PARIS (Reuters) - France’s constitutional court took the financial sting out of a new law requiring big companies to make sure their subsidiaries and subcontractors around the world respect human rights and environmental rules, striking down its power to levy fines.
The law was intended to improve factory conditions and workers’ rights after the collapse of the Rana Plaza factory complex in Bangladesh four years ago, when 1,136 people were killed.
The disaster brought demands for greater safety in the world’s second-largest exporter of readymade clothes and put pressure on companies buying clothes from Bangladesh to enforce standards.
The French law, passed this year after years of negotiation, requires companies with more than 5,000 employees, or 10,000 including their foreign subsidiaries, to publish plans to prevent violations of human rights and environmental regulations in their supply chains.
They could have been fined up to 30 million euros (25.61 million pounds) if they failed to put the plans in place.
The court on Thursday left intact the requirement for companies to draw up the plans, but ruled that the law was too vague to require fines.
Socialist lawmakers pushed the law through parliament in the face of opposition from conservatives and then economy minister Emmanuel Macron, who feared it could make French companies less competitive.
Macron, running as an independent, is now favourite to win presidential elections held over two rounds in April and May.
Economy Minister Michel Sapin said in a statement that the law should be revised to be made clearer. However, parliament is out of session until a June legislative election in which the ruling Socialists are likely to lose their majority.
Reporting by Emile Picy; writing by Leigh Thomas; Editing by Adrian Croft and Elaine Hardcastle