UK National Contact Point under the OECD Guidelines for Multinational Enterprises delivered in late August an important decision in Global Witness v. Afrimex (UK) Ltd. Global Witness alleged that Afrimex paid taxes to rebel forces in the Democratic Republic of Congo and employed insufficient due diligence on the supply chain, sourcing minerals from mines that use child and forced labour. It further maintained that Afrimiex Ltd violated Chapter II (General Policies), Chapter IV (Employment and Industrial Relations) and Chapter VI (Combating bribery) of the Guidelines. The UK NCP concurred and noted that:
51 ….Afrimex did not fulfil the requirements of paragraph II.10 of the Guidelines. The lack of due diligence on the supply chain means that Afrimex failed to fulfil the expectations of paragraphs II.1 and II.2 of the Guidelines. The payment of taxation down the supply chain funded the conflict in which numerous human rights abuses have occurred. The conflict prevented the economic, social and environmental progress key to achieving sustainable development and contributed to human rights abuses.
Accordingly, the UK NCP concluded that:
61. The NCP has found insufficient evidence that Afrimex encouraged business partners or suppliers (comptoirs and SOCOMI) to apply principles of corporate conduct compatible with the Guidelines. Taxation on minerals paid by these business partners and suppliers to RCD-Goma will have paid for weapons and therefore the contributed to the continuation of the conflict. From June 2000, the NCP has concluded that Afrimex failed to meet the following requirements of the OECD Guidelines for Multinational Enterprises:
II.I “Respect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments.” and
II.2 “Contribute to economic, social and environmental progress with a view of achieving sustainable development.”
II.10 Encourage, where practicable, business partners, including suppliers and subcontractors, to apply principles of corporate conduct compatible with the Guidelines.
62. The NCP also concluded that from June 2000 Afrimex applied insufficient due diligence on the supply chain and this remains the case. The UK NCP expects UK business to respect human rights and to take steps to ensure it does not contribute to human rights abuses. Afrimex did not take steps to influence the supply chain and to explore options with its suppliers exploring methods to ascertain how minerals could be sourced from mines that do not use child or forced labour or with better health and safety. The assurances that Afrimex gained from their suppliers were too weak to fulfil the requirements of the Guidelines. Therefore the NCP found that Afrimex had failed to:
IV.1.b “Contribute to the effective abolition of child labour.”
IV.1.c “Contribute to the elimination of all forms of forced or compulsory labour.”
IV.4.b “Take adequate steps to ensure occupational health and safety in their operations.”
In this way, UK National Contact Point recommended that Afrimex formulates a internal corporate human rights policies and further noted that
64. In creating this corporate responsibility document, the NCP draws Afrimex’s attention to the UN Special Representative on the issue of Human Rights’ recent report: “Protect, Respect and Remedy: A Framework for Business and Human Rights”. In this report, Professor Ruggie outlines a basic human rights due diligence process which will include “a human rights policy…broad aspirational language may be used to describe respect for human rights but more detailed guidance in specific functional areas is necessary to give those commitments meaning.”
65. In formulating this corporate responsibility document, Afrimex is required to consider the potential implications of their activities. The Company has been provided with a great deal of information over the years describing the human rights abuses associated with the mineral trade in Eastern DRC. Afrimex must take proactive steps to understand how their existing and proposed activities affect human rights in DRC. This impact assessment should make explicit references to internationally recognised human rights. The information gathered in this impact assessment should directly feed into the corporate responsibility policy.
66. To ensure this policy is effective, it needs to be integrated into Afrimex’s way of working; to create this policy without a subsequent change in behaviour would merely create a worthless piece of paper. In Afrimex’s case this means requiring its suppliers to do no harm: to take credible steps to ensure that military forces do not extract rents along the supply chain; to require a commitment that adequate steps are taken to ensure that minerals are not sourced from mines using forced and child labour, and are not from the most dangerous mines. Afrimex then needs to consider the necessary steps to monitor the effectiveness of this policy, which should be reviewed periodically.
67. The NCP also refers Afrimex to the OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones, which has been developed as part of the OECD’s Investment Committee’s follow up to the Guidelines. The Risk Awareness tool consists of a list of questions that companies should ask themselves when considering actual or prospective investments in weak governance zones. These questions cover obeying the law and observing international relations; heightened managerial care; political activities; knowing clients and business partners; speaking out about wrongdoing; and business roles in weak governance societies – a broadened view of self interest.
Undoubtedly, this decision represents a seminal development in the field of corporate responsibility for human rights and case law of NCPs. In turn, it also points at striking inefficiency of the enforcement system of NCPs, namely that national authorities can not produce binding decision with a proper sanctions or compensation to the benefit of victims.