The Bill now being considered in the French Parliament imposes on the largest French companies a mandatory due diligence plan aimed at preventing human rights harms caused by their activities, those of their subsidiaries, sub -contractors and suppliers. An estimated 100 to 200 companies are likely to be impacted by the law, known as “Devoir de Vigilance” or DdV. The move could create a domino effect and similar provisions could be adopted in Switzerland and possibly, at a later stage, at the European Union level. The law could have significant implications for corporate liability, and potentially “lift the corporate veil” that currently insulates many Groups from such far-reaching responsibilities.
The mobilization of civil society organizations on these initiatives advocating for binding legal frameworks and civil, and even potentially criminal, liability is getting increasingly strong. For the first time, following the move initiated by the inception of the United Nations Guiding Principles on Business and Human Rights (UNGP) in June 2011 and the 2011 revision of the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, a State has proposed a piece of legislation imposing a mandatory due diligence plan on public limited companies and their supply chain addressing human rights abuses. So far, the Bill only covers French corporations with five thousand or more employees (including within their French subsidiaries), or 10 thousand or more (including within all subsidiaries, both French and foreign). Most observers estimate the number of companies covered by the law between 150 and 200.
A few of them could be subsidiaries of foreign companies. In Switzerland, a motion by the Swiss lower chamber calling for a law imposing a duty of human rights due diligence (obligation de diligence) on Swiss companies, has been narrowly rejected in March 2015. In response, civil society organizations launched a popular initiative on the matter in April 2015 with a target of collection of 100 000 signatures. The initiative could then lead to the organisation of a binding referendum to amend the Swiss constitution. Mandatory due diligence regulations are under consideration in Spain, the Netherlands and Sweden for public companies. In France, it is expected that some additional provisions on business and human rights might be included in the transposition law of the “Barnier” Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups, at the latest in December 2016.
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