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Banks and the OECD Guidelines
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By: BankTrack

Contact:

Ryan Brightwell ryan@banktrack.org


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Banks & OECD. Photo: BankTrack

BankTrack and the OECD 

BankTrack is engaged in the Advisory Group to the OECD Proactive Agenda Project for Responsible Business Conduct in the Financial Sector, through which we aim to encourage higher standards in the implementation of the OECD Guidelines for Multinational Enterprises, particularly in the field of human rights. In addition to this, BankTrack has engaged with National Contact Point complaints against financial institutions through giving advice to communities and civil society organisations, and in bringing a particular complaint alongside other organisations to the Dutch NCP against ANZ Bank in 2014. Our work on the OECD Guidelines and their relevance to the financial sector is ongoing. 

The OECD Guidelines

The OECD Guidelines for Multinational Enterprises are recommendations from governments to multinational enterprises on responsible business conduct around the world. They define standards for socially and environmentally responsible corporate behaviour and establish a grievance mechanism procedure to address complaints between corporations and the communities or individuals negatively affected by corporate activities. The Guidelines are adhered to by 48 countries (all 36 OECD member states and 12 other adhering states).

The OECD and non-OECD adhering governments last updated the Guidelines in May 2011, introducing substantial new provisions in areas such as human rights, due diligence, and supply chain responsibility, and bringing the Guidelines substantially into line with the UN Guiding Principles on Business and Human Rights.

National Contact Points

The OECD Guidelines establish a unique complaint procedure ( or “Specific Instance Procedure”) in the form of National Contact Points (NCPs). Every government that adheres to the Guidelines is required to establish an NCP to promote the OECD Guidelines and handle complaints against companies that have allegedly failed to adhere to the Guidelines’ standards. For details, advice, and support in making use of the complaint procedure see the OECD Watch page on Filing OECD Guidelines complaints. 

Due Diligence Guidance

In addition to the Guidelines, the OECD published ‘Due Diligence Guidance for Responsible Business Conduct’ in May 2018. This provides practical support to multinational enterprises on the implementation of the OECD Guidelines. OECD Watch commended the Guidance as it settled certain critical issues and concepts around due diligence and it dispels many common misunderstandings. The OECD has also published a number of sector specific guidance which helps enterprises identify and address risks to people, the environment and society associated with business operations, products or services in particular sectors.

OECD Responsible Business Conduct in the Finance Sector Project

The OECD’s Proactive Agenda Project on Responsible Business Conduct (RBC) in the Finance Sector is a multi-stakeholder project which aims to elaborate practical and relevant approaches for the finance sector to implement the OECD Guidelines. BankTrack has served as an Advisory Group member of the project since its initiation in 2015. We expect the project to be influential in setting expectations for how the finance sector should approach managing the human rights and environmental impacts of its finance.

Phase one of the project delivered a guidance document on ‘Responsible business conduct for institutional investors’ in March 2017. Important things to note regarding this guidance are:

  • Investors, including minority shareholders, are at least “directly linked” to all impacts of all companies in which they hold shares, except in some extremely rare situations.
  • In some situations, such as where an investor has substantial shareholding in or a seat on the board of an investee company causing an adverse impact, the investor can be considered to be “contributing” to adverse impacts caused by that investee company. This means the investor is also responsible for (contributing to) remediating impacts.

The second phase of the project delivered new guidance on ‘Due Diligence for Responsible Corporate Lending and Securities Underwriting’, in October 2019. Throughout this phase of the project, BankTrack provided comments on three draft documents, participated in regular Advisory Group calls, and gave its view of the guidance at an ‘Expert Working Session’ held by the OECD in September 2018. The guidance elaborates on the OECD Guidelines and represents an important step forward in encouraging responsible conduct by financial sector actors. Important things to note regarding this guidance are:

  • The guidance clearly recognises that banks providing loans and underwriting services can contribute to adverse human rights and environmental impacts through both actions and omissions.
  • The guidance clarifies in several places how and why banks should establish and/or participate in grievance mechanisms.
  • There is a clear recognition that banks can take steps to promote greater transparency with respect to client relationships without being in breach of a bank’s duties around client confidentiality.
  • There are clear references to the Paris Climate Agreement and SDGs, and a statement that financial institutions can contribute to sustainability goals first and foremost by seeking to avoid and address environmental and social risks associated with their activities.
  • Banks may engage in public policy advocacy to seek to raise minimum standards as part of their approach to using leverage.
  • Recognition of the importance of ensuring the views of impact rightsholders or their legitimate representatives are considered by banks during due diligence.

Phase three of the project, which focuses on RBC for project and asset based finance transactions, is currently underway. BankTrack will continue its role as an Advisory Group member.


