VIGILANCE PLANS REFERENCE GUIDANCE: legal analysis on the duty of vigilance pioneering law
VIGILANCE PLANS REFERENCE GUIDANCE: legal analysis on the pioneering duty of vigilance law
Two years after the adoption in France of the law on the duty of vigilance for parent and instructing companies, Sherpa releases its Vigilance Plans Reference Guidance, now available in English. Specially intended for stakeholders and companies liable under the duty of vigilance obligation, it provides a legal analysis of the content and the scope of the law and suggests some legislative improvements.
With this Guidance, Sherpa aims to explain its understanding of the law n ° 2017-399 of March 27th, 2017 on the duty of vigilance for parent and instructing companies.
Sherpa is seeking to provide various stakeholders meaningful tools, and especially a support in the dialogue for implementing the new legal obligations. The Guidance could also be used for training and awareness-raising on the necessary legislative improvements. It also provides inputs for the development of new European or international norms on vigilance.
Furthermore, it should help companies to improve their vigilance plans for 2019. After having reviewed more than 80 vigilance plans in 2018, we have noticed they were particularly terse, and did not reflect the importance of the issues raised by the law. Besides the establishment and the effective implementation of vigilance measures, the law also provides an obligation of transparency and information.
The respect of human rights and environmental compliance in companies’ activities is no longer only the prerogative of the non-binding soft law rules anymore: the law brings up a brand-new perspective that companies must comply with.
Sherpa encourages these companies to publish exhaustive and sincere vigilance plans.
Finally, companies struggling with the establishment of their vigilance plan, due to too complex supply chain and lack of clearly defined perimeter, should seek a reorganization of their activities in order to comply with their obligations.
Few words about the Law on the Duty of Vigilance
After a legislative saga, the French National Assembly finally adopted the law on the duty of vigilance in February 2017. It was partially censored by the French Constitutional Court the following month because of the civil fine, which lacked compliance with the requirements of criminal legality. The other provisions were declared in accordance with the Constitution.
For the concerned companies, the duty of vigilance consists in establishing, effectively implementing and publishing “reasonable vigilance measures useful to identify risks and prevent serious violations of human rights and fundamental freedoms, health and safety of persons and the environment”.
These measures must involve subsidiaries, subcontractors and suppliers with whom an established business relationship is maintained. They must be formalized in a vigilance plan, i.e. a material support for vigilance, made public and included in the annual management report of a company, as well as in a report on its effective implementation. Vigilance measures include, but are not limited to: risk mapping, value chain assessment processes, mitigation and preventive actions, alert mechanisms and monitoring systems on the effective and efficient implementation of measures.
On the basis of our analysis of the law, due diligence standard, and the first vigilance plans published in 2018, this Guidance highlights elements that need to be improved for the second year of the law on the duty of vigilance application, year in which judicial mechanisms enter into force.