The Australian OECD National Contact Point
How it can be reformed

by Kristen Zornada

Australia's only government body charged with hearing complaints of human rights by Australian business abroad is failing.  This report finds that the Australian National Contact Point is tucked away in Treasury and barely resourced.  The majority of complaints are dismissed at the initial assessment stage.

Executive Summary

The Australian National Contact Point (ANCP) is a non-judicial human rights mechanism. Because the mechanism is non-legal, it provides freedom to act in a way which promotes human rights due diligence amongst Australian business and address breaches using novel problem solving and mediation techniques.  The ANCP is charged with implementing the OECD Guidelines for Multinational Enterprises (Guidelines).  These are perhaps the best developed standards and procedures internationally for providing guidance to business about how to do the least harm possible and act with integrity. The ANCP presents an easy way for the Australian Government to promote sound human rights practices amongst Australian business. There are clear models for best practice developed by other NCPs across OECD countries.  The ANCP already exists – there is no need to create an entirely new institution – it simply needs improvement.

The ANCP is particularly important because it is the only avenue for redress for many communities and individuals affected by Australian business outside our national borders. Australia does not have a legal framework that specifically regulates the human rights obligations of Australian corporations overseas.[1] Communities and individuals who live in jurisdictions with weak legal systems or those plagued by bias and corruption face great barriers to accessing justice in their own countries against companies domiciled in Australia.  The ANCP is a transnational human rights mechanism that allows grievances to be addressed in accordance with international human rights norms. Given its central role in the Australian human rights landscape, it is vital that it offers effective redress.

Based on a thorough analysis of all the cases the ANCP has considered, the report finds that the ANCP is presently failing to follow the Guidelines. This means that the Australian Government is missing an important opportunity availed to by its membership of the OECD to promote good human rights practices amongst business and remedy problems when they occur. This report suggests 23 changes the ANCP could implement to improve its practices.  These are not big changes, but they would make a world of difference to communities who are negatively impacted by the actions of Australian business. 

None of the reforms recommended will make the desired difference unless the ANCP is adequately resourced and sufficiently independent.  This requires dedicated staff with the necessary expertise to apply the Guidelines and navigate often complex disputes.  It is unfair to expect staff without the necessary expertise and resources to address disputes which have occurred in other countries, with complex and long histories, involving some of Australia’s largest companies.  Likewise, it is unfair to expect staff located within government without sufficient authority or independence to address cases involving government, placing them in conflict with their primary duty to government. 

How it operates

The ANCP is a non-judicial mechanism within the system created by the OECD for implementing its Guidelines for Multinational Enterprises. The Guidelines set out principles for good business practice in areas like human rights, environment, information disclosure, employment and industrial relations, combating bribery and consumer interests. Any person with an interest in the matter can submit a complaint, also known as a specific instance, about alleged breaches of the Guidelines by a multinational enterprise registered in or operating in an adhering country. In handling complaints NCPs are required to follow the OECD’s implementation procedures of the Guidelines, which aside from setting out procedure, sets out the core expectations that NCPs will operate with visibility, accessibility, transparency and accountability.

When it receives a complaint, the NCP makes an initial assessment of whether or not to accept the complaint, and if accepted, offers its good offices and to facilitate mediation between the parties to resolve the dispute. If mediation fails or is refused, the NCP may make a determination as to whether or not there has been a breach of the Guidelines. NCPs are tasked with promoting compliance with the Guidelines, through the specific instance complaint mechanism and outreach activities.

The ANCP, based in the Department of the Treasury, has received 15 complaints since 2005, including four since 2011, which coincided with both the change in government domestically and the introduction of Guidelines that included a new human rights chapter. This review of the functioning and structure of the ANCP considers the statements published by the ANCP on the outcome of the specific instance process for the 15 complaints it has received, as well as other documents relevant to procedure like the ANCP Process for handling complaints that arise under the OECD Guidelines on Multinational Enterprises (ANCP Process for handling complaints). 

This report finds that the ANCP is failing to follow the Guidelines. The evidence reported herein shows that it suffers from major deficiencies in the way in which it handles complaints and the way in which it is structured. The ANCP regularly rejects claims for reasons falling outside the OECD Procedural Guidance for NCPs. The ANCP has never issued a single determination of a breach of the Guidelines. These deficiencies have rendered it ineffective, and possibly contribute to its lack of utilisation as a non-judicial mechanism by civil society and communities impacted by the activities of Australian business overseas.