Top Publications

The OECD Due Diligence for Responsible Corporate Lending and Securities Underwriting
2019-11-20 00:00:00 | BankTrack, OECD Watch

Further sections

Overview: closed complaints on banks

2020-06-16 17:45:34

Full table of OECD complaints involving Financial Institutions

2020-11-26 13:32:05

News

| |
Type:
Year:
blog
external news
our news

Bushfire survivors and Friends of the Earth’s response to Initial Assessment of ANZ climate complaint under OECD guidelines

2020-11-25 | Friends of the Earth Australia
blog
external news
our news

Mass surveillance of the Uyghurs: STP files complaint against UBS

Society for Threatened Peoples files complaint with the OECD's Swiss National Contact Point regarding UBS' continued relationship with China's Hikvision
2020-06-22 | Switzerland | Society for Threatened Peoples
blog
external news
our news

ANZ agrees to landmark settlement with Cambodian farmers displaced by sugar company it financed

The agreement, the first of its kind by a commercial bank, sets an important human rights precedent for the banking industry worldwide.
2020-02-27 | Inclusive Development International
blog
external news
our news

Bushfire survivors launch claim against ANZ under international law for financing climate change

2020-01-30 | Friends of the Earth Australia
blog
external news
our news

Indigenous Women file OECD Specific Instance against Credit Suisse for rights violations regarding pipeline financing

2020-01-30 | San Francisco | WECAN
blog
external news
our news

Friends of the Earth groups complaint against ING Group admissible, declares OECD

2020-01-20 | Amsterdam | Milieudefensie, OECDWatch
blog
external news
our news

New OECD guidance clarifies banks’ responsibilities to prevent and address adverse impacts

OECD Watch & BankTrack analysis highlights seven areas of important progress on specifying how banks should conduct due diligence in their lending and underwriting
2019-11-20 | BankTrack, OECDWatch
blog
external news
our news

Credit Suisse makes a step towards indigenous rights

2019-10-16 | Society for Threatened Peoples
blog
external news
our news

Friends of the Earth groups and supporters file OECD complaint against ING for financing palm oil abuses

2019-07-05 | Amsterdam | Milieudefensie, Sustainable Development Institute Liberia, WALHI
blog
external news
our news

Dutch NCP on OECD Guidelines: Banks must publish climate targets in line with Paris Climate Agreement

2019-04-19 | Nijmegen | BankTrack
blog
external news
our news

EU financial institutions to report on due diligence for responsible business conduct in line with OECD guidance

2019-04-18 | OECD
blog
external news
our news

ANZ Declines to ‘Do the Right Thing’ for Displaced Cambodian Farmers

Statement by Inclusive Development International And Equitable Cambodia for the ANZ Banking Group Annual General Meeting
2018-12-19 | Equitable Cambodia, Inclusive Development International
blog
external news
our news

ANZ bank issued rare rebuke by Australian oversight body

2018-10-11 | Inclusive Development International
blog
external news
our news

Apartheids Banks: Civil society groups demand accountability for apartheid profiteers

2018-04-19 | Brussels | Centre for Applied Legal Studies (CALS), Open Secrets
blog
external news
our news

IndustriALL and BWI file OECD complaint against BHP Billiton and Vale

2018-03-26 | Industriall-union.org
blog
external news
our news

ING to be investigated under OECD grievance mechanism in climate finance test case

Dutch OECD ‘National Contact Point’ accepts NGOs’ complaint
2017-11-16 | Responsible Investor
blog
external news
our news

Disappointing and lengthy mediation leaves impacts of Xayaburi Dam unaddressed

Last week, the Austrian National Contact Point (NCP) concluded a lengthy and ultimately disappointing OECD Guidelines mediation process between Andritz, the turbine supplier for the Xayaburi Dam, and a coalition of Mekong-based and international civil society organizations.
2017-07-20 | Bangkok, Thailand
blog
external news
our news

NGOs file complaint against ING for violation of OECD guidelines

Organisations call on the Dutch bank to take further steps on climate
2017-05-09 | Amsterdam | BankTrack, Greenpeace, Friends of the Earth Netherlands, Oxfam Novib
blog
external news
our news

FoE response to final statement on complaint guidelines on Rabobank and Bumitama

2016-01-31 | Friends of the Earth Europe
blog
external news
our news

Bumitama cuts ties with illegal palm oil plantation following Friends of the Earth pressure

OECD accepts Friends of the Earth complaint against Rabobank
2014-12-16 | Brussels/Amsterdam | Friends of the Earth Europe
blog
external news
our news

Publication initial assessment for Friends of the Earth/Milieudefensie - Rabobank

