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24 Mar 2017

European Coalition for Corporate Justice

France: Constitutional Council reaches favourable decision on corporate duty of vigilance law

"Last hurdle overcome for landmark legislation: French Corporate duty of vigilance law gets green light from Constitutional Council", 24 March 2017

The French Constitutional Council published a decision yesterday following objections brought to the corporate duty of vigilance law on grounds of unconstitutionality.  The Council maintained the law’s text, validating the creation of new duty of vigilance obligations for companies with regard to the protection of human rights and the environment.

Although the Council removed the €10 to €30 million civil penalty attached, liability continues to apply when companies default on their duty of vigilance obligations, including failing to publish a vigilance plan or faults in its implementation.

We welcome the Council’s decision to retain the majority of the law’s text, and the mention of its “compelling public interest benefits”.  We also appreciate the Council’s opinion that the duty of care requirements created do not infringe on companies’ freedom to trade and do business.  Although the civil penalties would have created a stronger incentive for companies to comply with this law, their removal does not undermine the architecture and general mechanism of the law.

Interested parties - including victims, NGOs and trade unions - are still able to ask judicial authorities to order a company to establish, publish and implement a vigilance plan in order to prevent human rights violations and environmental damage caused by their activities, and those of their subsidiaries, subcontractors and suppliers, in France and abroad.  Interested parties can also engage the company’s liability through civil action and ask for compensation when a company’s violation of its legal obligations has resulted in damages.

The French law is a historical step forward in regulating the activities of transnational corporations.  ECCJ joins French civil society organisations in calling for similar legislation to be adopted by all European countries, and at EU and international level, in order to achieve effective human rights and environmental protection and provide access to justice and remedy for victims of corporate abuse.