Court/Judicial body:: UK National Contact Point for the OECD Guidelines for Multinational Enterprises grievance mechanism
Date: 28 August 2008
Instrument(s) cited: Organisation for Economic Co-operation and Development (“OECD”) Guidelines for Multinational Enterprises 2000, Chapters II (General Policies), IV (Employment and Industrial Relations), VI (Combating Bribery) and X (Taxation)
Case summary
Background: Global Witness filed a complaint against Afrimex (UK) Ltd (“Afrimex”), a UK-based mineral trading company, with the UK National Contact Point for the OECD Guidelines for Multinational Enterprises grievance mechanism (“UK NCP”). The complaint concerned the company’s operations around the exploitation of natural resources in the Democratic Republic of Congo (DRC), namely cassiterite, a form of tin ore commonly extracted for use in the electronics industry. Many Congolese cassiterite mines are located in East DRC, a recognised conflict zone which has suffered much violence, poverty and mortality since the start of the domestic unrest in 1997. Global Witness alleged that Afrimex had made tax payments to rebel forces in the DRC known as RCD-Goma. This faction controlled many of the mines in the eastern areas of North and South Kivu and had been condemned for severe human rights abuses including torture, sexual abuse and civilian massacres. In addition, Global Witness alleged that Afrimex had failed to carry out sufficient due diligence in relation to its supply chain, with cassiterite being sourced from mines where child and forced labour was commonplace and the working conditions were highly unsafe.
Issue and resolution: Business and human rights. Whether the company had infringed the OECD Guidelines by financing a rebel group responsible for human rights violations and by allowing child labour and forced labour in unsafe conditions to be used in its supply chain.
Court reasoning: The NCP concluded that, since June 2000, the company had failed to carry out sufficient due diligence in relation to its supply chain. The fact that Afrimex had merely based its business practices upon assurances provided by its suppliers demonstrated, in the view of the NCP, that the enterprise had not taken appropriate steps to ensure that its practices did not adversely impact the human rights of those affected by its activities. Furthermore, it was concluded that Afrimex had not considered or pursued alternative methods of acquiring the minerals from mines which did not use child labour or those with higher standards of health and safety. Therefore, the NCP held that Afrimex had failed to meet the requirements of Chapter IV of the Guidelines to contribute to the effective abolition and elimination of child and forced labour and to take adequate steps to ensure occupational health and safety in their operations. Regarding the allegation that the company paid taxes to the RCD-Goma which amount to bribery, the NCP found that Afrimex itself did not make such payment. However, payments were made its associated company SOCOMI and these payments contributed to the continuation of the conflict. Although, Afrimex was found to have breached its obligations under Chapter II of the Guidelines (to espect the human rights of those affected by their activities consistent with the host government’s international obligations and commitments and to contribute to economic, social and environmental progress with a view of achieving sustainable development), the NCP did not hold the payments made constituted bribery. Impact: The UK NCP recommended that Afrimex should formulate a corporate responsibility policy document to govern its future operations and should subsequently integrate such policies into its business practices. Moreover, in 2008, the UK government urged British companies to exercise the highest levels of due diligence in areas such as East DRC, where the abuse of human rights and violence was still prevalent. In 2009, in response to a letter from Global Witness, Afrimex confirmed that it no longer traded in minerals and that its last shipment of minerals left the DRC in September 2008. Despite requests from Global Witness for a UK governmental review of Afrimex’s claim and for the company and its directors to be put before the UN Sanctions Committee, no further action has been taken. Read more at: http://www.oecdwatch.org/cases/Case_114.
Notes: The Organisation for Economic Co-operation and Development (“OECD”) is an intergovernmental organisation, comprising 43 countries, which develops social and economic policies. The OECD’s Guidelines for Multinational Enterprises set recommendations to ensure that companies undertake business responsibly in their worldwide operations. The Guidelines represent a collection of voluntary principles and standards which should be pursued in order to ensure the responsible business conduct of multinational enterprises. The Guidelines advocate sustainable development throughout the supply chain, respect for the human rights of those affected by the activities of the enterprise and the abolition of child and forced labour. Whilst the Guidelines are not legally binding, OECD governments and a number of non-OECD governments are committed to encouraging multinational enterprises operating in or from their territories to observe the Guidelines wherever they operate, whilst taking into account the particular circumstances of each host country. For more information about this OECD grievance process, read the joint guide by CRIN and ICJ for civil society on the General Comment no. 16 of the UN Committee on the Rights of the Child.
Link to full judgement: http://oecdwatch.org/cases/Case_114/561/at_download/file