France

France

Last updated 4/12/2020
Summary of developments:

Legislative Developments

French Law on Corporate Duty of Vigilance

 

In a nutshell

In more detail

Name of Legislation

Corporate Duty of Vigilance Law (also known as the Corproate "Duty of Care" law)

 

Loi du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre

This is sometimes translated as the French "duty of care" law. This is problematic because "duty of care" has a very specific meaning in English common law systems. The French law does not, strictly-speaking, create a "duty of care" on companies in the common law sense of the term. For this reason "duty of vigilence" is preferable.

Area of Law

Company Law with implications for Civil / Tort law

 

Jurisdiction

National

 

Current Stage

Passed into law

Companies must fully comply with the law by 2019.

  • Vigilance plans must be elaborated effective immediately;
  • Vigilance plans have to be published in the company's annual report for this current fiscal year (current fiscal year is 2017, reports with vigilance plans will then be published in 2018);
  • Reporting on implementation and legal actions (formal notice and order by the judge and liability) will be available only by the second year of implementation (when the reports and the vigilance plans on the fiscal year 2018 will be published, meaning in 2019).

The implementation process is explained in the decision of the French Constitutional Court : “With the exception of those relating to the report concerning the effective implementation of the oversight plan contained in the second last subparagraph of paragraph I of Article L. 225-102-4, the provisions of paragraph I apply to the financial year during which the law referred was published. The provisions concerning the report mentioned above, the remainder of this Article (L. 225-102-4) and Article L. 225-102-5 apply with effect from the annual management report relating to the first financial year starting after the publication of the law referred.”

Requirements

Duty of vigilance and disclosure of due diligence processes

The law creates a general obligation to identify and prevent risks of sever abuses to human rights, health and safety and the environment. Companies which fall within the scope of the law have to:

(1) Establish and effectively implement a vigilance plan which shall include a mapping assessment to identify and rank risks; set out procedures to assess subsidiaries, subcontractors, and suppliers; establish appopriate action to mitigate risks; create an alert mechanism, and a monitoring scheme to assess the efficiency of the measures implemented.

(2) Publish the plan in their annual report.

Material Scope

All human rights and the environment

Severe violations of human rights and fundamental freedoms, health and security as well as the environment.

Personal Scope

Any company that at the end of two consecutive financial years has at least 5000 employees employed within the company and its direct and indirect subsidiaries, with registered offices in French territory, or that has at least ten thousand employees in its service and in its direct or indirect subsidiaries, with registered offices in French territory or abroad (unofficial translation).

Estimate: 120 companies

“Any company that at the end of two consecutive financial years, employs at least five thousand employees within the company and its direct and indirect subsidiaries, whose registered office is located on French territory, or that has at least ten thousand employees in its service and in its direct or indirect subsidiaries, whose head office is located on French territory or abroad“ (article 1).

Reach of the requirements

Full supply chain

 

Covering direct/indirect subsidiaries and “established business relations” (i.e. subcontractors and suppliers).

Enforcement

Transparency

Civil action

 

Transparency: Publication of the vigilance plan which must then be included in the company’s annual report.

Monitoring: any person can send a formal notice to urge the company to comply with its duties.

Civil Action: If the company fails to comply within three months following a formal notice, any person with standing (locus standi) may ask the court to order the company to comply with its duties, even under penalty payment. President of the court can order companies to comply with rulings in interlocutory proceedings.

If Harm Occurs: company can be held civilly liable if they fail to establish, implement or punish their plan. In such case, companies may be obliged to compensate for the harm that the execution of these obligations would have avoided (on the basis of generat tort law defences under the French civil code)

Pros

Mandatory with fairly broad scope

Facilitates, in-part, piercing of the corproate veil

 

Cons

Depends on judicial application

No reversal of burden of proof

No civil fine or other form of sanction adding an incentive to comply

Scope of parent companies which have the obligation to make a vigilance plan is very restrictive. Matters such as the scope of suppliers and business relations covered by the notion of “sustained business relations” depends on the interpretation of the judge;

No reverse of burden of proof and no removal of rebuttable presumption, which were included in the initial version of the law;

The initial draft law planned for a fine up to 10 million euros if a company failed to establish and publish a vigilance plan; it also planned for a civil fine up to 30 million in case the company was found liable for any resulting harm; both were removed by the Constitutional Court, thus reducing the financial incentive for companies to comply.

