- Observatory: EMCC
- Published on: 31 March 2008
Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.
The Dutch government has a positive attitude towards the different forms of globalization, both outward relocation and inward relocation. These developments are seen as natural economic processes of which both the Netherlands and the receiving countries as well as the entering countries will benefit. The idea is that the Netherlands will loose some – that is low-skilled labour – but at the same time gain some – that is labour of better quality -. The Dutch government’s policy therefore is aimed at stimulating a knowledge economy. The employers take a somewhat similar position. Beside stimulating a knowledge economy, they also advocate adjusting labour standards to international competition. The unions are not opposed to relocation abroad as such, but they warn against the attitude of both government and employers. They are of the opinion that government and employers underestimate the employment impact of relocation and overestimate the chances for the development of a flourishing knowledge economy. More needs to be done to moderate the consequences of relocation and to stimulate the development of a knowledge economy. They are opposed to adjusting Dutch labour standards to international competition but on the contrary want to raise labour standards in the receiving countries.
Institutional responses to globalisation
Government action to prevent or reduce the extent of off shoring/relocation
Are there any recent examples in your country (i.e. over the past 3-4 years) of the government intervening to prevent particular activities from being relocated abroad or to reduce the scale of this?
No. The government has a positive attitude towards relocation as part of economic processes that will benefit both the Netherlands and the receiving countries. (Ministerie van Economische Zaken, 2005)
If so, please give summary details and indicate the activities concerned
There are a few cases in which companies were brought into the Netherlands with subsidies for employment reasons, and after only a few years started relocating their activities abroad. In some of these cases, questions have been raised in parliament as regards the possibilities to re-claim those subsidies. This has happened, for example in the case of the computer company SCI, that relocated its activities from the Netherlands to a low wage country, whereas it had received an investment premium in the context of employment measures. The Secretary of State of Economic Affairs, Mr. Wijn, has answered that the subsidies would be reconsidered at the basis of the plans for relocation of the company.
Social partner attitudes towards off-shoring/relocation
Have there been cases over the past 3-4 years where the possibility – or threat – of relocation of production has featured as a factor in collective bargaining?
We have no indications that the possibility or threat of relocation of production has featured as a factor of great importance in collective bargaining.
If so, please indicate the cases concerned, how the possibility has been used and whether its use has become a more frequent occurrence.
A recent press release of the largest union of the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), FNV Allied Unions (FNV Bondgenoten), gives a possible explanation for the fact that the possibility or threat of relocation of production hardly plays a part as a factor in collective bargaining. A press release of the union on the collective bargaining process with the bank ABN AMRO (2006) states the following: In the former collective bargaining round, FNV Allied Unions has consciously chosen for an income freeze, presuming that the bank would relate its labour costs to its decision whether or not to outsource or offshore its activities. Now, one year later, we can conclude that such a connection has not been made: ABN AMRO has considerably reduced its fte’s by way of outsourcing and offshoring activities despite the reduction in labour costs.
Are there any cases over the past 3-4 years where trade unions have successfully resisted plans to relocate production abroad or have managed to reduce the extent of this?
If so, please indicate the cases concerned and outline their main features Are there any cases where trade unions have accepted the need for the relocation of production – or part of it – abroad as a means of maintaining or improving the viability of companies and so of preserving some jobs and even ultimately expanding them?
If so, please briefly describe the cases concerned
Government policy on foreign-owned firms controlling significant sections of the economy
Does the Government in your country have an explicit policy on restricting the acquisition of domestic companies in certain sectors by foreign-owned firms?
If so, please give summary details and indicate which sectors this applies to as well as whether any distinction is made between companies according to their nationality (e.g. whether non-European companies are treated differently from European ones)
Are there any restrictions on foreign-owned companies setting up branches or subsidiaries in your country either generally or in specific sectors?
Please indicate the sectors concerned and the stated reasons for the restrictions. Please also indicate whether the restriction apply to companies from other parts of the EU as well as from outside
Are there any sectors of the economy in which the acquisition of a domestic company has not been allowed over the past 3-4 years?
If so, please indicate the sectors concerned and the nationality of the foreign companies involved as well as the reasons given for the decision
Social partner responses to the take-over of domestic firms by foreign-owned ones
Have there been any recent cases (i.e. over the past 3-4 years) where trade unions have resisted foreign acquisition of domestic companies explicitly because of the nationality of the company concerned?
