CORPORATE SOCIAL RESPONSIBILITY: A HYBRID CONCEPT RESTRAINING

LEGISLATION

By

Odélia Guez

A Thesis submitted to the Faculty of Graduates Studies of

The University of Manitoba

In partial fulfilment of the requirements of the degree of

MASTER OF LAWS

Faculty of Law

University of Manitoba

Winnipeg

Copyright © 2020 by Odélia GUEZ

ABSTRACT

This thesis focus on the Corporate Social Responsibility as a hybrid concept born from

discussion on corporations’ behaviors and the consequences of its activities on the world stage.

The purpose of this thesis is to study the origins of corporate social responsibility and how this

concept was introduced in the law. The first part of this study is to identify the substance of

CSR. After understanding the concept of CSR, the next objective will be to identify how this

content is implemented in the legislation. In order to do that, the approach will be international.

On the second part, this thesis starts to focus on how the concept of CSR is implemented in the

international standards and norms by international organizations. As this study was born from

my experience in Canadian and French law school, this thesis will focus for the third part on

how these international standards have been implemented into Canadian and French law.

Moreover, this will be illustrated by case law of the Canadian and French Courts. This will be

concluded by a reflection on the situation of corporate social responsibility and observations of

how CSR have evolved during these years, how case law showed evolution and improvements

in the approach of CSR, and what could be the future of CSR.

DEDICATIONS

I would like to thank the University of Manitoba for its warm welcome, and especially

every member at the Robson Hall Law School.

I would like to thank Dean Jonathan Black-Branch for accepting to be Director of this

thesis, and for his friendly welcome at the Robson Hall Law School. Moreover, I would like to

thank him for giving me the opportunity to study at the University of Manitoba, and to let me

explore a fascinating topic trough this thesis. Finally, I would like to thank him for giving me

the opportunity to discover Winnipeg and the Canada, and its wonderful citizens. This

experience has been for me one of the most gratifying. It also allowed me to discover a new

culture and news landscapes but also a new way of life and a different approach of the law.

I would like to thank Professor Michelle Gallant, for her support and advices on my

thesis.

I will also like to thank my two French friends, Lara and Mert, for their support during

this experience, and for all the great memories I came home with. But also, my parents for their

long-distance support.

Finally, I would like to thank Mr. Xavier Philippe Vuitton for giving me the

opportunity to integrate this program and for giving me the opportunity to enjoy this experience

in the best conditions.

TABLES OF CONTENTS

INTRODUCTION ............................................................................................... 1 PART I. ORIGINS OF CORPORATE SOCIAL RESPONSIBILITY ......... 3

Title 1: History of Corporate Social Responsibility ...................................... 3 Chapter 1: Bhopal’s catastrophe .................................................................... 3 Chapter 2: Rhana Plaza catastrophe ............................................................... 4

Title 2: Definitions of Corporate Social Responsibility ................................ 7 PART II. DIFFERENT TYPE OF REGULATION AND STANDARDS OF CORPORATE SOCIAL RESPONSABILITY ON THE WORLD STAGE ............................................................................................................................. 14

Title 1: International Standards ................................................................... 17 Chapter 1: Global Reporting Initiative ......................................................... 17 Chapter 2: International Organization for Standardization .......................... 19 Chapter 3: United Nations ............................................................................ 21

Title 2: European Standards ....................................................................... 29 Chapter 1: Standard COM 2001- 266 .......................................................... 29 Chapter 2: Standard COM 2002-347 ........................................................... 30 Chapter 3: Standard COM 2011 681 FINAL ............................................... 31

PART III. IMPLEMENTATION OF THESE STANDARDS ...................... 33 Title 1: Soft law v. Hard Law ....................................................................... 35 Title 2: Application on the national level ..................................................... 40

Chapter 1: France’s application .................................................................... 42 Chapter 2: Canada’s application .................................................................. 66

CONCLUSION .................................................................................................. 96

ABBREVIATIONS

ACTA Alien Tort Claim Act AFA Agence Française Anti-corruption (French Anti-corruption Agency) AMF Autorité des marchés financiers (French Authority of Stock Markets) CEO Chief Executive Officer CFPOA Corruption of Foreign Public Officials Act CSA Canadian Securities Administrators CSR Corporate Social Responsibility CJEU Court of Justice of the European Union DFATD Department of Foreign Affairs, Trade and Development DPA Deferred Prosecution Agreement ECC Essentially Contested Concepts EU European Union ESTMA Extractive Sector Transparency Measures Act FCPA Foreign Corrupt Practices Act GRI Global Reporting Initiative ILO International Labour Organization IOP Institute of Physics ISO International Organization for Standardization ITO International Third-party Organization JORF Journal Officiel de la République Française (French Official Law Journal) NCP National Contact Points NER New Economic Regulations NGO Non-Governmental Organization OECD Organization for Economic Co-operation and Development PIJC Public Interest Judicial Convention SDA Sustainable Development Act SME Small and Medium size Enterprises TCS Trade Commissioner Service UK United Kingdom UN United Nations US United States

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INTRODUCTION

Nowadays, there is a proliferation of corporations on the world stage. There is a

multiplication of transnational corporations with growing power, sometimes with more

influence than States themselves. However, unlike States and physical person, they do not have

international legal personality. When a corporation is international and develops its activities

all around the world, its headquarters can be in one country and its subsidiaries in another. It

means that even if a parent company is located in one place, it can have consequences on others.

The growing importance of companies raised awareness regarding the environmental and social

consequences related to its activities. This is where Corporate Social Responsibility finds its

origins.

The term ‘corporate’ relates to a business, especially a large business. In other words,

it is a company that have a lot of influence on the economy. The term ‘social’ relates to society

and the way people live together. And finally, ‘responsibility’ means something that is a duty

to deal with and take care of. However, from one country to another the translation of Corporate

Social Responsibility can be different because of linguistic reasons and tends to cause

confusion. As an example, in French there is no distinction between the notion of responsibility

and the legal concept of liability. Moreover, French understands the term social in a different

way than English. Whereas the term social in English deals with the concept of society, in

French it deals with the concept of labor and internal relationship. On the contrary, the English

concept relates to external relationships. Because this confusion can lead to a completely

different approaches to the concept of CSR, French decided to turn the word social into

‘sociétale’ to adjust the concept to its original meaning, and internal activities.

CSR is a ‘young’ concept. It was born in the second half of the 20th century. Originally,

it was not a juridical concept since it finds its genesis in the business ethic and the American

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liberal vision of business. Indeed, CSR is primary a voluntary principle and reflects a voluntary

approach of corporations. However, the fields of CSR are many and varied. The importance of

the CSR field led to a rise in awareness of the voluntary aspect of the concept. Indeed, it should

not be only because a corporation decided to act ethically that ethics should be observed.

Environmental catastrophic consequences, human rights violations, or anti-competitive

practices have to be taken into consideration by corporations and in the context of any kind of

activities. The respect of these should not be optional. The goal of CSR is to create transparency,

a duty of care and compliance with business relationships on the world stage. However, due to

the voluntary origins of this principle, the legislation on CSR is incomplete.

International organizations have tried to create guidelines on the subject but nothing

enforceable. Indeed, CSR is a concept of soft law, which refers to quasi-legal instruments with

no legally binding force. It seems that in order to find a more complete law we have to focus

on domestic law, the implementation of CSR’ soft law principles into domestic hard law.

Originally, Corporate Social Responsibility was a voluntary process used in the self-

regulation of corporations. However, without a legal framework, corporations may decide that

CSR’s principles are optional. This thesis will focus on Canada and France, two countries with

different legal systems, different histories, different cultures and different business’ practices

and how these countries implement corporate social responsibility.

To answer to this question, the definition and origins of Corporate Social Responsibility

concept will be studied in order to understand its real meaning and goals and the complexity of

its regulation (Part 1). Then, in order to study the soft law aspect of Corporate Social

Responsibility, the study of regulations and standards present on the world stage will be

considered (Part 2). Finally, this thesis will conclude with a discussion of the implementation

of these standards in France and in Canada (Part 3).

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PART I. ORIGINS OF CORPORATE SOCIAL

RESPONSIBILITY

To discover the meaning of CSR, we have to focus on its origins. This “trend” was

born because corporations’ activities have created huge consequences both in social and

environmental aspects. There was a real social context in order for this legal phenomenon to

arise. There are two famous legal cases often mentioned as the trigger of CSR’s birth.

Title 1: History of Corporate Social Responsibility

Chapter 1: Bhopal’s catastrophe

First of all, we can start by talking about the Bhopal’s catastrophe of 1984. Bhopal is

a place which has been at the origins of an industrial disaster. A factory, a subsidiary of Union

Carbide, was old and damaged and one day it blew up and released a toxic cloud. The outcome?

Tens of thousands of people died and millions of wounded.

Today, there are still consequences of this event. The contamination of the toxic cloud

has touched many areas, including water tables. As these areas have been touched, it means

that it will continue to impact the next generation living in the area. This factory was producing

pesticides and it was known that the corporation Union Carbine was aware of the problems of

the old factory but decided not to deal with it because of budget cuts. It was a tragedy both

ecological and human which led to considerable legal actions.

Moreover, this event highlighted the limits of victims’ rights in case of parent

company/subsidiary relation when a catastrophe like this one takes place. It showed that a

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company can make enormous profits while being able to hide behind a total impunity and in

the meantime, the local subsidiary does not have the funds to compensate the victims. Indeed,

only the Indian subsidiary has been sentenced to compensate families. Many people tried to sue

in United States in order to recover more damages and for orders that the company clean up the

location. However, such actions failed. Union Carbide has been bought by Dow Chemical

which also refused the moral responsibility of the catastrophe and to clean up the location. From

this situation, an overall reflection started. Reflections included issues of governance and state

territory.

Chapter 2: Rhana Plaza catastrophe

Second of all, the case of the Rhana plaza is another illustration of environmental

consequences linked to corporations’ activities. This case study is about the Bangladesh

garment industry. The factory produced clothes for many famous brands. Unsafe conditions

have been highlighted several times mainly due to fires and building collapses. One day, the

Rhana Plaza collapsed. The outcome? 1129 casualties and 2515 people were rescued. It is now

known as one of the worst industrial catastrophes of modern times and for many people, this

accident was avoidable. Of course, it had a huge marketing consequence for the brands which

led them to officially apologize. The world was particularly shocked because victims could not

have access to justice neither in Bangladesh or France. Similar to the Bhopal, the parent

company was perfectly advised of the situation in the factory but remained silent and passive

because of budget cuts. As a consequence, it led jurists to think about the control of the ordering

company.

The tradition of a corporation is to make profit and for the CEO to promote benefits

for the shareholders. However, this purpose has been reduced in the last 50 years. The spirit of

Corporate Social Responsibility is to include additional notions than only legal liability. For

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example, the fact that a corporation is also a part of the society, of the humans that composed

it and the environment in which it evolves. Therefore, it requires from the company to integrate

in its economic and development strategy the improvement of its internal and external societal

performance. Thus, the company has to be actively involved in the community it is settled in

and particularly with all the stakeholders. The philosophy of CSR is to take into account other

data’s rather than just making a profit. Corporations have to consult social and environmental

data’s before acting.

