EU stance on duty of care by multinationals seen as ‘obstructive’

After France adopted a law on the duty of care by multinational companies, UN member states are discussing a treaty on human rights in international trade, despite the EU’s policy of obstruction.

The French law on duty of care by multinationals has inspired other countries. It is the first EU country to pass legislation enforcing the protection of human rights and decent working conditions for workers in the supply chains of multinational companies.

From 23 to 27 October, a UN working group on the subject is meeting in Geneva to discuss the possibility of creating a legally binding tool guaranteeing the enforcement of human rights by multinational corporations.

The negotiations were initiated by a group of developing countries, driven by Ecuador and South Africa, and should be supported by France, Europe’s pioneer of legislation on corporate accountability. The 2017 “Rana Plaza” law strengthens the duty of care of parent firms and main companies towards their subcontractors, both in France and in developing countries.

The Rana Plaza

The French proposal was put forward in April 2013, right after the Rana Plaza tragedy in Bangladesh, which saw more than 1,000 textile workers die when the building they were in collapsed. The tragedy shed light on the responsibility of parent companies, such as Benetton and Mango, to ensure their subcontractors provide acceptable working conditions.

Paris was not the only capital to react. Indeed, the proposal of the developing countries at UN level was first formulated in 2014.

“A hypocritical veil separates parent companies and the subcontractors of their subsidiaries on the other side of the world,” French MP Dominique Potier said during a question session at the government.

“Today, 134 developing countries are asking for the French law to become a UN treaty,” he added. The MP has asked the government to support this initiative during the Geneva negotiations.

“A procedure was launched by the United Nations human rights council several months ago, France has been actively and regularly contributing to this initiative,” said Jean-Yves Le Drian, minister for Europe and foreign affairs, who considers this treaty “a necessity”.

European ambiguity

While the negotiations are in progress, the question of the European Commission’s raises a challenge. Brussels has indeed adopted a communication on the responsible management of international supply chains and the trade practices of European firms in developing countries. But these measures are not legally binding and the Commission has not made much progress since the publication of the communication in 2014.

“The law on the duty of care by multinationals makes France the leader in the subject. Paris thus has an essential role to play in the Geneva negotiations, and it would be inexplicable for our government […] not to push the EU to do the same,” said Alice Bordaçarre, of the NGO ActionAid France-Peuples Solidaires.

France leads EU on duty of care requirements for multinationals

After four years of debate, France has finally adopted a law on multinational companies’ duty of care. This paves the way for similar laws in Belgium and Spain, although the project is stalled at European level. EURACTIV France reports.

The European executive seems to dislike the idea of a legally binding measure, as such a mechanism is sometimes considered as counterproductive for the UN Guiding principles on business and human rights.

Those principles, adopted in 2011, touch upon the respect of human rights by multinational companies, but they are not binding. Today, only 12 of the 28 EU member states have transposed them into their national legislation, according to a report by Friends of the Earth France and ActionAid France – Peuples Solidaires.

Just like in 2015, when the subject was last debated at the UN, the EU has impeded the adoption of the work programme, citing worries linked to the impact of the guiding principles. An approach that has been criticised as obstructive by Spanish MEP Lola Sánchez (GUE/NGL group), who was “angered by the position of the EU representative” in Geneva, where the negotiations will continue until 27 October.

“I am asking the EU to adopt a constructive and positive position during this process,” Sánchez concluded.