Dutch NCP findings in Unilever case

About the case

• On 12 April 2018, the Association of Former Marsavco/PHC Unilever Workers in Congo (ATUMA) filed a complaint against Unilever with the Dutch and UK OECD National Contact Points (NCP). The Dutch NCP investigated the complaint in coordination with the UK NCP and on 7 May 2024 published its final statement, including its findings and recommendations.
• The ATUMA complaint alleged that

• In 2001, Marsavco – a consumer goods company wholly owned by Unilever until 2002 and operating in the DRC, unjustifiably dismissed 802 employees and failed to provide them a complete legal severance package
• In 2002, 686 of the dismissed workers filed a complaint with the Congolese General Inspector for Labour to recover the unpaid severance packages. The complainants alleged that the labour inspectorates and the courts estimated the money owed to workers at over US$ 45 million.
• To settle the dispute, Unilever made several transfers to Marsavco’s new owners for the compensation of the workers. The ATUMA alleges that Unilever failed to monitor the financial transactions and none of the money was received by the workers.

• Unilever denied the claims in the case and stated that it had agreed on a retrenchment process with the trade union representing Marsavco employees prior to the sale of the company and that the process included full severance, despite this not being a legal requirement.  Unilever also denied the claims that it had transferred money to Marsavco to settle the legal dispute, and argued that the legal dispute was with Marsavco and its current owners, as the legal proceedings were initiated after Unilever had sold the company.
• Both parties agreed to engage in a mediation process, however due to the legal nature of the case, Unilever required that the NCP engage a legal expert in the process. The parties agreed to bring in legal expertise, however, the costs were too high for the NCP.  The NCP asked Unilever to pay a substantial portion of the fees (ATUMA had agreed to pay a small portion of the fees). Unilever declined, citing concerns that this could affect the perceived impartiality of the legal expert. The mediation process closed in September 2023 due to a lack of legal expertise.

NCP Findings  

• The case occurred in 2001, which made it difficult to assess. The NCP had to assess Unilever against the 2000 version of the OECD Guidelines for Multinational Enterprises, which included fewer expectations on companies than the current 2023 version. For example, companies were not required to carry out due diligence on human rights risks until 2011. 
• The NCP concluded that it was not able to take a determination on the legal claims in the case due to the lack of legal expertise. The NCP could also not determine whether Unilever violated the Guidelines regarding the payment of severance packages. This was partly due to the lack of a legal review. Additionally, Unilever was unable to provide the necessary documentation and indicated that many documents relating to the dismissals and severance before selling the company were destroyed during a fire in the premises at the time.  
• The NCP found that Unilever did not engage in good faith in the NCP process and this significantly hampered the process. According to the NCP
  • Unilever focused on its legal obligations rather than the spirit of responsible business conduct and international standards, which go beyond national labour laws. Unilever’s lawyers also lead the dialogue on behalf of Unilever which further ‘legalised’ the case  
  • Unilever insisted on an external mediator, which added a layer of complexity  
  • Unilever refused to cover a significant portion of the legal fees and required extensive legal questions that led to costs exceeding the NCP’s budget 
  • Unilever claimed that the NCP’s handling of the case was biased due to an alleged conflict of interest involving an NCP member previously associated with the NGO advising ATUMA. The NGO was not named.

NCP Recommendations

The NCP recommended that

• Unilever evaluate and update its policies and practices on responsible disengagement, including in conflict affected areas, to reflect the expectations of the 2023 Guidelines
• Unilever evaluate and update its policies and practices on good faith engagement in the NCP procedure
• The NCP conduct an evaluation in May 2025, one year after the publication of the final statement. The NCP will follow up with the parties in writing and/or in person and will publish the outcomes on its website.