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Two years since French vigilance law, momentum builds against corporate impunity

Thousands still await full justice after the 2013 Rana Plaza disaster (photo credit – Rijans)

By Swann Bommier, advocacy officer at CCFD-Terre Solidaire

On 27 March 2017, the duty of vigilance law came into force in France. Two years later, this law, unique in the world, is cited as a reference in Brussels and Geneva. Is it the first stepping stone towards putting end to the impunity of multinationals?

Industrial disasters, environmental destruction and other scandals that make newspaper headlines are frequently followed by long legal battles in which the victims try, often in vain, to obtain compensation from transnational corporations that refuse to take any responsibility. Often they do this by blaming their subsidiaries or subcontractors abroad.

The case of the Rana Plaza disaster is the most telling. On 24 April 2013, corporate negligence lead to the deaths of 1,134 people when the Rana Plaza commercial building collapsed. It then took two years of international mobilization for Benetton, a major buyer of products produced at Rana Plaza, to agree to contribute to the compensation fund. In total, the Rana Plaza Donors Trust Fund, voluntarily funded by textile brands, reached $30 million, which was distributed among the 3,000 individuals and families directly affected by the disaster. To obtain real justice, with damages proportional to the harm suffered, much remains to be done. Going back to challenge the parent companies remains a very complicated exercise for local populations.

In many cases even minimal voluntary action does not materialize. In Pakistan, on 11 September 2012, 250 people were burned alive in the Ali Enterprises textile factory. Four victims tried to obtain compensation from the German company Kik, which had outsourced part of its production there. In January 2019, they were dismissed by the German courts on the grounds that their complaint did not respect the limitation periods of Pakistani law! Shell’s pollution-affected communities in Nigeria received equally staggering responses: for British judges, Shell UK was in no way responsible for the actions of its subsidiary Shell Nigeria.

In order to remove these obstacles, France adopted a pioneering law in March 2017, the  duty of vigilance law. This law imposes a duty of due diligence on French companies with more than 5,000 employees in France, or more than 10,000 employees worldwide, on their actions and those of their subsidiaries and subcontractors. Large French companies are now required to draw up, publish and implement a vigilance plan based on an inventory of the risks that the company poses to fundamental freedoms, health, human rights and the environment. If human rights or environmental violations nevertheless occur, the affected persons can use this law to seek redress before the French courts. This is nothing less than a small revolution in the business world, where previously total impunity prevailed!

At the moment, numerous reforms are underway to replicate this model in Europe and around the world. Switzerland is pursuing a “responsible business initiative”. The Dutch parliament is debating a law on the duty of vigilance for child labour; two German ministries are also working on a similar idea.

In Spain, Italy, Finland and Luxembourg, social movements and political parties are also calling for the adoption of duty of vigilance laws. A European directive could also be issued in the near future, as the vice-president of the European Commission and a group of parliamentarians have expressed their support for such a directive in recent days.

As the European elections approach, and as we await the publication of a new version of the UN treaty on business and human rights, the law on the duty of vigilance shows that impunity for multinationals is not inevitable, but rather the result of inaction.