Further Developments

In January 2020, the French General Council for the Economy, Industry, Energy and Technology released an assessment report on the enforcement of the Duty of Vigilance Law.

This report includes several recommendations, notably:

  • Extend the application scope of the Duty of Vigilance Law;
  • Entrust a state authority with the mission to promote the Duty of Vigilance;
  • Monitor the legal proceedings introduced under the Duty of Vigilance Law;
  • Promote sectorial and multipartite initiatives;

Promote the recognition of the Duty of Vigilance at the European level.

 

Resources

♦ Database of vigilance plans: https://vigilance-plan.org

♦ Full text of the law: in French | English translation

♦ Sherpa Vigilance Plans Reference Guide (1st edition, February 2019)

Ruling of the Constitutional Council (23 March 2017).

Frequently Asked Questions on the French Duty of Vigilance Law.

♦ Cossart, S., Chaplier, J., & Beau De Lomenie, T. (2017), "The French Law on Duty of Care: a Historic Step Towards Making Globalization Work for All". Business and Human Rights Journal, 2(2), 317-323.

♦ Action Aid, Amnesty International, CCFD Terre Solidaire, Collectif Ethique sur l’Etiquette, Les Amis de la Terre France, Sherpa, Report – The law on duty of vigilance of parent and outsourcing companies : Year 1 Companies must do better, February 2019

♦ Online reference and full text of the assessment report released by the General Council for the Economy, Industry, Energy and Technology (in French).

ActionAid France, Amis de la Terre France, Amnesty International France, CCFD-Terre Solidaire, CFDT, CGT, Collectif Éthique sur l’étiquette, Forum citoyen pour la RSE, Sherpa, Léo Lagrange Consommation, Le Conseil Général de l’Économie évalue la loi devoir de vigilance : des recommandations bienvenues, une ambition à réaffirmer, March 2020.

 

Case Law

Section I. Criminal liability for parent company

Vinci Qatar case

 

In a nutshell

In more detail

Name of Case

Vinci Qatar

QDVC is a Qatari company, owned at 49 percent by Vinci Construction Grands Projets (VCGP), and directed by a French national. The French group VINCI, represented by its QDVC branch, has won contracts worth several million euros in connection with the FIFA World Cup and employs thousands of workers onsite, both directly and via numerous subcontractors incorporated in Qatar.

These companies may be involved in human rights violations on the construction sites in Qatar, such as forced labour, slavery, inhumane working conditions, and inadequate housing.

Area of Law

Criminal law

Forced labour and enslavement (articles 225-13, 225-14 et 225-15 of the criminal code), human trafficking (article 225-4-1 criminal code), breach of the safety obligation (art. 222 criminal code), reckless endangerment of workers (art 223-1 criminal code), failure to prevent an offence or a crime (art 223-6 Crim. code), concealment (art 321-1 Crim. code).

Jurisdiction

French judge (parent company’s headquarters)

Tribunal de Grande Instance de Nanterre (France)

Current Stage

Ongoing

24 March 2015 – SHERPA files a complaint against VCGP and the French managers of its Qatari branch, QDVC, before the tribunal of Nanterre.

13 April 2015 - VINCI lodges a complaint against SHERPA and two employees for defamation.

13 May 2015 – VINCI seeks injunctive relief for breach of the presumption of innocence. The judge denies the injunction due to lack of jurisdiction.

