Addressing Sector-Wide Risks Through Negotiated Covenants in the Netherlands /
Shift supported the Dutch government throughout a process where businesses developed sector-wide agreements to address human rights and environmental risks in global supply chains.
Between 2015-2021 Shift worked with the Social and Economic Council of the Netherlands (SER), and the Dutch Ministry of Foreign Affairs to bring together companies, unions and civil society groups to design agreements on responsible business conduct.
The resulting agreements committed companies to working together with trade unions, civil society organizations and government departments to prevent human rights risks across global value chains. Under the agreements companies also agreed to address environmental impacts, animal suffering, corruption and other negative impacts covered by the OECD Guidelines for Multinational Enterprises.
Hundreds of businesses have signed up to agreements covering a range of sectors: garment and textile | banking | gold | natural stone | food products | insurance | pension funds | renewable energy | sustainable forestry | metals | floriculture
In our work on fostering sustainable supply chain management among Dutch industry, Shift elevated the policy discussion and business practice in the area of business and human rights. The Shift team’s unique combination of strategic policy advice and practical experience with companies and other stakeholders has been invaluable to our work.”
Mariëtte Hamer / Former President of SER
Shift collaborated closely with SER, an advisory group including employers’ representatives, union representatives and independent experts that has been fostering sustainable supply chain management among Dutch industry since 2008. | See our explanatory note on prioritization of human rights risks prepared for the SER
In each sector, parties identified severe risks they were facing and developed individual commitments and collaborative approaches to address them. With the support of Shift, the SER developed guidance -contained in its Advisory Report – to help parties ensure that the measures developed are credible, and aligned with international standards.
Agreements last between three to five years, with the aim of ensuring companies improve conditions for those most at risk of human rights impacts within that timeframe.
The expectations are that parties:
- Use credible methodologies, aligned with leading international frameworks, to identify sector-wide human rights, environmental, corruption and related risks;
- Identify collaborative approaches to building and exercising the leverage of sectors and their stakeholders to address such risks;
- Involve relevant stakeholders in credible, dialogue-based multistakeholder processes.
Shift helped to build the capacity of all parties to play their envisioned roles as leaders, participants and conveners of a credible process aiming to address sector-wide risks. This support included running workshops for a number of sector associations, together with expert stakeholders, held in The Hague and hosted by the SER. | Learn more about how Shift facilitates multistakeholder dialogue on business and human rights
Shift also supported implementation of a number of specific agreements, most notably the Dutch Banking Sector Agreement. Our support to the parties involved in that agreement has included:
- Facilitating a workshop series on human rights reporting, which led to the issuance of the first human rights reports by ING and Volksbank (Dutch).
- Provided expert input and led the drafting of a paper on “enabling remedy”, which among other themes, explored the concept of a “remedy ecosystem.”
- Supporting the “value chain mapping” working group by helping to shape its methodology and facilitating the process for the cocoa value chain mapping and part of the process for the palm oil value chain mapping.
In 2020 the Ministry of Foreign Affairs commissioned KIT (Royal Tropical Institute) to evaluate the success of the agreements. The report, published that year, found that meaningful progress on due diligence had been made by companies in two of the longest-running agreements which covered the garments and textile sector and banking.
The Dutch Government subsequently recommended introducing legislation to make sustainability due diligence mandatory for companies, preferably at EU level. The EU has since introduced legislation including the Corporate Sustainability Due Diligence Directive (CSDDD), which places greater responsibility on companies to identify and address human rights and environmental impacts across value chains. The sector agreement process has helped demonstrate how multistakeholder collaboration can strengthen due diligence processes, which will be essential to effective implementation of the CSDDD.
Shift is proud of the work it did to set up the process for bringing companies together to sign agreements and to help build lasting expertise both at the SER and among the parties to the agreements.
To learn more about the Sector Agreements, click here.