The Sapin 2 law, published last year, significantly increases obligations for companies with more than 500 employees to prevent and report corruption
While it is a leader on sustainability, France has been a relative laggard on corruption, placed 23rd in the 2016 Transparency International Index. Some European neighbours get top 10 ratings. A 2017 poll suggested 75% of French people view politicians as generally corrupt to some degree.
There’s a belief in France that powerful individuals and companies can "get away with it". Corruption was a big issue in the presidential election, and thousands demonstrated in Paris and other French cities in February against candidates Francois Fillon and Marine Le Pen, both accused of misusing public funds.
Although fighting sleaze was a key Macron pledge, it won’t be easy. Corruption has dogged French public life, from presidents down. Even a minister responsible for tax fraud had undeclared Swiss accounts.
Two 2017 presidential candidates were accused of misusing funds. In June, then justice minister, Francois Bayrou published a "moralisation" bill to eliminate conflicts of interest. It stops MPs and others employing family and tightens up onexpenses.
Embarrassingly, Bayrou was one of several ministers caught by it and was forced to resign. As for corporate corruption, even in 2014 the OECD found no French company convicted in France for foreign bribery. Several had been convicted overseas, including Technip, Total and Alstom.
In 2014, US authorities fined BNP Paribas, France’s largest bank, $9bn for conspiring to violate sanctions that prohibit transactions with Sudan and other regimes. (It was also accused of complicity in the Rwandan genocide.) Société Générale featured in the Panama papers tax leak.
In 2015, the Institute of Business Ethics reported that French employees had the weakest knowledge of their organisation’s culture on supporting ethical issues of any European country surveyed. Just 66% said honesty was always or frequently practised - down from 79% in 2012.
But could attitudes be changing? The Sapin 2 law, published last year, significantly increases obligations for companies with more than 500 employees to prevent and report corruption.
It will strengthen protection for whistleblowers, which has been weak. Mostly inspired by the UK Bribery Act and the new Brazilian anti-corruption regulation, Sapin 2 came into force on 1 June and provides a new set of legal obligations that will significantly impact companies operating in France and their directors.
‘Wake-up call’ for companies
Failure to comply with these new provisions will be harshly punished, and leave directors open tocriminal prosecution. Conviction would result in upto two years' imprisonment and a fine of up to €50,000. Another recent development is the Loi Bertrand, or Sunshine Act, where payments of as little as €10 by health care companies to professionals must be publicly listed.
The new financial prosecution service, PNF, has a reputation for tough, fast action, and an enormous workload in front of it. Under one investigation Switzerland’s UBS isfacing trial and a potential €4.8bn finefor allegedly helping French clients evade taxes.
IBE director Philippa Foster Back says Sapin 2 is a wake-up call for companies. She thinks growing awareness of codes of ethics and whistleblower protection will bring change and end the tendency to compartmentalise bad behaviour. “It will take time [but] it will be hastened by charging people and putting them in jail. They don’t know they are doing wrong.”
This article is part of a series on France. See also:
Can Macron add green to the tricolour?
France steps up war on plastic waste
Danone calls for nutrition revolution to fix 'broken' food system
Investing in the future of the planet
Taking aim at corporate human rights abuse
The companies leading the pack on CSR