Public and private power : working together towards better working conditions? : a case study on the cooperation between the Dutch government and the Dutch electronics and garment sector in improving labour conditions

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University of Amsterdam

Faculty of Social and Behavioural Sciences

Master Thesis Political Science

Public and Private power: working together towards better working conditions?

A case study on the cooperation between the Dutch government and the Dutch electronics and garment sector in improving labour conditions

Raïsa van Eijndhoven

[10068635]

Political Science: International Relations

Supervisor: dhr. Dr. L. W. Fransen Second reader: dhr. Dr. P. Schleifer

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Abbreviations

BSCI Business Social Compliance Initiative

CFSI Conflict Free Sourcing Initiative

CFSP Conflict Free Smelter Program

CFTI Conflict Free Tin Initative

CSR Corporate Social Responsibility

DCR Democratic Republic of Congo

EICC Electronics Industry Citizenship Coalition

EPRM European Partnership for Responsible Minerals

FWF Fair Wear Foundation

GeSI Global e-sustainability Initiative

GRI Global Reporting Initiative

IDH Sustainable Trade Initiative

ILO Declaration the ILO Declaration on Fundamental Principles and Rights at work

JAC Join Audit Cooperation

KPN KPN N.V.

MVO Maatschappelijk Verantwoord Ondernemen

NCP National Contact Point

Philips Koninklijke Phillips N.V.

SAC Sustainable Apparel Coalition

SOMO Stichting Onderzoek Multinationale Ondernemingen

The Accord The Accord on Fire and Building Safety in Bangladesh

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UNGP UN Guiding Principles on Business and Human Rights

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Introduction

The social responsibility of firms in improving labour standards has become of increasing importance for large businesses and society as a whole. The trend towards

internationalisation has rendered large firms increasingly reliant on different supplier firms in different countries who each contribute to the manufacturing process of their product. Many of these leading firms have attained important economic power: large U.S. firms, such as Wal-Mart or Apple, are, when comparing revenues with GDP, comparable to countries such as South-Africa or Greece (Worldbank 2010). As a result, national governments have lost their grip on these firms and lack the instruments to enforce national labour standards in countries around the world. The increasing power of firms thus renders questions about the social responsibilities and accountability of firms inevitable. In the past decades, leading firms have experienced a lot of pressure from NGOs and social pressure groups to improve their labour conditions. Although firms such as Nike, Reebok and Apple, state that they continuously try to improve their social standards by implementing corporate social

responsibility in their supply chain1, the effectiveness of these measures are questionable (Yu 2008). The pressures that these leading firms exert on their suppliers are often too limited or not prioritized and there is still a lot of uncertainty about whether firms actually can (or are willing) to uphold the labour standards they have tried to implement in their supply chain. Research has shown that corporate social responsibility is, on its own, insufficient to tackle all the problems related to labour standards violations (Locke 2013: 157). Collaboration with government is in some cases essential to enhance the effectiveness of self-regulation

standards within an industry. However, the question remains to what extent and how national governments can contribute. The following research question is therefore suggested:

‘To what extent and how has the Dutch government played a role in the implementation or enhancement of the Corporate Social Responsibility (CSR) policies of Dutch industries?’

In order to answer this question the following sub-questions are suggested:

- What kind of strategies and instruments are applied by the Dutch government to implement or improve labour standards in the CSR policy of Dutch industries? - To what extent have industries responded to the initiatives of the Dutch government?

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- How have industries perceived the role of the Dutch government generally? - What kind of CSR practices are initiated or taken on by the Dutch industries?

- To what extent has the Dutch government responded to these CSR practices initiated or taken on by the Dutch industries?

The next chapter will outline the theoretical framework on the literature of modes of governance and public-private interaction with regard to CSR policies. Chapter three will describe the analytical focus, case selection and methodology of this research. Chapter four will then provide a historical overview of the approaches that the Dutch government has taken on with regard to CSR policy in the past decades. Chapter five and six provide the answers to the sub-question by discussing the initiatives and instruments of the Dutch government and the initiatives and government involvement in both industries respectively. Chapter seven aims to provide an overview of the findings and addresses the limitations of the research and implications for further research.

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Chapter 2: Literature review

Two categories of literature can be considered to be relevant with regard to this research question: the literature on the modes of governance and the literature on public-private interaction with regard to CSR. Both will be discussed in this chapter.

2.1. Literature on modes of governance

2.1.1. New and old modes of governance

Many different views have been developed on the types of governance that international organisations and governments take or should take vis à vis voluntary agreements, CSR practices, and the like. In general, a distinction is made between old modes of governance and new modes of governance (Abott & Snidal 2009; Osborne 2010: 1-17; Steurer 2013). Abbott & Snidal (2009) are among the scholars who make the distinction between old and new governance and explicitly base their argument on the state’s role with regard to regulation. In the old forms of governance, they argue, the state is the central actor who implements

regulation from the top down and control and expertise are exercised by bureaucratic institutions (Abott & Snidal 2009: 521). Compliance can be forced by coercive measures because rules are mandatory. In new governance, in contrast, the state is considered to have a more orchestrating role by promoting and empowering public and private actors to engage in regulatory activities (idem). Regulative measures are not mandatory but facilitative,

encouraging and persuading to provide incentives for firms to self-regulate.

Meuleman (2008) stresses a different distinction of, the often used, three ideal-types of governance: ‘hierarchical’, ‘market’ and ‘network governance’. ‘Hierarchical governance’ refers to a bureaucratic type of public policy in which standardising is the norm and which coincides with the old type of governance, while ‘market and network governance’ falls in the category of new governance. ‘Market governance’, however, pertains to the mode of governance based on the core idea of ‘New Public Management’ ideal in which market mechanisms contribute to improving performance of public policy (Meuleman 2008: 27). Network governance relates to the management of complex networks involving many different actors from different political or societal groups (Meuleman 2008: 31).

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2.1.2. Different types of new governance

Within the broad categorizations of old and new governance, more nuanced types of governance can be distinguished. Within the categorization of ‘ new governance’, Abott & Snidal (2009: 511) consider ‘orchestration’ as an indirect mode of governance that aims to actively steer and support regulatory emerging private schemes and considers them as crucial parts of the international regulatory system. They argue that ‘orchestration’ as a mode of new governance is very advantageous at the international level as it demands fewer state resources and makes use of a wide range of expertise in addressing regulatory issues (Abbott & Snidal 2009, 2010, Abbott 2012). Although the concept is well used in theory, attempts to analyse or identify the phenomenon are scarce (Abbott & Snidal 2012: 2). Schleifer (2013) is amongst the few scholars that have provided an empirical analysis of ‘orchestration’ as a mode of governance with regard to European biofuel regulation.

