It was late evening on Saturday January 17th when the special cross-party parliamentary commission in charge of studying the French government’s bill of law on ‘Growth and Activity and Equality of Economic Opportunities’ rushed through approval of several of the proposed law’s articles. The commission was in a hurry, for the next day it was to examine, in a timely coincidence, the bill’s proposition to free up regulations that currently limit Sunday trading activities.
The commission had charge of examining and adopting proposed amendments to the bill, and that Saturday its lead rapporteur, Socialist Party Member of Parliament (MP) Richard Ferrand, presented an amendment that he himself put forward on January 12th. Yet more than a simple amendment, it proposes altering French criminal law by making the violation of “business secrecy” an offence that carries a penalty of imprisonment and a fine.
For more than three years, the business world has been lobbying for adoption of what is the substance of Ferrand's text, beginning under the presidency of Nicolas Sarkozy in early 2012. That was when, supported by the then industry minister Éric Besson, the conservative UMP party MP Bernard Carayon presented to parliament a bill to allow for the prosecution of those who divulge information classified by a company as secret. The presidential and parliamentary elections which followed soon after, won by the socialists in May and June 2012, led to the abandoning of the bill. However, in October that year, and under strong pressure from within his ministry, then economy minister Pierre Moscovici revived the project. Even though a European Union directive on the same theme that was under preparation, again following lobbying by the business world, France was keen to overtake it with its own legislation, as was the case with recent bank regulation laws.
Last summer, the socialist president of the law commission of the National Assembly, the lower house, presented a new bill of law to protect business secrecy, and which was itself prepared in the greatest secrecy.
It is the text of this that has now made its appearance in the Growth and Activity bill, which is widely dubbed as ‘the Macron law’ - la loi Macron – without raising any astonished reactions over its sudden inclusion, nor any debate beforehand. Mediapart was unable to reach rapporteur Richard Ferrand to interview him about the circumstances of the sudden addition of the amendment, but the method, like the text, once again illustrates how the business world has captured the law and political world.
Isn’t it justified to expect that this proposed law, which it is in itself, should be presented as a separate bill, and not within the hotchpotch of countless other measures contained in the Macron bill of law? “Our possibilities of presenting bills of law are limited,” said Socialist Party MP and member of the commission Sandrine Mazetier. “We have only three per parliamentary session. To put the text on business secrecy into the legislative vehicle of the Macron law allows us to present other [bill] texts, apart. We would notably like to present a proposition on the social responsibilities of companies, the relations with sub-contractors. We all have [our own] priorities.”
That proposition to regulate large firms’ social responsibilities was rejected by parliament’s laws commission last Wednesday, after Mazetier’s socialist colleagues voted against it.
Was there any debate by the commission about filling the Growth and Activity bill with amendments, like that on business secrecy, to the point of losing its sense, and was there any discussion at all about the rushed-through business secrecy amendment? “No, I don’t remember there being any reactions or discussions within the commission,” said Jean-Louis Roumégas, EELV Green party member of the commission. “It happened very quickly.”
Another commission member, Socialist Party MP Colette Capdevielle, confirmed this. “It was not the subject of discussion,” she said. “It is a text that is much awaited by companies. We are one of the rare countries where no protection exists for business secrecy. But I don’t know [the substance of] the text. Why, is there a problem?”
Indeed, the text, which allows for punishment for any breach of business secrecy, represents considerable problems. It borrows from the bill of law prepared by Bernard Carayon in 2012, and which was rejected at the time by the parliamentary Left, and stipulates that any violation of business secrecy is subject to a maximum sentence of three years imprisonment and a fine of 375,000 euros. The text also allows that in the event that “the offence is of a nature to damage the sovereignty, security or essential economic interests of France”, the maximum sentence is increased to seven years imprisonment and a fine of 750,000 euros.
It should be remembered that the crime of ‘misuse of company assets’ carries a maximum sentence of five years in prison and a fine of 375,000 euros. It would appear that the MPs believe the violation of business secrecy is far more serious than a number of other crimes affecting business.
