Coronavirus, OECD: unity and solidarity are needed to overcome the crisis and countries must encourage responsible behaviour in business
16 April 2020
The COVID-19 crisis has impacted the economy, people and the planet.
In its statement for the G20 Virtual Summit that took place on March 26th, 2020, the OECD Secretary General Angel Gurria, in addition to stressing the need to massively increasing the production of medical infrastructure, equipment and supplies, and to ensuring that vaccines and treatments are available at affordable prices widely and swiftly, he also called for decisive and collective action in five fronts:
1. People and workers;
2. Businesses, particularly SMEs;
3. Macroeconomic: mobilising the three policy levers (monetary, fiscal, and structural);
4. Trade: liftig existing trade restrictions, including on imports of much needed medical supplies;
5. Developing and low-income countries. OECD joins the call of the IMF and the WB, and Prime Minister Trudeau, on his call to support the Small Island Developing States.
The OECD released its estimates on the lockdown showing that it will directly affect sectors amounting to up to one third of GDP in the major economies.
According to the OECD, in this scenario, adopting a responsible business conduct approach in government and 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.
In the OECD document "COVID-19 and Responsible Business Conduct" is not acknowledged that "many companies are rolling out contingency plans to weather the economic storm. Some are guaranteeing workers' pay and supporting their suppliers, e.g. by providing financial assistance or contract flexibility, or have directly contributed to containing the pandemic by redirecting production lines towards critical health products. Other companies are taking measures that are resulting in massive worker layoffs, short-term cancellation of orders with suppliers, human rights violations and environmental harm, as well as increased anti-competitive practices, corruption and other illegal conduct. These measures may in turn have longer-term legal and reputational effects on companies".
"For companies, an RBC approach, including applying risk-based due diligence throughout supply chains, helps ensure that strategies to respond to the crisis identify and address potential adverse impacts on people, the planet and society at large. These strategies can often be put in place with few resources and bring direct economic benefits for companies, including improving stock prices, avoiding volatility, increasing long-term value, improving access to emergency funds and capital, mitigating legal risks, and protecting brand value and reputation. Company RBC approaches could include the following measures:
• Social dialogue and stakeholder engagement that ensure worker support for measures taken by the company and to keep the workers and affected communities engaged in view of the restart or redesign of operations;
• Environmental, health and safety management that address short-term threats by avoiding accidents and protecting workers and consumers.
• Supply chain management that addresses vulnerabilities in the supply chain and supports continuity planning to manage disruptions.
• Corporate governance approaches that ensure leadership and a clearly defined responsibility for disaster, continuity and contingency planning; and better reporting on measures taken to address the financial, environmental, social and governance risks companies face as a result of the COVID-19 crisis."
See the OECD upon Covid-19 https://www.oecd.org/coronavirus/en/
On RBC see: https://mneguidelines.oecd.org/