by Elizabeth Umlas
Lecturer, University of Fribourg
In 2011, the United Nations (UN) Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (GPs), which offer guidance on how to implement the UN Framework on Business and Human Rights (UN Framework), adopted in 2008. The Framework is built on three pillars: “the State duty to protect against human rights abuses by third parties, including business; the corporate responsibility to respect human rights; and the need for more effective access to remedies” for the victims of corporate-related human rights abuses. In the years since the GPs’ emergence, an increasing concern has been the relative strength (or weakness) of the third pillar, “access to remedies.” In fact, a major focus of work for practitioners and academics alike has been to shine a light on the range of accountability mechanisms available for victims, as well as the barriers to using them, and how to address these. The OECD National Contact Point complaints process is a potential tool to hold companies accountable on corporate-related human rights abuse.
2011 also marked the year that the Organisation for Economic Co-operation and Development (OECD) updated its Guidelines for Multinational Enterprises (OECD Guidelines) in order to align them with the GPs (through, among other things, a new chapter on human rights). The OECD Guidelines, first adopted in 1976, are binding on member states and consist of recommendations by governments to corporations on “all major areas of business ethics, including corporate steps to obey the law, observe internationally-recognized standards and respond to other societal expectations.”
All governments adhering to the OECD Guidelines must set up a National Contact Point (NCP), “whose main role is to further the effectiveness of the Guidelines.” The work of NCPs includes serving as a mediation and dispute resolution platform for problems arising in relation to the implementation of the OECD Guidelines. Specifically, NCPs are tasked with helping, through dialogue and mediation, to address allegations of non-observance of the Guidelines through a complaints process called “specific instances.” As they are created by governments, and their actions do not have the force of law, NCPs are an example of what the GPs classify, under the third pillar, as a state-based non-judicial mechanism.
Non-judicial grievance mechanisms such as NCPs are not a substitute for judicial remedies. They can, however, complement the latter, which might not always be effective or accessible in a particular situation, or provide an optimal approach for claimants. NCPs and the specific instance process are thus part of the landscape of access to remedy, and constitute one of a range of potential routes to holding companies accountable on human rights abuses. It is also notable that the NCPs provide a forum for extraterritorial cases, or ones in which the country where alleged violations occur differs from the home country of the company in question. Because NCPs are the grievance mechanism of the OECD Guidelines, and the Guidelines are aligned with the GPs, it has been said that “through the vehicle of NCPs, the Guidelines are a de facto implementation mechanism of the UNGPs.”
States may set up their NCPs as they see fit, and the structure of NCPs has evolved over time. The OECD recently noted that some governments were “moving away from the ‘mono-agency’ structure where an NCP is housed in one single Ministry.” NCPs can be based in one ministry “but involve other Ministries and other stakeholders.” Some NCPs consist of “an office with independent experts and a supporting secretariat attached to a Ministry.” Still others might be inter-ministerial, and some are tripartite, involving representatives of government, employees and business, or quadripartite (which includes, in addition, civil society representatives).
NCP Complaints Process
Any “interested party” (e.g. individuals, communities, NGOs, trade unions, employers’ organizations) can file a complaint, or specific instance, with an NCP. If the alleged violation(s) took place in an adhering country, complainants should file the complaint with that NCP, but they can also file it with the NCP of the home country of the entity in question. Most often, NGOs or trade unions file specific instances against multinational enterprises (MNEs). One exception, however, involves an NGO that filed a specific instance with the Swiss NCP in 2016 against another NGO.
The OECD Guidelines provide Procedural Guidance on the NCP process. NCPs are expected, “in a timely fashion,” to carry out their functions, including making an initial assessment of the allegations. If the issue calls for further examination, the NCP is expected to “offer good offices” to resolve the issue. After the procedure, the NCP should make public the results of the process by issuing a final statement or report and, if relevant, recommendations on the implementation of the Guidelines. Where the parties fail to reach an agreement, or if one party is “unwilling to engage or to participate in good faith,” the NCP is supposed to publish a statement that identifies the parties and issues involved and any recommendations and observations “on the reasons why the proceedings did not produce an agreement.” The Procedural Guidance lays out an “indicative timeframe” for these steps, saying that NCPs should “strive to conclude the procedure within 12 months from receipt of the specific instance.”
