Legal report shows how to increase transparency about human rights policy

03 May 2018
Bank entrance. Illustration for the Dutch Banking Sector IRBC Agreement.

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Over the course of 2017, the parties and adhering banks to the Dutch Banking Sector Agreement (the “DBA”) explored options for banks to display greater transparency about their human rights policies and practices. In accordance with section 6.10.c of the DBA, the parties and adhering banks discussed how client confidentiality relates to the increased expectations of parties and society that enterprises show how they put their responsibility to respect human rights into practice.

Research by law firm Nauta Dutilh

To facilitate this discussion, the law firm Nauta Dutilh was instructed to analyse how Dutch financial regulatory law, civil law and contract law may enable or impede adhering banks from providing greater transparency. The main question of the analysis was “To what extent are adhering banks legally able to provide (i) the civil society organisations (that are a party to the DBA) or (ii) the public with individual client information regarding the outcome of a human rights due diligence investigation and any measures taken pursuant thereto within the framework of the DBA?”.

Transparency versus client confidentiality

The legal report provided the following general insight into the constraints on and the opportunities to increase transparency about human rights policy and practices in the Dutch context:

  • individual client information can be made public or shared with the client’s consent or pursuant to a statutory obligation (unless the Market Abuse Regulation or the Dutch Act on the Prevention of Money-Laundering and the Financing of Terrorism applies);
  • individual client information cannot be made public or shared with civil society organisations (that are a party to the DBA) without the client’s consent;
  • individual client information in anonymous form can be shared or made public;
  • aggregated anonymous client information can be made available.

In follow-up discussions based on the report, the parties and adhering banks agreed that the gist of the conclusions is expected to apply to financial relationships within the scope of foreign law. Parties acknowledge that other limitations could apply in jurisdictions outside the Netherlands. In the spirit of the DBA, if an adhering bank claims that another limitation is applicable, it will briefly substantiate why this is the case.

In addition to legal considerations, the adhering banks also indicated that there may be strategic considerations for (not) sharing information about clients or transactions. During the course of the DBA options to increase transparency about banks’ human rights policies and practices will be further explored.

Involved in the IRBC agreement

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