Duty of care

Duty of Vigilance: Ethics as an Imperative

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The proposed law on the duty of vigilance of parent companies was adopted by the National Assembly in second reading on 23 March by 32 votes to one. It aims to strengthen the social and environmental responsibility of French companies through "reasonable vigilance". French parent companies (with more than 5,000 employees in France or 10,000 with their subsidiaries abroad) will have to draw up and implement a due diligence plan. In the event of non-compliance, they will risk a civil fine of up to 10 million euros.
 
Chis decision is the end of a soap opera that has been the subject of lively parliamentary debate and violent pressure from employers' organisations and a large number of NGOs and members of parliament who are defenders of this text. Already last November, the Senate had indeed succeeded in emptying the text of its substance by voting three amendments intended to delete each of the three articles of the text. This is also the path chosen by 193 deputies from Les Républicains et apparentées (including Nathalie Kosciusko-Morizet, Laurent Wauquiez and Éric Woerth) for this second reading, on the grounds that the text would harm the competitiveness of the companies giving the orders, but also of French SMEs.
 
Arguments borrowed from employers' organizations. They have expressed themselves on numerous occasions. The President of the French Association of Private Enterprises (Afep), Pierre Pringuet, gave an interview to Libération denouncing the consequences of this law for French companies which would find themselves "penalized" by a text that is "excessively vague" and constitutes "the wrong answer to a good question".
Benjamin Thouverez, manager of the audit and consulting firm EY, explains on a daily basis The Cross that this law does" to French companies a bad lawsuit. French companies are not opposed to the spirit of the text and some have already begun to take steps to better integrate their social and environmental responsibility into their "business model". ». He adds that nearly 80 % of the CAC 40 companies have implemented actions of varying degrees of scope to ensure that their subcontractors or suppliers comply with international standards in force.
 
For the representatives of multinational companies, this law is therefore completely useless. They believe that their companies are already models of ethics and social responsibility for many of them and that they are already sufficiently vigilant with regard to human rights. That is fine. But then why are the economic lobbies so determined to prevent the law? An NGO representative actively supporting the proposal says : " We met with AFEP [the French Association of Private Enterprises, representing major French companies] at every turn. ». Even the American Chamber of Commerce, the main American lobby and champion of absolute corporate rights (and of the Tafta free trade project), has joined the party to weigh in against the French bill, through a platform in Echoes.
 
 
However, in two articles This law provides that large French companies must put in place a plan to prevent human rights abuses in their supply chain and that, in the event of a serious event, victims may bring a case before a French civil court to verify whether or not the plan was adequate.
 
For the rapporteur of the text, the deputy Dominique Potier (PS), this law is part of a new generation of rights adapted to globalisation. Questioned by Libération he reminds us that " One of the driving forces behind ultraliberalism is the irresponsibility of the parent companies of large groups for the actions of their subsidiaries and subcontractors at the other end of the world. This is true of tax havens, modern slavery and serious damage to ecosystems. "
This law lifts an opaque veil that had been created between large multinational companies and their subcontractors. It establishes a duty of vigilance on human rights for those who give orders. In the background, the promoters of the text have in mind the drama of the Rana Plaza in Bangladesh almost three years ago, which caused 1,138 victims and as many injured in a low-cost textile factory where French and European distributors were supplying themselves. According to Dominique Potier, " this disaster has made the ignorance and feigned actions of the principals visible... ".
 
The Raza Plana disaster in Bangladesh (Photo ©Rahul Talukder)
 
In its concrete implications, the proposal does not seem to contain anything insurmountable for French multinationals. It is difficult to escape the conclusion that it is above all a matter of principle: for some, it is apparently inconceivable that anyone would want to enshrine in law any ethical or societal obligation for companies. However, for the rapporteur of the law, "[t]he law Ethics is more than ever a political imperative. Europe, which is a step ahead of the Anglo-Saxons and Asians in this area, must use its influence to change international rules and not allow low-cost standards to be imposed. Several EU countries have already legislated: on child labour in the United Kingdom, on corruption in Italy. With this text, France is aiming for a more global approach that could inspire a European directive. ".
 
In a statement published today, several NGOs including Amnesty International welcomed the adoption of the text by the National Assembly. However, they call on the government to do everything possible to ensure that the process is completed before the summer of 2016, and now call on the Senate to put it on its agenda as soon as possible. There is still a long way to go before the law is finally adopted, which will also require the implementation of a decree. According to them, this law constitutes " a first historic step towards the consideration of human rights by multinational companies ".
 
By imposing the obligation of vigilance, this law introduces the ethical imperative into the conduct of business. Large companies established in France will not be able to escape their responsibility, in France and abroad, for the whole of their value chain, from the environmental damage that their activities could generate to the human rights violations of which they could, directly or indirectly, be guilty.
 
 
 

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