The text of the amendment defines business secrecy as “all information” of the following nature: “1) Which does not have a public character in that it is not, in itself or in the composition of its elements, generally known or easily accessible to someone involved in a sector or a domain of activity that usually treats this type of information; 2) Which […] is analysed as being an element in itself of a scientific and technical potential, strategic positions, commercial and financial interests or the competitive capacity of the owner and which therefore represents an economic value; 3)Which is the subject of reasonable measures of protection, given its economic value and the circumstances, to preserve the unpublished character.”
When the text first appeared in Bernard Carayon’s attempted bill in 2012, the French association of economic and financial journalists warned that, if ever it became law, it would have prevented the revelation of recent medical scandals like the Mediator drug marketed by French pharmaceuticals firm Servier for weight loss despite its known dangers (and which is estimated to have caused the deaths of at least 500 people) or the faulty PIP breast implants made of unauthorised silicone filler. The same fears resurface now. Violation of business secrecy, as the amendment defines it, goes well beyond the issue of industrial espionage, abuse of patent rights or data protection. Given the vagueness of the text, it is difficult to understand what information would not be protected by the law. For rather than simply protecting companies from devious competitors, it is journalists and whistleblowers who could well become the prime targets for charges under this new offence.
Key role of the press in face of a snail's-pace justice system
If all information that is not public is classified as coming under the protection of “business secrecy”, then the reporting of economic affairs will be limited to relaying statements issued by corporate communications teams. It would become impossible to denounce bad or dubious practices, to report on misuse of company assets or improper personal gain. How could the press detail the industrialized system of tax evasion set up by Swiss bank UBS other than by placing confidential documents in the public arena? What would be the fate reserved for whistleblowers who take the risk to disclose such practices? On top of losing their jobs, would they also face criminal charges?
It would be impossible to denounce banking scandals like those that have shaken the Caisses d’épargne or the Crédit Lyonnais, not to mention the financial scandals at Areva or Vivendi. Would reports revealing the delays affecting the A380 or the A400M be interpreted as an illegal attack on the commercial interests of Airbus?
Furthermore, what piece of information can be considered as not having an economic value? The answer to that is "none". The financial and business worlds feed on information, on reporting, and adopt their positions in consequence. It is even one of the bases of the neoliberal economy, which considers information as an essential value to determine market prices.
According to the French parliamentary commission’s rapporteur behind the amendment, Richard Ferrand, it contains every guarantee for the exercise the right of freedom of information. “I asked the question during the meeting,” said his fellow socialist member of the commission, Karine Berger. “He assured me that there was no danger.” The text states that “the legitimate exercise of freedom of expression or information, or the revelation of an illegal act” is not considered to be a violation of business secrecy. Ferrand has also drawn up another amendment for inclusion in the fundamental 1881law that regulates French press activity, and which he presents as a modification that “secures the capacity of journalists to reveal crimes that may eventually have been committed by a company”.
But in fact, this amendment to the law governing the press simply permits journalists to present documents and information that come under the category of business secrets for the defence of the said journalists if they are tried for defamation. Similarly, the amendment to the Macron law for the protection of business secrecy would not target whistleblowers “who inform or indicate to the competent authorities acts that are susceptible to constitute offences against the laws and regulations in place which he has had knowledge of”.
Initially, Green MPs lodged an amendment with the commission with the aim of granting greater protection to whistleblowers, notably concerning the denunciation of wrongdoings in the fields of health and the environment, they later decided not to pursue the matter with the commission but to voice their argument during the parliamentary debates. “For us, it’s essential to preserve two things, whistleblowers and the freedom of the press,” said Jean-Louis Roumégas, whose EELV Green party last Wednesday issued a statement denouncing the ‘business secrecy’ amendment as “a threat to the right to inform”.
“It is a confused text which is likely to prompt debate,” said socialist MP Sandrine Mazetier, who explained she had not found time to study the amendment, having focused her attention on issues of housing and Sunday trading contained in the wider bill.
“We are ready to do all necessary amendments to guarantee freedom of information and the protection of whistleblowers,” added Karine Berger. “There must be no ambiguity about the matter.”
