Commentary, Danish NCP Advances Due Diligence Obligations of OECD Guidelines in Rana Plaza Case

Abstract

The case concerns a complaint by Clean Cloth Campaign Danmark and Aktive Forbrugere (Active Consumers) to the Danish OECD National Contact Point (NCP) regarding the activities of PWT Group. The complaint alleged that PWT Group had violated the OECD Guidelines for Multinational Enterprises by failing to carry out due diligence in relation to its supplier, the textile manufacturer New Wave Style Ltd. of Bangladesh. New Wave Style was housed in the Rana Plana Complex in Bangladesh, which collapsed in 2013, killing more than a thousand textile workers. The NCP found that PWT had indeed violated the OECD Guidelines, first, by not using risk and decision-making systems, such as checklists, in connection with inspections and visits with its supplier at Rana Plaza and, second, by failing to demand that the supplier ensure its employees’ basic human and labor rights, including taking adequate steps to ensure occupational health and safety in their operations. The inspection of the supplier’s work site building structures revealed no violation of due diligence in that no incorporated or established practice was in place at the time of the accident. The NCP found that practice per se can be indicative but is not conclusive in regard to the scope of risk-based due diligence.