Who do you think really pays for that 10 Euro T-shirt?

Professor Liesbeth Enneking holds a five-year chair investigating how the law may contribute to socially responsible business conduct. ‘One of the big challenges of our time is how we can foster inclusive prosperity. I would like to add to this purpose with my research.’

What is your research about?
‘If Dutch companies are producing goods in countries that don’t have the kind of environmental and human rights regulations we have over here, so-called low-wage countries, can these Dutch companies be held responsible for the negative local effects of producing these goods? Is it okay if companies only look at local regulations, even if those are a lot less strict in terms of environmental protection, human rights, employment conditions or child labour?’

Do you have an example? 
‘In April 2013, the Rana Plaza building in Bangladesh collapsed due to sub-standard construction, resulting in the deaths of more than a thousand people who were working in the hundreds of small textile factories housed in the building. Many of them were actually manufacturing garments destined to be sold by large textile discounters to consumers in the Netherlands, France, the US and in a number of other Western societies. As the extent of the disaster became clear, this raised many questions about whether these large textile discounters should have done more to ensure the safety of the people who were working for their Bangladeshi sub-contractors.’

How is this example linked to your research? 
‘Western prosperity is partly based on this system, because the West doesn’t shoulder the true cost of production. We don’t pay the full price for the T-shirt or the smartphone, we leave that to the producing countries. They sacrifice their environment, or time, or health, or children, or sometimes even their lives for our T-shirts. What can we as consumers do to make this process more fair? And what can companies do to make prosperity more inclusive? In which way can the law be helpful? And it is also not just about legal issues, working together with other academic fields of expertise is very important for coming up with solutions to challenges this big.’

'We don’t pay the price for the T-shirt or the smartphone, we leave that to the producing countries. They sacrifice their environment, time, health, children or sometimes even their lives for our T-shirts.'

Liesbeth Enneking

How can the law be helpful to improve fairness? 
‘In 2017, the infamous Shell-Nigeria human rights case came to court in the Netherlands. Twenty years earlier, the same case had gone to court in the US. Cases like these have sparked a broad debate about this subject – are the effects of business activities by subsidiaries and sub-contractors in other countries just as much a company’s responsibility? How can we solve such cases, or how can we prevent future disasters? In the background there’s this ongoing public discussion about the question ‘If it would help to pay one Euro extra on every gallon of gasoline, would we be willing to do that?’. I think a lot of people would hesitate. But the idea is growing that we have to do something, that we cannot close our eyes to the disasters that happen on the other side of the globe. Their loss is also our responsibility. Step by step, we’re moving in the direction of more transparency on the true costs of our goods and services, more companies that take their responsibilities in this context seriously, and – where necessary – stricter regulations. Last year, a law introducing a duty of care for Dutch companies with respect to child labour in their supply chains was adopted by the Dutch parliament. Although it seems unlikely at this time that the law will be passed by the Dutch Senate, where it is currently pending, this is a step in the right direction.’ 

If not even politicians can agree about a law against child labour, doesn’t this discourage you?
‘No, on the contrary. The fact that politicians talk and think about such topics is a good thing. The more we all know, the more responsibility we can and must take. But this process takes a lot of time. Politicians are still of the mindset that ‘If we make regulations more strict, companies will move to other countries.’ When in fact, that is a very unlikely scenario. Research tells us that tightening regulations does not necessarily make that happen. France has recently adopted a law requiring large French companies to monitor the human rights and environmental risks related to the activities of their subsidiaries and sub-contractors, and to take preventive measures where necessary. Similar initiatives are being debated in a number of other neighbouring countries, a development that is bound to lead to increasing political pressure also on the Dutch government to adopt similar measures. In my research we look not only at the legal aspects of case law and regulations in this context, but also at their societal context, including for instance the socio-political dynamics that give rise to these initiatives and their potential for fostering more socially responsible business conduct.’

What is your personal goal? 
'For me these cases and legislative initiatives are all about the equal distribution of justice on a global scale. Here in the Netherlands, we owe our prosperity at least partly to goods and services that are being produced abroad. We cannot allow the true costs of those goods and services to be externalized onto workers, communities and the environment in countries that are less prosperous to begin with. If it takes lawsuits and legislation in Western societies like the Netherlands to achieve socially responsible international business conduct, then let’s be realistic about that and look at how we can optimize the role of the law in this context. Helping the world become more fair and just means at least doing something. Let’s try to make sure that ‘our’ companies do not get involved – even indirectly – in human rights violations or environmental messes here or elsewhere, and let’s make absolutely sure that if those messes do occur, the victims get access to justice and are compensated for their losses. Consider it yet another way to get to inclusive prosperity.'

More information

Liesbeth Enneking is one of the early contributors to Challenge Accepted, a joint campaign that advances three ambitions that help shape the future: living together in vital cities, striving for better health and healthcare and fostering inclusive prosperity. Join our community EUR Connect to contribute as well and get exclusive access to Liesbeth Enneking’s 15-minutes pop-up college and other interesting stories.

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