After all these events, the CSR was born in a world movement of regulation, with the

coexistence of mandatory regulations and non-mandatory regulations. Likewise, initiatives of

CSR come from public and private sources.

The corporate social responsibility can be defined as a concept with multiple origins.

Different actors have played a part in the development of CSR. From a source point of view,

CSR is creating different levels of regulation which are coexisting, and this is why the state is

not the only actor to have an impact on the CSR regulation and especially cannot be considered

as the most important one. Moreover, as the state is not one of the most important actors of the

development of CSR’s regulation, it can be explained by the fact that CSR is the result of all

the stakeholder’s consultation. One of the most important characteristics of CSR notion is to

take into account issues that stakeholders can achieve through corporations’ activities. CSR was

also born from a collective negotiation, from many discussions with stakeholders which are

implied or directly connected to the company’s activities.

Much CSR regulation is soft law. Responsible behavior for corporations and progress

in improving the standards of corporate social responsibility is done through non-coercive

means. The soft law ‘refers to rules that are neither strictly binding in nature nor completely

lacking legal significance’1. As we can observe the context of international law, soft law can

be related to guidelines, policy declaration or codes of conduct. The most important point and

1 Online: https://definitions.uslegal.com/s/soft-law/

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what makes soft law so interesting in the context of CSR and that appealed to corporations is

its non-enforceability. Whereas, hard law means binding laws. For example, treaties or

international agreements can be seen as binding law because they create enforceable obligations

and rights for the countries which are part of these agreements.2

Until a few years ago, corporate social responsibility was the illustration of a soft law,

meaning it could be defined as unclear rules with no detail and optional.

However, a hardening of CSR has started to rise. As the CSR was a movement born

outside of the law, the law ‘decided’ to take care of it. The law started to supervise the corporate

social responsibility more and more as the years go by and this supervision has become firm

and formal and tried to oversee the practices of the companies.

As we talk about ‘responsibility’, it has to be clarified that it concurs with term

‘liability’. When the notion of CSR is discussed it has to be understood as the idea that the non-

CSR behavior of a company can have consequences not only on its responsibility but also on

its liability. So, when in CSR we are talking about ‘responsibility’ the idea is to deal with a way

for the company to be conscious and accountable for its behavior on social and environmental

issues. A responsibility to adopt responsible behaviors on social, economic, human and

environmental concerns it is a management of risks policy. This evolution led to a real legal

and societal responsibility, not only a societal one.

From a different point of view, one of the major characteristics of this responsibility

is the sharing of the responsibility of the management of risks policy. Who are the protagonists

of this sharing? The states and the economic actors. That is why we are talking about “co-

responsibility”.

Last but not least, usually the scope of the law is stops at the country’s border. The

empire of the law is often connected to the state that created it. However, the globalization of

2 Supra note 1.

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industry and of economies have led the companies to act without the principle of the borders

and to act on many areas of the world without being aware of the complicated consequences

that could be created by their activities on many states and especially, which laws govern their

activities.

Moreover, they expect to hide behind the law of their country and operate with

impunity. This type of behavior can lead to real legal issues. International law should propose

solutions to these issues however nothing was created to control these types of behavior and

their consequences. As a result, without mandatory rules imposed by the law, transnationals

regulations were introduced. The main idea is to create an extraterritoriality of the corporate

social responsibility. The result? A focus on new duties to legally empower the parent group

company to manage their activities spread on the world stage. To do business with the

consciousness of the impact of their activities on the country they settle in.

Title 2: Definitions of Corporate Social Responsibility

As we have mentioned much information about the concept of corporate social

responsibility, we can observe that this philosophy of business contains a terminological

ambiguity. Why? Because it can describe a concept, a technic or even a questioning. This

consideration process can be identified to be between the company and the society in which the

corporation exercises its activities. Corporate social responsibility can find its origins in legal

sources, voluntary codes, or from privates or publics initiatives. The concept of corporate social

responsibility refers to the idea that the corporation is strongly encouraged to go beyond its

speculative and economic purposes in order to integrate in its decision-making progress some

ethic, social and environmental considerations for the benefit of its stakeholders.

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The corporate social responsibility has become an element of the nowadays business

and the demand of legal subject matter expert has intensified. It has led to the creation of

departments specialized in corporate social responsibility including jurists, generally senior

legal experts who already have a lot of knowledge and experience. This concept has become

more and more popular, including the attempts to identify and define the meaning of corporate

social responsibility, and especially find a definition that will be universal and not contested.

As we think of this concept, we can already expose that a concept born from social

sciences may lead to a not clear definition. Moreover, as the concept is pretty theoretical it can

be difficult to verify if the applications of the concept are well followed. On the other hand, it

seems complicated that the diversity of subjects covered by the concept would yield to a

universal definition of corporate social responsibility.

A study from Walter Bryce Gallie, who was a Scottish social theorist and philosopher,

exposed the essentially contested concepts (ECC) theory in 19563. The idea? Talking about

concepts that, because of their nature, are perpetually contested. In his study, he decided to

identify seven criteria for evaluating if the concept, by its very nature, will inevitably engender

disputes.

In another study, Adaeze Okoye had used these criteria in order to identify if corporate

social responsibility is a contested concept.4 According to this study, it suggests that CSR is an

ECC and by consequence, explains why CSR could know a ‘definition problem’ and why many

people can find different definitions for CSR and why many conceptions are existing on the

world stage. However, it is not because a subject can have difficulties to find a universal

definition that people and research cannot work on finding one. The main idea of course is for

3 Gallie, W.B., ‘Essentially Contested Concepts’ (1956), Vol. 56, Proceedings of the Aristotelian Society, JSTOR, pp.167-198. 4 Okoye Adaeze, ‘Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?’ (2009), Vol. 89, Issue 4, Journal of Business Ethics, Introduction [Okoye]

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people, when they deal with CSR matters, to all deal with the same areas and to try to reach the

same goals while using the same means to do so.

Indeed, ‘corporate social responsibility means something, but not always the same thing

to everybody’5. As mentioned above, the term ‘responsibility’ can take two different meanings.

Some understand it as responsible behavior with respect for ethics. Some others understand it

as a liability, in other words to be ‘responsible for something’, in a legal sense. It can also mean

that corporations are acting with social consciousness. For the one who deeply believe in CSR,

they can see it as a duty for corporations to reach standards of behavior.

The work accomplished in order to find a definition led to the analysis of all the fields of CSR

by academics. For instance, in 1930s an exchange of articles could be observed between Berle

and Dodd on the role of corporate managers published in the Harvard Law Review. Indeed,

Dodd has pointed out that substantial strides have been made in order to settle a new view of

what the business of a corporation should be. He pointed out the need of a coexistence between

social-service and profit-making function inside a company6. According to that, for Dodd, the

business of American’s companies in the 1930s was evolving into a more socially responsible

form.

However, it was only in 1950s that corporate social responsibility became more

famous with the help of writers like Abrams and Bowen, especially with his well-known book

Social Responsibilities of the Businessman7 of 1953. On the top of that, some others famous

writers, supportive or not, such as Davis and Caroll, as well as Levitt and Friedman, have built

5 Okoye, supra note 4. 6 Ibid.

7 Bowen H. R., Social Responsibilities of the Businessman (New York: Harper & Row, 1953).

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a landscape for corporate social responsibility.8 This topic has known a time of support and

analysis from writers who helped creating an acceptability and popularity of the concept of

CSR, but it has also faced critics.

One of the main problems of the concept of corporate social responsibility is that, even

if it may be accepted as a concept, it remains that there is an existing lack of normative basis.

This situation has been linked to the absence of an agreed universal definition of CSR9. This

is echoed by Whitehouse, when she points out that ‘the apparent failure of CSR to fulfil its

potential in remedying the adverse impact of corporate activity is due in part to the failure on

the part of its advocates to establish a universally accepted definition of the term and the

normative grounding necessary for effective regulation…’10.

For some authors like Amaeshi and Adi, they considered that CSR can be accepted as a

concept unclear and even contested. However, even if CSR faces difficulties to establish a

definition for its concept, in spite of that interpretations and practices have emerged. It is only

when we try to map the landscape of CSR that we face difficulties.

McMahon theorizies about two generals approaches to the relationship between

corporations and society by studying a ‘rights’ approaches and power model11. On one side,

there are four rights approaches which include the rights arising from express contracts between

corporations and groups12. On the other hand, we can find three power models including power-

responsibility model13 involving two principles: the fact that the more power the corporation

8 Caroll, A.B., ‘A Three-Dimensional Conceptual Model of Corporate Performance’ (1979), Vol. 4, Academy of Management Review, pp. 497-505; Caroll, A.B., ‘Corporate Social Responsibility – Evolution of a Definitional Construct’ (1999), Vol. 38, Business & Society, pp. 268-295; Caroll, A.B., ‘A History of Corporate Social Responsibility: Concepts and Practices’ (2008), The Oxford Handbook of Corporate Social Responsibility, pp. 19-46; Davis, K., ‘Can Business Afford to Ignore Corporate Social Responsibility’ (1960), Vol. 2, California Management Review, pp. 70-76; Friedman, M., ‘The Social Responsibility of Business is to Increase its Increase its Profits’ (1970), New York Times Magazine, September 13th, pp. 32,33,122,126; Levitt, T., ‘The Dangers of Social Responsibility’ (1958), Vol. 36, Harvard Business Review, pp. 41-40. 9 Okoye, supra note 4, p. 614, at para 1. 10 Ibid at para 2. 11 McMahon Thomas F., ‘Models of the Relationship of the Firm to Society’ (1986), Vol. 5, Issue 3, Journal of Business Ethics, pp. 181-191, Abstract; online: https://doi.org/10.1007/BF00383624 12 Okoye, supra note 9, at para 3. 13 Davis Keith, ‘Understanding the Social Responsibility Puzzle’ (1967), Vol. 10, Issue 4, Business Horizons, pp. 45-50, Abstract; online: https://doi.org/10.1016/0007-6813(67)90007-9

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has, more responsibility it has, and the iron law of responsibility which settles the idea that if

corporations do not use their power, they will lose it.

However, some authors have made a distinction between ethical, altruistic and

strategic CSR14 or between instrumental, political, integrative and ethical corporate

responsibility15.

The instrumental aspect can be seen as a marketing tool in order to gain reputation16

by the adoption, for example, of fair-trade standards. The political aspect could deal with the

idea of the place of the corporation on the word stage and as a citizen of the world, so to be in

possession of rights but to be subject to obligations too. The integrative point can be related to

the idea that if a corporation is inside a society, it takes into account social facts, especially

considerations of all stakeholders. It goes with the idea of a corporation’s ethical behavior.

