United States: Dutch Child Labor Due Diligence Act Approved By Senate – Implications For Global Companies

The Dutch Senate has approved the Child Labor Due Diligence Act, which had been pending for more than two years. This soon-to-be addition to the growing global body of corporate human rights legislation is intended to address child labor in supply chains. The Act will require supply chain due diligence and reporting by a significant number of foreign-based multinationals providing goods or services in the Netherlands. In this Alert, we provide a detailed overview of the Act and suggested near-term action items for multinationals. An unofficial translation of the published version of the Act commissioned by Ropes & Gray also is included as an Appendix to this Alert.

The Legislative Process

In the Netherlands, new legislation generally is initiated by the government. However, in rare instances, Parliament exercises its right to put forward its own legislative proposal. This is how the Act was introduced into the Dutch parliamentary system.

The Act was approved by the Parliament on February 7, 2017, but with severe criticism that it interfered with the standing policy of the Dutch government to promote the OECD Guidelines for Multinational Enterprises and the UN Sustainable Development Goals through voluntary sector-specific covenants or "IMVOs." IMVOs are essentially agreements between companies in a sector and the government regarding a particular corporate social responsibility topic, providing a means of self-regulation instead of government regulation. Typically, if an IMVO is concluded on a topic, the Dutch government only will introduce additional regulation if an evaluation of the IMVO indicates that it is not effective.

There are IMVOs in place that, among other things, cover child labor and that are in the process of being evaluated. In recognition of the concerns of opposing members of Parliament and the Dutch government, Attje Kuiken, the member of Parliament who drafted the Act and initiated the legislative proposal, requested suspension of the parliamentary process in the Senate until after these evaluations were completed. However, the evaluations have taken longer than expected and are still not complete.

The Dutch Senate elected not to wait for the IMVO evaluations and approved the Act on May 14, by a slim three-vote margin. The next step is for the Act to be published in the State Gazette, after which it will be submitted to the King for approval. After approval by the King, the Act will be submitted to the designated regulator, which is expected to be Consumer and Market Authority or an entirely new government agency, for implementation.

Effective Date

By its terms, the Act will enter into force on a date to be determined by Royal Decree, but not prior to January 1, 2020. However, the initiating Parliament members indicated in their last meeting during April 2019 the expectation that the Act will become effective sometime in 2022. According to Ms. Kuiken, this three-year period would allow the government to prepare a General Administrative Order that appoints the regulator and fleshes out the obligations of companies under the Act in more detail.

Covered Entities

Companies will be subject to the Act if they sell or supply goods or services to Dutch end-users, regardless of where the company is based or registered or its legal form. For purposes of the Act, an end-user is the natural person or legal entity using or consuming the goods or purchasing the service.

The Act does not contain an exemption for particular categories of companies. However, categories of companies may be exempted by General Administrative Order. In legislative debates in both the Senate and the Parliament, there appears to be a consensus that the size of a company will not necessarily determine whether it is exempt. The absence of a general exemption for small and medium-sized enterprises would be inconsistent with analogous legislation in several other countries.

The Act contains a transitional provision, which provides that it will not apply to goods or services to the extent the obligation to supply the goods or services was entered into prior to the publication of the Act. The transitional exemption will sunset not later than five years after the effective date of the Act.

The Act provides that a company that transports goods is not considered a supplier of those goods. Although the Act is silent on the point, the transportation of the goods will presumably be a covered service under the Act.

Child Labor Defined

For purposes of the Act, child labor includes any form of work performed by persons under 18 and that is included among the worst forms of child labor referred to in Article 3 of the Worst Forms of Child Labor Convention, 1999. Under the Convention, this comprises (1) all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including forced or compulsory recruitment of children for use in armed conflict; (2) the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; (3) the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties; and (4) work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.

If the work takes place in the territory of a state that is party to the Minimum Age Convention, 1973, in addition to the foregoing, child labor will include any form of work prohibited by the laws of that state in implementation of the Convention. If the work takes place in the territory of a state that is not a party to the Minimum Age Convention, child labor will further include (1) any form of work performed by persons who are subject to compulsory schooling or who have not yet reached the age of 15 and (2) any form of work performed by persons under 18 if the work, by virtue of its nature or the conditions under which it is performed, may endanger the health, safety or morality of young persons, except that child labor will not include light work (as defined in the Minimum Age Convention), carried out for a maximum of 14 hours a week by persons who have reached the age of 13. "Light work" is defined in the Minimum Age Convention as work by persons 13 to 15 years of age which is (1) not likely to be harmful to their health or development and (2) not such as to prejudice their attendance at school, their participation in vocational orientation or training programs approved by a competent authority or their capacity to benefit from the instruction received.

Exercising Due Diligence

In contrast to corporate modern slavery legislation in many other jurisdictions, the Act imposes an affirmative due diligence obligation. Subject companies must investigate whether there is a reasonable suspicion that the goods or services to be supplied to Dutch end-users have been produced using child labor. Due diligence is to be based on sources that are reasonably known and accessible to the subject company. Due diligence also can be satisfied by obtaining goods or services from companies that have issued declarations that they exercise due diligence (declarations are discussed in more detail below).

If the subject company has a reasonable suspicion of child labor in the production of the goods or services, it must adopt and implement a plan of action. A joint action plan aimed at ensuring that affiliated companies exercise due diligence that is developed by or among one or more social organizations, employees' organizations or employers' organizations and approved by the Minister for Foreign Trade and Development Cooperation will satisfy this requirement.

