What Is the French Corporate Duty of Vigilance Law?
The French Corporate Duty of Vigilance Law places the onus on large companies in France to identify and prevent risks to human rights and the environment that could occur as a result of their business activities. These activities can include those of the company itself, of their suppliers or subcontractors, of companies they control and more. The law, in brief, requires companies to create and implement publicly-available vigilance plans for which they can be held accountable. The law is designed to improve the corporate social responsibility programs of the companies in scope, as well as aid the victims of these crimes in achieving justice.
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What Companies Are in Scope?
Large companies established in France are in scope of the French Corporate Duty of Vigilance Law. This can include companies 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). However, the impact of the law extends far beyond companies directly in scope, as their supply chains will also have requirements to fulfill in order to ensure compliance. In this respect, companies all over the world can be affected by the law.
Compliance with the French Corporate Duty of Vigilance Law
Companies in scope of the law are required to establish, publish and implement a vigilance plan on an annual basis. This vigilance plan must include:
Appropriate measures to identify, prevent and mitigate risks to human rights and the environment
A means to assess the situations of supply chains, subsidiaries or subcontractors in relation to risk mapping
A collection method for actual and potential risks, and planned actions to mitigate risks and prevent violations
Monitoring to assess the efficiency of implemented measures
If companies fail to publish or implement a vigilance plan, any concerned parties can turn to relevant jurisdiction for action, in which case the company has a three-month period to meet their obligation. After this time period, companies could be subject to a fine of up to 10 million euros.
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