Other scholars (such as Peters 2010; Meuleman 2008; Sorensen 2006) have focused on ‘meta-governance’ as a mode of new governance. ‘Meta-governance’ refers to the process of controlling and steering the process of (private) governance or, as Peters puts it: ‘the

“governance of governance”(Peters 2010: 37). Meuleman (2008) has elaborated extensively on ‘meta-governance’ by analysing this mode of governance in relation to the three other modes of governance discussed earlier (hierarchies, markets and network governance). Peters (2010) has engaged in a discussion of the instruments that are attainable for steering

governance. He considers ‘performance management’ and ‘strategic management’ fitting tools for steering governance. ’Performance management’ entails goal-setting without specifying the means for the organisation who is trying to achieve these goals and leave this decision to the organisation itself (Peters 2010: 44). ’Strategic management’ relates to the governance of policy coordination by accentuating the goals that need to be achieved by society as a whole instead of initiating the forming of policy from disparate objectives of various actors. Overall it is important that these instruments provide steering where necessary while preserving efficiency and enough autonomy for the governing actors (Peters 2010: 48). Although the concept of meta-governance is well developed in the literature, no further empirical research has been conducted on the effects of meta governance or the reaction to meta-governance (idem).

The term Public-Private Partnerships (PPP) is used for a new mode of governance in which public and private actors act together to achieve certain policy goals. Börzel and Risse (2002)

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distinguish four types of Public Private Partnership: co-optation, delegation, co-regulation and self-regulation in the shadow of hierarchy. In each mode, the influence of the private actors is relatively larger or smaller in comparison with that of the public actor (Börzel and Risse 2002). ‘Cooptation’ is here the weakest form and non-state actors have the role of providing knowledge, expertise and moral legitimacy (Börzel and Risse 2002: 6).

‘Delegation’, in this context, refers to the delegation of certain public authority to private actors (idem: 7). ‘Co-regulation’ pertains to the situation in which all the negotiating partners are more or less equal in the decision-making (idem: 8). ‘Self-regulation in the shadow of hierarchy’ entails that private-governance schemes emerge but only because legislation looms (idem:9). Again few empirical research has been conducted on the actual use of these modes of governance. Héritier and others are among the scholars who has asked empirical questions in this regard and have focussed on the efficacy of government in improving voluntary standards and has investigated the conditions under which self-regulation in environmental policy emerges at the European level (Héritier & Eckert 2008; Héritier & Lehmkuhl 2008). Lastly, ‘hybridisation’ is often mentioned in the literature as a mode of governance and refers to the governance of organisation by ‘two or more “pure” modes of governance’ (Meuleman 2008: 14).

Steurer (2010; 2013) provides an elaborate overview of the different policy themes and instruments employed by government. With regard to policy themes, Steurer discerns the following four themes: improving awareness and building capacities for CSR, enhancing transparency, facilitate socially responsible investment and leading by example (Steurer 2010: 58 Next, he suggests five types of instruments that are widely acknowledged in the literature on public administration: 1. Informational instruments 2. Economic instruments 3. Legal instruments 4. Partnering instruments and 5. Hybrid Instruments (Steurer 2010: 57). The legal instruments are considered to be these instruments that are developed through the use of the legislative, judicial or executive power of the state (Steurer 2010: 57). These legal instruments can be laws, directives or other legal binding regulations and are applied as instruments across all different policy strategies. Economic instruments are designed to influence the behaviour of companies with financial incentives and market forces (Steurer 2010: 57). These instruments can consist of fiscal advantages, subsidies, financial support and financial awards. Informational instruments pertain to the ‘moral’ obligation of firms to act (Steurer 2010: 57). Partnering instruments are instruments that aim to establish

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objectives (Steurer 2010:57). Types of this instrument are stakeholder forums, certain types of agreements or public-private partnerships (ibid). Hybrid instruments are instruments that combine two or several of the above-mentioned instruments (Steurer 2010:57). These

instruments are for instance some CSR platforms, centres and strategies (ibid). Steurer (2013: 393-394) further elaborates on the legal policy instruments by distinguishing between hard and soft types of regulation.

2.2. Literature on public-private interaction in relation to CSR policies

The literature on the interaction between private and public actors in relation to CSR policies is very limited. In general, we can discern a divided debate vis-à-vis the role of the state in regulating labour standards. The proponents suggest that these private initiatives are more effective and flexible than state regulation, while the critics fear that the retreat of the state will cause that regulatory boundaries for industries will be erased (O’Rourke 2006;

Amengual 2010). However, this debate has lacked empirical support. Locke (2013) and Bartley et al. (2015) are among the scholars who provide an extensive overview of the limitations of enhancing labour standards and investigate under what conditions labour standards in a global supply chain can be enforced. Throughout both books, the role of government is taken into consideration when trying to understand the effectiveness of CSR practices (Locke 2013: 174-18; Bartley et al. 2015). Locke, stresses, on the one hand, the lacking role of government in developing countries, while the government is, especially in these countries, needed to secure compliance with national labour laws of supplier firms. Bartley et al. on the other hand, accentuate the institutional context in which firms have to operate and the fact that firms do not act in a political and legal neutral vacuum but have to intersect with varied national and subnational political arrangements (Bartley et al 2015: 216). Although these observations are very valuable, it does not provide us with a lot of insight into the dynamics at play between corporations and the government specifically. Amengual (2010) is one of the few that conducted research on the relation between private and state regulation through a case study in the Dominican Republic. This research examined the conditions under which state and private regulation can be complementary and found that private voluntary initiatives can reinforce state regulations rather than displace them

(Amengual 2010: 412-413). This research, together with the other few case studies conducted on this topic, lack however the generalizing power to draw firm conclusions with regard to the interaction of public and private regulation. Furthermore, this research does not

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influence CSR policy of companies and the relevance of governments in consumer countries is barely addressed. Other research has focused on the role of stakeholders in addressing labour standard issues and constructing new standards (Fransen & Kolk: 2007). Here first attempts have been made to assess the effect different types of actors have on corporate rule-setting. Although the role of the government is briefly discussed, this research focuses mainly on multi-stakeholder standards. The sole collaboration of the state with corporate actors is not elaborately discussed. One very relevant study that does focus on this relationship

specifically is that of Knudsen and Brown (2014). They argue that the involvement of government in CSR can be identified as an ongoing interaction that results in jointly shaped CSR policies (Knudsen & Brown 2014: 2). The aim of their research is to find out by what these policy decisions of governments are driven and why they were adopted. This study does, however, not address how and to what extent government intervention has had an effect on the CSR policy of industries. The present research aims to fill this gap within this category of literature.

