While energy companies around the world are becoming aware of the possibility of being sued in domestic courts for human rights offenses that their global subsidiaries have allegedly committed, there is another important forum for these complaints that energy companies should be aware of: National Contact Points (NCPs). NCPs are hearing more and more complaints related to energy companies, giving a voice to those opposing their actions, and putting these grievances at the forefront of the public’s attention. Energy companies and their attorneys should pay attention to these emerging matters, and take seriously any complaints lodged with their local NCP.
NCPs are a product of the OECD Guidelines for Multinational Enterprises, a set of international best practices created in 2000, which provide standards for responsible business conduct consistent with applicable laws. While the OECD Guidelines are non-binding, they are intended to be implemented at a national level by OECD member states (which includes the United States). The OECD Guidelines called for the creation of agencies that concerned parties could use to lodge public complaints against businesses with respect to alleged human rights violations. OECD member states, including, among others, Australia, France, Germany, Switzerland, the United Kingdom and the United States, have created NCPs, and these NCPs have investigated complaints lodged with them by concerned parties.
NCPs do not generally have the power to impose binding sanctions on companies. However, that does not mean that companies should take these NCPs lightly. Over time the use and functions of NCPs have evolved, with the upward trend of NCPs making more concrete recommendations and engaging with the viewpoints of all concerned parties. Some noteworthy public investigations involving energy companies that NCPs have heard throughout the past decade include:
2008 Irish/Dutch NCPs
An early example occurred in August 2008, when a pressure group based in Irelandfiled a complaint against a consortium of energy companies led by a large international energy company based in the Netherlands. The complaint alleged health & safety and environmental issues, as well as human rights violations related to a gas project located in Ireland. The Irish and Dutch NCPs agreed to hear the case through a grievance mechanism known as the “Specific Instance” process. A Specific Instance raises a complaint about conduct by an enterprise that is alleged to be inconsistent with the recommendations contained in the OECD Guidelines. The NCPs also informed the NCPs in Norway, the United States, and Canada, based on the nationality of other companies in the consortium. After a failed attempt by the Irish government to mediate the complaint, the NCPs issued their final statements in August 2010.
In doing so, the Irish and Dutch NCPs stated that it was beyond the NCPs’ competence and mandate to draw conclusions on the validity of location of the processing facility, and instead focused on the issue of due diligence by the consortium. The NCPs concluded that in the early stages of the project, dialogue with stakeholders was not in accordance with the spirit of the OECD Guidelines, but since 2005 the consortium improved its practice and showed willingness to address health and safety concerns. The complainants expressed concern that the NCP did not consult with local residents in making their recommendations.
Since this early example, other NCPs have taken stronger stances against energy companies, indicating a trend in holding these companies accountable for their alleged human rights violations.
2013 French NCP
In October 2013, the French NCP (in parallel with several French courts and the administration in charge of labor issues) investigated an energy company operating in France following a request for review submitted by three French trade unions. The unions alleged that the group breached the general policies and the provisions on employment and industrial relations of the OECD Guidelines.
While the NCP found that the conflict in question had already been settled, it determined that the company had not been in compliance with these provisions of the OECD Guidelines between February and July 2013. The NCP closed the case following the initial assessment and sent recommendations to the company related to its due diligence processes, and emphasized the gravity of the previous violations.
2015 Swedish NCP
On April 30, 2015, two local Senegalese NGOs, Lumière Synergie pour le Développement and Takkom Jerry Plyvalence Culturelle et Environnmentale, filed complaints at the Swedish NCP against a Stockholm-based company that offered process and power systems, engineering consultancy and project development services. Takkom Jerry, a community in the vicinity of Dakar, impacted by the coal-fired power plant that the company had proposed, alleged that the Swedish company breached the OECD Guidelines by not taking sufficient measures to avoid potential negative impacts of power plant, for not meaningfully engaging with the local communities whose livelihoods have been put at risk and for acting upon an outdated environmental and social impact assessment from 2009. The complaint also alleged that community members who had already been adversely impacted by the project and were resettled had not been compensated.
The NGOs requested that the Swedish NCP facilitate a dialogue aimed at bringing the company’s behavior in compliance with the OECD Guidelines. They additionally suggested that the company relocate its power plant.
The Swedish NCP issued its initial assessment of the case seven months after receiving the complaint. After evaluating the complaint, the Swedish NCP decided to accept the case for further consideration and began consulting with the parties about the issues raised, though its findings have not yet become public.
2017 Dutch NCP
On May 8, 2017, Oxfam Novib, Greenpeace, BankTrack and Friends of the Earth Netherlands filed a complaint against a Dutch Bank with the Dutch NCP. The organizations claimed that the Bank violated the OECD Guidelines in the area of environment and climate change by continuing to lend billions of dollars to fossil fuel companies, with no plans to reduce the greenhouse gas emissions resulting from its finance. They additionally claimed that the Bank failed to sufficiently commit and contribute to the targets set in the international climate agreement concluded in Paris in 2015.
On November 14, 2017, the Dutch NCP published its initial assessment and accepted the case for further examination. While accepting the case, the NCP stated that it was “conscious of the complexity of this subject, not least in respect to the methodology currently in development to calculate C02 emissions. However this should not prejudice a dialogue with respect of this notification, all the more so since ING indicates that climate change is an immense challenge for the world and one in which banks also have a role to play. The NCP therefore takes the view that consideration of this notification could contribute to the purpose and enhance the effectiveness of the Guidelines, in the sense that it can clarify issues relating to climate change in the financial sector in respect of due diligence, and more particularly in respect of this specific instance.”[1] All parties expressed their willingness to participate in mediation.
2018 French NCP
On February 8, 2018, representatives from the Union Hidalgo in Mexico filed a complaint with the French NCP against Electricity of France for breaching the OECD Guidelines. The complainants allege that EDF and its subsidiary in Mexico, Eolico de Oaxaca, violated the indigenous community of Union Hidalgo’s right to free, prior and informed consent (FPIC) with the possible construction of a wind farm on their land, EDF’s fourth wind park in Mexico.
The complainants asked the NCP to offer mediation to discuss the human rights violations and ensure that the company act in compliance with the OECD Guidelines and with its responsibility to ensure dialogue with the community. The matter is currently pending, leaving open the question of how the French NCP would treat the alleged FPIC violation of a French company operating abroad.
As evidenced by the above matters, the role of NCPs is evolving, as they move towards becoming a more popular and inclusive option for complainants. In many jurisdictions, the NCPs take their functions seriously, and investigate the complaints they have received. The results of the investigation may severely impact the bottom-line through public shaming, reputational harm, and the sharing of material gathered by the NCP to potential litigants. Energy companies and their attorneys should monitor this trend and take seriously any possible complaints lodged with their NCP.
[1] Initial Assessment Notification Oxfam Novib, Greenpeace, BankTrack, Friends of the Earth Netherlands (Milieudefensie) vs ING, Ministry of Foreign Affairs of the Netherlands, National Contact Point, OECD Guidelines for Multinational Enterprises, Nov. 14, 2017. Available at: https://www.oecdwatch.org/cases/Case_476/1675/at_download/file
