In 2017, France became the first country to enact a due diligence law, the Law on the Duty of Vigilance, requiring large French companies to identify risks and prevent serious human rights, health and safety, and environmental harms in their supply chain. The French Vigilance Law was groundbreaking. It paved the way for the adoption of mandatory due diligence standards in Europe, culminating in the European Commission’s proposal for the Corporate Sustainability Due Diligence Directive in 2022. However, six years after the law’s enactment, the results of its implementation and enforcement have been disappointing, and victims of business-related abuse continue to face significant challenges in holding companies accountable and obtaining justice. The French experience should serve as a cautionary tale for future mandatory due diligence legislation.

France’s Law on the Duty of Vigilance

Under the Law on the Duty of Vigilance, large French companies are required to draft and effectively implement a due diligence plan, termed the ‘vigilance plan’. This plan must include ‘reasonable due diligence’ measures to identify risks and prevent serious harm to human rights and fundamental freedoms, individual health and safety, and the environment throughout their supply chain. More specifically, the plan must cover risks and harm resulting from the activities of the company, the companies it controls, as well as subcontractors or suppliers with whom it has an established commercial relationship. The law also establishes enforcement mechanisms involving private and judicial oversight. Affected stakeholders and NGOs can give a company formal notice to comply with its due diligence obligations. If the company does not comply within three months, they may petition the court or its interim relief judge to compel compliance (Article L225-102-4(II) French Commercial Code). Finally, the law allows for a company that fails to meet its due diligence obligations to be held civilly liable for the damage that could have been avoided if these obligations had been met (Article L225-1025 French Commercial Code).

Poor implementation of the French Law

The implementation of the French Vigilance Law has run into several issues. First, it is unclear which companies are subject to the law, and the French government has not published an official list of these companies. Furthermore, there is no official monitoring of company compliance with their due diligence obligations, particularly their vigilance plans published to date. In the face of government inaction, NGOs have compiled a list of companies that appear to meet the requirements set out in the law. They found that 17% of them had failed to publish a due diligence plan. A further problem is that when companies publish a vigilance plan, the content is often vague or insufficient. This is due to several factors, including the general terms of the law, which give companies a lot of leeway, and the lack of government guidance on the content and implementation of the required vigilance plans. Companies also appear to be wary of disclosing too much information in their vigilance plans.

Conclusion

The French experience demonstrates that without clarity on the due diligence obligations, such as who they apply to and what should be included in the required due diligence plans, the law cannot be effective. Further exacerbating this is companies’ reluctance to disclose information about their due diligence plans. The law therefore lacks essential details and doesn’t include enough provisions for monitoring and enforcement which would be required to overcome some of the implementation challenges it faces. These issues are considered further in Part II of this blog series.

Want to Learn More?:

• Read: France’s Ambitious Business and Human Rights Law to be Tested: the Yemen LNG case
• Read: Business and Human Rights: A Tale of Two Duties
• Read: Lessons from the French Vigilance Law for the EU’s Corporate Sustainability Due Diligence Directive
• Read: Giving Voice to the Vulnerable: How Advisory Opinions have the Potential to Advance Climate Justice through International Courts

Learn more about the EU’s corporate sustainability due diligence revolution
Since 2019, the Asser Institute offers a week-long academy on the theory and practice of sustainability due diligence as key to responsible business conduct. Learn about the corporate sustainability due diligence process and its implementation in various European states at our spring academy on 08 – 12 April 2024. Read more.