Global Witness v. Afrimex Ltd.: Decision Applying OECD Guidelines on Corporate Responsibility for Human Rights
On August 28, 2008, the United Kingdomâs National Contact Point (UK-NCP) issued its decision in Global Witness v. Afrimex Ltd. In this case, Global Witness, a non-governmental organization, alleged that Afrimex Ltd. (Afrimex), a British corporation, violated the Guidelines for Multinational Enterprises of the Organization for Economic Development and Cooperation (OECD Guidelines) by paying bribes to a rebel group in the Democratic Republic of the Congo (DRC) and purchasing minerals from mines in the DRC that employ child and forced labor. The UK-NCP agreed with the allegations of Global Witness and found Afrimex in violation of OECD Guidelines. This Insight analyzes this case and its importance for efforts to heighten corporate responsibility for the protection of human rights.
Background on the Case
The OECD Guidelines promote the corporate responsibility of multinational enterprises with respect to human rights. Under the OECD Guidelines, OECD Member States have non-binding obligations to promote compliance with the Guidelines by corporations subject to their respective jurisdictions. A decision of the OECD Council requires OECD Member States to establish National Contact Points (NCPs) to oversee national implementation of the OECD Guidelines, provide a forum for discussion, and contribute to resolving issues and disputes that arise concerning implementation of the OECD Guidelines.
Conflict in the DRC and Afrimex
In 2001, the United Nations Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo (UN Panel of Experts) noted that the conflict in the DRC âhas become mainly about access, control and trade of five key mineral resources: coltan, diamonds, copper, cobalt and gold.â The UN Panel of Experts also asserted that the ârole of the private sector in the exploitation of natural resources and the continuation of the war has been vitalâ and that âa number of companies have been involved and have fuelled the war directly, trading arms for natural resources.â In 2002, the UN Panel of Experts suggested that Afrimex might be violating the OECD Guidelines.
Global Witness Brings a Complaint against Afrimex to the UK-NCP
In Feburary 2007, Global Witness requested that the UK-NCP investigate whether Afrimex was in violation of the OECD Guidelines in its activities in the DRC. Global Witness alleged that Afrimex had paid financial contributions through subsidiary corporations (Societe Kotehca and SOCOMI) to rebel forces in the DRC and sourced minerals from mines that used child and forced labor. Global Witness argued that Afrimex violated Chapter II (General Policies), Chapter IV (Employment and Industrial Relations), and Chapter VI (Combating Bribery) of the OECD Guidelines.
The UK-NCPâs Decision
The UK-NCP held that Afrimex failed to comply with the human rights requirements in the OECD Guidelines. The UK-NCP concluded that Afrimexâs âtaxation payment down the supply chain funded the conflict in which numerous human rights abuses have occurred.â The UK-NCP concluded that, from June 2000 onward, Afrimex did not:
- ârespect the human rights of those affected by their activities consistent with the host governmentâs international obligations and commitmentsâ;
- âcontribute to economic, social and environmental progress with a view to achieving sustainable developmentâ;
- âencourage, where practicable, business partners, including suppliers and subcontractors, to apply principles of corporate conduct compatible with the Guidelinesâ; and
- apply sufficient due diligence throughout its supply chain because it purchased minerals from mines that employed child and forced labor.
In these ways, Afrimex contributed to a conflict that âprevented the economic, social and environmental progress key to achieving sustainable development and contributed to human rights abuses.â
The UK-NCP made a number of recommendations to Afrimex concerning how it could improve its corporate responsibility for human rights. The UK-NCP recommended that Afrimex adopt a corporate code of conduct that includes corporate policies on human rights. In its recommendation, the UK-NCP referred directly to the report from the UN Special Representative of the Secretary General on human rights and transnational corporations and other business enterprises, John Ruggie, on Protect, Respect, and Remedy: A Framework for Business and Human Rights (Ruggie Report). The Ruggie Report proposes a three-pillar framework for corporate accountability for human rightsâprotect, respect, and remedy. This framework ârests on differentiated but complimentary responsibilitiesâ that include (1) the Stateâs duty to protect against human rights violations by, or involving, corporations; (2) the corporate responsibility to respect human rights; and (3) effective access to remedies. The Ruggie Report argues that this framework can assist governments, corporations, and civil society groups strengthen the protection and promotion of human rights.
The UK-NCP also recommended that Afrimex should include in its corporate policies the OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones (OECD Risk Tool). The OECD Investment Committee developed the OECD Risk Tool as a follow up to the OECD Guidelines. The OECD Risk Tool includes questions that companies should ask âwhen considering actual or prospective investments in weak governance zones.â The questions cover âobeying 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 societiesâa broadened view of self interest.â
Finally, the UK-NCP urged Afrimex to use its âinfluence over contracting parties and business partners, when trading in natural resources from this region, to ensure that due diligence is applied to the supply chain.â
Implications of the Decision for the OECD Guidelines as a Mechanism for Improving Corporate Responsibility for Human Rights
Lack of Authority to Issue Binding Decisions and Impose Sanctions
The UK-NCPâs decision in Global Witness v. Afrimex is an important development in the field of corporate responsibility for human rights and the handling of disputes by NCPs under the OECD Guidelines. The decision also reveals some problems with the NCP system, particularly the inability of NCPs to make binding decisions on corporations under the OECD Guidelines and to impose sanctions or forms of compensation for victims of human rights abuses. Although the UK-NCP found Afrimex in violation of the OECD Guidelines over the course of many years in the DRC, neither the UK-NCP nor any other organ of the UK government has the authority to impose sanctions on Afrimex for such violations.
