France Duty of Vigilance Law
Governmental Agency: French Government
Jurisdiction: France
Ref no: No. 2017-399
Status: ADOPTED
In 2017, France introduced its "Duty of Vigilance" Law, placing a due diligence duty on large corporations operating in France. The law is designed to ensure corporate social responsibility. Companies in scope are required to establish, publish and implement a "vigilance" plan on an annual basis, including:
- Measures to identify, prevent and mitigate risks to human rights and the environment
- Systems to assess the situations of supply chains, subsidiaries or subcontractors in relation to risk mapping
- Methods to collect data on actual and potential risks, as well as implement actions to mitigate these risks and prevent violations
- Systems to assess the efficiency of implemented measures
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The due diligence law puts in place significant requirements for large corporations operating in France. These requirements apply to French businesses who employ at least 5,000 employees, within the head office and within subsidiaries, at the end of two consecutive years. This can also include companies with a head office on French territory or abroad, who employ a minimum of 10,000 employees (including subsidiaries).
For those obligated businesses, the implementation and operation of all necessary systems to monitor, address & report on corporate responsibility are likely to result in increased costs. Those that do not comply with the legislative requirements can be fined up to 10 million euros. Equally, for those who, through these measures, are found to have issues with regard to their corporate social responsibility, there may be additional reputational issues.