However, ethic has to mean the same for every person. Ethical theory includes stakeholders’

theory, universal rights, sustainable development and a common good approach17.

This difficulty to theorize corporate social responsibility leads to the question: is it a

contested concept? It can find a definition different from a person to another and can imply

different concepts. The difficulty of finding a definition led Okoye to identify if corporate

social responsibility as a contested concept. Indeed, it is composed of many arguments about

its meaning and from different users. ‘The problem of defining CSR is not in isolation as

14 Lantos Geoffrey P., ‘The boundaries of strategic corporate social responsibility’(2001), Vol. 18, n°7, Journal of Consumer Marketing, pp. 595-632, Abstract; online: http://dx.doi.org/10.1108/07363760110410281 15 Garriga Elisabet & Melé Domènec, ‘Corporate Social Responsability Theories : Mapping the Territory’ (2004), Vol. 53, Issue 1-2, Journal of Business Ethics, pp. 51-71, Abstract [Garriga & Melé]; online: https://doi.org/10.1023/B:BUSI.0000039399.90587.3 16 Mc Williams Abagail & Siegel Donald, ‘The corporate social responsibility: a theory of the firm perspective’ (2001), Vol. 26, N°1, Management Review, pp.117-127, online: http://dx.doi.org/10.2307/259398 17 Garriga & Melé, supra note 15.

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defining concepts in the social sciences are often subject to contest’18. According to Gallie, a

concept of common sense is liable to be contested19.

According to Okoye, ‘for CSR being an essentially contested concept means that while

universal meaning for CSR is not necessary, there is still the need for a common reference point

or exemplar. The core (…) sets out the parameters of the debate and identifies the common

basis that indicates that all such arguments relate to the same concept. In this manner, the

common reference point or ‘exemplar’ for CSR should set out the distinguishing factor which

identifies issues of CSR. However, in line with other critical analysis of ECC, it is doubtful that

CSR’s exemplar can be distilled to a single definition. It may rather be a core or common

reference point. For CSR purposes, this core can be found more generally in attempts to address

various issues which arise out of the dynamic relationship between corporations and society

over time’20.

The author concludes by saying that CSR corresponds with Gallie’s criteria for ECC.

Indeed, it corresponds enough to leave the subject open to other conceptions. However, she

settled that this point does not occlude the definitional debate and does not exempt from

normative justifications of CSR. Moreover, she added that because of the nature of CSR it

would be forced to evolve with the society’s changes21.

Talking about CSR as ECC has to make us understand the complexity of the concept

and how the law has to follow all the changing circumstances on the world stage in order to fit

with the evolving notion. It is a reflexibility that can both be an advantage and an inconvenience.

18 Okoye, supra note 9, p. 616, at para 3. 19 Ibid. 20 Okoye, supra note 9, p. 623, at para 3. 21 Ibid, p. 624, at para 2.

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It may open the way for too many interpretations by corporations in their self-

regulation, by legislators when they establish the laws or even by the judges when they have to

make decisions. Nonetheless, it offers the opportunity to adapt CSR with the society’s changes.

The main goal here is to create a symbiose between the corporation’s business

activities and the society in which it performs its activities.

According to all of this, it appears important to identify the regulations which were

born from the research of the meaning of corporate social responsibility, its application, and its

limit. Not only to give a definition, but also to create a legal ground for a concept that can be

understood differently from one person to another. This in order to try to create a uniform and

respected application.

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PART II. DIFFERENT TYPE OF REGULATION AND

STANDARDS OF CORPORATE SOCIAL RESPONSABILITY

ON THE WORLD STAGE

As corporate social responsibility appears to be a concept purely social, environmental,

and ethic, the encountered problem is the lack of legal regulation. The conception of corporate

social responsibility is hybrid. The law has taken care of the subject, but the CSR became also

interested in the law. The main idea is to go one step ahead of the law, and for the corporation

to act in a philanthropic way. That is why a legal process has started to emerge in order to

contain these actions and to regulate them.

As mentioned earlier, the corporate social responsibility finds its origins in public and

private authorities. It can be explained by the fact that states and corporations have to work

together. That is why the sources are so diverse. It has led to the creation of a tension between

the public and private authority, notably in the international relationship. The existing tension

has appeared between the proponents of binding standards imposed by the states and the

proponents of the corporation’s spontaneous standards, for instance, code of conducts, or codes

of professional customs.

Some organizations have decided to settle some non-binding standards. Standards

which have become an international frame of reference in this regard. The development of these

standards was based on founding text in order to commit, report and evaluate the CSR

approaches of the corporation. Because of this hybrid context of regulation, there was finally a

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core of common international standards that was built, and which led to a duty of care at the

expense of transnationals corporations.

Moreover, one of the most important problematics to deal with here is the stakeholders

and the role they play in corporate social responsibility.

This concept is coming from the theory based on the observation that the corporation

cannot be limited to the simple and the obvious goal to make profit. It is more than that. It is an

entity that certainly is performing a lucrative activity but also it belongs to an economic and

social environment which it uses at its advantage. That is why the concept of corporate social

responsibility has to take into consideration the stakeholders. It means that it has to take into

consideration all the parties that are part, directly or indirectly, of its activities. This includes

the parties that are participating to the activity and the ones that experience its impacts. In other

words, it includes the shareholders, the business partners, the employees, the union

representatives, and the investors. It does not leave out parties that are not inside the corporation

system, such as associations, non-governmental organisms as well as clients, suppliers, and

competitors. Moreover, it does not leave out parties with no contractual relation with company

such as local communities, or geographical neighbors. Consequently, stakeholders include

every person, every party that could be subject to any consequences from the corporation

activities, positive or negative.

The study of corporate social responsibility regulation and standards reveals a number

of rules applicable to the corporation and a reinforcement of its legal liability. Even if the

concept of CSR does not have legal status, it provides the basis of an individual and collective

duty of care. Indeed, it is necessary to question the legal framework of the transnational

companies in a context of globalization. In fact, the main problem is that economic and

commercial activities are framed by the law, but the consequences of these activities are not.

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In terms of CSR, many standards exist. Indeed, corporate social responsibility is a

subject of growing interest in the 20th century and has prompted many organizations to look

into the subject.

In international matters, many standards have emerged. They cannot all be studied in

this part and will be retained only those having a major impact.

The organizations which have decided to get involved in this area do not have

legislative power so the norms that have emerged are not mandatory and are seen as advice to

companies regarding the management of their activities.

This lack of legally binding nature has created a real legal void in CSR. This void has

pushed the European Union to question CSR. First of all, the purpose of the texts could be

perceived as having the same scope as international standards. Indeed, the first European texts

came to define the subject, consisting of advices for companies, but not mandatory.

The consequence of the absence of laws involving a legal liability of the company led

them to consider that if the principles of CSR were applied it would be a potential marketing

advantage, but failing that, they were aware that they could escape all legal consequences.

Therefore, it seems important to study the international standards in order to determine

the extent and content of the principles to be taken into account with regard to CSR, in particular

to determine which type of law should be taken into account in order to legalize the subject

matter.

The study of European standards allows us to go into the subject in depth and to study

whether the European Union has attempted to introduce legal consequences for CSR principles.

But we can observe that this has not been the case for years. Firstly, the Commission of the

European Union has confined itself to drafting texts that have contributed to the definition of

CSR as well as to taking up pre-established principles and considering new ones. It was not

until the last ten years, that it decided to consider corporate’s obligations and to begin legalizing

17

the matter. In addition, it requires companies to respect the laws already in force and this is the

beginning of a link between European law and corporate social responsibility.

Finally, on the country level, states have started to develop their CSR policy.

According to the legal forms taken by the compulsory legislative acts of the country concerned,

they have started to create laws and statutes imposing obligations on companies in the field of

social law, environmental law, consumer law and criminal law. If they are not respected by

companies, it may result in legal consequences.

Title 1: International Standards

Chapter 1: Global Reporting Initiative

One of the major international standards in CSR is the Global Reporting Initiative. It

is an independent and international organization which laid the foundations on sustainability

reporting since 1997. ‘In addition to mandatory financial reports, many corporations have

recently embraced – though voluntarily- corporate responsibility or sustainability reporting’22.

Regarding the Global Reporting Initiative, the objective has been to help companies

and governments around the world to understand and mainly communicate on the impacts on

issues such as global warming, human rights, governance, and social welfare. The idea is to

push companies to undertake actions that will have a positive impact on society, whether

socially, environmentally or economically. The GRI and all resulting standards have been

established through stakeholder’s collaboration and in the public interest.

22 Laine Anniki L., ‘Integrated Reporting: fostering Human rights Accountability for Multinational Corporations’ (2015), Vol. 47, The Geo. Wash. Int’l L. Rev., p. 654, at para 1; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/gwilr47&id=673&collection=journals&index=

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The strength of GRI Sustainability Reporting Standards is its popularity as it is the

first and most adopted global standard for sustainability reporting on the world stage. ‘In fact,

93% of the word largest 250 corporations report on their sustainability performance’23

according to KPMG Survey of Corporate Responsibility Reporting 2017.

According to that, the GRI has identified four areas on which it desired to focus. The

first one is about creating standards and guidance in order to push forward the sustainable

development. The second one is about harmonizing the sustainability landscape, in other words

to ‘make GRI the central hub for sustainability reporting frameworks and initiatives and select

collaboration and partnership opportunities that serve GRI’s vision and mission’. The third one

is about leading an efficient sustainability reporting; the main idea is to improve the quality of

disclosures that are made by using the standard. And the final one is to use sustainability

information in order to improve performance. This point reflects the idea to work with the

stakeholders to drive transparency and an effective reporting.

GRI is not a single standard. It develops into sub-standards composed of social,

environmental and economic concerns. These standards are classified: GRI 200 is specialized

in economy, GRI 300 in environment and GRI 400 in social.

However, ‘despite the lofty goals and some successes that GRI can claim for

sustainability reporting, a major shortcoming of GRI’s Reporting Guidelines is that it is

completely voluntary and does not have an enforcement mechanism in place to meet GRI’s

policy goals’24. That is why it is not clear that all the relevant information has been disclosed

or if they are accurate. Equally, even if GRI encourages the positive and the negative reporting,

it is obvious the temptation is to disclose on only positive information about corporate

performance.

23 Global Reporting Initiative (1997) Official Website; online : https://www.globalreporting.org/Information/about-gri/Pages/default.aspx 24 Ghoogassian Chloe, ‘Evading the Transparency Tragedy: The Legal Enforcement of Corporate Sustainability Reporting’ (2015), Vol. 11:2, Hastings Business Law Journal, p. 369, at para 2; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/hbuslj11&id=361&collection=journals&index=

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Chapter 2: International Organization for Standardization

1. ISO 26000

The International Organization for Standardization (ISO), an international standard-

setting body, has tried to find a proper definition for CSR in order to create a framework of the

subject. The ISO 26000 standard was published on the 1st of November 2010. ISO is ‘an

independent, non-governmental international organization with a membership of 162 national

standards bodies. Through its members, it brings together experts to share knowledge and

develop voluntary, consensus-based, market relevant International Standards that support

innovation and provide solutions to global challenges’25. It is composed of organizations,

governmental or non-governmental. The main task of these committees is to prepare these

International Standards which are accepted by the member of ISO by vote. The publication of

an International Standard requires an approval by at least 75% of the member.

