Businesses placed on notice on human rights obligations

Campaigns and Advocacy, Media Releases, News article written on the 27 May 2011

Multinational enterprises, including Australian companies, will be required to take greater responsibility to make sure their operations do not harm human rights, under the latest updated Organisation for Economic Co-operation and Development (OECD) guidelines.

The new version of the OECD Guidelines for Multinational Enterprises, released this week as part of the OECD’s 50th anniversary celebrations, place an increased responsibility on companies to identify, mitigate and prevent the negative impacts their operations may have.

“Companies have been put on notice that they must avoid causing or contributing to adverse social and environmental impacts through their own activities, and through their business relationships,” said Serena Lillywhite, mining policy analyst at Oxfam Australia.

“This is an important development as Australian companies increasingly outsource production to developing countries, and high commodity prices drive Australian mining operations to high risk countries prone to conflict and corruption.”

OECD member countries, including Australia, have committed to promoting these principles of corporate responsibility to Australian business and investigating cases of non-compliance.

While not a comprehensive review, some important advances have been made with regard to human rights, supply chain responsibilities, workers and wages, and climate change.

But indigenous peoples have missed out. The OECD failed to keep pace with international developments in other agencies, such as the World Bank International Finance Corporation, which recognises indigenous peoples’ right to free, prior and informed consent in project decisions.

Another major disappointment is the lack of redress for breaching the guidelines. Despite the existence of a complaint mechanism, OECD governments failed to agree on more stringent measures that would provide incentives to comply and consequences for poor business practice.

“This weakens the effectiveness of the guidelines as a global instrument. Enforcement will depend on the integrity and commitment of individual governments and their willingness to hold companies to account for misconduct,” Ms Lillywhite said.

To date, the complaint mechanism has been used most often against mining companies for human rights violations and environmental degradation.

“With more than 300 Australian mining companies active in the countries of Africa alone, we encourage the Australian Government to demonstrate its commitment to promoting the principles, resolving disputes and helping provide remedies for those adversely affected by corporate misconduct.”

For interviews or more information contact Oxfam Australia Media Coordinator Chee Chee Leung on 0400 732 795.