The Dutch Parliament has adopted a law requiring companies to determine whether child labour occurs in their supply chains – and set out a plan of action on how to combat it.

The Child Labour Due Diligence Law ('Wet Zorgplicht Kinderarbeid') now heads to the Senate after last month's vote, and if approved will come into force from 1 January 2020.

The law would also require companies to draw up a declaration about their investigation and plan of action into child labour, with the statement recorded in a public register that is due to be opened next year.

Firms would not only have to determine whether there is a "reasonable suspicion" that their first tier suppliers are free from child labour but also – when possible – whether child labour occurs further down the production chain.

According to Gerard Oonk, senior advocacy officer of Stop Child Labour, it has not yet been decided whether very small companies or companies that are not active in countries or sectors where child labour occurs would be exempted from the Act.

He also explains that the research on child labour and the possible plan of action will be based on guidelines from the International Labour Organization (ILO) and the International Organisation of Employers (IOE), the so-called ILO-IOE Child Labour Guidance Tool for Business.

Complaints can be filed by any person or legal entity on the basis of concrete evidence that a company is involved in child labour.

The company must deal with it first, followed by a "binding instruction" and a term of execution imposed by authorities. If the research and/or a plan of action are not met, an administrative fine will follow. If a company violates the law again within five years it can be punished with imprisonment.

Expanding mandatory reporting, disclosure and due diligence laws across supply chains serving Western markets were this week identified as among the top 10 human rights risks to watch in 2017.

10 human rights risks to supply chains in 2017

The research by Verisk Maplecroft notes that failure to get it right will now come with a hefty price tag in under the French Duty of Care law (Le Devoir de Vigilance) and the Dutch Due Diligence Child Labour Law – with the Swiss Responsible Business Initiative legislation likely to follow next.

The trend to move from voluntary to mandatory reporting means the costs of non-compliance are increasing – but Verisk Maplecroft also believes making human rights due diligence a standard business practice will create commercial opportunities for early adopters of best practice.