The French Corporate Duty of Vigilance Act entered into force in 2017. A pioneering law that establishes a legally binding obligation for some of the largest French companies, requiring them to assess and address the adverse impacts of their activities on people and the planet, by having them publish annual, public vigilance plans.
Article 1 states that the Act applies to any company that at the end of two consecutive financial years-
- Employs at least 5000 employees within the company and its direct and indirect subsidiaries whose head office is located on French territory;
- Or, which has at least 10,000 employees in its service and in its direct or indirect subsidiaries, whose head office is located on French territory or abroad.
Such a company must establish and implement an effective vigilance plan which shall:
- Include reasonable vigilance measures to identify risk and prevent
- Violations of human rights and fundamental freedoms
- Serious bodily injury
- Environmental damage
- Health risks
These risks include the ones resulting directly or indirectly from the operations of the
- Companies it controls
- Subcontractors or suppliers with whom it maintains an established commercial relationship, when such operations derive from this relationship.
The plan should consist of-
- A mapping that identifies, analyses and ranks risks;
- Procedures to regularly assess, in accordance with the risk mapping, the situation of subsidiaries, subcontractors or suppliers with whom the company maintains an established commercial relationship;
- Appropriate action to mitigate risks or prevent serious violations;
- An alert mechanism that collects reporting of existing or actual risks, developed in working partnership with the trade union organizations representatives of the company concerned;
- A monitoring scheme to follow up on the measures implemented and assess their efficiency.
- Be drafted in association with the company stakeholders involved, and where appropriate, within multi-party initiatives that exist in the subsidiaries or at territorial level.
The vigilance plan and its effective implementation report shall be publicly disclosed and included in the report
This Act gives power to a Council of State to add to the earlier stated vigilance. It can specify the modalities for elaborating and implementing the vigilance plan, within multi-party initiatives that exist in the subsidiaries or at territorial level where appropriate.
Non-compliance by a company to the obligations laid down in the vigilance plan in a three months period after receiving formal notice, the relevant jurisdiction can ask the company to comply with its duties under financial compulsion, if appropriate
An application may be made to the president of the court, ruling in interlocutory proceedings (court hearing dealing with a specific issue related to a trial, either before the trial takes place or before the end of the trial), for the same purpose.
Article 2 states that any failure to comply with the duties specified in this Act shall be liable and obliged to compensate for the harm that the implementation of the would have avoided. The action to establish liability shall be filed before the relevant jurisdiction by any person with a legitimate interest to do so.
The court may order the publication, distribution or display of its decision or an extract thereof, in accordance with its procedures. The costs shall be paid by the person convicted.
The court may order its decision to be carried out under financial compulsion.