French National Assembly approves law on supply chain responsibility

01.12.2016

France has taken a step closer to adopting a law requiring companies to take greater responsibility for working conditions and environmental risks in their global supply chains.

On 29 November, the National Assembly approved draft legislation requiring French companies employing more than 5,000 employees to implement a vigilance or due diligence plan to identify risks to human rights and the environment as a result of their activities, and those of their subsidiaries and suppliers.

Act 1 of the draft law says the companies must: “establish a vigilance plan including measures to identify and prevent risks of violations of human rights and fundamental freedoms, serious bodily injury or environmental damage or health risks arising from their activities and those of companies they control, as well as the activities of subcontractors or suppliers over which they exercise decisive influence.”

The legislation must now be adopted by the Senate before it is made law, which would also apply to multinational companies employing more than 10,000 employees in France.

As part of the vigilance plan, companies will have to identify and chart areas of risk, carry out regular evaluations of subsidiaries, suppliers and subcontractors, put in place measures to reduce risk, and set up an alert mechanism. Companies which fail to do so could be fined up to 30 million euros, although the fine would not exceed 0.1 per cent of the company’s yearly turnover.

The text also allows for company stakeholders, such as trade unions and civil society groups to be involved in the development of the vigilance plan.

The law puts a legal obligation on the companies in France, of which around 150 are affected, to take responsibility for their supply chains, rather than just a moral obligation.

The law has been watered down from its original draft and does not give strong provisions in getting justice for victims. Nevertheless, it marks considerable progress in putting obligations on multinational companies for workers’ rights in their supply chains.

IndustriALL’s assistant general secretary, Jenny Holdcroft, said:

“The French National Assembly has taken a big step in legislating to put obligations on multinational companies for their responsibilities towards the rights of workers throughout their global supply chains. While the law could go further, it is an important milestone in improving the lives of millions of workers toiling for multinational companies, who are too often on poverty wages, with few rights and working in dangerous conditions.”