THE LAW ON DUTY OF VIGILANCE OF PARENT AND OUTSOURCING COMPANIES YEAR 1: COMPANIES MUST DO BETTER

MEMBERS OF Editors: Juliette Renaud (Friends of the Earth France) Françoise Quairel, Sabine Gagnier, Aymeric Elluin (Amnesty International France) Swann Bommier, Camille Burlet (CCFD-Terre Solidaire) Nayla Ajaltouni (Collectif Ethique sur l’étiquette)

Proofreaders and contributors : Chloé Stevenson (ActionAid France – Peuples Solidaires) Lorette Phillipot, Lucie Pinson (Friends of the Earth France) Sandra Cossart (Sherpa)

Spell checking : Elisabeth Maucollot

Graphic design : Antoine Guinet

Translation : Maria Gioia

Date of publication : February 2019 4INTRODUCTION PART 1.

General summary of the 6plans published and how they conform to the law 1 The content of the law P.7 General summary of the implementation 2 of the law: broadly insufficient plans P.10

PART 2.

Sectoral analysis 20Extractive sector P. 20 Arms sector P. 25 Agri-food sector P. 30

TABLE OF CONTENTS TABLE Banking sector P. 35 Garment sector P. 40

GENERAL 46CONCLUSION AND PROSPECTS INTRODUCTION

For many years now our organisa- the activities are distributed between impact of its activities – including tions have been documenting cases branches, subcontractors, suppliers those of its subsidiaries, suppliers of human rights abuses by multina- and other commercial partners. As and subcontractors, wherever they tionals, as well as the many ways in these are supposedly independent may be in the world – it is the first which the victims’ access to justice legal entities, each under disparate legislation worldwide that proposes has been restricted. The tragedy in jurisdictions, the parent and outsour- surpassing the independence of the Bhopal, India, the dumping of toxic cing companies are not held legally legal entity. This law is based in par- waste in the Ivory Coast, the pollu- responsible for any serious acts of ticular on the United Nations’ Guiding tion caused by the Erika tanker on environmental and human rights abuse Principles on Business and Human the French coast, dumping by Shell committed by their subsidiaries or by Rights (UNGPs) 4, which is currently the in Nigeria and by Chevron/Texaco other companies within their sphere of internationally recognised standard in Ecuador, or even the much publi- influence (subcontractors, suppliers, of reference on this matter. Unani- cised collapse of the Rana Plaza in etc.). Indeed, the independence of mously passed by the United Nations Bangladesh are emblematic and dra- the legal person allows the parent Human Rights Council in 2011, these matic examples of this. Recently, in company to be protected from any non-binding guidelines affirm the cen- January 2019, a new mining tral role of the government in catastrophe in Brumadinho in the protection and promotion the state of Minas Gerais shook of human rights in companies, Brazil and claimed 300 lives1. the priority of a risk-based These cases demonstrate that A legally binding approach for third parties, the national and internatio- and the extended liability nal regulatory framework in within the value chain, and general do not allow for the framework is emphasise that it is manda- economic players to be held tory for companies to respect responsible when it comes to therefore human rights by recognising human rights or for payments that their liability extends to for damages to be requested necessary their business dealings as a wherever they may have occur- whole. red in the world. France is the first country to This situation reveals that voluntary action taken against it as a result of have adopted legislation such as the standards, only framework that cur- its subsidiary’s actions. This ‘corporate law on duty of vigilance. Other similar rently exists on an international level, veil’, in reality, is a major obstacle initiatives are being developed across are not enough to prevent the human for anyone representing the victims Europe and the world. However, in rights abuses and environmental in their search for justice and com- order to be efficient on a global level, damages committed by companies. pensation. an international binding treaty would A legally binding framework is there- be necessary so that all companies fore necessary. The French law on the corporate everywhere in the world could be held duty of vigilance of the parent and accountable for their actions and sub- Transnational corporations carry out outsourcing companies (Law No. ject to effective sanctions. A crucial activities in multiple countries and 2017-399 of 27 March 2017)3 wanted step regarding this was taken when on therefore depend on multiple juris- to address this issue. By placing the 26 June 2014, following the initiative of dictions. Organised in groups of com- burden of responsibility of prevention Ecuador and South Africa, the United panies via long and complex chains of on the multinational and, above all, Nations Human Rights Council adop- subcontracting in different countries2, by incurring its civil liability for the ted the 26/9 resolution establishing an

1. This catastrophe arrives three years after Samarco’s mining dam collapse in Mariana, involving the same mining giant, Vale, and when the victims from 2015 are still awaiting compensation. See the press release of 26 January 2019 from MAB (Movement of People Affectif by Dams) in Brazil: http://www.mabnacional.org.br/noticia/le-mouvement-des-personnes-affect-es-par-les-barrages- 4 d-nonce-le-nouveau-crime-commis-par-va INTRODUCTION intergovernmental working group with it comes to the concerned parties, 2.See the ITUC report on 50 of the largest this aim. Mandated to “elaborate an both the government and companies, transnational companies which shows that international, legally binding instru- in order for the implementation of this they only directly employ 6% of workers; 94% are employed by subcontractors and sup- ment to regulate, under international law to meet its principal objective: the plier : https://www.ituc-csi.org/frontlines-re- human rights law, the activity of trans- prevention of violations of fundamen- port-2016-scandal?lang=en national corporations”, this working tal rights to fundamental rights and group achieved a historical milestone environmental damage. 3. The text of the law on duty of vigilance is when in its fourth session in October available here: https://www.legifrance.gouv. fr/eli/loi/2017/3/27/2017-399/jo/texte 2018, for the first time in the UN’s This study is not an exhaustive review history, the member States opened of all the plans published in this first 4. The text on the UNGPs can be found here: negotiations for a first draft treaty. year of implementation. Our organi- https://www.ohchr.org/documents/publica- sations have chosen to select certain tions/guidingprinciplesbusinesshr_fr.pdf Until such a treaty is adopted, the large companies operating in speci- French law on duty of vigilance pre- fic sectors due to their high risks of sents the first opportunity worldwide human rights abuses and damage to to prevent as best as possible the the environment that we have docu- important risks associated with mul- mented using information gathered tinationals’ activities and to grasp the in the field. complexity of their structures and value chains. In the first section, the study gives a general analysis of the vigilance plans The purpose of this study is to pro- published in order to determine the duce a summary of the first year in positive elements and shortfalls and which this new legislation has been to present our main observations and implemented in France. Our gene- recommendations. ral observation is that the first plans published in 2018 only very partially The second section presents secto- meet the objectives and requirements ral analyses to underline the specific of the law, notably in terms of iden- challenges in sectors particularly at tifying the risk of abuse, their location, risk: garment, food industry, arms, and measures put in place to prevent weapons and extractive industries. them. Our organisations thus wish to In each sector, the vigilance plans of express here their expectations when three companies have been analysed.

5 Part 1

General summary of the plans published and how they conform to the law

6 tation of this vigilance plan. In case of « 3° Appropriate actions to mitigate non-compliance, the civil liability of risks or prevent serious impacts; the company may be incurred before a French judge and then, if need be, « 4° A whistleblowing mechanism the company may be ordered to repair that collects reports of existence or damages caused and compensate the materialisation of risks, elaborated in 1 victims. Before any damage, if the consultation with the representative company does not establish its vigi- trade unions organisations within the lance plan, make it public or efficiently company; THE CONTENT implement then it can be obliged to do so by a judge if necessary, with « 5° A system monitoring the imple- OF THE LAW financial penalties. mented measures and evaluating their effectiveness. The law defines a minimum content The law on duty of vigilance concerns for the vigilance plan and conditions « The vigilance plan and the report on companies established in France with regarding how it should be elaborated: its effective implementation must be over 5,000 employees in France or published and included in the report 10,000 employees in the world (within « The plan shall include adequate, mentioned in Article L.225-102.» the companies and their direct and reasonable vigilance measures to indirect subsidiaries). There may be identify risks and to prevent serious Extract from Article 1 of the law of 27 around 300 of these companies, but impacts on human rights and fun- March relative to the duty of vigilance since no comprehensive list of com- damental freedoms, the health and (article L. 225-102-4.-I inserted in the panies subject to this law has been safety of individuals and the envi- Commercial Code). published – despite many requests ronment, resulting from the activities for such by our organisations and MPs of the company and of the compa- made to the Ministry of Economy and nies that it controls, within the mea- Finance – we can only make an esti- ning of article L.233-16 II, directly or mate. indirectly, as well as the activities of subcontractors or suppliers with whom The law creates a legally binding obli- they have an established commercial gation for parent and outsourcing relationship, when these activities are companies to identify and prevent related to this relationship. human rights abuses and damages No complete to the environment resulting not only « The plan should be elaborated list of companies from their own activities but also from in cooperation with the company’s subject to that of companies that they directly or stakeholders, and where appropriate, indirectly control as well as activities as part of multiparty initiatives that this law has of the subcontractors and suppliers exist in the subsidiaries or at a ter- been published with which they have an established ritorial level. commercial relationship both in It shall include the following measures: France and in the world. It therefore establishes a legal obligation of pru- « 1° A mapping of risks designed to dent and diligent conduct. identify, analyse and prioritise them;

In order to do this, the French com- « 2° Procedures to regularly assess panies concerned are obliged to the situation of subsidiaries, establish, publish and efficiently subcontractors or suppliers, in line implement an annual vigilance plan, with the risk mapping, with whom included in their management report, the company maintains an established as well as a report on the implemen- commercial relationship;

7 UNDERSTANDING THE DUTY OF VIGILANCE

Civil society would have preferred a more ambitious bill. However, despite its flaws, the French corporate duty of vigilance law is undeniably a groundbreaking law on the SCOPE international stage, and constitutes a major historic step towards ensuring that the rights THE LAW CONCERNS of communities, workers and the environment are respected by multinational corpo- rations. Indeed, French parent and outsourcing companies can finally be held legally THE ACTIVITIES OF: accountable for harms to people and the environment caused by their activities, as well as those of their subsidiaries, subcontractors and suppliers abroad, and taken to court if necessary. A parent company or outsourcing firm

TYPES OF VIOLATIONS COMPANIES Its CONCERNED THE LAW COVERS ALL BUSINESS SEC- subsidiaries ANY COMPANY WITH: TORS AND COVERS SERIOUS VIOLA- and affiliate TIONS OF: companies

Human rights More than 5,000 and fundamental freedoms Subcontractors and suppliers with employees in France whom there is an established business relationship

Health and safety of persons This represents a major break- through! The law now reco- gnises that parent compa- or more than 10,000 The environment nies or outsourcing firms are legally responsible for their employees worldwide subsidiaries, suppliers and subcontractors, both in France and abroad.

