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15 Jan 2020

French High Council for the Economy publishes first assessment of Duty of Vigilance Law

"Evaluation de la mise en œuvre de la loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre", January 2020

[Excerpts from English abstract retrieved here]

....The strengths of the Act can be seen in particular in the higher governance of the Duty of Vigilance, compared to other policies such as Corporate Social Responsibility, but also in efforts to use relevant benchmarks (such as those of the ILO, the OECD and the UN on Business and Human Right), adapting pre-existing tools or creating new ones for its implementation.

The weaknesses of the Act lie in the still unclear and unevenly shared understanding of the Duty of Vigilance, its insufficient readability and visibility in the already heavy Management Report, the relevant level of details, an alert mechanism that is still being sought, and a dialogue to be strengthened with trade union organisations and even more with NGOs.

The paths of progress in the application of the Act are the gradual uptake in companies’ vigilance, which is better in France than in the rest of the world, but is still insufficient. Strengthening sector-wide approaches and harmonising of practices would allow for greater efficiency and a shift from an obligation to a real opportunity for businesses. Considering the substantial number of obligations and commitments that companies must comply with, the increased effort required for the Duty of Vigilance is substantial, equivalent to several full time jobs and relatively large and frequent external service contracts that increase the cost of social and environmental progress expected by consumers and citizens. The expectations of the actors, such as NGOs and civil society, trade union organisations and surrounding communities, businesses and their sector-led federations, are already partially met. The spirit of the Act must be preserved so that it continues to apply more and more concretely to the substance, in a pragmatic way, and does not return to a pure formalism that would cause all its interest to be lost...

...In conclusion, the Law on the Duty of Vigilance is useful in that it reinforces principles derived from soft law, on which all can agree, by giving them “force of law” in France and, by “cascade effect”, in all the countries where French largest groups’ subsidiaries and subcontractors are established.

However, its application must be better ensured by expressly commissioning a State service to this support, in order to promote its implementation by concerned companies. As this scope is difficult to verify as it is, the criteria of companies’ social form and size could be specified occasionally. This service could carefully monitor the implementation of the Act, contribute to harmonising and converging businesses towards good practices, and promote sectoral and multi-stakeholder approaches. For the sake of fair competition, the extension of the Duty of Vigilance to a European level would be desirable.

The full report is available in French only here.