New Legislation n°2578

A French bill rendering parent companies responsible for the acts of their subsidiaries and sub contractors will be debated and probably adopted on March 30, 2015.

If passed in its current draft without further modifications and amendments, , French Sociétés Anonymes (corporations) having more than 5,000 employees in France,and more than 10 000 employees including their French and foreign subsidiaries, will be obligated to must establish and implement a vigilance plan.

This vigilance plan shall include reasonable measures to identify and prevent risks of violations of human rights and fundamental freedoms, severe physical or environmental damage or health risks resulting from its activities, those of its subsidiaries, of its subcontractors, or those of its suppliers over which it has a significant influence. These measures will also involve corruption. The vigilance plan shall be available to the public.

Any interested person may require the company to establish and publish this vigilance plan. In case of breach of these obligations, the company can be held liable for all damages caused by the violation. In addition, it may be sentenced to a civil fine of up to € 10 million. Finally, the court can order the publication of the judgment.

If adopted, it would appear that it could apply to approximately 150 French companies. To read the current draft of the bill, click on this link.

Please feel free to contact Salli Anne Swartz, Partner of Artus Wise, if you would like more details.

The text of the bill as currently drafted reads as follows:

(Le texte de la proposition de loi n°2578).