The NCP system has been the subject of significant criticism by NGOs, in particular OECD Watch (a global network of civil society organizations housed by SOMO, the Centre for Research on Multinational Corporations) and the International Federation for Human Rights (FIDH). In an analysis of the first 15 years of their existence, OECD Watch asserted that NCPs had provided few solid benefits: only 35 out of 250 complaints (or 14% of cases) had “some beneficial results that may have provided some measure of remedy.” OECD Watch’s 2015 analysis concluded that NCPs could be a “valuable tool” for access to remedy, but that they were “not meeting that potential.”
While NCPs are supposed to be functionally equivalent, a key criticism is that some NCPs are much weaker than others. The amount of resources and the powers that a state devotes to its NCP can vary greatly, which in turn has an impact on the effectiveness of an NCP’s work. OECD Watch has also pointed out that some NCP structures (as well as where the NCP is located in government) “contribute to a (perceived) lack of independence.” A government could place its NCP in the Ministry of Trade or of Commerce, for example, at the very least causing the perception of a conflict of interest (as questions could be raised about how objectively the NCP would assess allegations of corporate wrong-doing if it reports to a ministry charged with fostering trade and commercial opportunities for its multinationals).
Another fundamental criticism of the NCP process is that, because there are no legal consequences even if an NCP publicly states that a company has breached the OECD Guidelines, companies can simply thumb their noses at a final statement. Claimants have little to no recourse if the company ignores the NCP’s recommendations to address the allegations, or the NCP itself fails to make a public statement on a case. FIDH notes that the Procedural Guidance “allows for – but does not require – NCPs to make a determination on whether the Guidelines have been violated in cases where mediation fails.” Similarly, OECD Watch points out that the 2011 updated Guidelines “still do not ensure that NCPs will make a final statement on the validity of a complaint, a minimum requirement for any credible complaint mechanism.”
In the context of these and other criticisms, it is worth noting the case of China Gold, a Canada-based, dual-listed mining company. In 2014, a Canadian NGO, the Canada Tibet Committee, filed a specific instance against China Gold International Resources, the parent company of a mine in central Tibet where a landslide in 2013 had killed 83 miners. The Canadian NCP took up the case, but China Gold failed to respond to its attempt to engage the company. In 2015, the Canadian NCP became the first to impose sanctions on a company for failing to engage. The NCP’s response included “withdrawing Trade Commissioner Services and other Canadian advocacy support abroad.” OECD Watch noted that the sanctioning in this case might “mark the beginning of a trend that is well worth watching,” but suggested that the sanctions would be more effective in improving company practice on the ground if they were tied “to a company’s compliance with the Guidelines (rather than its willingness to engage in mediation).”
It is possible that in at least some cases, governments might begin to build consequences into specific instance outcomes. Further, an adhering country, OECD Watch, or the OECD advisory committees for trade unions and business (TUAC and BIAC, respectively) can submit a complaint to the OECD Investment Committee in cases where there is a question of whether the NCP is “fulfilling its responsibilities with regard to its handling of specific instances.” As of 2016, this procedure had not been used.
One way in which it is thought NCPs could be strengthened is through peer reviews. The OECD Guidelines note that NCPs are “encouraged” to engage in such reviews on a voluntary basis. Some NCPs have already undergone peer reviews. NGOs have recognized the potential for peer reviews to contribute to improving NCPs’ work, but have called for them to be mandatory.
In a course on business and human rights, the NCP complaint process can be taught as part of an overview of mechanisms intended to offer access to remedy. There is easily enough material for an entire session on NCPs (which would allow, for example, for in-depth discussion of specific cases.) Instructors might want to assign specific cases to students to present; this provides an opportunity to examine the variations in how states approach the mechanism, as well as the reasons for which complainants choose this route over others and the different ways in which multinational corporations have responded to the NCP process. Ultimately, this will provide students with insight into the viability of the mechanism and how NCPs fit into the larger picture of access to remedy.