The main findings and conclusions of this report, recommendations for remedying the issues identified and examples of best practice are summarised in this Executive Summary.

1.1        Key Findings

Refusal to consider claims due to failure to follow Guidelines

The ANCP rejects nearly a third of all complaints made to it. It transfers another third of all complaints to NCPs in other countries. Most claims that are rejected at the initial assessment stage are for reasons that fall outside the admissibility criteria for complaints. A complaint can only be refused on initial assessment if there is “insufficient evidence of any breach of the Guidelines to warrant further examination or the complaint is frivolous, vexatious or falls outside the Guidelines”.[2]  This report shows that the ANCP is not considering “any breach”.

Even in cases that proceed beyond initial assessment, the ANCP has closed complaints or extricated itself from the complaint resolution process where a party, usually the company the subject of complaint, has shown itself unwilling to engage in mediation or discussions. The report shows that the ANCP is yet to make a determination on whether a company has breached the Guidelines

For complaints that are transferred to another NCP, there appears to be very little follow-up or assistance provided by the ANCP to the home NCP, despite the Procedural Guidance contemplating an approach of inter-NCP coordination and cooperation.

The ANCP’s approach to complaint handling reflects a misinterpretation of the Guidelines. In addition, the failure of the ANCP to engage with the specific instance process to its conclusion, may cause a chilling effect on the taking up of the specific instance process in Australia. The ANCP is not fulfilling its mandate to be accessible and to carry out its activities in a manner compatible with the Guidelines.

Lack of clear guidance concerning the complaint handling process

The ANCP has adopted and claims to be committed to adhering to the ANCP Process for handling complaints, which is published on its website as part of its commitment to transparency and accessibility.

However, there are gaps in this process. The role of the ANCP is not clearly defined throughout the ANCP Process for handling complaints. There is no clear guidance about how submitted complaints will be handled by the ANCP.  These gaps likely contribute to the high rejection rate and comparatively low utilisation of the specific instance process in Australia.

Lack of transparency

Fundamental to the NCP mandate is transparency. The ANCP claims to be committed to ensuring transparency in its activities. However, it does not appear to be upholding this commitment in practice.  It is not transparent with the parties about the process once a specific instance is being investigated. For instance, it does not inform a claimant about the response of a company which would allow the claimant to formulate a response. Further, the outcome of the various stages of the complaint handling process are not published until after the final stage has concluded. The lack of a consistent format for published statements often results in statements that fail to address all the matters required to be addressed.

This means that, firstly, parties are engaging with the process without the necessary information about the other party’s position or evidence submitted to know how to respond or proceed. And second, there is no transparency about the principles the ANCP has taken into account, or has omitted to take into account, in making its decision, and how it has arrived at its decision. This makes it difficult for prospective complainants to determine what information is relevant to include in any complaint they may decide to submit and to assess their prospects of having their complaints accepted, which may also be responsible for the relatively low take-up rate of the specific instance process in Australia. 

Lack of outreach

The ANCP conducts very little outreach work to promote knowledge of the mechanism or access to it and has no formal budget to do so.  Given the barriers to accessing redress mechanisms reported in the series that this report is part of, this is particularly concerning. There is no way for communities to know how to seek redress through the ANCP when affected by relevant business behaviour.

Lack of independence

There are characteristics of the operation of the ANCP which reduce the mechanism’s claim to impartiality and independence.  It is troubling that the ANCP is based in the Foreign Investment and Trade Division of the Treasury. Given the role of this division is to provide advice to the Foreign Investment Review Board, and therefore its focus on foreign investment in Australia, this may give rise to a conflict of interest concerning its role in investigating complaints against companies who invest in Australia.

Further, this report finds that the ANCP has rejected complaints implicating companies contracted to carry out controversial government policies, without transparent rationale. If the ANCP refuses to consider complaints involving government policy, this sets a worrying precedent of impunity for companies contracted to undertake government work that may involve human rights abuses.  It is not the intention of the Guidelines that complaints concerning government contractors should be rejected on the basis that they involve comment on government policy alone.

