With the debate on the future French Pacte Law (a law concerning the growth and transformation of businesses) and what has followed from the Notat /Senard report, the hearing on March 26, 2018 at the Commercial Court should be closely observed.
The Bolloré group attacked journalists and NGOs who denounced the exploitation of land managed by one of its subsidiaries in Africa. The group demanded that the national news channel, France 2, pay 50 million euros for damages to its "brand". This is called a SLAPP order, or Strategic Lawsuit Against Public Participation.
This is considered in the realm of journalistic activities as prescribed in law concerning the press. But the head of the group has chosen to attack them for damages to the company’s reputation before a court that has no limits to the sanctions it can impose. This opens a legal loophole and poses a threat to the possible revelations to come from lack of due diligence, introduced with the February 2017 law.
The law requires companies to put in place a plan to "prevent serious violations of all human rights and fundamental freedoms, including the health and safety of people, and the environment". However, it was these kinds of abuses that were denounced in the incriminating report. The Commercial Court in Paris dismissed all the Bolloré group’s claims three days later. It remains to be seen if this will create a precedent.
Journalists and NGOs fear this type of phenomenon as the bill on business confidentiality was submitted to the French National Assembly on 27 March. This fast-tracked transposition of a European directive, rare in France, allows for another legal breach. The version adopted in first reading proposes safeguards. But business confidentiality remains unclear. It refers to "information that is not known or readily available". This definition could be attributed to most ESG data (environmental, social and governance criteria).
For the moment, a provision would protect whistle-blowers and limit SLAPP orders since fines are specified for unjustified procedures and "disclosures made in good faith for wrongdoing or illegal activity" which are authorised to not respect these confidentiality rights. "Good faith", a concept open to many interpretations, side by side with the notion of "confidentiality," is an ambiguous concept.
Which version of the bill will the Senate adopt? What will the final version consist of? So many questions that lead to many others. In what direction does the legal web intertwine within business activity?
Opposing legal arsenals
At the risk of being too simplistic, we find on the one hand, regulations which move companies towards more transparency and control of their supply chains on an environmental and social level: the Grenelle 2 law, article 173 of the TEE law (French Energy Transition Law), the law of Due Diligence and probably the Pacte law (law for the growth and transformation of enterprises).
On the other, there is the law on business confidentiality and requests made to commercial courts for damages to the reputation of a company. All mechanisms that provide legal loopholes to companies that refuse to hear calls for greater transparency.
These calls come from laws, but also from guidelines such as the TCFD (Task Force on Climate Disclosure), the European Commission's Action Plan on Sustainable Finance and the Notat / Senard report. But they will have no effect on the most reluctant of companies. How do we get them to act if they have a potential legal arsenal put in place to justify their inactions?
During his speech to the European Commission on 22 March, Emmanuel Macron emphasised two aspects: the coherence of the regulatory framework and the generalisation of reporting and transparency capacities for companies and investors. But there is still a long road ahead!
Anne-Catherine Husson-Traore, @AC_HT, CEO of Novethic
© 2018 Novethic – All rights reserved