Further requirements pertaining to due diligence and the plan of action will be specified in a General Administrative Order, which will take into account the ILO-IOE Child Labour Guidance Tool for Business. The Child Labour Guidance Tool was created jointly by the International Labour Organization and the International Organisation of Employers as a resource for companies to meet the due diligence requirements indicated in the UN Guiding Principles on Business and Human Rights, as they pertain to child labor.


A company that is subject to the Act generally must prepare a declaration indicating that it exercises due diligence in order to prevent the goods and services that its sells or supplies to Dutch end-users from being produced using child labor.

Companies that already are registered in the trade register will be required to submit the declaration to the designated regulator within six months after the Act takes effect. If a company is not already registered in the trade register, it will be required to submit its declaration immediately after it is registered. A company that is not registered in the European part of the Netherlands and that is not registered in the trade register will be required to submit a declaration within six months after the company supplies goods or services to end-users in the Netherlands for the second time in a given year.

Declarations will be published in an online public register to be established by the designated regulator. The Act indicates that further rules may be established pertaining to the content and form of declarations.

If a company only receives goods or services from other companies that have issued a declaration, it is not required to issue its own declaration. Other exceptions to the reporting requirements of the Act may be established by General Administrative Order.

Enforcement and Penalties for Non-compliance

A regulator will be appointed to oversee compliance with the Act.

Any natural person or legal entity whose interests are affected by the actions or omissions of a subject company relating to compliance with the Act may submit a complaint to the designated regulator. The complaint must contain a concrete indication of non-compliance by an identifiable party.

In the first instance, an aggrieved party must work with the subject company to resolve the complaint. The regulator only may address a complaint after it has been dealt with by the company, or six months after the submission of the complaint to the company without it having been addressed.

A company can be fined up to €8,200 for failing to submit a statement declaring that it exercises due diligence. If a company fails to carry out due diligence in accordance with the Act or to draw up a plan of action, or to comply with any further requirements that are established pertaining to due diligence and the plan of action, a fine of up to 10% of the worldwide annual turnover of the company can be imposed. However, the Act provides that a fine will not be imposed until after a binding instruction has been issued to the company. A time limit may be set for complying with the instruction.

In addition, the company can incur additional fines and a director may even be imprisoned for up to two years if, in the prior five years, a fine previously had been imposed for violating the same requirement of the Act and the new violation is committed under the order or de facto leadership of the same director.

Next Steps for Multinationals

As noted earlier in this Alert, further rulemaking will be required to address some of the compliance details not covered in the Act. Among other things, additional rulemaking is expected to further flesh out the form and content of declarations and due diligence and plan of action requirements. In addition, the effective date of the Act will be indicated in the Royal Decree.

The Act will require companies to put in place substantive compliance measures to address child labor. In contrast, disclosure-only modern slavery legislation, such as the California Transparency in Supply Chains Act, UK Modern Slavery Act and the federal and New South Wales Modern Slavery Acts in Australia, requires companies to each year publicly disclose what they are doing to address modern slavery, but do not require companies to put in place policies, procedures or substantive compliance programs.

It is premature to establish a compliance program, or enhance an existing compliance program, specifically to comply with the Act, until there is further visibility on some of the Act's requirements. Furthermore, we expect the effective date will be set far enough out to give companies enough time to address the Act's requirements.

However, we recommend that multinationals take the following preparatory steps in contemplation of the Act:

  • Conduct a preliminary applicability assessment. Assess whether group companies are providing goods or services to end-users in the Netherlands and, if so, which companies, the extent of those activities and the nature of the products or services involved.
  • Even if not providing goods or services to end-users in the Netherlands, assess whether products or sub-contracted services are being provided to companies that are likely to be subject to the Act. As is the case with other legislation that requires supply chain due diligence, such as the U.S. Conflict Minerals Rule and the U.S. Federal Acquisition Regulation anti-human trafficking rule, companies that are subject to the Act are likely to put significant pressure on their supply chains, in particular their tier-1 suppliers, to support their compliance requirements.
  • Assign responsibility for monitoring further developments under the Act and for compliance oversight. As we have noted in prior Alerts, multinationals are moving toward more centralized human rights compliance. Increasingly, policies, procedures and disclosures are being developed and coordinated by a centralized, group-wide steering committee comprising of representatives from relevant corporate functions, business units and geographies. This approach is being taken both to increase compliance efficiency and reduce risk.
  • Continue up the learning curve on child labor risks in the supply chains of applicable goods and services. Among other things, consult publicly available resources, such as those published by the U.S. and other governments, NGOs and other comparable companies, as well as trade group resources.
  • Assess the adequacy of existing child labor due diligence procedures and conduct a gap assessment against the ILO-IOE Child Labour Guidance Tool for Business. Part C of the Guidance Tool contains recommended steps for preventing and addressing child labor impacts.
  • Based on all of the foregoing, develop a preliminary, high-level project plan for addressing the requirements of the Act and/or commercial customers that will be subject to the Act. This will provide a framework for developing a more detailed compliance plan and facilitate an efficient approach to compliance when the effective date of the Act has been set and the compliance requirements under the Act have been further fleshed out.

The Ropes & Gray attorney authors gratefully acknowledge the input of contributing author, Harm Kerstholt, Partner, NautaDutilh.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions