Due diligence and supply chains

The Guidelines acknowledge and encourage the positive contributions of the enterprises to the economic, environmental and social, but also acknowledge that their activities can have a negative impact in areas such as corporate governance, labour rights, human rights, environment, corruption and consumer interests.

In particular, the enterprise are required to adopt a responsible business conduct and to:

• avoid causing or contributing to adverse impacts on matters covered by the Guidelines, through their own activities, and address such impacts when they occur;
• seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship. This is not intended to shift responsibility from the entity causing an adverse impact to the enterprise with which it has a business relationship;
• in addition to addressing adverse impacts in relation to matters covered by the Guidelines, encourage, where practicable, business partners, including suppliers and sub-contractors, to apply principles of responsible business conduct compatible with the Guidelines.

In order to do all this effectively, the OECD Guidelines recommend companies to implement a due diligence, i.e. a “process through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts as an integral part of business decision-making and risk management systems”.

To support companies effectively in the implementation of this process, the OECD has developed a series of sectoral guides. lastly, a general due diligence guide.

 

The due diligence process

1. Embed responsible business conduct into policies and management systems.
2. Identify and assess actual and potential adverse impacts associated with the enterprise’s operations, products or service.
3. Cease, prevent and mitigate adverse impacts.
4. Track implementation and results.
5. Communicate how impacts are addressed.
6. Provide for or cooperate in remediation when appropriate.

 

The guides

• OECD Due Diligence Guidance for Responsible Business Conduct [General guidance]
• OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector
• Sourcing gold from  artisanal and small-scale gold mining
• OECD due diligence guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
• Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains
• OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
• OECD-FAO Guidance for Responsible Agricultural Supply Chains
• Responsible Business Conduct for Institutional Investors. Key considerations for due diligence under the OECD Guidelines for Multinational Enterprises
• Preventing Corruption and Promoting Responsible Business Conduct when Organising Sporting Events