This standard has been developed with a multi-stakeholder approach. It has involved

more than 90 countries and 40 international and regional organizations from different aspects

of social responsibility. There were about 500 experts. Six different stakeholder groups, experts

such as consumers, government, industry, labor, non-governmental organizations, service,

support, research and academics. Attention was made to ensure balanced participation. The

ISO 26000 standard was created to make organizations understand the need to protect

ecosystems, ensure social equity and establish good governance.

25 ISO on guidance on how businesses and organizations can operate in a socially responsible way (2010); online: https://www.iso.org/about-us.html

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In its guidelines, ISO defines CSR as ‘The responsibility of an organization for the

impacts of its decisions and activities on society and the environment, resulting in ethical

behavior and transparency which contributes to sustainable development, including the health

and well-being of society; takes into account the expectations of stakeholders; complies with

current laws and is consistent with international standards of behavior; and is integrated

throughout the organization and implemented in its relations’.26

The ISO 26000 standard is not an obligation but it is ‘ground-breaking: ‘The standard

represents a groundbreaking experiment in multi-stakeholder’s governance and norm-

setting’27. It is organized around seven clauses which are 1) scope, 2) terms and definitions,

3) understanding social responsibility, 4) principles of social responsibility, 5) recognizing

social responsibility and engaging stakeholders, 6) guidance on social responsibility core

subjects, 7) guidance on integrating social responsibility throughout an organization28.

The first defined the scope of this standard, and the second key terms and definitions.

Clause 3 is trying to describe the important factors and conditions that have influenced the

development of social responsibility. Clause 4 introduces the principles. Clause 5 addresses

two practices of social responsibility, such as the recognition of an organization of its social

responsibility and its identification and engagement with its stakeholders. Clause 6 explains the

core subjects and associated issues relating to social responsibility. The last clause provides

guidance on putting this social responsibility into practice.

The ISO 26000 was actually very appreciated because of its statute of “guidance”

rather than “requirements”. However, it is important to remind that the ISO 26000 is a standard

26 ISO 26000, Terms and definitions, at para 2.18; online: https://www.iso.org/obp/ui/#iso:std:iso:26000:ed-1:v1:en:term:2.18 27 Ward Halina, ‘The ISO 26000 International Guidance Standard on Social Responsibility: Implications for Public Policy and Transnational Democracy’ (2011), Vol. 12;665, Theoretical Inquiries in Law, p. 666, at para 2 [Ward]; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?collection=journals&handle=hein.journals/thinla12&id=681&men_tab=srchresults 28 ISO Platform for Guidance Official Website; online: https://www.iso.org/obp/ui/#iso:std:iso:26000:ed-1:v1:en

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with no certification. Nevertheless, it is one of the advantages of this standard because it is

here to give a guidance on social responsibily, not punish. It advises but does not mandate.

And because it does not give any certification, it is difficult to evaluate its efficiency.

Nonetheless, some evaluations exist which are based on the integration of ISO 26000 and which

can be used to measure the contribution of one organization, tools like AFAQ 2600029, VIGEO

2600030. This standard has tried to create an evolution and an impact on the international law

as it wants to raise consciousness. One of the objectives is to make the stakeholders realize

how much we need to progress on all the subjects mentioned by the ISO 26000 standard.

Indeed, ‘ISO’s brand recognition gives it real potential to make a positive contribution to social

responsibility’31. When many people take part in the establishment of the standard it is, from

my point of view, a way to have an impact on the world stage. As it was voted by a majority of

the members of the committee, it became a form of international consensus. It is not because it

is not a certification that it does not have an impact. Moreover, it became a reference in the

domain of social responsibility, especially in discussion between stakeholders and companies.

This standard has to be seen as a way to improve organizations.

Importedly, the standard has no legal authority. It is good, but not enough.

Chapter 3: United Nations

1. Global Compact – Initiation of extra financial reporting.

The Global Compact is an initiative launched in 1999 at the World Economic Forum

in Davos. The operational phase of the Pact was launched in 2000.

According to UN Secretary-General Ban Ki-Moon, the Global Compact constitutes

the world's largest entrepreneurial initiative. It has pushed companies to adopt universal

29 AFNOR Certification Website; online: https://certification.afnor.org/en 30 VIGEO Certification Website; online: http://www.vigeo-eiris.com/#panel3 31 Ward, supra note 27, p. 666, at para 3.

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principles and to partner with the United Nations to tackle the big problems. It has become

synonymous with corporate responsibility. The Global Compact proposed by Secretary General

Kofi Annan ‘seeks to improve corporate responsibility in the areas of human rights, labor

standards, and environmental protection’32.

It is an important step in the area of corporate social responsibility, since it invites

companies, as well as states, to take responsibility for protecting fundamental rights and

fighting against illegal practices. The main request of this pact was to ask the companies

undertake to promote the fundamental rights and to ensure this respect for the benefit of the

stakeholders, whether private partners, non-governmental organizations, local authorities or

states. This pact recalls that the company does not supersede the state in the protection of

fundamental rights, however this is the first time it is mentioned that it has the responsibility to

ensure the respect of these rights.

International law does not have the means to protect human rights and states are not

always inclined to do so. This considered that a solution to this shortfall could be to integrate

transnational companies into the equation. Consequently, we find the idea of self-regulation,

i.e the regulation initiated by the corporation and for the benefit of corporation.

According to the UN, ‘Corporate sustainability starts with a company’s value system

and a principles-based approach to doing business. This means operating in ways that, at a

minimum, meet fundamental responsibilities in the areas of human rights, labour, environment

and anti-corruption. Responsible businesses enact the same values and principles wherever they

have a presence and know that good practices in one area do not offset harm in another. By

incorporating the Ten Principles of the UN Global Compact into strategies, policies and

32 Meyer William H. & Stefanova Boyka, ‘Human Rights, the UN Global Compact, and Global Governance’ (2001), Vol. 34, Cornell International Law Journal, Introduction, p. 501, at para 1 [Meyer & Stefanova]; online : https://heinonline-org.uml.idm.oclc.org/HOL/Page?collection=journals&handle=hein.journals/cintl34&id=509&men_tab=srchresults

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procedures, and establishing a culture of integrity, companies are not only upholding their basic

responsibilities to people and planet, but also setting the stage for long-term success’33.

In view of this, it is important to emphasize that the United Nations has a more legal

approach in order to settle the principles. Indeed, the organization refers these principles to

rights and thus creates a more legal framework of the subject, which is not always the case in

the field of CSR. This is an important starting point for states to transpose at the national level.

Indeed, the ten principles of the Global Compact are derived from the Universal Declaration of

Human Rights, the International Labour Organization’s Declaration on Fundamental Principles

and Rights at Work, The Rio Declaration on Environment and Development, and finally the

United Nations Convention Against Corruption.

A technique used to displace responsibility is the implementation of reporting.

According to the Cambridge’s dictionary, the reporting can be defined as ‘the act by a company

giving an official report, for example about its accounts or activities’34. In France, two authors,

Michel Capron and Françoise Quairel-Lanoizelée wrote a book in 2010 called The Social

Responsibility of the Corporation and settled that the reporting can be related to publications

of information on how the company will deal with, and perceive, the economic, social and

environmental impacts’ of its activities.

The question of ‘Is the self-regulatory approach the best mean for improving global

corporate conduct?’35 remains. We cannot know if the Global Compact was better than the other

standards, or the best way to improve CSR. We can only affirm that ‘the Global Compact is

just one of the many attempts to improve labor standards (…) but it is just one among many

efforts’36. Moreover, it seems that the Global Compact had considered that there is a

33 Global Compact of United Nations (2000) Official Website; online: https://www.unglobalcompact.org/what-is-gc/mission/principles 34 https://dictionary.cambridge.org/fr/dictionnaire/anglais/reporting 35 Meyer & Stefanova, supra note 32, p. 502, at para 4. 36 Ibid note 32, p. 504, at para 2.

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universality regarding the corporate governance however it is not the case. Indeed, ‘it assumes

that dialogue between its elite participants would produce best governance practices which are

universally applicable to all industries and countries irrespective of differences in the nature of

business and national cultures’37. The Global Compact does not set any verification. It is a really

vague and non-regulatory instrument, with no enforcement nor monitoring mechanisms.

2. OECD Guidelines for Multinational Enterprises

The OECD Guidelines38 are addressed to multinational corporations and consist of

recommendations made by governments to those enterprises operating in or from acceding

countries. Originally, ‘The OECD is a transregional body that has developed its own programs

to enhance corporate social responsibility’39. Historically, the first version of these guidelines

came into existence in 1976 and is the oldest intergovernmental standard for CSR. This version

was a guide for companies facing the globalization, while being in line with existing

international standards. In order to follow developments in International Law, many revisions

were made between 1976 and 2011.

Highlights of this 2011 revision include the establishment of a new chapter on human

rights, which was inspired by the Guiding Principles for Business and Human Rights40, with

the idea of protecting these rights, but also to seek redress for violations. Moreover, it settled a

new approach of the supply chain management in order to be more responsible and be regulated

by notions of due diligence. And finally, an extremely important point, the establishment of

37 Oshioneno Evaristus, ‘The U.N Global Compact and Accountability of Transnational Corporations: Separating Myth from Realities’ (2007), Vol. 19, Florida Journal of International Law, p. 21, at para 3; online : https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/fjil19&id=7&collection=journals&index= 38 OCDE Guidelines for Multinational Enterprises (2011); online: https://www.oecd.org/daf/inv/mne/48004323.pdf 39 Meyer & Stefanova, supra note 32, p. 509, at para 2. 40 Guiding Principles for Business and Human Rights (2011); online: https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

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clearer and, above all, stricter procedural guidelines to strengthen the role of National Contact

Points (NPC).

This is a breakthrough in CSR since the framework, limited to very flexible notions

and soft law, finally begins to start a transformation towards more stringent notions.

NPC are national reference organizations for the implementation of these guiding

principles. These NCPs carry out two main tasks: an information and promotion mission to

companies and other NCPs of the acceding States; and a mission of mediation and conciliation

between companies and members of civil society. It is possible to submit a complaint to the

NPC. It can be done by a union, an NGO, an individual or a politician if these principles are

not respected. For example, in case of non-compliance by a French company in France or in a

foreign country or by a foreign company on French territory. The Guidelines ‘provide a link

between the state and the corporate level through the establishment of National Contact Points

in each home country’41. However, it is necessary to underline that the NCPs do not constitute

a jurisdiction and consequently the recommendations that they can make are not binding. The

risk in this case is purely in terms of image when the NCP makes public its press release.

