Significant developments occurred in France this year with regard to business and human rights regulation.
Indeed, three years after its adoption, the French Minister of Economic and Financial Affairs published in January 2020 the first study on the implementation of the French Law n° 2017-399, 27 March 2017, related to the duty of vigilance for parent and instructing companies (Duty of Vigilance Law). As a reminder, according to this law, parent and instructing companies must identify and prevent severe impacts on human rights and fundamental freedoms, health, safety and on the environment resulting from their activities as well as those of their controlled companies, subcontractors and suppliers. In addition, companies are required to publish their vigilance plan and to report how they effectively implement it in their management report. The vigilance plan must feature five measures:
- a risk mapping intended for the identification, analysis and prioritization of the risks;
- processes for the regular assessment of the situation of subsidiaries, subcontractors or suppliers with whom there is an established commercial relationship as identified by the risk mapping;
- tailored actions to mitigate risks or prevent severe impacts;
- an alert mechanism on the existence or materialization of these risks, established in cooperation with trade unions and;
- a system monitoring implementation measures and evaluating their effectiveness.
In case of failure to comply with the law, any interested person may give formal notice to the company to adopt and publish a vigilance plan and may file an injunction before the competent court for this purpose. In addition, in the event of fault resulting from failure to comply with these provisions, the company may be held liable under tort law.
We observed meaningful case law developments regarding the implementation of this Duty of Vigilance Law and the first decisions have been delivered earlier in 2020. The Nanterre Judicial Court (Tribunal judiciaire) first declared itself incompetent in favor of the Commercial Court (Tribunal de commerce), in a ruling confirmed by the Versailles Court of Appeal (December 10th, 2020 RG n°20/01692). However, the Nanterre Judicial Court delivered a contrary decision in February 2021, declaring itself competent to hear the duty of vigilance case as the claimants benefit from on option between the judicial and the commercial courts (February 11th, 2021, RG n° 20/00915). If these decisions do not appreciate the company’s effective implementation of the Duty of Vigilance Law, they still are decisive as it will determine which court ultimately has jurisdiction to judge the quality and effectiveness of a vigilance plan.
Furthermore, the Duty of Vigilance Law continues to be actively leveraged by different stakeholders, such as NGOs, labor unions and local authorities. To date, seven formal notices have been addressed to companies urging them to comply with the Duty of Vigilance Law. Two of these formal notices were issued in 2020 : (i) Suez received a formal notice in July 2020 from several Chilean and French NGOs alleging that the company did not take the appropriate measures to prevent risks and failures resulting to violations to the right to live in a healthy environment in regard to water supply in Chile; and (ii) Casino received a formal notice to comply with the Duty of Vigilance Law in September 2020 in which several US, Brazilian and French NGOs urged the company to adopt a new vigilance plan to appropriately address the risks of deforestation generated by Brazilian and Colombian farms supplying the company with meat products.
In total, five of the seven formal notices raised legal challenges before the courts. For instance, several foreign NGOs seized the Judicial Court in October 2020 against EDF (Electricité de France) in relation to the inadequacy of the company’s vigilance plan regarding the rights of indigenous populations to a free, prior and informed consent in connection with a wind farm construction project in Mexico. In March 2021, representatives of the indigenous peoples of the Brazilian and Colombian Amazon, as well as French and American non-governmental organizations (NGOs) also seized the Judicial Court against Casino following the above-mentioned formal notice.