22 July 2015 – VINCI lodges a complaint against SHERPA and its employees for breach of the presumption of innocence.

13 April 2016 – VINCI’s complaint on the ground of breach of presumption of innocence is dismissed. It appeals.

19 April 2016 – At its Annual General Meeting, VINCI highlights in its annual report new voluntary approaches to human rights, adopted in 2015, concerning its Qatari subsidiary.

28 June 2017 – Decision against VINCI by the Court of Appeal on the action for defamation. The judge declared VINCI admissible but ill-founded in his application for breach of the presumption of innocence.

31 January 2018 Dismissal of the first complaint by the prosecutor

September 2018/November 2018/March 2019 – Further complaints lodged against VINCI.

25 November 2019 – Opening of a formal investigation against Vinci

Result

Pending

 

Material Scope

Human rights violations (including forced labour, enslavement, human trafficking, health and safety breaches, reckless endangerment, failure to prevent a crime) and concealment of the profits of these crimes by the parent company.

Forced labour and enslavement (articles 225-13, 225-14 et 225-15 of the criminal code), human trafficking (article 225-4-1 criminal code), breach of the safety obligation (art. 222 criminal code), reckless endangerment of workers (art 223-1 criminal code), failure to prevent an offence or a crime (art 223-6 Crim. code), concealment (art 321-1 Crim. code).

Reach of the requirements

Controlled subsidiary

 

Enforcement

France

 

Legal issues

 

This case highlights the need:

  • To change the legislation to strengthen the prevention of retaliation by companies, particularly in the form of gag lawsuits (i.e. SLAPPs, Strategic Lawsuit Against Public Participation).
  • To abolish the monopoly of the Public Prosecutor's Office for offences committed abroad.
  • To strengthen criminal cooperation between countries

 

Resources

 

♦ Business and Human Rights Resource Centre coverage.

 

 

Other relevant ongoing cases:

LAFARGE SYRIA CASE

Summary: In 2016, two NGOs (Sherpa and ECCHR) and eleven former Syrian employees – acting as civil parties – filed a criminal complaint before French courts against the French cement company, Lafarge, for alleged abuses committed in Syria by its subsidiary Lafarge Cement Syria. Allegations: war crimes, complicity in crimes against humanity, financing of a terrorist enterprise, deliberate endangerment of foreign employees.

Resources:

♦ Business and Human Rights Resource Centre coverage.

♦ Chronology of the lawsuit by Sherpa.

PERENCO RDC CASE

Summary: In July 2019, Sherpa and Friend of the Earth France requested the French judge access to documents to preserve and establish factual evidence (Article 145 French Code of civil procedure) related to the involvement and decision-making role of the French company Perenco in the management of oil operations carried out by its subsidiaries in the Democratic Republic of Congo (RDC), alleged of causing severe environmental damages.

Resources:

♦ Le Monde coverage.

♦ Sherpa coverage

 

 

Policy development

French National Action Plan on Business and Human Rights

The French government published its National Action Plan on 26 April 2017. The plan makes repeated use of the terms "duty of care" and announces France’s intention to have a coherent policy and to promote the new French legislation concerning multinational corporations’ duty of care in Europe and in the rest of the world, notably within the UN Human Rights Council intergovernmental working group working on the elaboration of an international instrument on human rights, transnational enterprises, and other business enterprises.

Resources

♦ Full text of the National Action Plan.

Section II. French Law on Duty of Vigilance

A) Litigations

1) Total Uganda Case

 

In a nutshell

In more detail

Name of Case

Total - Uganda

Two French civil society organisations (Friends of the Earth France; Survie) and four Ugandan civil society organisations (AFIEGO - Africa Institute for Energy Governance; CRED - Civic response to Environnement and Development; NAPE - The National Association of Professionnal Environmentalists / FoE Uganda; NAVODA - Navigators of developpement association)

v/

TOTAL S.A.