Nonetheless, it is a start. Thus, neither the Guidelines nor the NCPs have any legally binding

power. The only binding feature is the fact that signatory governments will commit to

establishing an NCP. It is inhibiting the effectiveness of the OECD Guidelines because there is

a ‘a lack of an appellate mechanism for reviewing the decisions and conclusions reached by the

NCPs’42.

41 Meyer & Stefanova, supra note 32, p. 510, at para 1. 42 Oshionebo Evaristus, ‘The OECD Guideline for Multinational Enterprises as Mechanisms for Sustainable Development of Natural Resources: Real Solutions or Window Dressing?’ (2013), Vol 17:2, Lewis & Clark Law Review, p. 578, at para 2 [Oshionebo]; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?public=true&handle=hein.journals/lewclr17&div=19&start_page=545&collection=journals&set_as_cursor=2&men_tab=srchresults

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The OECD has not created any enforcement mechanism in order to go with the

Guidelines it has set. The compliance has a purely ‘voluntary and non-binding nature’43.

3. United Nation Guiding Principles on Business and Human Rights

Finally, the standard of the United Nations Human Rights Council Guidelines on

Business and Human Rights must be addressed. The term 'right' appears at last in a title. On

June 17, 2011, the United Nations Human Rights Council unanimously adopted these

principles. This is considered as a major event in the field of human rights protection, a real

step forward and a real evolution in the area of corporate social responsibility.

In 1993, the idea of ensuring respect for human rights by business started to emerge at

the World Conference on Human Rights in Vienna.

In 1999, the United Nations Compact was launched along with the Ten principles that

came with it. However, in 2004, a project drafted by the United Nations Human Rights

Subcommittee was rejected by the states.

In 2005, Professor John Ruggie was appointed by the Human Rights Council to

represent the UN Secretary-General on human rights as well as transnational corporations and

other businesses. Following its three years in office, the Council adopted a framework and

principles of action in 2008 to feed the debate on rights and especially human rights with

business.

Like mentioned above, previous international standards have always been related to

guides and never directly concerned specific rights. This does not mean that these standards

have not actively contributed to CSR. On the contrary, they are the first standards to anchor

concepts and behavior guides. Conversely, the Guiding Principles of the UN Human Rights

Council wanted to create a framework rather than a guide. This standard is based on three

43 Oshionebo, supra note 42, p. 573, at para 2.

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fundamental principles: The State's obligation to protect when third parties, including

corporations, infringe upon human rights; corporate responsibility to respect human rights; the

need for more effective access to reparation for victims. The first and third pillar includes

binding norms and non-binding recommendations44.

Certain vocabulary points consist of a real breakthrough from the point of view of CSR

standards. First, the term ‘obligation’ is underlined, an obligation for the states. The state

representing a powerful organ on which weighs a real obligation, duties, and a behavior to have

towards the companies since they can have actions with possible consequences of undermining

human rights. Therefore, states must take the necessary measures by establishing laws to protect

the population from the human rights violations, including the ones which have been done by

companies in the country and abroad. Then, we can observe the term ‘responsibility’ of the

companies, although this term always appeared more or less in the texts, the coexistance of

words such as ‘responsibility’ and ‘rights’ is a step forward the enshrinement of CSR.

Finally, the UN focused on the concept of ‘reparation’. The text mentions the

possibility for the victims to ask for compensation and exposed how the accessibility should be

improved to obtain effective solutions from access to judicial bodies.

These guiding principles on business and human rights follow consultations with

several international institutions that have themselves contribute CSR, such as ISO, OECD, or

the European Union. This consensus was found by setting up a dialogue with the stakeholders,

i.e. the people involved in the company's activities, such as employers’ and employees’

organizations, and those dealing with human rights.

44 Guiding Principles for Business and Human Rights (2011); online: https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

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Similarly, there are certain terms in the text that are actually related to the three pillars:

protect, respect, remedy.

The text settles the importance of the state’s accountability. There is an affirmation of

the predominant role of the state regarding CSR and the significant role it must play in order to

protect and promote human rights. This responsibility is also extended to the value chain.

In the European Union, in order to have these principles adopted, a national plan of

action for their implementation has been drawn up following a request from the European

Commission to its member states. In France, this plan provides for an action list and allows

dialogue between representatives of companies, employees, associations, NGOs, and

representatives of public authorities such as central and parliamentary administrations, local

authorities, etc.

These Guiding Principles are a real leap, but they have no legally binding value at the

international level. These Principles have faced critics. Indeed, they were criticized because of

their ‘conservative approach to the extraterritorial dimension of the obligation to protect human

rights over which there is significant disagreement’45.

The legal void is filling but it is still not satisfactory and optimal. One can then wonder

whether the international framework is too broad and whether establishing international

legislative principles binding on stakeholders is simply far too complicated. In addition, all

signatory states should make a real commitment to settle all the international standards. Yet, it

is not always the case.

In summary, the Guiding Principles are not stating that home states have ‘binding

obligations under international human rights law to regulate and adjudicate transnational

45 Simons Penelope, ‘Canada’s Enhanced CSR Strategy: Human Rights Due Diligence and Access to Justice for Victims of Extraterritorial Corporate Human Rights Abuses’ (2015), Vol. 56, n°2, The Canadian Business Law Journal, p. 175, at para 1 [Simons]; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/canadbus56&id=179&collection=journals&index=

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corporations so as to prevent and remedy human rights harm’46. Nonetheless, they have settled

guidance regarding the measures the states should implement in order to prevent human rights

violation in business activities.

The question then arises whether the European Union, which has legislative power,

has more control over the subject and has been able to impose European directives on the

Member States.

Title 2: European Standards

Chapter 1: Standard COM 2001- 266

The European commission has established in 2001 a ‘Green paper’ ‘Promoting a

European framework for corporate social responsibility’ COM 2001 26647. According to the

definition it gave, CSR is about ‘companies’ voluntary consideration of social and

environmental concerns in their business relationship and with stakeholders.

The Commission has listed the requirements which provide an illustration of what we

seek when we are talking about the notion of CSR. Here, we find again the criteria of

volunteering. The commission did not even try to create obligation of means. The idea was

more to introduce the debate on the need of taking into consideration some environmental and

ethical problems in the corporation’s decision-making process. Again, a good thing, but nothing

enforceable.

46 Seck Sara L., ‘Canadian Mining Internationally and the UN Guiding Principles for Business and Human Rights’ (2011), 49 Can. Y.B. Int'l L. 51, p. 100, at para 2; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/cybil49&id=63&collection=journals&index=

47 Green Paper: Promoting a European framework for corporate social responsibility COM 2001 266; online: https://ec.europa.eu/commission/presscorner/detail/en/DOC_01_9

30

It settled two points. An internal one which consists in the commitment to expose

socially responsible resources, to promote health and safety at work, the diversity of human

resources, the legality of remuneration, the participation of employees in the company. An

external one, it concerns the relations that the company maintains with its commercial partners

and NGOs. These relationships need to be taken into account both locally and internationally,

and it integrates the idea according to which the companies must increasingly adopt codes of

conduct that cover both human rights and protection of the environment. An important point

that to mention is that the commission specified that these ‘code of conduct’ are here to

supplement the existing national and international legislation. Besides, as the text settled by the

commission had no element that could be juridically enforceable, nonetheless it specified that

it has to be used in cooperation with the existing legislations. It starts to be not only advice but

something that could supply a juridical line of argument.

Chapter 2: Standard COM 2002-347

Secondly, the European Commission has renewed its work in 2002 COM 2002 347

FINAL ‘Commission Communication on Corporate Social Responsibility: A Business

contribution to Sustainable Development’48. It is the first time that the Commission establishes

the link between CSR and sustainable development and tries to expose the strategies of the

European Union on CSR. Among the principles it lists, it recalls that the nature of CSR activities

is voluntary, however it also reminds the transparent nature of these activities and their

credibility. Moreover, it recalls the respect that must be observed with regard to international

agreements and instruments implemented in the field of CSR, in particular those of the IOP and

the OECD.

48 European Commission Communication COM 2002 347 Commission Communication on Corporate Social Responsibility: A Business contribution to Sustainable Development; online : https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2002:0347:FIN:EN:PDF

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By doing so, it encourages businesses to adopt codes of conduct, management standards that

integrate social and environmental aspects into the day-to-day activities. For instance, internal

and external audits, labeling of products and standards of socially responsible investment.

Chapter 3: Standard COM 2011 681 FINAL

A paradigm shift took place on the 25th of October 2011, a communication on the new

European Union’s strategy COM 2011 681 FINAL49, which adopted a new definition of

corporate social responsibility.

Indeed, it settled the principle of the company’s responsibility with regards to the

effects they have on society. Moreover, it exposed that in order to take this responsibility, the

companies have first to comply with current legislation and agreements with social partners.

To fulfill their social responsibility, companies must have engaged a process in close

collaboration with their stakeholders to integrate social, environmental, ethical, human rights

and consumer concerns into their business activities.

The new version of CSR revises the European Union’s vision on the subject for two

reasons. Firstly, it integrates compliance with current legislation and collective agreements.

This could be considered obvious; however, it is the beginning of the judicialization of

corporate social responsibility.

Secondly, it imposes specific goals and the term of obligation appears in texts. It is an

obligation, so we finally start to leave the field of volunteering to enter to the mandatory area.

However, the European Union imposed only an obligation of means and not as of a result. By

this approach, the EU was sure to not offend any companies according to the certain flexibility

49 European Commission Communication COM 2011 681 Final on European Union’s strategy for Corporate Social Responsibility; online: https://www.europarl.europa.eu/meetdocs/2009_2014/documents/com/com_com(2011)0681_/com_com(2011)0681_en.pdf

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of the standard, allowing a more favorable reception by the companies. Nonetheless, it is a

beginning.

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PART III. IMPLEMENTATION OF THESE STANDARDS

Corporate social responsibility is currently an essential concept in the business world,

a popular subject for the values advocated, a subject that has given rise to numerous academic

studies and that has started to develop some grounding in stakeholders. Despite the international

and European standards, we observe that these standards have brought a lot about techniques

to adopt but also about the measures to establish within a society in order to ensure that the

principles conveyed by the notion of CSR are respected, even if they have no binding legal

force. According to that, companies have always been more or less free to apply these standards,

the repercussions of non-compliance have been problematic from the point of view of image

and media rather than judicial.

This rather delicate situation can be explained by the coexistence of soft law and hard

law. The soft law is at the origin of many norms in our society. The use of soft law has been a

real contribution to the concept of corporate social responsibility since, as its adjective ‘soft’

suggests, it allows for the introduction of a degree of flexibility. This enabled the beginning of

the integration of CSR into the normative framework. If the concept had been directly

established in terms of hard law, the notion of CSR could have been immediately rejected. The

flexible and voluntary character that constituted the beginnings of CSR probably allowed its

integration into practice but also into the minds. Once the concept is broadly accepted by all

stakeholders, hard law must come into action.