Lack of independent oversight

The ANCP’s Oversight Committee lacks the external-to-government members necessary to provide independence. This raises serious questions as to how it can fulfil its role to provide advice, oversee and conduct reviews of the ANCP’s activities. There is no evidence that the Oversight Committee has reviewed the ANCP’s decisions or overturned a decision of the NCP on review. The ANCP’s Review Procedure suggests that reviews will be undertaken by a Review Panel comprising three members of the Oversight Committee. The failure of the Oversight Committee to fulfil the functions of its role envisaged in its Terms of Reference results a lack of proper scrutiny and revision of decisions in the event that errors have been made and a lack of pressure on the ANCP to improve its functioning.

More resources urgently needed

While this report focuses on the complaint handling function of the ANCP, namely through its practices and procedures, it is clear that the ability of the ANCP to function effectively is tied to the resources made available to fulfil its remit. It is understood that there has never been a dedicated budget assigned to the ANCP beyond the general funding provided to the Treasury Department’s Foreign Investment Division within which it is housed.[3]

The failings referred to in this report do not necessarily reflect the performance, diligence or capability of individual members who carry out the duties of the ANCP. The ANCP currently comprises one senior public servant with only part-time commitment to carrying out the role of ANCP. This raises questions as to whether it is fair for the Australian Government to expect that one person working part-time can conduct adequate outreach to communities negatively affected by Australian business activities and consider complaints that, for example, raise complicated human rights issues, bring parties that are often geographically dispersed and sometimes antagonistic towards each other together for mediation, or issue statements as to whether a breach of the Guidelines has occurred, and follow up, in a timely and effective manner. The Australian Government has a responsibility to ensure that the ANCP is appropriately resourced in order to achieve quality outcomes within acceptable timeframes. The government has a responsibility to ensure that Australian businesses, and businesses operating in Australia, adhere to the Guidelines.  Adequately funding the ANCP is one part of meeting this commitment.

1.2        Recommendations for reform

The categories that appear below are ordered by priority for implementation, based on a root cause analysis of the issues underlying the underperformance of the ANCP.  The key drivers identified are: insufficient independence, non-compliance with processes, including a failure to correctly apply the admissibility criteria under the Guidelines, lack of transparency, and failure to provide remedy.  Other flaws with the ANCP flow from these core problems.

This report recommends that in order to increase its effectiveness, the ANCP should prioritise defining its procedures and better adhering with the Guidelines concerning processes.  The next priority is improving its transparency and ensuring that remedies are provided. A final priority is providing greater support and outreach to potential complainants and those who have already made complaints.

Properly resource and improve the independence and expertise of the ANCP

1.     The ANCP should be re-designed as a cross-departmental body within government in order to increase its independence and draw on a wider range of expertise. This will entail moving the ANCP out of the exclusive ambit of Treasury, and require appropriate resources in the form of funding and staff.  This may also help to promote a ‘whole of government’ approach to Business and Human Rights.

Best practice

The French NCP has a tripartite structure that is composed of representatives from several ministries, trade unions and an employer's federation, coordinated by the Director-General of Treasury.[1]

The Dutch NCP is independent and consists of four independent members and four advisory members from the government departments most relevant to business and human rights. The secretariat of the NCP is housed in the Ministry of Foreign Affairs. The Dutch government allocated significant funding (€900 000 over three years) plus two full-time staff to its NCP, in addition to those staff who have responsibilities to the NCP as part of their other duties.[2]

2.     Permanent, external-to-government members should be appointed to the Oversight Committee in an open, transparent process. The Oversight Committee should meet at least biannually or more often as required.  The Oversight Committee should be made up of dedicated trade union, civil society, business and independent representative in addition to representatives from relevant departments permanently appointed to the Oversight Committee. This could be augmented by a roster of suitably qualified and experienced independent experts in areas covered by the Guidelines, especially those typically cited in complaints considered by the ANCP, like human rights and the environment, who will be available be called upon on an ad hoc basis throughout the specific instance process, as required. When the ANCP is unable to determine or resolve matters relevant to the admissibility of a complaint, it should consult these independent experts, and/or other NCPs with relevant experience.

Best practice

The work of the UK NCP is overseen by a steering board which includes representatives of government departments and external members. The four external members currently appointed include representatives of business, trade unions and non-governmental organisations.[3]

3.     Serious cases of maladministration by the ANCP should be subject to review.

Improve the process for handing complaints, particularly those that impact admissibility

4.     Assess complaints based on whether they raise a bona fide issue that is relevant to the Guidelines and warrant further examination. In doing so, the ANCP should take into account only the matters included in the OECD Procedural Guidance and Commentary on the Implementation Procedures. Decision makers should not take into account other matters, like for example, whether the parties are willing to mediate, whether the complaint involves government policy, or whether there are parallel proceedings.  These matters may require sensitivity in the way the complaint is handled, and impact later processes, but they should not impact admissibility.

