CSR: Business and Human Rights
Speech by the Dutch Minister for Foreign Trade, Mr Frank Heemskerk, at the conference on 'CSR: Business and Human Rights', in Wassenaar on 1 December 2008.
Ladies and Gentlemen,
Important progress has been made on CSR in recent years, not only in the Netherlands, but also throughout Europe and beyond. As regards that international dimension, I am especially pleased about the report by Professor John Ruggie, the Special Representative of the U.N. Secretary-General on the issue of human rights and transnational corporations and other business enterprises. Professor Ruggie's mandate extension shows that the international community is serious about CSR - not only in terms of human rights, but also as regards protecting the environment and practising fair trade.
I would like to say that the Dutch Cabinet endorses the distinction that Professor Ruggie makes between the duty of governments to protect their citizens on the one hand, and the duty of the business sector to respect human rights on the other hand. Professor Ruggie can also count on our support when he points out the need for channels that can be used to effectively expose human rights violations.
Respecting human rights is, of course, of the utmost importance. But CSR in the process chain is about more than human rights. Businesses should use their influence to ensure CSR in relation to all parts of products and services throughout the entire process chain. Or as defined by the Commission Burgmans: CSR in a nutshell is doing business in a decent and respectable manner, that is recognized as such by society; its neither more nor less.
Outsourcing is making international production and supply chains increasingly complex, especially in emerging markets. Doing business in a world of globalisation means you have to confront global issues such as climate change and loss of biodiversity, corruption, and respect for human rights and basic standards in the work place.
CSR is therefore a regular subject during trade missions. The Netherlands also lobbies in all kinds of international forums for the drafting of CSR guidelines and for raising the awareness of other countries about supply chain responsibility. In this respect, I would like to point to our support for the development of the ISO 26000 standard. Also within the European Union we put CSR on the agenda.
But what about the Dutch business sector? Well, the Dutch business sector has a great reputation for CSR. I am proud to inform you that Dutch companies perform excellently against international sustainability benchmarks. At the end of last year, for example, there were no fewer than 15 Dutch listed companies on the Dow Jones World Sustainability Index. Akzo Nobel, Philips, TNT and Unilever were even leaders in their sectors.
So far, so good, ladies and gentlemen. Nevertheless, there is still a lot of work to be done. In a moment I will come to the specific steps that the Dutch government wants to take to promote chain responsibility both in the Netherlands and abroad.
But first of all I would like to discuss two questions with you that precede those specific steps. The first question is: what is the extent of influence and of CSR of the business sector? And secondly, does the government have any role at all to play in this spectrum? It is not easy to answer the first question. The Social and Economic Council of the Netherlands (the SER) - which has reported extensively on CSR - is not entirely certain about the answer. Professor Ruggie's approach to the issues surrounding the 'sphere of influence' is not clear-cut either.
Nevertheless, I still expect businesses to really use their influence so that they can take up their responsibility in the supply chain. There are a number of elements involved, such as the balance of power, complexity, and the length and transparency of the supply chain. A business that leases cars clearly bears less direct responsibility for reducing child labour on rubber plantations than a company that produces rubber boots. In other words, there are no strict rules to determine chain responsibility - customised measures are needed.
I would like to emphasize however that there is less and less room for businesses that do not take chain responsibility seriously - and that's a good thing.What role does the government play? In my vision the government plays an encouraging and facilitating role. Not only on the international stage - as we have just seen - but also by bringing parties together and providing financial support for promising initiatives.
We, the government, should practice what we preach. Customised measures are needed on the national as well as on the multilateral level.I asked our Dutch Social and Economic Council (the SER) for advice regarding sustainable globalisation and they recently came back with a number of recommendations. I will just pick a few at random:
• The Dutch Accounting Standards Board must make recommendations by 1 July 2009 about CSR reporting by businesses and about possible ways of mapping out their supply chains;
• The SER calls on businesses to further develop the international aspects of CSR and chain management, and to do so using the guidelines drawn up by the International Chamber of Commerce;
• The SER also expresses its support for the Cabinet's CSR policy, for the new National Contact Point, and for the recently launched Sustainable Trade Initiative (IDH).
In addition, the SER will also be putting forward a proposal by the end of this month for a standard framework for international CSR. The proposal will address supply chain management in particular. I think that Mr Rinnooy Kan will have more to say on this subject shortly.
Ladies and Gentlemen,
The government cannot and should not do all the work. Many initiatives designed to create sustainable supply chains are arranged without government involvement, based on the clearly understood self-interest of the businesses and civil-society organisations concerned.
Consumers and civil-society organisations, for example, are increasingly calling businesses to account if there are abuses in the work and/or production process, or if the businesses have not been sufficiently open. Of course, we should criticize companies in such cases. But in my opinion, NGOs still focus too much on retail/consumer producers (Business to Consumer) alone. Through the media these are relatively easy 'victims'. I expect NGOs to do more for companies in the B-to-B sector. Not only through media, but also during shareholders' meetings.
The Dutch government sees it as its task to promote CSR. We are therefore launching a number of new policy initiatives on knowledge, raising awareness, transparency and accountability.I already briefly described the role of CSR as a component of our economic diplomacy. As regards raising awareness and increasing knowledge, I would like to mention the following:
• initiatives to couple Dutch businesses to foreign businesses that consider CSR to be of paramount importance;
• making practical information about chain responsibility accessible, especially to small and medium-sized enterprises (SMEs);
• setting a good example by aiming to have all Dutch local and national government agencies implement a policy of 100% sustainable procurement;
• and compulsory compliance with the OECD guidelines on CSR for all businesses that receive government funding for activities abroad.
The government is also involved in the improvement of transparency and accountability:
• Since April 2008 Dutch consumers can consult the Consuwijzer information website for information about the meaning, reliability and independence of a number of sustainability quality marks. I will take tough measures to tackle the misuse of quality marks and codes of conduct;
• there will be financial support for projects such as the aforementioned Sustainable Trade Initiative;
• there will be support for an international sector programme to help sectors where there is a clear need for concrete measures to implement chain responsibility; for example, for entrepreneurs in the textile industry that import or would like to start importing from China;
• a generous interpretation will be given to the so-called 'investment nexus', whereby complaints about breaches of OECD guidelines are assessed based not so much on formal division of ownership, but more on the impact that an enterprise can have on a foreign partner;
• and last but not least, I have asked the Frijns Committee to include CSR in the Corporate Governance Code that will be presented to the Cabinet on 10 December.
Ladies and Gentlemen,
I'm sure it's clear that we can, will and should have long discussions about CSR and supply chain responsibility. CSR is essential: it is the core of business management. And CSR bears its rewards: I am convinced that the CSR component of Dutch products will create a substantial competitive advantage in a large number of markets.