Pierrick Le Goff, associate lawyer at Cabinet De Gaulle Fleurance & Associés, is the eco guest of franceinfo on Thursday to detail the future European directive CS3D (Corporate Sustainability Due Diligence Directive).
Since a law adopted in 2017 in France, after the Rana Plaza tragedy, theMultinationals that generate billions of euros must be responsible for their actions and respect a duty of vigilance. Large French companies are responsible for the activities of their subcontractors or their subsidiaries. Three aspects are highlighted: the protection of human rights, the environment and the fight against corruption. A European directive, which is due to come into force in 2024, plans to harmonize and strengthen regulations. The De Gaulle Fleurance firm and the HEC Paris business school have just organized the 4th edition of the Observatory of Societal Transitions. They are particularly interested in strengthening the duty of vigilance. Pierrick Le Goff, associate lawyer at Cabinet De Gaulle Fleurance & Associés, is the eco guest of franceinfo, Thursday November 9.
franceinfo: Remind us in a few words, what the duty of vigilance and the CS3D directive (Corporate Sustainability Due Diligence Directive) are?
Pierrick Le Goff: We are talking about a law which imposes prevention obligations on French multinationals: prevention of risks of harm to the environment, prevention of risks of violation of human rights and prevention of risks of harm to personal safety. This means that in your chain of subcontractors, and in particular the subcontractors with whom you have established commercial relationships, it is a question of ensuring that these subcontractors are not going to have people work in buildings unsanitary conditions that could be at risk of collapsing.
How does this translate, concretely, in court?
These are actions which are formal notices to the company, therefore perhaps a “warning” to act on its vigilance plan. And then, in cases where NGOs – it is mainly NGOs which attack multinationals – are not satisfied with the rectification efforts requested, it turns into an outright legal action.
This law has existed since 2017, are we seeing more and more legal actions or on the contrary, is it tending to decrease?
Initially, we were in an increasing phase of actions, that is to say that more and more companies were being attacked on the basis of this law. So it’s true that the main bases that were put forward were either environmental attacks or human rights attacks. That being said, the year 2023 is a strong year in terms of education since we see that the decisions that came down this year were all decisions to reject the actions of NGOs. And at the same time, we see that in terms of new cases, we are seeing a sharp drop in new requests, with approximately three cases this year being recorded compared to much larger amounts of cases in past years.
Finally, if it never comes to fruition, can we understand why the associations become discouraged?
Yes, it’s true that successive rejections do not necessarily encourage new actions. In any case, not on the basis of the duty of vigilance. Now, there may be other explanations since the community directive on the duty of vigilance is approaching. So it could also be a wait-and-see position for NGOs. While waiting to see the new framework that will be installed at the community level.
A European directive will come into force next year, the scope of this law will be much greater. It will no longer be just in France, but throughout Europe?
That is to say that the main objective of Community action is harmonization, since the Germans have adopted their own laws. There are laws in Scandinavia that have been adopted. So we are on national differentials. And it is true that the directive will be much more restrictive on companies, with much lower thresholds for application and above all financial sanctions. Financial sanctions could go up to 5% of the turnover of the companies concerned. So we are facing fairly significant sanctions. And then, a big difference with French law is that the directive provides for the establishment of corporate control bodies which do not currently exist, since ultimately the current control authorities are the NGOs which monitor companies and who launch actions.
Do you think that this will force companies to be more respectful of the environmental and social standards that they display on paper?
I think we are going to be in the phase of what we can call a phase of continuous improvement of these subjects and their consideration by companies. And above all, the fact of harmonizing at the European level, I think that this will allow everyone to be on the same page and on the same scale in terms of deployment of prevention measures.
Europe, a pioneer in this area, is this a good thing or is there a risk that companies will go elsewhere?
I think the risk of relocation is not necessarily very serious. It was already mentioned at the time of the duty of vigilance law. I don’t think we’ve had a hemorrhage of businesses abroad. Then, if we want to see a risk, it is perhaps the risk of cumbersome procedures, since financial and human resources are needed to put these obligations in place. Then, if we think in a more positive way, I think that this will allow European companies to be spearheads in their activity, that is to say to be truly perceived as green companies, certainly making it possible to attract more capital towards European companies.