Netherlands

Current policy [page 9]

(…) In its letter ‘CSR Pays Off’ the government identifies its tasks in relation to ICSR. They are:

• to ensure that CSR frameworks are as clear as possible and that companies are informed about them;
• to promote a level playing field for Dutch business;…
• to hold other government authorities to account for their responsibilities, e.g. through economic diplomacy;
• to promote a transparency and stakeholder dialogue;
• to set a good example – by pursuing sustainable procurement policies, for instance.

The letter ‘CSR Pays Off’ also focuses on promoting business responsibility to respect human rights, the second pillar of the Ruggie Framework.

We can achieve the most if parties with different interests and target groups have a shared agenda and work together. Where the government can offer added value, it will bring parties and interests together. For example, through sector risk analysis it can check high-risk Dutch sectors for due diligence, enabling companies, civil society organisations and other stakeholders in these sectors to join forces.

The policy letter ‘Respect and Justice for All’ endorses the importance of integrated implementation of the Ruggie Framework and points to the responsibility of the business community in this respect. Credibility is an important element of Dutch human rights policy. The Netherlands Institute for Human Rights can monitor whether relevant legislation complies with the Netherlands’ human rights obligations. It has entered into a dialogue with companies and non-state actors on this issue. The Institute monitors policy, provides independent advice and researches human rights issues.

Agreements to improve working conditions in the agriculture and horticulture sectors [page 10]

The government has made agreements with the Dutch Federation of Agriculture and Horticulture and the grocery retail industry’s sector organisation on tackling abuses with conditions of employment and working conditions in the agriculture and horticulture sectors. The agreements apply to mushroom and strawberry production, the glasshouse horticulture sector and tree nurseries, all of which are high-risk sectors. Supermarkets will no longer source products from growers using employment agencies that do not possess the relevant Netherlands Standardisation Institute (NEN) certificate. In choosing their suppliers, supermarket buyers will devote specific attention to conditions of employment and working conditions. They will receive information on this matter from the Social Affairs and Employment Inspectorate. The Ministry of Social Affairs and Employment is now amending legislation so that imposed fines can be made public.

 3. Results of the consultations and government response

3.1 An active role for the government [page 13]

“(…) As the government pointed out in its policy letter ‘CSR Pays Off’ and as is discussed under point 3 below on due diligence, the challenge in the next few years will be timely identification of risks in Dutch companies’ supply chains. The government wants to work on structural solutions within international chains, not incident management.”

BOX – Cooperation with the Dutch textile sector [page 14]

At a conference held on 20 June 2013, the sector organisations representing Dutch textile companies presented an action plan to tackle abuses in the production of clothing. (…) . The Minister for Foreign Trade and Development Cooperation has called on textile companies to commit to the plan. She has entered into dialogue with the sector on its implementation, and on opportunities to conclude a voluntary CSR agreement on textiles, for which the action plan forms a good starting point.

 3.3 Clarifying due diligence [page 21]

In the 2011 update of the OECD Guidelines, the recommendation to apply due diligence was extended to the CSR domain. In all its communications with and conditions for the business community, the government uses the OECD Guidelines as its framework of reference for ICSR. Companies must take account of the potential social impact of their activities. Due diligence is thus the most important new element in the CSR policies of companies operating internationally and/or within international supply chains.”

Raising companies’ awareness [page 22]

The aim of the information strategy described in the policy letter ‘CSR Pays Off’ is to raise companies’ awareness of the need for due diligence. As an earlier study showed, SMEs operating internationally mainly need practical information. There are various aids for companies wishing to apply due diligence, and new ones are currently being developed, by the Social and Economic Council (SER), for instance. The government also has a role to play in making information and aids accessible. The knowledge centre CSR Netherlands plays an important role, while NL Agency and the embassies are major sources of information for companies operating at international level.

The government supports the SER with a grant for workshops to help companies shape the human rights component of their CSR policies, and to assist them in charting and prioritising the risks they face. These workshops are organised by SHIFT, a non-profit organisation set up with Professor Ruggie’s support to help companies and government authorities put the UN Guiding Principles into practice. The SER has also been given a grant to investigate whether the ISO 31000 risk management standard is applicable to CSR due diligence. It is essential for companies to have access to all available information on due diligence.”

