© Springer-Verlag Berlin Heidelberg 2015Pierre Kobel, Pranvera Këllezi and Bruce Kilpatrick (eds.)Antitrust in the Groceries Sector & Liability Issues in Relation to Corporate Social ResponsibilityLIDC Contributions on Antitrust Law, Intellectual Property and Unfair Competition10.1007/978-3-662-45753-5_25
Independent Practitioner, Paris, France
Université de la Rochelle, la Rochelle, France
25.1 CSR French Policies
Since 2001 and the enactment of the NRE Statute (Loi NRE1), research on CSR policies has been conducted about governance issues in the social and environmental fields. It led to the introduction in the French Statute of these two new concerns, first in the field of public procurements and then, more broadly, with the enactment of the Grenelle I2 and Grenelle II3 laws.
25.1.1 In the Field of Public Procurement
In 2006, Council Directive (EC) 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts4 and Council Directive (EC) 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors5 were implemented, leading to a remake of the French Public Procurement Code (all state agencies and regional/local authorities can now include CSR clauses in a public call for tender and enforce the dispositions of the Charte de l’environnement Legislation of 2005).
Article 5 of the French Public Procurement Code (Code des marchés publics) provides:
The nature and extent of the needs to be met shall be precisely ascertained before launching any competitive public tender or negotiation not preceded by a competitive public tender. Objectives of sustainable development must be taken into consideration. The only purpose of Public Procurement(s) or framework agreement(s) concluded by the contracting authority is to meet these needs.6
Article 14 of the French Public Procurement Code provides:
Public Procurement(s) or framework agreements performance clauses can contain elements of social or environmental nature which take into consideration the objectives of sustainable development by balancing business with environmental protection and promotion, and social progress. 7
Article 53 of the French Public Procurement Code provides:
A Public Procurement shall be awarded to the applicant who proposes the most advantageous economically offer. The contracting authority shall base its decision on the items listed hereinafter:
Either in respect of a plurality of non-discriminatory criteria related to the subject matter of the Public Procurement, including the quality, the price, the technical merit, the aesthetic and functional characters, the performance in the fields of environment protection and employability, the life-cycle costs, the profitability, the innovative character, the after-sales service and technical assistance and the delivery date and time. Other criteria can be taken into consideration if they are justified by the subject matter of the Public Procurement;
Or, given the subject matter of the Public Procurement, on the sole criterion of price.
In 2007, the French Government adopted a national plan for sustainable Public Procurement.8
On 9 April 2008, the French Government decided that the use of social clauses should be equal to 10 % of the State’s markets. Social clauses are seen as a tool to fight against exclusion and unemployment. They integrate with the social aspects of sustainable development and are leverage for the promotion of employment.
On 3 December 2008, a ministerial circular clarified the concept of exemplarité de l’Etat (exemplarity of the State), which is based on a concrete application of the principles of environmental and social responsibility.
Between 2009 and 2011, the integration of social clauses in public call for tender has increased by more than 200 %, from less than 2,000 to more than 4,000.
Since 2009, reduction of energy consumption must be taken into consideration in Public Procurement. Article 5 of Law no 2009-967 of 3 August 2009 provides:
In order to take into account the reduction of energy consumption, when it offers to enter into a public procurement, the contracting authority shall resort to an energy performance contract, in the form of a global market bringing together the design, operation or maintenance and provided that the improvements of energy efficiency are contractually guaranteed.
On 11 March 2010, a Circular of the Prime Minister on the incentive financial facilities reaffirmed the priority of the exemplary administrations plans supplemented in 2012.9
25.1.2 In the NER Field
Since 2001, the French companies listed on a regulated market (NYSE Euronext) shall publish their data management annual report in order to evaluate “how they take into consideration the social and environmental impacts of business.” The New Economic Regulations Statute of 15 May 200110 defines the requirement to be met for the publication of social and environmental data in annual management reports.
Then the Decree of 20 February 2002 set a list of information to be provided: the internal social data collection (workforce, schedule, vocational training, hygiene, security, parity, disability, etc.), the territorial impact (subsidiaries, subcontractors, territory link) and the environmental effects of the business activity (emissions into the air, the water and the ground, etc.).
The Decree of 30 April 2002 defined the information on serious polluting discharges (emission of greenhouse, emission into the air, the water or the ground of certain substances…).
The implementation of paragraph b of section 1–14 of the Council Directive (EC) 2003/51/EC,11 on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings, by Order No. 2004-1382 of 22 December 2004, supplemented the existing scheme.
Henceforth, to the extent necessary for the understanding of the business evolution, the financial performance or the overall condition of the company (or the companies included in the consolidation), the analysis of the annual report includes (…), if any, a key indicator of non-financial nature performance relating to the “specific activity of the company (or the companies included in the consolidation), including information relating to environmental and staffing matters.”12
25.1.3 In the Grenelle I and II Fields
An action plan on governance issues was established by the “Grenelle I” Act in order to
enhance social and environmental information provided by companies to their stakeholders (shareholders, salaries, NGOs, residents, etc.);
involve employee representative bodies in business and sustainable development issues;
develop sectorial development benchmarks;
support the development of “labels,” in order to give recognition to companies with good social and environmental practices;
promote socially responsible investments;
support the creation of Community social and environmental standards.
