Ministers Ploumen and Dijsselbloem sign voluntary human rights agreement with banks

Ministers Lilianne Ploumen (Foreign Trade and Development Cooperation) and Jeroen Dijsselbloem (Finance) this morning put their signatures to a voluntary agreement with the banking sector. The agreement includes measures to combat and prevent human rights abuses associated with investments by banks and their business partners. It has been signed by 13 Dutch banks, the Dutch Banking Association, trade unions, NGOs and the government, and was facilitated by the Social and Economic Council. ‘Dutch banks are shouldering their responsibility for human rights worldwide,’ said Ms Ploumen and Mr Dijsselbloem. ‘This is an important step towards making global supply chains fairer and more sustainable.’

Following the lead of the textile sector, the banking sector is the second industry to sign a voluntary agreement on corporate social responsibility. Ms Ploumen, who took the initiative for the agreement, commented: ‘All companies responsible for poor working conditions, environmental degradation or unfair expropriation of land have bank accounts or loans. The banks have now agreed to use their influence to stop their clients abusing human rights. Thanks to its very wide range, the voluntary agreement can improve the lives of millions of people.’

Mr Dijsselbloem sees the voluntary agreement as a good example of public-private cooperation. ‘I am pleased Dutch banks have made agreements with NGOs to prevent and combat human rights abuses. Banks can help ensure that their clients respect human rights and do not use child labour or forced labour in their supply chains. The agreement will also strengthen transparency. Consumers have a right to know which sectors banks invest in and how they hold their clients accountable for their human rights policies.’

Under the voluntary agreement, banks and other parties will together analyse the risks in their clients’ investment chains. If a company applies for a loan to build a factory in a region where child labour or land grabbing is rife, for example, the banks will make agreements with it on how best to tackle the risks.

The agreement is voluntary but not without obligations. Via an independent secretariat of the Social and Economic Council, the banks must report their results to a monitoring committee and a steering group every year. Those that do not observe the agreements will be called to account by other parties and may ultimately be excluded from the agreement.

Ms Ploumen and Mr Dijsselbloem will urge their counterparts in the EU and the OECD to make comparable international agreements. More voluntary agreements will be signed with the gold, food, insurance and other sectors in the months ahead.