If so, please give summary details, indicating whether there is any evidence of different attitudes being shown towards European firms as opposed to companies from outside Europe
Have there been any recent cases (i.e. over the past 3-4 years) where domestic companies have resisted acquisition by a foreign-owned firm on the grounds of its nationality?
If so, please give summary details, indicating the nationality of the company concerned and whether there is any evidence of European and non-European companies being regarded differently in this regard.
Attitudes to globalisation
Have employers’ associations in your country adopted a stated position as regards the main aspects of globalisation – i.e. outsourcing or the relocation of production abroad and the acquisition of domestic companies by foreign-owned ones?
The Confederation of Netherlands Industry and Employers (Vereniging Nederlandse Ondernemers – Nederlands Christelijk Werkgeversverbond, VNO-NCW) has, the Dutch Federation of Small and Medium-Sized Enterprises, (Midden- en Kleinbedrijf Nederland, MKB-Nederland) has not, but research has been conducted on the perception of globalisation by SME’s.
If so, please give summary details, indicating whether or not the position varies across sectors of the economy
Relocation of production to other countries is accepted as a fact of life by the Dutch employers’ organisations, which comprehends both opportunities and threats. To be able to produce against lower (labour) costs is seen as the main opportunity. To loose, in term, the manufacturing industry altogether and become mainly a services economy is seen as the main threat. This threat can be resisted by way of specialising into knowledge intensive industrial activities in which the Netherlands excels. The development of R&D and the education of workers are key tools in this process. (nl0508101s.doc)
VNO-NCW, the largest Dutch employers’ association, deals with the issue of globalisation in the context of its labour market policies. In its brochure on this subject “increasing competition from rising, highly dynamic competitors, leading to displacement of economic activities and labour to those countries”, is stipulated to be one of the three major developments on the Dutch labour market until 2010, beside the ageing of the workforce and the context of the Lisbon agenda. The creation of a favourable climate for the establishment of businesses should be the answer to the increasingly internationalising Dutch economy. In order to do so, the Dutch economy should “restructure itself in the direction of market segments with knowledge intensive production and the creation of higher added value by way of innovative investments and better education of the workforce.” Activation of the workforce, a flexible labour market, and wage moderation are preconditions to achieve the desired attractive business climate. (VNO-NCW, 2004).
Not only large companies, but also Dutch SME’s are internationalising. Recent research conducted by the Dutch ING-bank, presented by MKB-Nederland in 2006, shows that 40% of the Dutch SME’s outsources activities to other countries, and 17% is off-shoring part of its production to other countries. The main reason for outsourcing is cost reduction. The opening of an establishment abroad is usually motivated by the wish to open up new markets. Most SME’s have positive experiences with internationalisation. Negative experiences lay in the field of communication and business manners or in bureaucracy and regulation. Half of the SME”s does not perceive a role for governments in the internationalisation of business. One quarter sees a role for governments in harmonisation of regulation between countries, financial support, and information and support. The Dutch employers’ organisation for medium-sized and small companies, MKB-Nederland, has not adopted a stated position on globalisation. It does however also plead for the education of workers since the shortages of personnel in the SME’s become pinching in recent years, especially in the technical sectors.
Have trade unions in your country adopted a stated position as regards the main aspects of globalisation – i.e. outsourcing or the relocation of production abroad and the acquisition of domestic companies by foreign-owned ones?
Yes. The FNV recently published an analysis of the information available on relocation of work from the Netherlands and formulated its opinion on the issue at the basis of this analysis (FNV Projectteam werkzekerheid, 2005).
If so, please give summary details, indicating whether or not the position varies across sectors of the economy
Althoug the FNV wants to have an open attitude towards the possibilities and chances that relocation might offer for the western world as well as the low wage countries, the FNV is also worried about the phenomenon of relocation and critical about the conclusions the Ministry of Economic Affairs has made at the basis of recent research (Ministerie van Economische Zaken, 2005; Gorter, e.a., 2005; Haverhals, e.a., 2004; nl0508101s.doc). This research, commissioned by the Ministry, comes to the conclusion that relocation from the Netherlands is a growing development, but not something to worry about. It is expected that there will be no serious macro-economic consequences, because another kind of labour, that is, labour of higher quality, will come to the Netherlands in return for the loss of mainly low-skilled labour. The only consequences are consequences for individual workers that loose their jobs, but macro-economically, the consequences are expected to be neglectable (Gorter, e.a., 2005; Haverhals, e.a., 2004).
