Broad support in parliament
On the 7th of February the Dutch parliament approved a new law, the Due Diligence Child Labour. The law was initiated by the Labour Party (PvdA) and after some amendments received broad support in Parliament.
Only the Liberal Party (VVD), the Freedom Party (PVV of Wilders), and the Christian Party (CDA) voted against the law. Just in time before the elections in March.
For companies selling to Dutch consumers
The law applies not only to companies registered in the Netherlands, it also applies to companies that sell to a Dutch consumer). The government can make an exception for certain categories of companies from this law, where the risk of child labour is very low.
Due diligence under this law means, first assessing whether one can reasonably presume child labour has contributed to this product or service. For the quality of this assessment, the law refers to a recent guide of the ILO and the IOE (International Organisation for Employers): Child Labour Guidance for Business.
If one can reasonably presume child labour has contributed to this product or service, a company is expected to make a plan of action in line with international guidelines (UNGP or OECD) to prevent this contribution. The government can later determine some quality criteria for this plan of action.
The government can approve a joint plan of action in cooperation with civil society organisations. In that case a company implementing this plan of action, is assured it is implementing due diligence.
A company has to declare it has applied due diligence on child labour and send this declaration to the Supervisory Body (to be appointed), six month after this law enters into force (1 January 2020). These declarations will be published on the website of the Supervisory Body. The goal of this legislation is to protect Dutch consumers. They should be able to assume that products and services are sold by companies which, within their means do everything that can reasonably expected, to carry out due diligence to prevent child labour. It is due diligence that is compulsory, it is not a guarantee that a product is free from child labour, as this is impossible to enforce.
Not a boycott
The risk of this legislation is that companies will try to find an easy way out and start sourcing from countries with low risk of child labour. Another way out would be to avoid suppliers where child labour might be a problem. While actually we would like companies to use their leverage with their plan of action to improve the situation for children in their supply chain. The quality criteria for a plan of action should clarify that due diligence is not seen as avoiding but as taking responsibility.
Enforcement and complaints
There is a fine on not sending in a Declaration, although that should be seen as a symbolic one: €4100. However, five years not sending in the Declaration and having been fined, can lead to imprisonment.
Any stakeholder can file a complaint with the Supervisory body about the Declaration. When it appears the company has not applied due diligence in line with this legislation, it can be fined. When still not implementing due diligence within five years, can lead to imprisonment.
This is the first time in the Netherlands due diligence becomes compulsory. Hopefully this will lead to more due diligence in relation to child labour and not to risk avoidance. It will also be applicable to companies selling to Dutch consumers online, which may raise awareness with a new group of companies. The Fund against Child Labour is currently open for companies in the Netherlands to receive support for carrying out due diligence. Companies may not have encountered child labour in their supply chain yet, however in several sectors there is a real risk, it is there.