The Duty of Vigilance for parent companies was introduced into the French Commercial Code by the Duty of Vigilance Law on 27 March 2017. The statute provides for French corporations with over 5,000 employees in France and/or over 10,000 employees worldwide (including affiliates’ employees) to set up, publish and implement a “vigilance plan”. The objective of such plan is to identify, anticipate and prevent human rights violations that might result from the activities of the parent company, its subsidiaries and controlled affiliates, as well as suppliers and subcontractors.
Case law uncertainty
As the Duty of Vigilance Law does not provide for any jurisdictional rules for disputes in such matters, this has given rise to conflicting interpretations in case law: while the Versailles Court of Appeal considered that commercial courts had jurisdiction on 10 December 2020, the Nanterre Judicial Court declared it – in its capacity to hear claims in civil matters – had jurisdiction on 11 February 2021.
French Minister of Ecological Transition, Barbara Pompili, explained that it would be useful to clearly specify whether Duty of Vigilance disputes fall under the jurisdiction of civil or commercial courts, to avoid seeing cases which progress is delayed due to pleas for lack of jurisdiction.
The French “Climate and Resilience” bill (the “Bill”) – resulting from the proposals of the Citizens’ Climate Convention which provides for various provisions ranging from energy renovation to the fight against land artificialisation, including, notably, the reinforcement of environmental criminal law – has been seen as an opportunity to put an end to the conflicting case law.
On 17 April 2021, during the review of the Bill by the French National Assembly, the MPs adopted several amendments as regards the Duty of Vigilance, and especially with respect to jurisdiction.
On 4 May 2021, the Bill was adopted in first reading by the French National Assembly. It provides, in its Article 71 ter, that a few designated civil courts will have jurisdiction with respect to matters related to the Duty of Vigilance. Future Article L. 211-21 of the French Code of Judicial Organisation should state that: “One or more specific designated civil courts shall hear actions relating to the Duty of Vigilance based on Articles L. 225-102-4 and L. 225-102-5 of the French Commercial Code”. It is planned that this amendment will be supplemented by a Decree designating the civil courts with jurisdiction, a priori the Paris Civil Court, and possibly that of Nanterre.
The Bill will now be submitted to the French Senate for consideration. The final vote on the Bill is expected in September 2021.
Please contact a member of Hogan Lovells’ Business and Human Rights group or your usual Hogan Lovells contact if you wish to discuss this development. We stand ready to assist companies from all industry sectors to assess how to adjust their processes and operations in this context.
Authored by Christelle Coslin and Margaux Renard.