2.3. Assessment of the literature

With regard to the first field of literature, a Dutch comparative case study can provide empirical insights about the type of governance that government employs, what strategy is adopted and what kind of instruments are applied to achieve the objectives. The literature on this topic provides a lot of theoretical contributions and categorizations of the types of governance but fails to provide a convincing empirical contribution of how governments employ these types of governance. Furthermore, the literature on public-private interaction in relation to CSR policy has touched upon the relationship between government and the CSR policy of companies but has never specifically addressed the role of CSR policy of

government in relation to the CSR policy of companies.These different interpretations in the literature of government policy, imply very different governance outcomes. This research will argue that based on a comparative case study in the Netherlands, government will be inclined to pursue new modes of governance. Many of these forms are applied but the meta form of governance, ‘network governance’, as formulated by Meuleman (2008) is considered a particular relevant mode of governance. Orchestration’, in which cooperation with

international private schemes is encouraged, is increasingly taking the upper hand. Public-Private partnerships are applied in many forms, however, this study suggests that self-regulation in the shadow of hierarchy is most visible. However, the categorization set out by Steurer (2010) captures the dynamics of government governance most accurately. Based on

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this study, additional categorizations have been added to this basic framework namely: ‘focus on CSR boosters’ and ‘strengthen CSR internationally’.2_{The implementation of these}

additional strategies appeared relevant as first, from the empirics it appeared that the focus on frontrunners and on the international supply chain was considered an important discerning strategy, which renders these strategies worth considering. Second, adding these

complementary strategies appeared sensible seeing that Steurer’s categorizations stem from 2010 and policy strategies tend to change as policy fields further develop (Steurer 2010: 58). Furthermore, based on the empirics, it is carefully suggested that hybrid and partnering forms of governance are the most influential for companies pursuing CSR.

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Chapter 3: Case selection and methodology

This chapter will discuss the case selection and methodology of this research. Firstly, the relevance of the focus on the Dutch government will be explained. Secondly, the selection of the Dutch garment and electronics industry will be analysed and their relation to the global garment and electronics sector. Thirdly, the conceptualization of the most importance concepts of this research will be revealed and the methods applied to select the data are clarified. Lastly, the relevance of this research will be examined.

3.1. The Dutch government

This research addresses the role of the government at the consumer side of the supply chain rather than the role of the government at the side of the suppliers. This choice is based on the expectation that the government on the consumer side of the supply chain are more

committed to acting against labour standard violations. These governments generally tend to enforce labour laws in the national context and are therefore expected to make their national companies comply with these regulations. Furthermore, as firms at the consumer side are usually targeted by social groups and activists, they are generally stimulated to establish private regulations to resolve the labour conditions within their supply chain. Consequently ,it is expected that these type of companies are more willing to deal with labour issues than the supplier firms in southern countries.

The focus on the Dutch government explicitly can be justified by the thriving Dutch environment for resolving labour issues. So have many Dutch labour standard initiatives emerged from Dutch soil. The NGO Stichting Onderzoek Multinationale Ondernemingen (SOMO) was founded in the Netherlands and has, since 2000, become a major player in displaying labour rights violations in the electronics industry (Bartley et al. 2015: 191). The Business Social Compliance Initiative (BSCI) has also been fuelled by Dutch companies and is still the main industry driven initiative in Europe (Bartley et. Al. 2015: 160). Additionally, the sustainable trade initiative (IDH) which aims to increase sustainable trade among

different sectors, is initiated by stakeholders in the Netherlands as well. More specifically with regard to the electronics sector, a Dutch social movement has emerged that produced the Fairphone, a phone that is free of conflict mineral and produced under fair working

conditions (Bartley et al. 2015: 207). Concerning the garment industry, the context of the Netherlands has also played a prominent role in the founding of the Fair Wear Foundation, an NGO that seeks to cooperate with industry to improve labour rights. The Netherlands has

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thus provided an environment in which Dutch initiatives have played a pioneering role when it comes to labour right improvement initiatives. For these reasons it is fair to expect that, in the case that attention is paid to labour standard issues by the government and companies, it is reasonable to believe that this occurs in a country such as the Netherlands.

3.2. Case selection

This research will further focus on two specific cases: the garment industry and the

electronics industry. The instruments and strategies employed by the Dutch government and their relationship to the voluntary labour policies within these industries will be analysed. Attempts have been made to control for the variety of independent variables that might influence the dependent variable by choosing these cases that share certain relevant characteristics. The similar independent variables between these cases are the labour-intensive character of both industries (Bartley et al. 2015: 151); the problems related to labour standards that both industries experience within their supply chain; the embracement of CSR policies by both industries with regard to labour standards and the activity of the sectors on a global scale. Furthermore, despite the fact that these two industries have taken on different types of private voluntary initiatives to tackle these issues, solutions in both sectors have not proven to be very fruitful yet (Locke 2013; Bartley et al. 2015). Apart from these similarities, the garment and electronics industry are both very different industries. A case study of both these industries is, in this regard, very relevant because the roles taken on by the Dutch government are expected to vary when the dynamics of the supply chain differ and both industries encounter different issues that inhibit compliance with labour standard

regulations. The disadvantage of this approach is that both industries are likely to vary with regard to many potential independent variables. This will make it harder to assess the causal relation between the role of the government and the implementation of labour standards in the CSR policy of companies. In reality, however, different cases will always vary with regard to various variables and comparison of the electronics and garment sector has proven to be successful in other research (Fransen & Conzelmann 2015). Further, this limitation will partly be resolved by the use of process tracing to investigate the underlying causal mechanism at play (George & Bennett 2005). Moreover, a number of methods such as in-depth

interviewing and content analysis will be applied to capture these mechanisms as accurately as possible.

