Only diligent businesses accepted

When drilling for oil in Uganda, the local population usually has no prospect of compensation.
Political article
The statutory requirement to conduct business with due diligence is meant to have a preventive effect, ensuring that business never violates human rights or harms the environment in the first place. A case study from France.

It is a first in France. On the basis of the new law regarding the Devoir de vigilance (Corporate Duty of Vigilance Law), French NGOs and their partners from Uganda[1] have formally requested the Total Group to publish and implement a "due diligence plan". The French law prescribing due diligence checks encompasses not just parent companies but also their subsidiaries and subcontractors. With 900 subsidiaries, Total is the world's fourth largest oil and gas company. It generated sales worth some US$210 billion in 2018 and has a head count of 104,000 in over 50 countries.

The case concerns the Tilenga megaproject operated by Total in Uganda and Tanzania for some years now. The project was developed on the banks of Lake Albert by an oil consortium of which Total is the operator and principal investor (a 54.9% share). Other partners are the Chinese multinational CNOOC (33.33%) and Britain’s Tullow corporation (11.76%). The Tilenga project is meant to open up six oilfields – mainly inside the Murchison Falls National Park – with an output of some 200,000 barrels/day. It includes the building of a pipeline to a nearby refinery, as well as an industrial zone. Tilenga is part of a major project in which Total is also a partner: the construction of the 1,445-kilometre East African Crude Oil Pipeline (EACOP) through Uganda and Tanzania to transport oil to the Indian Ocean. Estimates put the overall cost of the EACOP at US$3.5 billion.

The Tilenga and EACOP projects pose a serious danger to the human rights of the affected population and could cause irreversible damage to the environment, biodiversity and water resources. Two social and environmental sustainability studies actually exist, only one of which has so far been published, but in the view of the NGOs, there are serious shortcomings, especially regarding measures to reduce environmental damage in the Murchison Falls National Park. Uganda's largest Park includes a wetland of international importance, protected under the RAMSAR Convention. According to studies by the WWF, Action Aid and BankTrack, the less advanced EACOP project could negatively impact tens of thousands of people.

In its 2017 Annual Report, the Total Group published an initial due diligence plan as prescribed by French law as of that year. Updated in 2018, the plan has been criticized by NGOs as grossly inadequate and not implemented in a sufficiently effective manner. Specifically, they accuse Total of not providing for any specific precautionary measures. The company's due diligence plan therefore failed to meet the legal requirements, which call for a detailed "illustration of the risks". That includes a weighted representation of the risks based on the Group’s actual activities.

It should be recalled that the French law on the Duty of Vigilance (Devoir de vigilance) was adopted on 27 March 2017 after three years of wrangling. At the centre of the law is the requirement of due diligence. The large companies covered by the law are required to produce, publish and effectively implement a due diligence plan. The firms must identify the risks associated with their business activities in order to avoid "serious harm to human rights and basic freedoms, the health and safety of persons and the environment". The due diligence plan must provide information regarding compliance of regulations. The plan as well as reports on its implementation must be made public and also included in the company's annual report of activities. Should the company not comply with these requirements or do so inadequately, it may be formally requested by human rights and environmental organizations or trade unions to do so.

If at the end of a three-month period the company has not fulfilled its obligations, it may be ordered by a judge to do so, and this in conjunction with a fine that continues to accumulate until the law has been complied with. Lastly, in the event of damage, the company may be requested "to compensate for the damage that would have been averted through compliance of these obligations". The parent company or the contracting enterprise may therefore be required to pay compensation to victims. However, for this to take place, a court must first determine the absence of a plan, the inadequacy of a plan or the unsatisfactory implementation of a plan. In other words, the law therefore requires that certain instruments are used. If a company has produced and implemented a due diligence plan to the required standard, it will not be liable in the event of damage.

In the case described above, Total was given until mid-2018 to remedy the due diligence shortcomings being complained about. The legal deadline given to the company for taking action expired at the end of September 2019. If the NGOs are not satisfied with the measures taken by Total, they may bring the matter before a court in France. This case should also be monitored very closely in Switzerland.

 

[1] Namely, the NGOs Friends of the Earth France and Survival as well as their Ugandan partners AFIEGO, CRED, NAPE/Friends of the Earth Uganda and NAVODA.

Konzern-Initiative auf der langen Bank

In der Schweiz bleibt die Frage weiterhin hängig, ob Konzerne dafür geradestehen müssen, wenn sie im Ausland Menschenrechte verletzen oder die Umwelt verschmutzen. Statt einen eigenen indirekten Gegenvorschlag zur Konzernverantwortungsinitiative (KoVI) zu diskutieren, zog es der Ständerat am 26. September vor, das Geschäft weiter auf die lange Bank zu schieben. Er stimmte einem Antrag des economiesuisse-Lobbyisten Ruedi Noser (FDP/ZH) zu, den im August überraschend angekündigten Gegenvorschlag des Bundesrats zur Initiative abzuwarten. Dabei ist der Inhalt dieses Gegenvorschlags bekannt: Konzerne sollen nur berichten müssen, wie sie die Menschenrechte im Ausland einhalten, im Schadenfall aber nicht für angerichtete Schäden haften. Das Vorgehen der Initiativ-Gegner erinnert an die Abzocker-Initiative: Auch damals wurde die heisse Kartoffel solange zwischen Parlament und Kommissionen hin und her geschoben, bis sich die Volksabstimmung nicht mehr weiter verzögern liess. Die Stimmbevölkerung quittierte das unwürdige Theater an der Urne, die Initiative erhielt 67.9% Zustimmung. DH