The scope is wide-ranging, unlike other laws which are limited to a particular sector As this threshold is very high, This infographic comes from the report of the – the extractive sector, for exa- Friends of France and ActionAid France- Peuples certain companies in high-risk mple – or only certain types of Solidaires: End of the road for transnational sectors (such as the extractive violations (corruption, child Corporations ? Human rights and environment: or garment industry) are not from a groundbreaking french law to a un treaty labour, etc.). affected. (October 2017), available here: https://www.amisdelaterre.org/IMG/pdf/ end_of_the_road_for_tncs_foef-aaf-oct17.pdf

8 LEGAL WHAT ARE THE OBLIGATIONS PENALTIES INVOLVED? ACTIONS THE VIGILANCE PLAN After a company has failed to respond SHOULD INCLUDE: WHO CAN REFER to a formal notice to comply with the law, a judge may force it to meet its A CASE TO COURT? obligations. Risk-mapping

Anyone with legal The civil liability of the company may standing before a French be incurred, and the company may be Appropriate actions to miti- court (“intérêt à agir”): ordered to pay damages to the victims. gate risks and prevent serious violations

Organisations defending human rights Measures to monitor and and the environment assess actions taken There is an obligation of means rather than of results: conviction may only occur when a vigilance Procedures to regularly A parent company The victims plan is incomplete, inexistent or assess the situation of or outsourcing firm ineffectively implemented. themselves subsidiaries, subcontrac- tors and suppliers

Trade unions There is no provision for criminal A whistleblowing mecha- Its nism that collects reports subsidiaries proceedings in the law. of potential and actual and affiliate companies risks

The law provides for proceedings before a French court even for victims abroad. TIMEFRAME

This is not just ex-post reporting, but an ex-ante prevention plan. A case may be referred even Companies must not only adopt before damages have occurred. measures but follow up on the The information published in measures implemented and the vigilance plans may be used as assess their effectiveness. evidence in the event of damages. 2018 1ST plans published

The burden of proof still falls on the claimants. For a more detailed explanation, see 2019 the document published by the Euro- ST 1 potential pean Coalition for Corporate Justice legal actions (ECCJ), French Corporate Duty of vigi- lance Law - Frequently Asked Ques- tions, available here (2018) : Vigilance plans and reports on their http://corporatejustice.org/news/405- implementation are made public and french-corporate-duty-of-vigilance- included in companies’ annual reports. law-frequently-asked-questions

9 2. GENERAL SUMMARY OF THE IMPLEMENTATION OF THE LAW: BROADLY INSUFFICIENT PLANS

Certain corporations have not yet publi- In terms of the content and implementa- shed a vigilance plan regardless of their tion of the plan, it should have: legal obligation to do so (e.g. Lactalis, Crédit agricole, Zara or H&M). - A detailed risk mapping mentioning Our organisations have reviewed 80 the risks for third parties and the envi- vigilance plans5, allowing us to make a ronment; general analysis following the first year - A regular and continued evaluation of of implementation of the law. the subsidiaries, subcontractors or sup- pliers with respect to the risk mapping; Unfortunately, we find that the objectives - The implementation of effective of the law are only very partially taken into measures and a mechanism to moni- account. The first plans are very heteroge- tor them; neous, indicating that, faced with this new exercise, each company has applied this - Functional and safe whistleblowing mechanisms. law with different stringency levels, with the majority of the plans still focusing on the risks for the companies rather than It is in accordance with these principles those for thirds parties or the environment. that civil society, and also the stakehol- ders and victims faced with these risks, According to Sherpa’s recently published will assess whether the plans publi- guidelines for vigilance plans6, the plan shed comply and are in accordance should on the one hand be readable and with the law. accessible and on the other hand be trans- parent, exhaustive and sincere. Finally, many company directors and stakeholders should be involved in this exercise.

5. Cf. list published in annex 6. Vigilance Plans Reference Guidance, Sherpa, December 2018: https://www.asso-sherpa. org/publication-guide-de-reference-plans-de-vigilance

10 A ELABORATION OF THE PLAN

1/ READABILITY AND ACCESSIBILITY All companies subject to the law must also at the very least in English. implement and facilitate access to their vigilance plans. To this effect, All relevant information concerning the vigilance plan is integrated in the duty of vigilance must be included annual report. However, in addition to in the plan and in the section of the being published in the management annual report that concerns it. report, there should be a separate Any information referenced when document with the plan that can be redirected to other sections of the downloaded from the Group’s website. annual report is also considered part The company should also distribute of the vigilance plan. Nevertheless, the plan to its commercial partners, for the sake of ease of reading and which would imply making the docu- accessibility, this type of referencing ment available not only in French but should be avoided.

OUR ASSESSMENT

The majority of the plans reviewed are only a few pages long, generally included in the chapter on social and environmental responsibility within the companies’ annual report. Most of them are not full separate plans in themselves, but rather a collection of information making reference to other chapters on disclosure of non-financial performance, notably the chapter on « purchases », and to other information outlets: the risk factors section of the annual report, integrated activity report, CSR report or website, dedicated documents…

This means that reading the plans involves constantly flicking back and forth between documents and therefore makes them hard to read. Furthermore, it makes it difficult to assess the different measures that the companies have put in place.

11 2/ TRANSPARENCY, COMPREHENSIVNESS AND SINCERITY The plans should be as transparent of their partners, indicating precisely as possible and include an exhaus- which ones pose risk factors based on tive list of the controlled companies: their activities, the countries in which the number of employees, the nature they are established, etc. of their activities, their location, any related risks and violations. These lists should be included in the plan itself or in an annex or, failing that, Beyond the group, the scope of obliga- the plan can contain a link that redirects tion includes any subcontractors and to a website with the list. suppliers that have established com- mercial relationships with the outsour- Finally, the plan must be as sincere and cing company and its direct or indirect precise as possible. Our organisations subsidiaries. Just as for the controlled believe that a vague plan does not meet companies, the outsourcing company the requirements of the law. must make an effort to provide a list

Our organisations believe that a vague plan does not meet the requirements of the law.

OUR ASSESSMENT

Our report demonstrates that the majority of plans published in 2018 are insufficient: they are not precise enough and often contain gaps. The majority do not define the scope of the plan, notably with regard to suppliers and subcontractors. However, on certain points some companies have presented interesting analyses and methods which are more in line with the obligations established by this law.

12 3/ GOVERNANCE OF THE PLAN: INVOLVING STAKEHOLDERS AND VARIOUS DIRECTORATES OF THE COMPANY.

Stakeholders should be involved in simple informative meeting cannot be have a global involvement of different every step of the plan. Stakeholders considered as a real consultation7, and departments in order to efficiently are individuals, groups or communi- the fact of a stakeholder being listed cover all aspects of vigilance and to put ties whose rights and obligations or should not be interpreted as them it in place in an appropriate manner. interests are, or can be, affected by backing the vigilance plan. Above all, duty of vigilance and respect the company’s activities. of human rights and the environment The law also foresees resorting to must be taken into account at the Companies should publish a list of multi-stakeholder initiatives within highest level and integrated into the internal and external stakeholders, sectors or at a territorial level. The company’s strategic decisions. in particular the local stakeholders company should publish a list of these who are involved in the establishment initiatives as well as a critical evalua- and implementation of each measure tion of the stakeholders involved, the of the plan, and they should indicate specifications of the initiative and its the methodology used to choose the governance, the quality of complaints stakeholders, notably the selection mechanisms and the degree of trans- criteria and consultation methods. parency. 7. See the analysis on the extractive sector in the second part of this review. Hence, the company should provide The participation of or resorting to mul- details on the frequency, spaces and ti-stakeholder initiatives does not exo- type of interaction preferred: prior nerate the company from carrying out information, interviews, hearings, its own due diligence on its activities consultations, questionnaires, dis- and implementing specific measures. cussions in boards of directors, social and economic committees, European Finally, the law does not provide for any works councils… Consulting stakehol- internal organisation or governance of ders should not be instrumentalised: a the plan. However, it is important to OUR ASSESSMENT

We can conclude that the identification and consultation of stakeholders has been fairly overlooked in the plans that were published last year – most likely because the law does not impose it, as it only contains one phrase inciting this: « the plan is meant to be elaborated in conjunction with the stakeholders of the company, where appropriate as part of multi-stakeholder initiatives within sectors or at territorial level. »

As a result, some companies do not mention their stakeholders at all in the part dedicated to risk mapping, whereas others show their efforts to involve the stakeholders in the process of elaborating the mapping. Some companies mention their policy of « dialogue » with stakeholders in the general operation of their activities, but the majority of the plans reviewed do not give precise enough information on the involvement of stakeholders in elaborating the plan.

In addition, few companies have indicated which human, technical and financial resources have been allocated to the implementation of the mea- sures and the evaluation of their effectiveness. 13 B CONTENT OF THE VIGILANCE PLAN

1/ A DETAILED RISK MAPPING STATING THE RISKS FOR THIRD PARTIES AND THE ENVIRONMENT

Companies subject to the law should which should be published in the annual Evasive, imprecise or incomplete map- not merely say they have done a risk reports of listed companies. The risks pings which do not refer to the activi- mapping. They should publish their risk that must be mapped are risks for third ties or countries in which the company mapping, explicitly and clearly stating parties (employees, the general popu- actually operates are not useful tools the serious risks to and severe impacts lation and the environment). for the populations whose rights could on human rights and fundamental free- be impacted by the Group’s activities. doms, health and safety of individuals The company should indicate its Rather, the mapping should be detailed, and on the environment. For example, methods of analysis, evaluation and with a list of the countries at risk among the plan should provide detailed lists of prioritisation of the risks. This must those where the company is establi- risks for each type of activity, product include the evaluated severity criteria shed, and a list of the specific risks of and service. regarding the level, size and reversible each type of activity of the company. or irreversible nature of the impacts, or Without this, the mapping included in It is these substantial risks, i.e. nega- the probability of the risk. This priori- the plan is neither an adequate means tive impacts on third parties and the tisation should allow the company to of risk prevention nor appropriate for environment deriving from general acti- structure how it implements its mea- addressing the impacts at stake. vities, on which vigilance must be exer- sures to resolve the impacts or risks cised and which the plan must cover. of impact.

The notion of risks, as defined by the Lastly, the company should mention all law on duty of vigilance, must not refer risks, including environmental ones. In to legal, reputational or financial risks the second part of this review we show for the company. The risks in question that these are too often left out or only do not concern those for investors, mentioned in an anecdotal way.

Companies subject to the law should not merely say they have done a risk mapping

14 OUR ASSESSMENT

Most of the companies reviewed merely trans- to the company’s activity or geographical loca- pose their reporting practices or social liability tion, as we demonstrate in the second part commitments into their vigilance plans. Even of our review which looks at various sectors. more worrying is that the companies have fre- We thus do not really know which countries quently stated the risks that possible human are considered at risk among those within rights abuses could cause for the company which the company operates, just as there is no and its performance, when it is in fact the risks information available concerning the industrial provoked by the company regarding human sites, activities or projects which pose risk of rights abuses and damage to the environment serious human rights abuse or damage to the that should be the subject of these plans. environment. Is there, for example, an ongoing project which involves significant displacement In more than two thirds of the vigilance plans of populations, situated in a conflict area or an reviewed, the methods for identification of ecologically sensitive area? Some companies risks are insufficient or even non-existent. For merely give examples but without justifying many companies, a materiality matrix is used their relevance. for prioritisation of issues, i.e. according to stakeholder expectations and the importance of these issues for company performance. Rare 8. Eramet’s Annual Report 2017, p.337: are the companies, like Eramet, that clearly http://www.eramet.com/publications/eramet-docu- state that the evaluation of the risks in the ment-de-reference-2017 framework of a vigilance plan « involve an assessment of the severity of the impact, not directly for the Group, but for the potentially affected third party(ies) (employees, local resi- dents or other people) »8.

Even when the risk mapping methods are des- cribed in detail, they do not actually present the results. It is therefore not possible to determine precisely what are the substantial risks related

15 2/ A REGULAR AND CONTINUOUS EVALUATION OF THE SITUATION OF SUBSIDIARIES, SUBCONTRATORS OR SUPPLIERS IN VIEW OF THE RISK MAPPING

Audits can be one of the tools loped using methods and benchmarks The company must indicate the cor- employed, and it is up to each com- which allow them to be effective9. rective measures adopted if necessary pany to determine the number, fre- and the timeline of their implementa- quency and accuracy of audits conduc- Whatever means of evaluation the tion, as well as the way in which the ted in order for them to comply with company chooses to use, it should company has made strategic changes their duty of vigilance. mention the following elements in its in order to comply. plan: the tools chosen (audits and/ In any case, and taking into account or others), methodology, objectives, 9. See the analysis of the garment industry in the numerous reports from interna- timetable of the evaluation processes, the second part of this study. tional organisations highlighting the criteria and results of evaluation (the 10. Cf. Code of commerce, article L225-102-1, III and the decree R225-105 shortfalls and weakness of using audits situation of subsidiaries, suppliers and to manage risks, they should be deve- subcontractors).

OUR ASSESSMENT

The law explicitly requires a regular evaluation of the value chain. The reviewed plans do not make a clear distinction between the vigilance policies from their subsidiaries and those from their suppliers and subcontractors; in general, the vigilance plans redirect to the policies of « responsible purchases » described in the non-financial performance statement10, and present their policies with regards to their suppliers only. Occasional evaluation measures are not enough to meet the legal requirements. This provision must be linked to the fifth point of the law, the system for monitoring the measures. And yet, the indications on the timetable and frequency of this evaluation are scarcely (if at all) provided in the first plans reviewed.