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3.2.1. The global garment industry

The garment industry covers many different types of clothing. The tendency of the garment industry to suppress wages and to extract as much labour as possible in the shortest time span can partly be attributed to the structure of production. Because of ‘Fast Fashion’, high

seasons workers are pushed into longer hours of work, unpaid overtime and stressful working conditions. However, the garment industry differs elementary from the electronics industry (Bartley et al. 2015: 149). The garment industry is considered to be a ‘buyer-driven

commodity chain’ (Gereffi 1994) which entails that retailers and brands are the ‘leading firms’ who possess the power to shape the dynamics of the supply chain. Horizontal relationships, instead of vertically integrated supply chains, are distinctive within this industry. Brands and retailers rely on independent contractors and supplier to produce the products (Bartley et al. 2015: 149). Many different firms can be discerned and are located in different parts of the world. Supplier firms in South-east Asian countries, with China and India as frontrunners, export their products to brands and retailers in the Northern countries such as Canada, the United State and Europe (Bartley et al. 2015: 152). The garment industry is, in comparison to the electronics industry, a very mobile industry. Retailers and brands can easily shift their orders between suppliers and locations to look for lower labour prices somewhere else (Bartley et al. 2015: 150).

The development of CSR policies in the garment sector has its origin in American companies (Bartley et al. 2015: 154-55). From 1990 onwards, many activists have started campaigns of naming and shaming. Levi Strauss, Nike and Reebok were among the first to endorse codes of conduct, which were followed by most of the leading firms in the garment industry by the end of the 1990’s (Bartley et al. 2015: 155). The role of the government in this sector seems to have increased for the past couple of years. Especially since the collapse of the Rana Plaza building in 2013, the Dutch government has taken initiative to address these issues on a broader scale. Now that the support for diminishing labour violations in this industry is well supported by many stakeholders, a comparison with the electronics industry can be

worthwhile to assess how this support has played a role in the initiatives the government has taken and the instruments and strategies applied in this sector.

3.2.2. The global electronics industry

The focus on the electronics industry is relevant as there are reasons to believe that labour violations in this industry are caused by different variables than these in the garment industry

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(Bartley et al. 2015: 181). Leading companies in the electronics industry have, in comparison to other industries, strong management, innovative and technological capacities and

substantial cash-flows (Bartley et al. 2015: 180). In comparison to the garment industry in which low-profit margins and pressures for price reduction are influential, the labour issues in the electronics industry are not explained by constrained resources (Bartley et al. 2015: 181). Additionally, most of the electronics production takes place in newly-industrialized

economies such as Thailand and China (Ibid). These economies generally have the capacities to enforce labour standards and to handle unstable political environments. Moreover,

electronics manufacturers have relatively high fixed capital investments which render relocation for these manufacturers costly (Bartley et al. 2015:181). It is therefore not

expected that these high-technology industries will leave the countries when labour laws are enforced. Thus, although most of these circumstances inhibit the garment industry from improving their labour standards, they are to a lesser extent influential in the electronics industry. However, despite these relatively favourable circumstances, still, labour law violations take place in this industry.

Relatively few social movement campaigns have targeted the electronics industry for the past few years (Bartley et al. 2015: 191). With the absence role of NGOs and activist groups, the attention paid to the labour standard policy of the electronics industry is less visible. Research is, therefore, necessary to assess the circumstances and solutions within this industry.

Furthermore, now that citizen groups or NGOs are relatively absent, the government as a supporting actor becomes even more important to denounce labour standard conditions in the electronics sector.

3.3. Conceptualization

The core concept in this research is ‘corporate social responsibility’. This concept lacks a uniform and universally accepted definition. The European Commission noted that ”most definitions of corporate social responsibility describe it as a concept whereby companies integrate social and environmental concerns in their business operations and in their

interaction with their stakeholders on a voluntary basis” (European Commission 2001). It is important to note that this concept is defined in a broad way to capture codes of conduct as well as voluntary sustainability standards. Codes of conduct can be developed internally or externally and can be defined as ‘a set of practice guidelines characterised by flexible implementation rules that tend to lack enforcement mechanisms and may not have audit or

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reporting criteria’ (Giovannucci et al. 2014: 359). Voluntary sustainability standards alternatively, are then defined as ‘the independent and publicly determined standards that have, as primary criteria of compliance, multiple aspects of sustainability defined as specific social, environmental and economic guidelines that feature transparent auditing and more credible (typically external) third-party enforcement mechanisms (Giovannucci et al.

2014:359)’. The term CSR points in this research to all these different standards or initiatives at play of which companies of the sectors or industries themselves have become a member or have gotten involved, but also the voluntary practices that industries or companies have initiated themselves. To be more accurate, this research focuses on initiatives taken on by industry (cooperative and individual initiatives) to incorporate or to improve labour standards beyond legal requirements.

Further, ‘implementation or enhancement’ of the policies of the industries or companies is conceptualized as ‘labour standard related regulation, such as regulation concerning overtime, minimum wage, labour conditions, child labour, freedom of association that is directly

incorporated into the labour standard policy of the company or industry itself’. This may also mean that the labour standard regulations has become part of a such a policy because a company or industry decided to join an existing initiative that imposes a certain obligation on the company. Nevertheless, the focus will be on the changed policy of the industry or

company itself. The effectiveness of these measures or the obligatory nature of the initiatives in terms of addressing labour standards, will therefore not be taken into consideration.

The term ‘Dutch industries’ is narrowed down by looking at the electronics and garment sector. Branch organisations and Dutch companies are considered to represent the industries. The term ‘Dutch companies’ captures these companies that are headquartered in the

Netherlands. For the purpose of this research, the term ‘garment industry’ will be used to refer to many sub-sectors of the garment industry such as apparel, textile and footwear. The term ‘electronics industry’ will encompass both the consumer electronics firms and telecom firms. Telecom firms are added in the definition on the basis that the telecom sector uses similar products and materials as consumer electronics firms. Furthermore, they deal with similar issues when it comes to improving labour conditions. It is important to note that the electronics industry is intertwined with the metal industry to such an extent that it is often unclear which part of the supply chain belongs to the electronics sector and which belongs to the metal sector when it comes to the use of metal and electronic components for production

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(KPMG 2014: 134-137). As a result, the emerged labour initiatives and risks and problems related to these sectors are partly overlapping (KPMG 2014: 134-137). However, the focus of this research will be first and foremost on the electronics industry.

