National Guidelines for Responsible Business Conduct

The IICA has provided technical assistance to prepare the National Guidelines 2019, called the National Guidelines for Responsible Business Conduct (NGRBC). The IICA is providing handholding for the preparation of the NAP, a key requirement of the UNGP. The United Nations Guiding Principles on Business and Human Rights (UNGPs) were adopted by the UNHRC in 2011. Broadly, the UNGP framework is built on three pillars: (a) State’s duty to protect human rights; (b) corporate responsibility to respect human rights; and (c) access to effective remedies for business-related human rights abuses. In June 2014, the UNHRC called upon its member States to develop a National Action Plan to promote the effective implementation of the UNGPs. India has already undertaken several measures aligned to the UNGP principles much before the UNGPs were formulated. These have been captured in the Zero Draft of the NAP placed on the public domain by the Ministry of Corporate Affairs (MCA). The IICA had provided technical assistance to the MCA to develop the Zero Draft.

Pillar II deals with the responsibility of businesses to respect human rights in their operations. In 2009, before CSR was a statutory requirement and prior to the formulation of UNGPs, MCA had issued the CSR Voluntary Guidelines that was aimed at nurturing the ‘culture of social responsibility’ in businesses. In 2011, based on feedback from various stakeholders, MCA decided to issue 2011 NVGs, which are a comprehensive set of guidelines that encompass social, economic and environmental responsibilities of businesses. Based on the NVGs the SEBI crested the Business Responsibility Reporting Framework (BRRF) for top 500 companies in the Stock Exchange.

The MCA has issued the 2019 NGs. Notably, the 2019 NGs which are also voluntary in nature have been drafted with a view to align it with the UNGPs. The 2018 NGRBCs are designed to be used by all businesses, irrespective of their ownership, size, sector, structure or location. It further provides that businesses investing or operating in India, including foreign multi-national corporations are expected to follow these guidelines. The 2019 NGs reiterate the need that businesses should not only follow the 2019 NGs in business contexts directly within their control or influence but also encourage and support their suppliers, vendors, distributors, partners and other collaborators to follow the 2019 NGs.

Annexure 3 of the 2019 NGRBCs contains the reporting framework and consists of 3 sections: (a) Section A – General Disclosures, covering operational, financial and ownership related information, (b) Section B – Management and Process Disclosures covering the structures, policies and processes to integrate the Guidelines and (c) Section C – Principle-wise Performance Indicators covering how well businesses are performing in pursuit of these Guidelines. This section is aimed at helping businesses demonstrate their performance in integrating the Principles and Core Elements with key processes and decisions. The information sought is categorized as “Essential” and “Leadership”. While the essential level is expected from every business that has adopted these Guidelines, the leadership level is expected of businesses which aspire to progress to a higher level in their quest to be socially, environmentally and ethically responsible.