Business and Human Rights - NCP RAID complaint highlights importance of working with local communities

18 June 2018

The Organisation for Economic Co-operation and Development (the OECD) provides a platform for governments around the world to work together to promote polices to advance economic and social-wellbeing.

Around 50 countries, including the UK, have signed up to the OECD Guidelines (the Guidelines) which comprise a set of voluntary standards to encourage responsible business conduct by multinational enterprises (MNEs). Since 2011 the Guidelines have included a chapter which seeks to ensure that MNEs respect human rights in their operations, and work to encourage such respect in their dealings with other companies.

Each signatory country to the Guidelines has a National Contact Point (NCP) which considers complaints about MNEs whose conduct appears to fall short of the standards set in the Guidelines.



The UK NCP is staffed by the officials from the Department for International Trade. It is not a statutory body and has no legal powers to require any party to provide information to it. Nor does it have any power to compel an MNE to take, or refrain from taking, any action where a complaint is upheld. Instead it offers recommendations to improve adherence to the Guidelines.

In this article we look at the latest complaint determined by the UK NCP and draw out some wider points in relation to the current NCP system.

RAID complaint against ENRC

In May 2013, the NGO Rights and Accountability in Development (RAID) submitted a complaint to the UK NCP regarding the conduct of the Eurasian Natural Resources Corporation (ENRC) in the Democratic Republic of Congo (DRC).

The complaint centred on the conduct of several companies holding mining concessions in the DRC which were either business partners or subsidiaries of ENRC.

The issue on which the UK NCP placed most focus was the disruption to the water supply at the village of Kisankala. This was installed in 2008 by a company in which ENRC later gained a controlling interest (Africo). However, on several occasions since its installation, the water supply had been disrupted - sometimes for months at a time and often as a result of security measures to address illegal artisanal mining by local individuals. Illegal mining had been a persistent problem at Kisankala due to delays in Africo developing its own mining operations on the concession. It was also alleged by RAID that when the water supply was operational, water was only available for a limited number of hours and users had to pay a maintenance fee.

The UK NCP noted that access to a safe water supply is regarded by the UN, and acknowledged by the UK government, as an important part of the right to an adequate standard of living under the International Covenant on Economic, Social and Cultural Rights. It also noticed that Africo had improved the situation at Kisankala, as prior to its installation of a water supply, access to water in the village did not meet international standards.

However, the UK NCP drew attention to the concept of progression in human rights law which - as it applies to states - requires that, where improvements have been made to services and facilities, the positive change must be maintained and any decline avoided or addressed. It considered that the same principle applied to the obligation to respect human rights in a business context such that, where an MNE has improved an existing situation, it should consider the impact of its activities on that improved situation and ensure that it is preserved as far as possible.

In its Final Statement following consideration of the complaint, published in February 2016, the UK NCP concluded that ENRC was not meeting its obligations under the Guidelines to address the impact of its activities and business relationships on the right to water, and to encourage its business partners to apply the standards in the Guidelines. In particular, it considered that ENRC should have taken steps - either directly or by using its leverage with Africo - to ensure the availability and accessibility of the water supply at Kisankala.

The UK NCP also found that ENRC had breached a number of other standards in the Guidelines in relation to engagement with local stakeholders regarding delays in commencing operations, and managing the effect of those delays on local communities. It had also failed to ensure that an effective mechanism was in place for the local communities on the concessions to raise concerns or grievances.

Based on those findings, the UK NCP recommended that ENRC take steps to:

  • ensure that effective communication takes place between ENRC, the concession companies and the local communities, including the introduction of accessible procedures for dealing with concerns;
  • inform the communities about the standards of conduct expected in regards to site security and give timely advice about anticipated changes to the mining schedule;
  • use its leverage with its subsidiaries to ensure that site security management includes measures assuring the continuation of unrestricted water supply at Kisankala; and
  • consider whether plans to provide or enhance community facilities as part of the overall mining plans, in consultation with the communities, can be progressed at an early stage.

Follow-up statement

Where it makes recommendations following the assessment of a complaint, the UK NCP will produce a Follow-up Statement summarising the actions that have been taken to implement those recommendations. The Follow-up Statement is based solely on responses that it receives from the parties to questions that it poses and the UK NCP does not undertake any further investigation.

In this case, publication of the Follow-up Statement was held up by delays in the parties providing the required information, together with the fact that ENRC undertook further action after the deadline for responses had passed. The Follow-up Statement was therefore published at the end of April 2018, more than two years after the UK NCP's Final Statement.

RAID submitted that, for the most part, the recommendations had not been adopted. Although, at Kisankala, water had been made available free of charge and there were attempts to improve the conditions at the village, there was no long term plan to ensure the continued provision of these facilities. In addition, there was little evidence of development or improvements at another village on the concessions (Lenge).

By contrast, ENRC explained that it was working on implementing structures in adherence with the Guidelines, and provided evidence of scheduled regular meetings with community stakeholders to address wider development needs and implementation of a Community Action Plan. It also indicated that it had begun drilling for a permanent water source at Lenge but did not disclose whether the villagers currently had access to water.

There were many inconsistencies between the accounts presented by the parties. However, the UK NCP concluded that although some action had been taken by ENRC, not enough had been done to comply with the recommendations set out in the Final Statement.

In addition, the evidence seemed to show that the company had not actually taken steps following the Final Statement until prompted to do so by requests for information for the Follow-up Statement. Conditions at the sites were largely still the same, particularly at Lenge where meetings with the community and plans for a sustainable water supply had only begun in June 2017 - despite the fact that the original deadline for information for the Follow-up Statement was March 2017.

In response to a request from RAID for the UK NCP to compel ENRC to take a series of actions to fully implement the recommendations, the UK NCP pointed out that the Guidelines offer voluntary principles for responsible business conduct, and that it has no power to mandate any action on the part of a party to a complaint.

Conclusion

The use by the UK NCP of the principle of progression is interesting and it will be important for MNEs to bear in mind that, where they make improvements for local communities, they should then ensure that such benefits are maintained. The RAID complaint also highlights the importance of communication with the communities in which MNEs operate.

The Guidelines are considered to be the most comprehensive set of government-backed recommendations on responsible business conduct today and as such have significant value. Additionally, the work of the NCP cannot be overlooked given its role in highlighting and publicising human rights issues that can arise through the action of MNEs, and providing recommendations to remediate those issues.

However, the RAID complaint does highlight some of the main flaws with the NCP process, most notably in relation to the length of the process and implementation. These echo flaws in the NCP system highlighted by Amnesty International in a report in 2016.

In terms of timing, RAID first raised its complaint in 2013. A Final Statement was not published until 2016 (following a failed attempt at mediation) and a Follow-up Statement not until 2018. Much of the delay was caused by the actions of the parties to the complaint but the nature of the process meant that the UK NCP lacked the ability to undertake effective case management.

In the meantime, the effected communities in the DRC have seen little change. The UK NCP found that ENRC had failed to take any real action of its own volition and, when it did this, was relatively inconclusive. Now that the complaint has been concluded there is no guarantee that the tenuous benefits have been secured will be sustained.

Largely, this comes down to the fact that NCPs have no real legal power to mandate a contravening party to take action. Because of this, there are no real consequences - beyond adverse publicity - for an MNE either breaching the Guidelines or failing to follow an NCP's recommendations.

Although publicity can be an important driver to commercial action in order for this to be effective, in the UK at least, a lot more would need to be done to publicise the work of the NCP and its determinations.


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