16 3/ APPROPRIATE ACTIONS TO MITIGATE RISKS OR PREVENT SEVERE IMPACTS

The measures put in place by the com- sition, population displacement and pany must vary in nature: preventive, compensation). mitigation and remediation measures. However, these standards are some- These measures must be developed times insufficient and, above all, the Vigilance must in view of the risk mapping so as to fact of mentioning them does not address, point by point, the risks exempt the company from including be exercised identified. the risks and impacts it has identified as well as the measures chosen and throughout the As for the evaluation of the subsidia- put in place to address them. entire year ries, subcontractors and suppliers, the steps presented in the plan must Finally, vigilance must be exercised include the corrective measures and throughout the entire year, and not the timeline of their implementation. only when reediting the plan. The plan must also be revised over the Furthermore, it is advisable to men- course of the year if risks have deve- tion the whole normative framework loped, if there have been impacts, of reference. The majority of inter- or if measures to remedy them have national standards, sectoral or not, been taken. do contain frames of reference for actions and measures to put in place when it comes to specific risks (for example, the International Finance 11. See the analysis of the banking sector in Corporation’s standards on land acqui- the second part of this review.

OUR ASSESSMENT

In many plans, the actions and measures are not detailed enough and only very partially address the risks mentioned in the mapping. Some companies indicate the policies and voluntary commitments they have adopted to address the specific risks in certain sectors that fall within their sphere of influence, such as banks’ sectoral policies, for example11.

It is important, however, to underline that the content of these policies is generally insufficient and must therefore be improved to meet the vigilance obligations decreed by the law.

17 4/ FUNCTIONAL AND SAFE WHISTLEBLOWING MECHANISMS

In order to give an appropriate and information must be widely spread and the mechanisms for violations, rapid response to concerns, problems both internally and externally to each and establish the proper procedures, and actual violations, the law on duty intended recipient in an appropriate guarantees and timelines for treating of vigilance contains provisions for a and accessible manner. each one. whistleblowing mechanism. This is a key element of the vigilance system. They must make sure to implement an To demonstrate the effectiveness of Collaborating with trade unions on the effective governance of these mecha- these mechanisms, the plan must development of the whistleblowing nisms, and the best way is to provide contain indicators on how reports are mechanism is a legal obligation. the details of this in their plan: is it taken into account in identifying and managed from the headquarters? responding to risks of violations or Depending on its scope of vigilance, Are there staff representative bodies actual violations, such as publication the company must foresee one or more present? What relationships are esta- of processed and anonymised cases. effective whistleblowing mechanisms blished with staff representatives in that allow information to be escalated concerned countries? Is there a dele- Any participation of stakeholders in to the management in order to ensure gation for external bodies ? How inde- the development and monitoring of that mitigation measures are updated. pendent is this body from the company whistleblowing and reporting mecha- Companies must publish a list of the directors? What measures are in place nisms must be specified. various mechanisms and procedures, to protect whistleblowers and other the intended audiences and the condi- individuals who use these mechanisms, tions of implementation (accessibility, in particular regarding guarantees of confidentiality, etc.). anonymity and absence of reprisals? They must ensure the accessibility, accountability, coherence and inde- The company should make a distinc- pendence of the mechanism(s). The tion between the mechanisms for risks

OUR ASSESSMENT

In parallel to the law on duty of vigilance, the law relating to transparency, the fight against corruption and modernising economic life (known as Sapin II law) also demands the implementation of a whistleblowing mechanism. This explains why certain companies explicitly refer to the Sapin II law in their vigilance plan and declare the intention to establish a whistleblowing mechanism that simultaneously meets the requi- rements of both laws. The type of whistleblowing mechanism can vary. The most common mechanism is the provision of an email address.

Such a mechanism has been established, for example, by Galeries Lafayette, Engie, Casino, Total, Schnei- der Electrics and Orange. This type of mechanism falls short due to the problems that it can pose in terms of accessing it: it requires knowing the email address, written communication, having Internet access, etc. Other companies have put in place more diverse channels of communication to directly contact those responsible for ethical issues, compliance or other bodies of the Group. But these mechanisms are generally inaccurate and, most of the time, are not available to third parties (the communities which are in particular affected).

Regarding consultation with the trade unions, although one would expect all the plans to indicate that this took place (or that it is foreseen in the near future), as it is a legal requirement, the majority of the plans reviewed do not mention it.

18 5/ A SYSTEM MONITORING THE IMPLEMENTED MEASURES AND EVALUATING THEIR EFFECTIVENESS

From the second year of the law coming In this regard, the law provides that « a must establish a timeline and indica- into force, i.e. 2019, the vigilance plan system monitoring the implemented tors of means, process and results that must be accompanied by a report measures and evaluating their effec- allow it to monitor the effectiveness of on its effective implementation and tiveness » must be established, effec- the measures and foresee corrective contain specific indicators demons- tively implemented and published. This measures. It must make sure that suf- trating the effectiveness and efficiency provision concerns all the identifica- ficient human, technical and financial of the plan’s measures. But in this first tion and prevention measures imple- resources are allocated to measuring year, the companies should have pre- mented. The monitoring and evaluation the effectiveness of these measures. sented the systems for monitoring the system must therefore cover all the implementation of measures and the plan’s measures from the identifica- evaluation of their effectiveness. tion and evaluation measures of the risk mapping to the whistleblowing mechanism the evaluation procedures Indeed, elaborating a vigilance plan of suppliers and subcontractors, and The company must differs from reporting and providing every other measure related to duty information on statements of non-fi- of vigilance. check the effectiveness nancial performance. It is not an acti- of these measures and vity report, but rather a report on the The company must check the effec- must therefore put effectiveness of the measures put in tiveness of these measures and must place. therefore put in place a methodology in place a methodology and means for this. For example, it and means for this

OUR ASSESSMENT

In these first plans, some companies do not mention at all the envisioned system for monitoring the implemented measures and evaluating their effectiveness at all. Most of the others explain that the system for monitoring the measures is still being developed, without giving information on the parties involved, the methodo- logy or the timeframe.

19 Part 2 Sectoral Analysis

EXTRACTIVE SECTOR

PLANS REVIEWED:

Eramet: https://www.eramet.com/system/files/ publications/pdf/280318_eramet_ddr2017_ vf2_1.pdf

Orano (ex-Areva): https://www.orano.group/docs/default- source/orano-doc/finance/publications-fi- nancieres-et-reglementees/2017/orano_rap- port-annuel-activite_31-12-17_avec-annexes. pdf?sfvrsn=14d9a171_10

Total: https://www.sustainable-performance. total.com/fr/plan-de-vigilance

20 INTRODUCTION

The extractive industry (mining, oil, population and, sometimes, their the largest French extractive corpo- gas) is, on a global level, one of the access to justice and compensation. rations, concentrating specifically on Sectoral Analysis most worrying in terms of human The United Nations Special Represen- the problems linked to their extraction rights abuses (forced evictions and tative on business and human rights, sites. The three companies have other land grabbing, intimidation, crimina- Mr John Ruggie, had signalled the activities as well, primarily the trans- lisation and assassinations of human fact that the extractive industry alone formation of extracted mineral ores or rights defenders, etc.), health impacts accounts for almost a third of human hydrocarbons, which also pose major and environmental damage (massive rights abuses by companies world- impacts on the health and safety of pollution, deforestation, global war- wide. Similarly, Ms Margaret Sekaggya, workers and local populations as well ming, etc.). then UN Special Rapporteur on the as on the environment and climate. situation of human rights defenders, It is also an industry that has been drew attention to the extractive indus- tainted by numerous corruption and try, denoting numerous complaints tax evasion scandals whose conse- against the security services employed quences on the independence of by mining and oil companies. institutions and the budget of many countries directly impact the fun- Here we have reviewed the plans of damental rights and needs of the Eramet, Orano (ex-Areva) and Total,

The extractive industry alone accounts for almost a third of human rights abuses by companies worldwide

21 GENERAL ANALYSIS OF THE PLANS

The plans of these three companies with a fairly weak risk mapping which that this system should be comple- vary greatly in quality. is not applied to the actual activities ted in the future. Various gaps in the and countries in which the company content of the plan compromise its To begin with, the vigilance plan of operates. As regards evaluation and quality and therefore the company’s Orano (ex-Areva) is unfortunately a monitoring measures, the company has ability to prevent certain major risks very clear example of what not to do. resorted to external agencies such as of impacts on human rights and the Firstly, it is not presented in a readable the Danish Institute for Human Rights environment. and accessible manner since the infor- or CDA. Total also refers to having mation that is meant to address the published a « Human Rights report »12 As for all companies, an evaluation of obligations established by the law on which presents the major impacts its concrete implementation in the field the duty of vigilance is mixed up with activities have had on human rights and is of course equally necessary. other information, notably the points the remedial measures deployed. The addressing the obligation of non-finan- main findings and measures detailed As indicated in the introduction, the cial reporting. Above all, the company in this report should be presented in adverse impacts on human rights, has not mapped the risks of impacts the vigilance plan. fundamental freedoms, the health and on human rights and on the environ- safety of individuals and the environ- ment, but rather the risks that could Finally, in terms of structure, Eramet’s ment are very many and varied in the affect the company: « all foreseeable plan appears to be the most accom- extractive industry. In this review we or incidental situations or events that plished. It is presented in annex to cannot discuss in detail every type of could impact the safety of staff, the the company’s annual report and is violation found in this sector and have financial results of a Business Unit or therefore easily accessible, it is metho- therefore chosen to concentrate on the group, and its brand image ». Fol- dical and easy to read, it lists the diffe- two fundamental aspects: firstly the lowing this logic, the company’s first rent industrial and mining sites of the respect for the rights of local commu- response to these risks is therefore to company, and, in general, it is much nities and the issue of land grabbing, resort to insurers and reinsurers. More more detailed than the average plan. and secondly the main impacts on the broadly, the management of risks is However, as with the other plans, the environment. only done using a set of internal audits system for monitoring the implemented and procedures. Lastly, the measures measures and evaluating their effec- presented only concern one part of the tiveness is still insufficiently developed Group’s activities. and essentially relies once again on internal reporting systems and audits. The content of Total’s plan is too vague, Nevertheless, the company stresses

THE MAIN ISSUE OF RESPECT FOR THE RIGHTS OF LOCAL COMMUNITIES

Mining, gas and oil extraction projects Given the severity – and in some cases Labour Organization Convention 169 have serious consequences for the local irreversibility – of these impacts, the and in the United Nations Declaration economies and populations. The arrival first right to respect is that of Free, Prior on the Rights of Indigenous Peoples. of a project of a certain scale is sys- and Informed Consent (FPIC), and in a As for non-indigenous populations, a tematically associated with more or more general sense the effective consul- large majority of countries in the world less severe impacts on land occupa- tation of populations that may poten- have legislation containing obligations tion, health and certain pre-existing tially be affected. With regard to indige- in terms of consultation and public economic activities (farming, fishery, nous populations, FPIC is internationally participation. This issue concerns even tourism, etc.). recognised, notably in the International France, as was demonstrated in the

12. https://www.total.com/sites/default/files/atoms/files/droits-de-l-homme-document-information-actualise.pdf

