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On 10 March 2021, the European Parliament approved a resolution aimed at forcing European companies to examine those aspects of their supply chains likely to be in breach of human rights or to negatively impact the environment and good governance On a national scale, several Member States have already adopted similar legal provisions. A recent French court ruling illustrates the potential of this duty to regulate companies operating internationally.

In France, the Law of 17 March 2017 imposes a “duty of care” on large French companies. Its aim is to prevent severe breaches of human rights and fundamental freedoms as well as negative impacts on the environment, health and safety. Companies are obliged to draw up a corporate “vigilance plan” to assess and prevent risks arising not only from their own operations, but also from those of the companies with which they have commercial dealings (Art. L 225-102-4 of the French Commercial Code). The law was adopted as a direct consequence of the collapse of a building in Dacca (Bangladesh) in 2013, resulting in 1127 deaths. The building housed several companies making clothes for international fashion companies. This disaster stimulated debates on establishing an international legal framework making parent companies responsible for the activities of their subcontractors.

While this law constituted an interesting step forward, it did little to establish materiality and had little impact on the ground. In France, a ruling handed down on 11 February 2021 contained the first concrete elements of corporate liability vis-à-vis society. The ball started rolling in January 2020 when five associations and fourteen local communities took the view that the “vigilance plan” published by Total did not respect the Paris Climate Agreement. In his ruling, the judge made reference to the 2017 law but also to the Law of 22 May 2019 (the loi Pacte), which states that every French company must “be managed in its best interest, taking account of social and environmental consequences of its operations”. The judge ruled that Total “had to include in its strategic orientations risks of breaches to human rights and of negative environmental impacts and, given the nature of its operations, to perform substantial retrenching”. The judge went on to stress that this type of legal action was “open to all persons justifying an interest to take action”. As the operations of Total have a negative impact on society as a whole, various communities and associations have been able to justify an interest to take action.

This “interest to take action” could also be interpreted more widely, benefiting worker representatives or unions. At present, staff representation bodies – made up of union members – have an information and consultation right with regard to their company's activities. These legal obligations can be combined with or fertilised by the transparency required through the “duty of care” with a view to extending their competences internationally, in particular focusing on the working conditions applied by subcontractors or subsidiaries. The “interest to take action” and the “right to probe” which unions could demand in the context of this corporate “duty of care” constitute a hands-on opportunity for the union movement.

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Photo: Philipp Jenny