BOX – CSR Risk Check

Using a grant from the Minister for Foreign Trade and Development Cooperation, CSR Netherlands has developed the CSR Risk Check for companies wishing to apply due diligence. Based on the sector and country in which a company is operating, this internet tool provides an indication of possible social impacts. CSR Netherlands works with the agency responsible for carrying out Sector Risk Analyses to harmonise the information on which the two instruments are based. This information will be used in the course of 2014 to compile sectoral world maps on which colour coding will be used to indicate whether a certain theme (e.g. child labour, discrimination of women) plays a role in a given country or region.”

One of the suggestions made during the consultations was to involve educational institutions in transferring knowledge, so that on graduating future entrepreneurs and managers will be aware of business responsibility for social impacts. The government feels that this would provide added value, and is now investigating which courses should take knowledge of business ethics and CSR on board.

Embassies are the spider in the web linking companies, government authorities and civil society organisations. They are thus in an excellent

position to inform Dutch companies abroad about the OECD Guidelines and the UN Guiding Principles. In the past few years, many embassies have worked to promote human rights within the framework of international enterprise. In March 2012, the embassy in Astana (Kazakhstan) organised a roundtable meeting on CSR. It was a great success, not least because it was attended by delegations from many Kazakh companies and government agencies as well as by ministry representatives and members of parliament.

The embassies bring Dutch and local entrepeneurs and civil society organisations together and are active in providing information on CSR,

human rights themes, the OECD Guidelines and National Contact Point (NCP) procedures. They can also identify country-specific risks. The CSR passport, a booklet for embassy staff with information on the OECD Guidelines, human rights and due diligence, is currently being updated.

Sector Risk Analysis [page 24]

An issue raised during the consultations was that the government should help companies to take a proactive approach in identifying risks to human rights. As announced in the CSR policy letter, Sector Risk Analysis has been introduced to identify the sectors that present the greatest risk of adverse social impacts and where priority should be given to strengthening company policy in relation to them. This forms part of the Dutch government’s due diligence towards the business community. In this way, it is helping the business community to fulfil its responsibility to apply due diligence on CSR. Both the business community and civil society organisations will be closely involved in the analysis. The government will enter into dialogue with the sectors identified in the analysis to explore how the situation can be improved. Human rights issues may also be raised. The government will report to the House of Representatives on progress with the project in early 2014.

Where specific issues relating to human rights and the Dutch business community play a role, the government will enter into dialogue with the companies concerned.

The government has reached agreement with a number of sectors on the subject of due diligence. Agreements with, for example, the textile sector and energy companies are now in preparation. The government is willing to remove obstacles identified by the companies concerned. It will support them in upscaling initiatives to international level – e.g. through the Better Coal Initiative dialogue – and will work for a level playing field for Dutch companies. The contents of these voluntary CSR agreements will depend on the nature of the problem, the degree to which the sector is organised and whether companies commit to achieving certain results or making certain efforts. The Minister for Foreign Trade and Development Cooperation and the Minister of Economic Affairs have requested the SER to advise them on effective CSR agreements with the business community. The SER is expected to issue its recommendations in early 2014. The sectors with which the government plans to enter into voluntary agreements will be announced in mid-2014.

Sector Risk Analysis

BOX- Land grabbing in Brazil [page 24]

Several Dutch financial institutions were recently linked through an investment partner to landgrabbing in Brazil. The Minister for Foreign

Trade and Development Cooperation immediately contacted the Dutch and Brazilian institutions concerned, and had talks with high-level

representatives of ABN AMRO Bank, the ABP Pension Fund, Aegon, the Entrepreneurial Development Bank (FMO), ING Bank, the Dutch Banking Association, the Federation of Dutch Pension Funds, PFZW pension fund and Rabobank. They discussed the need for greater transparency with regard to loans and investments, and had a constructive exchange of views on participation of Dutch financial institutions in multi-sector consultations on better land and land-use rights.

Legally binding measures [page 28]

The consultations failed to produce consensus on whether the obligations of Dutch companies in relation to CSR are adequately regulated by law, or whether more specific provisions are necessary. An independent committee will be asked to look into this matter, taking the following issues into consideration:

• relevant Dutch legislation and interpretations in case law;
• the situation in neighbouring countries (level playing field);
• the effects of legislation on companies and the business climate.

