French Senate rejects proposed law on due diligence obligations for parent companies and their sourcing companies.

On 18 November 2015, the Senate voted to eliminate three draft articles making up the legislative proposal by the National Assembly at its first reading on 30 March 2015.

The proposed legislation establishes a legal obligation for large companies and French multinationals to effectively implement a "due diligence plan" comprising "reasonable due-diligence measures" designed to prevent activities that result in human rights violations, violations of fundamental liberties, bodily injury, severe environmental or health hazards, and active and passive corruption.

This due diligence obligation  only applies to French companies of at least 5,000 employees, either directly employed by the company itself or through their French subsidiaries, and to French companies of at least 10,000 employees whether directly employed through the company itself or through a French or foreign subsidiary.

For companies subject to this proposed law, the due diligence plan should identify and prevent risks arising not just out of their own business operations, but also those arising out of the operations of companies which these companies control, as well as sub-contractors and suppliers with which these companies have contractual relationships, both in France and abroad.

The report also notes Article L.225-102-1 of the French Commercial Code, which requires corporations of a certain size, as well as other concerned companies, to include in their business reports information relating to the ways a company has taken account of social and environmental consequences of it activities, including in respect of climate change, sustainable development, combatting discrimination and promoting diversity.  

Several international instruments, albeit non-binding, have already disseminated good practices on social responsibility, including the guiding principles of the OECD Guidelines for Multinational Enterprises (updated in May 2011) and the guiding principles of the United Nations on human rights and companies (adopted in June 2011).

Deputy Director of Freight for SNCF cannot be declared guilty for the offence of the unlawful taking of interest. 

In a decision handed down on 28 October 2015 by the Criminal Chamber of the French Court of Cassation (France's highest court for private law matters), the Court clarified the concept of a "person entrusted with a public service mission" within the meaning of Article 432-12 of the French Penal Code which sanctions the unlawful taking of interests.

The provision prohibits "the taking, receiving or keeping of any interest in a business or business operation, either directly or indirectly, by a person holding public authority or entrusted with a public service mission, or by a person holding a public electoral mandate who at the time in question has the duty of ensuring, in whole or in part, its supervision, management, liquidation, or payment."

French doctrine and jurisprudence retain a broad concept of "a person entrusted with a public service mission", having held that this notion covers all persons in the public and private sectors, who are entrusted directly or indirectly, permanently or temporarily, with a mission of general public interest, even if they do not have decision-making powers.

It is for the courts to decide, on a case-by-case basis, which persons are entrusted with a public service mission. French jurisprudence illustrates a broad range of persons who are included in this category: officials of the Red Cross, the French Public Housing Board (OPAC), the social housing board (HLM), the National Centre for Scientific Research (CNRS), the French land agency (SAFER), the Chamber of Commerce and Industry, the Chamber of Skilled Trades, sports federations, hospitals, and universities

This recent case demonstrates a limit to those persons entrusted with a public service mission. The Court upheld the decision of the Paris Court of Appeal, and held that the Deputy Director of Freight for SNCF (France's railway company) was not entrusted with a public service mission.  SNCF was only providing a service in competition with private actors providing freight services. Accordingly, such freight services were not considered a "public service" within the meaning of Article 432-12 of the French Penal Code.

Law enacted relating to surveillance measures of international electronic communications.

Law n°2015-1556 of 30 November 2015 published in the Official Journal on 1 December 2015, authorises, under certain conditions and in the defence and promotion of certain fundamental national interests, the monitoring of communications that are sent or received abroad.

The objective is to collect intelligence on persons located abroad as well as those using means of communications in which their phone numbers or other identifiable data are not linked to the French territory.

The Constitutional Council, in its decision on 23 July 2015, held that the provisions of Article 6 of the Law of 24 July 2015 on intelligence devoted to international surveillance measures were contrary to the French Constitution. The Constitutional Council held that by failing to provide a legal definition of the conditions of usage, conservation, and destruction of the intelligence gathered in application of Article L.854-1 of Code of Internal Security and by failing to define the National Commission on the Control of Intelligence Techniques' (CNCTR), the standard of review pertaining to the legality of authorisations to gather intelligence and their implementing provisions, the legislator did not properly determine the rules concerning the fundamental guarantees accorded to citizens in the exercise of their civil liberties.

In response to these constitutional requirements, the new law defines the conditions of usage, conservation, and destruction of intelligence collected, as well as the standard of review to be used by the CNCTR, and the legality of issued authorizations, as well as their implementing provisions.

The new law was published after the Constitutional Council, in its decision on 26 November 2015, confirmed that the newly modified law does not disproportionately or manifestly violate the right to privacy, privacy of correspondence, and the right to effective judicial recourse.