Toespraak van minister Ploumen bij het Global Forum

Toespraak | 27-06-2014

Last year’s Global Forum took place shortly after the collapse of the Rana Plaza textile factory. That disaster presented us with clear choices. Do we cut and run, or stay and help Bangladesh? Do we debate policy or do we act?

We chose the latter. We stayed. We chose to carry out the policies that were already at our disposal.

But there is no cause for celebration. Circumstances in Bangladesh are still dire. The road to reform is a treacherous one. Many of the victims’ relatives still haven’t received due compensation. Not all the companies that should have paid did so. Not even all the dead have been recovered. In many other respects, too, the process is as painful as it is painfully slow.

Even so, last year did give cause for hope. The governments of a large group of countries made a concerted effort, together with the ILO, NGOs and the business community. By and large, all stakeholders stayed on in Bangladesh.

That decision wasn’t an easy one, especially for companies. Staying on in a country with such a tarnished reputation poses a risk. The current situation calls for cooperation, which does not come naturally for rivals. New accidents can happen at any time. The public’s reaction is unpredictable. There are other countries where production is cheap; countries that haven’t yet received negative media coverage.

However most companies did stay on and they are cooperating. They did sign new long-term contracts, giving their suppliers the breathing space, time and resources needed to make improvements. They did agree to strive for better working conditions and fire and building safety and they did step up their commitment. And other companies should follow this example! That is why France and the Netherlands, together with other European governments will launch a statement this afternoon, calling all companies that sourced in Rana Plaza to donate generously to the Trust fund.

We see a glimpse of a better future here. To engage or not to engage is one of the true dilemmas for the business community. But we now have a starting point for solving this dilemma: The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights, better known as the Ruggie Framework, are taking root. They provide the framework for new efforts to improve corporate ethics.

Responsible business conduct is in principle the responsibility of companies themselves. To achieve it, they will often have to work together. And that isn’t easy. Companies are rivals – they want to profile themselves as different from their competitors. Competition laws even require them to do so. Companies that work too closely together can expect a call from the competition authority.

So there is a role for government here. But what exactly? We are learning lessons now about the role governments can play in fostering engagement.

Last year we have consulted closely with the Dutch textile sector. We’re doing the same with the energy sector as regards the coal supply chain. As we speak, the Dutch government, in close cooperation with several business sectors, is conducting a Sector Risk Analysis – a study into the specific risks of environmental or human rights violations in every production chain. In some cases, the results will show that changes are needed. I have pledged assistance in bringing such changes about.

The Dutch government has also introduced the Sustainable Trade Initiative, IDH, whose aim is to make production and trade sustainable in 18 commodity sectors. It does so by building coalitions of companies, NGOs and governments that use market forces and economic drivers to bring sustainability from niche to norm. The Danish and Swiss governments now support IDH, and we also invite others to join us.

The Dutch government responds in these and other ways to the most urgent issues of our times. There is still a lot of uncertainty. Companies, too, are trying to find out what role they should play, and their responses to new challenges differ greatly.

Take, for instance, the concept of supply chain responsibility. How should a company react to human rights violations by one of its suppliers? According to Professor Ruggie, the answer to this question depends on whether the supplier is crucial to the company’s operations and on the leverage the company has over its supplier. Cut and run seems a rational reaction if the supplier can easily be replaced, especially if you have no leverage over this supplier. But seeking leverage in order to effectuate change is, from a moral point of view, superior.

Companies themselves respond very differently to this question. Some have leverage but shy away from using it. Others don’t have leverage but seek to attain it by joining forces with others, so that they can change things for the good.

Take the tin mines in the Democratic Republic of Congo. When the Dodd Frank Act came into force, companies had to be able to prove that they didn’t use conflict minerals in their products. Many companies decided they couldn’t and pulled out of the Congo altogether.

Others felt they could provide a phone assembled from materials that are guaranteed conflict-free: the fair phone. They appear to be succeeding. I hope they do, and prove the other companies – those that gave up and left – wrong. I, for one, support them. My fair phone is right here.

Or take the BetterCoal initiative. In recent years, European energy companies came under close scrutiny over their dealings with coal mining companies in Colombia that were accused of human rights violations. Several of these energy companies decided to team up with their rivals, thus making sure their demands for better working conditions and other improvements were heard by the mines’ owners. I agree with those choices. It was not yet time for the last resort: cut and run. Here, too, engagement is preferable.

Ladies and gentlemen,

Many of these issues are about morality, about being prepared to look beyond your own interests. We must not run away from discussing the moral implications of global value chains.

This is where governments have a key role to play. We must make it possible for companies to give human rights full consideration in all their decisions. We must counter any unintended obstacles to this posed by laws and regulations. Above all, we must prevent companies from taking the easy way out: from giving in to their instinct to disengage.

Thank you.