The Netherlands' plans to encourage Corporate Social Responsibility

They were not designed to become a legal instrument under which governments were given a set of transparent and enforceable rules for their subsidy and guarantee programs.

With this in mind, the Dutch government's CSR Policy uses the Guidelines as an element of "moral persuasion," in the sense that private companies should act in a responsible manner when supported by public funds.

Consequently, companies wanting financial support will be required to declare in writing that they are familiar with the Guidelines and that – within the limits of their ability – they will attempt to apply the Guidelines to their own actions. The government will not monitor compliance with this "declaration of intent" and sanctions are not foreseen.

While this policy encourages businesses to implement the Guidelines, I remain convinced that the threshold between recommendations and binding rules has not been crossed.

Why? Because no enterprise is forced to apply for government subsidies or guarantees. Each company determines for itself whether or not to apply for official support. If it wants that support, it must meet the criteria. Also, as I just stated, the government will not monitor compliance with this "declaration of intent" and sanctions are not foreseen.

Regarding the second building block, detailed criteria, it is important to note that many Guidelines elements are expressions of a consistent policy in pursuit of certain policy objectives.

For instance, the chapters on Employment and Industrial Relations, Environment and Combatting Bribery are related to other international instruments, such as the ILO Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and Agenda 21 and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Consistent with such instruments, concrete criteria will be developed in relation to corruption, the environment and social conditions for government programs that support Dutch companies' foreign operations.

In sharp contrast with the "rules of the game" of the first building block of our policy, compliance with these concrete, qualifying criteria on environment, corruption and industrial relations of this second building block will be monitored and enforced.

In my letter to Parliament, I noted the possibility of withdrawing support in cases of a serious breach of the criteria. I noted also, however, that enforcement of CSR criteria would be particularly difficult in legal terms. Therefore, we have made clear that the criteria now under development must be transparent and contestable, even in court.

Some claim that we have abridged the terms of the Guidelines and moved beyond the Ministerial agreement of June 2000. I strongly disagree. The explanation just given should clarify the scope of my CSR policy.

I firmly believe that we have struck a fine balance between societal concerns about the government's implied co-responsibility for unacceptable conduct of the Dutch private sector abroad, the international community’s recommendations as laid down in the OECD Guidelines and the government's objectives in the promotion of exports, overseas investments and international co-operation by the Dutch private sector.

We are happy with this policy and we are hopeful that it will garner positive results, not only for Dutch business but also for the developing world.

Corporate social responsibility is a phenomenon that has become firmly established in our society: it is here to stay. We see signs of it becoming established across the international community.

At base, CSR is the private sector's response to structural changes in domestic society and in the international community. Given the dynamic that is inherent in corporate social responsibility, the government's role must likewise change to reflect changing needs and future goals.