“A historic step for the protection of human rights and the environment, a strong signal for Europe and the world”.
On 24 April 2013, in Dhaka, capital of Bangladesh, 1,127 people perished in the collapse of the Rana Plaza. This building housed numerous garment factories working for various major international brands.
This serious accident had a major impact on the public but also on politicians.
Indeed, in France, as early as 2013, a bill for the supervision of the supply chain of large French companies was tabled in the National Assembly.
After numerous discussions and various revisions, a new law was finally adopted by the French parliament on 2017, February 21st.
Internationally, there have been other texts on more ethical management of supply chain management. For instance, in 2012, the state of California implemented the Transparency in Supply Chain Act, 1 year before the tragic event that inspired the French legislator (https://oag.ca.gov/sites/all/files/agweb/pdfs /sb657/resource-guide.pdf). This Transparency Act obliges large corporations with over $ 100 million turnover to publish regular reports and action plans on child labor and forced labor.
More recently, in 2015, the Modern Slavery Act in the United Kingdom punishes forced labor and slavery with imprisonment.
On the other hand, France is the first to adopt such a comprehensive law on supply chains as the law “on the duty of vigilance of parent companies and companies giving order” adopted last February.
The law covers a wide range of subjects: human rights, fundamental freedoms, health, safety and the environment.
Companies with more than 5000 employees should ensure that these principles of environmental protection and the protection of fundamental freedoms are respected by all their trading partners (subcontractors, suppliers, subsidiaries, etc.).
As part of the publication of their management report, the companies covered by this law will publish various documents relating to these issues.
– A mapping of identified, analyzed and prioritized risks;
– Regular risk assessment procedures with all trading partners and subsidiaries;
– A risk mitigation or prevention action plan;
– A mechanism for warning and reporting of risk situations made available to the company’s stakeholders.
– A process for monitoring the measures implemented and evaluating their effectiveness.
This law also had a strong arsenal to ensure its enforcement and the punishment of its non-compliance with maximum fines ranging from 10 to 30 million Euros depending on the violations found.
The high level of these fines, even if they remain a moderate risk to offenders, represents an increased risk to their brand image.
It should be noted that, in the context of the prevention of image-related risks and NGO pressure, most large transnational corporations have already for a long time incorporated these good practices proposed by the legislator.
In addition, shortly after the release of this legislation in the media, opposition MPs referred the new low to the Constitutional Council.
The latter finally conceded to dissatisfied parliamentarians the unconstitutionality of 2 articles of this law which nevertheless count only 4.
So no fine anymore for the offenders who will still have to answer publicly for their responsibility in case of the seizure of the justice which can constrain them to more transparency.
The financial risk is abolished, but there is still to consider the risk of the image of these companies.
Many international CSR players, NGOs and companies, recognize the importance of legislation to support or encourage efforts in this area. The French State has therefore taken a major step in recognizing the principles of CSR and their geographical and conceptual universality. If the employers breathe after the announcement of its alleviation, the association group that supported the law welcomes this first step in favor of ethical practices in industry: “A historic step for the protection of human rights and the environment, a strong signal for Europe and the world “.