Adopted following the Rana Plaza tragedy in Bangladesh in which more than 1,100 workers lost their lives, the law requiring multinationals to establish a vigilance plan was enacted on 28 March 2017.
However, the law that is finally applicable is largely devoid of its repressive component since the planned financial sanctions, of up to 10 million euros, were declared contrary to the Constitution by the Constitutional Council.
However, the system remains mandatory for the companies concerned, which will have to draw up a vigilance plan covering in particular the working conditions of workers in their subsidiaries or subcontractors abroad.
1- What are the companies concerned?
These new obligations apply to companies headquartered in France and employing at least 5,000 employees at the end of two consecutive financial years within them or in their subsidiaries, direct or indirect, as well as companies headquartered abroad and employing at least 10,000 employees.
As it stands, the number of companies concerned is therefore relatively limited but the system could be expanded in the future.
On the other hand, the vigilance plan has an extremely broad scope of application since it must concern, in addition to subsidiaries in which the parent company has a dominant influence (ownership of capital, appointment of administrative bodies, etc.), subcontractors and suppliers with whom the parent company maintains established commercial relationships.
All companies with which the company maintains regular commercial relationships must therefore be associated and covered by the vigilance plan.
2- What should the vigilance plan contain?
In particular, the plan must include reasonable vigilance measures to identify risks and prevent serious violations of human rights and fundamental freedoms, the health and safety of persons and the environment, resulting from the activities of the company and those of the companies it controls.
The law also states that” The plan is intended to be developed in association with the company's stakeholders, where appropriate as part of multi-stakeholder initiatives within sectors or at the territorial level. It includes the following measures:
1° A risk map intended for their identification, analysis and prioritization;
2° Procedures for the regular assessment of the situation of subsidiaries, subcontractors or suppliers with whom an established commercial relationship is maintained, with regard to risk mapping;
3° Appropriate actions to mitigate risks or prevent serious harm;
4° A mechanism for alerting and collecting reports relating to the existence or occurrence of risks, established in consultation with the representative trade union organizations in said company;
5° A system for monitoring the measures implemented and evaluating their effectiveness. ”
In other words, the legislator was inspired by the occupational safety obligations existing in French law (risk assessment document, preventive measures, right to alert, etc.) to extend this obligation to the international activities of companies falling within the scope of application of the law.
Although these plans are intended to be drawn up according to the territorial specificities of their area of application, representative trade union organizations must be involved in the implementation of this plan at least as part of a procedure for alerting and reporting risks.
On the other hand, the law does not require trade union organizations to be involved in the adoption of the vigilance plan, which can therefore be established unilaterally.
Finally, the vigilance plan must be made public, which should encourage many associations to comment on the compliance of companies with this new obligation.
3- What sanctions?
No fines or financial sanctions are provided for in the absence of a plan since the provisions of the initial draft providing for these sanctions were censored by the Constitutional Council (DC no. 2017-750 dated 23 March 2017).
On the other hand, the legislative system provides for the possibility for any person with an interest in it to engage the responsibility of the company who has not put in place a vigilance plan under the conditions of common liability law.
The mere absence of a plan is therefore not enough to engage the responsibility of companies that fail in this area.
Finally, the law provides for the possibility for any person with an interest in it, after notice to adopt such a plan that has remained unsuccessful for at least 3 months, to refer the matter to the President of the High Court so that he can order the company concerned to comply with its obligations under penalty.
Undoubtedly, this procedure should be used by associations defending workers or the environment in order to put pressure on companies that have not adopted a vigilance plan.
4- What is the impact on commercial relationships with subcontractors?
In practice, in addition to the adoption of a vigilance plan and regular monitoring of its compliance by subsidiaries and subcontractors, the companies concerned have every interest in modifying their commercial and subcontracting contracts in order to insert provisions referring to this new vigilance obligation.
This is all the more so as the implementation of prevention and control measures will necessarily require the cooperation of local actors.
For the most invested companies, the adoption of such a plan could also be a real tool for communicating and recognizing the efforts made to respect decent working conditions as much as possible, including for foreign workers who do not benefit from special protection in their country of origin.
To find out about the system definitively adopted: https://www.legifrance.gouv.fr/eli/loi/2017/3/27/ECFX1509096L/jo
Tristan Hubert
#plandevigilance #multinationales #donneurdordre #conseilconstitutionnel #sociétémère #association #soustraitants #alerte #risques