Area of Law

Civil law, civil procedure

First legal action under the Duty of Vigilance Law

LOI n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre (aka Duty of Vigilance Law) included in articles L. 225-102-4 and L. 225-102-5 of the commercial code).

Preventive action (Commercial Code, L. 225-102-4): legal complaint for judicial review.

Jurisdiction

National: France (Total’s headquarter)

First instance: Nanterre Tribunal de Grande Instance (known as « Tribunal judiciaire » since January 2020) (Civil Court);

Second instance: Versailles Court of Appeal (Court of Appeal, Civil Division).

Current Stage

Ongoing

 

24 June 2019 – FoE France, Survie, AFIEGO, CRED, NAPE/FoE Uganda and NAVODA served a formal notice to Total, pointing out its failure to comply with the duty of vigilance law. Total had three months to reply and to meet its obligations: develop, publish and effectively implement a detailed vigilance plan to prevent environmental and human rights abuses in its oil project in Uganda.

24 September 2019 – At the end of the legal three-month period, Total rejected the charges and did not change its behaviour in Uganda.

23 October 2019 – FoE France, Survie, AFIEGO, CRED, NAPE/FoE Uganda and NAVODA filed a lawsuit against Total before the Nanterre Tribunal de Grande Instance. In view of the urgency of the case, the claimants referred it to the judge in charge of summary proceedings (référé).

12 December 2019 – The first hearing was held at the Nanterre Civil Court and it was judged in a collegial formation (3 judges).

30 January 2020 – Nanterre Civil Court issued its decision on jurisdiction, declaring itself incompetent in favour of the Commercial Court. The court did not rule on the merits of the case, namely whether TOTAL’s vigilance plan was sufficient.

16 March 2020 – The claimants filed an appeal before the Versailles Court of Appeal in a context of a slowed-down justice because of the Covid-19 crisis. In view of the urgency of the situation in Uganda, the appellants are asking the Court of Appeal to rule not only on the question of jurisdiction, but also on the merits of the case, i.e. to decide whether or not Total has violated the Duty of Vigilance Law (Code of Civil Procedure, article 88). The appeal hearing, previously scheduled for 24 June, was postponed to 28 October 2020.

 

Requirement

Claimants requested the French Court to order Total to comply with the Duty of Vigilance Law’s requirements. (Commercial Code, article L. 225-102-4, II.)

Claimants asked the court to force Total to remedy the shortcomings in its current vigilance plan and to effectively implement urgent measures in response to the violations and risks observed in Uganda.

Material Scope

Insufficiencies of Total’s vigilance plan (Commercial Code, article L. 225-102-4, I).

Insufficiencies of the vigilance plan in details:

  • Mapping of risks (identification, analysis and prioritisation): non-specific. The specific risks, the location and type of activity associated with the risk, as well as its severity and probability of occurrence, are not identified.
  • Adapted measures to mitigate risks or prevent serious harms: missing.
  • Scheme for monitoring the implementation and the effectiveness of these measures: missing.
  • Report on the implementation of the vigilance plan: no specific indicators identified; no clear results of monitoring and evaluations included.

Reach of the requirements

Total would be ordered (even under a periodic penalty payment) to review and effectively implement a detailed vigilance plan to prevent environmental and human rights abuses in its oil project in Uganda.

Action: the lawsuit concerns the preventive action only (Commercial Code, L. 225-102-4). No tort action for compensation of damages was taken (Commercial Code, L. 225-102-5).

The decision on jurisdiction would be reviewed, with a declaration of competence of the civil court (not the commercial one).

Enforcement

Not yet.

No verdict yet.

Legal and advocacy issues

French civil court issued a decision on jurisdiction only, declaring itself incompetent in favour of the commercial court.


As the Covid-19 crisis affects the normal functioning of the justice system, claimants are concerned about the consequences of the lengthy delays for the appeal hearing to take place, which further delays a judicial decision.