3.4. Methods

This research will have an inductive nature and a qualitative research method will be applied. In absence of a wide range of literature that could guide the research towards certain

propositions, process tracing is used to capture the causal mechanisms at play in an

environment where many interactions take place and many stakeholders are involved (George & Bennett 2005). After a brief overview based on secondary literature on the policy of the Dutch government for the last twenty to fifteen years, process tracing will be used to assess the instruments and strategies used by the Dutch government in the last five years up till now. This focus will allow reviewing medium-term developments together with more recent developed government initiatives. To get more confidence in the findings, triangulation is applied and in depth-interviewing and content analysis will be taken as research methods. Data on the following aspects should be collected:

- An outline of the applied policy instruments and the response of the companies of both sectors.

- An overview of the various private governance initiatives (both cooperative and by individual firms) in these industries and how these are organised.

- Information on the support of government for these private governance initiatives

In order to answer the research question, in-depth interviews were held with different stakeholders that were relevant in relation to the emerged initiatives. Interview respondents were selected by purposive sampling. First, a selection was made of the different voluntary initiatives that were relevant in the Netherlands by searching the internet. Keywords such as ‘private’, ‘ arrangements’, ‘initiatives’, ‘corporate social responsibility’, ‘ electronics’, ‘ garment’, ‘apparel’, ‘ voluntary’ and the combination of these keywords were used in the databases of the UvA and Google scholar and the regular Google search engine. The articles that matched these searches were scanned to get an idea of what voluntary agreements or initiatives were mentioned. Further, the internet site of the government was checked to receive information on the voluntary projects they had initiated or that they supported at the moment. The focus was on initiatives that played a role with regard to the Dutch government

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and in which Dutch companies were involved that were relevant for the sectors. When an initiative or arrangement was found, the stakeholders were analysed. The selection of the interviewees was based on the stakeholders that appeared to be very involved and were relevant for the sector. The key stakeholders existed of government officials and key sector representatives of the Dutch garment industry and the Dutch electronics industry. To check the information provided by these stakeholders, officials from NGOs or other relevant organizations active in the area of labour standard regulations were also interviewed. Apart from the interview with Phillips, all conducted interviews were in Dutch and the quotes used in this research are translated to English by the author. For both industries, four different firms were analysed. These consisted of King Louie, WE fashion, Hema and G-star Raw for the garment industry, and Koninklijke Philips N.V. (Philips), Fairphone, TomTom

International B.V.(TomTom) and KPN. N.V. (KPN). Companies were selected on the ground that they were headquartered in the Netherlands and belonged to either one of the sectors. However, it is important to note that as a result, companies in both sectors differed to some extent with regard to size, and CSR activism. Especially in the electronics sector, larger and more CSR active firms are represented as these were most relevant and most accessible. As a result, these factors pose some threats to the generalizability and validity of this research. The generalizability is narrow as only four companies of both sectors are taken into account. Concerning the validity of this research, the potentially biased characteristics of the firms in the electronics sector limit their representation of the Dutch sectors. These limitations should be considered when relying on the conclusions drawn in this research.

The most appropriate interview method was that of the semi-structured interview as this method allows for flexibility in the responses of the interviewee but does offer some structure for the interviewer. This method has increased the likelihood that the different interviews with different persons contained similar information, which makes it easier to draw valid conclusions from the experiences of people. Furthermore, semi-structured interviews do also enhance the reliability of the research as the interview is more structured and the set of questions are more clearly specified. As a result, it becomes easier to replicate the interviews in more or less the same way. Moreover, interviewees will be to a lesser extent influenced by personal wordings of the interviewer.

Secondly, it is necessary to scrutinize official documents of the Dutch parliament, such as policy documents or legal documents and laws. Documents issued by the electronics industry and the garment industry, by NGOs or other relevant organizations needed to be collected. To

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increase the objectivity of this analysis, content analysis was used as a method and applied to the documents.

3.5. Relevance of this research

The role of government in enforcing labour regulations has become more and more questionable with the emerging relevance of private codes of conduct and corporate social responsibility of firms. However, recent research has shown that firms cannot enforce these private regulations on their own and the role of additional actors seems vital to tackle labour related problems in their supply chain. To date, little is known about the ways and to what extent government contributes these labour situations. This comparative case study aims to contribute to the knowledge of how the Dutch government collaborate with industries and which strategies and instruments are applied for different industries. This new type of

information allows Dutch policy makers and Dutch industries to decide more effectively how government can contribute and what types of government strategies are valuable in dealing with labour conditions in the supply chain. Furthermore, investigating the different strategies that are used by the government can teach us about the key issues with regard to labour violations at play in the garment and electronics industry and can contribute to gain a more thorough view of how these problems should be addressed. These reasons make this research societally relevant.

Theoretically, this research contributes to the gap in the literature on modes of governance and the role of government with regard to private labour standard regulations. This research, being inductive, will contribute through theory building and does not specifically draw from theoretical propositions or assumptions. The results of this research could provide a more nuanced view of how government relates to private governance initiatives on which future research could build.

3.6. Conclusion

This chapter has set out the demarcation for this research, has elaborated on the limitations of this research and has aimed to legitimize the choices that have been made. The reasons to focus on the Dutch government and Dutch electronics and garment sector has been discussed. To answer the research question, the research design of a comparative case study is used and qualitative methods are applied that consist of in-depth interviewing and content analysis. The next chapter will provide a general historic overview of the strategies and approaches of

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the Dutch government in stimulating industries and firms to improve labour conditions in the past decades.

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Chapter 4: Historical overview of the policy of the Dutch government

in relation to CSR

This chapter will discuss the evolution of the CSR policy of the Dutch government and the promotion of these practices. First, this chapter will lay out the general CSR approach from a European perspective. In the second section, it will zoom in on the CSR policy as it has emerged in the Netherland in the 20th century. The third and fourth section will discuss the development of the CSR policy in the Netherlands from 1990 up to 2011. Lastly, this chapter will conclude on the findings.

4.1. Emergence of CSR policy at the European level (from 1970 onwards)

After the concept of CSR had received attention in the US in the 1950’s, the idea of CSR had also gained foothold in European countries by 1970 (Steurer 2010: 55). The history of the UK with regard to CSR is the most notable in this regard. High unemployment, social unrest and the downsizing of the role of the government by prime minister Thatcher, provided a fruitful environment for the launch of a CSR policy (ibid). From the year 2000 onwards, due to the facilitating role of the European commission, the idea of CSR spread across other Western European countries (ibid). In 2001 and 2002, the European commission conveyed the message that CSR should be considered as a part of sustainable development and promoted the need for transparency across Europe. However, from 2006 the European Commission took a different approach and adopted a more passive role, emphasising the need for businesses to act voluntarily (ibid).

