State relationships with organisations

What is the relationship between the state and economic activities?

spraying pesticide

Belgium is accountable for the respect, protection and fulfilment of human rights, in accordance with the ratified international human rights treaties. Therefore, Belgium is expected to regulate the human rights duties of public and private organisations, and their activities that imply human rights risks within Belgium’s territory and/or jurisdiction. It must also evaluate the effectiveness of the regulations and fill any gap observed. 

Belgium is not automatically responsible for adverse human rights impacts caused by private organisations, but if it fails to take concrete steps to prevent, investigate, punish and redress these adverse impacts, it can be held accountable. It should also inform and support organisations on how to comply with human rights law. If an adverse impact is produced, the state must investigate, sanction and redress any human rights violation. 

The UN Vienna Declaration and Programme of Action (1993) seeks to guide states on the respect, protection and fulfilment of human rights and emphasises that human rights worldwide should be applied in a fair and equal manner, despite national and regional particularities and differing political, economic and cultural systems. The UNGP, the OECD Guidelines and the ILO Tripartite Declaration and other general guidelines reinforce these principles and promote states’ creation of national human rights compliance mechanisms. One method is responsive regulation, where organisations are encouraged to comply voluntarily with human rights and environmental laws and standards. When they violate these regulations, the state must sanction them, guarantee remedy to the victims and avoid repeated abuses.

Although states cannot control activities taking place in other states, they are expected to create mechanisms to ensure that organisations headquartered in their territory respect human rights abroad, especially public organisations or private organisations receiving support from the state. 

This tool refers to the state-business nexus, which covers the main aspects of the state’s human rights duties of the state when it interacts with economic actors. It also includes the tools developed by the state to ensure that private organisations respect and protect human rights in Belgian territory, and that Belgian organisations active in the EU or in third countries respect human rights there as well. This tool also includes related guidelines published by national, European or international institutions that promote human rights compliance and guidelines that focus on state entities’ nexus to economic activities. This tool is organised in line with the first ten principles of the UNGP in three groups: 

  1. Tools addressed to the state when it acts as an economic actor, to avoid related activities causing adverse human rights impacts. These activities are varied, the most common being public procurement, privatization processes, public private partnerships (PPPs), concession contracts or contracts related to the federal policy on energy performance
  2. Tools addressed to the state when it creates corporations or enters into corporate agreements with private organisations (state-owned corporations, commonly known as state-owned enterprises (SOEs)). The state as owner and/or controller must verify whether their activities respect human rights rules and standards. Usually SOEs have to report to the state entity to which they are linked, and this entity in turn has a reinforced competence to oversee their activities. This close oversight should in principle include human rights compliance. 
  3. Tools addressed to the state when it intervenes in the economy by granting economic incentives to private organisations, such as labels, preferential credits and insurances for activities in third countries, subsidies, licenses, incentives for target programs such as circular economic projects, etc. The state is expected to ensure reinforced oversight and to create mechanisms to avoid beneficiaries of these incentives causing adverse human rights impacts through their activities.

Some of the mechanisms used by the state to identify risks, control compliance or address failures or gaps are listed below in a non-exhaustive way.

The state as economic actor 

The state as economic actor plays a double role, by regulating its own economic activities and by implementing, overseeing compliance with and enforcing this legal framework. Belgium, as part of the EU, is also bound by EU regulations and directives enacted to regulate economic activities of general interest. In addition, international organisations have also released guidelines to orient states in performing economic activities within the framework of international human rights law and the SDG agenda.

Sustainable public procurement

Sustainable public procurement is mandatory in the EU and in Belgium. The law in Belgium defines the three pillars of sustainable public procurement as environmental protection in public services, protection of dignified working conditions and green jobs, and promotion of competition rules. Public officers, contractors and stakeholders should be informed and trained on sustainable development principles and goals to improve their organisational capacity. These principles and goals should also be diffused throughout the supply chains of organisations operating in Belgium, who in turn, should monitor and enforce compliance. 

