Tag Archives: human rights

Duty of Care Law: You Got The Green Light In France!

France’s new legislation, The Duty Of Care Law will prevent serious human rights risks and threats to fundamental freedoms. Will other countries follow suit? 

It would be wise for procurement professionals to pay close attention to France’s new sustainable procurement legislation.   The Duty of Care law, which affects organisations with over 5,000 employees, is likely to have some influence on other nations,  starting with those in the EU.

If similar human rights legislation is implemented across the globe; forewarned is forearmed, and sustainable, ethical procurement is a hot topic that’s only getting hotter!

Whilst the progress of global sustainability standards have traditionally been  pushed by individual businesses and activist groups, things are changing. This month saw the publication of ISO20400,  (International Standard for Sustainable Procurement), which creates a standard for every organisation in the world to follow.

The Duty of Care Law

In its much-awaited decision last month, the French constitutional council has given a  green light to the “Duty of Care” law (Devoir de Vigilance) although they stated that there remain some provisions to the French constitution.

The major points of the law, requiring French companies with at least 5 000 employees, including in their French direct or indirect subsidiaries (or 10 000 employees in their direct or indirect subsidiaries worldwide) to develop a diligence plan (“plan de vigilance”), are recognised of general interest. The intent is for the diligence plans to prevent serious risks related to human rights and fundamental freedoms, health and safety of persons and the environment. The constitutional council considers however that the sanctions initially included in the law violate the constitutional principle that penalties must have a sound legal basis. As a result, the civil fine of up to €10 million, as well as its increase to €30 million in case of damages that could have been prevented by implementing the diligence plan, are removed from the law.

Developing A Diligence Plan

The obligation of implementing a diligence plan however, as well as the formal notice and the civil liability mechanisms in case of lack or deficiency of the diligence plan, are constitutional. Consequently, companies are still compelled to implement a diligence plan, even if the law loses some of its deterrent effect, which makes for the first law of this type: it introduces an obligation much more stringent than a mere reporting obligation, such as the ones required by the UK Modern Slavery Act or the California Transparency Act. Companies are required to implement specific concrete actions and cannot limit themselves to reporting on what they do (or do not do).

There are also some talks of developing similar regulations at European Union level.  Eight national parliaments have called for a corporate duty of care towards the human rights and local environment impacted by the company’s operations. They have jointly proposed that the European Commission take action on this matter. This shows that the French “Duty of care” law is indeed the first step of a generalized global movement requiring companies to address their Corporate Social Responsibility (CSR) risks, including throughout their supply chain.

This article was first published on the EcoVadis Blog

20400 Reasons The World Needs An International Standard For Sustainable Procurement

ISO20400, otherwise known as the International Standard for Sustainable Procurement, is due to be published this month. Procurious recently interviewed Jean-Louis Haie, sustainable procurement expert, head of the Australian delegation for ISO20400, and guest speaker at the upcoming Women in Procurement 2017 conference in Melbourne.

“We are at a tipping point in terms of the sustainable procurement journey across the globe”, says Jean-Louis Haie. “Organisations spend between 40 per cent and 80 per cent of their revenue on the supply chain, but increasingly recognise that they can’t achieve their sustainability objectives without getting their suppliers to actively contribute.”

“CPOs who are serious about sustainability goals know that around half of those objectives can only be delivered by their suppliers. There’s no such thing as an effective sustainability program without a supply chain component.”

By nature, supply chains are international, which is why having an international standard is vital. “When you’re asking a supplier based in China to align with your business’ or your country’s standards, they simply don’t have the same standards and don’t speak the same language around sustainability. ISO20400 seeks to create a standard that will enable every organisation in the world, regardless of size, industry and location, to have a flexible guidance framework on sustainable procurement.”

Learning from France’s sustainable procurement bible

Jean-Louis says that it depends on the industry and the area of sustainability under discussion, but in general, governments around the world can learn from his home country (France) when it comes to implementing sustainable procurement. Three key milestones took place – in 2006, 2010 and 2012 – that illustrate France’s journey towards a national sustainable procurement standard.

“The first thing I would mention is that France has a National Procurement Code – a “bible” for procurement professionals that’s applied to all public procurement tasks. In 2006 they changed the Code to include some clear objectives and principles around sustainable procurement. This caused a lot of change, as governments, councils, public hospitals, water corporations etc were encouraged to look at environmental and social specifications when making purchasing decisions. The private sector followed to a certain extent. The point is that it’s a national Code, and highly centralised. I now live in Australia, and we don’t really have that here – the federal government, state governments and local councils are all pretty autonomous.”

In 2010, the ObsAR, a National Association for Sustainable Procurement was created in France in reaction to a crying need to share knowledge and experience around this important topic. “It’s a platform for public and private organisations to share lessons learned around sustainable procurement, through working groups, an annual conference, and ongoing discussions.

At the same time, the government started to get involved in making sure the big buying organisations (including private companies) manage their supply relationships with SMEs fairly. It created a Charter for Responsible Supplier Relationships, which described 10 commitments to be respected by signatory organisations. This initiative was a success and thousands of organisations follow its principles now. 2 years later, the Government transformed this Charter into a certification scheme, which was tested on a selection of 30 organisations, including some SMEs, multinational companies and government agencies.”

“The certification program includes fair payment terms, fair contractual clauses, checks on abuse of power, inclusion of social and environmental requirements, and more.”

While France’s sustainability journey is encouraging, Jean-Louis notes that supply chains are international. “These are international companies dealing with an international supply chain in a global economy”, he says. “No matter how rigorous the standards are in one country, the system can’t work unless there’s a similar standard in the country you’re sourcing from – hence the need for an international standard.”

What does ISO20400 include?

The Standard includes seven core subjects, such as the environment, fair operating practices, labour issues and human rights, with a range of subtopics under those, such as discrimination and gender inequality. “It provides the reader with a thorough description of all the potential sustainability issues and risks they may face when they want to put in place a contract and buy something. Then it’s the responsibility of the procurement professional to decide what the hot spots (risks) are for their particular procurement activity, using ISO20400 as a framework. The Standard provides a methodology to set priorities. What it doesn’t do is put more weight on any one subject over another – we’re not telling people that human rights are more important than the environment, for example.”

Bringing procurement and sustainability expertise together

“In my experience, procurement professionals struggle to work with sustainability experts. They should be best friends”, say Jean-Louis. “The trouble is that there’s no framework to enable these two groups of experts to speak the same language and work more effectively together. ISO20400 will provide a framework – or a bridge – to channel the discussion in plain English so they can understand each other.”

“For example, most companies have some sort of sustainable procurement code in place, which puts pressure on suppliers to comply. But they forget that a good many of these sustainability impacts are created by bad procurement practices. Look at the fashion industry, for example – impossible deadlines put pressure on suppliers, which causes them to abandon key guidelines such as working safely and not using child labour”.

Jean-Louis Haie is the founder of Planet Procurement and a guest speaker at Quest’s upcoming Women in Procurement 2017 conference in Melbourne, Australia.