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France: Natl. Assembly adopts law imposing due diligence on multinationals to prevent serious human rights abuses in supply chains

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Item
12 September 2017

France's loi de vigilance

Author: Herbel Consulting

[Presentation about the French duty of vigilance law:

  • Companies covered & requirements
  • Scope & field
  • Relevant activities
  • Content of the vigilance plan
  • Liability
  • Comparison with UK Modern Slavery Act ]

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Article
15 June 2017

The French law on duty of care: A historic step towards making globalization work for all

Author: Sandra Cossart, Jérôme Chaplier and Tiphaine Beau de Lomenie (Business & Human Rights Journal)

The difficult journey of the French Bill on the duty of care of parent and subcontracting companies came to an end on 23 March 2017, when the French Constitutional Council [...] decided in favour of upholding the majority of the law’s text... This piece looks at how this French law fits into the growing trend to embed corporate respect for human rights into different types of legal requirements... [It] reflects on the Council ruling and a potential political shift that this decision reveals... Should the new French government maintain this leading role in Europe and at the international level, and should other states and the European Commission seize this opportunity, the duty of care law could have a similar knock-on effect and steer towards wider convergence.

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Article
17 May 2017

Commentary: Opportunities & potential pitfalls to the French duty of vigilance law

Author: Anna Triponel and John Sherman for International Bar Association

...There has been debate over whether the French law requires companies to conduct the same human rights due diligence as provided for under the Guiding Principles, or whether the law is asking for something different. Indeed, the law itself refers to reasonable vigilance (mesures des vigilance reasonable) rather than due diligence (procédure de diligence raisonnable). Nevertheless, the French law and the Guiding Principles resonate strongly together. It is thus highly likely that where the law is ambiguous, human rights due diligence under the Guiding Principles will be used or referenced in order to determine the law's intention. Indeed, using the Guiding Principles as the key framework for interpreting and implementing the French law will assist companies in developing highly flexible and effective solutions to minimise the risks of harming people throughout their business. Indeed, the French Government itself remarks that a number of French companies are already seeking to implement the Guiding Principles, and that the French law is aligned with these efforts...

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Article
12 April 2017

Commentary: New French vigilance law complements existing laws for subcontractors

Author: Charles Dauthier & Sabine Smith-Vidal, Morgan Lewis on JD Supra

"French Companies Must Show Duty of Care for Human and Environmental Rights", 4 Apr 2017

After the Constitutional Court rendered its recent decision on the law regarding the duty of care of parent companies and ordering companies, the rule has finally entered into force—but is it much ado about nothing?...According to the law, all companies headquartered in France and employing more than 5,000 employees in France, or headquartered in France or abroad and employing more than 10,000 employees worldwide, must set up vigilance plans...[A]fter the decision of the Constitutional Court, a company cannot be fined if it does not establish a vigilance plan or does not comply with its vigilance plan.  Nevertheless, the breach of the duty of care may still entail liability for the company...Since the provisions of Law No. 2017-399 of March 27, 2017 are of immediate application, companies meeting the criteria established by the law should begin drafting vigilance plans in order to demonstrate the care they put into compliance with fundamental human and environmental rights...

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Article
4 April 2017

Human Rights and Business 2017: Promoting responsibility and ensuring accountability

Author: Joint Committee on Human Rights (UK)

Human rights violations, such as child labour, prevention of free association and forced and compulsory labour all occur within the realm of business activity. Examples of multinational companies violating the human rights of their workers or of local communities are extensive. When UK companies source or manufacture goods in less developed countries where there are weaker mechanisms for protecting human rights than in the UK, serious violations can occur. Human rights are just as important abroad as they are in the UK, and we want to see UK companies being exemplary in their respect for human rights wherever they operate...

We commend the Government for being the first in the world to publish a National Action Plan. However, we are disappointed that the updated National Action Plan, published in 2016, is modest in scope and fails to incorporate best practice regarding having measureable objectives.The Government must lead by example and demonstrate the same behaviour it expects from businesses...

The Modern Slavery Act in 2015 has raised the profile of the problem of modern slavery within UK companies and their supply chains abroad. However, more action is needed before any meaningful changes brought about by the Act can be evaluated. We believe that the Government could make a positive start by facilitating the passage of Baroness Young of Hornsey’s Modern Slavery (Transparency in Supply Chains) Bill and by introducing laws to make reporting on due diligence for all other relevant human rights compulsory for large businesses...

The UK is weakest in the area of access to remedy. A number of obstacles to justice exist including changes to limit legal aid provision, limits on the recovery of legal costs in these types of case, increases in court and tribunal fees, and the otherwise high costs of civil action...

...we considered the effect of Brexit on business and human rights. We heard that concerns about the status of EU workers in the UK may leave them more vulnerable to labour exploitation and we urge the Government to reassure workers that all victims of human rights abuses will be protected, without reference to nationality or immigration status.

We were encouraged that the Government plans to include human rights clauses in all future bilateral trade agreements and encourage it to include provisions on enforcement, and to undertake human rights impact assessments before agreeing trade agreements.

