The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or
policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

RESPONSIBLE
SUPPLY CHAINS
Drivers, expectations & vulnerabilities

Tyler Gillard, Head of Sector Projects

Responsible Business Conduct Unit
OECD Investment Division
 How does OECD lead on
Responsible Business
Conduct?
1. A comprehensive international instrument on responsible
business conduct endorsed by governments– the OECD
Guidelines for Multinational Enterprises

2. National Contact Points: The only international RBC

instrument incorporating an implementation mechanism

3. Sector specific guidance: The leading standard setter

for due diligence guidance (extractive, garment,
agriculture, and financial sector)

4. A unique convening power and outreach capacity

(Global Forum on Responsible Business Conduct,
Investment Policy Reviews, outreach through sector
projects or bilateral engagement)
.
The OECD Guidelines for Multinational Enterprises
The most comprehensive set of government-backed recommendations on responsible
business conduct covering all major areas of business ethics
A Global Grievance Mechanism for Responsible Business Conduct
 Specific instances at a glance

Over 320 specific instances were submitted to National Contact Points

(NCPs) between 2000 and mid-2015, covering MNE operations in 90
countries.

40 Specific Instances by Sector

instances

30
% of

20
10
0
Manufacturing Extractives Finance Retail Accomodation Transportation

80 Specific Instances by Theme

% of instances

60
40
20
0
Labour Human Rights Environment Disclosure General Bribery
Policies
 Sector–specific due diligence
Common & practical approaches to complex challenges for a
level playing field

Sector projects Implementation

Boost industry
capacity to meet due
diligence standards

Support alignment
with OECD Guidance

Conduct research to
drive implementation
and better practices
 Drivers of responsible supply chains
Global support for OECD Due Diligence Guidance
Political
• G7 (2016)
• G20 (2017)
• OECD Guidelines for MNE’s +
Council Recommendations
on Due Diligence Guidance
• UN Guiding Principles on
Business & Human Rights
(2011)
• ILO: 2016 ILO Labour
Conference on decent work in
global supply chains + update
of MNE Declaration
• EU Parliament statements on
various industries (garment,
minerals)
• China-OECD Programme of
Work
Industry &
Consumer
• Consumer campaigns,
workers and civil society
(e.g. Good Electronics,
Human Rights Corporate
Benchmark, Amnesty
International, Human Rights
Watch, ITUC, IndustriALL)
• Institutional investors (e.g.
APG, NBIM & ethical council;
SRIs; Blackrock)
• Brands and retailers (e.g.
Responsible Business
Alliance (formerly EICC);
FLA, BSCI, Fairwear, WRAP)
Legal &
regulatory
• UK Modern Slavery Act
(2015)
• US Trade Facilitation &
Enforcement Act (2015)
• California transparency in
supply chains (2010)
• EU non-financial reporting
directive (2014)
• French Duty of Care Law
(2016)
• Australia Bill on modern
slavery (under consideration)
• Dutch Bill on child labour
(under consideration)
8
Guidelines topic Examples (could be in own operations or supply chains!)
for due diligence
Disclosure
Part I: Core
 Failure to discloseconcepts
relevant information on material matters, e.g. foreseeable risk factors and issues regarding workers
and other stakeholders
Capturing the essence of due diligence
 Failing to provide the public and workers with adequate, measureable and verifiable (where applicable) and timely
information on the potential environment, health and safety impacts of the activities of the enterprise.
 Intensive use of land or water without preventing impacts on local communitieswho use the land and water
Human rights
 Failing to take into consideration the rights of disabled persons, e.g. through reasonable accommodation, access
 Involvement in sexual harassment or sexual violence at work, in operations or sourcing
 Failing to identify and appropriately engage with indigenous peoples where they are present.
 Use of forced labour or child labour
 Retaliating, interfering with or discriminating against workers’ representatives
Workers and
industrial relations  Discriminatory or disciplinary action against workers who make bona fide reports
 Payment of wages that do not meet the basic needs of workers and their families
 Exposing workers to hazardous materials and substances
 Engaging business partners who contract temporary migrant workers required to pay a large recruitment fee for the job
 Ecosystem degradation through land degradation; Water resource depletion, and/or destruction of pristine forests and
Environment
biodiversity
 Using harmful and hazardous chemicals and restricted chemicals in production
 Failing to have in place an environmental management system appropriate to the enterprise.

 Bribery of service-level bodies overseeing the land sector to obtain access to land, rights to mining,
Bribery, bribe
solicitation &  Bribing environmental inspection authorities to ignore water use and pollution
extortion  Providing gifts, meals and entertainment to those with whom the enterprise does business in foreign markets without
adequate controls or records

 Putting on the market products that are unsafe for consumer use
Consumer interests
 Failing to take reasonable measures to ensure the security of personal data that is collected, stored, processed or
disseminated
 Potential vulnerabilities for migrant labour

Vulnerability Identify & Assess Prevent & mtigate

 Depending on the country of origin, private recruitment  Use collaborative initiatives to tackle harmful
Recruitment
& employment agencies can be a huge risk of forced, recruitment practices
practices
compulsory or bonded labour
 Establish pre-qualification systems for high-risk
 Assess suppliers
• Sub-contracting practices  Integrate into corrective actions training,
• Existence of credit arrangements & debt monitoring
• Onsite housing of workers
 Engage with governments on labour reform if
• Informal workers
issues are systemic
• Production pressures

 Assess compliance with legal or collective bargaining  Integrate into corrective actions training,
Working time
agreements on : monitoring
• Overtime  Embed respect for working hours into factory
• Personal leave, sick leave, annual leave manager and human resource functions
• Maternity, breastfeeding breaks and paternity
 Engage with governments on labour reform if
leave
issues are systemic
 Consider drivers for excessive working hours, including
 Communicate to buyers if purchasing practices
low wages, poor purchasing practices of buyers,
are driving working hour issues.
inefficiencies in production planning, and weak labour
inspections
 Thank you!

For further information on the OECD’s work on Responsible Business

Conduct
http://mneguidelines.oecd.org/

tyler.gillard@oecd.org

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