NL – HR Due Diligence
Explicit references to human rights due diligence are highlighted in this section. However, measures to realise specific elements of human rights due diligence can be found in large number of sections of the Netherland’s 2nd NAP.
Pillar I
Central government procurement and private-sector instruments
Government procurement
“The government’s central procurement strategy includes the International Social Conditions (ISCs). These have applied to all EU contract award procedures since 2017 and aim to establish more sustainable international supply chains by preventing or responding to risks related to working conditions, human rights and the environment. The ISCs are one of the contractual conditions obliging contractors to apply due diligence.“ p. 31.
LINE OF ACTION 3: Improve policy coherence
“This includes both administrative and substantive improvements. For example, central government website content should be consistent in its message about legislation and procurement policy. Other points of focus include how ISC procurement policy relates to the approach set out in the UNGPs and to due diligence policy as set out in the OECD Guidelines. Existing documents on ISC policy such as guidelines and specifications will, where possible, be brought in line with the OECD Guidelines for Multinational Enterprises and the UNGPs. ….” p. 33.
Including ‘business and human rights’ in the Netherlands’ foreign policy
Integrating responsibilities in conflict areas and fragile states into policy
“States should pay particular attention to the human rights risks that can occur when enterprises conduct business in conflict areas, and help ensure that businesses do not exacerbate existing risks. States must also take action against businesses which become involved in human rights abuses. Although the due diligence procedures described in the UNGPs and the OECD Guidelines are not fundamentally different for conflict areas (the guidelines are based on proportionality, so the higher the risk, the more complex the procedures), the Dutch government notes that there may be extra risk of human rights abuses. This is in line with the report on doing business in conflict areas by the UN Working Group on Business and Human Rights, which states that ‘heightened’ due diligence is required in conflict areas. Dutch efforts in fragile states and conflict areas are therefore partly based on a ‘conflict-sensitive approach’. This approach aims to take better account of the unforeseen effects of business activities in the community and to ensure that activities do not exacerbate existing conflicts or lead to new ones.
The Netherlands is committed to collaborating with other donors and organisations in making joint analyses which include a gender dimension. An example here is Dutch investment in the International Finance Corporation’s (IFC) Conflict Affected States in Africa (CASA) initiative. A conflict-sensitive approach to private sector development was central in the 13 fragile states in which this IFC project was implemented. Furthermore, the European Conflict Minerals Regulation, which came into effect in January 2021, requires all EU businesses importing certain metals and minerals to apply due diligence. All EU member states must appoint a national supervisory authority to monitor businesses’ compliance with this Regulation. In the Netherlands this is the Human Environment and Transport Inspectorate (ILT). Regular meetings between the European Commission and member states aim to ensure uniform implementation of the Regulation.
The Ministry of Foreign Affairs has drawn up conflict sensitivity guidelines for private sector development for its staff in The Hague and at its embassies around the world as well as for employees of implementing partners, with the aim of making conflict sensitivity a cross-cutting component of Dutch foreign policy. The guidelines explain the possible context-specific risks and responsibilities of conducting business in conflict-sensitive regions. Conflict-sensitive policy requires the early identification of conflict and instability risks (early warning) so that these can be addressed in a timely manner (early action). The involvement of local stakeholders is advisable here. … The government guidelines will, when applicable, be addressed in embassies’ Multiannual Country Strategies, with implementing organisations and in dialogue with the Dutch business community in order to improve the integration of conflict sensitivity into Dutch foreign policy. Furthermore, conflict sensitivity guidelines for the Dutch business community will be drawn up in collaboration with companies, NGOs and implementing organisations, with an additional focus on Dutch SMEs. These guidelines can be used to carry out
the contextual analyses that businesses need to complete before doing business in such areas. As noted in chapter 2 of this NAP, businesses and implementing organisations share this responsibility with governments. Businesses are thus likewise expected to assume responsibility, especially in relation to conflict areas and fragile states.