22 recent legal proceedings brought by nous or vulnerable populations », but mentions in its risk mapping « the res- Friends of the Earth France, Green- neither explains what this reinforced triction of access to land inhabited by peace France and five other associa- vigilance actually contains nor men- local communities », but without then tions against the authorisation for Total tions the FPIC. presenting any action to address this to begin very deep drilling works off the risk. coast of Guyana and which was based What appears evident is that opposi- in particular on the absence of referral tion to an extraction project from local Of the three companies, Eramet is the to the National Commission for Public communities is often considered by only one to more explicitly touch on Debate13. companies to be a simple problem of the risks of human rights abuse related poor communication that could be to land acquisition, and refers in its In its vigilance plan, Orano does not resolved by building « a relationship vigilance plan to the Performance Stan- mention at any point the need to obtain of trust ». In the meetings organised dards of the International Finance Cor- public consent or even to consult the by the companies, the projects are poration (World Bank Group). Nonethe- populations that may be affected by often presented in a biased and par- less, in 2013, an alarming report – based its activities. On a more general note, tial manner, emphasising the possible on fieldwork – exposed forced evic- it is very worrying that within its plan future benefits for the local populations tions and violation of the right to FPIC the company does not even appear to and downplaying the risks. Above all, of indigenous communities affected by address the risks of impacts linked to they are never about obtaining the Eramet’s exploration project « Weda its mining activities, when these consti- consent of the resident populations, Bay » in Indonesia15. tute a core activity for the Group and and even when affected individuals it operates in countries that are at In many countries, the extractive particular risk, such as Niger and sector is also linked to very serious Kazakhstan. violations of fundamental rights and freedoms of individuals: repression, For its part, Total makes no refe- Opposition to an extraction intimidation and even assassina- rence to the specific rights of indi- project from local tions increase each year. In its plan, genous peoples14 and only discusses Total mentions the « disproportio- the matter of consulting local popu- communities is often nate use of force », but only in its lations in the plan’s introduction considered by companies risk mapping. On this subject, the as part of its « process of dialogue responses are essentially the same with stakeholders ». The company to be a simple problem as in the other sectors, and the role explains organising consultation of the whistleblowing mechanism meetings « to better understand of poor communication is therefore key, as explained in our their impacts » and establishing a analysis of the agri-food industry. network of mediators in touch with In addition to the companies’ inter- local communities « to maintain a nal whistleblowing mechanisms, constructive dialogue ». voice criticism or complaints, they are Eramet and Total indicate in their plans generally left unanswered or rarely that they have systems dedicated to Finally, Eramet employs a similar lead to substantial modifications to resident populations with, in the case of approach to Total, through various the project. Eramet, « methods for reception, treat- « mechanisms of dialogue », « infor- ment and resolution which are adapted mation and consulting activities with This issue of population consent is all to the body’s cultural context and the the residents », « in order to take into the more worrying in cases where the nature of the impact ». In both cases the account their impacts ». Eramet does, project requires massive land grabbing actual methods of these whistleblowing nevertheless, appear to go a step fur- which too often results in pressure and systems are not detailed. Orano only ther with taking into account the level intimidation, forced evictions and/or mentions one internal whistleblowing of impact and risk of each site and a insufficient and inadequate compen- mechanism. « reinforced vigilance regarding indige- sation. On this subject, Total briefly

13. See the press release from Amis de la Terre France and other petitioning associations, 12 December 2018: https://www.amisdelaterre.org/ Forages-petroliers-en-Guyane-face-au-deni-de-democratie-la-societe-civile.html 14. The risk of violations of the rights of indigenous peoples are addressed in Total’s « Human Rights » report, which mentions the FPIC and indicates that the Group has a « Charter on the rights of indigenous peoples ». 15. Marshall, Shelley D. and Balaton-Chrimes, Samantha and Pidani, Omar, Access to Justice for Communities Affected by the PT Weda Bay Nickel Mine – Interim Report (September 4, 2013): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2343957. The authors of the report explain that « community members who will lose access to their land that they cultivate were subjected to pressure and intimidations to sign agreements with the company ». This situation had already been revealed by the Indonesian National Human Rights Commission (Komnas HAM) (findings and recom- mendations on page 47). 23 ENVIRONMENTAL AND HEALTH-RELATED IMPACTS

The large scale nature of mining, gas the permanent oil spill in Nigeria’s one). The same goes for the risks of and oil projects comes with environ- Niger Delta or, more recently, the water pollution and overuse; Total mental and health-related impacts Mariana mining dam collapse in Brazil. touches on the issue of populations that appear to sometimes be diffi- having access to potable water, but yet cult to manage, despite the technical As previously mentioned, in its vigi- again does not suggest any solution advances made in terms of mana- lance plan Orano does not consider the for this in the measures implemented. ging these risks. Indeed, whether it is risks linked to its mining activities, with hydrocarbons or mineral ores, explo- the exception of one sentence in the Eramet is the only company of the ration has become more and more section concerning its subcontractors three to provide details on the actions complicated: the resources (metal, where it indicates that a monitoring of that it has put in place to manage the oil, gas, coal) are no longer found in the subcontractors using dosimetry is environmental risks. This is a posi- concentrated form, they are dispersed ensured by its subsidiaries. So there is tive element in terms of the plan’s in the rocks or sand that contain them. nothing on the pollution risks linked form, but we find large gaps in the Consequently, extraction techniques to the extraction of uranium, despite content. To give a few examples, we have become increasingly invasive and its enormous impacts16 and the fact do not understand why the issue of destructive: giant open-pit mines, that its radioactive contamination water pollution is only addressed for mountaintop removal, tarsands, shale continues for many decades after, as Eramet’s industrial sites, but not for gas and oil, etc. shown by the long record of mining left its mining sites. Mining sites can cause in France by Cogema (now Orano) in the contamination of surface water This results in major contamination the region of Limousin for example17. and groundwater19, in particular from of the air, water and ground which rainwater runoff from heaps of mining then has severe health-related As for Total, the issue of greenhouse tailings or even from mining tailings consequences (respiratory and skin gas emissions and global warming that are directly discarded in streams. diseases, cancers, etc.), as well as is completely absent in its vigilance The company does not mention the often destroying or polluting resources plan18 and neither does the company dust emissions from open-pit mines on which the resident populations mention the risks of air, water and and transport in dumpers either, depend to live (forests, rivers, fertile ground pollution. The word « pollu- when these have consequences for soils, etc.). Extraction activities also tion »only appears once regarding the the health of workers and local com- imply high levels of water and energy risk of largescale, accidental pollu- munities and can also cause environ- consumption and greenhouse gas tion, and therefore does not take into mental problems depending on the emissions, thus contributing to global account the risks of pollution from composition of these dust emissions. warming. Lastly, serious accidents carrying out « normal » operations (for continue to occur as demonstrated by example pollution linked to burning the Deepwater Horizon catastrophe, gas, which is far from being the only

16. See in particular the report by Greenpeace: Left in the dust AREVA’s radioactive legacy in the deser towns of Niger (2010): https://www.green- peace.org/archive-international/Global/international/publications/nuclear/2010/LeftinthedustF.pdf, and the 2013 l’Observatoire des multinationales articles:: « Areva deaf to civil society’s demands » http://multinationales.org/Niger-Areva-sourde-aux-demandes-de ; « The impact of uranium mines »: http://multinationales.org/Impact-des-mines-d-uranium-Areva ; and finally the testimony of the Niger association Aghir In’man in 2017https://www. francetvinfo.fr/sante/environnement-et-sante/exploitation-de-luranium-au-niger-nous-avons-herite-de-la-pollution-durable_2378413.html 17. See the follow-up by the French Institut de Radioprotection et Sûreté Nucléaire (IRSN), notably on old uranium mining sites in France: https://www. irsn.fr/FR/connaissances/Environnement/expertises-locales/sites-miniers-uranium/Pages/1-exploitation_uranium_en_France.aspx?dId=dc655106- 968f-4948-b6f7-01c78d23229c&dwId=0d36bacd-9bfa-44aa-8de9-93e4811629b0#.XEJNSqd7Q8Y ; and on the health of former Cogema employees, revealing abnormally high levels of lung and kidney cancer: https://www.irsn.fr/fr/larecherche/organisation/equipes/radioprotection-homme/lepid/ pages/lepid-cohorte-mineurs-uranium.aspx#.XEJMIqd7Q8Y. 18. TTotal was the subject of an appeal on this matter brought by a group of associations (Notre Affaire à Tous, Les Eco Maires, Sherpa and ZEA) and 13 municipalities in October 2018: https://www.asso-sherpa.org/15c-13-collectivites-4-associations-interpellent-total-face-changement-climatique 19. Residents of Moanda in Gabon complained about water contamination linked to manganese exploration by Comilog, a subsidiary of Eramet: http://www1.rfi.fr/actufr/articles/103/article_68220.asp

24 ARMS SECTOR

PLANS REVIEWED:

Thales: https://www.thalesgroup.com/sites/de- fault/files/database/document/2018-05/ document_de_reference_2017_1.pdf

Naval Group: https://www.naval-group.com/wp- content/uploads/2017/03/dcns-rapport- dactivite-2016-fr.pdf

Dassault Aviation: https://www.dassault-aviation.com/ wp-content/blogs.dir/2/files/2018/03/ Dassault_Aviation_2017_RFA_FR.pdf

25 INTRODUCTION

These last years, France has become authorising them. This international ning and maintenance in operational the world’s third biggest arms expor- treaty complements the EU Council condition. Besides, arms manufactu- ter. In 2015, orders reached a record Common Position 2008/944/CFSP rers are obliged to respect internatio- level of 17 billion Euros20. of 8 December 2008, which defines nal arm embargoes, as well as treaties banning certain arms (antiperson- France has ratified the Arms nel mines and cluster bombs), Trade Treaty (ATT) which ente- according to the Ottawa and Oslo red into force on December 24 conventions. In France it is for- 2014. The ATT imposes, for the bidden to export war materials. first time, restrictions aimed at Those exports are only possible ensuring that states do not trans- In France it is after being authorised by the Prime fer arms, ammunition, parts and Minister following an interminis- components whenever there is a forbidden to export terial evaluation process. risk that they might be used to commit or facilitate acts of geno- war materials However, states show an astoni- cide, crimes against humanity or shing lack of political will in the war crimes (article 6). matter, notably regarding the ATT dispositions. The fact that France Even if a transfer is not banned, and other countries have refused the ratifying States must assess to suspend arms transfers towards if there is a « substantial » or Saudi Arabia, despite the count- « major » risk that arms exports might common rules governing the control less suspected war crimes committed contribute to serious violations of of exports of military technology and by the Saudi-led coalition in Yemen, international humanitarian rights equipment. The latter also covers has become an emblematic case of and related human rights before technical assistance, including trai- irresponsible, even illicit arms trade.

20. 2018 Parliamentary Report on arms exports, https://www.defense.gouv.fr/actualites/articles/ rapport-au-parlement-2018-sur-les-exportations-d-armement, p.73

26 GENERAL ANALYSIS OF THE PLANS

Thales, Naval Group and Dassault rants the maintenance of the combat operate, or the number of employees Aviation’s vigilance plans in particu- ships sold to Egypt. In December 2018 and activities, and they do not indicate lar have been reviewed for this sector Naval announced they were opening which risks are associated to these overview and were examined in the a new subsidiary in Egypt, Alexandria locations and activities. Naval Group light of the criteria developed in the Naval for Maintenance and Industry and Dassault Aviation do not mention first part of this review. These three (ANMI), to manage current mainte- any specific risk. They just list the main corporations are among the world’s nance contracts22. components of their vigilance plans top 100 arms-producing and military without going into details. services companies for 2017 according These three companies’ vigilance to the SIPRI fact sheet published in plans are, indeed, accessible, but they In the case of Naval Group and Das- December 2018: Thales ranks 8th, Naval remain relatively hard to read. They sault Aviation, the plans themselves Group 19th and Dassault 50th 21. The refer to other reports of the company, do not contain a methodology for the French state holds a 62.5 % stake in which makes for difficult reading. Par- analysis, evaluation and prioritisation Naval Group. ticularly in the case of Thales, the plan of risks that takes into account the keeps redirecting to other company risks for the population or the envi- Besides furnishing a wide variety of documents, which means one needs ronment; whenever methodologies war materials (optronics, avionics…), to spend time researching in order to are mentioned (usually somewhere Thales and their subsidiaries also pro- get the full information. This absence else in the annual report) they deal vide ammunitions (TDA Armements of readability goes against the actual with risks for the investors or, at best, SAS in France and Forges de Zeebrugge purpose of the law. for the companies themselves. in Belgium) as well as dual usage goods The sections about whistleblowing subject to a European Union regula- With regard to the means imple- mechanisms are quite poor. Certain tion to which the Common Position mented, all three companies reviewed companies (Naval Group and Thales 2008/944/PESC mentioned above insist they have implemented internal for instance) specify that the mecha- applies. Another feature of Thales, and external controls which are useful nism which covers corruption is also regarding the defence solutions offe- means of exercising vigilance, but wit- used to cover the duty of vigilance, red by the company, is that they are hout ever giving any precisions about but without giving any further details. usually integrated to or associated with their contents. As for Dassault Aviation, they indicate the arms systems proposed by Naval that this mechanism will become ope- Group or Dassault. Naval Group are All these companies indicate that they rational in 2018. known suppliers of warships (frigates, have a monitoring system in place, but corvettes, submarines, LHD...) and without giving any other details, either None of them indicate the mitigation Dassault supply combat aircraft of schedule, means (human, financial, and compensation measures regar- (Rafale, Mirage). All these compa- material) or indicators (qualitative and ding the risks to third parties and the nies also provide technical assistance, quantitative). environment. including training and maintenance in operational condition. So Dassault warrants, for instance, the mainte- None of the corporations reviewed nance of the United Arab Emirates fleet report in their vigilance plan a list of of Mirage 2000-9; similarly, Naval war- the companies they control, or the countries where they are established or

