OECD Guidelines

The Organisation for Economic Co-Operation and Development Guidelines (the "OECD Guidelines") set out ethical principles addressing how multinational companies should act, from the perspective of responsible business conduct, in relation to the environment and climate change, human rights and employment.  The OECD Guidelines contain recommendations for multinationals as endorsed by numerous governments, and are aimed at encouraging a positive contribution from multinationals to economic, environmental and social progress.  Whilst the OECD Guidelines are not legally binding on multinational companies, they are binding on signatory governments who are, in turn, required to ensure that the OECD Guidelines are observed by those multinationals active in the relevant jurisdictions.  Recent updates to the OECD Guidelines have emphasised the importance of focusing on environmental, climate change and biodiversity as part of responsible business as well as the granular nature of current due diligence expectations for multinationals.

Any natural or legal person can bring a complaint in relation to alleged breaches of the OECD Guidelines to a relevant national contact point, irrespective of whether or not the natural or legal person bringing the complaint has been directly affected.

Complaint Against Glencore UK and Findings

The UK National Contact Point (the "UK NCP"), which is responsible for monitoring UK companies' compliance with the OECD Guidelines, has recently determined that Glencore UK failed in its compliance with the OECD Guidelines in relation to an oil spill on an oilfield in Chad run by Glencore UK's subsidiary, at the time, PetroChad.

The complaint was submitted in 2020 by three public interest groups - the Association des Jeunes Tchadiens de la Zone Pétrolière, Rights and Accountability in Development and Public Interest Law Centre - against Glencore UK alleging that Glencore UK had failed to carry out proper due diligence – in particular, in relation to environmental and human rights – on the wastewater and oil spill in Chad.  It was alleged that Glencore UK failed to engage with local residents who had reported injuries and negative impacts following the oil spill, such as burns, blurred vision and stomach aches.

The UK NCP, having engaged an expert to advise on the environmental risks of the spill and how PetroChad could have prevented the spill, agreed that Glencore UK had failed to "leverage" its influence, as the parent company, over PetroChad to "mitigate any adverse impacts as a result of the wastewater spill".  The UK NCP did not agree that Glencore UK was responsible for the adverse consequences of the spill or the failure to respect the human rights and environmental provisions of the OECD Guidelines, finding that Glencore UK “has not directly caused or contributed to any adverse impacts.”

The UK NCP's decision is particularly notable for the fact that it is a decision as against the parent company, Glencore UK, and because the UK NCP continued with the complaint against Glencore UK, despite the fact that Glencore UK sold PetroChad to Perenco in 2022, during the complaints process.  

UK NCP Recommendations

The UK NCP found that Glencore UK's human rights and environmental policies and code of conduct are in line with the OECD Guidelines but recommended that Glencore UK improve its policies on carrying out effective due diligence on its business relationships.  The UK NCP said it will issue a follow-up report in July 2025.

What Does This Mean For Multinationals?

This decision supports a general trend towards an increased use of the OECD Guidelines complaints process, especially in the context of environmental and human rights concerns.  The process was specifically mentioned in the recent Milieudefensie v Shell Court of Appeal decision in the Netherlands as an area of soft law which courts may consider.

Further, this decision also reflects a clear trend in the UK and Europe towards seeking, where possible, to hold parent companies responsible for breaches of environmental and human rights protections, including, as in this instance, when that company no longer owns the offending entity.  For example, we saw this through the Supreme Court decision in Okpabi v Shell.

As we see greater focus on and awareness of environmental and human rights related disputes, we expect to see an increased use of the OECD Guidelines complaints process, and we would, in turn, expect to see an increased consideration of these complaints in certain court proceedings.