Declaration of incompetence of the civil court: stating that the duty of vigilance is comparable to an «acte de gestion» of the company, the civil court ruled that the dispute falls withing the jurisdiction of the commercial court. According to the appellants, this reasoning is based on an incorrect interpretation of the law related to «actes de gestion» (Article L. 721-3 2 of the commercial code).

Further, according to several NGOs who closely worked on the adoption of the Duty of Vigilance Law, this ruling betrays the spirit of this law which goes beyond reporting and aims to make companies accountable for their social and environmental impacts and beyond purely commercial and financial conflicts. Secondly, the French commercial courts does not seem to be the most appropriate places to deal with disputes concerning serious human rights violations and environmental damages, as these are exceptional courts with non-professional judges (businesspeople elected by their peers) in charge of judging disputes between businessmen or disputes concerning the internal life of companies.


Delays related to Covid-19 crisis: the appeal hearing initially scheduled for 24 June 2020 was postponed to 28 October 2020, which delays the ruling – which may only be on the question of jurisdiction and not on the merits of the case – to the end of 2020, more than a year after the start of the proceedings.

Resources

Dedicated website (in English and French)

♦ FoE France and Survie’s Report: Serious breaches of the duty of vigilance law: The case of Total in Uganda (June 2019 – this report, available in English and French, contains the facts on with the case is based).

♦ Formal notice to Total (24 June 2019) – FoE France press release (in French)

♦ Total responds to questions from NGOs about its projects in Uganda (24 September 2019) and FoE France press release in reaction (26 September 2019 – in French)

♦ Legal action against Total (23 October 2019) – FoE International press release (in English)

♦ First hearing in front of the Nanterre Civil Court (12 December 2019) – FoE International press release (in English)

♦ Nanterre Civil Court’s ruling on jurisdiction (30 January 2020) – FoE International press release (in English); full text of the court decision (in French)

♦ Appeal (16 March 2020) – FoE France press release (25 March 2020 – in French); Total response (18 April 2020 – in French)

♦ FoE France and Survie’s summary analysis of the insufficiencies of the 2019 Total’s vigilance plan (March 2020 – in French)

♦ UN Special Rapporteurs' letters to Total and French and Ugandan governments – FoE France press release (23 June 2020 – in French); FoE France and Survie’s critical analysis of Total's response to the UN Special rapporteurs' letters (June 2020 – in French).

 

2) Total Climate Change Case

 

In a nutshell

In more detail

Name of Case

Total – Climate change

14 French local authorities (Arcueil, Bayonne, Bègles, Bize-Minervois, Champneuville, Correns, Est-Ensemble, Grenoble, La Possession, Mouans-Sartoux, Nanterre, Sevran et Vitry-le-François, Centre Val de Loire) and five French NGOs (Les Eco Maires, Notre Affaire à Tous, Sherpa, Zéa, and France Nature Environment)

v/

TOTAL S.A.

Area of Law

Civil law, civil procedure.

First climate change litigation against a private company in France.

LOI n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre. Preventive action (Commercial Code, L. 225-102-4): legal complaint for judicial review.

Article 1252 of the French Civil Code: prevention of environmental damages.

Jurisdiction

National – France (Total’s headquarter)

Tribunal judiciaire de Nanterre (Civil Court)

Current Stage

Ongoing

 

19 June 2019 – 14 French local authorities and the four French NGOs served a formal notice to Total, pointing out its climate-related failure to comply with the duty of vigilance law. Total had three months to reply and to meet its obligations, by taking the necessary measures to deal with climate change adequately reducing its greenhouse gas emissions to contribute to the Paris Agreement’s objectives.

28 January 2020 –14 French local authorities and five French NGOs filed a lawsuit against Total before the Nanterre Civil Court.

Requests

On the basis of the Commercial Code, article L. 225-102-4 I-II, claimants requested the French court to order Total to comply with the Duty of Vigilance Law.


On the basis of the Civil Code, article 1252, claimants requested the French court to prescribe Total reasonable measures to prevent or stop the ecological damage.

