OECD Launches Handbook to Guide Companies on Due Diligence Framework in Global Supply Chains

The OECD has launched the OECD Handbook on Due Diligence for Enabling Living Incomes and Living Wages in Agriculture, Garment and Footwear Supply Chains to help multinational enterprises use the OECD due diligence framework to achieve living incomes and living wages in global supply chains.

• Implementation of the recommendations would help companies to avoid and address adverse impacts related to workers, human rights, the environment, bribery, consumers and corporate governance that may be associated with their operations, supply chains and other business relationships.
• The handbook responds to demands by businesses for practical tools to help translate commitments to living incomes and living wages into action as part of their human rights due diligence.
• It focuses on the agriculture, garment and footwear sectors where inadequate incomes and wages have been identified as prevalent risks.
• It builds on existing OECD standards on supply chain due diligence and responsible business conduct, notably the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the guidances for the agriculture and garment and footwear sectors, and seeks to align with the International Labour Organization (ILO) concept of a living wage.
• The Guidance also seeks to promote a common understanding among governments and stakeholders on due diligence for responsible business conduct. The UN Guiding Principles on Business and Human Rights as well as the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy also contain due diligence recommendations, and this handbook can help enterprises implement them.

BACKGROUND: The Guidance responds to the G7 Leaders’ Declaration adopted on 7–8 June 2015 in Schloss Elmau, which recognised the importance of establishing a common understanding on due diligence, in particular for small and medium-sized enterprises, and encouraged enterprises active or headquartered in their countries to implement due diligence in their supply chains.

• In their Declaration adopted on 8 July 2017 in Hamburg, G20 Leaders committed to fostering the implementation of labour, social and environmental standards and human rights in line with internationally recognised frameworks in order to achieve sustainable and inclusive supply chains, and underlined the responsibility of businesses to exercise due diligence in this regard.
• The development of this Guidance was overseen by the OECD Working Party on Responsible Business Conduct (WPRBC) and involved a multi-stakeholder process with OECD and non-OECD countries and representatives from business, trade unions and civil society.

Taking into account that due diligence should commensurate with risk and appropriate to a specific enterprise’s circumstances and context, it outlines measures:

1. to embed RBC into the enterprise’s policies and management systems;
2. to undertake due diligence by (2) identifying actual or potential adverse impacts on RBC issues,
3. ceasing, preventing or mitigating them,
4. tracking implementation and results,
5. communicating how impacts are addressed; and (6) to enable remediation when appropriate.