Implementing Action

Back Corporate Duty of Vigilance

The French due diligence law for parent companies came into effect on 27 March 2017, requiring certain large companies to establish and effectively implement a due diligence plan.
France 2017
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It applies to companies who:

  • at the end of two consecutive financial years employ at least 5 000 employees within the company head office and its direct and indirect subsidiaries, whose head office is located in France; or
  • employ at least 10 000 employees within the company and its direct and indirect subsidiaries, whose head office is located on French territory or abroad.

The required plan includes "reasonable due diligence” measures to identify risks and prevent serious violations of human rights and fundamental freedoms, human health and safety, and the environment.

Such risks to be identified are those that result from the activities of the company and the companies that it controls directly or indirectly within the meaning of Article L. 233-16 II of the French Commercial Code, as well as the activities of subcontractors and suppliers with whom it maintains an established commercial relationship.

The vigilance plan must include:

  • a risk mapping that identifies, analyses and prioritises; 
  • regular evaluation procedures for the situation of subsidiaries, subcontractors or suppliers with whom an established commercial relationship has been maintained, with regard to the previous risk mapping;
  • appropriate actions to mitigate risks or prevent serious harm;
  • a mechanism for alerting and collecting reports relating to the existing or potential risks, drawn up in consultation with the representative trade union organisations in the said company;
  • a system for monitoring the measures implemented and evaluating their effectiveness.

The vigilance plan and the report of its effective implementation are made public and are included in the management report of the company.

Failure to comply with these obligations is punishable by Articles L. 225-102-4 II and L. 225-102-5 of the French Commercial Code, which include provisions enabling an interested party, such as human rights or environmental organisations, to put the company on notice to meet its duty of care obligations.