The RBC support office for Dutch businesses abroad can provide a means of disseminating the forthcoming conflict sensitivity guidelines for the business community more widely.” pp. 43 and 44
Pillar II
Due diligence at EU level
“A general due diligence obligation, ideally at European level, is the key element in the smart mix of RBC measures. This obligation should not only promote RBC but also respect a level playing field for businesses, prevent fragmentation and enhance impact. The government therefore welcomed the publication on 23 February 2022 of the European Commission’s proposed Corporate Sustainable Due Diligence Directive (CSDDD). This proposal is the first step towards European legislation. It aims to encourage businesses to contribute to respect human rights and the environment in their own operations and throughout their value chains.
The Netherlands also has its own responsibilities. The 2021-2025 coalition agreement ‘Looking out for each Other, Looking Ahead to the Future’ details agreements committing the Netherlands to encouraging RBC legislation in the EU and to introducing national RBC legislation that promotes a level playing field with neighbouring countries and implementation of forthcoming EU legislation. The Commission’s proposal will therefore form the basis of a national policy proposal, in anticipation of the forthcoming CSDDD.
The aim is for the two proposals to run parallel to each other, so that any anticipated changes to the draft Directive can be included in the national legislative process. The proposed EU Corporate Sustainability Reporting Directive (CSRD – see next section) is also relevant in relation to due diligence. This revised Directive will require a larger number of businesses to be transparent in their reporting on relevant sustainability criteria and the due diligence processes applied. In addition to this legislative proposal on reporting, the inclusion of a due diligence process is an approach used in several EU instruments, such as the proposal for an EU Regulation to combat deforestation, the planned Batteries Regulation and the Conflict Minerals Regulation referred to above.” p. 55
Corporate Sustainability Reporting Directive (CSRD)
“Non-financial reporting obligations were applicable to all listed companies with more than 500 employees since 2017. The annual report of these companies must include information on how they respect human rights. The European Commission’s recent legislative proposal on CSRD requires a greater number of businesses than before to provide information on the impact of sustainability factors on the company as well as the company’s impact on people and the planet. The draft Directive’s scope includes all large credit institutions and insurance companies, all large enterprises and all listed companies, with the exception of listed micro-companies. In line with the UNGPs, accountability should be given of the due diligence process, including a description of any negative impacts in the company’s value chain resulting from its own activities or from its business relations and supply chain. The Commission’s proposal is that large, listed companies and other large enterprises, banks and insurance companies should start reporting as of financial year 2023, and small and medium-sized listed companies as of financial year 2026.” p. 56
| ACTION POINTS PILLAR 1 | Aim | Responsible party | Timeline |
| Due Diligence and CSRD | |||
| Negotiate ambitious due diligence legislation at EU level within existing frameworks. | Implement suitable due diligence legislation at EU level. | BZ | From 2022 |
| Develop national due diligence legislation mindful of maintaining a level playing field with neighbouring countries and of the implementation of potential EU legislation | Improve application of RBC by businesses via both EU and national legislation. | BZ | 2022-2025 |
| Negotiate the Corporate Sustainability Reporting Directive (CSRD) | National implementation of reporting obligations in line with the CSRD. | J&V, FIN | The Directive is expected to be adopted by EU legislators in 2022. |
Sector-wide cooperation
“… The government aims to continue to encourage sector-wide initiatives aimed at implementing due diligence and at raising its impact on specific themes or value chains, in line with the OECD Guidelines and the UNGPs. By collaborating with civil society organisations, businesses can impact the value chain by making linkages and jointly increasing their influence. There is a connection between the development of financial support mechanisms for sector-wide due diligence and the development of the other components of the RBC policy mix, particularly legislation. A supervisor authority role requires a change in the government’s role in sector-wide cooperation on due diligence. This means it is time to discontinue the RBC agreements in their current form. The government will continue to be part of the current RBC agreements for the agreed time frame and will continue to participate in ongoing negotiations towards the end. As part of the RBC policy mix, the new instrument for sector-wide cooperation aims to facilitate the implementation of due diligence by businesses through collective action on one or more steps of the process.” p. 58.
| ACTION POINTS PILLAR 2 | Aim | Responsible party | Timeline |
| Sector-wide Cooperation | |||
| Define the frameworks for sector-wide cooperation as part of the RBC policy mix. | Support sector-wide cooperation in order to apply due diligence. t | BZ | 2022 |
p. 59.