4.2. Emergence of CSR policy in the Netherlands (1900-1990)

Although the focus on social and environmental issues had already been present in the Netherlands, the shift in the power relations between enterprises, government and citizens created a fruitful environment in which CSR could prosper (Cramer 2005: 87). From the end of the 19th century, frontrunner companies had already implemented socially responsible entrepreneurship by providing social services on a voluntary basis. This practice was triggered by the emergence of trade unions and the development of social ideas. These developments led society to further question what role government should have in protecting social matters (Cramer 2005: 88). As a result, the government gradually implemented a social security system within the national framework to protect workers’ rights and continued to protect and develop this system until the 1980’s (ibid). One of the first sustainability policies of the government that had an important impact was the introduction of the Green Fund

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System in 1992. This entailed a joint project of the Dutch government and the financial sector which consisted of various tax incentives to stimulate green projects. Similarly, awareness about environmental issues spread across society as well and the Dutch government tried for many years to regulate these issues by adopting various environmental laws and policies. However, from the 1980’s and 1990’s onwards the government started to realise that most regulation had an opposite effect and only resulted in a resistive attitude among companies (ibid). NGOs then also increasingly changed their policy by not influencing policy measures of the Dutch government but targeting companies directly instead. From this time onwards, the idea of Corporate Social Responsibility began to take shape in the Netherlands (Cramer 2005: 87).

4.3. CSR policy development (1990-2005)

Different favourable factors rendered a shift in power relations between the government and companies feasible (Cramer 2005: 89). The public authorities adopted a policy in which companies were increasingly given a free rein and in which certain tasks and responsibilities were attributed to the private sector. However, the government was still required to provide a clear framework in which companies should and could operate (ibid). An advisory report published in 2000 by the SER , at the request of the Ministry of Economic Affairs, set the guidelines for the Dutch government’s policy towards CSR. The SER pointed out that CSR entailed first: the targeting of business activities at three different levels namely: profit, people and planet, and second, the maintenance of relationships with important stakeholders based on transparency and dialogue (SER 2000:2). The ‘people’ aspect of this approach pertained to the focus on responsible business with regard to people internally (companies employees) and externally (community outside) and to the proactive and transparent approach that companies should take in this regard (SER 2000: 3).The role that the SER attributed the government in this regard was that of providing legislation and public services, facilitating and stimulating the right conditions and of leading by example through

procurement and being a fair employer (SER 2002: 10). In 2001, the Dutch government endorsed a large part of this SER advisory rapport and published the memorandum

‘Corporate Social Responsibility: the government perspective’. This was the first time that CSR was considered an independent policy theme by the government (Ministerie van

Economische Zaken 2007: 1). As a result, the government revived the National Contact Point (NCP) for multinationals (Cramer 2005: 91). The role of the NCP was to provide companies with information about the OECD guidelines and how these should be interpreted.

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Furthermore, in 2004, the Dutch government established a knowledge and information centre for CSR (MVO Nederland), to which the industry could turn for questions and information. Next, the Dutch government requested the Council for Annual Reporting to report annually on how companies can improve their transparency with regard to their reporting on CSR issues (ibid). Additionally, in 2002, mr. Ybema, the junior minister for Economic Affairs, was willing to finance a project called‘ the Dutch National Research Programme on

Corporate Social Responsibility’ carried out by seven universities who focused on research on corporate responsibility. After all these policies were implemented by the government, controversy remained within Parliament with regard to whether it should be compulsory for companies to report on their CSR policy. However, this policy suggestion was not

implemented.

4.4. CSR policy development (2005-2011)

After the publishing of the advisory rapport in 2000, the succeeding governments all adopted the approach of enhancing the implementation of CSR by actively playing a stimulating and facilitating role (Ministerie van Economische Zaken 2007: 1). In a subsequent government document that reflects on the CSR policy of the Dutch government, several remarks were made with regard to government policy and CSR (idem: 7-10). First, it was noted that companies had become more approachable on the topic of CSR, recognition and awareness had increased but not all companies had accepted CSR as a matter of course yet. Secondly, the government reflected that encouragement of the development of CSR had taken place but sustainable procurement was not yet fully realised within government policy. Thirdly, it was recognised that a growing need for a sector-specific approach instead of a general approach was desirable, and lastly, it was mentioned that companies (and consumers) encountered difficulties in gaining an overview of the available instruments, marks of quality and

certifications. It was therefore suggested to implement a more systemic approach in which the current range of initiatives could be combined and scaled up. The overall objective of the government was formulated in this document as their policy outline for 2007-2011, as follows :”the government wants all companies to become aware of the societal effects and responsibilities that accompany entrepreneurship and the opportunities that CSR offers, and it wants companies to make an actual effort to integrate CSR into their core activities”

(idem:10). As a result, seven ambitions were formulated, namely: the promotion of

information and awareness, the improvement of transparency and accountability, more focus on CSR boosters, the linkage of CSR to innovation, the strengthening of CSR diplomacy, the

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promotion of CSR in the international chain and the positioning of the government as a role model (idem: 10-11).

First, with regard to the promotion of information and awareness, it was stressed that MVO Nederland, as a CSR center of expertise, continued to be financially supported by the Cabinet. This center had set the target to have reached at least 75.000 to 100.000 entrepreneurs with the topic of CSR (idem: 11).

Second, the ambition of the cabinet was to develop the Dutch business community as the most transparent in Europe. This was partly done by harmonizing Dutch regulation with an EU directive which made it obligatory for companies to provide information in their annual report on environmental and personnel issues. Further, the cabinet wanted to stimulate

companies to issue their reports in accordance with the Global Reporting Initiative (GRI) and wanted to increase transparency by lifting the transparency benchmark to the level of

becoming a definitive national transparency benchmark in the Netherlands. Furthermore, the role of the NCP needed to become more visible (idem: 11-14).

Third, the government wanted to focus and cooperate more with these actors that take the lead in CSR, such as leading companies, to stimulate other actors in the CSR field. MVO Nederland played an important role to stimulate this and emphasis was on forming

partnerships with these frontrunners to achieve acceleration in the process of CSR (idem: 14).

Fourth, by linking innovation to CSR, the cabinet aimed to embed CSR practices in daily activities of businesses. To achieve this, subsidy instruments should be applied to promote sustainable innovation. Furthermore, the cabinet had the ambition to stimulate research centres and business schools to develop more knowledge and skills in the field of CSR (idem: 19).

