France adopts corporate duty of care law
On 21st February, the French National Assembly adopted a law establishing a “duty of care” obligation for parent and subcontracting companies. Friends of the Earth International (FoEI< www.foei.org>) describes the law as a “first historic step towards better human rights and environmental protection.” The vote comes after several years of mobilization from a range of groups including Friends of the Earth France. The hope is it will now pave the way for similar binding regulation in other countries and at the UN, where negotiations on an international treaty have already begun.
It has long been obvious that voluntary approaches to corporate responsibility and accountability have proved ineffective. You might as well introduce vegetarianism for tigers. France is the first country to adopt binding legislation covering all human rights abuses and creating binding obligations for parent and subcontracting companies across the whole supply chain.
Companies covered by the new law, which applies only to big French corporations, will have to assess and address adverse impacts of their activities and those of subsidiaries, as well as 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, it could have been more ambitious. The law’s scope is limited, only covering around 100 large companies. The burden of proof still falls on the victims, who often lack the means to seek justice, further accentuating the imbalance of power between large companies and victims of abuse. Furthermore if a parent company is deemed to have implemented an adequate vigilance plan and damages occur, the company will not be liable. A company is not required to guarantee protection from damage, only that is has done everything in its power to avoid damages.
Juliette Renaud, corporate accountability campaigner for Friends of the Earth France comments: “This vote is a huge victory for French civil society, as this law has faced fierce opposition from private sector lobbies during the whole legislative process. It is not as ambitious as we would have liked, but it is a historic first step to put an end to corporate impunity.”
It is now essential, say FoEI, that other countries follow France’s lead, bringing in binding legislation at national, European and international levels, to advance on much needed regulation for transnational corporations and their financiers.
For Lucia Ortiz, Friends of the Earth International economic justice program coordinator, “The victory of French civil society shows how people power can lead to the end of transnational corporate impunity, building binding rules from the bottom up, that will have implications for the world’s largest companies, obliging them to respect human rights in a way they have never had to do before. Other countries in the EU should follow this example and regulate their businesses at home and abroad. EU countries should also support developing countries in leading the Intergovernmental Working Group mandated to develop a new international legally binding Treaty at the UN Human Rights Council for business in relation to human rights.”
Friends of the Earth International and social movements worldwide are mobilizing towards the next decisive step of negotiations taking place at the UN in October this year in Geneva.