Indeed, this thesis is intended to study the normative framework established in the field

of CSR, but we cannot leave out the problem of marketing repercussions that non-respect of

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CSR’s social and environmental principles can have. A corporation that does not take into

account social and environmental considerations commits itself to a dangerous track. A

company that experiences consequences linked to its lack of investment in applying social and

environmental principles, is exposed to mediatic retaliation. The image of the company would

be jeopardized and, as it has been the case for multinational companies such as Nike, it may

take several years before consumers give their trust again to the brand. Failure to comply with

the principles of CSR leads to a risk of image and a risk of image leads to an economic risk.

Despite the notions of CSR, the company remains an entity whose purpose is to make profits.

Considerations should be given to the other possibilities offered to companies to

enforce CSR concepts. In this case, it is possible to consider the option of the contract. It would

be established from the outset specific CSR concepts that a party would like to see applied. In

case of non-compliance, it is easier to engage the liability of the party with whom one has

business relations rather than enter into endless debates of legislation which are different from

one state to another. The parties would be directly in a contractual relationship. It is an option

for corporations however both parties have to agree on it, and as a contract is an agreement

between two parties, it does not have the power of the law since parties can decided to refuse

some obligations. Nonetheless, it will allow to deal with a failure to comply with CSR principles

on the ground of contract which leads to a different approach of the subject in Court.

It seems that CSR is an internationally accepted principle, but clearly not

internationally applied. It also happens that only the national application has a real influence on

the subject. Therefore, it is necessary to study how the state’s national legislation has been able

to use international and European standards for corporate social responsibility in the

establishment of its domestic law, and how case law has evolved in this area regarding the

existing or non-sufficient legislation.

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Title 1: Soft law v. Hard Law

In the context of CSR, when soft law and hard law are taken into consideration, the

situation of transnational companies must be taken into account. In fact, these companies

operate in different territories and are not subject to the same national regulations. These

companies are therefore governed mainly by national laws. In such a way that they are

ultimately not legally bound to apply the standards established by the treaties. The existence of

CSR is trapped between notions of territorial boundaries of national rights and the international

economic activity that a corporation can have. CSR’s soft law is characterized in particular by

the standards established by international organizations which, knowing that it does not have a

legally binding power, has tried to regulate the economic activity of companies by establishing

devices, principles and guidelines.

If international organizations have wanted to regulate the economic activity of

transnational corporations, this is mainly due to the international impact that a company can

have. Corporate decision-making does not directly impact a person as the company is a non-

physical legal entity and therefore all stakeholders may be negatively or positively impacted.

The guiding principles of the OECD, the ILO Declaration, the Global Compact, the UN Guiding

Principles and ISO 26000 have all contributed to this. For example, in 2011, the European

Commission wanted to monitor European companies with more than one thousand employees

committed to taking account of these recognized principles of CSR and the ISO 26000 standard.

As mentioned earlier in this argument, the Commission has not established any judicial

consequences for any breach and does not make any legislative proposal. The device is purely

voluntary.

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Moreover, it is only if this commitment is made that a supervision will be set up. This

device is soft law. Therefore, it is a voluntary approach accompanied by the constraint of

monitoring. Finally, soft law does not consist of a total absence of constraint but rather one that

will be different from hard law. This very thin difference is what makes all the difference. It is

mentioned above that one of the means of pressure that CSR can have on society is the risk to

create a negative publicity in case of non-compliance. Therefore, in case of non-compliance

with these principles of soft law, the sanction will be more mediatic than judicial. However,

this type of sanction also has its advantages since it constitutes a real means of pressure.

This media sanction is not new since it can also be found in the Global Compact of

l999. Indeed, States which have signed this must try to set up the principles established by the

text and thus use the logo of the Global Compact. But it is a subject that has given rise to much

criticism since some non-governmental organizations have considered that corporations could

benefit from the influence of the UN without being really constrained to anything. Since 2003,

a communication on the progress must be made by the companies otherwise they are removed

from the list of active participants. It is still a mediatic sanction.

Notwithstanding, it can be seen that in French law the soft law interferes in the hard

law. Indeed, according to the article L. 121-1- 1 of the French Consumer Code, if a company

maintains in these commercial documents its belonging to the Pact whereas it was erased from

the UN list of active participants, its liability can be engaged because it can be considered as

deceptive marketing practices. The limit can therefore be very thin. This principle can be

illustrated by the case Supreme Court of California, Kasky v. Nike, hw, 27 CAL 4 th 939,

SO87859, May 2, 2002. This case states that the use of information relating to membership in

the Global Compact to improve its media image and therefore to challenge consumers has a

nature purely commercial. It is important to mention the Pact and its consequences in this area

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since it can be very clearly identified that in a case like this, soft law can very quickly switch

to hard law.

ISO 26000 is also an excellent example of CSR regarding the position of soft law

and hard law. This standard has attempted to integrate elements of international law. We are

talking here about attempts.

ISO 26000 wanted to refer to standards that can be qualified as legal, even though its

drafters absolutely did not want to establish a standard of any legal significance. In the same

way that the European Union in these books did not initially seek to create legally binding

standards. It seems that the drafters of ISO 26000 did not create any legislation in order to avoid

going against the opinion of states and corporations. Thus, a form of guide of conduct has been

created which can potentially be freely adopted and does not create any debate. This voluntary

aspect was once again a mean to be sure that notions of CSR would be globally accepted. It

was a way to bring CSR into mentalities without being confronted with a virulent opposition.

There is an expression in French law about judges, it says that judges are the ‘mouth

of the law’ so in other words, it means that it is the person that express the spirit of the law and

interpreted it.

The interpretation of a text and its effectiveness is not limited to the will of its authors

since it has to conform with state’s customs, legislating process and to the different

interpretations that can be made by the judges who compose the Courts of the country. Indeed,

an international text can be adapted to the states in which it attempts to impose itself.

The principle of states’ sovereignty allows them to incorporate into their national law

ISO standard’s regulations. The norm is composed of soft law rules, but soft law can be

incorporated into hard law. It is not impossible, everything is a question of adaptability

regarding the legal system of the State.

The ISO 26000 standard tends to extend the influence of international law since it is

composed of characteristic elements of international law.

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One of the benefits of the standard is that it institutes behaviors that businesses should

follow. What is important and what is 'hidden' behind this is that it is also a way to make

international public order prevail on the local law in countries where the citizens see their

fundamental rights violated. A soft law purpose that yet could easily take precedence over hard

law. The problem is that national law often prevails in this area. Despite the pressures that

organizations exercise on states and or even a pressure that can emerge from the companies on

the public authorities, the hard law always quickly reclaims its place as king. The principle of

territoriality dominates.

A good illustration of this is the American Alien Tort Claims Act, the ATCA.50 The

law is a good example of extra territoriality since it allows foreign victims to sue in the states

natural or legal persons who have violated international conventions on human rights. However,

it can be used only in the eventuality in which the persons prosecuted are in the United States.

It is not a perfect system.

In the guiding principles of the OECD and ISO 26000, there is the idea of going

beyond the autonomy of corporations.

Companies must be able to anticipate the negative effects that their activities may have

on the global level. It is a principle of sphere of influence. The company must be able to modify

the harmful practices of its subsidiaries, for example, or its subcontractors. Company and its

sphere of influence, its indirect connection with the consequences of stakeholders’ practices,

may be a form of vicarious liability.

The OECD Guidelines already constitute a normative leap compared to other

international standards since they set up national contact points as mentioned above. It is a

process that ultimately has nothing legally binding because the proposed recourse to NCPs is

50 Alien Tort Statute (also called Alien Tort Claims Act ACTA), 28 U.S.C. § 1350; online: https://www.law.cornell.edu/uscode/text/28/1350

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not judicial. It is almost like a law but not yet. These national contact points have an advantage

which is also a disadvantage: they are submitted to the states. If the national contact point was

international and managed by the OECD, it would be preferable, independence for the wiles of

the state. If States want to prevent these NCPs from gaining power, they can reduce the budgets.

In the same way as before, the mediatic sanction is the sanction which applies.

Therefore, there is a real competition in this area between international standards and

national laws. National law ultimately predominates.

One of the major problems in CSR is this soft law / hard law confrontation. Therefore,

this difference is between international standards, that will register voluntary approaches with

constraints that can somehow be assimilated to sanctions, but which are ultimately mediatic

sanctions, and the national law, which settles penalties.

As a result, there is a risk of confronting two types of companies. On one hand, those

virtuous which strive to implement CSR measures and wish to implement more restrictive and

effective sanctions mechanisms so that their efforts are recognized by the stakeholders. On the

other hand, those less virtuous which let the stakeholders think that they are implementing

international standards while they are not and embellishing the reality. This is, according to the

law, typical of unfair competition.

Companies may require public intervention on the subject. There is a need of

transparency advocated by the standards.

It is absolutely necessary to establish a legal framework to create a harmony, a balance

on the market. Companies remain free to implement their code of conduct. Moreover, they stay

free of their room for maneuver since they are entitled to self-regulate.

But this self-regulation must also find its limits on the international level. Soft law and

hard law are complementary. These standards are a source of inspiration in the drafting of

corporate codes of conduct and it is an excellent point. However, it is obvious that there is a

40

need of improvement regarding corporate social responsibility from an international point of

view.

Finally, it is clear that this failure of international law in the area of corporate social

responsibility has led to initiatives on the national’s level. It is the hard law that imposes itself.

It seems that it is only under the condition of judicial threat that things are gradually change.

Title 2: Application on the national level

When we observe the principles illustrating CSR, we can notice that the ideology of

CSR has for years been subject to soft-law regulation. Despite the existence of a thin line

between soft and hard law, there is a predominance of soft law in this area. Indeed, it is clear

that there is a legal void that does not allow CSR to be applied properly. If legislators do not

focus on the matter, it can have major repercussions.

First of all, at the corporate level, CSR principles in social, environmental and criminal

matters will not be uniformly applied since there are too few laws to force companies to apply

them. Consequently, may not automatically be held liable by bringing a case to the courts if

these principles are of a voluntary nature.

It can also be an issue in courts as there is no ‘law’ upon which on which to rely to

provide a solution.

Thus, the law should incorporate non-binding soft law concepts in order to turn them

into hard law. This does not exclude that hard law makes use of the soft law to refer to condition

of application.

The problem of normativity with regard to CSR is found in the idea that when binding

norms are set, application of CSR is no longer 'responsible' but is performed because of the

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constraint. The heart of CSR is characterized by its reference to the responsible nature of the

company's actions. The law and its binding aspect might not be compatible with it. There is a

real opposition between the notion of CSR and hard law.