The FNV, however, states that the research does not at all convincingly show that there will be hardly any effects from relocation for the structural employment in the Netherlands. It is still unclear, according to the union federation, how threatening the recent developments are:
- Is offshoring and outsourcing abroad a “normal” process of relocation of labour in the continuous process of job destruction and job creation? Will indeed high quality labour come in return for the low-skilled labour that disappears? In that case, it is basically a threat for individual workers, that have to be assisted in finding new jobs or eventually supported by social security measures. Moreover, the FNV warns for the social consequences and costs of a group of unemployed that cannot be replaced in any other jobs. The fact that individual workers will be damaged also justifies a preventive assessment of the necessity of the relocation. Finally, it would be necessary to monitor the labour conditions in the countries labour is relocated to.
- Or does relocation abroad eventually damage the structure of the Dutch economy, e.g. because essential parts of it disappear, necessarily followed by others, etc.? In that case much more is necessary than just a preventive assessment, reparation of individual cases and monitoring of labour conditions in the receiving countries.
The FNV therefore pleads for new research to monitor also the most recent developments that seem to go in the direction of more and more offshoring and outplacement activities of companies of not only low-skilled production work, but also higher-skilled production work, ICT activities, sales and marketing and even R&D.
At the basis of this opinion the FNV has formulated the following policy strategy:
- Relocation as a broad development does not need to be stopped altogether, but every single case of relocation has to be assessed and embedded in a long term company strategy. Certain limits and conditions have to be taken into account. An assessment has to be made whether relocation is useful and necessary. This assessment has to be made at the basis of a long term view.
- The maximalisation of profit has to be in balance with the consequences for society and for specific groups of workers, that is, relocation with the pure purpose of maximalisation of profit for the shareholders, without any consideration to the costs for society as a consequence of the disappearance of jobs, should be limited. These consequences include beside unemployment, that can lead to political instability, also damage to the environment as a consequence of a growth in transport activities and lower environmental standards in the lower wage countries.
- The market position of the Netherlands should be strengthened by way of knowledge development and not by way of a devaluation of labour conditions.
- Individual workers that loose their jobs should be coached more adequately (work to work measures and extra measures in case of great burdens for specific sectors or regions) and a greater job security should be created by way of improving the proper functioning of the labour market.
- Prevention of exploitation or workers in low wage countries. The FNV pleads for chain responsibility of companies that relocate their activities to lower wage countries. The FNV supports and cooperates with unions in these countries to improve the employment and labour conditions of their workers and supports the freedom of association for unions.
- The opportunities and risks of relocation have to assessed at the basis of “real facts”, not ideology.
The largest union for industry and services, FNV Bondgenoten, participates in the so-called MOOS-project (Making Offshore Outsourcing Sustainable) of Union Network International Europe(UNI Europe).
The Christian Trade Union Federation (Christelijk nationaal Vakverbond, CNV) also has an international division that supports unions in third world countries and Central and Eastern Europe. It has not explicitly put these policies in the perspective of relocation processes.
*A Eurobarometer survey on globalisation was carried out in 2003 in the EU-15 Member States. This might serve as a useful point of reference for the countries concerned, to see, for example, whether or not national attitudes expressed in the survey are in line with similar surveys which have been conducted nationally. The survey findings are available at:
Have there been any surveys of public opinion in your country over the past 3-4 years on attitudes towards globalisation or on the various dimensions of this (as listed above)?
Yes. Www.21minuten.nl is a large public opinion poll in the Netherlands (it claims to be the largest ever), which is conducted by way of a questionnaire on the internet. The poll is on line since 2005. It explores suggestions of the Dutch population for solutions for important social problems. Among other things, these concern measures that promote economic growth. One of the specific subjects in this context is the position of the Dutch economy in relation to Europe and Asia.
If so, please summarise the main findings of these. Please give a breakdown, where possible, in terms of the characteristics of respondents (e.g. by sex, age, socio-economic group, education level, occupation, sector of employment or region).
