On June 1, 2023, Members of the European Parliament voted, with a large majority, in favour of new European rules on corporate sustainability due diligence. This vote is part of the legislative procedure for the adoption of a future corporate sustainability due diligence directive. Now begins a series of negotiations between the Commission and the Member States, called “trilogues”, to find a compromise position. Final adoption of the directive is expected before the end of 2023.

The draft European directive is notably influenced by the French law on the duty of vigilance, adopted in 2017 (Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre). In a few words, the future directive aims to oblige large companies to conduct due diligence in order to identify, prevent, end or mitigate the negative impact of their activities, including that of their business partners, on human rights and the environment. Firms should also be required to implement a transition plan compatible with a global warming limit of 1.5°C in line with the Paris Agreement. Failure to comply with these obligations should lead to sanctions determined by a national supervisory authority. Victims should also be able to sue the companies in civil court for damages.

Taking into account the experience of French law and its (mis)application, Sandra Cossart and Roula Mamlouk from the Sherpa NGO called for a strengthened legislative framework and ambitious rules at the European level in a previous Business and Human Rights Journal Blog. To understand this call, we propose to shed some light on the weaknesses of the French law on the duty of vigilance in terms of preventing violations of human rights and the environment.

The law on the duty of vigilance is based on a co-regulatory approach: the legislator recognises a central role for the commercial company in its own regulation, as the first concerned and as the expert in its own market and strategy.

The law specifies the objectives of risk identification and prevention, the use of the vigilance plan and lists the vigilance measures that must be included in this plan. These measures are named, listed, but are not detailed: they must involve risk mapping, regular assessment procedures, appropriate actions to mitigate risks or prevent serious harm, an alert mechanism and collection of reports, and a measurement monitoring device (Fr. C. com. L. 225-102-4 I). The company targeted by the legal obligations to draw and effectively implement the vigilance plan is left free to choose the appropriate content of measures, the organisation of monitoring and the persons associated.

Thus, the law only suggests association with stakeholders in prevention. The company may or may not implement multi-stakeholder initiatives. The data collected on  the implementation of the law on the duty of vigilance show that the association of stakeholders is rare in practice. Corporate due diligence does not lead to an evolution of the governance practices and the democratisation of firms. It only suggests an adaptation, possibly temporary and often superficial, of business processes. Dialogue with stakeholders, if it takes place, is unlikely to really influence decision-making.

Finally, the French law does not provide for compliance with preventive measures to be subject to elaborate institutional control. Vigilance plans must be made public, but no supervision or administrative sanctions are foreseen. In practice, NGOs monitor companies’ compliance with their obligations. If necessary, they put a company on notice. A civil judge may order, if necessary under penalty, to comply with legal obligations. Several legal actions are in progress before the French courts but the task is immense.

Overall,the French duty of vigilance is still very ineffective in terms of risk prevention. Without control by the public authorities, many companies do not play the game. The European project is a unique opportunity to move towards more corporate sustainability and accountability on a larger scale.

Juliette Camy, PhD, is a doctor of law and temporary teaching and research assistant (ATER) at the University of Paris 2 Panthéon-Assas. She specialises in corporate sustainability due diligence issues.

Read more on this topic in the Business and Human Rights Journal including “The French Law on the Duty of Vigilance: Theoretical and Practical Challenges Since its Adoption” by Elsa Savourey and Stéphane Brabant.