The “Grenelle II” Act introduced in the French legislation both Article 224 on socially responsible investment and Article 225 on corporate social responsibility.
These two articles have respectively been supplemented first by the Decree of 30 January 2012 relating to the information provided by Asset Management Companies in connection with social, environmental and governance quality criteria taken into account in their investment policy13 and then the Decree of 24 April 2012 relating to the obligations of transparency of companies in terms of social and environmental issues.14
Corporate social responsibility is also present in the national strategy for sustainable development15 adopted on 27 July 2010 by the Interministerial Committee for Sustainable Development for 2010–2013.16 To ensure effective social responsibility, the tools and levers are the following:
the companies’ promotion of their environmental and social achievements (socially responsible investment, accession to the European Eco-Management and Audit Scheme (EMAS), nonfinancial reporting based on environmental societal and governance criteria, etc.);
the companies’ involvement of representative bodies in the elaboration of the sustainable development strategies and the environmental and social Reports;
the involvement of services providers (accountants, auditors, accounts, social auditing firm, etc.);
the adaptation of sustainable development tools to SMEs (development of standards/simple labels adapted to eco-responsible SMEs);
the development of ecolabels (NF Environment and European ecolabel).
The Government’s Ecological Transition Roadmap of September 2012 made a number of significant announcements regarding corporate social responsibility and socially responsible investment, including the creation of a platform for CSR policies or of a socially responsible investment label.
With the Preparatory Document at the french national level for the development of the corporate social responsibility (CSR) of January 2013,17 the French Government answered to the Communication from the EU Commission of 25 October 2011 on a renewed EU strategy 2011–2014 for Corporate Social Responsibility. This white paper presents a current state of government commitments and actors of the French nation as they could be identified in late 2012. They are divided into the following chapters:
A consistent and pro-active CSR Policy in respect of International and European Agreements;
Creation, for big business, of mandatory reportings based on social, environmental and economic criteria, in order to harmonize the European standards;
Promotion of standardization and voluntary libeling programs;
Concertation, social dialogue, vocational training and research promotion;
The State, the central responsible economic player for CSR Policy;
French promotion and support of socio-economic development at the European and international levels.
25.2 General and Specific Laws Dealing with Violation of Voluntary Commitments
25.2.1 Absence of Specific Penalties
Article L. 225-102 para. 7 of the French Commercial Code provides that “social and environmental information included or to be included with regards to legal and regulatory duties are investigated by an independent body. This verification leads to a notice forwarded to the shareholders or associates’ meeting at the same time as the Board of Directors or the Management’s report.” But companies’ liability is, in fact, very limited.
Foremost, the Act provides no specific penalty for violation of commitments. Under these circumstances, only the shareholders to whom the audit report is transmitted can take a decision. In this case, they can probably sue the offending officer. Indeed, Articles L. 223-22 and L. 225-251 of the French Commercial Code penalize mismanagement. However, as it is underlined by the doctrine, “infringements of ethical standards are likely to incur directors’ civil liability since mismanagement is defined with regards to social interest and, under the influence of the so-called ‘corporate governance’, voluntary codes of conduct must be respected.”
Besides, it appears that internal controls are, in fact, nonexistent and shareholders or the directors cannot effectively play their oversight role.
25.2.2 Enforcement of General Rules
According to principles of natural law,18 a policy voluntarily adopted by a business can acquire binding force. On the face of it, a natural obligation is only a moral duty, not legally binding, and its breach cannot therefore be repaired through damages or specific performance. However, it can turn into a legal duty when one unilaterally commits to perform. Thus, for the French “Cour de cassation,” “a unilateral commitment to execute a natural obligation, when taken in full knowledge, is transformed into a legal duty.” Under such conditions, “CSR policies voluntarily adopted by Directors on behalf of their company, create a legal duty supported by the company.”
Moreover, CSR policies voluntarily adopted could be qualified as unilateral commitments, even if French law barely resorts to this notion.
Finally, the “defects of consent” theory can be applied when a party enters into a contract on account of ethical commitments. Nullity of a contract for deception can be obtained if the disputed agreement, which was taken in consideration of environmental CSR commitments, actually remained unfulfilled. According to Article 1116 of the French Civil Code, such decisive considerations are not presumed and must be proven.
Outside contractual relationships, principles of tort law can apply (Articles 1382 and 1383 of the French Civil Code). Thus, an operator who falsely claims to meet, in an advertisement, a voluntarily adopted CSR policy, could be sued for unfair competition. But the French “Cour de cassation” held that infringements to a code of conduct (which is not legally binding) do not automatically equal a civil wrong. The same position should be adopted for CSR policies’ infringements.