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Article
27 March 2017

Commentary: French due diligence law tackles modern slavery by putting burden on companies to ensure there are no abuses in supply chains

Author: Cassidy Slater, Human Rights First (USA)

"How the French are Tackling Modern Slavery", 24 Mar 2017

In February, the French Parliament adopted a new law establishing a duty of vigilance for businesses, requiring them to monitor their company and supply chains for human rights and environmental protection violations...This bill closely resembles the U.K. Modern Slavery Act, although the French law applies to fewer companies.  The French law does not use profits as a criterion for reporting, but instead focuses on the size of the company...Another difference is that the French law lays out specific reporting requirements—although they are not perfect.  Companies that fail to monitor themselves or publish reports can be reported...Unfortunately, this practice can bring an unfair burden of proof for victims who already face a severe imbalance of power...Despite its limitations, the French law addresses what many trafficking advocates argue is a key to combating trafficking: enlisting the private sector ensure that products imported are not made at the expense of protecting human rights...This approach may be the fastest way to reach some of the millions trapped in modern slavery...Banning these tainted goods could economically devastate companies that continue to profit from trafficked labor, forcing them to amend their ways...

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Article
24 March 2017

France: Constitutional Council reaches favourable decision on corporate duty of vigilance law

Author: European Coalition for Corporate Justice

"Last hurdle overcome for landmark legislation: French Corporate duty of vigilance law gets green light from Constitutional Council", 24 March 2017

The French Constitutional Council published a decision yesterday following objections brought to the corporate duty of vigilance law on grounds of unconstitutionality.  The Council maintained the law’s text, validating the creation of new duty of vigilance obligations for companies with regard to the protection of human rights and the environment.

Although the Council removed the €10 to €30 million civil penalty attached, liability continues to apply when companies default on their duty of vigilance obligations, including failing to publish a vigilance plan or faults in its implementation.

We welcome the Council’s decision to retain the majority of the law’s text, and the mention of its “compelling public interest benefits”.  We also appreciate the Council’s opinion that the duty of care requirements created do not infringe on companies’ freedom to trade and do business.  Although the civil penalties would have created a stronger incentive for companies to comply with this law, their removal does not undermine the architecture and general mechanism of the law.

Interested parties - including victims, NGOs and trade unions - are still able to ask judicial authorities to order a company to establish, publish and implement a vigilance plan in order to prevent human rights violations and environmental damage caused by their activities, and those of their subsidiaries, subcontractors and suppliers, in France and abroad.  Interested parties can also engage the company’s liability through civil action and ask for compensation when a company’s violation of its legal obligations has resulted in damages.

The French law is a historical step forward in regulating the activities of transnational corporations.  ECCJ joins French civil society organisations in calling for similar legislation to be adopted by all European countries, and at EU and international level, in order to achieve effective human rights and environmental protection and provide access to justice and remedy for victims of corporate abuse.

 

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Article
24 March 2017

French duty of care: the Constitutional Court approves the major parts of the law

Author: Sherpa

Yesterday, the constitutional court published its decision following the referral by the French members of Parliament of the law which instituted a duty of care for transnational corporations. The council deemed that the the major parts of the text respected the Constitution, thus approving the creation of a new obligation for transnational corporations to implement duty of care as regards the protection of human and environmental rights. Although the council rejected the amendment which mentioned a fine for non-compliance, its decision approves the possibility to bring to the courts corporations which fail to comply to their new obligations. Our organizations* will remain alert to the effective application of the law, and active to ensure that this example can inspire similar achievements beyond France, with the adoption of similar legislation to protect human and environmental rights in Europe and at the international level...

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Article
23 March 2017

UN Working Group on business & human rights welcomes French human rights due diligence law

Author: UN Working Group on business & human rights

"UN expert group welcomes legislative efforts in France and other countries to address adverse business human rights impacts", 23 Mar 2017

A group of United Nations experts applauded the adoption of a new law requiring human rights due diligence by large French companies in their operations and supply chains...The Working Group welcomes this effort to more effectively prevent business-related human rights abuse, in line with the UN Guiding Principles on Business and Human Rights*. It views this as an example of efforts to implement the Guiding Principles through a smart mix of approaches, including regulation, policy and guidance to incentivize corporate respect for human rights. The Working Group encourages more countries to show leadership in this area...

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Article
1 March 2017

French "duty of care" law for companies: similarities & differences with UK Modern Slavery Act

Author: Jane Moyo, Ethical Trading Initiative

...NUMBERS: The UK law has greater reach as it focuses on annual turnover in the UK (£36 million or more) as the criterion for reporting, whereas the French law only applies to French companies and is based on the number of staff employed (5,000 staff in France or 10,000 staff from their combined French and foreign offices). It is therefore estimated that around 150 companies will be affected compared to more than 13,000 in the UK. SCOPE: Despite affecting far fewer companies, France's diligence plan covers a much broader scope in terms of issues, as both human rights and environmental concerns are included. The focus is not only on ensuring decent working conditions and fair wages in supply chains but on sustainability too. CONTENT: The UK's Modern Slavery Act does not set out any specific reporting requirements. There may be six suggested reporting areas...but the only requirements are that a company posts a link to a public statement on the home page of their website and gets sign-off from senior executives or the Board of Directors. Under the French law, it is interesting to note that companies are required to report on their alert mechanisms to identify risks, which should be “developed in consultation with the legitimate trade unions operating within the company”.... PENALTIES: In France, if companies fail to demonstrate that they have established and implemented a plan, they will risk a penalty of up to 10 million euros. Currently, the only risk in the UK is to reputation...

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