Corporate Social Responsibility for Transnational Companies: the French Law Rana Plaza as a Role Model
Yassin EL SHAZLY
Commercial and Martime LAW - LAW - AIN SHAMS UNIVERSITY (on leave) - QATAR UNIVERSITY
Abstract
There is no doubt that investment is not only an objective in itself, but also a mean to develop the society and achieve a sustainable economic progress for the community. The success of any investment policy does not only depend on the ability to attract foreign capitals as much as the extent to which these capitals contribute in improving people’s living conditions and achieving the aspiration of the society at all levels. Developing countries seek to attract foreign investment and overcome different investment obstacles, whether political, administrative, economic or legislative. This has led many Gulf countries to modernize their legal system by reforming the governing legislation of investment in order to secure the investors and create a sustainable business environment. For instance, the State of Kuwait issued the Law No. 116 of 2013 in the matter of encouraging direct investment in Kuwait. Also, Qatar issued the Law No. 1 of 2019 regulating the investment of non-Qatari capital in economic activity. This tendency also includes the Oman Royal Decree No. 50/2019 issuing the Foreign Capital Investment Law and the Law No. 19 of 2018 regarding foreign direct investment in UAE. However, the quest of countries to attract foreign investment might include certain negative impact such as wasting the resources of the society or affecting the harmony of the national economy. This is what is called in the field of investment, the need to reach the summit without rushing to the bottom. In other words, attracting investments must not cause the establishment of free tax havens, the spread of corruption, the abandonment of the rights of future generations in development, the violation of workers' rights, or hosting investments that pollute and harm the environment. In this context, the French Law No. 399 of 2017 amending the Trade Law, which is also called the Rana Plaza Law, was issued on March 27, 2017 in relation to the tragic accident that occurred on April 24, 2013 in Bangladesh as a result of the collapse of a property owned by one of the French transnational companies, and where around a thousand workers died as a result of the accident (which ranks the worst in the history of industrial activity). Under this law, French transnational corporations became obligated to take duty of care against violations of human rights and fundamental freedoms when they invest outside French territory, regardless of the laws of the country hosting such investment. They must also develop a plan that explains how to implement this commitment. In this research paper, we will try to review the position of the new Gulf legislation on the issue of the social responsibility of the investor, and then review the experiment of French legislation and its positives or negatives.
Keywords
Corporate social responsibility- foreign investment- duty of care- multinational companies.
