Dutch Agreements on International Business Responsibility

Since 2014, the Dutch government has been active in developing semi-voluntary sector-based agreements on how to address risks relating to international responsible business conduct. The following section provides an overview of these initiatives.

1. Background

2. Which agreements have been concluded?

3. Upcoming developments

4. Further information on mandatory due diligence duties re child labour

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1. Background

Economic globalisation has meant that production increasingly takes place in locations where comparative advantage allows for lower production cost. A large number of international Dutch companies operate in industry sectors where production-related risks related to human rights (including labor rights), environmental impacts, and other negative impacts covered by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles are high. However, developments in the Netherlands, especially efforts to introduce a legal framework for a duty of care on child labour, show that regulations in the area of business and human rights are gathering momentum.

As one of the cornerstones of the Dutch National Action Plan on Business and Human Rights, the Dutch government has been active in facilitating the development of voluntary agreements on International Responsible Business Conduct (IRBC) between companies, NGOs and other partners at sector level. 

These covenants have two main goals:

1. Take steps to avoid adverse effects of and improve circumstances for groups affected by specific risks (e.g. child labour, low wages, human rights violations or environmental pollution) within a period of three to five years after an agreement has been concluded.

2. Offer a collective solution to problems that businesses are unable to solve, or solve entirely, on their own.

So far, agreements have already been concluded in several sectors and more are currently being negotiated.

Sources:

2. Which agreements have been concluded?

The following section lists the covenants that have been signed. The amount of information available on each one depends on the phase and not all is available in English. 

2.1. Dutch Agreement on Sustainable Garments and Textile

On 9 March 2016, a coalition of industry organisations, trade unions, civil-society organisations and the Dutch government presented an agreement on international responsible business conduct in the garment and textile sector. There is a particular focus on working conditions, including fighting discrimination, child labour and forced labour as well as supporting the right of negotiation by independent trade unions, a living wage, and health and safety standards for workers and on minimising the negative impact of activities on the environment.

Participating companies also provide a list of production locations used in the previous year - an important step towards increasing transparency of the supply chain and reducing the number of unknown production locations. An aggregated list of production locations can be accessed here

Further information is available on the Dutch Agreement on Sustainable Garments and Textile page of the main IRBC website. A full list of signatories and participants can be found here.

2.2. Dutch Banking Sector Agreement

On 28 October 2017, the Agreement on International Responsible Business Conduct in the banking sector was signed to ensure that, in the case of corporate lending and project financing, human rights are respected. The agreement stipulates that banks be more transparent about their investment portfolios, their client screening programmes, and their dialogue with clients in the event that they become involved in human rights violations, as well as requiring them to set up a complaints mechanism for actual or potential victims of human rights violations, as set out in the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

Further information is available on the Dutch Banking Sector Agreement page of the main IRBC website. A full list of agreement parties and adhering banks can be found here

2.3. Agreement Responsible Gold

On 19 June 2017 the Dutch gold sector along with partners (government, jewellers, recycling firms, smelting firms, NGOs and goldsmiths) agreed to work on improving international responsible business conduct across the entire gold value chain. A key focus is on improving transparency.

Further information, including facts and figures about the gold sector, is available on the Agreement Responsible Gold page of the main IRBC website. A full list of signatories and participating parties can be found here.

2.4. Agreement to Promote Sustainable Forestry

The agreement was signed on 22 March 2017 by representatives of the wood sector, the building, furniture and retail sectors, trade unions, NGOs and the Dutch government. Further information is available in Dutch here.

2.5. Agreement for the Vegetable Protein Sector

A key aim of this agreement is to make sustainably produced vegetable proteins more appealing and easily available internationally. Further information is available in Dutch here.

2.6. Agreement for the Food Products Sector

A broad coalition of parties consisting of sector organisations, trade unions, the Dutch national government, and civil society organisations signed the Agreement for the Food Products Sector to minimise risks of negative impacts, including human rights abuse and environmental damage, and work towards a more sustainable production chain. Key focus issues include child labour, low wages, supporting the right of negotiation by independent trade unions as well as occupational health and safety for workers.

Further information, including a full list of signatories and participating parties as well as the text of the Agreement in Dutch, is available on the Agreement for the Food Products Sector page of the main IRBC website.

2.7. Insurance Sector Agreement 

On 5 July 2018, the insurance sector, civil-society organisations, trade unions, the Minister of Foreign Trade and Development and the Minister of Finance, signed the IRBC Insurance Sector Agreement to clarify the international chain and thereby tackle such issues as human rights violations and environmental damage. With this agreement, Dutch insurers are among the first in the sector to enter into a broader agreement that addresses issues relating to the environment and social aspects such as corporate governance. 

Further information, including a full list of signatories and participating parties as well as the text of the Agreement in Dutch, is available on the Insurance Sector Agreement  page of the main IRBC website.

2.8. Agreement for the Pensions Funds

On 20 December 2018, a broad coalition consisting of over 70 pension funds, the Federation of the Dutch Pension Funds, non-governmental organisations, trade unions and the Dutch government, signed the Responsible Business Conduct Agreement on responsible investment by Pension Funds. The aim of this agreement is to help pension funds gain a clearer picture of the international investment chain and thus use their influence to prevent or tackle issues such as human rights violations and environmental damage. In the first year of the agreement, the parties will work to develop a toolkit to help pensions funds identify and address such risks.

Further information, including a full list of signatories and participating parties as well as the text of the Agreement in Dutch, is available on the Agreement for the Pensions Funds page of the main IRBC website.

3. Upcoming developments

To minimise the risk of human rights abuses in the production and sourcing of natural stone, Dutch and Belgian parties in the sector, NGOs, trade unions and government are currently negotiating an RBC agreement on natural stone. In anticipation thereof, several pilots are being carried out to promote the sustainable procurement of natural stone, as well as identify procurement practices that can help companies contribute actively to reducing risks in the production and supply chain, in particular the risk of child labour. More information can be found on the Natural Stone Pilots page of the main IRBC website here.

Further sector agreements currently in development include metallurgy and floriculture. For an overview see the main IRBC website here.

An evaluation of the responsible business agreements policy is to take place in 2019, after which the government will assess whether more binding measures are required. Civil society has raised concerns that there have been no serious negotiations on sector wide responsible business agreements in several risk sectors including enery and electronics as well as a lack of direct participation from companies in some of the sector agreements.

Source:

  • MVO Platform 2018

4. Further information on mandatory due diligence re child labour

On 7 February 2017, the lower house of the Dutch Parliament adopted a law introducing a duty of care to prevent child labour. As currently drafted, the “Child Labour Due Diligence Law”, would require companies selling goods and services to Dutch end-users to determine whether child labour occurs in their supply chains. If so, companies must set out a plan of action on how to combat it and issue a due diligence statement on their investigation and plan of action. If approved, the legislation would not come into effect before 1 January 2020.

A first debate was held in the Senate on 19 December 2017, and on 14 May 2019, the Senate voted to adopt the law. According to the MVO Platform, it is now up to the government to elaborate a number of important elements of the Act, in the form of General Administrative Orders. For more information see our page on the Dutch Child Labour Due Diligence Law here.

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