Bowen, in his work The Social Responsibilities of the Businessman, stated that the

more public intervention is important in the field of business related to ethics, health, safety at

work or in matters protection of the environment with a goal to supervising economic activities

and avoiding abuses, the more companies will apply CSR. He adds that with the ‘blue sky’ laws

on fraud and financial manipulation, antitrust laws, minimum wage laws or the recognition of

social rights relating to collective bargaining or the protection of workers, companies will prefer

to move towards an internal policy and establish their own code of conduct51. Therefore, there

is in this case a real opposition to any legal action and any state intervention. This is specific to

the American economic system of free trade.

Thus, CSR for nearly half a century was abandoned by the government, leaving the

matter in the hands of the private sphere and self-regulation.

It is ultimately this delay that has led some states to make up for lost time and to look

into it. For this reason, CSR’s hard law have emerged a posteriori. The scale of the phenomena

must have convinced public authorities to study the question seriously. Finally, there is

recognition of the relevance of the societal responsibility of companies by the legislator.

The government finally decided to look into the issue of CSR legislation. In this case

it would be interesting to study the different areas of intervention of CSR and to study their

integration in national law. Then, it would be interesting to focus on the laws settled in France

51 Bowen Howard, The social responsibilities of the businessman (New York: Harper & Row, 1953).

42

and in Canada to compare the implementation. This would provide a benchmark to evaluate the

integration of flexible and international law standards into hard and national law.

One of the main interesting points of this comparison between France and Canada

relate to the fact that both countries are on different continents, with different history, different

culture, or even different ways of doing business. These two countries, with the same

international standards to refer to can have different approaches to CSR. They also may focus

on different point. The economic structure can be different. For example, even if the French

governments have privatized many companies, the French economy remains well known for

the significance of its public sector. Whereas, for example, Canadian major companies can be

found in the extractive sector. This difference between economic approaches explained the

potential differences in their legislation. Moreover, besides economic elements, and cultural

factors, the practice of CSR can also be influenced by the different groups of social and

environmental actors in each country ‘because many people think deeply about the origins and

development of their institutions in an analytical, political and historical way’52.

Chapter 1: France’s application

Like mentioned above, besides the political and economics differences, the cultural

differences between countries can also have impacts in their approaches of CSR.

In France, there is a real influence of traditions and history that can be more present

than in Canada. France has a tradition regarding CSR. It is not well known internationally

because of the very few articles on the subject that have been writing in English by French

citizens. Indeed, the barrier of the language had limited France to its relationship with French

52 Charkham Jonathan, Keeping Good Company: A study of corporate governance in five countries (Oxford: Oxford University Press, 1995).

43

speaking countries like Belgium, Canada, and Switzerland. ‘As compared to many other

countries, and particularly to the United States and Britain, the French State played a leading

role in the field of CSR between the mid-1970s and the mid-1980s, achieving changes via

legislation. For example, France was a pioneer in requiring corporate social reporting,

introducing legislation for the ‘bilan social’ (social report) in 1977’53.

1. French’s domestic legislation

1.1. The obligation of transparency.

In French law, one of the major breakthroughs in CSR at the national level is the

implementation of extra-financial reporting.

Indeed, financial reporting is a principle already established in companies, but the

implementation of extra financial reporting is recent. While a company initially had to look at

purely financial data’s, this time it should look at a social and environmental rating that

converges to the principle of transparency advocated by the different international standards

mentioned above.

This technique makes it possible to ensure transparency for shareholders who would

like to invest in an 'ethical' company today. This principle of transparency results in a perfect

accessibility of information in all areas that can affect public opinion and therefore an obligation

to communicate. This obligation is not new, but its establishment was mainly reserved for the

shareholders and associates of the company. Now CSR concerns all stakeholders. Moreover,

the European Union had also impact on France regarding its legislation.

53 Berthoin Antal Ariane & Sobczak André, ‘Corporate social responsibility in France: A mix of national traditions and international influences’, Business and Society, SAGE Publications, 2007, 46 (1), pp. 9-32. 10.1177/0007650306293391. hal-00765278, p. 6, at para 6 [Berthoin Antal & Sobczak]; online: https://hal.archives-ouvertes.fr/hal-00765278/document

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1.1.1. Impact of the EU

At first, extra-financial reporting is mentioned in international standards, in particular

by the Global Reporting Initiative.

However, the European Union has intervened in this matter since the first

recommendation of the European Commission 2001 is inviting companies during the

establishment of the accounts to take into consideration environmental and social aspects of the

company. These principles are included in a 2003-51 Directive54 in 2003. This directive

provides for the first time the publication of recommendations in social and environmental

matters.

Afterwards, it is only following its 2013-34 Directive55 of 2013 on the publication of

extra-financial information that the Commission planed for companies to include performance

indicators of a financial nature as well as non-financial in the management report regarding the

company’s activity and more particularly to environmental or social issues.

Finally, the 2014-94 Directive56 of 2014 noticed that too few companies have taken

action in terms of extra financial reporting. In order to unify information published within the

EU, the Directive had mandated a non-financial reporting requirement in the management

report. But the scope is limited since it excludes SMEs. Therefore, this only concerns large

companies with a number of 500 employees. These companies must be considered as entities

of public interest, i.e. listed companies, banks, insurance companies or state-owned companies.

54 Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003, amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings, Official Journal of the European Union, L178/16; online : https://op.europa.eu/en/publication-detail/-/publication/d8fc17a1-0bba-4628-b6f6-cf670b2f744b/language-en 55 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013, on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC, Official Journal of the European Union, L.182/19; online: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32013L0034 56 Directive 2014/94/EC of the European Parliament and of the Council of 22 October 2014, on the deployment of alternative fuels infrastructure, Official Journal of the European Union, L307/1; online https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0094

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This information must be published in the management report or in another separate

report but communicated simultaneously. Failing to set out all the elements that the report must

contain, it must provide a clear and reasoned explanation: the comply or explain principle. Yet,

in the case of sensitive information, companies may refuse certain disclosures.

One might therefore wonder why a national law’s intervention is necessary? This can

be explained by the following reason: European law does not impose any obligation of control.

This limit explains the intervention of French national law.

1.1.2. National French legislation

Following the publication by the European Commission of its directives, the French

legislator decided to intervene.

France is committed in a movement of moralization of the business’ life. As such, the

legislator has decided to make the communication of companies on their social and

environmental performance mandatory. This decision took shape through the NRE French law,

‘Nouvelles Régulations Economiques’ (New Economic Regulations (NER))57 enacted on May

15, 2001. This legislation had ‘supplemented the 1977 law on the ‘bilan social’ (social report)

by expanding the scope of reporting and changing its readership’58.

This law enshrined in the French Commercial Code the Article L225-102-159. The

purpose of this article is to constrain listed companies to include in their annual management

report information ‘on how society takes into account social and environmental consequences

57 NRE Law (New Economic Regulations) May 15, 2001, Law n°2001-420, JORF 16, May 2001, p. 7776, text n°2 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000000223114 58 Berthoin Antal & Sobczak, supra note 53, p. 7, at para 2. 59 Article L225-102-1 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000037556825&cidTexte=LEGITEXT000005634379&dateTexte=20181102

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of its activity’60. The French Decree of February 20, 200261 subsequently came to supplement

the NER law. It provides the list of social and environmental information to communicate. This

process is in line with the concept of triple bottom line which was developed by Anglo-Saxon

academics62.

But this law has been widely criticized because of its limited scope, especially limited

to listed companies. Besides, the interpretation of keys elements was not always clear,

particularly regarding the scope of the application of the reporting obligation and it led to

different interpretations from one company to another. Moreover, one of its weakness was the

lack of provision for any kind of stakeholder’s dialogue. Finally, no sanction or control has

been provided by the legislation with regard to this extra-financial information. It does not

impose any external audit of the information.

The legislator has therefore decided to rework this law on the occasion of law Grenelle

I63 of August 3, 2009 on the protection of the environment. On this occasion, obligations were

extended to unlisted companies.

Following the NER law, the French law known as the Grenelle II64 was enacted on

July 12, 2010. This law relates to the national commitment to the environment. The Grenelle II

law allows three major evolutions.

In the first instance, the scope is expanded. In a second step the content of the

obligation has been amplified. And lastly, the integration of the principle of verification by a

60 Article L225-102-1, supra note 59. 61 French Decree of February 20, 2002, JORF n°44 of February 21, 2002, p. 3360, text n° 16 (French Official Law Journal); online : https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000000775209&categorieLien=id

62 Elkington John, Cannibals with forks: The triple bottom line of the 21st century business (New Society Publishers, 1998).

63 Grenelle I Law August 3, 2009, Law n°2009-967, JORF n°0179 of August 5, 2009, p.13031, text n°2 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000020949548 64 Grenelle II Law July 12, 2010, Law n°2010-788, JORF n°0160 of July 13, 2010, p. 12905, text n°1 (French Official Law Journal); online : https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000022470434

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third party of the published information has been imposed. This law has expanded the obligation

to provide non-financial information to certain unlisted companies that have a balance sheet

total or a turnover, and a number of employees exceeding thresholds set by the French Decree

n ° 2012-557 of April 24th, 201265.

Regarding the identification and management of sustainable development issues

related to the economic activities of companies, stakeholders should be in favor of intervention

by a third party to ensure the credibility of the information provided by companies. The Grenelle

II law identifies the methods of intervention and the mission of the independent third-party

organization (ITO). Thus, the law and the Decree of May 13, 201366 makes it mandatory for

listed and unlisted companies to verify the information transmitted. But also, the issuance of a

reasoned opinion by an independent third party with regard to the presence in the management

report of the required information but also their sincerity67.

The non-financial information will be verified by the organization and its opinion will

be given and sent to the general meeting of shareholders at the same time as the management

report. We seek here to generate debates within the organs of society. The ITO will verify that

all the information required by law are present. In case of omission, it must verify that these

omissions are justified. Then, it will give a reasoned opinion on the sincerity of the information

contained. It must report on the diligences it has accomplished to fulfill its mission. Finally, it

constitutes a conclusion with an attestation of sincerity.

The problem with the ITO is that it must be neutral, yet it is appointed by the company's

managing director or board of directors for a maximum of 6 years. This practice does not ensure

perfect impartiality.

65 French Decree n°2012-557 of April 24, 2012, JORF n°0099 of April 26, 2012 p. 7439, text n° 18 (French Official Law Journal); online : https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000025746900&categorieLien=id 66 French Decree of 13 May 2013 determining the procedures under which the independent third-party body conducts its mission, JORF n ° 0136 June 14, 2013, p. 9861, text n°7 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000027541680&categorieLien=id 67 Ibid.

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As regards to sanctions, non-compliance with this extra-financial communication does

not give rise to explicit sanctions. The applicable regime is similar to the one of financial

obligations. Paragraph 3 and 5 of the Article L225-102 of the French Commercial Code68

provide for various sanctions, namely an injunction, managers' liability, the sanction of the

French independent Authority of Financial Markets or the Competition Authority.

This remains real progress on the national level since it is a real legal framework which

governs the extra financial reporting. The sanctions, however, remain rather 'light'.

