New Dutch Law Would Let the Government Order Companies to Produce for the Military
A new Dutch bill would let the government compel a small number of companies to produce for the armed forces in an emergency, and to requisition their stocks.
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The Dutch government is preparing a law that would allow it to order a small number of companies to produce equipment for the armed forces during an emergency, and to take control of their stocks. The aim, the government says, is to make sure the military never runs short of vital supplies at a moment of crisis.
What the law would allow
The bill, formally called the Law on the resilience of the defence and security-related industry, would give the state new powers over parts of Dutch industry in exceptional situations. It would allow the government to designate certain companies and require them to reserve production capacity for the armed forces, to build up strategic stocks, and, if necessary, to cooperate or share knowledge with one another. The government would also be able to requisition, meaning compulsorily take, the stocks these companies hold.
Economic Affairs Minister Heleen Herbert, of the CDA party, is sending the bill to the Council of State, the government’s main legal advisory body, for advice on Wednesday. She hopes the law can take effect sometime next year.
‘Voluntary first, force as a last resort’
Herbert stressed that companies would not be forced to do anything straight away. The government would first ask for voluntary help, she said, and would only turn to compulsion if that proved insufficient. The powers would apply only in an emergency, and only to a limited number of firms.
“If there is a war situation, this law provides the possibility to designate a few Dutch companies for production,” she told the newspaper AD, which first reported the plans. The companies involved are already aware of the law, she said, and the government has already agreed with them on compensation.
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Which companies, and a ‘seal of approval’
The businesses concerned will not be named publicly. “I think most people will understand why not: this is part of what keeps you safe,” Herbert said, adding that the list could change over time as companies are added.
Most are firms that already make things “recognised as something needed in a war situation,” she said, and that mostly already supply the armed forces. But she did not rule out designating companies from war-adjacent sectors, giving the example of drugstores and makers of bandages.
The law would also work in the companies’ favour in one respect, according to Herbert. It would give approved Dutch defence firms a kind of seal of approval that could make it easier for them to win orders abroad. “We would then stamp the fact that you are a solid company, that has been thoroughly screened, and it is clear who is pulling the strings,” she said.
A divided industry
When an earlier version of the plan was discussed, Dutch industry was split. Some companies welcomed it. Derk te Bokkel, a director at Royal IHC, which builds ships for the navy as well as dredging vessels, said that purchasing processes can currently take eight to ten years and that the law might help speed them up. “I am convinced that we need such a law in the fast-changing global security situation,” he said, describing it as emergency legislation.
Others were more cautious. The employers’ organisation VNO-NCW acknowledged the law’s importance but warned about how far it went. “The law goes quite far on some points. That is logical in a war economy, but there are many stages before that,” said Thomas Grosfeld of VNO-NCW, adding that such far-reaching interventions in the market should only be used as a last resort.
Part of a wider defence push
The bill fits into a much broader expansion of Dutch and European defence. The Netherlands, like other NATO countries, has sharply increased military spending in recent years, driven by the war in Ukraine and a push to rely less on foreign suppliers for weapons and ammunition. Revenue in the Dutch defence industry rose steeply between 2021 and 2023 as orders grew.
For now, the plan remains a proposal. After the Council of State gives its advice, the bill would still have to be debated and approved by both houses of parliament, the Tweede Kamer and the Eerste Kamer, before it could become law.