RBC support office
“The new RBC support office will form a one-stop shop for RBC policy by supporting all businesses, including those that do not (as yet) fall under the scope of current legislation, in their application of due diligence. In addition to its informative role, other instruments such as grants can also be entrusted to the support office. The support office can provide resources to businesses and promote knowledge exchange between businesses and the embassy network.
Services offered by the RBC support office may include:
• Supporting businesses in the implementation of the OECD Guidelines and the UNGPs, including providing information and guidance through the different steps of the due diligence process.
• Offering and providing risk-specific knowledge and expertise, for example about major RBC risks such as the right to form trade unions and bargain collectively, a living wage, combating child labour and gender-related risks, or about RBC risks in specific sectors or geographic regions.” P. 59.
| ACTION POINTS PILLAR 2 | Aim | Responsible party | Timeline |
| RBC Support Office | |||
| Define the frameworks for sector-wide cooperation as part of the RBC policy mix. | Support sector-wide cooperation in order to apply due diligence. | BZ | March- August 2022 |
| Set up the RBC support office. | Support businesses in their application of due diligence. | RVO | From September 2022 |
p. 60
Pillar III
Introduction
“The UNGPs stipulate that a state’s obligation to protect against human rights abuses by companies includes the duty to take appropriate judicial, administrative, legislative or other steps to ensure that when such abuses occur within their territory or jurisdiction those affected have access to effective remedy. …
The proposed due diligence legislation will strengthen this ecosystem, creating a stronger legal basis on which to call European businesses to account regarding any violations. The due diligence legislation will also require businesses to comply with step 6: setting up a complaints mechanism. These efforts to strengthen both state-based and non-state-based mechanisms will lead to the creation of an ecosystem for remedy for affected parties.” p. 62.
Strengthening complaints and dispute mechanisms
“The government expects businesses to conduct due diligence in accordance with the OECD Guidelines as described in Pillar 2. This includes the responsibility of businesses to address negative consequences via a complaints or dispute mechanism. Step 6 of the due diligence process (provide or cooperate in remediation) also contributes to the non-state-based component of the due diligence ecosystem.
Dutch companies often have an internal complaints mechanism for employees. A complaints and dispute mechanism as described in the UNGPs should, however, also be accessible to all actually or potentially injured parties outside the company. This prevents legal proceedings and plays an important role in prevention, as it offers scope to report evidence of abuses and thus prevent escalation. Businesses themselves can use the information from complaints, as part of their due diligence process, to identify negative consequences of their activities. An effective complaints mechanism can thus help trace systemic problems.
The NBA concluded that dispute settlement (including the results of dispute settlement) and remedy organized by businesses themselves still receive little attention. This is in line with the monitoring study into the application of the OECD Guidelines by businesses in the Netherlands, which showed that so far only very few businesses are working on offering access to remedy.
The government points out that providing access to remedy is an essential step in the OECD Guidelines and must form part of a broad obligation to conduct due diligence. To this end the government will continue in the years ahead to encourage the establishment of complaint and dispute mechanisms as an element of access to remedy.” p. 67.
Access to remedy in sector-wide cooperation
“The instrument for sector-wide cooperation will support businesses in collaborating on due diligence processes. Establishing a collective complaints mechanism may be one form of collaboration. See Pillar 2 for more details of sector-wide cooperation. As stipulated by the UNGPs and the OECD Guidelines, businesses have an individual responsibility to establish a functioning complaints and disputes mechanism and it is the responsibility of the supervisory authority to call individual businesses to account where necessary. Businesses may find it logical to work with other companies on this obligation, as sector-wide collaboration agreements can help participating businesses set up complaints mechanisms and make them accessible. This can contribute towards lower costs, increased efficiency and greater independence.” p. 67.