The Organization for Economic Co-Operation and Development (OECD) is working towards a targeted update of its Guidelines for Multinational Enterprises, a government-backed instrument on responsible business conduct. Used by over 50 countries–including Australia, Brazil, Canada, and the United States–the Guidelines outline the expectation that all businesses avoid and address negative impacts of their operations while contributing to sustainable development in the countries where they operate.
For the Guidelines to be the “most comprehensive international standard,” as the OECD describes them, revisions must better encapsulate the rights of Indigenous Peoples. Reference to Indigenous Peoples first appeared in the Guidelines’ 2011 revision and only twice: in the sections on Human Rights (pg. 32) and Employment and Industrial Relations (pg. 40) among lists of at-risk, marginalized, or vulnerable populations that require particular attention based on past and ongoing harms. There is no reference to free, prior and informed consent (FPIC) or of the rights of Indigenous Peoples as enumerated in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).
This article defines the OECD and the Guidelines for Multinational Enterprises, discusses how better consideration and articulation of the rights of Indigenous Peoples will improve the standards, and encourages Indigenous Peoples and advocates for the rights of Indigenous Peoples to engage on this issue.
What is the Organization for Economic Co-Operation and Development?
The OECD is an intergovernmental organization founded in 1961 to stimulate economic progress and world trade. The forum’s 38 member countries describe themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, and coordinating domestic and international policies of its members. The OECD works by informing members and partners via independent research and analysis, influencing policy and strategy via forum meetings, and setting international standards to “protect citizens while enabling governments to save time and money.”
What are the Guidelines for Multinational Enterprises?
Adopted in 1976, the OECD Guidelines for Multinational Enterprises outlines expectations for operationalizing enterprise practices responsibly in the areas of human rights, labor rights, environment, bribery, consumer interests, information disclosure, science and technology, competition, and taxation. The Guidelines were revised in 1979, 1984, 1991, 2000, and 2011.
While the Guidelines are not legally binding, they are the only government-backed international instrument on responsible business conduct with a built-in grievance mechanism. Adhering countries (51 as of this writing) are required to set up a National Contact Point (NCP) to promote the guidelines, handle inquiries, and provide a space for mediation to help find a resolution in response to alleged non-observance of the Guidelines. NCPs are a critical component to ensure multinational enterprises in adherent countries that operate abroad are held accountable to the responsible business conduct outlined in the Guidelines. NCPs are also a useful instrument for Indigenous Peoples seeking urgent recourse or remedy when multinational companies, or one of its affiliates, clients or services providers, is the cause of negative impacts.
In 2017, the NCP grievance mechanism was utilized successfully by the Society for Threatened Peoples, after alleging non-observance concerning Credit Suisse’s business relationship with companies involved in the construction of the Dakota Access Pipeline in the United States. Supported by the Swiss NCP, the Society for Threatened Peoples met with Credit Suisse five times between 2017-2019 to discuss “internal corporate responsibility procedures regarding coherence with international standards and implementation in practice.” According to the subsequent agreement, Credit Suisse agreed to include the concept of FPIC for project lending in its internal sector-specific policies for Oil & Gas, Mining, and Forestry & Agribusiness.
Updating the Guidelines
OECD instigated a targeted review of the Guidelines in 2020 in alignment with the goal to keep its standards fit for purpose in recognition that much has changed since the last revision in 2011. The “targeted update” excludes a wholesale revision or redrafting of existing chapters but is based on issues raised in a stocktaking exercise and is guided by four criteria: ensuring coherence with OECD priorities and standards, enhancing OECD’s leading on Responsible Business Conduct, building on achievements and strengths, and ensuring focus and proportionality. The review process started with a stocktaking exercise wherein feedback was gathered from NCPs, OECD stakeholders, and the public. Feedback was compiled into a Stocktaking Report and integrated into the Guidelines Consultation Draft, on which First Peoples Worldwide submitted comments in February 2023.
Indigenous Peoples’ rights featured prominently in feedback from both OECD stakeholders and the public, with Indigenous Peoples mentioned 42 times and FPIC referenced 19 times in the Stocktaking Report, as well as through specific asks from NCPs and other commenters. This significant attention demonstrates the need for comprehensive inclusion of Indigenous Peoples’ rights and related enterprise accountability in international standard setting. NCPs requested clarity regarding operationalizing Indigenous Peoples rights in responding to and arbitrating complaints. Additionally, stakeholders suggested that the Guidelines’ Human Rights chapter should call on enterprises to respect the right to FPIC with “commentary explaining the meaning of each element of FPIC and the expectation that enterprises will cooperate with Indigenous Peoples’ own representative institutions and customary decision-making processes” (pg. 49 of the report).
Despite these widespread calls for robust inclusion of Indigenous Peoples’ rights from those most connected to the OECD system, including FPIC as articulated in the UNDRIP, the Guidelines Consultation Draft falls significantly short. While the draft now mentions the UNDRIP in the section on Human Rights, it does not explicitly mention Indigenous Peoples’ right to self-determination or FPIC. Overall, the Guidelines continue to incorporate Indigenous Peoples in a limited manner and primarily only as part of larger lists of vulnerable or at-risk populations instead of as unique and separate rights-holders. Without these inclusions and expansions, the draft fails to meet its goal of incorporating feedback from key participants to enhance the OECD’s leadership in Responsible Business Conduct.
How can Indigenous Peoples participate in the review process?
Information on the review process and updates can be found on OECD’s website. As of February 2023, the OECD Working Group has not released information regarding the next opportunity for public comment, but there may be opportunity to engage with the OECD on Indigenous issues in the coming weeks, according to OECD Watch–a global network of civil society organizations with more than 130 members in over 50 countries.
Substantial participation by Indigenous Peoples and advocates for Indigenous People’s rights is imperative in ongoing reviews of the Guidelines for Multinational Enterprises. As part of OECD’s continued feedback process, we recommend that the Working Group incorporate the significant feedback calling for robust inclusion of Indigenous Peoples’ rights in the Guidelines. At the same time, Indigenous Peoples and organizations should continue to proactively submit comments and feedback to magnify the need for inclusion and can connect with their designated National Contact Point for additional information and advocacy opportunities.