Voluntary due diligence to mandatory: The Responsible Business Conduct Act
The Dutch Responsible Business Conduct Act (Wet Internationaal Verantwoord Ondernemen, or WIVO) marks an important step in the evolution of responsible business conduct.
Its foundations lie in international human rights and environmental standards. The adoption of the Universal Declaration of Human Rights (1948), followed by subsequent international treaties, established a global framework for protecting human rights. Building on this, the UN Guiding Principles on Business and Human Rights (UNGPs, 2011) and the OECD Guidelines for Multinational Enterprises introduced the concept of due diligence. Under these frameworks, companies are expected to identify, prioritise, prevent, mitigate, and, where necessary, bring to an end adverse impacts on human rights and the environment.
Although the UNGPs and the OECD Guidelines have become the global benchmark for responsible business conduct, they remain voluntary. As a result, implementation depends largely on companies' willingness to act, leading to inconsistent application of due diligence practices.
To create a level playing field across Europe, the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD), making due diligence mandatory for large companies. The Netherlands is implementing the Directive through the WIVO. The Act is expected to enter into force on 26 July 2028, with companies required to comply from 26 July 2029.
The purpose of the WIVO
The WIVO requires large companies to identify, prevent, mitigate, and, where necessary, end actual and potential adverse impacts on human rights and the environment throughout their chain of activities. Companies may also be held liable if they fail to meet these obligations.
What is meant by a "chain of activities"?
The WIVO uses the term chain of activities, which is narrower than the value chain concept used in the Corporate Sustainability Reporting Directive (CSRD).
The key difference concerns downstream activities. The use of products by consumers and end-of-life disposal are generally outside the scope of the WIVO, unless the company itself has influence over those activities.
Which companies fall within the scope of the WIVO?
Following the Omnibus I Directive, the scope of the legislation has been narrowed. The WIVO applies to companies that meet both of the following criteria in two consecutive financial years:
- More than 5,000 employees worldwide; and
- A global net turnover exceeding €1.5 billion.
For non-EU companies, the threshold is net turnover exceeding €1.5 billion generated within the European Economic Area (EEA).
Enforcement: What happens if companies fail to comply?
The Dutch Authority for Consumers and Markets (ACM) has been proposed as the supervisory authority.
If a company fails to comply, the ACM may request information on how it is implementing due diligence obligations and may issue binding instructions requiring corrective action. Failure to comply with these instructions may result in periodic penalty payments and administrative fines of up to 3% of the company's worldwide net turnover. The ACM may also publicly disclose violations, potentially causing significant reputational damage.
In addition, affected parties, including workers, local communities, and environmental organisations, may bring civil claims against companies that fail to fulfil their obligations. This may expose companies to substantial financial liability.
Beyond legal consequences, companies that fail to meet responsible business conduct requirements may also risk losing business relationships with customers or commercial partners. Non-compliance can therefore result not only in lost business opportunities, but also in reputational harm and reduced trust among customers, investors, and other stakeholders. As sustainability and responsible business practices become increasingly important, failure to comply with the WIVO may create significant strategic and financial risks.
How will companies be supported?
To support implementation, the European Commission is expected to publish guidance by 26 July 2027, including best practices and model contractual clauses. In addition, subsidy programmes such as SPVO and SVOM are available to help companies implement due diligence in practice.