21. https://www.sipri.org/sites/default/files/2018-12/fs_arms_industry_2017_0.pdf, p.9 22. See https://www.naval-group.com/en/news/naval-group-strengthens-its-partnership-with-the- egyptian-navy-for-the-next-five-years/

27 ANALYSIS OF THE PLANS IN TERMS OF THE CHALLENGES OF THE SECTOR

In their vigilance plans, French arms commitments23. Previously, Amnesty they demanded a minimum salary, manufacturers tend to downplay the International and Actions by Chris- security conditions and bonuses. The risks linked to human rights or not tians for the Abolition of Torture (ACAT) sites involved are building, as part of a even mention them. The main problem, published a report24 which they had transfer of technology, three Gowind- as in other sectors, is that compa- commissioned to Ancile law firm, which 2500 corvettes. This transfer is the nies under review dwell on risks they they had commissioned, looking at result of a contract made in 2014 themselves come under rather than the legality of French arms transfers between Egypt’s Defence ministry those that their activities might pose to Saudi Arabia and the United Arab and Naval Group for the sale of four for people and the environment with Emirates, two of the main actors in the corvettes, only one of which is being serious consequences. war in Yemen. The report concluded made in France. Front Line Defenders’ that there was « a high judicial risk that report echoes the findings of Amnesty Now, although arms trade is a legi- the arms transfer could be illegal with International26, who had challenged timate and legal activity, the arms regard to France’s international com- the company27. transfers it facilitates fall within strong mitments, whether it be the rulings of judicial boundaries. In particular, the the Arms Trade treaty or the Common In Egypt, workers’ rights defenders transfer of equipment, technology, Position ». have been victims of persecution personnel or training in the fields of – intimidation, sackings, enforced the military, security or police, as Regarding Thales, one must turn to disappearances, torture and military well as logistic or financial support the « legal and compliance risks » trials – since Marshal Abdel Fatah for these transfers can contribute to section to know more about export al-Sissi took power. More than 15,000 grave violations of human rights and controls and economic sanctions and civilians have been sent to military international humanitarian rights. The what that means for the company, courts. Such risks ought therefore to following are violations often docu- but there are no details on how the be mentioned in the vigilance plan of mented by Amnesty International and operation was carried out. The fact Naval Group which has, furthermore, their partners: that this section is not included in the just opened a branch [in Egypt]. vigilance plan is a problem given the ● Violations of the right to life, notably serious human rights issues involved. In light of these findings, Thales is summary and extrajudicial murders It is only on its website, elsewhere than the firm that gives the most details and executions; in the vigilance plan therefore, that of the issues and risks in its supply ● Disproportionate and indiscrimi- the company says it respects existing chain, such as working conditions, the nated attacks such as deliberate armed exports rights25. environment and the use of toxic subs- attacks on medical installations and tances or even « conflict minerals ». personnel, teaching establishments More specifically, there are also issues and their pupils and camps of refugees linked to working conditions at the And it provides solutions to put in place or people displaced within their own equipment construction sites of the as a response to these challenges: countries; subcontractors and suppliers of French chromate replacement, identification ● Forced displacements of populations; industrialists. of suppliers at risk of conflict minerals ● War crimes; – but we lack the means to evaluate ● Forced disappearances. By way of example, Front Line Defen- how effective these are. Corruption ders in January 2019 published is quite far reaching even if it does Even quite recently, Amnesty Inter- a report on Naval Group and the not come under the aegis of the law national pointed out that French war manner in which 26 workers at a site on duty of vigilance (but rather the and security material had been given called Alexandria Shipyard, held and law relating to transparency, the fight to Egyptian Interior ministry forces or managed by the Egyptian army, were against corruption and modernising handed over to them and then used arrested and put before a military economic life, known as Sapin II). against Egyptian demonstrators, for court – without charges being made example, despite France’s international – following a strike in May 2016 when

23. Amnesty International, Egypt: French weapons at the heart of repression, 2018, https://www.amnesty.fr/controle-des-armes/actualites/france- egypte-aux-armes-policiers-egyptiens 24. https://www.acatfrance.fr/public/etude-juridique_cabinet-ancile_transfert-d-armes-de-la-france-dans-le-cadre-du-conflit-au-yemen.pdf 25. https://www.thalesgroup.com/fr/worldwide/groupe/des-exportations-sous-controle 26. See https://www.amnesty.org/fr/latest/news/2017/04/egypt-relentless-assault-on-rights-of-workers-and-trade-unionists/ https://www.amnesty.org/download/Documents/MDE1261542017ENGLISH.PDF https://www.amnesty.fr/responsabilite-des-entreprises/actualites/egypte-des-travailleurs-et-des-syndicalistes-reprimes 27. Correspondence in May and June 2017 between the company D.C.N.S and Amnesty International. Furthermore, Amnesty International met with 28 the company in August 2017. Regarding their actions taken in favour issues of compliance with human the arms, the risk of gross violations of human rights and fundamental rights international law relating to of international law in terms of the freedoms, Thales mentions that they the use of arms supplied are generally end user and the declared end use? adhere to the UN Global Compact, not taken into account, in association something the Naval Group has also with the applicable international law ● Which internal mechanisms have mentioned. However, the Global com- which France, as well as its companies, been implemented to respect export pact is not a binding instrument, but must respect. control regulations in the country an incentive for the signatory compa- where the subsidiaries are located nies to show initiatives reflecting their To do that, the company can raise and the destination of the equipment ? voluntary commitment to integrate questions that are specific to the these principles into their strategies arms sector and which should guide ● Which internal mechanisms have and activities. Its effectiveness is quite their actions and their vigilance mea- been implemented to avoid the risk of relative and above all unverifiable. sures. A few examples, without being diversion whenever there are interme- exhaustive: diaries in the transfer chain (broker, Thales specifies as well that they financing, transport )? apply the OECD guidelines for mul- ● Which mechanisms have been tinational enterprises. At this point, implemented to make sure the com- the company also indicates that they pany respects international sanctions have supported the United Nations set out by the European Union and the Arms Trade Treaty, which came into United Nations such as arms embar- force at the end of 2014, and that they goes? Arms embargoes are usually have ceased all activity in the field wide reaching. of cluster munitions in line with the Oslo Convention. The company also ● Which internal mechanisms have referred to the UN Guiding Principles been implemented to check the on Business and Human Rights. recipient’s actions in terms of arms embargo? Starting next year and thereafter, all arms manufacturers subject to the ● Which internal mechanisms have law on duty of vigilance should more been implemented to respect the detail the risks related to their acti- national regulations in terms of arms vities which could impact the human export control, including the Arms rights of third parties and the envi- Trade Treaty and the EU common ronment, giving the exact location position? and activities of their subsidiaries, subcontractors and suppliers in terms ● Which internal mechanisms have of these risks. been implemented in order to exercise It is time for companies to implement vigilance regarding decisions resulting a paradigm shift and understand the in a request for an export licence sub- law does not requires them to analyse mitted to the Ministry of the Armed the risks to themselves but rather to Forces in relation to the respect of the human rights. human rights international law by the recipient state? But also what analysis Because it is striking to observe that has been made regarding the nature of

29 AGRI-FOOD SECTOR

PLANS REVIEWED:

Bel: https://www.groupe-bel.com/wp- content/uploads/2017/03/bel-ddr-2017. pdf

Bolloré: https://www.bollore.com/bollo-content/ uploads/2018/06/boll_1802391_rap- port_d_activite_fr_mel.pdf

Danone: https://www.danone.com/content/dam/ danone-corp/publications/publica- tionsfr/2018%2004%2012%20Danone-Do- cument_de_Reference_2017.pdf

30 INTRODUCTION

The agri-food industry is the primary is worth checking that the agri-food French industrial sector, worth 180 giants are exercising their duty of vigi- billion euros in 201728. France is the lance in a transparent, exhaustive second biggest agri-food exporter in and sincere manner in order to iden- Europe and fourth in the world, with tify, prevent and remedy any adverse 44.2 billion euros worth of exports impacts on human rights, the envi- in 201629. Moreover, agri-food is the ronment or common goods resulting primary sector of industrial investment from their activities. in France. With this in perspective, it

31 GENERAL ANALYSIS OF THE PLANS

Considering the size of the three with their CSR efforts or non-financial nies that are active in the sector of companies selected, Bel, Bolloré reporting, which does not at all facili- seeds to be transparent on the policies and Danone, and their value chains tate understanding the plans regarding research, marketing of seeds in France and internationally, their and protection of biodiversity. vigilance plans are shockingly short In light of this, CCFD-Terre Solidaire ● Risk of impact on the environment and, consequently, vague. In general, has written a report called Vigilance on and health: pesticides. the plans in fact take very little of the the menu30 in which there is a detailed It is undoubtedly essential that com- specificities of their activity sector into analysis of five symptomatic risks of the panies are vigilant on all measures of account. agri-food industry which, traceability, transparency and security at the moment, are not concerning the production, marketing, First of all, sufficiently addressed by use and reduction of pesticides in regarding the the companies in the vigi- order to avoid any health or environ- consultation Tt appears that lance plans that have been mental risks. with stakehol- examined. Without pro- ● Risk of criminalisation: human ders, their their risk mapping viding the entire report, rights defenders. identification which has been published There is a conflict between the exploi- and the risk is evasive in March 2019, we can list tation of natural resources on the mapping is not the non-exhaustive risks one hand and on the other hand the at all specific and briefly explain the efforts of defenders to protect the to these three issues linked to them: environment and communities and companies’ activities and diverse guarantee that legally mandatory consultations are implemented. Given locations. Bolloré carried out a more ● Risk of resource grabbing: land detailed risk mapping than the other and water. that the means of the companies and two companies reviewed by defining Land and water grabbing, whether the defenders are totally unequal, it a principal geographical area, but the legal or not, of a territory can bring is important that the agri-food com- reasons for such as choice are hardly negative impacts for local communi- panies pay particular attention to the documented and the company reco- ties and affect the economic, social, consultation and protection of these gnised that the dialogue with the societal or environmental balance of individuals. stakeholders concerned in these areas these people by violating their rights. has not yet been organised at all levels ● Risk of violation of the rights of Having presented these few elements of the company. farmers: contracting. of the CCFD-Terre Solidaire report, Contracting is an agreement between we believe it is essential to mention But above all, when reading the vigi- a farm owner and a company which another weak point in the vigilance lance plans of Bel, Bolloré and Danone, defines conditions of production of plans from 2018: the whistleblowing it appears that their risk mapping is a given product on the land of the mechanisms. evasive and does not target specific farmer and conferring certain rights of risks. Only Bolloré mentions specific ownership of the harvest to the com- cases of activity sites in its risk map- pany. The power relationship between ping. Nevertheless, this pick-and- the farmers and the contracting com- choose approach makes their metho- panies can be asymmetric and lead dology questionable. Also, if further to unfair contracts which endanger research and analysis of the risks has human rights. been carried out, it is unfortunate that ● Risk of impact on biodiversity: seeds. these three companies have not, in an In a context where cultivated and effort to be transparent, published it wild species are disappearing, where for the stakeholders to see. Further- diseases and natural disasters are more, companies tend to mix up the increasing, it is essential for compa- information linked to duty of vigilance

28. Ania, « Economic review 2017 of the food industry », March 2018, available on https://bit.ly/2RsaawV 29. Ministry of Agriculture, Agrifood and Forestry, Panorama of agri-food industries, Edition 2018, p.10. 30. CCFD-Terre Solidaire, Vigilance on the menu, March 2019. 32 WHISTLEBLOWING MECHANISMS

