Duty of care makes headway in Europe
Following French and German laws, the European Parliament has just passed a directive on the duty
of care of multinational companies.
On June 1, a few weeks after the 10 th anniversary of the Rana Plaza disaster, the European Parliament
passed a directive on the duty of care for multinational companies. Following a 2017 French law and
a 2021 German one, this move does not yet guarantee its adoption by the European Union. But it
forcefully demonstrates the progress in Europe of a French conception of business and globalization.
On April 24, 2013, in a suburb near Dhaka, Bangladesh, a nine-story building collapsed, causing the
deadliest disaster in the history of the textile industry, with over 1,100 killed and thousands injured.
The building housed sewing workshops working for major fashion brands. The tragedy unleashed a
wave of emotion around the world, and almost all of the companies that ordered through the factory
admitted that they had been blind to the danger posed to these workers by their subcontractors.
This awareness sparked a French innovation: the April 27, 2017 law on multinational companies duty
of care. It requires them to implement a plan to prevent violations of fundamental workers rights
throughout their supply chain, but the law has certainly provoked persistent criticism and opposition.
Indeed, the feasibility of such a plan of care could be contested when supply chains are long and
complex.
A new social approach
But the sheer scale of the human issues involved should encourage more manageable processes to
be found. Above all, the law was criticized for blaming companies for endangering the work
environment through no fault of their own. However, the law did not include this and reiterated a
principle of considerable doctrinal force. The government has the right to impose standards of « good
management »; when a company activity or power can lead to danger for others.
The car rental company must therefore check that its customer has a driving license! Thus, the law
only requires the company to prove that it takes documented and serious preventive measures to
avoid working with suppliers who do not respect these rights. This conception first crossed the
borders of France with a similar law adopted in Germany in June 2021. The recent vote of the
European Parliament therefore confirms the diffusion across the continent of a more responsible
conception of the role of companies in globalization.
Admittedly, the size of the companies concerned, the extent of the rights under vigilance, the penalties associated with non-compliance with the requirements, are yet to be determined and nothing says that a demanding directive will be
adopted.
But who would have bet in 2017 on such a European reception when many saw in this law a
French error? To tell the truth, by adding the innovations of the Pacte law of 2019, such as the
company with a mission which is developing in France – more than 1,100 companies with a mission
to date – and in Europe (Italy, Spain), French law establishes step by step » the company as a political
actor ». This does not mean that the imperative of profitability and competitiveness has disappeared,
but that it does not exhaust the identity or the responsibilities of companies.
Sources : Le Monde
