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12 Apr 2017

Charles Dauthier & Sabine Smith-Vidal, Morgan Lewis on JD Supra

Commentary: New French vigilance law complements existing laws for subcontractors

"French Companies Must Show Duty of Care for Human and Environmental Rights", 4 Apr 2017

After the Constitutional Court rendered its recent decision on the law regarding the duty of care of parent companies and ordering companies, the rule has finally entered into force—but is it much ado about nothing?...According to the law, all companies headquartered in France and employing more than 5,000 employees in France, or headquartered in France or abroad and employing more than 10,000 employees worldwide, must set up vigilance plans...[A]fter the decision of the Constitutional Court, a company cannot be fined if it does not establish a vigilance plan or does not comply with its vigilance plan.  Nevertheless, the breach of the duty of care may still entail liability for the company...Since the provisions of Law No. 2017-399 of March 27, 2017 are of immediate application, companies meeting the criteria established by the law should begin drafting vigilance plans in order to demonstrate the care they put into compliance with fundamental human and environmental rights...