Beyond inaccurate and incomplete data published by this NGO in the powerful interests »33. It is therefore risk mappings, the companies give previous year – making this sector the the democratic ideal and, above all, very little (or even no) details on the deadliest for the first time. fundamental liberties that are being whistleblowing mechanisms. These harmed when individuals expressing are essential in order for individuals In a sector which is greatly affec- their opinions to protect the environ- such as human rights defenders and ted by intimidations, forced evic- ment, guarantee acceptable working environmentalists to be able to signal tions or deaths, French companies conditions, fight against corruption risks and violations caused by activi- must actively get involved in order and defend the rights of affected com- ties of a company so that the latter, to make sure that their subsidiaries, munities are threatened, intimidated knowingly, can rectify them. subcontractors or suppliers do not and silenced. contribute to the perpetuation of these Thanks to their work, the defenders repressive practices by putting in Yet, although it is a duty in the law, it help to identify, prevent, mitigate place efficient whistleblowing mecha- must be noted that the vigilance plans and allocate responsibility for viola- nisms. The UN Guiding Principles are only make succinct references to these tions committed by companies. Eve- clear on what is expected of these whistleblowing mechanisms – when rywhere in the world, on a daily basis, mechanisms: « to make it possible for this issue is merely mentioned. they might face serious risks to their grievances to be addressed early and lives and livelihood remediated directly, The companies Bel, Danone and Bol- since they very often business enterprises loré, for example, all mention whist- work under threat of should establish or leblowing mechanisms at different extrajudicial execu- participate in effective stages of rollout. Bolloré mentions a tion, deportation, The companies give operational-level grie- « management of reports concerning surveillance, incri- very little (or even no) vance mechanisms for behaviours that do not comply with minations and inti- details on the individuals and com- the specified vigilance measures » midation resulting munities who may be which will be implemented over the from their efforts to whistleblowing adversely impacted »32. course of the year34, without further defend human rights mechanisms details being added. Bel refers to a against commercial The whistleblowing mechanism with regard to distributors interests. Thus, wit- mechanisms are in fact which allows them to be « informed hout functional and essential so that com- if any of its distributors, customers safe whistleblowing mechanisms, panies can anticipate and manage or agents, of which there are nearly defenders’ may see their fundamen- as close as possible to local realities 500, is convicted, politically exposed tal rights violated and may face risks the risks of adverse impacts on free- or added to an embargo blacklist »35. as serious as death. doms and fundamental democratic Lastly, Danone mentions a whistle- principles. The UN Special Rappor- blowing and reporting mechanism In 2017, the Business and Human Rights teur on the situation of human rights which a priori is more complete with Resource Centre recorded 388 attacks defenders, Michel Forst, notes that « « a whistleblowing system whereby against human rights defenders. 100 for defending human rights over profit, employees, suppliers and other third cases, of which 55 were deaths, were privilege and prejudice, ordinary parties may confidentially report any linked to the agri-food industry. Global people, communities, workers and suspicions of fraud, corruption […] Witness, for its part, documented the trade unionists face stigmatization, violations of Human Rights and envi- killing of 207 land and environmental criminalization, physical attacks and ronmental rules violation »36. defenders in 201731. Almost a quarter sometimes death. In many situations, of the defenders killed were protesting such brave people are being deprived against agribusiness projects – which of their most fundamental rightsfor is a 100% increase compared to the the mere fact of having opposed Nevertheless, there are many ques-

31. Global Witness, At what cost?, 2018, p.9. 32. United Nations, United Nations’ Guiding Principles on Business and Human Rights, 2011, principle n°29. 33. Forst, Situation of human rights defenders, A/72/170, 2017, para.3. 34. Bolloré, Activity Report 2017, 2018, p.112.

33 tions regarding the description is found or if after examination of a there are violations of human rights, of these mechanisms. Were they case it is concluded that it is neces- fundamental freedoms, the environ- designed in consultation with the sary to withdraw from the market and ment and/or health. trade unions, as required by law? Bel site and/or break a major commercial and Bolloré do not give any details, contract? Danone provides more detail A whistleblowing mechanism that and Danone mentions a mechanism on the governance: « all reported does not ensure that these individuals designed « in consultation with staff wrongdoings will be examined by a could have a sympathetic ear whilst representative bodies ». But have these steering committee comprising repre- also effectively addressing the pro- mechanisms been advertised outside sentatives of the Sustainable Develop- blems raised, cannot claim to meet of the company? While Danone expli- ment, Human Resources and General the requirements of the law. citly mentions a mechanism which Secretary functions »38. Nonetheless, is accessible for external stakehol- the questions regarding the indepen- Yet, none of the plans evaluated ders, Bel and Bolloré, on the contrary, dence, accountability or effectiveness include measures for eliminating the draw from corruption whistleblowing of this committee and the coherence risk of reprisals against whistleblowers mechanisms and appear to limit the of its decisions remain unanswered. and defenders or measures to protect mechanism and its publicity to com- them. pany staff – in this regard Bel alludes As underlined by the Special Rappor- to an internal training programme teur on the situation of human rights It is in this sense that in the agri-food « through a film (translated into 20 defenders, Michel Forst, human rights sector, where fragmentation of value languages and widely disseminated) defenders « help to bring to the atten- chains means that communication and posters dedicated to the whist- tion of States and business enterprises between the headquarters and its leblowing system in all Group sub- business-related impacts on human direct and indirect activity zones is sidiaries »37 – and to corruption and rights, address inconsistencies in the essential, whistleblowing mechanisms business ethics issues (in accordance domestic legal and policy frameworks are a vital prerequisite, both literally with the Sapin II law on anti-corrup- that may contribute to such impacts and figuratively. tion). Escalating the information and and support affected communities accessing the whistleblowing mecha- and individuals in seeking remedy nism for violations that take place in where adverse human rights impacts suppliers, subcontractors or the local have occurred »39. For this reason, communities therefore still remains a they are not only pillars upholding major challenge… democratic balance, but also whist- leblowers, quickly detecting where Many questions regarding the gover- nance of these mechanisms accom- pany this crucial challenge. Bel and Bolloré say nothing about how they are operated: do headquarters manage it? And in the presence of staff representative bodies? What relationships are established with staff representatives in concerned countries? Is there a delegation for external bodies? How independent from the directors of the company is this body ? How much weight does the whistleblowing mechanism carry in cases where professional misconduct

35. Bel, Annual Report 2017, 2018, p.44-45. 36. Danone, Annual Report 2017, 2018, p.170. 37. BBel, Annual Report 2017, 2018, p.41.. 38. Danone, Annual Report 2017, 2018, p.184.39. Forst, Forst, Situation of human rights defenders, A/72/170, 2017, para.14.

34 BANKING SECTOR

PLANS REVIEWED:

BNP Paribas: https://invest.bnpparibas.com/sites/ default/files/documents/ddr2017_fr_bnp_ paribas.pdf

Natixis: https://www.natixis.com/natixis/upload/ docs/application/pdf/2018-05/natixis_ rapport_rse_-_extraction_ddr.pdf

Société générale: https://www.societegenerale.com/sites/ default/files/documents/Document%20 de%20r%C3%A9f%C3%A9rence/2018/ ddr-2018-societe-generale-depot-amf-d18- 0112-fr.pdf#page=265

35 INTRODUCTION

In terms of legal structure, the large employees or their private clients, with the implementation report, the French private banks are limited com- for example). We have studied the latter of which only needs to be publi- panies and, with a employees over vigilance plans of BNP Paribas, Société shed from 2019 onwards. Or, knowing 5,000, are therefore subject to the générale and Natixis. that any potential legal sanctions only new law on duty of vigilance. come into effect as of 2019, it could be It is important to underline that Crédit a new example of the fact that without Concerning severe impacts on agricole, the second largest French the threat of sanctions, companies human rights and the environment, bank and the tenth largest in the are unwilling to act. the banking activities that pose the world, did not publish its vigilance greatest risk are corporate and invest- plan in 2018, as was required by law. ment banking and asset management. Amis de la Terre France contacted the We have therefore concentrated on bank which appears to have misinter- these activities in this analysis, even preted the law, understanding that if all of activities must be covered in it was only necessary to publish its their vigilance plans (be it concerning plan as of 2019. Crédit agricoleseems risks of violations to the rights of their therefore confused the vigilance plan

Crédit Agricole, the second largest French bank and the tenth largest in the world, did not publish its vigilance plan

36 GENERAL ANALYSIS OF THE PLANS As with most companies, the gene- the environment. But the results of who treats them, how. In contrast, ral analysis of the plans reviewed this risk mapping, which constitute Natixis explicitly notes that there highlights that their content is too the most important information for will be no disciplinary or legal action vague and they lack detailed infor- the stakeholders, principally those against whistleblowers. It is impor- mation on concrete measures and who may potentially be impacted, are tant to highlight that a protection actions and on the planned monitoring not published as they should be: the mechanism for whistleblowers is systems for evaluating their imple- plan should explicitly contain the list provided for in the Sapin II law. Mo- mentation and effectiveness. of countries at risk and the detailed reover, there should be no reprisals risks for each type of activity or pro- or legal action taken against indivi- Regarding the risk mapping, the banks ject contained in the banks’ portfolio. duals who transmit the information appear to have understood its impor- (via the whistleblowing and report tance in actions for vigilance. They Regarding the whistleblowing collection mechanism), even if they provide some facts on their methodo- mechanism, none of the three banks are not considered whistleblowers. logy. The three banks worked jointly foresee one that is available for third to initiate this risk mapping40. Each of parties (local communities, etc.). the banks identifies general challenges We also deplore the lack of clarity linked to respecting human rights and on the treatment of these reports –

HOW TO APPLY THE LAW ON DUTY OF VIGILANCE TO THE BANKING SECTOR There are many elements that allow us finance advisory activity or before any However, it is important to empha- to clarify this. Firstly, under pressure decision to finance a major project sise that the content of these policies from public campaigns, notably those or grant loans to a company41. In the remains insufficient. The inadequacy of Friends of the Earth France since Equator Principles there are also some of the Equator Principles was under- 2005, banks developed a number of of the elements that must be included lined many times. Following the Dakota voluntary codes of conduc to take into in the vigilance plans regarding risk Access Pipeline scandal in the USA, a account environmental and social identification or implementation of a project that was supported by ten EPFIs, risks and respect for human rights whistleblowing mechanism, for exa- four of which were French banks, civil in their corporate and investment mple. Equator Principles Financial Ins- society demanded that the standards banking activities. These voluntary titutions (EPFIs) must refuse to finance of evaluation of projects be the same commitments and the measures the or grant loans to companies linked in all countries since issues regarding banks put in place to respect them to any project which cannot prove respect for community rights and the provide a basis for the vigilance plans that it complies with the principles. environment can equally arise in Desi- to be elaborated. As for project gnated Countries42. More finance advisory recently, in a letter to the THE ROLE OF SECTORAL services, the EPFI EPFIs in October 201843, 45 POLICIES AND OTHER demands that the The content of global civil society organi- VOLUNTARY COMMIT- client « explicitly sations insisted on three MENTS expresses their these policies critical principles: intention to meet Firstly, the banks have elaborated remains in-house « sectoral policies » in order the Equator Prin- to regulate their activities in at-risk ciples ». insufficient sectors such as extraction, fossil fuels, arms, or even palm oil. The three banks reviewed mention Secondly, collectively on an internatio- their sectoral policies and the Equa- nal level, the banks have contributed tor Principles in their vigilance plans. since 2003 to the creation and deve- This is very important as the banks’ lopment of the « Equator Principles ». policies and voluntary engagements These are ten principles committing thereby become binding due to the the banks involved to take into account fact that the banks’ civil liability may a certain number of social and envi- be incurred on the basis of their vigi- ronmental criteria before any project lance plans.

