining buy-in. The SCNO project resulted inbetter yields and returns for smallholder farmers. Better animal welfare practices led to a reduced
carbon footprint and an increase in feed efficiency for a pig producer in Thailand. This encourages support for action and changing behaviour among key stakeholders.
8) Public communication is important. Reporting publically as recommended by the OECD-FAO Guidancein Step 5 helps inform consumers and supply chain partners on the efforts being made to improve
performance related to responsible business. Reporting annually helps strengthen trust and transparency.
TOOLS AND RESOURCES:
There are many tools and resources to help businesses identify and address risks across the supply chain.
Examples, including those shared during the webinar, are listed below.
Labour rights: Seeds of change: A pilot project to address wage improvements in India’s seed sector(FLA, 2019). Resources from around the world on improving worker’s rights can be found at Fair
Labour Association; International Labour Organisation; Business and Human Rights Resource Centre.
47



Animal Welfare: Global business case for group sow housing with enrichment & Global businesscase for higher welfare for pigs raise for meat (World Animal Protection); Fish Welfare Initiative;
The Business Benchmark on Farm Animal Welfare Report 2019. Resources can be found at theWorld Organisation for Animal Health.



Benefit-Sharing and Environmental protection and sustainable use of natural resources:
Sustainable certified coconut oil production (SCNO) project; Working with smallholders: A
handbook for firms building sustainable supply chains (IFC, 2019); Examples and resources oncollaborative approaches can be found at IDH's Sustainable Trade Initiative.



Reporting:
Reportingmatters:
Navigatingthelandscape:apathforwardfor sustainability reporting (WBCSD, 2019); Sustainability reporting in ASEAN countries (ASEAN CSR
Network/National University of Singapore, 2018): Global Reporting Initiative.

48

OECD SEA Pilot on Responsible Agricultural Supply Chains
Grievance Mechanisms
ADDITIONAL RESOURCESThe OECD Pilot on Responsible Agricultural Supply Chains in Southeast Asia (OECD SEA Pilot) conducted thebaseline survey with 23 pilot participants in 2019. The results found that establishing a robust policy on
grievance mechanisms was a key challenge for many companies.
Grievance and remediation processes interact with, and may ultimately support due diligence by providing
channels through which companies can become aware of and respond to adverse impacts of their activities.
Strong implementation of policy on grievance mechanisms can help companies enhance risk-based due
diligence across all issues related to responsible business conduct (RBC). This is why grievance mechanisms
are an important cross-cutting standard recommended by the OECD.
Given the valuable role of grievance mechanisms in supporting RBC and due diligence, this note helps
companies better understand grievance mechanisms and support their decisions on the adoption of suchmechanisms.
WHAT ARE GRIEVANCE MECHANISMS?
In the context of RBC, a grievance mechanism is a formal complaint process for use by individuals, workers,
communities and civil society organisations that are negatively affected by business activities andoperations. Grievance mechanisms are sometimes also called ‘complaints’, ‘redress’, or ‘accountability’mechanisms, 18 and help provide remedy where a company has caused or contributed to a negative impact.
Grievance mechanisms can help prevent future conflict, save the costs of a judicial trial, reach agreementon problems and build trust amongst stakeholders. They can provide valuable information to identify
supply chain risks and act as an early warning system before problems escalate. This then may help
companies feed critical information into broader due diligence processes. 19
WHAT ARE INTERNATIONAL EXPECTATIONS ON GRIEVANCE MECHANISMS?
International instruments such as the OECD Guidelines for Multinational Enterprises (OECD Guidelines) andthe UN Guiding Principles for Business and Human Rights (UNGPs) recognise the role that both states andbusinesses can play in facilitating access to remedy.
One of three pillars of the United Nations ‘Protect, Respect and Remedy’ framework is “the need for rights
and obligations to be matched to appropriate and effective remedies when breached”. 20 The OECD
Guidelines expect businesses to provide for or co-operate in the remediation of adverse impacts where
they have caused or contributed to adverse impacts. 21

18 SOMO, What are grievance mechanisms, https://www.somo.nl/hrgm/what-are-grievance-mechanisms/

19

Shift, et al. (2016) Doing Business With Respect for Human Rights

20 UN Guiding Principles for Business and Human Rights, p.1

21OECD Guidelines for Multinational Enterprises, IV. A.6. To learn more about the relationship of an enterprise to an adverse impact and its
response, please see OECD Due Diligence Guidance for RBC, Q30 & FIGURE 2. Addressing adverse impacts.