5.     In complaints raising issues that are subject to parallel proceedings, the ANCP should address in its statement on the complaint its view on whether or not serious prejudice would be occasioned to one of the parties to the parallel proceedings if the specific instance process were to continue, in accordance with its own guidance on parallel proceedings. When determining whether or not a party is likely to be seriously prejudiced in parallel proceedings if the NCP complaint process continues, the ANCP should consult the Oversight Committee.

6.     The ANCP should adhere to its own timeframes for timely consideration of claims.

7.     The ANCP Process should be amended to make it compulsory for the ANCP to consider the complaint and issue a determination on whether there has been a breach of the Guidelines in cases where mediation has been refused or has failed. This could be achieved by changing the existing language of “may examine … and issue a determination” to “will examine … and issue a determination”, similar to the UK NCP Process.

8.     The ANCP should seek to overcome the barriers that affected communities experience in relation to collecting and presenting evidence in a number of ways, such as by:

a.     requesting evidence from interested parties in the host country;

b.     conducting investigations in the host country;

c.     coordinating with relevant government and non-government agencies in the host country;

d.     communicating determinations to stakeholders in the complaint beyond just those named in the complaint.

Best practice

Six NCPs conduct fact-finding in the countries in which the complaints occurred including the German, Dutch, Canadian and Norwegian NCPs.[4]

9.     The ANCP should actively participate in the NCP Peer Review process scheduled for Jul-Dec 2018 in order to take advantage of opportunities for learning and improvement.

Increase transparency

10.  Details should be provided on the ANCP website on how to submit a complaint, including by email and by post. The ANCP Process should be updated to reflect the logical order of steps for addressing complaints, including the confidentiality arrangements that apply at each stage, similar to the UK NCP Process.  This information should be provided in the languages of the primary countries in which Australian businesses operate. 

Best practice

 The UK NCP has developed a manual that provides clear procedural guidance.[5]

 The Brazilian NCP’s web site describes the information to be included when submitting a case/specific instance. It also provides links to a legal document setting out detailed procedures, in both Portuguese and English.[6]

11.  The ANCP should make explicit whether or not the complaint has been accepted or rejected by issuing an initial assessment. The ANCP should adopt a standard template for its initial determinations and its final statements.

12.  At the conclusion of the initial assessment stage for all complaints it considers, the ANCP should prepare and publish initial assessment statements. The ANCP Process should be amended to clarify that this is required for all complaints considered by the ANCP in which it is the only or lead NCP.

Best practice

The UK NCP and Dutch NCP both publish initial assessments to their website as soon as they have concluded the initial assessment stage, after sending drafts of the statement to the parties for comment. The UK and Dutch NCP procedural guidance documents reflect this commitment.[7]

13.  Final statements should be published in a timely manner.

Ensure fairness and effectiveness

Delivering outcomes that promote company behaviour consistent with Guidelines in a way that improves conditions for impacted communities requires users and potential users of the specific instance process to have confidence that the process is fair and effective. Specific recommendations for ensuring fairness and effectiveness are as follows:

14.  The ANCP should hold introductory meetings with the parties following the lodgement of a complaint in order to gather any additional information required for the initial assessment, not after the initial assessment stage.

15.  In cases where the parties agree to mediate, the ANCP should consider employing professional mediators in order to achieve better outcomes and relieve itself from the workload of preparing for and running mediation.

16.  The ANCP should be thorough in its investigation and assessment of both domestic and foreign domiciled complaints for which it acts as lead NCP.

17.  The ANCP is encouraged not to be deterred from reaching a conclusion based on the evidence before it regarding compliance with the Guidelines by non-cooperation from a party to a complaint.

Best practice

In Survival International vs Vedanta, a specific instance complaint before the UK NCP, the company Vedanta refused to attend mediation and claimed that the UK NCP should not have jurisdiction over the matter.  The UK NCP nonetheless issued a Final Statement and Follow Up Statement which addressed the facts the evidence provided by the complainant and other experts.

18.  Where companies have agreed to implement changes and publish follow-up reports on its website, the ANCP should utilise its follow-up procedure to check on their progress.

19.  The ANCP Process should be amended to require the ANCP to draw conclusions on the extent to which a remedy has been achieved, where appropriate.

