By Manon Stravens
The screening of investments on risks of human rights’ violations is the responsibility of companies and pension funds, says the new Dutch Minister in her answers to parliamentary questions after Profundo research on Dutch links with Qatar. Is she revoking Dutch promises?
It was important news last December: 38 Dutch companies were involved in construction projects in Qatar and at least nineteen Dutch pension funds invest in Qatari government bonds. For years, the Dutch ING Bank has been providing loans to the Qatar National Bank (QNB). Money that is invested in the construction of stadiums, hotels, and infrastructure in the run-up to the World Cup in Qatar this year.
Early 2021, British newspaper The Guardian had already reported how migrant workers from India, Pakistan, Nepal, Sri Lanka and Bangladesh are dying and suffering in the heat while building the stadiums for the World Cup 2022. That Dutch companies and financial institutions are happily oiling this mega event, amidst numerous reports by Amnesty International, trade unions and Human Rights Watch on appalling working conditions, human rights abuses, and deaths of migrant construction workers, was revealed by research carried out by Profundo, on behalf of De Volkskrant. The triptych of articles on this Dutch newspaper’s front pages drew quite some attention. Apart from debates, radio reports, and opinion pieces, also parliamentary questions were asked.
In the recent answers to these questions by the new, liberal Minister Schreinemacher (Foreign Trade and Development Cooperation), we hear the echo of old liberal policy positions. In sum, she strongly emphasizes the own responsibility of banks, pension funds, and companies to screen their investments and identify and address risks of human rights’ violations, in line with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Transparency from these companies and financial institutions is only required about the process, according to the Minister, not about actual considerations, decisions made, or actions taken. She sees no role for the Dutch government to monitor compliance.
Schreinemacher seems to forget that the OECD Guidelines “reflect the expectation from governments to businesses on how to act responsibly” and that the previous Dutch government has set the goal that 90% of its large companies (more than 500 employees, more than 40 million turnover) in the Netherlands explicitly endorse the Guidelines by 2023. So far, 35% of the researched companies endorsed either the OECD or the UNGPs, according to a monitoring report (2020) on these endorsements. This is a “small improvement with regard to the sample of reporting 2017”, which calculated 30% endorsements, concludes the report. “Many companies must take concrete steps in the coming years.”
In its twilight, the previous government therefore acknowledged that legislation on International Corporate Social Responsibility (ICSR) is necessary. In its coalition agreement the new Dutch government in December 2021 made the promise that it will promote ICSR legislation at EU level and introduce national ICSR legislation. “In this way, the government expects that the application of due care by companies will be increased and that fewer human rights and environmental violations in the value chains of Dutch companies will occur.”
With this step, the Netherlands would be one of the first to respond to the growing political and societal support for mandatory Human Rights Due Diligence (mHRDD) in different countries. In response to this pressure, the European Commission already in 2020 promised to propose a directive on human rights due diligence, but does not proceed with urgency. It is constantly being rescheduled, to the point that it even disappeared from the European Commissions’ latest agenda in December last year. In this light it would be good if the Netherlands takes its own responsibility and introduces national legislation in this field, the findings on how Dutch companies and financial institutions deal with human rights’ risks in Qatar show the urgency. But is this Minister ready to take the lead?
Despite its intensive role as an indirect financier of controversial World Cup constructions, ING Bank, Schreinemacher for instance feels that the bank can remain the Dutch government’s principal banker. The question is where the ‘red line’ is. On top of the thousands of deaths, what should be the level of abuse for the Dutch government to say stop and back off? Or will no abuse win it from the political and economic interests of Qatar (and the whole Gulf), being “a priority market for trade and investment, facing social challenges in areas in which Dutch companies have a great deal of expertise?” as Schreinemacher writes?
As far as we know, none of the companies or pension funds in our research took steps to address their role in the human rights’ violations in Qatar. Let’s therefore hope that Minister Schreinemacher drops her old liberal reflexes and realizes that mandatory Human Rights Due Diligence legislation is much needed.
(Photo: Typhoonski on Istock)