The Belgian legal framework for sustainable public procurement applies to federal and subnational entities and transposes the EU Directives on sustainable public procurement. This legal framework covers general processes, concession contracts and procurement related to public services. The implementation of these mechanisms should not constrain contractors to have specific CSR policies. 

Belgian law explicitly indicates the international framework that must be considered in public procurement: the eight ILO core conventions and for environmental protection,  the Vienna convention for the protection of the ozone layer, and its Montreal protocol, the Basel convention on the control of transboundary movements of hazardous wastes and their disposal and the Basel protocol on liability and compensation, the Rotterdam convention on the prior informed consent procedure for certain hazardous chemicals and pesticides in international trade and the Stockholm convention on persistent organic pollutants.

Sustainable public procurement seeks to protect the right to a healthy environment, social and labour rights, and children rights, as well as to fight systematic human rights violations such as modern slavery. These rules bind all contracting authorities, being the “[s]tate, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law other than those authorities”. It also covers bodies or associations that perform public services or activities, those that have been awarded a related concession, and in some cases, construction activities (NACE 45).


The state has specific obligations related to sustainable procurement. It can also promote sustainable practices in procurement and implement objective mechanisms of evaluation. The following are some examples:

Contracting authorities must exclude organisations that have demonstrably violated environmental or social obligations. These requirements may also be included in the executing conditions of the contract and as an award criterion. These cases are explicitly mentioned in the law: 

  • when the contracting authority has established, after a labour or environmental inspection, that “abnormally low price or costs proposed” are reached by means of non-compliance with mandatory law in social, labour or environmental fields. This duty should also cover subcontractors. 
  • when the organisation has been convicted by final criminal judgment for an abuse of the social, labour or environmental rules. If the abuse is not a criminal offence, their exclusion is discretionary. 
  • when the organisation has been convicted by final judgment of child labour, human trafficking or employment of nationals of third countries with irregular immigration status.

Some mechanisms that promote sustainable procurement practices are the establishment of award criteria or contract performance conditions, such as requiring:

  • labels, but without using this requirement in a discriminatory way. In processes below the European limit, other evidence of compliance, such as standards or certifications, can be used. 
  • active anti-discriminatory policies and practices at work
  • environmental benchmarks during all the steps of the life cycle, “from extraction of raw materials for the product to the stage of disposal of the product” for instance, the prohibition of toxic chemicals, or the promotion of waste minimisation. 
  • products of fair-trade origin. 
  • mechanisms to enhance transparency in the information on the supply chains and subcontractors. 
  • specific monitoring and reporting of sustainable development practices. 
  • climate change policy goals. 
  • compliance with specific targets of the SDGs, circular economy or circular procurement.
Guidelines and initiatives on sustainable public procurement

Several public and private initiatives have been published to orient contracting authorities on the implementation of sustainable practices. The following list includes some international, European and national initiatives:

This network is a multi-stakeholder partnership adopted at the UN World Summit on Sustainable Development to implement the 10-Year Framework of Programmes on Sustainable Consumption and Production (10YFP), integrated into SDG 12. These programmes are public procurementbuildings and constructiontourismfood systemsconsumer information, and lifestyles and education. Regarding public procurement processes, some Belgian public entities and organisations are members of this initiative, such as the Fair trade advocacy office and the Walloon public service. This initiative guides impact assessments to identify obstacles and implement innovative solutions in procurement processes. 

This is another initiative of the One Planet Network that supports public authorities in implementing sustainable procurement. In Belgium, Brussels EnvironmentFlanders and Wallonia and the city of Ghent are members of the initiative. This initiative published the Procura+ Manual: A Guide to Implementing Sustainable Procurement (2016) that describes key sustainability issues in procurement processes with emphasis on the sectors of construction, ICT, cleaning, food, vehicles and energy.

This global network formed by cities, towns and regions promotes sustainable development with a focus on the global urban population. ICLEI Europe manages the Sustainable procurement platform which provides news, case studies, events, and guidance on sustainable procurement worldwide.

This network is formed by cities that promote sustainable consumption and production, efficient use of resources, low carbon and social responsibility in procurement processes. The city of Ghent is presented as following a leading procurement strategy for minimizing the ecological footprint throughout the entire lifecycle. Ghent´s strategy is based on the rational use of energy and independence of non-renewable energy; sustainable transportation; waste elimination; sustainable employment of disadvantaged groups; sustainable growth of the social economy sector and innovation; integration of ILO standards and fair trade principles along the supply chain, among others. 

These guidelines map the context, key concepts and scope of the tools and techniques of this SLCA. The guidelines also allow to develop databases and design software to implement this assessment. There are various mechanisms of utility for public procurement including a life cycle inventory elaborated for indicators linked to impact categories and related to five stakeholders: workers, consumers, local communities, societies and value chain actors.

This standard has been recently created to guide any kind of public or private organisation in the implementation of sustainable practices into the procurement processes, including risk management and priority setting. 

This European Commission guide promotes public authorities’ adoption of social standards in public procurement processes, in line with EU rules and international standards, such as the ILO core conventions. It also promotes the use of procurement processes to stimulate social inclusion. 

This European Commission handbook supports public authorities in implementing sustainable procurement processes, with an emphasis on low environmental impact. It also aims at persuading policymakers and organisations to adapt their practices to sustainable principles. The handbook indicates how the EU environmental legal framework can be incorporated in all the steps of the procurement process, with particular references to the sectors of construction, foodvehicles and energy. 

This website of the Belgian federal program on sustainable development is intended for organisations that participate in public procurement processes. It incorporates legislation and state guidelines on the sustainable requirements of public procurement. Other organisations can also use it to design their own procurement processes (design, selection, adjudication, execution and market studies). It also includes information for specific economic sectors.

  • “La traite et le trafic des êtres humaines”, informations pour le secteur bancaire /Mensenhandel & Mensensmokkel, Informatie voor de bankensector

It is a brochure of the Federal Public Service of Justice that explains this phenomenon and includes indicators related to banking operations potentially related to trafficking in human beings. For more information, contact the Belgian Financial Intelligence Processing Unit (CTIF-CFI)

Flanders has also released some guidelines to implement the SDGs: 

The Vereniging van Vlaamse Steden en Gemeenten vzw is guide promotes sustainable procurement, particularly labour rights, in the garment value chains. Private organisations can also use it. The aim is to facilitate the participation of vulnerable populations by guaranteeing equal labour opportunities to fight unemployment besides the protection of environmental rules and standards. 

Wallonia also has a website:

  • Achats publics durables (Boite à outils)” to guide public authorities of the region in implementing public procurement practices. However, this toolbox is not updated in accordance with the new law on public procurement.
Public private partnership (PPP)

PPPs are long term contracts between the public and the private sector in which public resources are invested to fund services of general interest, provided by private or mixed organisations. Protocol 26 on services of general interest of the Treaty of Lisbon and other EU rules and standards, define services of economic interest as the activities considered by public authorities to be of importance to citizens and to require state intervention, such as energy, water provision, transport networks, postal services and social services. Within this framework, these partnerships can perform activities of “design, construction, financing, operation and management of a capital asset required for service delivery”. They are similar to concession contracts, which have special rules.  PPPs can also develop energy efficiency contracts that seek to develop the Europe 2020 strategy on diminishing energy consumption, in line with the EU Directives for the energy efficiency.

These energy efficiency contracts should also follow the principles of sustainable public procurement. In Belgium, BELESCO, the Belgian Energy Services Companies (ESCOs) Association, brings together the major stakeholders in this sector to promote energy efficiency and renewable energy. 

Sustainable PPPs can implement the same procurement mechanisms: requesting labels, reporting systems, resource efficiency, fair trade, prohibiting hazardous substances, minimising waste and pollution, clean technology, SMEs participation, and fighting against human trafficking. Some specific guidelines are the following:

Guidelines on sustainable PPP

The guidelines seek to address the organisational and institutional challenges for the public sector in line with the UN Global Compact. They aim to implement good governance of PPPs as providers of public services to solve the problems of public corporations and to avoid privatisations that do not always serve the public interest.

The guidelines are included in a report aiming at supporting public and private organisations and international development agencies to improve their PPP regulatory quality, particularly in developing countries. The quality of PPPs influences the development of infrastructure projects, and the possibilities for private organisations to participate in PPPs. The guidelines refer to all the steps of the PPP project cycle: preparation, procurement, and contract management.

This Public-Private-Partnership Legal Resource Centre is a joint initiative of the regional development banks from Asia, Europe, the Americas, Islamic countries, the European Bank for Reconstruction and Development (EBRD), the Global Infrastructure Hub, the OECD, the UNECE, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP), and the World Bank Group. This Guide orients public and private organisations, international development institutions and academia on the key PPP legal and institutional frameworks. It also refers to human rights-related issues, such as stakeholder communication and engagement, environmental and social due diligence, and climate change. The guide also includes municipal PPPs and private participation in fragile and conflict-affected states.

This guide supports public authorities of member states in financing high quality and efficient services of general interest, in compliance with state aid rules. It also seeks to give users an understanding of sustainable public procurement rules and goals, and indicates when the provision of social services can be limited to non-profit providers.

State owned enterprises (SOEs)

Corporations whose shareholders are public entities are active in diverse sectors. In Belgium, the law on sustainable public procurement defines these corporations as those under the influence of public entities due to their property rights or their financial participation. The legal presumption is that the state has a dominant influence when it has the majority of the capital of the corporation or the majority of votes linked to the shares, or when it can appoint more than half of the board of directors, or the management of the corporation. Belgium has various types of SOEs, being of particular relevance for activities related with human rights, the ones that provide public services. 

  • Autonomous public corporations are the best known. They usually provide public services or are public social security organisations. They have to conclude a management contract with the federal government. 
  • SOEs created by regional and local public entities with various corporate aims, such as transport, financial or public services, ports and airports management, public audio-visual services, urban maintenance, social credit and housing, higher education and cultural activities. Some of them are classified in the non-profit sector while others develop for-profit activities in a similar way to private corporations. 
  • Inter-municipal corporations or cooperation agreements among municipalities are created mostly to develop public utility services such as water or electricity distribution, social housing, etc. 
  • Regional development corporations are created by sub-national regions to develop infrastructure works, such as industrial or scientific parks for private organisations. In Flanders, they are called Provincial Development Corporations (POM), which may have public and private shareholders to promote socio-economic development and entrepreneurship.

In Belgium, SOEs that carry out public service activities are subject to a special regime delineated by law and by the management contract to protect the rights and duties of the users. In Flanders, public corporations carrying out public service activities are considered to be public service institutions (Vlaamse overheidsinstellingen, VOI). They conclude a management/partnership agreement, and non-compliance allows the state to impose sanctions (generally in the form of compensation).

OECD Guidelines on corporate governance of state-owned enterprises (2015)

These guidelines focus on efficient management, transparency and responsive business of  SOEs. They highlight the monitoring role of SOE boards in approving corporate strategy, objective indicators of evaluation, implementation of risk management policies and reporting financial and non-financial information to employees and other stakeholders. They seek responsive behaviour of SOEs by linking environmental, social and human rights compliance to reputation. The framework is provided by the OECD Guidelines, the ILO Declaration on Fundamental Principles and Rights at Work, and the UNGP.

Responsive intervention of the state in the economy

The UNGP and other guidelines highlight the central role of the state in regulating economic activities in line with the human rights framework. In Europe, the Council of Europe (CoE) released a Recommendation on human rights and business and its Explanatory Memorandum to guide member states in the formulation of policies and programs to implement the UNGP. The EU has also released several rules and guidelines to orient the state in enacting responsive regulation. For instance, the staff working document on implementing the UN guiding principles on business and human rights – State of play (2015)  provides a comprehensive framework to member states and EU organs to develop the UNGP in the EU context. 

This part refers to mechanisms of state intervention, such as granting economic incentives to private organisations to promote specific sectors, promoting responsive activities or controlling adverse actual or potential impacts of these activities. In these situations, the state is expected to conduct more detailed oversight to guarantee that beneficiaries respect human rights law.