20.  The ANCP should implement a range of remedies available to it through its position within government.

Best practice

Some NCPs are increasing their effectiveness by implementing novel remedies. In Canada Tibet Committee vs China Gold International Resources (2013) the Canadian NCP imposed sanctions on the breaching company, withdrawing its Trade Commissioner Services and other overseas Canadian advocacy support.[8]

21.  The ANCP should prepare and publish annual reporting of its activities to the OECD Investment Committee, ensuring that its answers are a thorough, specific and accurate reflection of its activities throughout that year.

Improve outreach and support

The ANCP should recognise that, as part of a broader international system, it should provide support to its peers and stakeholders. This is necessary to achieve the common goal of delivering outcomes that promote company behaviour consistent with Guidelines in a way that improves conditions for impacted communities. Specific recommendations on ways to achieve this support are as follows:

22.  A protocol for follow-up and offering assistance should be developed for cases which have been transferred to foreign NCPs.

23.  The ANCP should conduct far more outreach activities, for example, holding workshops and trainings on the Guidelines and the specific instance process for other government departments, business communities, civil society, and any other relevant stakeholders, as well as having active and meaningful involvement in the NCP peer-review process.  It should also hold an annual consultation with stakeholders as well as more regular meetings with key stakeholders. Australian Embassies and trade missions should help promote the Guidelines.

Best practice

The Dutch NCP is part of a body called CSR Netherlands which engages with businesses, employers unions, sector associations, financial associations, media, NGOs and OECD Watch to promote the Guidelines. This involves holding workshops and presentations at conferences and other meetings. The NCP makes a strategy each year for communication and promotion. The website also has toolkits for companies to assess whether their behaviour is in line with the Guidelines.[9]

The Norwegian NCP actively engages with NGOs in Norway through stakeholder meetings, such as KOMpakt, and through the government's consultative forum on CSR. The NCP’s website is in multiple languages. The website also has tools for companies to assess their behaviour in reference to the Guidelines, and to ascertain whether they are operating in conflict zones. The Norwegian NCP also gives presentations at business conferences and schools.[10]

[1] Le ministère de l'Économie et des Finances, Point de contact national (2017) <http://www.tresor.economie.gouv.fr/pcn>.

[2] OECD Watch, Model National Contact Point (2007) 8 <http://www.oecdwatch.org/publications-en/Publication_2223>.

 [3] UK Government, UK National Contact Point for the Organisation for Economic Co-operation and Development Guidelines (2017) <https://www.gov.uk/government/groups/uk-national-contact-point-for-the-organisation-for-economic-co-operation-and-development-guidelines>.

[4] Trade Union Cases, National Contact Point Comparison (2017) <http://www.tuacoecdmneguidelines.org/NCPcomparisonAll.asp>.

[5] See United Kingdom National Contact Point, UK National Contact Point Procedures for Dealing with Complaints Brought Under the OECD Guidelines for Multinational Enterprises (January 2014) <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/270577/bis-14-518-procedural-guidance.pdf>.

[6] Brazilian National Contact Point, Resolution PCN no 1/2012 (2012) <http://www.pcn.fazenda.gov.br/assuntos/english/files/resolution-no-01.pdf>.

[7] United Kingdom National Contact Point, UK National Contact Point Procedures for Dealing with Complaints Brought Under the OECD Guidelines for Multinational Enterprises, above n 6 [3.8.2] – [3.8.3]; (Dutch) Ministry of Foreign Affairs, Specific instance procedure - Dutch National Contact Point OECD Guidelines for MNEs (2016); see also OECD Watch, Model National Contact Point (2007) 15 <http://www.oecdwatch.org/publications-en/Publication_2223>.

[8] Canadian National Contact Point, Final Statement on the Request for Review regarding the Operations of China Gold International Resources Corp. Ltd., at the Copper Polymetallic Mine at the Gyama Valley, Tibet Autonomous Region (2015) <http://www.international.gc.ca/trade-agreements-accords-commerciaux/ncp-pcn/statement-gyama-valley.aspx?lang=eng>.

[9] Ministry of Foreign Affairs, National Contact point OECD Guidelines <http://www.oesorichtlijnen.nl/en>.

[10] Norwegian Ministry of Foreign Affairs, Corporate social responsibility in a global economy (June 2011), 3 <http://www.regjeringen.no/pages/2203320/PDFS/STM200820090010000EN_PDFS.pdf>.