Annual Report 2018 | September 2019
Value Chain Working Group
The parties and adhering banks committed to conducting a minimum of two sector-specific value chain exercises per year, starting with Cocoa, Palm Oil, Gold and Oil & Gas. It is safe to say that this turned out to be an unrealistic ambition. Parties and banks have needed time to conduct thorough, in-depth sector analyses that add value to the information already available and to agree on suitable follow-up actions. Drawing on the UNGP methodology, parties chose an innovative approach, by jointly identifying and prioritizing human rights impacts in a particular sector (see quotes on the ‘value chain approach tool’). But jointly making longlists and shortlists of the most severe human rights impacts takes time: information has to be obtained from experts or colleagues, and consensus then reached on what constitutes the most serious human rights impacts and on what the suitable follow-up actions should be.
Instead of two value chain exercises per year, parties and banks are now hoping to finalise a total of four value chain analyses across the three years. Cocoa was published in 2018 and Palm Oil in August2019. Parties and banks will finalise their Gold and Oil & Gas value chain analyses in 2019.
In 2018, and joined by the dissolved Matrix working group’s members, a Palm Oil value chain analysis sub-working group was set up. Its work included a fieldtrip to Indonesia to give the banks a better idea of the first link in the Palm Oil value chain: the plantations. The sub-working group explored whether current, specific on-the-ground information relevant to banks could be gathered during the analysis. Parties are also exploring the feasibility of developing a database of existing collective bargaining agreements on palm oil plantations - information adhering banks active in palm oil could use when assessing loan requests from clients in the sector.
Invaluable additional information
“Banks wanting to improve their due diligence get much of their information from large agencies who collect data based on publications. But that isn’t the whole picture, and workers on the plantations can provide invaluable additional information. Banks must learn that employees are a fantastic source of information, and plantation employers must learn that a genuine dialogue on their plantations between employer and employees will help enormously to improve the image of the palm oil companies.”
Roel Rotshuizen
CNV
Getting a complete picture
“For a complete picture of conditions on plantations you need to talk to people working there, see their work environment, and hear their stories of their daily lives and circumstances. After all, nobody knows what those conditions are better than the workers and their union representatives. Audit reports provide some information, but it’s often incomplete or incorrect. A complete picture is needed to understand the complex local situation, and provides insights for developing concrete solutions to improve labour conditions, a better due diligence process and ways to comply with international standards.
“Where trade union rights are often under pressure, as is the case on palm oil plantations, banks set an example by talking with and acknowledging union representatives as important stakeholders and key change agents in improving labour conditions and freedom of association. If organized jointly, as our fieldtrip was, this helps strengthen the position of unions in respect of the directives of the companies, and contributes to mutual understanding of the roles of the trade unions and banks in making the value chain more socially sustainable.”
Fred Polhout
FNV
Field Trip to Indonesia
In 2018, the Value Chain Working Group organised a fieldtrip to Indonesia to learn first-hand more about palm oil plantations. The programme included a discussion between banks and trade union/worker representatives.
Invaluable additional information
Getting a complete picture
Informative meetings
Value Chain Approach Tool
The DBA has adopted a tool developed in collaboration with SHIFT to assess actual and potential human rights impacts in value chains. This ‘value chain approach tool’ involves jointly identifying and prioritizing the most severe human rights impacts within a specific sector, and identifying opportunities for positive impact. Is it working?
Generating better understanding
How to foster respect for human rights
Accelerating human rights within our organisation
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Informative meetings
“Though ABN AMRO representatives frequently visit palm oil plantations, it was invaluable to go with such a diverse group of stakeholders. The meetings with worker representatives of one of the plantations and with a local NGO were particularly informative. Main takeaway for ABN AMRO is that stakeholders on the trip and those we met in Indonesia felt ABN AMRO can achieve much more as a committed partner who remains in dialogue with the industry than if we were to abandon the sector altogether.”
Wijbrand Fabius
ABN AMRO
Generating better understanding
“Bringing together the different perspectives, expertise and networks from all stakeholders has been helpful in generating a better understanding of salient human rights risks in the sectors analysed. Translating this into a jointly-agreed analysis report (‘writing by committee’) and detailed recommendations (‘all agreeing on everything’) proved a daunting and time-consuming task. Having experienced the process from different sides, I suspect both banks and other parties would prefer to put future efforts into hearing the multi-stakeholder perspective and then developing follow-up actions, rather than focusing on producing documentation.”
Johan Verburg
Rabobank (formerly worked for an NGO)
Thinking about how to foster respect for human rights
“Before the DBA, ABN AMRO had already been carrying out value chain analyses in textiles, diamonds, copper and cocoa. But this was the first time we’d been part of a multi-stakeholder value chain analysis, which engages many different people, internal and external, in thinking about what banks can do to foster respect for human rights. I hope that long after the DBA, banks will continue to find new ways of assessing how they can contribute to human rights in the value chains in which they are active.”
Ruben Zandvliet
ABN AMRO
Accelerating human rights within our organisation
“Working together with Dutch NGOs, trade unions, government and other stakeholders to define the most salient human rights issues in the different value chains has been an innovative and rewarding experience for ING. By closely working together in an unrestricted and open setting, we were able to find creative and constructive solutions, so in the end we can collectively create impact on the ground. This has helped us further accelerate the topic of Human Rights within our organisation through, for example, intensification of our client engagement, and by defining our own most salient human rights issues in our role both as an employer and as a corporate lender.”
Maarten de Jongh
ING Bank