The successful structure and process of covenant preparation is enabling the Dutch to recover environmental quality, by giving businesses the role of determining how goals are met. During covenant negotiations, industry and government agree to reduction targets that each sector will meet within the eight themes. In the chemicals industry covenant, for example, SO2 emissions will be reduced ninety percent by the year 2010, given a 1985 baseline. Individual companies then create their own environmental plans. Each plan is reviewed to ensure that the aggregated plans meet sector targets.
Covenants work with economic incentives as well as regulation, if necessary.
They are not an alternative to regulation and they do not take precedence over existing law. However, once a corporation creates an environmental plan that meets NEPP targets, those companies are exempted from other regulations. The covenant process involves corporations from the beginning, and lets them decide how targets will be met. Since the targets are specific, corporate leaders know exactly what is expected from them. There is no guesswork involved, since both parties are working from a mutual agenda during negotiations.