Netherlands

Name of Legislation

Child Labour Due Diligence Bill

“Wet Zorgplicht Kinderarbeid”

Area of Law

Consumer Protection Law

Jurisdiction

National

Current Stage

Law proposal adopted by the lower chamber. Currently being debated in the Senate.

Bill adopted by the Parliaments Lower Chamber on 7 February 2017.

Requirement

Disclosure of due diligence process.

Primary Obligation: companies covered by the law would be required to submit a statement to the regulatory authority declaring that they have carried out due diligence related to child labour throughout their full supply chain.

If there is a presumption of the use of child labour, the company shall draw up an action plan to prevent this impact.

The competent authority can consider joint plans of actions.

Material Scope

Issue-focused: child labour

Personal Scope

Any company, wherever incorporated, that delivers products and services to the Dutch market two or more times a year.

Reach of the requirements

Full supply chain

Enforcement

Transparency: All statements will be published on the website of the competent authority.

Monitoring: No active enforcement of the competent authority; only complaints from third party will trigger enforcement.

Enforcement: Companies that fail to submit a statement will be fined up to € 4,100. Authority can provide instructions and time frame requirements for companies that fail to conduct due diligence. If a company is fined twice within five years, the next violation can lead to imprisonment of the responsible director or a fine of up to 10 percent of the company’s annual revenue.

Name of Case

Friday Alfred Akpan et al v. Shell

Court of Appeal The Hague 17 December 2015, ECLI:NL:GHDHA:2015:3587 (Shell/Akpan).

Area of Law

Tort law - Nigerian Law.

The Hague court applied Nigerian Law (as Nigeria is the place where the damage occurred and is a common law jurisidction).

Substantive applicable norm: Nigerian Oil Pipelines Act 1956 (OPA) (Section 11(5)(b) for negligence on third parties.

Jurisdiction

District Court of the Hague - The Netherlands

Current Stage

December 2015: Court of Appeal accepts jurisdiction over the subsidiary and parent company; it does not rule out the possibility that the parent company has a duty of care with respect to acts of its subsidiary; it as partially accepted the claimants demands for company disclosure of documents.

Final decision of the Court of Appeal pending.

Case evolution:

2013: District Court decision:

Finds it has competence over the Nigerian subsidiary, SPDC, and the parent company, Royal Dutch Shell (RDS);

Declares the subsidiary liable for the tort of negligence for failing to take adequate measures to prevent the sabotage that caused the oil spills;

Rejects a duty of care on the part of the parent company. It referred to the applicable Nigerian law, which, as a general rule, does not recognize a duty of care on parent companies with respect to their subsidiaries' impacts on third parties. It rejected claimants’ arguments that it should depart from the general rule.

Both claimants and respondents appealed the decision.

December 2015: Dutch Court of Appeal handed down its preliminary verdict:

Declaring itself competent to hear the case against the subsidiary, SPDC, and the parent, Royal Dutch Shell (RDS);

Does not rule out the possibility of parent company duty of care with respect to the activities of its subsidiaries;

Ordering Shell to disclose documents that may shed light on the parent company’s role in the maintenance of the pipelines.

Granting legal standing to claimants and the non-governmental organisation (NGO) Friends of the Earth NL.

Final decision on the merits pending.

Requirement/Result

Claimants demand a recognition of liability of the subsidiary and parent companies; compensation for damages; clean-up of the pollution; measures to prevent further oil spills; and disclosure of documents.

Claimants demand:

Recognition of liability of Shell Nigerian subsidiary and Dutch Shell parent company for damages caused by oil spills from two underground pipelines and an oil well;

Compensation for damages;

Greater effort from the company to clean-up the pollution resulting from the leaks and the introduction of preventive measures to prevent recurrence of oil spills;

Disclosure of documents regarding the cause of the spills and the role of the Shell parent in its subsidiary’s infrastructure maintenance activities.

Personal Scope

Claimants: 4 Nigerian farmers.

Defendants: Royal Dutch Shell (parent company) and SPDC (subsidiary)

Claimants: four Nigerian farmers from the Ikot Ada Udo community.

Defendants: Parent company Royal Dutch Shell, RDS + subsidiary Shell Petroleum Development Company of Nigeria (SPDC)

Reach of the requirements

Claimants demand full supply chain requirements (parent company’s duty of care and liability for acts by its subsidiaries).

Claimants demand that a duty of care be recognised on the parent company with respect to the impacts caused by its subsidiary.

Enforcement

Final decision pending.

Pros

The decision could establish parent company liability and duty of care;

Recognition of Home State Courts' jurisdiction over foreign subsidiaries, together with jurisdiction over the parent company.

Substantive aspects: Possible establishment of parent company’s liability and duty of care with respect to the acts and omissions of its subsidiaries.

Jurisdiction: Based on the Dutch Code of Civil Procedure (DCCP), art 7(1) regarding the plurality of defendants, the Court accepted jurisidction over the foreign subsidiary, together with the parent company.

Transparency: the Court of Appeal honours claimants’ demands that Shell disclose internal documents relevant to understanding its role regarding the maintenance of the pipelines and wells.

Cons

Applicable law: locus delicti. Nigerian law does not recognize a duty of care on parent companies.

Broader Application to Other Sectors

Applicable to other tort law cases.