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The OECD Guidelines also contain a legallybinding obligation for adhering countries to set
up a non-judicial grievance mechanism to help
provide access to remedy. These agencies
called the National Contact Points for
Responsible Business Conduct (NCPs) are in
charge of resolving issues related to theimplementation of the OECD Guidelines bycompanies
throughmediationor
recommendations (the so-called “specificinstances”). 22
The OECD Due Diligence Guidance for
Responsible Business Conduct provides clarity
on what due diligence means. It aligns with the
UNGPS on when companies should respond toadverse impacts and gives examples of practicalactions that companies can take to provide foror co-operate in remediation. 23

Box 1. What is the relationship of remediation to due
diligence?
The provision of a remedy is not a component of due
diligence but a separate, critical process that due
diligence should enable and support. Grievance andremediation processes interact with, and may ultimately
support due diligence by providing channels throughwhich the enterprise can become aware of and respondto RBC impacts. Inputs and feedback from remediation
processes can help strengthen identification of real andpotential adverse impacts by highlighting issues that may
not have received sufficient attention, and by providing
inputs on how to effectively respond to adverse impacts.
Source: OECD Due Diligence Guidance for RBC, Q48

WHAT ARE EXAMPLES OF GRIEVANCE MECHANISMS?
Effective judicial grievance mechanisms are at the core of ensuring access to remedy. Yet other types ofgrievance mechanisms play an essential role in complementing and supplementing judicial mechanisms.
They can be also helpful where judicial mechanisms pose legal, practical and other barriers to access toremedy. 24 NCPs are state-based, non-judicial grievance mechanisms that handle RBC issues related tocompanies operating in or from the country of the NCP. 25 An operational-level grievance mechanism(OLGM) is a non-state-based, non-judicial grievance mechanism provided by a company alone or incollaboration with stakeholders such as a group of companies, industry initiatives and multi-stakeholder
programmes.
Table 1. Examples of grievance mechanisms for RBC

Judicial

Non-judicial

Civil court
Criminal court
Labour court

State-based

National Contact Points
National Human Rights Institutions
Environmental ombudsman
Specialist government bodies, consumer
protection agencies, regulatory oversightbodies, environmental protection agencies

Non-state-based

Operational-level grievance mechanisms
provided by companies such as in-house
worker complaint mechanisms or third-party
complaint systems
Grievance mechanisms developed by industry,
multi-stakeholder, or other collaborative
initiatives
Grievance mechanisms developed byinternational financial institutions

Source: OECD Guidelines; OECD Due Diligence Guidance for RBC; UN Guiding Principles; OHCHR ARP Project

22 See Decision on the OECD Council on the OECD Guidelines for Multinational Enterprises, Section I.

OECD Due Diligence Guidance on RBC, Section II, 6.
UN Guiding Principles for Business and Human Rights, pp.30-33
25 OECD, Frequently Asked Questions: NCPs for RBC, https://mneguidelines.oecd.org/OECD-Guidelines-for-MNEs-NCP-FAQ.pdf
23

24

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WHAT ARE CRITERIA FOR EFFECTIVE OPERATIONAL-LEVEL GRIEVANCE MECHANISMS?
The OECD Guidelines and the UNGPs recommend thatcompanies establish or participate in effective OLGMs
for individuals and communities who may be adversely
impacted by their actions. 26 These international
standards set out the criteria to ensure theeffectiveness of OLGMs (See Box 2). The OECD also
recommends that companies establish OLGMs in
consultation and collaboration with stakeholders. 27 A
grievance mechanism can best serve its purpose if
individuals, communities and stakeholders know about
it, trust it and can use it. 28

Box 2: OLGM effectiveness criteria
Operational-level Grievance Mechanisms
should be: Legitimate
 Accessible
 Predictable Equitable Transparent
 Rights-compatible
 A source of continuous learning Based on engagement and dialogue

WHERE CAN I FIND OUT MORE ABOUT GRIEVANCE MECHANISMS?






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

UN (2011) Guiding Principles for Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” framework.
OECD‒ OECD Guidelines for Multinational Enterprises (2011)‒ OECD Due Diligence Guidance for Responsible Business Conduct (2018)‒ Brochure on National Contact Points for Responsible Business Conduct and website for more
information about how NCPs handle cases
The Office of the Compliance Advisor Ombudsman (CAO) Grievance Mechanism Toolkit for informationand tools, including templates.
Shift, et al. (2016) “Doing Business with Respect for Human Rights: A Guidance Tool for Companies”
Chapter 3.8 on grievance mechanisms (PDF & interactive website) for types of grievance process andconsiderations to be taken into account.
Federal Institute for Sustainable Development, Toolbox Human Rights for business and organisations“Operational-level Grievance Mechanisms: What does this mean for your organisation?”
Institute for Human Rights and Business Remediation and Operational-level Grievance Mechanisms forcompany examples
Business and Human Rights Resource Centre Company-based grievance mechanisms for tools and examples of the uses of OLGMs
Ethical Trading Initiative (2017) Grievance mechanisms & remedy in global supply chains for case studies on access to remedy and OLGMs, and discussions on roles of trade unions and NGOs

26 The OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector provides examples of how OLGM criteria

may be met in Table 8. However companies should note that these examples are neither intended to be prescriptive nor exhaustive.
27
OECD-FAO Guidance for Responsible Agricultural Supply Chains, Step 1.5.
28 UN Guiding Principles for Business and Human Rights, III. B. 31.

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Annex 3: Key Findings from the SEA Pilot Baseline Report
The baseline survey was carried out from September to October 2019 at the beginning of the SEA Pilot. It
provided an overview of how certain agribusiness companies operating in Southeast Asia were implementing the recommendations of the OECD-FAO Guidance at that time.
Companies’ policies and actions were assessed against the five-step framework for risk-based due diligence
set out in the OECD-FAO Guidance. Potential gaps and opportunities for improving the implementation ofrisk-based due diligence were identified, along with key findings and recommendations.
The baseline report presented the following seven overarching findings and recommendations for further
consideration in the work of the SEA Pilot. The full report is available at http://mneguidelines.oecd.org/Pilot-on-Responsible-Agricultural-Supply-Chains-in-SEA-Baseline-Report.pdf.
1. Companies are interested and motivated to improve responsible business policy and action.
This is particularly so within the immediate boundaries of company operations and with Tier 1 business
partners. Some companies are also engaged with suppliers beyond Tier 1 relationships and have invested
in the development, and implementation of comprehensive policy related to RBC, which is regularly verified. Others, however, are at the very start of developing policies and processes across their operations
and supply chains. A ‘learning by doing’ approach, as well as sharing of experiences across the sector,
should be further encouraged and supported.
2. Few companies demonstrate the development of comprehensive written policy across all relevant
areas of responsible business.
Companies could improve risk-based due diligence efforts by using the model enterprise policy containedin the OECD-FAO Guidance as a template to identify potential policy gaps, with the goal to develop written
policy for RBC, appropriate to their own needs and particular risk profile. Examples of written or model
policies that have been implemented by companies with more advanced RBC programmes should beshared as a valuable resource to help other companies develop or refine strategy.
3. The use of, or reference to, international and regional guidance, frameworks and standards, is low.
Despite the many international frameworks on responsible agricultural practices available (e.g. the UN
Committee on World Food Security’s Principles for Responsible Investment in Agriculture and Food Systems(CFS-RAI), the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forestsin the Context of National Food Security (VGGT), and the OECD-FAO Guidance for Responsible Agricultural
Supply Chains, there is low awareness of these instruments and consequently a low level of these instruments being referenced in company policies. It is valuable to understand why many companies are notusing or referring to such guidance. Discussion on ways to better integrate and increase awareness of theseresources would be useful.
4. Adoption of an RBC policy requires buy-in from internal and external stakeholders and this can be acomplex process.
Obtaining buy-in for the adoption of policy can be challenging and requires the support of both internaland external stakeholders. Case examples of actual adoption of responsible business policy would be useful. In particular, there is a need to share success stories regarding the implementation of activities upstream in the supply chain. It is also important to share experiences that have not worked well, as suchlearnings give extremely useful insight into future approaches.
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5. The implementation of RBC policy on cross-cutting standards is lower than the implementation ofpolicy on issue-specific standards.
Companies tend to focus on responsible business efforts on issue-specific standards (e.g. Labour rights orenvironmental issues) compared to the cross-cutting standards (e.g. Benefit-sharing) listed under themodel enterprise policy. 29 Cross-cutting standards are, however, crucial to enabling responsible businessacross all areas of company operations. Developing a deeper understanding of the ways that cross-cutting
standards can enhance overall business performance, including performance on issue-specific standards,
could promote their implementation. The development of policy on grievance mechanisms is one example
identified where the development of policy would reinforce efforts towards improved risk-based due diligence across other standards such as human rights.
6. Management systems to implement RBC and the use of verification processes in partnership withexternal stakeholders is less developed.
Robust management systems to support the implementation of supply chain diligence is critical. Results
indicated a need for some companies to better clarify roles and responsibilities across the company on RBC
implementation. The implementation of management systems to implement RBC in partnership with external stakeholders is less developed in many companies. These can include measures like contractual
terms in commercial agreements, requesting information from suppliers on their RBC policy and practices,running supplier training sessions, and providing incentives (e.g. long-term supplier contracts, financial bonus). A focus on strengthening verification processes to help measure company performance is alsoneeded. Examples and case-studies of measures and verification processes that support RBC implementation across the supply chain would therefore be helpful for companies to learn from, and adapt to theircircumstances.
7.