2014-12-16 | OECD
blog
external news
our news

Displaced Cambodians file OECD complaint against ANZ Bank for financing massive land grab

2014-10-07 | Inclusive Development
blog
external news
our news

Several Individuals vs. NORDEX SE operating in Turkey

(OECD Watch complaint)
2014-08-04 | OECD Watch
blog
external news
our news

OECD releases letters clarifying banks’ human rights responsibilities

2014-07-22 | Nijmegen | BankTrack
blog
external news
our news

Friends of the Earth files OECD complaint against Rabobank finance for illegal palm oil

2014-07-01 | Amsterdam, Brussels | FOE Netherlands, FOE Europe
blog
external news
our news

OECD complaint against Rabobank concerning financial services to Bumitama

2014-06-27 | Milieudefensie
blog
external news
our news

UK government accepts complaint over GCM Resources’ Bangladesh coal mine

2013-06-14 | London | Miriam Ross
blog
external news
our news

Complaint seeks resettlement and compensation from Shell and UK banks for damage caused by Sakhalin II oil and gas project

2012-07-31 | Sakhalin Island, Russia | Pacific Environment
blog
external news
our news

BP violating human rights rules, says UK government

Company failed to respond to alleged intimidation by Turkish security forces along its UK-backed Caspian oil pipeline
2011-03-09 | UK | The Corner House et. al
blog
external news
our news

Church of England disinvests from Vedanta Resources after following up on issues also raised in OECD Guidelines complaint

2010-02-08 | OECD Watch
blog
external news
our news

NGOs lodge complaint against ANZ Bank for PNG illegal logging ties

2006-08-23 | Australia and Papua New Guinea | Rainforest Action Network

Documents

Type:
Year:
our publications
2019-11-20 00:00:00

The OECD Due Diligence for Responsible Corporate Lending and Securities Underwriting

An analysis and briefing for civil society organisations on the strongest elements for use in advocacy
2019-11-20 00:00:00 | BankTrack, OECD Watch
other documents
2018-12-31 00:00:00

OECD - Due diligence guidance for responsible business conduct

2018-12-31 00:00:00 | OECD
other documents
2011-12-31 00:00:00

OECD - Guidelines for Multinational Enterprises

2011-12-31 00:00:00 | OECD
other documents
2017-03-28 00:00:00

OECD - Responsible Business Conduct for institutional investors

Key considerations for due diligence under the OECD Guidelines for Multinational Enterprise
2017-03-28 00:00:00 | OECD
other documents
2019-05-21 00:00:00

OECD - Policy Framework for investment's user tools kit

2019-05-21 00:00:00 | OECD
correspondence
2018-12-17 00:00:00

Letter from ANZ to BankTrack and OECDWatch on ANCP report regarding Phnom Penh Sugar

2nd response to October 29th letter
2018-12-17 00:00:00 | ANZ
correspondence
2018-10-29 00:00:00

Letter from BankTrack and OECD Watch to ANZ on Compensation for Families Displaced by Phnom Penh Sugar

2018-10-29 00:00:00 | BankTrack and OECD Watch
ngo documents
2017-04-28 00:00:00

Society for Threatened Peoples files OECD complaint against Credit Suisse at the OECD National Contact Point (NCP) Switzerland

2017-04-28 00:00:00 | Society for Threatened Peoples
other documents
2014-06-26 00:00:00

Due diligence in the financial sector: adverse impacts directly linked to financial sector operations, products or services by a business relationship

2014-06-26 00:00:00 | OECD
other documents
2014-06-26 00:00:00

Expert letters and statements on the application of the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights in the context of the financial sector

Reference material for the session on Responsible Business Conduct in the Financial Sector of the Global Forum on Responsible Business Conduct taking place in Paris on 26-27 June 2014.
2014-06-26 00:00:00 | OECD
other documents
2014-06-26 00:00:00

Scope and application of ‘business relationships’ in the financial sector under the OECD Guidelines for Multinational Enterprises

2014-06-26 00:00:00 | OECD
other documents
2007-08-23 00:00:00

Equator Principles and OECD Guidelines

2007-08-23 00:00:00 | Paul Watchman
annual reports
2007-07-20 00:00:00

OECD Guidelines and Financial Institutions

2007-07-20 00:00:00

Links

OECD Due Diligence Guidance for Responsible Business Conduct

http://mneguidelines.oecd.org/due-diligence-guidance-for-responsible-business-conduct.htm

OECD Guidelines for Multinational Enterprises

https://www.oecd.org/corporate/mne/

OECD Watch

https://www.oecdwatch.org/

OECD Watch Case Database

https://complaints.oecdwatch.org/
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