"Corporate accountability under the French Duty of vigilance law, just an illusion?", 10 July 2023

On June 1, 2023, a Paris civil court dismissed NGOs’ claim brought on the ground of the Duty of vigilance law against Suez regarding its activities in Chile. Once again, the judge considered that claimants did not give proper formal notice. The rationale used and its outcome raises the question of effective corporate accountability five years after the adoption of the law and at the time of EU negotiations on a Directive on human rights and environmental due diligence...

The dismissal of the claim against Suez occurred few months after the dismissal of a complaint against TotalEnergies, where the judge also ruled on the issue of sending appropriate formal notice...

In both cases, judges referred to the legislator’s intention to establish consultation between the company responsible for drawing up the vigilance plan and stakeholders who may be affected by its activities to consider that the aim of the formal notice mechanism is to allow dialogue between parties and that the absence of dialogue prevents legal action.

While judges rightly noted that the vigilance plan should be drawn up in association with stakeholders, their overall interpretation of the law is flawed...

While companies should collaborate with stakeholders to determine and implement due diligence measures, it cannot be said that the formal notice mechanism is a mean to allow dialogue between companies and their stakeholders nor that it introduces a compulsory phase of dialogue and discussion between parties prior to an injunction...

It does not appear from legislative debates that the legislator intended to give a new objective to the formal notice than the traditional one, i.e., put pressure on companies...

What was undeniably the intention of the legislator was to improve corporate accountability and remediation for victims (see the explanatory statement of the first draft of the law). By requiring a formal notice per vigilance plan on the pretext of guaranteeing dialogue between parties, judges are undermining the impact of the law. In fact, considering the average time it takes courts to reach a decision, it is without a doubt that courts won’t be able to rule on claims before a new vigilance plan is published...

One could argue that French judges are in a way reversing the burden of ensuring dialogue.

As pointed out by a 2022 legislative report assessing the law, too often companies do not engage with their stakeholders when drawing up their vigilance plan (and when they do interact with stakeholders, it is only to inform them rather than to collaborate), but according to judges claimants should send a formal notice per plan to ensure dialogue...