In a small but notable advance for corporate accountability, the U.S. State Department announced on Tuesday the creation of a Stakeholder Advisory Board (SAB) for the U.S. National Contact Point (NCP) on the OECD Guidelines for Multinational Enterprises.  EarthRights International Staff Attorney Jonathan Kaufman will join civil society, labor, and business experts on the SAB which will advise the NCP on the settlement of disputes between companies and affected individuals and communities, as well as promotion of the Guidelines in the U.S. and worldwide. 

The OECD Guidelines are the only comprehensive, multi-stakeholder code of corporate conduct that is endorsed by over forty governments globally.  They cover human rights, environmental protection, corruption, labor relations, and consumer rights, among other topics.  Unique among corporate codes, the Guidelines require all subscribing countries, including the U.S., to designate a responsible government entity – known as a National Contact Point – tasked with promoting the Guidelines to stakeholders and accepting and helping to resolve complaints from people, communities, and others that allege corporate activity in violation of the Guidelines.  Thus the Guidelines provide an unusual and theoretically promising mechanism for bringing community and labor representatives together with business to promote ethical corporate behavior according to international standards. 

Unfortunately, the record of the U.S. NCP has been deplorable. Until recently, the NCP was located within the State Department’s Office of Investment Affairs – completely subordinating it to officials whose job is to facilitate corporate development abroad – and had no dedicated staff.  Of the dozens of complaints that had been submitted to the NCP over the course of about a decade, the NCP had not contributed to the resolution of a single one.  Instead, the NCP had found technical reasons to reject the complaints, or in the case of several labor-related complaints, had simply delayed responding to the complainants until the workers’ attempts to organize were defeated and the issue was moot.  

From 2009 to 2011, ERI was part of a coalition of civil society and labor groups that advocated for the reform of the U.S. NCP.  The State Department responded by convening a subcommittee of stakeholders to advise it on improving the NCP.  ERI served on this subcommittee, which produced a small number of consensus recommendations, and helped to draft a dissenting report with civil society and labor groups that called for more far-reaching reforms.  While there have been some modest changes to the US NCP, ERI remains concerned that best practice in the formation and operation of other NCP offices, including structural independence, a stakeholder review board, more permissive procedures for allowing complaints to proceed, a robust fact-finding function, and strengthened mediation capacities, remain largely absent from the new US NCP office. It remains to be seen whether the SAB will be able to effectively review the NCP’s actions and nudge him toward greater accountability and efficacy.

ERI will continue to push for expanded and meaningful access to remedies for communities impacted by overseas businesses activity. Whether the OECD Guidelines and the U.S. National Contact Point will play a meaningful role in the realization of this goal is yet to be known. Only through newly filed and resolved cases, will the updated Guideline and NCP reform efforts be judged.