37 ● the Equator Principles place no climate and biodiversity. Between 2015 and social impact and major public restrictions on the financing of pro- and 2017, BNP Paribas, Crédit agricole, opposition49. In fact, as RWE bought jects or infrastructures related to fossil Société générale and Natixis granted out EON’s renewable energy portfolio, fuels, and no obligation to ensure that 502 million dollars to Total’s deep-sea the proportion of coal in their energy financed projects limit their impact on offshore oil activities44. production mix has gone down and so climate change; BNP Paribas now considers the com- ● Many policies are much too permis- pany to be in a transition period, despite ● they have not prevented the financing sive such as Société générale’s oil and it not having any intention to review its of projects leading to severe human gas policy. Far from taking into account involvement in the coal sector rights abuses, in particular violations the impacts of liquefied natural gas of the right of Indigenous Peoples to on the climate, Société générale takes ● The policies lack coherence, such Free, Prior and Informed Consent and of pride in its role as a global leader in as the oil and gas policies and the coal the land rights of various communities, this sector, describing it as « an energy policies of Natixis and Crédit agricole including forced evictions; source to transition to a low-carbon which exclude the financing of new coal- world » and presenting it along with its fired power plant projects, but do not ● they do not always guarantee full renewable energy development finan- exclude financing the companies that transparency or access to project infor- cing45. In December 2018, in response develop them. The same goes for their mation for the concerned communities. to being targeted by a massive citizen policies which are ill-adapted to the action for its support of Rio Grande to funding mechanisms of new oil pipelines Lastly and most importantly, it is neces- LNG shale gas export terminal project46, for transporting oil from tar sands50. sary to point out that the Equator Prin- the bank reaffirmed that « gas, including ciples only apply to project finance, shale gas, is a necessary transition which represents less than 10% of the energy »47. financial services of banks – the main ones being general loans to companies ● The policies are too often vague or issuance of shares on the financal and unclear, such as BNP Paribas’ coal market. policy which simply requires that the companies it finances have « a diversifi- The sectoral policies also have many cation strategy leading to a reduction in gaps, some even regarding the scope of the proportion of coal in their electricity application, or above all when it comes production »48. In reality, this policy has to criteria for excluding companies of not stopped the bank from giving up certain sectors such as those of coal or to 995 million euros in finance, since tar sands. For example: COP21 and adoption of its coal policy, to the German energy company RWE, ● Lack of policies on certain high despite the latter planning expansions risk activities such as offshore pro- to its mines in Hambach and Garweiler jects which pose severe danger to the in spite of their huge environmental

40. BNP Paribas, Natixis and Société Générale all mention in their plans of the Earth: Société générale, « plein gaz sur les fossiles » published in the fact that the risk mapping was initiated « with three other French March 2018: http://www.amisdelaterre.org/IMG/pdf/20180712rapport- banks », without explicitly naming them. We can therefore assume that societegenerale.pdf they did it together and that the last bank involved is Crédit Agricole. 47. https://www.societegenerale.com/fr/s-informer-et-nous-suivre/ 41. https://equator-principles.com/wp-content/uploads/2018/01/ dialogue-et-transparence equator_principles_french_2013.pdf 48. https://group.bnpparibas/uploads/file/rse_politique_sectorielle_ 42. https://www.banktrack.org/download/letter_from_10_banks_to_ charbon.pdf epa_secretariat_on_designated_countries_eps/170522_letter_banks_ 49. See http://www.amisdelaterre.org/Action-de-masse-a-la-mine- on_designated_countries.pdf d-Hambach-AXA-et-BNP-Paribas-derriere-le-charbon.html et http:// 43. https://www.banktrack.org/download/letter_from_banktrack_ www.amisdelaterre.org/BNP-Paribas-ciblee-pour-enliser-l-Europe- and_45_organisations_to_equator_principles_association_on_ep4/181011_ dans-le-charbon.html letter_to_epfis_on_update_process_washington.pdf 50. https://www.natixis.com/natixis/jcms/lpaz5_71651/fr/natixis-esr- 44. http://www.amisdelaterre.org/IMG/pdf/note_latotaldesbanques- sector-policy-oil-gas ; https://www.natixis.com/natixis/upload/docs/ francaises_final.pdf application/pdf/2016-07/160708_coal_policy_fr.pdf ; https://www. 45. https://www.societegenerale.com/fr/transition-energetique-en- credit-agricole.com/content/download/122247/2424794/version/8/ gagements-climat/financement-transition-energetique et https:// file/Politique-sectorielle-RSE-Petrole-et-gaz-de-schiste-2018-03.pdf ; www.societegenerale.com/fr/content/societe-generale-sengage-en- https://www.credit-agricole.com/content/download/122248/2424804/ faveur-du-climat-1 version/2/file/Politique_sectorielle_mines_Juin2015.pdf 46. For further information on Societe generale’s support of gas and shale gas, and on the Rio Grande LNG proect, please see the report by Friends

38 WHEN DOES A BANK CONTRIBUTE TO HUMAN RIGHTS ABUSES?

In their annual reports the three banks when it recognises that it was aware studied indicated that they « respect », or should have been aware of risks of « support » or « draw on » a number of adverse impact of infrastructure pro- international standards. Among these jects or companies that it finances. In are the United Nations Guiding Principles concrete terms, if the bank does not on Business and Human Rights. In June withdraw its financial support or does 2017, the UN High Commissioner for not address the issue with its client to Human Rights published an interpre- prevent or mitigate the impact, « it could tive guide on the application of the UN eventually be seen to be facilitating the Guiding Principles in the banking sector continuance of the situation and thus be in order to determine in which cases a in a situation of contributing ». Following bank may cause or contribute to human this, the organisation BankTrack publi- rights abuses and thus in which cases shed a series of concrete case studies victims should be compensated. based on this interpretive guide53.

This guide is a response to the Thun As the law on duty of vigilance draws Group of Banks which is an international in particular from the UN Guiding Prin- group of banks, including BNP Paribas, ciples on Business and Human Rights, with a very restrictive interpretation of this guide could help judges to evaluate banks’ liability and which considers that and interpret the liability of banks that banks cannot « in general » be consi- are subject to this law. dered to have contributed to human rights abuses51. The UN guide has a clear response52, in particular underlining cases where the bank fails to take action

51. See the exchanges between the Thun Group, UN experts and civil client relationship, yet over time fails to take reasonable steps to seek to society on the subject: https://www.business-humanrights.org/en/ prevent or mitigate the impact—such as bringing up the issue with the thun-group-of-banks-releases-new-discussion-paper-on-implications- client’s leadership or board, persuading other banks to join in raising the of-un-guiding-principles-for-corporate-investment-banks issue with the client, making further financing contingent upon correc- 52. -« bank can contribute to an adverse impact through its own acti- ting the situation, etc.—it could eventually be seen to be facilitating the vities (actions or omissions)[21] – either directly alongside other entities, continuance of the situation and thus be in a situation of ‘contributing’.» or through some outside entity, such as a client. [22] (…) For example, a 53. https://www.banktrack.org/download/how_banks_contribute_to_ bank that provides financing to a client for an infrastructure project that human_rights_abuses/180416_how_banks_contribute_human_rights_1.pdf entails clear risks of forced displacements may be considered to have facilitated – and thus contributed to – any displacements that occur, if the bank knew or should have known that risks of displacement were present, yet it took no steps to seek to get its client to prevent or mitigate them.» “if bank identifies or is made aware of an ongoing human rights issue that is directly linked to its operations, products or services through a

39 GARMENT SECTOR

PLANS REVIEWED: (DISPENSER BRANDS)

Carrefour: http://www.carrefour.com/sites/default/ files/carrefour_-_document_de_refe- rence_2017_0.pdf

Auchan: https://www.auchan-holding. com/uploads/files/modules/re- sults/1520592102_5aa264e657d73.pdf

Casino: https://www.groupe-casino.fr/wp-content/ uploads/2018/04/Documents-de-refe- rence-chap-8.pdf

40 INTRODUCTION The clothing industry is typically a well below the living wage in order to set of fundamental rights at work, and labour-intensive industry. Since the meet the minimisation of production no longer being based on the short- 1990s, and in particular since 2005 costs and excessive working hours to term profitability and competition and the Multifibre Arrangement dis- meet the production needs54. between workers which generalise mantling which completely liberalised violations of international labour the sector, the pillar on which it was This tragic event demonstrated the standards. founded – production cost minimisa- urgent need to change the growth tion – increased. model of a sector in which 20 years By not publishing a plan, they are of soft law and ‘ethical’ commitments not only violating their legal obliga- The emergence of «fast fashion» in were not able to prevent the worst tion, but also demonstrating their the 2000s, which borrowed from the accident in history. It is furthermore unwillingness, beyond cosmetic mea- generalist mass distribution model doubly emblematic as it established sures, to take on their responsibility and applied it to the clothing indus- the first scandal and awareness of in developing an industry which they try, ended up pushing a model with image risk along with the 1996 ‘Nike are contributing to dragging down considerable social and environmental affair’ and child work in its subcontrac- with their model (low-cost produc- impacts to its extreme. tors in Pakistan. tion, increasing volumes, and per- manently renewing collections as a By relocating their production to We also deplore that at the time of central paradigm). low-wage countries, they have dele- writing this report, and considering gated the risk to third countries, and that the Rana Plaza shock accelerated Only Decathlon, a brand specialised consequently to the economic entities work towards adopting national legis- in sports products, published its there. It is also currently the second lation on duty of vigilance, none of the vigilance plan, at the time of writing most polluting industry in the world, clothing brands have published a plan this report, which includes measures after oil. of vigilance, including big names like aimed at addressing the specific risks H&M and Zara. in this sector. The violations and risks of violations Hence, we studied the plans of three are indeed on labour rights– as protec- Their purchasing power as leaders main multi-product distributors with ted by the conventions of the Interna- in the sector make them vital actors their own clothing brands: Carrefour, tional Labour Organization (ILO) and in initiating change in the industry’s Auchan and Casino. also by the International Covenant on production model towards taking Economic, Social and Cultural Rights into account respect for a minimum (ICESCR) and by the Universal Decla- ration of Human Rights. Identifying and preventing them should therefore be subject to specific analysis in the vigilance plans of the of the globalized economic actor operating in the clo- thing industry.

The Rana Plaza collapse in Dhaka on 24 April 2013, in which 1,138 workers were killed and 2,000 were seriously injured, highlighted and concentrated remedial actions on the question of health and safety at work, particularly in Bangladesh. As prominent as this was, this event was just the tip of the iceberg; the most systematic viola- tions are the least spectacular and are directly linked to the intensive pro- duction rhythm of this sector: wages

54. See the file « Rana Plaza, 5 years later: time for assessment » https://ethique-sur- etiquette.org/RANA-PLAZA-5-ANS-DEJA

41 GENERAL ANALYSIS OF THE PLANS

In general, the three plans are eva- sive and too generic. They are more of a review of the brands’ CSR com- mitments, which are pre-existing the duty of vigilance. We, and various others, have been pointing out for years that if they are merely declara- tions of goodwill for consumers, they will fail to prevent serious impacts to fundamental human rights.

While the methodologies for defining a risk mapping appear to be based on The three retailers do, neverthe- tion of violations, even for the garment relevant criteria for two of the three less, mention the Accord on Fire and sector which is identified as being at retailers (Carrefour and Casino), Building Safety in Bangladesh which particular risk, and essentially com- neither of them present the results. was signed following the Rana Plaza municates a series of pre-existing They do not specify the degree to collapse and which constitutes, for commitments to CSR. which the risk is taken into account Collectif Éthique sur l’étiquette, an in their value chain, nor do they prio- effective measure of prevention and Auchan, which published an extremely ritise the risks. mitigation of risks to the succinct two-pages plan, appears to Aside from iden- safety of workers in this have merely carried out a pure exer- tifying the risks, the country. cise of form which does not show plans remain much The three plans any recognition of its responsibility too unclear on the Carrefour appears to as outsourcing company, despite the measures of preven- are evasive have adopted an inte- fact that clothes from its own brand, « tion and mitigation and too generic resting risk mapping In Extenso », was found in the rubble of violations, which methodology, crossing of Rana Plaza and the company is the appear to be kept to various approaches and subject of a complaint from Collectif simple social audits. types of risks, but its Éthique sur l’étiquette, Sherpa and mitigation actions amount to commu- ActionAid France55 for deceptive mar- None of the companies consider taking nicating a list of its CSR commitments. keting practices. on the responsibility as outsourcing As the number one French retailer, it is company to point out the impact of quite significant and unfortunate that their business practice on the occur- in its risk analysis, Carrefour places rence of risk. They thus continue to risks for the company and risks for leave the burden of managing the risk the stakeholders on the same level: to their suppliers and subcontractors, « business, financial, legal, human/ in line with their code of ethics and social, image ». Carrefour must move conduct. past interpreting responsibility and duty of vigilance as means of justifi- The exercise [of elaborating the plan] cation for stakeholders so that it can is much too succinct and does not finally translate them into its strategic specifically address the sectors’ decisions. challenges enough to be considered efficient, even if it now shows some Likewise, Casino presents an inte- recognition from Casino and Carrefour resting approach by introducing a of their responsibility when it comes differentiation of risks by sector. Its to their supply chain. plan, however, contained almost no measures for mitigation and preven- 55. See: https://ethique-sur-etiquette.org/Plainte-Auchan-Les-associations-se

42 INTERESTING RISK ANALYSES, BUT NOTHING SAID ABOUT FUNDAMENTAL AND GENERALISED VIOLATIONS SUCH AS POVERTY WAGES

Casino has in a fairly meaningful way Only Carrefour mentions « decent sala- identified several sectors which are ries » in its supplier charter, but does particularly « at risk »; garment being not specify the measures it plans to one of them, along with palm oil and take to help ensure them. fishery. Lastly, violation of workers’ freedom Among the risks of violations that the of association and right of collective retailers have identified as being a bargaining is a key risk, particularly in priority, those of health and safety, countries where there is substantial child labour and non-discrimination complicity between employer repre- figure prominently, and are heavily sentatives and the public authorities, linked to reputational risk, as seen in like in Bangladesh. Yet, these types continual, publicised disaster. Yet, in of violation, which are widespread the garment sector, large-scale and in countries where this sector has a generalised violations remain less strategic character, are completely spectacular, closely related to the absent from the plans. business model: poverty wages and excessive working hours, the later If we do not ignore the primary duty caused by wages being too low and of states in the protection of these also as a direct consequence of the particular fundamental rights, we pressure on production costs and believe that no company can presume rates56. to guarantee its duty of vigilance wit- hout identifying the ways in which its Casino and Auchan refer to respecting model allows, encourages or profits legal minimum wage, which means from situations of social dumping in only respecting the local law and the countries where it operates. cannot be considered as a vigilance measure.

