New legislation has been introduced in France which places a new “duty of vigilance”, or “duty of care”, on large French corporates.
Qualifying legal entities will have to develop and implement yearly “vigilance plans” that outline the measures they will take to identify risks and thwart serious breaches with regard to human rights, fundamental freedoms and the health and safety of individuals and the environment, which arise from company, subsidiary, supplier and subcontractor activities.
Law No. 2017-399 of March 27, 2017 on the “Duty of Care of Parent Companies and Ordering Companies” will apply to any parent company registered in France. This includes firms, during the previous two years, that have employed at least 5,000 employees across the parent company and its direct or indirect French registered subsidiaries; or 10,000 employees across the parent company and its direct or indirect global subsidiaries.
Vigilance plans will have to highlight processes associated with risk assessment and risk management, including regular subsidiary, supplier and subcontractor assessments, and provisions to lessen and/or tackle negative outcomes.
Legal entities that do not abide by their obligation to publish plans can be ordered to do so by the courts in public hearings. Such companies could leave themselves open to civil claims for compensation by people who have suffered as a result of the non-compliance.