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Dutch bill a major step towards protecting human rights and the environment worldwide

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Yesterday, four political parties submitted a bill on Responsible and Sustainable International Business Conduct in Dutch parliament. The bill proposes a duty of care for all companies in the Netherlands and an obligation to conduct due diligence in accordance with the OECD Guidelines for Multinational Enterprises for all enterprises with more than 250 employees.

Manon Wolfkamp (MVO Platform): "The submission of this bill is a major step towards the protection of human rights and the environment in global value chains. If adopted, the proposed law will contribute to better conditions for millions of people worldwide, including children and women."

The MVO Platform, the network of civil society organisations and trade unions in the field of corporate accountability in the Netherlands, has been advocating for a legal obligation for companies to address human rights violations and environmental damage in their value chains ever since it was founded in 2002.

A law on responsible business conduct is necessary to set clear standards and to end the impunity of companies that cause or contribute to violations of human rights and environmental standards, such as deforestation, the underpayment of workers and violation of trade union rights. The bill addresses negative impacts by companies’ own operations, as well as those in their value chains. Years of civil society research and policy evaluations by the Dutch government have shown that voluntary policy measures are insufficient to encourage companies to act responsibly.

Mandatory due diligence

The legislative proposal of the four parties (ChristenUnie, GroenLinks, PvdA, SP) imposes a duty of care on all companies in the Netherlands to address human rights violations and environmental damage in their value chains. Companies with more than 250 employees will be obliged to implement the six steps of due diligence, in line with the OECD Guidelines. The law will be enforced by a public regulator, which can issue financial sanctions. Repeated failure within five years to stop activities that cause or contribute to negative impacts or to provide remedy will be considered a criminal offence, punishable by fines and jail. The bill also enables third parties to hold companies liable in civil court for harms suffered as a result of a violation of the law. If adopted, the law would replace the Child Labour Due Diligence Law, which was passed by the Senate in 2019.

Strong support for legislation

There is strong support for legislation on responsible business conduct in the Netherlands, both in civil society and in the business community. Over 125 companies, civil society organisations, trade unions, religious organisations and academics support the Initiative for Sustainable and Responsible Business Conduct (IDVO), which advocates the introduction of corporate accountability legislation in the Netherlands. The business association MVO Nederland, with over 2,000 members, and a group of 50 companies also spoke out in favour of national legislation, as well as several large and small companies in Dutch media. In September 2020, the Dutch Social and Economic Council advised the government to introduce binding rules for responsible business conduct.

Contribution to EU discussions

The MVO Platform welcomes the bill and hopes it will receive wide political support after the general elections in the Netherlands next week. Manon Wolfkamp (MVO Platform): ‘Strong Dutch legislation helps to increase support in the EU for an ambitious European Directive. It also provides the Dutch government with more and stronger opportunities to influence discussions at the EU level’. The bill follows developments in France, where similar legislation has been in place since 2017, and Germany, where similar legislation will be introduced in 2023. The Dutch government has expressed its preference for legislation at the EU level, but is also preparing ‘building blocks’ for national legislation in case of insufficient progress or ambition at the EU level.

All documents related to the bill (in Dutch) can be found here.