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Remarks by Richard Boucher, OECD Deputy Secretary-General, at the Ministerial Session of the UN Global Compact Leaders Summit 2010

United Nations Headquarters
23 June 2010 - New York

Ministerial Session: "How can Governments promote business efforts to ensure that markets, commerce, technology and finance advance in ways that benefit economies and society everywhere?"

 

Ladies and Gentlemen,

On behalf of the OECD Secretary-General, I am delighted to join in this 10th anniversary celebration of the UN Global Compact and to participate in this first Ministerial Meeting to discuss the responsibilities of governments in promoting corporate responsibility.

Sustainability and corporate responsibility

Let me begin by recalling that the Millennium Development Goals and the Monterrey Consensus recognised that the best way to lift people from poverty and underdevelopment is to promote a healthy and vibrant private sector. The strong economic performance of the major emerging economies and so many other developing countries prove the point.

Private sector development needs a sound enabling environment to work its magic.  But corporate responsibility matters too and governments can lead the way, which is why we are here today.

What can governments do to enhance corporate responsibility? 

First, they can be firm about companies’ obligations to obey the law, and encourage them to observe internationally recognised human rights and labour standards and to exercise due diligence in their operations and business relations. Companies should respect the rights of others and mitigating any harm caused.

Second, governments can encourage or partner with enterprises in meeting basic human needs such as water, electricity, roads, schools so long as they – governments -- do not relinquish their basic responsibilities to provide these essential services.

Third, as we are discussing today, governments can co-operate with each other across the world and with other stakeholders to press the case that corporate responsibility is essential to sustainable economic development and hence in the interests of all.

Role of the OECD

OECD is active in many dimensions of sustainable development, promoting a healthy enabling business environment sensitive to environmental concerns and the special needs of developing countries. 

• The OECD’s Policy Framework for Investment has been adopted by more than 60 countries as a practical tool for mobilising domestic and foreign resources. The OECD Principles for Private Sector Participation in Infrastructure offers guidance on how public-private partnerships can be designed to provide essential services to needy people.
   
• Prompted by the business ethics challenge of the recent financial crisis, OECD  Ministers in May this year adopted a Declaration on Propriety and Transparency for the Conduct of International Business and Finance that gives new impetus to OECD work on a range of issues including corporate governance, taxation, competition, corporate responsibility and anti-corruption.
   
• Ministers also welcomed the decision to launch a substantial update of the OECD Guidelines for Multinational Enterprises, which is still the world’s most comprehensive international corporate responsibility instrument developed by governments.  The aim of the update is to address more thoroughly issues of human rights abuse and company responsibility for their supply chains. It is also planned to strengthen the Guidelines’ unique mediation mechanism which operates through National Contact Points designated by each of the 42 participating countries. This mediation mechanism is available to all stakeholders whether from companies, unions, NGOs or governments. 

Partnering the UN Global Compact

UN Global Compact and OECD intensify collaboration, 27 October 2009   The UN Global Compact and the OECD Guidelines for Multinational Enterprises: Complementarities and Distinctive Contributions, 2005

Finally, let me stress that, with our Guidelines for Multinational Enterprises, we are true partners with the UN Global Compact. Indeed, the two instruments are complementary:

• The UN and the OECD instruments share the same values of business ethics, including human rights, labour and industrial relations, environment and anti-corruption.
• The OECD Guidelines are recommendations addressed by governments to enterprises, while the UN Global Compact provides a public platform for enterprises to express their corporate responsibility engagement.

The planned adoption at this Ministerial meeting of a governmental declaration by UN members is a welcome reinforcement of this complementarity. 

We also welcome the recent UN announcement encouraging the Global Compact’s Local Network of Focal Points to make use of the OECD mediation procedures. For their part, OECD National Contact Points have agreed to encourage multinational enterprises to engage with the UN Global Compact.

Next week in Paris, on the occasion of the National Contact Points Annual Meeting, we will begin the process of revising the text of the OECD Guidelines and strengthening the implementation procedures.  We have high hopes for this open process which will seek input from many sources, including all stakeholders and governments not yet adhering to the Guidelines.  We look forward to the active involvement of our friends from the UN Global Compact.

Thank you