56. See the report from Collectif Éthique sur l’étiquette « Salaires sur mesure »: https://ethique-sur-etiquette.org/Rapport-Salaires-sur-mesure

43 PREVENTION MEASURES WHICH ARE LIMITED TO SOCIAL AUDITS AND IGNORE PURCHASING PRACTICES

In terms of risk mitigation, the mea- standards. Secondly, they remain the outsourcing company. sures described in the plans are ineffective for preventing violations generally limited to conducting social if there is no consequent analysis and But none of the vigilance plans of the audits or to other similar control mea- study of the non-complying purcha- companies studied propose mea- sures described at length, or even sing practices: pressure on production sures for this or acknowledge their sometimes to training staff. speed and costs, excessive sanctions, responsibility as outsourcing com- limited visibility on orders, etc., as panies to adopt responsible purcha- It has, however, been established for shown in the report « Cashing in! » sing practices. If Carrefour touches on more than a decade that social audits by the international network Clean « reciprocal commitments » – without are necessary, but far from enough to Clothes Campaign58, among others. prioritising responsibility – the three prevent violations57. Firstly, they must retailers continue, as in their codes of be carried out following an ambitious The duty of vigilance differs in this conduct, to place full responsibility methodology and frame of reference in regard to the audits in that it removes on their suppliers. order to make realistic identifications the responsibility of compliance from of violations of international labour the value chain links and places it on

NO WORDS ON THE FIGHT AGAINST HIDDEN SUBCONTRACTING IN THE PLANS

The plans are much too evasive on Rights have been considered the good part of the content of the plans the question of hidden subcontrac- most complete text on the subject, consists in stating the pre-existing ting, which poses an aggravating and in particular as they acknowledge a CSR initiatives and commitments, sector-specific risk of violations of responsibility extending to the whole which we remind, did not manage fundamental labour rights. business relationship, given the weight to prevent the worst accident in the the parent and outsourcing companies industry and which no longer reassure Carrefour states that its « code of have on these economic bodies. This consumers. We can hope that this is conduct forbids resorting to hidden aspect is crucial in the textile industry due to the time necessary to elabo- or undeclared subcontracting » – since the way multinationals struc- rate an appropriate plan covering the Casino and Auchan’s codes of conduct ture their production in complex and multiple environmental and social contain the same statement – and vast chains of subcontracting leads risks related to their operations, and Auchan indicates that it carries out to a disappearance of traceability not a matter of choice of these actors. « audits to detect non-transparent and an increase in the risk of unde- subcontracting ». But the plans do clared subcontracting and resulting Only a complete reform of the business not mention any precise measure for violations, getting out of hand. It is model of clothing multinationals could explicitly preventing this risk, which is therefore especially surprising and demonstrate a good implementation notably linked to their own purchasing regrettable that this issue is missing of the duty of vigilance and lead to a practices. from the prevention measures. tangible improvement in respect for the fundamental rights of workers in The companies do not specify the rank Thus, the first plans of these three this sector. of suppliers that are taken into account companies, having practically ignored in the risk mapping, particularly with the prevention measures, fail to meet regards to upstream of the value chain. the objective of the law: identify Up to now, the United Nations’ Guiding risks of violations, prevent them and Principles on Business and Human implement monitoring mechanisms. A

57. See in particular the report Beyond social auditing, by Fondation pour les droits de l’Homme au travail, 2008. 58. Accessible here: https://cleanclothes.org/resources/publications/cashing-in.pdf/view

44 45 GENERAL CONCLUSION AND PROSPECTS

This study aims to be a guiding step it poses an indispensable milestone towards an effective implementation of in hard law. Designed with the aim to the law on duty of vigilance, designed prevent risks, it constitutes a minimum to prevent violations of human rights standard for all companies. Conse- and environmental damage resulting quently, we strongly urge for it to be from the activity of multinationals, in implemented as ambitiously and effec- particular in the sectors where these tively as possible. Now is seriously abuses are predominantly found. the moment to seize and comply with While the last months have still seen this obligation, which has become an environmental or social disasters international reference, but also to linked to some of these activities, it work for the adoption in Europe and does not appear that French multi- worldwide of binding laws for all nationals under this obligation fully multinationals, allowing victims recognise their legal responsibility to finally have efficient access when it comes to duty of vigilance or to justice. even of international texts. If the law is hardly or badly implemented, it is With this in mind, our unrealistic to envision a reduction in organisations put violations against the environment or forward the following in which the victims are workers and recommendations: populations across the world.

Wanting to avoid judicial procedures, sanctions, or having to answer to actions brought against them by consumers and citizens or being ques- tioned by civil society are not effec- tive driving forces for corporations to develop vigilance plans, as can be seen from the content of some of them. This is why regulation by public authorities is essential for the implementation of this law.

Our organisations believe this law could have been more ambitious, in particular concerning the companies covered and concerning the facilitation of access to justice for the victims. Indeed, it is not an end in itself, but

46 > For all companies subject to the law > For the French public authorities: on duty of vigilance: Guarantee the effective implementation of the Taking into account the critical analysis and French law on duty of vigilance and reinforce recommendations within this report and in it by: Sherpa’s Vigilance Plans Reference Guidance, and in conjunction with internal and external • Publishing an annual list of the companies subject to stakeholders: the law;

•Comply with the legal duty to establish, publish and • Designating an administrative body in charge of following efficiently implement vigilance processes. In particular, the implementation of the law and which guarantees a cen- to publish a detailed risk mapping as well as the metho- tralised access to the vigilance plans of these companies; dology and bring particular attention to the development of efficient alert mechanisms. Equally, it is necessary that • Creating an independent monitoring body to ensure the the companies clearly understand the concept of risk as effective implementation of the law; defined by the law: this regards risks for third parties and the environment and not risks for the company or its investors. • Lowering the thresholds to include more companies that operate within sectors with high risk of human rights vio-

lations and environmental damage on the one hand, and > For all companies that are not subject reversing the burden of proof on the other hand. to the law on duty of vigilance, in par- ticular those implementing activities in > Support the internationalisation of mul- “high risk” sectors: tinationals’ duty of vigilance by:

• Design, publish and effectively implement mechanisms • Providing proactive and constructive support for the of vigilance, based on a serious sectoral analysis of human treaty on transnationals and human rights currently under rights and environmental abuse risks. negotiation in the United Nations;

• Working within the European Union towards its com- mitment to the process of and ambitious contribution to the draft treaty;

• Promoting the adoption of a binding European legislation on duty of vigilance. > Aux pouvoirs publics français:

47 LIST OF THE COMPANIES WHOSE VIGILANCE PLANS WERE REVIEWED

1 ACCOR 21 CASINO 2 ADP 22 CIC 3 AIR FRANCE-KLM 23 CLUB MED 4 AIR LIQUIDE 24 DANONE 5 AIRBUS 25 DASSAULT AVIATION 6 ALSTOM 26 DASSAULT SYSTÈMES 7 ALTEN 27 EDF 8 ARCELORMITTAL 28 ENEDIS 9 ARKEMA 29 ENGIE 10 ATOS 30 ERAMET 11 AUCHAN 31 ESSILOR INTERNATIONAL 12 AXA 32 FAURECIA 13 BIC 33 GALERIES LAFAYETTE 14 BNP PARIBAS 34 GRDF 15 BOLLORÉ 35 GROUPAMA 16 BOUYGUES 36 GROUPE BEL 17 BPCE 37 GROUPE RENAULT 18 BUREAU VERITAS 38 HSBC 19 CAPGEMINI 39 ILIAD 20 CARREFOUR 40 IMERYS

48 41 IPSOS 61 PSA 42 JCDECAUX 62 PUBLICIS GROUP SA 43 KEOLIS 63 REXEL 44 KERING 64 SAINT-GOBAIN 45 KORIAN 65 SANOFI 46 LA POSTE 66 SCHNEIDER ELECTRIC 47 LAGARDÈRE 67 SOCIÉTÉ GÉNÉRALE 48 LEGRAND 68 SUEZ 49 L’ORÉAL 69 TELEPERFORMANCE 50 LVMH 70 THALES 51 MICHELIN 71 TOTAL 52 NATIXIS 72 UBISOFT ENTERTAINMENT 53 NAVAL GROUP 73 VALEO 54 NEXANS 74 VALLOUREC 55 NEXITY 75 VEOLIA 56 ORANGE 76 VINCI 57 ORANO (EX AREVA) 77 VIVENDI 58 ORPEA 78 WENDEL 59 PERNOD RICARD 79 WORLDLINE 60 PLASTIC OMNIUM 80 ZODIAC AEROSPACE

49 CAPTIONS AND PHOTO CREDITS

p. 2 : Credit: Rawpixel - Unsplash p.5 : Credit: Anders Jilden – Unsplash p.6 : Credit: Samuel Zeller – Unsplash p.10: Demonstration, Tahrir Square, Cairo (Egypt), January 2013 – Credit: Mohamed Abd El Ghany, Reuters p.11 : Garment factory (Bangladesh) – Credit : Clean Clothes Campaign p.12 : Gas Flaring (United-States) – Crédit : Lucie Pinson, Friends of the Earth France p.13 : Campaign against the Dakota Access Pipeline (United-States) – Credit : Peg Huner p.15 : Site of the gas pipeline project « Arc de Dierrey » (France) – Credit : b@arberousse p.16 : Credit: Ant Rozetsky - Unsplash p.17 : Credit: Ammiel Jr – Unsplash p.19 : Up : Shale gas wells of Total (Argentina) – Credit : Observatorio Petrolero Sur p.19 : bottom : Fishermen who could be affected by the Rio Grande LNG project (United-States) – Credit : Lucie Pinson, Friends of the Earth France p. 20 : Extraction operations of oil sands (Canada) : Credit : Jiri Rezac – WWF p.21 : Uranium mine (Namibia) – Credit : jbdodane p.22 : Credit : Xiang Gao – Unsplash p.25 : Demonstrator, Tahrir Square, Cairo, 29 January 2013 (Egypt) – Credit : Mohammed Abed/AFP p. 26 : Sherpa Light Scout in Cario’s streets, 3 July 2013 (Egypt), Credit : Amr Abdallah Dalsh, Reuters p. 30 : Farm worker in Haïti, banana plantation (Dominican Republic) – Credit : Eros Sana, ActionAid France p.31 : Farm worker, banana plantation (Guatemala) – Credit : Barbora Trojak, Eucumenial Academy Prague p.34 : Farm worker in a rice field, Chhenua village (India) – Credit : Florian Lang p.35 : Coal-fired power station in Belchatów (Poland) – Credit : Bogusz Bilewski, Greenpeace p.36 : Credit : Foriane Vita – Unsplash p.39 : Campaign against the Dakota Access Pipeline (United-States) – Credit : Peg Huner p.40 : Living place of a garment worker (Bangladesh) – Credit : Clean Clothes Campaign p.41 : Credit : Anya Smith – Unsplash p.42 : Outside a garment factory(Cambodia) – Credit : Martin de Wals p. 43 : Garment worker (Bangladesh) – Credit : Clean Clothes Campaign p.45 : Garment factory (Bangladesh) – Credit : Clean Clothes Campaign p.46-47 : Credit : Melany Rochester - Unsplash p.48-49 : Credit : Charles Forerunner - Unsplash

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