The NCP process can also be presented in a session that compares and contrasts either state-based and non-state-based grievance mechanisms, or judicial and non-judicial mechanisms. In any of these approaches, it is useful to have students review Section III of the GPs, “Access to Remedy,” in addition to other materials prior to the session. The topic of the strengths and weaknesses of the NCP process is a rich one, and a growing critical literature provides detailed coverage of these issues (see Teaching Resources).
Law courses can explore how the OECD Guidelines differ from the GPs, and the relationship of the Guidelines to law, as Professor Sara Seck does in her class on Corporate Social Responsibility at Western University Faculty of Law in Ontario. Her course includes a dedicated discussion of the National Contact Point as an example of non-judicial remedy, and delves into the Canadian context by looking at cases involving both the NCP and Canada’s CSR Counsellor for the Extractive Sectors.
Law courses could also include discussions of regulatory approaches to strengthen NCPs or otherwise address their weaknesses (e.g. requiring NCPs to make compliance determinations, or sanctions for corporate non-compliance with the OECD Guidelines) and the implications of such measures. Law students might want to compare NCPs from various countries and discuss the legal parameters of the powers with which they are endowed. For example, the Danish NCP has the power to investigate allegations and to determine if a party has breached the Guidelines. In contrast, the US NCP states that, “consistent with the voluntary nature of the Guidelines,” it “does not make a determination whether a violation of the Guidelines has occurred.” Law students might explore whether there is a legal basis for this assertion – i.e. is it inconsistent with the non-binding (on companies) nature of the Guidelines for NCPs to make a public determination of whether a company breached the Guidelines? They can also discuss the advantages and disadvantages of pursuing a non-judicial route, such as a specific instance, in comparison to a judicial route in particular situations. And the NCP mechanism can be used an entrée to exploring the complexities (legal and otherwise) of cases involving extraterritorial human rights abuses.
Further, law students might be particularly interested in the Mylan case, which involved a US pharmaceutical company that moved its headquarters to the Netherlands (see Teaching Resources). Mylan became the subject of a specific instance filed with the Dutch NCP over the company’s alleged breach of the OECD Guidelines due to its sale of medicine that was used in lethal injection executions in US prisons. The case touches on a number of interesting legal issues (e.g. company involvement in or association with the death penalty; the implications of a relocated business being subject to a different set of laws and social norms – for example, on the death penalty – than those in its original home country; the extent of a company’s responsibility with regard to the distribution of its products).
Business courses can explore case studies of how various companies have reacted to specific instances (for this, OECD Watch’s Remedy Remains Rare offers a useful range of short cases that can foster discussion.) The same students might want to explore the China Gold case: e.g. the business implications of a government denying certain services and support abroad to a company that refused to participate in an NCP process. In addition, for business courses, the POSCO case (below) provides an excellent example of how the OECD Guidelines are being applied to institutional investors, and thus an entrée into discussing the broadening scope of the mechanism. In this context, instructors can emphasize that the GPs and the OECD Guidelines (and therefore the NCP process) apply to institutional investors, including minority shareholders, as forms of business enterprise.
The POSCO case involved several NGOs filing a specific instance with two different NCPs against both POSCO (a Korean multinational steel company) and two of its institutional investors. The investors reacted differently to the process, with one cooperating and accepting the NCP’s findings and recommendations and the other not engaging in the process and eventually arguing that the OECD Guidelines did not apply to it as a minority shareholder. The case provides an opportunity for students to explore investor responsibility under the Guidelines and what this means for the day to day work of investors in managing their portfolios (e.g. what does “human rights due diligence” look like for investors and how might specific instances brought against investors affect their behavior?)
Policy courses can emphasize the fact that, per the OECD Guidelines, NCPs are “encouraged” to inform other government agencies of their statements and reports where the NCP knows them “to be relevant to a specific agency’s policies and programmes.” This provision is interesting to discuss with policy students in light of the GPs’ and the UN Framework’s emphasis on “policy coherence” among government agencies. It is worth noting to students that the OECD asserts that the provision “does not change the voluntary nature of the Guidelines,” which also provides an entry to discussing voluntary versus mandatory instruments.
Policy students can explore the different tools with which governments might reinforce the work of their NCPs (e.g. tying export credit and other government services to NCP findings and recommendations.) They might also be interested in discussing the policy implications of a state granting more powers to its National Contact Point; in this context, having them compare and contrast NCPs across several countries could be enlightening. The same students might be especially interested in discussing how NCPs fit into National Action Plans on business and human rights, which an increasing number of governments have published since 2013.