UK Moves to Strengthen NCP Performance
The decision has, however, raised interest in the how the UK-NCP operates in light of significant changes made to it in 2007. These changes transformed the UK-NCP into a multi-department unit, consisting of officials from the Foreign and Commonwealth Office, Department for International Development, and Department of Trade and Industry. In addition, the UK government established a Steering Board headed by a senior official of the Department of Industry and Trade and involving external members drawn from several other government departments, non-governmental organizations, business, and employee relations. The Steering Board monitors the work of the UK-NCP.
These improved mechanisms strengthen oversight through close involvement of governmental officials and non-governmental representatives and represent a novel approach for NCPs that other countries may follow. The UK governmentâs transformation of its NCP connects to what OECD Watch suggests is a long-term objective: âthe Model NCP is an expert quasi-legal panel with sufficient autonomy to reach decisions and make recommendations, chaired by a senior judge.â
Global Witness v. Afrimex highlights the promise and the problems with the system of NCPs established under the OECD Guidelines. The decision of the UK-NCP suggests that NCPs could play a constructive role in the efforts to improve corporate responsibility for human rights, even with the lack of authority to issue binding decisions and impose sanctions. Empowering NCPs to engage in binding dispute resolution and to apply sanctions would, however, require significant revision of the OECD Guidelines, a process that OECD Member States may oppose, potentially undermining the entire system as developed to date.
Jernej Letnar ?erni?, an ASIL Member, is a Doctoral Candidate, School of Law, University of Aberdeen, Scotland; University of Ljubljana, Slovenia, LL.M.; Raoul Wallenberg Institute of Human Rights and Humanitarian Law, Lund University; Researcher, Law Institute, Ljubljana, Slovenia.
 See Final Statement by the UK National Contact Point for the OECD Guidelines for Multinational Enterprises: Afrimex (UK) Ltd., Aug. 28, 2008 [hereinafter UK-NCP Afrimex Decision], http://www.berr.gov.uk/files/file47555.doc.
 The OECD Guidelines for Multinational Enterprises: Text, Guidelines, Commentary, DAFFE/IME/WPG(2000)15/FINAL, June 2000 [hereinafter OECD Guidelines], http://www.oecd.org/dataoecd/56/36/1922428.pdf.
 Complaint to the UK National Contact Point under the Specific Instance Procedure of the OECD Guidelines for Multinational Enterprises, Feb. 20, 2007 [hereinafter Global Witness Complaint], http://www.globalwitness.org/media_library_get.php
 The two other major international documents on corporate responsibility on human rights are the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, Geneva, International Labour Organization, OB Vol. LXI, 1978, Series A, No. 1), DOCNO:28197701, adopted by the Governing Body of the International Labour Office at its 204thSession,Geneva, November 1977, and the UN Norms on the Responsibilities of Transnational Corporations and Other Business enterprises with regard to Human Rights, UN Doc. E/CN.4/Sub.2/2003/12/Rev/2 (2003)).
 OECD Guidelines, supra note 3, at Chapter I. Concept and Principles, Â¶ 2.
 Decision of OECD Council, June 27, 2000, C(2000)96/FINAL, Â¶ 1, http://actrav.itcilo.org/english/calendar/2002/A3-5560/technical_files
 Report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo, S/2001/357, Â¶ 213, http://www.natural-resources.org/minerals/CD/docs/other/357e.pdf.
 Id. at Â¶ 215.
 Id. at Annex I, at 46.
 Global Witness Complaint, supra note 4.
 Id. at 3-6.
 Id. at 10-12.
 UK-NCP Afrimex Decision, supra note 1.
 Id. at Â¶ 51.
 Id. at Â¶ 61.
 Id. at Â¶ 62.
 Id. at Â¶ 51.
 Id, at Â¶ 41, 64 and 77. See John Ruggie, Protect, Respect and Remedy: A Framework for Business and Human Rights, A/HRC/8/5 (Apr. 7, 2008) (hereinafter Ruggie Report), available at http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf. On the Ruggie Report, see Christiana Ochoa, The 2008 Ruggie Report: A Framework for Business and Human Rights, ASIL Insights, June 18, 2008, http://www.asil.org/insights080618.cfm#_ednref1.
 Ruggie Report, supra note 21, at Â¶ 9.
 Id. at Â¶ 17. See also John Knox, Concept Paper on Facilitating Specification of the Duty to Protect, Prepared for Special Representative John G. Ruggie, Dec. 14, 2007, http://www.business-humanrights.org/Documents/
 UK-NCP Afrimex Decision, supra note 1, at Â¶ 76.
 O. De Schutter, Transnational Corporations and Human Rights, Global Law Working Paper 01/05, at 6, http://www.law.nyu.edu/global/workingpapers/2005/ECM_DLV_015787.
 For example: Attorney Generalâs Office, Department for Environment, Food and Rural Affairs, Department for Constitutional Affairs, Department for Work and Pensions, Export Credit Guarantee Department, and the Scottish Executive.
 See Report by the Chair, 2007 Annual Meeting of the National Contact Point, June 19-20, 2007, at 5.
 OECD Watch, Five Years on: A Review of OECD Guidelines and National Contact Points, at 8, http://www.oecdwatch.org/docs/OECD_Watch_5_years_on.pdf.