Introduction

Scope of application

Compliance program

Protection of whistleblowers

Audit and sanctions

Rules arising from the Sapin II Law

EU law

French law

Rules derived from competition law

Sapin II Law/Competition

Scope ratione personae

Scope ratione materiae

Scope

Development of plan

Measures included in plan

Inclusion in management report

Vigilance plan

Injunctions

Civil liability

Sanctions

Duty of vigilance (devoir de vigilance)

CSR programs

Reporting

Communication

Reporting and communication

Judicial sanctions

Risk to reputation, strategy and stability

Corporate Social Responsability (CSR)

Middlenext Code

IFA Corpus

AFEP - MEDEF Code

Types

Principles of governance

Principles incorporating CSR values

Principles

Comply or explain

Binding force

Private codes of conduct

Compliance

Article L. 225-102-4 of the Commercial Code stipulates that appropriate action must be taken to mitigate risks or prevent serious harm. These must be graduated and proportionate to the nature of the risk identified and to the evolution of its severity.
Once again risk mapping is the starting point. It is in effect on this basis that the undertaking must define and implement appropriate corrective  …

Implementation of actions

Article L. 225-102-4 of the Commercial Code stipulates that appropriate action must be taken to mitigate risks or prevent serious harm. These must be graduated and proportionate to the nature of the risk identified and to the evolution of its severity.

Once again risk mapping is the starting point. It is in effect on this basis that the undertaking must define and implement appropriate corrective actions, which can range from simple training to the implementation of dispute resolution mechanisms. Under penalty of an injunction to modify, actions to mitigate risks and prevent serious harm must not simply be a reminder of the group's policies or of the commitments it has made, without the resulting concrete actions being known. In effect, such general or ill-defined measures can lead neither to concrete and effective implementation, nor to a system for monitoring and evaluating their effectiveness .

In Principle19 , the United Nations provides recommendations designed to ensure the effectiveness of mitigation or prevention measures: firstly, that responsibility for remedying damage is assigned to the appropriate level and function within the undertaking, and secondly, that internal decision-making, budget allocation and oversight processes enable effective action to be taken against such impacts. The measures that need to be taken depend on whether the undertaking is at the origin of or contributes to the adverse impact, or whether it is involved only because the impact is directly linked to its operations, products or services through a business relationship, or whether it has more or less room for maneuver to combat the negative impact.

The c3sd  lays down a similar obligation as part of the implementation of the due diligence plan instituted by it. In effect, it requires Member States to ensure that undertakings take appropriate measures to prevent or, where prevention is not possible or not immediately possible, to adequately mitigate potential negative impacts on human rights and the environment that have been or should have been identified. Undertakings are required to take the following measures, as appropriate:

- if necessary, due to the nature or complexity of the required preventive measures, they should draw up and implement, in consultation with the relevant stakeholders, a preventive action plan, with reasonable and clearly defined timeframes for action and qualitative and quantitative indicators for measuring improvements;

- seek to obtain contractual guarantees from business partners with whom they have a direct commercial relationship, obliging them to comply with the company's code of conduct and, where necessary, a prevention action plan, but also from its partners, insofar as their activities form part of the company's value chain;

- make the necessary investments, particularly in management and operational processes and infrastructures;

- provide targeted and proportionate support to an SME with which the company has a well-established business relationship, where compliance with the code of conduct or prevention action plan would jeopardize the SME's viability;

- in compliance with  Union law, including competition law, collaborate with other entities,  including, where relevant, in order to increase the company’s ability to  prevent or mitigate the adverse impact, in particular where no other  measure is suitable or effective.

With regard to potential adverse impacts that cannot be avoided or adequately mitigated by these measures, the directive specifies that the undertaking may seek to enter into a contract with a partner with whom it has an indirect relationship, with a view to guaranteeing compliance with the company's code of conduct or prevention action plan. Contractual guarantees or contracts must be accompanied by appropriate measures to verify compliance. For the purposes of such verification, the company may refer to appropriate industry initiatives or to verification by an independent third party. Where contractual guarantees are obtained from, or contracts concluded with, SMEs, the terms used must be fair, reasonable and non-discriminatory. Where measures to verify compliance are implemented in relation to SMEs, the company must bear the costs of independent third-party verification.

In addition, the company is required to refrain from entering into new relationships or extending existing relationships with the partner in relation to whom the impact has occurred, or in whose value chain the impact has occurred, and, where the law applicable to their relationship so permits, is required to take the following measures:

- temporarily suspend commercial relations with the partner in question, while continuing prevention and reduction efforts as a minimum, if these efforts can reasonably be expected to succeed in the short term;

- terminate the business relationship with regard to the activities concerned if the potential adverse impact is serious.

By way of exception, where the companies concerned provide credit, loans or other financial services, they are not obliged to terminate the credit agreement, loan agreement or other financial services contract where such action could reasonably be expected to cause significant harm to the entity to which the service is provided.

The European directive goes further than the French-style duty of vigilance, by also advocating the elimination of actual adverse effects. In fact, when it is not possible to put an end to the adverse impact, the undertaking is responsible for minimizing the extent of this impact, by taking the following measures:

- neutralizing the adverse impact or minimizing its impact to a minimum, including paying damages to the persons concerned and providing financial compensation to the communities affected, proportionate to the importance and magnitude of the adverse impact and to its share of responsibility for the adverse impact;

- if necessary, when it is not possible to put an immediate end to the adverse impact, develop, where appropriate, in consultation with stakeholders, and implement a corrective action plan, with reasonable and clearly defined timetables for action and qualitative and quantitative indicators for measuring improvements;

- seek to obtain contractual guarantees from direct partners with whom it has a well-established business relationship, obliging them to comply with the code of conduct and, where necessary, a corrective action plan, including endeavoring to obtain the same guarantees from its partners, insofar as they form part of the value chain );

- implement the necessary investments, for example in management or production processes and infrastructures;

- provide targeted and proportionate support to an SME with which it has a well-established business relationship, where compliance with the code of conduct or corrective action plan would jeopardize its viability;

- in compliance with EU law, including competition law, collaborate with other entities, including, where appropriate, to strengthen its ability to put an end to the negative impact, in particular where no other action is appropriate or effective.

TJ Paris, 5 December 2023, LawLex202300014265JBJ.

United Nations, Guiding principles on business and human rights, implementing the United Nations “Protect, Respect and Remedy” Framework, Principle 19 24-26 	 	 	 

Directive No 2024/1760 of 13 June 2024 on corporate  sustainability due diligence and amending Directive No 2019/1937 and  Regulation No 2023/2859.

Compliance

113. Implementation of actions

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113. Implementation of actions

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Les notions juridiques connexes

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