Due vigilance for global corporations

A French court’s ruling highlights moves in Europe to ensure companies avoid human rights abuses and climate damage.

Reuters
Workers walk by what is officially known as a vocational skills education center in China's Xinjiang region but what critics say is a factory relying on forced labor by the Uighur minority to make export goods.

A ruling last month by France’s Supreme Court has sent a strong signal to international corporations about a need to be more vigilant in their foreign operations. For the first time, the high court said a company could be charged with complicity in crimes against humanity. The decision marks a wider awakening in Europe to holding firms accountable for their global impact, from supporting terrorists to the worsening of climate change.

The decision was a blow to French cement maker Lafarge, which faces charges it indirectly gave millions of dollars to armed groups, including Islamic State, to keep open a subsidiary’s factory in Syria between 2012 and 2015. The court held that the company can be tried for charges of knowingly backing a terrorist group responsible for the killing of innocent people. The case has been returned to an investigative court for a final determination.

The judgment reflects an effort by the European Union and its member states to use new laws and regulations to influence the global struggle on human rights and environmental issues. France passed a Duty of Vigilance Law in 2017 while Germany is considering a Corporate Sanctions Act. This year, Germany adopted the Supply Chain Due Diligence Act, which will require large companies to prevent such dangers as child labor and environmental destruction at any point in a firm’s supply chain. The EU is studying whether to require member states to pass similar laws by 2022.

“Ten years ago, corporate criminal liability was routinely questioned and criticized,” writes Richard Cassin, founder of a blog on corruption. “Today, corporate accountability is breaking out all over. Let’s celebrate the sudden and encouraging acceptance of the idea that corporations can be guilty too.”

One reason corporations – and not individuals in a corporation – are being held responsible on human rights and climate damage is that often reparations are needed. If found guilty, for example, Lafarge might be required to make amends to Syrian families whose loved ones were killed by the financing of terrorists. When crimes are committed across borders, justice must be seen as universal. And so too must be making the victims of injustice whole again.

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