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

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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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Article
23 February 2017

FAQs: French corporate duty of vigilance law

Author: European Coalition on Corporate Justice (Belgium)

The question of what should be the legal obligations on business to ensure respect for human rights throughout their activities and business relationships is at the centre of the business and human rights debate.  In the past years, this question has gained important political momentum, and initiatives to improve corporate accountability have increased at national, European and international level.  The new French corporate duty of vigilance law shows that respect for human rights and the environment can be legally mandated into business activities.

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Article
23 February 2017

France leads EU on duty of care requirements for multinationals

Author: Samuel White, EurActiv

After four years of debate, France has finally adopted a law on duty of care by multinational companies.  This paves the way for similar laws in Belgium and Spain, although the project is stalled at European level...Under negotiation since almost the beginning of François Hollande’s mandate, the bill aims to strengthen the responsibility of parent companies for their subcontractors, particularly in the developing world.  The bill was adopted by a large majority: of the 98 MPs present for the vote, 94 voted in favour.  Most MPs outside the governing Socialist Party abstained, but despite official instructions to reject the bill, some Republican MPs voted for it...In more tangible terms, the new law obliges French companies to adhere to a vigilance plan to prevent violations of human rights and environmental damage throughout their production chains.  “That should allow us to avoid another Rana Plaza,” said Dominique Potier, a Socialist MP and rapporteur on the bill...Companies can be sanctioned with fines of up to €30 million for not respecting the rules.  But the original bill was softened during the long debate, with criminal prosecutions for company bosses among the measures removed from the final version...

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Article
22 February 2017

France adopts corporate duty of care law

Author: Friends of the Earth International

The French Parliament yesterday adopted a long-awaited law establishing a duty of care obligation for parent and subcontracting companies...The vote comes after several years of mobilization of French civil society...Companies covered by the new law (it only applies to the largest French companies) have to assess and address adverse impacts on people and the planet under annual public vigilance plans.  This includes impacts linked to their own activities, those of companies under their control, and those of suppliers and subcontractors, with whom they have an established commercial relationship.  When companies default on these obligations, the law empowers victims and other concerned parties to bring the issue before a judge.  Judges can issue fines of up to 10 million euros if vigilance plans are absent, and 30 million euros if this absence results in otherwise preventable damages.  Although this law is a major achievement, French civil society organizations believe the law’s text could have been more ambitious.  The law’s scope is limited, only covering around 100 large companies...It is now essential that other countries follow France’s lead, in other words, binding legislation at national, European and international levels, to advance on much needed regulation for transnational corporations and their financiers...

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Article
22 February 2017

France adopts corporate duty of vigilance law: a first historic step towards better human rights and environmental protection

Author: Sherpa

The French Parliament adopted a much-awaited law establishing a duty of vigilance obligation for parent and subcontracting companies.  The law marks a historic step towards improving corporate respect for human rights and the environment.  We call on European countries, the EU institutions, and the international community to develop similar legislation...When companies default on these obligations, the law empowers victims and other concerned parties to bring the issue before a judge.  This bill will allow to prevent human and environmental rights violations created by multinational activities...[I]f damages are incurred despite a parent company having implemented an adequate vigilance plan, the company will not be liable: a company is not required to guarantee results, but only to prove that it has done everything in its power to avoid damages...We ask the French Government to continue on this path and promote the duty of vigilance law at European and international level, and show support for other initiatives aiming to improve corporate accountability, like the UN Treaty on Business and Human Rights in order to guaranty a globalization respectful of populations and our planet.

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Article
21 February 2017

France adopts corporate duty of vigilance law

Author: European Coalition for Corporate Justice

The French Parliament adopted a much-awaited law establishing a duty of vigilance obligation for parent and subcontracting companies.  The law marks a historic step towards improving corporate respect for human rights and the environment.  ECCJ joins the French corporate accountability platform, Forum Citoyen pour la RSE in calling on European countries, the EU institutions, and the international community to develop similar legislation.  The law, which only applies to the largest French companies, will make the latter assess and address the adverse impacts of their activities on people and the planet, by having them publish annual, public vigilance plans.  This includes impacts linked to their own activities, those of companies under their control, and those of suppliers and subcontractors, with whom they have an established commercial relationship.  When companies default on these obligations, the law empowers victims and other concerned parties to bring the issue before a judge.  Judges can apply fines of up to € 10 million when companies fail to publish plans.  Fines can go up to € 30 million if this failure resulted in damages that would otherwise have been preventable.  Despite being a major achievement, French civil society organisations argue the law’s text could have been more ambitious...

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Article
14 December 2016

French Duty of Vigilance Law - English translation

Author: European Coalition for Corporate Justice

...Any company that at the end of two consecutive financial years, employs at least five thousand employees within the company and its direct and indirect subsidiaries, whose head office is located on French territory, or that has at least ten thousand employees in its service and in its direct or indirect subsidiaries, whose head office is located on French territory or abroad, must establish and implement an effective vigilance plan...The plan shall include the reasonable vigilance measures to allow for risk identification and for the prevention of severe violations of human rights and fundamental freedoms, serious bodily injury or environmental damage or health risks resulting directly or indirectly from the operations of the company and of the companies it controls...

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