A T-shirt for 2 euros, or a return ticket to Barcelona for 38 euros. We know something like that should not be possible, and yet we buy it here in the Netherlands. The real price will be paid elsewhere, by vulnerable people in remote areas or by future generations. To what extent are the companies involved – in this case: clothing manufacturers and airlines – responsible for the human, environmental or climate damage involved? And what is our own role in this as consumers?
Liesbeth Enneking (Erasmus School of Law) has been researching the legal aspects of responsible and sustainable business for 20 years. She looks at national and international rules, covenants and procedures that oversee companies' involvement in climate change, environmental pollution and human rights violations. One of the most important new developments in this area is Europe's Corporate Sustainability Due Diligence Directive (CSDDD), also known as the CS3D.
This directive aims to ensure that companies no longer avert their eyes from the harm to people and the environment they cause with their activities – including the activities of their subsidiaries or chain partners. For example, where do the minerals and metals for products like smartphones and windmills come from? How were they taken out of the ground? By whom? At what salary? Did that include child labour? Where will the waste released in the process be disposed of? Will that just so happen to be the same river where local residents get their drinking water and the water for their crops?
'Blood coal' from Colombia
Enneking is part of the OECD National Contact Point for Corporate Responsibility (NCP) as an independent member. The NCP is a complaint mechanism that groups or individuals, often from abroad, can turn to if they feel that their human rights have been violated or that environmental pollution has occurred as a direct or indirect result of the activities of Dutch multinationals. The NCP assesses reports based on the OECD guidelines, which provide guidance for internationally operating companies on issues such as supply chain responsibility, human rights, child labour, the environment and corruption.
A current case, for example, concerns 'blood coal' from Colombia. 'Human rights have been violated in mining for decades. Through the ports of Rotterdam and Amsterdam, those coals were transported to coal-fired power plants in the Netherlands. The question now is: are the ports and multinationals behind the coal plants partly responsible for violating human rights? And if so, what does that mean? This is an incredibly interesting question with wide-ranging implications, but the answer is tricky', Enneking says.
What do you do after such a complaint comes in?
'We will sit down with all parties to see if they can talk things out. Ultimately, you want things to change in the producing country, to prevent, limit or end human rights violations or environmental pollution. One option would be to stop working with local partners in the chain. But companies will respond by saying: "Even if we stop working with them, someone else will simply take over. Does that solve the problem? Or can we do more by trying to improve the local situation?"'
'That is a difficult issue. Suppose a company tries to improve the local situation, but after a few years, it turns out that nothing has changed. At some point, you have to draw your conclusions; if you don't, as a company, you become complicit in human rights violations or environmental pollution. After all, you know what is happening, and you try to change it, but you can see that nothing is changing. How long should you keep trying to exert your influence, and when has it been enough?'
How do we solve this?
Enneking: 'Everyone tends to look for a black-and-white solution, but there isn't one. The solution will always be a combination of different tools: legislation, legal and out-of-court procedures, covenants and cooperation. However, the CSDDD is certainly an important link in the chain: companies now have an obligation to consider the potential or actual negative impacts of their activities on people and the environment. Looking away is no longer an option. That also serves as a big stick for all these other instruments.'
'If we really want change, we will all have to take action. Once we do, we will no longer be able to avert our eyes either'
Liesbeth Enneking
Professor Corporate Responsibility and Sustainability at ESL
We must take responsibility too
Most rules, covenants and procedures focus on companies. According to Enneking, they are indeed important players, but at the same time, we should not forget that states and – not unimportantly – we ourselves, for example, also have a role to play. We also have a responsibility to be mindful of the potential negative impacts on people, the environment and the climate of the activities we undertake and the choices we make.
'As consumers, as employees, as participants in a pension fund, as voters, and so on. These are all roles through which we can influence the world around us, through which we can ask questions about the origin of a product or the content of a human rights or sustainability policy. How was that €2 T-shirt made? What is the climate impact of your air travel to Barcelona? Which companies does your university work with? Does your pension fund have an SRI policy? We can and should think and ask questions about that ourselves. If we really want change, we will all have to take action. Once we do, we will no longer be able to avert our eyes either', Enneking concludes.
Corporate Sustainability Due Diligence Directive (CSDDD)
This recently adopted EU directive requires large EU companies to exercise due diligence on the potential and actual negative impacts of their own activities and those of their subsidiaries and supply chain partners in relation to human rights and the environment, both here and elsewhere.
OECD guidelines
The OECD guidelines provide guidance for Dutch companies doing business abroad in relation to issues such as supply chain responsibility, human rights, child labour, the environment and corruption. They are concrete recommendations for corporate social responsibility.
OECD National Contact Point for Corporate Responsibility (NCP):
All countries subscribing to the OECD guidelines have a National Contact Point (NCP). An NCP has two core tasks:
- to familiarise companies with the OECD guidelines and promote their application;
- to handle reports from individuals, civil society organisations and companies that have a disagreement regarding the application of the Guidelines.
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On Tuesday 22 October, Liesbeth Enneking will be a guest on the Dutch talk show Studio Erasmus. Here she will explain more about how we in the West profit from cobalt mines in Congo and oil extraction in Nigeria and make others pay the price in the form of child labour, environmental pollution and climate damage.
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