Translation of advisory report IMVO-convenanten, 25 april 2014, (2014/04)
Due to economic globalisation, the production of the jeans we wear and the cell phones we use no longer takes place in the Netherlands, but in locations where comparative advantage allows for lower production cost. This presents opportunities and risks for producing companies and consumers alike. It entails that an internationally operating Dutch company may become directly or indirectly involved in child labour, unsafe working conditions, land grabbing, or damage to vulnerable ecosystems. Often, these complex issues arise in emerging markets or developing countries in which governments do not sufficiently protect rights. In such situations, companies can only contribute part of the solution. Cooperating with other partners enhances the chance of success.
The Dutch government, employer and employee associations, consumers, and civil society organisations (CSOs) expect companies to do business with respect for human rights and the environment. Internationally, these responsibilities are enshrined in the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights (UNGPs). According to these guiding documents, companies are expected to identify, prevent, mitigate and account for how they address their actual and potential adverse impacts (due diligence).