During a press conference on September 6th, Minister of the Economy Franz Fayot, introduced the Organisation for Economic Co-operation and Development (OECD) National Contact Point for Responsible Business Conduct for Luxembourg: LuxNCP. During the conference, Minister Fayot presented the team, and outlined the missions, and the activities of LuxNCP. He also seized the opportunity to present the main recommendations contained in the recently published LuxNCP's Peer Review Report.
OECD Guidelines on Responsible Business Conduct
The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct ("the Guidelines") are a set of recommendations issued by governments to businesses to promote responsible business conduct. They are the only internationally recognized standard on responsible business conduct which 51 governments have agreed at a multilateral level. Since their introduction in 1976, the Guidelines have been revised and updated six times to remain fit for purpose in light of societal challenges and the evolving context for international business. The most recent update took place in June 2023.
The Guidelines cover a range of issues such as disclosure of information on business activities, respect for human rights, management of labour relations and employment practices, environmental protection, anti-corruption, promotion of consumer interests, alignment with host country science and technology policies, compliance with competition laws, and compliance with tax requirements.
As such, the Guidelines have a broad scope, both in terms of content and geographical coverage. The Guidelines provide for a unique implementation mechanism through the National Contact Points.
Each government that adheres to the Guidelines is required to set up a National Contact Point for Responsible Business Conduct (NCP). There are currently 51 NCPs, which together form the OECD's NCP Network, with an identical mission.
Created in 2000, the LuxNCP has three primary tasks:
1. To raise awareness and promote the uptake of the OECD Guidelines and the related due diligence guidance published by the OECD.
2. To contribute to the resolution of issues that arise in the implementation of the Guidelines when complaints are lodged with the LuxNCP.
3. To contribute to the Government's efforts to develop, implement, and foster policies that promote responsible business conduct.
The LuxNCP for RBC is based, managed and coordinated within the Ministry of the Economy.
Main recommendations of peer review
The OECD NCP peer reviews are the primary mechanism for evaluating the effectiveness and performance of individual NCPs. The objectives of the peer review are to assess the functioning and activities of the NCPs; to identify NCPs' strengths and achievements as well as shortcomings and opportunities for improvement; to make recommendations for improvement in line with the Guidelines; and to serve as a learning tool for both the NCP under review and the NCPs that participated in the review.
In September 2022, the LuxNCP, as a part of the peer review process, hosted a delegation consisting of NCP representatives from Iceland, Latvia and Switzerland, accompanied by representatives from the OECD Secretariat.
Some of the main recommendations of the peer review report include putting in place regular, formalized stakeholder engagements. The LuxNCP has taken this recommendation into account already by initiating stakeholder consultation meetings. In light of the LuxNCP's "mono-agency" structure, where it operates within a single ministry (the Ministry of the Economy), the peer review addressed concerns about independence and being overly pro-business. The peers found that the LuxNCP's proximity to the Ministry of the Economy in reality facilitated interactions with companies, especially when handling complaints, and helped in raising awareness.
As per the recommendations of the peer review, the LuxNCP will be studying the possibility of introducing a legal basis and has already set up a programme of activities to promote the Guidelines for the years 2023-2024. To improve the visibility of the NCP, and to maximize reach and impact both among companies and the general public, the LuxNCP is drawing up a list of organisations to reach out to. LuxNCP has set up a new website in two languages and established an account on the social network X (formerly Twitter).
Following the presentation, Minister of the Economy Franz Fayot stated: "Compliance with the OECD Guidelines is essential to ensure a sustainable economy. The LuxNCP is a formidable tool for promoting responsible business conduct, particularly in terms of due diligence, human rights and governance. I would like to pay tribute to its remarkable development in recent years, and I congratulate the entire team for its tireless work, which has made it possible to achieve these positive results in the peer review".
Press release by the Ministry of the Economy