But time is short. Can such a debate really be possible during the passage of the wide-ranging ‘Growth and Activity’ bill that includes so many issues and which is to be examined by parliament in a fast-track procedure? Are MPs even convinced, themselves, of the need to establish safeguards? Many of them have already accepted the principle of business secrecy and the restriction of right to information, even in cases that involve public interest. Thus it was that, during the cross-party parliamentary commission into the now-abandoned ‘eco' road-tax and the circumstances of the appointment of the Ecomouv’ company to collect the levy, MPs accepted without complaint that the controversial contract signed between Ecomouv’ and the state should remain secret “in the name of commercial interests”. Yet the issue was about a contract signed by a public body and paid by money from the public purse. The abandoning of the project has now cost the state 883 million euros, and yet not even one line from the terms of the deal has been made public.
Despite promises of introducing transparency measures, the reinforcement of secrecy in business affairs is gaining supporters. Socialist Party MP Bernadette Laclais even came up with a proposition for the Macron law to allow companies to not publish their financial accounts. If the trend continues, information about a company’s turnover will be regarded as confidential as national defence secrets. While a number of MPs said Laclais’ proposition never had a chance of being adopted by the commission, it is nevertheless indicative of how politicians are now approaching the issue of freedom of information with regard to the business world.
By choosing definitions that are deliberately vague, and which feature in a fast-track passage through parliament, the socialist government has rallied itself to the position taken by businesses against citizens’ right to freedom of information. In the name of competitivity, of the defence of corporations and economic interests, the political class unreservedly supports the opacity and secrecy cultivated in a pronounced manner by the French business world. It demonstrates a significant complicity with regard to economic crimes, corruption and tax evasion.
A deafening silence in France surrounded the settlement with US prosecutors that saw BNP Paribas forced to pay a record fine of 8.6 billion euros for corruption in the form of sanctions violations. Not one political figure called the bank’s management – and notably its honrary president of the board, Michel Pébereau - to account, not even just one question. The only concern expressed by French politicians was with regard to the workings of the US justice system its methods and intrusive manners.
An amendment to French law is being prepared to limit the scope US lawyers have in their investigations into, and demands for documents from, French companies. There may well be justification for this, but no political figure has voiced questions about the reasons for such intrusions. If US justice has appeared to be so hard, is it not because French justice shows itself to be much more understanding?
Economic crimes are almost never punished, and when they are it is after such a delay that the sentence has hardly any significance. It took 20 years for the Crédit Lyonnais scandal to be judged. It was 12 years after his departure from Vivendi that CEO Jean-Marie Messier was finally given a watered-down sentence of a ten-month suspended prison term for misuse of company assets. The scandal of the more than 400 million euros paid in an arbitration award in 2008 to French tycoon Bernard Tapie, the irregularities of which were first revealed by Mediapart journalist and co-founder Laurent Mauduit that same year, is still far from a judicial conclusion. The scandal involving the Caisses d’épargne bank which also broke in 2008 is still under investigation. The evidence given 18 months ago by trades unions to the public prosecutor’s office of corruption and tax evasion by the management of department store chain Printemps is still limited to a ‘preliminary investigation’, as opposed to a full-blown judicial probe. It is now a year since France’s national audit body, the Cour des Comptes (Court of Accounts) informed the public prosecutor’s office of dubious practices at Areva but, there again, investigations are still in the preliminary stage.
In face of such a slow justice system, it is only the press that investigates, denounces wrongdoings, informs citizens and gets things moving. Without it and whistleblowers, nothing would have happened in the case of UBS, despite the fact that all the authorities, from the French domestic intelligence services, the DCRI, to the Bank of France’s banking supervisory body, the French Prudential Supervisory Authority, not to mention the finance ministry’s tax inspection services, were alerted with evidence to the bank’s tax evasion activity as of 2009. Yet it is precisely the press and whistleblowers who are in danger of being gagged by the protection of business secrecy amendment contained in the Macron law.
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- The French version of this article can be found here.
English version by Graham Tearse