Fifth, internationally, the Netherlands ought to take an active and leading role to create coherent, applicable and transparent guidelines for CSR (ibid). In promoting trade, CSR should be a key component of all the diplomatic missions. Further, the focus had to be on shaping partnerships with different countries with a strong emphasis on the OECD guidelines (idem: 20). Within international bodies, the Netherlands ought to position itself as a strong supporter of the international regulation and promote CSR wherever achievable. Harmonising CSR guidelines and providing coherence between the different standards were the focal points (idem: 21). At the European level, the Netherlands should join frontrunner countries

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such as the UK and Sweden in promoting a European focus on CSR at the European commission (ibid).

Sixth, CSR should be integrated within supply chains. In 2007, the cabinet did not have a clear vision yet on how to achieve this but working with front-runners needed to be part of the approach. Next, the cabinet stressed the need for round table initiatives on natural resources and mentioned the establishment of the Initiative for Sustainable Trade (IDH) (idem: 22).

Seventh, the emphasis was on the government itself as a leading role model in the field of CSR. The overall objective was the full integration of sustainability in the operational management and policy of the government. One of the facets of these objectives entailed a 100% sustainable national procurement by 2010. Further, the ministry of economic affairs was requested to take part in the development of GRI guidelines for governments specifically (idem: 24). Foreign financial instruments should be introduced to promote CSR. Moreover, CSR should form a part of the policy of the Dutch government and sustainability needs to be a theme throughout the policy agenda (idem: 25).

4.5. Conclusion

This chapter has outlined the emergence of the CSR policy of the Dutch government. CSR has begun to play a role in the Netherlands from 1980’s onwards when government realised that strict regulation did not have the desirable effect on companies, and they, as a result, increasingly transferred authority to companies themselves. From 2001, CSR policy was considered an independent theme by the Dutch government and a strategy was set out to raise awareness among companies and to stimulate them to implement CSR practices. From 2007 onwards, the government has boosted the implementation of CSR policy to accelerate CSR practices among companies. As a result, the government has subdivided seven different objectives to achieve this by applying all different types of instruments. The following

chapter will look more closely at the application of these strategies and instruments in current policy.

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Chapter 5: Policy of the Dutch Government

In this chapter, the first and second sub-questions of this research will be addressed by analysing the different policy strategies and instruments as set out by the Dutch government and by providing an overview of the response to these initiatives of companies in the Dutch garment and electronics sector. The different strategies and instruments will be analysed through the framework provided by Steurer (2010). The categorization of the strategies of the Dutch government is to a large extent based on the four policy strategies (themes) as

developed by Steurer (2010), but is complemented by additional policy strategies as

developed by the Dutch government specifically (Ministerie van Economische Zaken 2007). The following policy strategies are therefore suggested: 1. Promote knowledge and awareness for CSR and build capacities 2. Improve transparency and accountability 3. Focus on CSR boosters 4. Strengthen CSR internationally 5. Develop government as a role model.3

Secondly, this chapter will connect these different strategies to the different instruments that are applied by the Dutch government. To categorise the instruments, five different types of instruments are suggested as outlined by Steurer (2010)4. These consist of 1. Informational instruments 2. Economic instruments 3. Legal instruments 4. Partnering instruments 5. Hybrid Instruments.The selection of the various Dutch instruments is first based on their scope: the instruments needed to be designed by the Dutch government to influence the social and/or labour aspect of CSR policy of companies to some extent and second, the selected instruments needed to effect the Dutch garment or electronics industry directly or indirectly. Additionally, throughout this chapter, indications of the effect of the different instruments on

3_{Of course the political reality is hardly as organized as this classification, however attempts have been made to}

legitimize the classification as satisfying as possible. The analysis of the themes of CSR strategies were therefore guided by three rules. 1. The strategy intended to target the CSR policy of companies of the scrutinized industries to a large extent 2.The strategy intended to affect the social or labour aspect of CSR policy of companies and 3. The typology should provide a holistic overview with as few themes as possible in order to provide a clear, necessary and adequate distinction. In light of these rules, the policy theme “Linking CSR to innovation” as developed by the Dutch government is not implemented in this analysis. This decision is legitimized by the argument that this policy theme is only slightly linked to addressing labour standards and therefore considered not essential for the instruments as discussed in this research. Moreover, the policy theme of Steurer to ‘facilitate responsible investment’ is not

considered a separate strategy in this analysis as it reaches beyond the scope of this analysis since this strategy focuses mainly on influences investors, such as pension funds. Additionally, this policy strategy is considered a very indirect mean of government to influence the CSR policy of industries. Even if indirect influence could be discerned, the causal connection between government influence and CSR policies of industries would be very hard to assess. Furthermore, the distinction of the Dutch government between ‘strengthening International CSR diplomacy’ and ‘Getting to work on CSR in the International chain’ is here put together as one strategy referred to as ‘ strengthening CSR internationally’ to make sure that the different categories remain clear and distinct and that as little overlap as possible exists between de different strategies.

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the CSR policy of companies will be discussed throughout the chapter. The rest of this chapter will consist first of a general overview of the focus of the Dutch government. Next, the different initiatives will be categorised and discussed in turn.

5.1. The general policy focus of the Dutch government

The encouragement and improvement of sustainability is a cornerstone of Dutch policy. This policy, also referred to as ‘Maatschappelijk verantwoord ondernemen’ (MVO), is applied by the Dutch government to convey the importance of sustainable production and trade towards Dutch companies and industries within the country and abroad. The Dutch government relies on international regulation such as the OECD- guidelines for multinational enterprises which should be interpreted in conjunction with the Universal declaration of Human Rights, the UN Guiding Principles on Business and Human Rights (UNGP) and the ILO Declaration on Fundamental Principles and Rights at work (ILO Declaration) (Rijksoverheid 2013: 2; Huisman 2016). These regulations and other Dutch national laws function as the framework in which social and sustainable activities can be stimulated and enhanced by the government (Rijksoverheid 2013: 2). These international laws combined stipulate a general idea of the responsibility of companies: companies have the responsibility to respect. This entails that companies should respect human rights and should actively search for risks in their supply chain and address these risks wherever necessary and possible. This last obligation is also referred to as ‘due diligence’ (MVO Nederland 2015-a: 3). The general objective of the government within this framework is to address the environmental and social risks related to the production of goods in the international supply chain and to encourage and stimulate companies to find structural solutions to these issues through cooperation with the government and other relevant stakeholders (Rijksoverheid 2013: 1-5; Huisman 2016).

