Speech: Responsible Business Conduct in the Extractive Sector

European Commission

[Check Against Delivery]

Karel De Gucht

European Commissioner for Trade

Responsible Business Conduct in the Extractive Sector

Informal OECD Ministerial meeting

Paris, 26 June 2014

My presence in this panel today is a testimony of the importance that the EU attaches to the issues of responsibility, accountability and transparency in the extractives sector in particular.

First, I would like to thank the OECD for its ongoing work on Responsible Business Conduct, and the OECD Secretary-General, France and the Netherlands for co-hosting and bringing together governments, business, trade unions and civil society to give impetus to this important agenda.

Resource extraction presents a range of risks and challenges for development, in the form of increased exposure to corruption, social and environmental sustainability issues, and the potential link with armed conflict and instability.

The need to reduce some of these risks by improving the governance of natural resources has gained a global profile - thanks to OECD work and stakeholder involvement - and a useful consensus is in the process of being reached. Increasingly international frameworks are set, and implementation is now of the essence.

As regards implementation, in 2013 the EU adopted its so- called Transparency Directive along the lines of the Extractive Industries Transparency Initiative (EITI) to fight corruption and encourage public reporting of company payments to governments when the exploitation of natural resources is involved. The EU also supports EITI in general through its foreign policy relations with current and prospective EITI participants.

Moreover, recently the EU stepped up non-financial reporting requirements for companies to disclose information on their policies, risk assessment and results as regards environmental matters, social and employee-related aspects, respect for human rights, as well as anti-corruption and bribery issues.

As part of its overall CSR policy, the Commission has also developed guidance for the oil and gas sector on how to implement the UN Guiding Principles for Business and Human Rights.

On due diligence and the responsible sourcing of minerals to curtail the financing of armed-groups in conflict zones, the EU recently adopted its so-called "integrated approach".

This integrated approach includes the initiative to set up an EU system for supply chain certification of responsible EU importers of tin, tantalum, tungsten and gold originating in conflict-affected and high-risk areas. We also intend to support interest in this scheme by working with the OECD to publish annual a list of global smelters that use the OECD guidance.

This initiative is firmly based on the OECD Due Diligence Guidance for responsible supply chains and is currently before European Union co-legislators. We should expect it to become law in the next Commission mandate.

The "integrated approach" also intends to provide public procurement incentives for companies carrying out due diligence for the minerals in their supply chain.

Furthermore, the EU will step up its diplomatic outreach and development cooperation to globally promote due diligence and responsible sourcing of minerals. Though our initiative captures small-scale mining to a large extent, our diplomatic outreach should also involve larger operators in the upstream part of the supply chain in particular. We can use these channels to help promote further the OECD's work in this area.

Finally, on responsible business conduct in extractive sectors, the EU supports further work to be carried out by the OECD on the "User Guide" sharing best practices on how to undertake due diligence in engaging with stakeholders to prevent and mitigate adverse impacts of extractive industries.

The collective effort that delegations have engaged in and the input of the "Global Forum on responsible business conduct" should be instrumental to this end. I look forward to learning that tomorrow's discussions have been productive.