25 Feb 21 | Podcast
As French corporate human rights laws tighten, the opposite is happening to progressive legislation in the US – but companies are pushing back
Companies will need to publish “public vigilance” plans every year, pointing not only to efforts in-house to tackle instances of human rights abuse, but also the efforts of suppliers and sub-contractors. Failure to transparently publish such details could result in a fine of up to €30m.
While the move might, on the face of it, appear to be stringent, the French government is tapping into the appetite of a progressive business community already acting on human rights, not least in the wake of the UK’s Modern Slavery Act and the California Transparency in Supply Chains Act that went before.
Using the US Congressional Review Act – enabling a quick repeal of regulations and executive actions from the last seven months of the Obama administration – both houses of Congress have recently passed legislation to undo regulations demanding that fossil fuel-based companies disclose their payments to foreign governments, something many argue will foster corruption particularly by repressive governments such as Angola and Kazakhstan.
However, much like the response to Trump’s travel ban, many companies likely to be affected have stood their ground. Thirteen companies, including Anglo American, BHP Billiton and Glencore, have responded in support of maintaining the original rules.
BHP’s stance in particular is clear, publicly stating: “Consistency of financial disclosure makes good business sense. It provides regulatory certainty, reduces compliance costs and facilitates ease of comparison of disclosed financial information across jurisdictions, which is in turn critical for civil society and other users of financial disclosure data. We will continue to disclose our payments of taxes and royalties.
So, where the hard-fought-for level playing field of legislation threatens to be dismantled, as in the US, business has a key role to maintain and uphold a strong commitment to operate ethically and effectively. As Norton points out, while citizens holding their elected officials accountable remains paramount, “many companies already lead in areas of human rights and sustainability without governmental pressure”.