This article is the last of a series of 4, presenting the results of an NGO consultation as part of a global report on corporate due diligence.
The next phase of the project will be to report on the views of large companies on the impact of the law on their governance.
What could be done to enable NGOs and companies to work together for the common good?
Would it be possible for NGOs and companies that are genuinely convinced, and have adopted a continuous improvement approach to achieve the goals of the 2017 French Duty of Vigilance Act, to get together to work for the common good? Wouldn’t this pragmatic approach be more effective than waiting for new standards to be imposed that will not necessarily be appropriate for the issues addressed or the scope under consideration, and will thereby maintain an ambiguity that can only be dispelled by a court decision?
The difficulty in working together due to divergent interests
Some organisations, including “Les Amis de la Terre”, believe that it is not their task to sit down with multinationals and coach them. The latter know what is required to achieve the desired results and have ample resources to draw up a proper risk map. However, according to the NGOs, they are falling far short of the mark, not because they do not understand the texts, but because they adopt strategies to avoid producing and publishing a document that is too precise and therefore too binding.
The same NGOs also feel that it is not up to them to allow for the fact that mid-cap companies and large SMEs, which will be affected either directly by the probable reduction in thresholds or indirectly through pressure from their customers, do not have the human resources to deal with ever more numerous regulations. It is their responsibility to organise themselves to factor in these new obligations.
For “Notre Affaire à Tous”, working meetings between companies covered by the 2017 Act and NGOs are more often for show than driven by a genuine desire to make substantial changes to their strategies or vigilance plans by factoring in comments made by these organisations. This is explained by the opposition in principle that exists between these two worlds. The main concern of a profit-making company is to meet its shareholders’ expectations. In this respect, it is not essential for them to take NGOs’ views into account when drawing up their strategies.
The final point that explains the difficulty of working together is the divergence of the parties’ interpretations of the act. The Act can be seen as either restrictive, as understood by the companies targeted, or extensive, as desired by the NGOs. Since the government has not taken up the option offered by the legislator to create an administrative authority responsible for setting and monitoring the framework for its application, the courts have become the player that decides between them.
The first court ruling on the duty of vigilance in the long-awaited Total Energie/Eacorp Tilanga case was a disappointment for the six NGOs involved in the case, as the urgent applications judge declared the complaint inadmissible on several counts and declined jurisdiction over the case.
The complexity of the 2017 act lies mainly in the fact that virtually every paragraph in the text is open to discussion and interpretation. The judge in the Total case forcefully emphasised “the difficulty of enforcing legislation on the duty of vigilance”. In particular, he explained that: “this legislation assigns monumental goals for the protection of human rights and the environment to certain categories of companies, specifying the minimum means that must be implemented to achieve them” and added that: “the act does not directly specify any guiding principle, or any other pre-established international standard, nor does it include a list or classification of the duties of vigilance imposed on companies”.
The importance of the government’s role in support and supervision
The NGOs maintain that the government should provide support by introducing services that would not only offer companies appropriate training but also facilitate the creation of various common tools. It has to be said that the public sector is not proactive in monitoring the implementation of the act at present. However, it is the government’s responsibility to educate. In this respect, the work of associations like SHERPA, which has produced a very detailed guide on how the act should be interpreted and what an appropriate vigilance plan would look like, could be a source of inspiration.
The government should also seek to achieve a degree of transparency by centralising the vigilance plans of companies subject to the act in a place easily accessible through a search engine, so that all the stakeholders can find out what they contain. This kind of work should be incumbent on the government, not NGOs.
Finally, NGOs believe that in working for the common good, their mission lies not in dialoguing with companies but in providing warnings and vigilance. According to some, their position as whistleblowers rules out the possibility of sitting at the table with the companies concerned, as their independence must be totally guaranteed. They consider that we need to go much further and make environmental protection and social and societal CSR issues central to corporate strategy, which is at present far from being the case. Transparency, the carbon footprint and impact, measured using reliable indicators, must be at the heart of the governing body’s decision-making process.
The Duty of Vigilance Act is currently being used as a tool, and this is not satisfactory. Dialogue with companies is constructive and necessary, but not truly effective. To have a real impact and bring about change in the structures and players involved it is vital to use legal channels, because the lines will only move if external pressure is applied.