Multinational Corporations’ Duty of Care: One Step Closer to the Final Adoption of the Bill

Wednesday, 30^th November 2016 – Yesterday, the Members of the French National Assembly passed the Bill on the duty of care of parent companies and commissioning companies on third reading. Although stakeholders were hoping for a more ambitious statute, this Bill – which has gone through an eventful legislative process for the last three years – is a significant improvement in the fight against the impunity of multinational corporations for violations of human and environmental rights. Our organizations welcome the new draft and call upon the government to ensure its final adoption before the end of term.

The Members of the National Assembly and the government have reiterated the Bill’s main goal: to create a requirement for major corporations to set up a vigilance plan which would identify and prevent risks related to their operations, throughout their supplier chain. They could also be held liable in case they do not set up such a plan, in case it is insufficient or in case of faulty implementation.

The latest draft introduces new elements:

• – The contents of the vigilance plan are outlined [1]. An implementing degree may complement these provisions and specifies the ways in which the vigilance plan should be drafted and published. We welcome the fact that the statute can be effective as soon as it is passed, even without such a decree.
• – Company stakeholders such as trade union representatives or other civil society groups can be involved in drafting the vigilance plan.
• – Lastly, the National Assembly increased the maximum amount of the fine that may be imposed in the absence of a plan or its faulty implementation. This amount is now set at 30 million Euro, however this remains a token penalty considering the revenues of the companies which will be governed by this Bill [2].

Our organizations nevertheless wish to underline the limits of this Bill: it would only apply to about a hundred major corporations, it doesn’t really contain any provision aiming to render the victims’ access to justice significantly easier – the burden of proof still rests upon the victim and not the company -, and last, these corporations’ liability is limited.

This Bill however is undeniably a first step forward. Our organizations remain mobilized and call upon the government to ensure that this Bill is quickly examined by the Senate so that its final adoption can take place before the end of parliamentary term.

Notes:

[1] The vigilance plan must notably contain certain elements defined by law, such as risk mapping enabling their identification, analysis and ranking, and regular monitoring of the status of parent companies, subcontractors and suppliers. A mechanism monitoring the precautionary measures set up and evaluating their efficiency is also included.

[2] The maximum fine only amounts to 0,1% of these companies’ revenue.