The main findings as regards globalisation are the following:
- 71% of the Dutch population is in favour of more international trade, provided that this leads to an increase in prosperity, and the same percentage of the population is prepared, for the sake of this, to accept a decay of Dutch identity.
- 41% of the Dutch population is in favour of further globalisation of the economy, while 24 % is against this.
- 45% of the Dutch population considers Europe as a positive factor for the chances for development of the Dutch economy, 30% does not. However, only 28% of the Dutch population advocates further unification of Europe, whereas 49% is opposed to this.
- 36% of the Dutch population sees more advantages than disadvantages for the Netherlands in the rise of countries as China and India, 30% does not.
- Globalisation is supported by followers of a broad political spectrum, although more by followers of large parties that represent the centre of the political spectrum than by more outspoken left- or right-wing parties: 60% of the centre-right wing People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie, VVD) is in favour of further globalisation, 53% of the centre-right wing Christian Democratic Party of prime-minister mr. Jan-Peter Balkenende (Christen Democratisch Appel, CDA), and 45% of the centre-left wing Labour Party (Partij van de Arbeid, PvdA), while respectively 15, 16 and 21% of the followers of these parties are opposed to further globalisation. Of the smaller, more outspoken left- or right-wings parties about 35% is in favour of further globalisation and the same percentage is opposed.
Have these surveys made a distinction between the different dimensions of globalisation (as listed above) or have separate surveys been carried out on these dimensions?
Yes, to a certain extent.
If so, please summarise the main findings of these as regards:
off-shoring(or the relocation of production abroad;
Although a large part of the Dutch population sees advantages in further globalisation and greater European cooperation for the Dutch economy, there are concerns about certain consequences of these developments. As regards off-shoring these concerns refer to the disappearance of jobs to low wage countries: 77% of the Dutch population considers this a big problem.
the take-over of domestic companies by foreign-owned ones and/or the growing extent of control by foreign companies of parts of the domestic economy
The same goes for the take-over of domestic companies by foreign-owned ones: 70% of the Dutch population considers this a big problem.
the establishment of new plants and offices by foreign-owned companies
Where possible, please give a breakdown in each case in terms of the characteristics of respondents (e.g. by sex, age, socio-economic group, education level, occupation, sector of employment or region)
Have these surveys made an explicit distinction between globalisation and the process of European integration, by, for example, distinguishing between relocation of production to other EU Member States and relocation to countries outside the EU or between the take-over of domestic companies by EU-owned firms and take-over by a non-EU companies?
If so, please give summary details of the differences in response to EU integration as opposed to globalisation.
The attitude of the Dutch population towards EU integration seems to be more ambivalent than towards globalisation, at least whereas further integration and globalisation are concerned. Although 45% of the Dutch population considers Europe as a positive factor for the chances for development of the Dutch economy, only 28% is in favour of further European unification. This in contrast with the percentage of Dutch adherents of further globalisation: 71%. However, certain consequences of globalisation are seen as threats for the Dutch economy, among other things this concerns the loss of jobs to low wage countries (77% of the Dutch population).
Marian Schaapman, HSI
FNV Projectteam werkzekerheid, Het verdwenen werk. De verplaatsing van werk naar het buitenland (The disappeared work. The relocation of work abroad). Amsterdam: FNV Marketing & Communicatie, 2006.
Gorter, J., P.Tang, M. Toet, Verplaatsing vanuit Nederland. Motieven, gevolgen en beleid (Relocation from the Netherlands. Motives, consequences and policy). Den Haag/Heerlen: Centraal Planbureau, 2005.
Haverhals, H., R. Barendreacht, R. Jansen, S. Kappers, L.O.M. de Wal, Aard, omvang en effecten van verplaatsen bedrijfsactiviteiten naar het buitenland (Nature, scale and effects of relocation abroad). Utrecht: Berenschot, 2004.
Ministerie van Economische Zaken, Visie op verplaatsing. Aard, omvang en effecten van verplaatsing van bedrijsactiviteiten naar het buitenland. Den Haag: 2005.
VNO-NCW, Nederland moet actiever – Werk(en) in de kenniseconomie 2010 (“The Netherlands should be activated – Work(ing) in the knowledge economy 2010”), The Hague, 2004.
McKinsey & Company, 21Minuten.nl. Editie 2006, Amsterdam: 2006.