Apparel Sourcing Intelligence - Worldwide

French constitutional court bans mandatory “duty of vigilance” penalties

France’s Constitutional Council declared on March 23 that penalties of up to €30 million agreed by its Parliament for major corporations’ human rights violations were unconstitutional.

In February, the French Parliament passed a Bill (known locally as the “Droit de Vigilance” – duty of vigilance – Bill) requiring the French companies with French head offices and over 5,000 employees to create plans preventing ethical, social or environmental shortcomings of their subcontractors, whether they are established in France or abroad.

Infringements would be the subject of a formal notice, followed by a possible judicial injunction to comply, potentially followed by fines of up to €30 million per offence.

The Constitutional Council’s declaration has removed the last stage (the fine), on the grounds that the law was too vague about what constitutes causes for being fined. The rest of the law was upheld.

The French government’s reaction to the finding appeared to carry no indication of possible changes to the Bill to allow fines, and it appears an amended version will now be presented to the French Parliament for approval.