Learning objectives for students in courses covering the NCP complaints process include:
- Gaining a detailed understanding of a key state-based non-judicial grievance mechanism.
- Learning how this mechanism fits into the larger picture of access to remedy.
- Critically assessing the strengths and weaknesses of NCPs.
- Understanding the connection between the OECD Guidelines and the GPs via the NCPs.
- Exploring case studies of specific instances to gain insight into how NCPs function, as well as the differences across countries.
- What are National Contact Points and how do they function?
- Who can file a specific instance?
- When would someone file one, and what outcome might they hope for?
- What are the strengths and weaknesses of the NCP complaint process?
- Overall, is this mechanism a promising one in relation to the “access to remedy” pillar of the UN Guiding Principles?
For law students
- In what ways does the NCP complaints process complement judicial mechanisms to which victims of corporate-related human rights abuses might turn?
- How does the NCP complaints process compare with other accountability mechanisms for extra-territorial corporate acts?
- Is it inconsistent with the non-binding (on companies) nature of the OECD Guidelines for NCPs to make a public determination of whether a company breached the Guidelines?
- What recourse do governments have when a company refuses to participate in an NCP mediation?
- How might governments, through regulatory measures, address some of the identified weaknesses of NCPs?
For business students
- What are the implications of applying the OECD Guidelines – and thus the NCP complaint procedure – to institutional investors as “business enterprises” like any other?
- As the NCP complaint process is voluntary, what incentives do businesses have to participate?
- What are the implications for business of some governments’ moving to attach sanctions to non-compliance with the OECD Guidelines?
For policy students
- How might governments use policy to address weaknesses of the NCP mechanism?
- How might National Action Plans on business and human rights strengthen the work of NCPs?
- What are the implications of placing an NCP in the Foreign Ministry? The Trade Ministry? The Ministry of Justice? And what might be the policy reasons for placing an NCP in a particular part of government?
- What might be the rationale of using a particular NCP structure (e.g. “mono-agency”; inter-ministerial; office of independent experts attached to a ministry; tripartite, etc.) and how might a government address potential weaknesses of a particular structure?
- How might NCP decisions be used to affect policy decisions in other parts of government?
[*] This Teaching Note may be cited as:
Elizabeth Umlas, “Teaching Note: OECD National Contact Point Complaints,” in Teaching Business and Human Rights Handbook (Teaching Business and Human Rights Forum, 2016), https://teachbhr.org/resources/teaching-bhr-handbook/teaching-notes/oecd-ncp-complaints/.
The author is a member of the OECD Advisory Group on Responsible Business Conduct in the Financial Sector.
 “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework,” Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises,” UN doc. A/HRC/17/31 (21 March 2011), available at http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf. See Teaching Note: Introducing the UN Guiding Principles on Business and Human Rights.
 “Protect, Respect and Remedy: A Framework for Business and Human Rights,” Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises,” UN doc. A/HRC/8/5 (7 April 2008), available at https://business-humanrights.org/en/un-secretary-generals-special-representative-on-business-human-rights/un-protect-respect-and-remedy-framework-and-guiding-principles.
 As of 2016, adhering countries included 35 OECD countries plus eight non-OECD countries (Argentina, Brazil, Egypt, Latvia, Lithuania, Morocco, Peru and Romania). http://www.oecd.org/corporate/mne/theoecdguidelinesformultinationalenterprisesfrequentlyaskedquestions.htm. A list of OECD NCP’s of governments adhering to the OECD Guidelines can be found at https://mneguidelines.oecd.org/ncps/listofnationalcontactpoints.htm.
 The first NCPs were established in 2000.
 Other accountability tools include civil litigation, national regulation and human rights advocacy.
 Roel Nieuwenkamp, “OECD’s Human Rights Grievance Mechanism as a Competitive Advantage” (Institute for Human Rights and Business, 4 November 2014), available at http://www.ihrb.org/other/governments-role/oecds-human-rights-grievance-mechanism-as-a-competitive-advantage.
