SOMO welcomes game-changing Dutch bill on mandatory due diligence
There are several aspects of the bill that SOMO finds particularly important and that give the bill the potential to have a significant impact in improving working conditions, respect for human rights and the environment, and access to justice in global value chains.
Effective access to remedy and justice
..The bill provides for multiple new avenues for seeking remedy and justice by way of administrative, civil, and criminal liability regimes. Companies have a duty to remediate or enable remediation of harms they cause or to which they contribute. If they fail to so, they are subject to an administrative penalty that accrues each day that the company remains in breach of its duty. In addition, individuals or organizations seeking to protect human rights and the environment that consider that a company has caused harm as a result of its failure to comply with its due diligence obligations can file suit in civil court to hold the company liable for that harm. Finally, the bill contains a provision on criminal liability for “economic offenses” committed by corporate board members responsible for repeated breaches of the law.
Full value chain and downstream impacts in scope
The bill obligates companies to identify and address negative impacts in their own operations and throughout their value chains...
Climate change and harmful climate impacts
...Importantly, the proposal explicitly covers “climate change”...
Financial sector in scope
The bill covers all types of financial sector companies, including banks, investors, and pension funds. Companies providing financial products and services have the same obligation to conduct due diligence and address risks and impacts in their value chains as other companies.
...Importantly, the bill specifies that responsible disengagement means that when exiting a relationship or situation, companies must identify and prevent or mitigate adverse impacts associated with the disengagement itself and remediate past harms the company caused or contributed to; cutting and running is a breach of the due diligence duty...
Dynamic, not static, responsibility
The bill recognises that a company’s relationship to an adverse impact, and its responsibility to address it, can shift over time depending on the adequacy and effectiveness of the company’s due diligence. This means that if a company is unsuccessful in convincing a business partner to stop harmful behaviour, but nonetheless decides to stay in the relationship, it may, over time, be considered to be contributing to the impact, not merely linked to it.
Collaboration possible, but companies remain individually responsible for due diligence
Companies can collaborate in conducting due diligence, for example through multi-stakeholder initiatives or industry schemes. However, the bill is crystal clear about the individual responsibility of each company for addressing risks and impacts throughout its value chain.