Both the ministry of Foreign affairs and the ministry of Economic affairs have been thrusted to carry out this policy. An elaborate overview of the CSR policy of the Dutch government is documented only once in 2007 (Ministerie van Economische Zaken 2007) which has extensively been discussed in chapter four. A policy document of 2014, largely coincides with this policy and accentuates some features of this policy such as a the increasing attention for CSR internationally (Rijksoverheid 2013: 5), the

multi-“I think that the Dutch government often has double standards because on the one hand they want to develop the IMVO covenant for gold, than it has to be [a covenant] for the electronics sector, than there has to be a Private Partnership, than it’s regulation, they do not really adhere to one consistent policy.”

(Anonymous 2016)

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stakeholder approach the Dutch governments adopts and the development of a sector analysis which entails a systematic analysis of different sectors and ensures a pro-active approach in tackling supply chain related issues (idem: 3). Scrutinising the CSR policy objectives in more detail, revealed a clear notion that, within this framework, the Dutch government pursued various smaller policy objectives that targeted slightly different target groups and, trying to achieve this, they made use of slightly different instruments with different focus areas

(Bonajo 2016; see figure 1). Wintermans (2016) and Anonymous (2016; see box 1) perceived that policy coherence is often missing which hinders clear communication to the parties in the garment sector. In the next sections, we will delve deeper into an analysis of these different developed instruments and how these instruments relate to targeting the CSR policy of the Dutch industries. Promote knowledge and awareness and build capacities Improving transparency and accountability Focusing on CSR boosters Strengthening CSR Internationally Government as a role model Informational Instruments NCP (National Contact Point) NCP (National Contact Point) Exchange information with leading firms IDH, MVO Nederland. IMVO-abroad Economic Instruments Transparency benchmark Financial aid: Dutch Growth Fund, Drive Sustainable procurement Legal Instruments Art. 2:391 of Dutch civil code, paragraph 1. Partnering Instruments Round Table on responsible conflict mining. IMVO-covenants

IMVO- covenants European Public Private Partnership for responsible mining European Public Private Partnership for responsible mining. Hybrid Instruments MVO- Nederland (partnering and informational) MVO-Nederland (Partnering and Informational) IDH (partnering and informational)

Figure 1. list of Dutch policy instruments categorised by types of instruments and policy strategies.

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The legal instruments are considered to be laws, directives or other legal binding regulations and are applied as instruments and do affect every policy strategy to some extent. A salient example is the implementation of article 2: 391 BW

of the Dutch Civil Code, paragraph 1, which

stipulates the need for companies to provide certain information per reporting year to increase

transparency. Legal instruments are considered to be one of the most stringent with regard to the

instruments government can adopt. As regulation is obligatory they can be assumed to be very effective in influencing CSR policy of companies. However, government policy officers often preferred

cooperation with stakeholders above legislation and

considered legislation as a last resort (Bonajo 2016; Huisman 2016; Veenhoven 2016). This approach was underlined by Huisman (2016) in the context of the covenant for sustainable Garments and Textile (see box 2). Furthermore, legal instruments were considered to be not very desirable as laws are intended to set a general standard for all different companies and are often not sector specific (Wintermans 2016; Veenhoven 2016). Consequently, it cannot be expected that all companies can meet the same standard as set by law as larger companies are much more developed than smaller companies. However, regulation can also provide security for companies when a lot of insecurity exists among companies about what standards to apply (Bonajo 2016; Janssen 2016).

5.3. Economic Instruments

Economic instruments can consist of fiscal advantages, subsidies, financial support and financial awards. The specific economic instruments employed are discussed below.

5.3.1. Transparency benchmark

The ‘Transparency benchmark’ is developed by the Ministry of Foreign Affairs to assess how transparent Dutch companies are regarding the documentation of their policy. This instrument thus stimulates transparency and accountability (Rijksoverheid 2015: 8). The benchmark consists of 500 firms of which the highest ranked firm wins a price (de kristalprijs). As companies receive an award when they win, this instrument is considered to be an economic instrument. The transparency is measured by an online self-assessment form that needs to be

“So I think that the minister is certainly not afraid to use

legislation, but we really believe in the ‘multi-stakeholder’ approach (…) there is more support if you do it together. And the sector should eventually carry out [the policy] and if it is something that comes from within [the sector] as well, I think it will work much better.”

(Huisman 2016- Ministry of Foreign Affairs)

Box 2

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filled in by the organisations (Rijksoverheid 2015: 8). The results are then checked by a team of researchers who analyse the correctness of the forms. The companies are assessed on the basis of eight broad criteria which are then further specified. These criteria are: the size and structure of the company, the social policy, the management policy, the relevance of the topics covered, clarity of the reporting, reliability, responsiveness to stakeholders and coherence of its policy (Ministerie van Economische Zaken 2016-a).The results from 2015 show that, comparing the garment and electronics industry, the electronics companies, such as Philips and KPN, overall score higher on the benchmark than the companies of the garment industry (Ministerie van Economische Zaken 2016-b). However, this benchmark is not mentioned in both of the annual reports of these companies nor are references made by other of the analysed companies, which renders the response of companies in both sectors to this instruments questionable.

5.3.2 Financial aid

The Dutch government provides subsidies and fiscal advantages for starting entrepreneurs that produce sustainably. Entrepreneurs within the garment and electronics sector who produce in an environmentally friendly way can gain from these advantages. The provided grants seem not directly related to improving social circumstances. However, programs, such as the Dutch Good Growth Fund or DRIVE seem to address social circumstances in

developing countries by providing financial means to entrepreneurs who stimulate the development of the developing country (RVO 2016). For the DRIVE project alone 150 million Euro was made available by the Dutch Government for the year 2015-2016 (RVO 2016-b). The companies scrutinised were not directly involved in these programs. However, the complete impact of these type of program’s on Dutch Electronics and garment sector specifically needs further research and reaches beyond the scope of this study.

5.3.3 Sustainable procurement instruments

The goods purchased by government need, in line with their procurement policy, to be produced fairly and according to certain social (and environmental) standards (Rijksoverheid 2016-a). In the past years, the Dutch government has moved away from a general

procurement policy to a more sector-specific approach (Bonajo 2016). When it comes to social standards, it was mentioned that it is still more difficult to assess whether a product is made according to fair labour standards than according to fair environmental standards (Bonajo 2016). However, companies have three different ways to fulfil their social