Claimants ask the court to condemn Total to publish a new vigilance plan remedying the shortcomings of the current one and to effectively implement adequate vigilance measures.

Action: the lawsuit concerns the preventive action only (Commercial Code, L. 225-102-4). No tort action for compensation of damages was taken (Commercial Code, L. 225-102-5).


Claimants ask the court to condemn Total to commit in a reduction trajectory of (direct and indirect) greenhouse gas emissions consistent with a pathway limiting global warming to +1.5°C.

Material Scope

Insufficiencies of the Total’s vigilance plan.


Preventing environmental damages.

According to the claimants, in its vigilance plan Total has not sufficiently identified the human rights and environmental risks linked to its contribution to global warming. Moreover, they claim that the vigilance measures mentioned by Total with respect to climate change are out of step with the Paris climate agreement’s goals and therefore fail to satisfy the legal requirements.


According to the claimants, the vigilance measures mentioned by Total with respect to climate change are out of step with the Paris climate agreement’s goals and therefore fail to satisfy the legal requirements.

Reach of the requirements

Total would be ordered to review and effectively implement a detailed vigilance plan to prevent environmental and human rights risks linked to its contribution to global warming.


Total would be ordered to put in place adequate measures to reduce its greenhouse gas emissions.

Total would need to should comply within six months after the notification of the decision, under a 50.000€ daily penalty payment.


 

Enforcement

Not yet.

No verdict yet.

 

Resources

Formal notice to Total (19 June 2019) – NGOs press release (in French).

♦ Statement of Claim (28 January 2020).

♦ The Guardian, French NGOs and local authorities take court action against Total, 27 January 2020.

♦ Forbes, This French lawsuit is making oil companies nervous, 30 January 2020.

 

B) Formal Notices

 

1) TOTAL UGANDA

See above.

 

2) TOTAL CLIMATE CHANGE

See above.

 

3) TELEPERFORMANCE

Summary: On 18 July 2019, the NGO Sherpa and the trade union UNI Global Union served a formal notice to the French outsourcing company Teleperformance. The applicants urged the company to comply with its duty of vigilance regarding alleged risks related to workers’ rights and lack of freedom of association in its foreign subsidiaries.

Resources

♦ Business and Human Rights Resource Centre coverage.

♦ Sherpa coverage.

 

4) ELECTRICITE DE FRANCE (EDF)

Summary: On 1st October 2019, indigenous human rights defenders and two NGOs (ProDESC and ECCHR) served a formal notice to the French company Électricité de France (EDF). According to the applicants, any identification and mitigation of human rights risks for local communities posed by its wind park project in Oaxaca (Mexico) is missing in the EDF vigilance plan.

Resources

♦ Business and Human Rights Resource Centre coverage.

 

5) XPO Logistics Europe

Summary: On 1st October 2019, a coalition of trade unions (the International Transport Workers’ Federation, the European Transport Workers’ Federation, the XPO Global Union Family of trade unions) served a formal notice to the French transport and logistic multinational XPO. The applicants urged the company to comply with its duty of vigilance, alleging that the vigilance plan does not fulfill the requirements set out by the law, failing to map the human rights risks within the complex supply chain and not consulting trade unions.

Resources

♦ Text of the formal notice.

♦ Business and Human Rights Resource Centre coverage.

 

6) SUEZ

Summary: On 9 July 2020, four NGOs (Red Ambiental Ciudadana de Osorno, International Federation for Human Rights, Observatorio ciudadano, Ligue française des droits de l’Homme) served a formal notice to the French multinational SUEZ, in relation to its activities in the water-supply market in Chile. The applicants called on the company to modify its vigilance plan and take necessary measures to avoid any new health emergency arising from the negligent behavior of its local controlled entity ESSAL.

Resources

♦ Business and Human Rights Resource Centre coverage.

♦ FIDH press release.

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