Various labels have been launched as a mechanism to encourage organisations to certify compliance in key areas. Labels are related to human rights compliance; they seek to protect specific rights such as the right to equality and non-discrimination, social rights, consumer rights, the right to health and the right to a healthy environment. Labels can also be used as a requirement to participate in public procurement processes. If labels are wrongly awarded, the competent authority must take the necessary measures to redress the situation and identify the damages caused. Belgium has introduced some labels related to human rights compliance, although there is no information available about their scope and effectiveness.

  1. The Social Label, awarded by the federal Programmatic Public Service (PPS) Social Integration, certifies that the label holder complies with the eight core ILO conventions in all steps of the production. 
  2. The Ecolabel, awarded by the Direction of the Environment of the Federal Public Service ( FPS) Health, certifies that the label holder commercialises environmentally friendly products for consumers. 
  3. Label Gelijkheid Diversiteit/Label Egalité Diversité was a pilot project of the FPS Employment that promoted equality and diversity at work. The aim was to persuade organisations to implement an equal and diverse labour policy. 
  4. Management and Audit Scheme (EMAS) is a premium management instrument developed by the European Commission that evaluates and reports on the environmental performance of any type of organisation active in all economic and service sectors worldwide, in line with ISO 14001.

Guidelines on Labels

This guide released by the European Commission supports users in implementing the EMAS Regulation. The website EMAS Implementation Tools provides permanent support for improvement of management processes and environmental performance for any organisation. This website is particularly useful for the implementation of EMAS by small and medium-sized organisations.

The aim of this guide by the NGO ECONOSO is for consumers to be able to identify the labels used in Belgium and to understand whether the label holder respects the environment, human health and labour rights in the production of the labelled goods, or whether the label is used only for marketing reasons.

Impact assessments

This tool refers to impact assessments performed by the state to assess actual or potential human rights risks of public policies, agreements, or economic activities which are supported by public resources or which hold a high risk for society, and to inform stakeholders in this respect. Tool 8 focuses on human rights impact assessments conducted by organisations.

Environmental impact assessments (EIAs) 

EIAs seek to verify the potential environmental impact of risky activities. EU member states must perform EIAs for activities with a significant impact on the environment. If an organisation is willing to perform these activities, it must request an environmental license from local or regional authorities. Stakeholders should have the opportunity to comment on EIA results. The final decision should be public, to allow citizens to appeal the decision before the competent courts or other bodies. Cross-border EIAs should be performed when an activity carried out in Belgium may create a negative environmental impact in another country. The EU and Belgium have developed several tools to guide public entities in conducting EIAs and related issues. Some of them are:

It relates to the e-registration, evaluation, and authorisation of chemical substances by Belgian competent authorities, to protect the environment and human health. 

This website of the Flemish government supports local and provincial authorities in implementing environmental protection measures within their competence.

This tool of the Flemish government gives information on the environmental law in force and provides concrete tools to implement it. 

The EU has released three related guidelines:

Impact assessment to provide financial support or risk insurances

Credendo is a public credit insurer coordinated by some FPS and by Flanders, Wallonia and the Brussels Capital Region. It is linked to a European credit insurance group that provides trade credit and political risk insurance, as well as other products that cover risks worldwide. This entity performs an impact assessment before issuing an insurance policy to assess the environmental, social and human rights impact of the project in the target country. The assessment can be consulted by stakeholders “before the offer of cover or the insurance policy is issued” and can be useful for assessing  value chains as well. 

Credendo has also developed the Country risk and insights database to inform stakeholders on risk assessment for any country or continent. It monitors the relevant risk parameters and alerts, and provide risk analyses and background information.

Credendo can also carry out a risk assessment of operations funded by Finexpo, the inter-ministerial advisory committee attached to the FPS Foreign Affairs and the FPS Finance, which awards grants to Belgian corporations that demonstrate competitiveness and contribution to economic and social development of the recipient country.

