In February 2017 the French government passed the Duty of Vigilance Law, known in France by its full name “Devoir de vigilance des entreprises donneuses d'ordre”. The law requires large companies to assess and reduce human rights infringements and environmental risks in their supply chains. One year later, French companies published their first vigilance plans as part of their financial statements.
What does this law entail?
The law is applicable for French companies with 5000 employees or 10.000 employees in France and other territories combined. The law requires these companies to publish vigilance plans to migitate risks in environmental, human rights, health and safety in the supply chain. These plans should include:
- A risk map with risk identification, analysis and prioritization
- A process for evaluation of risks regarding subsidiaries, subcontractors or suppliers
- Corrective actions to mitigate identified risks an prevention of violations
- A reporting process for risks and impacts, with consultation of trade unions
- A system for monitoring and evaluation of implemented measures.
What does this mean for non-French companies?
ChainPoint sees this law as part of a larger trend where countries introduce new and strict legislation that requires companies to address issues regarding human rights and environmental issues in their supply chains. Australia for example, is working on The Modern Slavery Bill 2018 which “require certain large businesses and other entities in Australia to make annual public reports (Modern Slavery Statements) on their actions to address modern slavery risks in their operations and supply chains”. This is quite similar to laws in the UK. Another example would be Switzerland, where the Swiss Coalition for Corporate Justice is pushing the Swiss government to pass laws that are partially based on the French Duty of Vigilance Law.
Don’t wait, act now
These new laws all have in common that companies should know as much about their supply chain as possible. In order to map supply chains, evaluate risks and report on impacts companies need to establish a system where supply chain data is collected thoroughly and efficient. ChainPoint helps our customers do this daily. In our solution paper on child labour we discuss how companies can reduce the risk of child labour. You can download this paper here or request a demo.