Public reporting and communication of due diligence policy is a challenge for many companies.

Companies use a diversity of approaches to communicate responsible business action, yet many companies
do not currently report publicly. Further discussion on the need for public communication of responsible
business policy and action, as well as on what, when, to whom, how, and why to communicate such information, would be beneficial. Examples of how various companies communicate to different stakeholders
across the supply chain on responsible business policy could be useful tools in themselves for other companies to learn from, and adapt for their own needs.

29

The model enterprise policy consists of nine issue-specific standards (Human rights, Labour rights, Health and safety, Food
security and nutrition, Tenure rights over and access to natural resources, Animal welfare, Environmental protection andsustainable use of natural resources, Governance, Technology and innovation) and six cross-cutting standards (Impact
assessment, Disclosure, Consultations, Benefit sharing, Grievance mechanisms, Gender).

53Annex 4: The SEA Pilot Online Follow-up Survey
The follow-up survey was carried out from June to July 2020, after approximately ten months since thebaseline survey was conducted. This follow-up survey aimed to capture any changes that companies participating in the SEA Pilot have made during the SEA Pilot period to align their RBC policy and due diligencepractices with the recommendations of the OECD-FAO Guidance.

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Annex 5: Participating Companies Feedback on the SEA Pilot
Understanding of the OECD-FAO Guidance
One of the goals of the SEA Pilot was to increase understanding of the OECD-FAO Guidance and the needfor undertaking due diligence on responsible business across agricultural supply chains. In that respect,
75% of respondents on the follow-up survey agreed or strongly agreed that they, “now better understandthe 16 RBC standards as set out in the OECD-FAO Guidance”. 81% of respondents agreed or strongly agreed
that, “since this SEA Pilot, I have become more aware of the need for undertaking due diligence on
responsible business across our supply chains.” Feedback from companies indicated that peer-learning
sessions can support and promote a better understanding of a range of RBC standards and due diligenceprocesses.
“All presenters were knowledgeable and delivered materials that were relevant to the topic.”“Webinars provided a lot of information, understanding and good feedback from other companies.”

Ways to improve the SEA Pilot
Several companies provided feedback on ways to improve the activities under the SEA Pilot. These included
suggestions for more case studies and webinars and a continued focus on the sharing of practical examples.
The exchange of actions and progress between companies, i.e. peer-learning opportunities, was seen as
valuable. It was noted that it takes time to build up knowledge and practices on RBC and therefore it would
be beneficial to continue the work over a longer period. The Covid-19 pandemic had also made it moredifficult for many participants to engage as one might have liked on the SEA Pilot activities due to time,
travel and resource constraints.
“I think the conversation has to continue. The RBC concept is in its incipient stage in many of themarkets in SEA. In particular, companies who are homegrown. This concept will take time to digest
among many individuals and companies.”“To promote the RBC and supply chain due diligence, there should be more engagement platforms
and linkages between SEA Pilot and the participants, and between SEA participants.”
Participants advice on ways to better promote RBC and supply chain due diligence in the agribusiness sector
in Southeast Asia centred around promoting wider and deeper engagement in the region withstakeholders, including governments and within the communities of the companies themselves, on theneed for RBC implementation. The provision of more platforms and opportunities for companies to learn
from each other and obtain practical information on how to implement RBC policy and practices across
supply chains was also important.
“I believe consultation meetings, follow-ups and more close monitoring among organizers andparticipants would help better promote RBC and due diligence in the agribusiness sector inSoutheast Asia.”“While Agriculture provides livelihoods to billions of people in Asia. We must never forget the
responsibility that we have to the environment, to the people. In the field - serious, adverse effects
of practices are palpable. If you can open the eyes of individuals and corporations to thedegradation of the environment, effect on people - the region will take notice. Don't stop theconversation.”70

OECD Pilot Project on Responsible Agricultural Supply Chains inSoutheast Asia
FINAL REPORTThe OECD is engaged in promoting the understanding and uptake in Southeast Asia of supply chain
due diligence recommendations in the OECD-FAO Guidance for Responsible Agricultural Supply
Chains.
This report provides insight into overarching trends and presents gaps and opportunities of how
policymakers, business and other stakeholders can further promote responsible business conduct(RBC) along agricultural supply chains in the region.

mneguidelines.oecd.org

With funding by theEuropean Union