The OECD MNE Guidelines on RBC are a set of recommendations for responsible business behaviour for multinational enterprises operating within or from accession countries. The Republic of Croatia joined the Guidelines in 2019.
The Guidelines are not exclusively intended for large enterprises but also apply to small and medium-sized enterprises (SMEs) active at a multinational level, taking into account that SMEs do not have the same capacities for implementation as large enterprises. The Guidelines apply to all entities within a multinational enterprise (parent companies and/or local entities). The aim of the Guidelines is not to introduce different treatment between multinational and domestic enterprises, but to represent good practice for all. Therefore, it is expected that multinational and national companies behave equally in all instances where the Guidelines apply to both.
The Guidelines contain voluntary principles and standards for responsible business conduct in accordance with applicable laws and internationally recognized standards. They include recommendations for responsible business behaviour that may go beyond what companies are legally obliged to comply with. The governments’ recommendation to companies to adhere to the Guidelines differs from the issue of legal liability and the application of law.
The Guidelines cover nine areas: human rights, disclosure of information, employment and industrial relations, environment, combating bribery and other forms of corruption, consumer interests, science, technology, and innovation, market competition, and taxation.
The Guidelines also contain a general recommendation for companies to conduct due diligence in order to identify and address adverse impacts in all these areas.
Due diligence is understood as a process that, as an integral part of business decision-making and risk management, enables companies to identify, prevent, and mitigate the real and potential adverse impacts of their activities and clarify how they approach addressing this issue. Due diligence can be included in broader risk management systems within companies, provided it is not limited to identifying and managing material risks to the company itself, but also encompasses risks of adverse impacts in areas covered by the Guidelines.
Implementing due diligence can help companies avoid the risk of such adverse impacts. The nature and scope of due diligence, such as the specific steps to be taken, depend on the specific situation and are influenced by factors such as the company’s business context and specific recommendations from the Guidelines, and should be proportional to the size of the company, its connection with the adverse impact, and the seriousness of the adverse impact.
The Guidelines apply to adverse effects caused by the companies themselves or to which they have contributed, or which are directly linked to their business, products, or services through business relationships. If a company causes or may cause an adverse effect, it should take necessary steps to stop or prevent such an effect. If a company contributes or may contribute to an adverse effect, it should take necessary steps to stop or prevent such a contribution and use its influence to mitigate any remaining effects to the greatest extent possible. It is considered that influence exists if a company has the ability to influence a change in the harmful practice of the entity responsible for the harm.
The Guidelines also foresee a mechanism for initiating specific instances related to alleged non-compliance with the Guidelines. According to this mechanism, countries that have joined the Guidelines are required to establish a national contact point for responsible business conduct (NCP) that acts as an extrajudicial mechanism for complaints.
More than 650 specific instances have been initiated since 2000. Most of them were launched by non-governmental organizations, individuals, and trade unions, with human rights and due diligence, workers’ rights, environment, and disclosure of information being the dominant themes. The proceedings have concerned the business operations of entrepreneurs in over 105 countries and territories, and in various sectors, particularly in manufacturing, extractive, and financial sectors.