3.4 Transparency and Reporting

Reporting [page 29]

As it points out in its policy letter ‘CSR Pays Off’, the government supports the European Commission’s proposal to amend accounting legislation in relation to non-financial reporting. Large companies will be required to disclose information on human rights, environmental matters, social and employee-related matters and corruption. The proposal affects some 600 companies in the Netherlands, which together account for considerable social impact. The new Directive will ensure a level playing field at European level. What is more, it will place a limited administrative burden on the business community, since it is non-prescriptive as regards information provision, and works on the basis of the ‘apply or explain’ principle.

The Netherlands pursues an active policy of encouraging social reporting through the transparency benchmark. This benchmark is carried out every year on the instructions of the Ministry of Economic Affairs to give the 500 largest Dutch companies a rating for transparency on sustainability and CSR. The benchmark’s criteria have been updated and brought in line with international developments such as the UN Guiding Principles and the European Commission’s proposal for a new Accounting Directive. The Transparency Benchmark will now apply to the 600 companies referred to in this proposal(…)

The government continues to call companies’ attention to the need to comply with the Corporate Governance Code and the principle that members of the management and supervisory boards should take account of CSR in fulfilling their duties. The government has pointed out that CSR should be part of the entrepreneurial spirit. It is therefore essential to devote serious attention to CSR within the existing structures and responsibilities of the management and supervisory boards. Their reports should also include more information on their CSR policies.

During the consultations, attention was again requested for the Production and Supply Chain Information (Public Access) Act (WOK). With this legislation, consumers, members of the public, civil society organisations and other parties who ask companies about the origins of their products and services would be assured of an answer. On the basis of the results of a study by Panteia/EIM15 in 2009, the government then in office concluded that implementation of the WOK was technically feasible, but that it would entail high costs for the business community, and its enactment would probably run into international legal obstacles. In this light, the government does not feel that this is the right time to enact such legislation, and points to the increasing availability of information on supply chains through instruments such as the Sustainable Trade Initiative and the Sector Risk Analysis project. The SER also devotes considerable attention to promoting supply chain transparency and responsibility in its ICSR committee. Moreover, it is possible to report to the NCP on companies that are insufficiently transparent for a constructive dialogue on CSR.

BOX – Burma

(…) To promote responsible investment, the Netherlands supports the Myanmar Centre for Responsible Business, a local platform for the development and coordination of capacity for business and human rights among all relevant actors in Burma. The platform focuses on promoting and enabling responsible investment in Burma, in accordance with the UN Guiding Principles. To this end, it supplies knowledge, tools and training to enable companies, investors, government authorities and civil society organisations in Burma to fulfil their roles. Through dialogue and consensus, it is drafting criteria to enable companies and investors to pursue effective human rights policies.

4. Action Points

Clarifying due diligence [page 42]

• The government will enter into dialogue with educational institutions providing courses in management-related studies on including business ethics and/or CSR in their curriculums.
• The government supports the SER with a grant for workshops to help companies shape the human rights component of their CSR policies, and to assist them in identifying and prioritising the risks they face. The SER has also been given a grant to investigate whether the ISO 31000 risk management standard is applicable to CSR due diligence.
• The government has entered into talks with Global Compact Netherlands on a follow-up to its publication ‘How to do Business with Respect for Human Rights’ (2010).
• The Ministry of Foreign Affairs will shortly provide an interministerial training course for civil servants whose work calls for knowledge of the UN Guiding Principles, and a refresher or other course for implementing organisations on the significance of the OECD Guidelines for companies.
• In 2014 an independent committee will investigate whether the obligations of Dutch companies in relation to CSR are adequately regulated in Dutch law, and in accordance with the UN Guiding Principles. The committee will take into account the relevant case law, the situation in neighbouring countries and the business climate.”

Transparency and reporting

• The voluntary CSR agreements reached with the sectors selected through the Sector Risk Analysis project will focus on transparency, dialogue with stakeholders and monitoring of agreements.
• The government will continue to call companies’ attention to the need to comply with the principle contained in the Corporate Governance Code that members of the management and supervisory boards should take account of CSR in fulfilling their duties and that their reports should include more information on their CSR policies.