The law seeks to force parent-companies and groups to ensure their suppliers and subsidiaries — located anywhere in the world — adhere to basic responsible business practices. It would make parent companies liable for human rights violations, environmental damage, and ethical transgressions of their suppliers or subsidiaries. They would have to demonstrate they have done adequate “due diligence” to ensure their operations and supply chains adhere to responsible business standards.
The law was originally proposed and eventually approved by the Parliament in September of 2015. Shortly after, the law then went to the French Senate in November, where it was voted on and soundly defeated by the right-led majority. The opponents of the law complained that the law would make French companies less competitive: Such strict regulations on supply chains compared to competitors in other countries – especially those in the EU – would put French companies at a disadvantage, they argued. Not surprisingly, French officials are also supporting adoption of a similar legislative package at the EU level. (Read more about trends in due diligence laws it in our white paper here.)
The authors worked with current government officials to rewrite the law that was voted on last week and approved again by the Parliament. It will pass again to the Senate for a second vote. Stay tuned: Although it is anticipated that it will be defeated again in the Senate, the battle will be far from over. Moreover, EU legislation may be their ultimate goal.