 OECD, “Implementing the OECD Guidelines for Multinational Enterprises: The National Contact Points from 2000 to 2015: Key Findings” (2016), 6, available at https://mneguidelines.oecd.org/15-Years-of-the-National-Contact-Points-Highlights.pdf.
 For helpful instructions on how to file a complaint, see FIDH, Corporate Accountability for Human Rights Abuses: A Guide for Victims and NGOs on Recourse Mechanisms, 3rd edition (Paris, 2016), 408-410, available at https://www.fidh.org/IMG/pdf/corporate_accountability_guide_version_web.pdf.
 As the International Federation for Human Rights (FIDH) notes, “NGOs have sought to highlight the issue of parent company responsibility by simultaneously filing cases before the host and home country NCPs and calling on both NCPs to collaborate and contribute equally to resolving the case.” FIDH, Corporate Accountability, 404.
 See, e.g., OECD, “Human rights of the Baka people in environmentally protected areas [of] Cameroon” (19 February 2016), available at https://mneguidelines.oecd.org/database/instances/ch0014.htm.
 OECD, OECD Guidelines (2011), 71-74 (and Commentary, 78-87) for Procedural Guidance relating to NCPs.
 OECD Watch, Remedy Remains Rare (Amsterdam: OECD Watch, June 2015), www.oecdwatch.org/publications-en/Publication_4201/at_download/fullfile, 19. Note that OECD Watch studied only cases filed by NGOs, individuals and communities. The cases did not include those brought by trade unions, which are monitored separately by the Trade Union Advisory Committee (TUAC) of the OECD.
 OECD Watch, Remedy Remains Rare, 5.
 See, e.g., FIDH, Corporate Accountability, 400-1.
 OECD Watch, Remedy Remains Rare, 33-4.
 FIDH, Corporate Accountability, 407.
 OECD Watch, “OECD Watch Statement on the Update of the OECD Guidelines for MNEs” (Amsterdam: OECD Watch, 25 May 2011), available at http://www.oecdwatch.org/publications-en/Publication_3675, 4.
 OECD Watch, Remedy Remains Rare, 46.
 OECD Guidelines, 74.
 OECD Guidelines, 81.
 See, e.g., Denmark National Contact Point Peer Review Report, June 2015, available at https://mneguidelines.oecd.org/Denmark-NCP-Peer-Review-2015.pdf.
 See, e.g., OECD Watch, Remedy Remains Rare, 51.
 Professor Sara Seck, Syllabus, “Corporate Social Responsibility” (Faculty of Law, Western University, Fall 2013), on file with the Teaching Business and Human Rights Forum Syllabi Bank.
 OECD Watch, “OECD Watch welcomes Denmark’s strengthened NCP” (5 October 2012), available at http://www.oecdwatch.org/news-en/oecd-watch-welcomes-denmark2019s-strengthened-ncp.
 U.S. NCP, “U.S. NCP Final Assessment: Communications Workers of America (AFL-CIO, CWA)/ver.di and Deutsche Telekom AG” (9 July 2013), available at http://www.state.gov/e/eb/oecd/usncp/links/rls/211646.htm.
 This position was confirmed in 2013 by the UN Office of the High Commission for Human Rights (Craig Mokhiber, “Subject: The issue of the applicability of the Guiding Principles on Business and Human Rights to minority shareholders” (OHCHR, 26 April 2013), available at http://www.responsiblebusiness.no/files/2013/12/nbim_ohchr.pdf); the same year by the Norwegian and Netherlands NCPs (Norwegian National Contact Point, “Final Statement, Complaint from Lok Shakti Abhiyan, Korean Transnational Corporations Watch, Fair Green and Global Alliance and Forum for the Environment and Development vs. Posco (South Korea), ABP/APG (Netherlands) and NBIM (Norway)” (Oslo, 27 May 2013), available at http://www.responsiblebusiness.no/files/2013/12/nbim_final.pdf , 21-22); and by John Ruggie himself in an interview in 2015 (Daniel Brooksbank, “Human rights principles clearly apply to minority investors – Ruggie” (Responsible Investor, 25 February 2015), available at https://www.responsible-investor.com/article/human_rights_principles_ruggie/.
 OECD Guidelines for MNEs, 85.