I – The State’s Obligation to Protect Human Rights

The National Framework

13. The Role of Public Agencies (pg 27)

The NAP recalls the CNCDH’s 2013 recommendation regarding France’s export credit agency COFACE, namely the establishment of human rights due diligence procedures including exhaustive human rights impact assessments, better transparency and information, and better civil society and affected stakeholders participation. It also recalls the CSR Platform’s recommendation for the development agency AFD and the export credit agency COFACE to reinforce their due diligence procedures and to establish grievance mechanisms.

Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE) [page 28]

The French export credit agency COFACE, which provides guarantees on behalf of the State, systematically applies the Recommendations of the OECD Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “Common Approaches”), most recently negotiated in 2012 by the OECD Export Credits Group. These recommendations cover all types of credit insurance transactions with a repayment term of more than two years, and require reasonable due diligence to be undertaken to ensure that each project complies with host country regulations and the international standards of the World Bank and International Finance Corporation (IFC). The Common Approaches establish strict common standards for OECD countries, and are more ambitious than the UN Guiding Principles as they require detailed due diligence determining project impacts on human rights. They also provide for the quarterly publication of a list of projects guaranteed for more than €10 million, and the publication of data on highimpact projects on the websites of credit agencies one month prior to transactions taking place. Discussions with civil society are held regularly at the OECD. Detailed impact assessments must be completed before COFACE awards government guarantees to projects likely to have major impacts on CSR (pollution, population movements, etc.), especially human rights. The inter-ministerial guarantee commission based at the Ministry of the Economy and Finance, which authorizes COFACE to allocate public funding on behalf of the State, also examines these requirements. Impact assessments are published on COFACE’s government guarantees website, and COFACE may request to visit industrial sites while carrying out due diligence or during the guarantee period. These analyses generally result in the inclusion of specific suspensive conditions (financial covenants) and detailed action plans to manage human rights impacts during the credit period. The OECD Common Approaches only apply to credit insurance transactions of more than two years. Businesses that request government guarantees from COFACE are systematically given information on the OECD Guidelines. When applying for credit insurance, businesses must confirm they have read and understood the OECD Guidelines.
A group of technical experts from export credit agencies has been mandated by the OECD Export Credits Group to work on the implementation of the Common Approaches, particularly in the field of human rights.

The Agence Française de Développement (AFD) [page 28-29]

Regarding the development agency AFD, the NAP recalls the 7 July 2014 law on orientation and programming related to development and international solidarity policies, through which “development and international solidarity policies must integrate the social and environmental responsibility of public and private actors”, and “the AFD integrates societal responsibilities in its governance and actions”.  The AFD also issues a yearly “organization social responsibility” report which covers human rights issues in accordance with ISO26000, and has established a list of exclusions which prohibits the funding of projects implying forced labour, child labour, grave environmental damage, destruction of cultural heritage, diffusion of discriminatory or anti-democratic messages and diamond mining activities conducted outside of the Kimberley Protocol. Diligence obligations and mandatory respect of ILO Core Conventions are integrated to financing agreements, and social risks are assessed in light of internationally recognized human rights standards. The AFD established a social responsibility action plan for 2014-2016, aiming to strengthen transparency, stakeholder consultations and the publication of project informations, among other . For high risk projects, the AFD demands that developers set up a grievance mechanisms, and the AFD and Proparco (a subsidiary of AFD devoted to private sector funding) are developing a grievance mechanism for social and environmental complaints. The AFD is strengthening CSR requirements in public works contracts, and has reinforced its rules and procedures to assess social and environmental impacts of each projects by aligning it to the World Bank’s safeguards. Finally the NAP indicates that article 5, part 3 of the 7 July 2014 law on orientation and programming related to development and international solidarity policies regarding financial transparency country by country is currently not being applied in France.

Actions Underway [page 30]

  • COFACE Government Guarantees and the Ministry of the Economy and Finance are currently examining whether to implement an IT module widening the scope of checks, to highlight at-risk industries or countries in the short, medium and long term. This would make it possible to check compliance with the UN Guiding Principles by reviewing all credit insurance operations and assessing human rights risks.
  • COFACE is continuing efforts to make information on reasonable due diligence in the social and environmental fields (which include human rights) visible and accessible on its website.
  • When evaluating extractive industry projects, the AFD ensures that funding recipients comply with the Extractive Industries Transparency Initiative (EITI),
    without excluding those who respect EITI standards but are not based in EITI countries.
  • The AFD supports the implementation of universal social protection and the promotion of initiatives to develop decent work (the creation of decent jobs, skills upgrading, training and the transition towards sustainable employment) in accordance with the AFD’s partnership with the International Labour Office and the priority areas in the ILO-France partnership agreement.
  • The AFD has implemented a grievance management mechanism to deal with environmental and social complaints.
  • The AFD is reinforcing CSR and human rights criteria in 80% of pending public works contracts with high social and environmental impacts.
  • The AFD is working to reduce gender inequality in AFD-funded operations.
  • The AFD is reinforcing the human rights focus of social clauses.
  • The AFD seeks to ensure that this policy regarding “non-cooperative jurisdictions” is respected.

Actions to be implemented:

  • Allocate the resources necessary to raise business awareness of the OECD Guidelines in AFD- and COFACE-funded operations.
  • Make AFD funding for businesses conditional on implementing or undertaking to implement non-financial reporting and a CSR due diligence plan for projects, or on the enforcement of host country or international standards.