Significant developments occurred in France this year in regard to business and human rights regulation.
As a reminder, according to the French Law n°2017-399 related to the duty of vigilance for parent and instructing companies (Duty of Vigilance 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:
(1) a risk mapping intended for the identification, analysis and prioritization of the risks;
(2) 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;
(3) tailored actions to mitigate risks or prevent severe impacts;
(4) an alert mechanism on the existence or materialization of these risks, established in cooperation with trade unions and;
(5) 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 jurisdiction of the courts. After several contradictory decisions giving jurisdiction to judicial and/or commercial courts[1], the French Parliament finally decided that the judicial court of Paris would have exclusive jurisdiction on this law. A new article L.211-21 of the Code of Judicial Organisation has thus been created, according to which “the Paris Judicial Court shall hear actions relating to the duty of vigilance based on the articles L.225-102-4 and L.225-102-5 of the Commercial Code”.
If these latest developments did not specify how to appreciate the company’s effective implementation of the Duty of Vigilance Law, it still is decisive as it allows companies and stakeholders to 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, eight formal notices have been addressed to companies urging them to comply with the Duty of Vigilance Law. These cases target several business sectors and human rights issues, for instance:
- A company operating in water related services and recycling 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;
- A large retail group 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.
- A company in the postal services sector received a formal notice in 2021 from the federation “SUD PPT”, alleging that the company didn’t comply with the law regarding their subcontracting practices, especially regarding the parcel and express sectors.
- Several foreign NGOs seized the Judicial Court in October 2020 against an energy company in relation to the alleged 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.