EU General Data Protection Regulation (GDPR) impact assessment

is a new requirement in the EU GDPR for specific activities, namely:

  1. automated processing of “a systematic and extensive evaluation of personal aspects relating to natural persons” including profiling that can produce legal effects concerning the natural person or significantly affect them.
  2. processing of “a large scale of special categories of data referred to revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership. However, the processing of “genetic data, biometric data for the purpose of uniquely identifying a natural person, data concerning health or data concerning a natural person's sex life or sexual orientation” is prohibited.
  3. processing personal data relating to criminal convictions and offences or systematically monitoring a publicly accessible area on a large scale. 

The OECD, the EU and the Belgian Data Protection Authority have released several guidelines for public and private organisations and persons to orient them in their data protection duties.

EU Better Regulation Guidelines and Toolbox 

The European Commission has further developed this toolbox to guide EU officials in preparing new initiatives and proposals or in evaluating existing legislation. It can be used to evaluate international agreements as well. The toolbox includes guidelines for impact assessments, as well as a Fundamental Rights Check List that incorporates the UNGP into the EU’s impact assessments. Besides fundamental rights, other tools also refer to labour conditions, health impacts, consumer protection, territorial impact and stakeholder consultation.

Impact assessment of trade and investment agreements

The UN Guiding Principles on human rights impact assessments of trade and investment agreements provide a roadmap for states in negotiating these agreements, as well as systematising existing legal/political procedures to assess them. If the assessment shows that the agreement is incompatible with human rights obligations, the state parties should amend it, include safeguards, mitigation or compensatory measures, or terminate the agreement to avoid human rights violations. The Guidelines also call on states to preserve their regulatory independence to protect human rights and vulnerable groups. They also include an indicative procedure to assess the impact of the activities of organisations when they perform human rights due diligence.

These human rights impact assessments should be prepared prior to the conclusion of the agreements and in time to influence the outcomes of the negotiations. If necessary, they should be completed by impact assessments afterwards. States should use human rights impact assessments to ensure that the agreement contributes to the overall protection of human rights. The key steps in preparing a human rights impact assessment are:

  • screening,
  • scoping,
  • evidence gathering,
  • analysis,
  • conclusions and recommendations,
  • evaluation. 

The OECD recommendation for combating bribery of foreign public officials in international business transactions (2013) is also a relevant framework for states in trade and investment negotiations. 

Responsive financing

The state must also assess if the activities of organisations which it funds may cause adverse human rights impacts. If the adverse impact is caused, the corresponding organisation and the funding state agency should take the necessary measures to guarantee a remedy. Several principles and reports have been released to guide responsive financing. Some documents require the EU to enact binding rules in this respect: 

At the international level, the Equator Principles, a risk management framework, is the main soft law regulation regarding financial activities. It has been adopted by many financial institutions to assess and manage environmental and social risk in projects. 

The NGO SOMO has also released the study Supervising the environmental, social and governance impact of finance: How to reinforce the role of European and national supervisory authorities?. It evaluates how financing activities can support climate change mitigation and address social adverse impacts, in order to persuade European and national supervisors of banks, insurers, asset managers, pension funds and other actors of the financial sector to evaluate the social and environmental impacts of the activities that they fund.  

In Belgium, some public financial agencies have implemented responsive financing: 


The public Belgian investment corporation for developing countries, is controlled by the FPS Foreign Affairs, the FPS Strategy and Support (BOSA) and by the Belgian Court of Auditors. It focuses on the investment of public resources of development cooperation in productive projects. When an organisation requests financial support, it should submit a feasibility study that includes environmental and social impacts. Stakeholders can report to BIO if the project is causing adverse impacts through the BIO complaint mechanism.

The Trade for Development Centre (TDC) 

The TDC of ENABEL the Belgian development agency, promotes fair and sustainable trade by funding projects and by raising awareness in Belgium about the consumption of fair and sustainable products from developing countries. The centre promotes sustainable business activities of Belgian organisations in developing countries and fair trade production from these countries. The centre has also published some related guidelines, for example relating to fair trade in war zones