They consist more of warnings than severe penalties. However, they can have real

consequences for companies, particularly in the mediatic and image point of view.

Regarding environmental matters, the French legislator enacted the law of 17 August

2015, known as the Energy Transition Law69 for green growth. The founding idea of this text

was to constitute a foundation statement constitutive of a new French energy model. Its goal is

to reduce by fourfold the emissions of greenhouse gases by 2050.

68 Article L225-102 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000035181850&cidTexte=LEGITEXT000005634379&dateTexte=20170714 69 Energy Transition Law August 17, 2015, Law n°2105-992, JORF n°0189 August 18, 2015, p. 14263, text n°1 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000031044385&dateTexte=20191129

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1.2 The duty of care

On March 27, 2017 CSR70 evolved at the national level following the adoption by the

French National Assembly and following the referral to the Constitutional Council71 of the law

relating to the duty of care of parent companies. This law is one of the consequences of the

Rana Plaza disaster in Bangladesh72 mentioned earlier in this thesis.

The French law July 7, 201473 on the orientation, development policy and international

solidarity as well as the law of July 10, 201474 fighting against unfair social competition (social

dumping)75 have already established the basis of this duty of care.

The duty of care institutes in France a civil liability regime based on the Article 1240

of the French Civil Code76. The purpose of this text is to create an obligation for large

companies to set up a vigilance plan to identify and prevent risks related to their activities

throughout their supply chain.

Their civil liability may then be engaged according to the conditions of liability of the

French common law. This will be either in case of absence or insufficiency of the vigilance

plan or in case of failure in its implementation. However, this law can be criticized for its lack

70 French Law on the duty of care March 27, 2017, Law n°2017-399, JORF n°0074 March 28, 2017, text n°1 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000034290626&categorieLien=id 71 Constitutional Council, Decision n°2017-750 DC, March 23, 2017; online : https://www.conseil-constitutionnel.fr/decision/2017/2017750DC.htm (The Constitutional Council had been seized on February 23, 2017 by 60 parliamentarians). 72 International Labour Organization exposed the Rana Plaza incident and its aftermath; online: https://www.ilo.org/global/topics/geip/WCMS_614394/lang--en/index.htm 73 French Law on the orientation, development policy and international solidarity July 7, 2014, Law n°2014-773, JORF n°0156 July 8, 2014, p. 11242, text n°4 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000029210384&categorieLien=id 74 French Law fighting against unfair social competition July 10, 2014, JORF n°0159 July 11, 2014, p.11491, text n°1 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000029223420&categorieLien=id 75 Ibid. 76 Article 1240 of the French Civil Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000032041571&cidTexte=LEGITEXT000006070721&dateTexte=20161001

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of precision. French law should provide for more decrees as to its implementation, otherwise it

will be left to the discretion of the judges and the case-law of the Court.

Indeed, this law can be criticized by supporters of soft law (for minimal supervision)

and by supporters of a hard and binding law. First of all because it only imposes itself on very

important French companies. In addition, there are no provisions to facilitate victims' access to

justice, in particular because the burden of proof is on the victims. Secondly, it can also be

perceived as ‘uneconomic’ because of the managements costs in implies. Knowing that the

company's main goal is to make profits, some might see this type of expense as useless. And

finally, the legal consequences of this law can be the multiplication of disputes. This can be

considered as a plus or minus.

Indeed, the search for a right for victims to claim damages in Court is also what is

sought by the hardening of CSR principles. However, the development of a multiplication of

Court referrals does not only present advantages, it is also a large number of disputes to manage

and whose management is not always easy.

This law requires any company to establish a vigilance plan, subject to thresholds. This

applies only to companies that employ, at the close of two financial years, at least 5,000

employees and in its direct or indirect subsidiaries whose head office is located in France or at

least 10,000 employees and in its direct or indirect subsidiaries and whose head office is in

France or in a foreign country77.This plan makes it possible to identify the risks resulting from

its activities. These risks can come from its subsidiaries and the companies it controls, but also

from its economic partners. We can only point out how high these thresholds are and thus limit

the scope of the law.

77 French Law on the duty of care March 27, 2017, Law n°2017-399, JORF n°0074 March 28, 2017, text n°1 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000034290626&categorieLien=id

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The purpose of this law is to prevent human rights abuses or the violation of

fundamental liberties; health; human safety and the environment78.

It must be underlined that this law is very much in line with the principles established

by the concept of CSR. This is a real strengthening of the practice of soft law that can be

established by companies in their internal regulation.

It creates a desire to become aware of the economic domination79 that a corporation

can have and how it must be careful regarding the scope of its actions, its activities. Therefore,

the law includes all the stakeholders involved in its activities.

As for the application of the law, there remain some doubts regarding its content.

Indeed, the law tries to prevent 'serious' violations that can be made to human rights and

fundamentals liberties, but what is the rating scale of these violations? How to determine the

severity thresholds?

The application of this text is limited to the society’s sphere of influence. In fact, only

those activities that fall within the sphere of influence of the ordering company are subject to

the obligation to establish a vigilance plan. For the purposes of the Article 233-16 II of the

French Commercial Code80, this means companies in which the company directly or indirectly

holds the majority of the voting rights or the companies for which it has appointed a majority

for two successive financial years or companies over which it has a dominant influence under

78 Article L225-102-4 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000035181820&cidTexte=LEGITEXT000005634379&dateTexte=20170714

79 Article L233-16 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000030927205&cidTexte=LEGITEXT000005634379&dateTexte=20160101 (notion of exclusive control); POTIER D., Rapport n° 2628, 11 mars 2015, AN, p. 70 (Report from the French National Assembly). According to the terms of the article L233-16, is taking into consideration notion of ‘dominant influence of the corporation’; online : http://www.assemblee-nationale.fr/14/rapports/r2628.asp

80 Article 233-16 II of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000030927205&cidTexte=LEGITEXT000005634379&dateTexte=20160101

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contracts or statutory clauses. In addition, this concerns subcontractors and suppliers with

whom the parent company has commercial relations.

This law of March 27, 2017 takes the form of a judicialization of CSR. In fact, a

company that does not establish a vigilance plan could face a prior notice to remedy. Then be

urged by the judge to respect the obligations provided for under penalty payments81. In addition,

an action for damages may be brought to the competent Court by any person who has an interest

in bringing proceedings82. The judge here is not directly pointed out, the competence of the

jurisdiction is. It refers to the Article 42 of the French Judicial Procedure Code83 which settles

to bring the action to the jurisdiction of the defendant’s home.

The liability created by this law is based on the principle of civil liability established

by Articles 124084 and 124185 of the French Civil Code. Three conditions must therefore be

met: the existence of a damage, a fault and the presence of a causal link.

The problem that may persist is the difficulty of establishing the existence of a causal

link between the fault that will result from this breach of the corporation’s duty of care and the

existence of 'serious' damage. This association is not so easy to establish86. In other words, in

81 Article L225-102-4 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000035181820&cidTexte=LEGITEXT000005634379&dateTexte=20170714 82 Article L225-102-3 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do;jsessionid=29F9AFABCD6551390AA6C230540F59E8.tplgfr38s_2?idArticle=LEGIARTI000031564682&cidTexte=LEGITEXT000005634379&dateTexte=20170714&categorieLien=id&oldAction= 83 Article 42 of the French Judicial Procedure Code; online; https://www.legifrance.gouv.fr/affichCodeArticle.do?cidTexte=LEGITEXT000006070716&idArticle=LEGIARTI000006410140 84 Article 1240 of the French Civil Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000032041571&cidTexte=LEGITEXT000006070721&dateTexte=20161001 85 Article 1241 of the French Civil Code; online : https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000032041565&cidTexte=LEGITEXT000006070721&dateTexte=20161001

86 Danis-Fatôme Anne, ‘La responsabilité civile dans la loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre’ (2017), Recueil Dalloz, p. 1610 (Civil liability regarding the duty of care of parent companies).

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practice the non-compliance with the due diligence requirements must have caused the damage

directly, and it is up to the victim to prove that. Moreover, that law is based on the reputational

risk and precipitates the economic sanction of the market in addition to the legal sanction by

providing a publication of the judgment by publication, dissemination or official boards87.

1.3 The obligation of compliance & anti-corruption law

In the fight against corruption, the French law 'Loi Sapin II' of 9 December 2016 on

the transparency and modernization of economic life was enacted88. This law provides for

measures to protect ‘whistleblowers’ but also to fight corruption within companies. Moreover,

this law is ‘aimed at bringing French legislation in line with the most exacting European and

international standards in the fight against corruption and at improving France’s image on the

matter abroad. Indeed until then, France was ranked only 23rd with a score of 69 out of 100,

according to The Corruption Perceptions Index 2016 published on the website of the NGO,

Transparency International. The Sapin II Law is modelled, in particular, on the US (Foreign

Corrupt Practices Act or FCPA – 1977) an UK (United Kingdom Bribery Act – 2010)

anticorruption regimes.’89

This law came in a context where the credibility of France had been seriously

questioned by the OECD in the fight against corruption. Indeed, after a first review in October

87Article L225-102-5 of the French Commercial Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000034291364&cidTexte=LEGITEXT000005634379&dateTexte=20170329

88 Sapin Law II on Transparency, December 9, 2016, Law n°2016-1691, JORF n°0287, December 10, 2016, text n°2 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000033558528&categorieLien=id 89 National Law Review Website; online: https://www.natlawreview.com/article/sapin-ii-law-new-french-anticorruption-system

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2012, the OECD Working Group on Bribery asked France to intensify its actions in order to

fight bribery of foreign public officials but also, with recommendations, to undertake reforms.

However, in 2014, the Group welcomed significant reforms undertaken by France.

‘The working Group has requested France to persist in prosecuting the offence of foreign

bribery. While acknowledging that 24 new cases have been opened since October 2012, the

Working Group remains concerned by the lack of proactivity of the authorities in cases which

involve French companies in established facts or allegations of foreign bribery’90. Indeed, in

October 2014, the Working Group underlined that ‘no French company has yet been convicted

for foreign bribery in France, whereas French companies have been convicted abroad for that

offence, and the sanctions for convictions of natural persons have not been dissuasive’91. The

Group considered that even if progress has been made, they have real concerns regarding the

efforts made by France to comply with the OECD Convention against bribery of foreign public

officials in international business transactions and insist that France pursue its efforts by

creating new reforms.

The objective of the Sapin II law has been for France to progress in this area and catch

up. One of the main strengths of this law is its extra territoriality. French law is therefore

applicable, even when the offenses are committed abroad, since they are committed by a person

who has the French nationality or a person who has most of his activity in France.

The purpose of this law is to prevent and detect corruption but also to punish it when

it is proven.

The Sapin Law was settled on many objectives. The main additional provisions of the

Sapin II Law are the following: creation of an anticorruption structure; implementation of a

90 OECD Working Groupe on Implementation of Anti bribery in France Official Website; online: https://www.oecd.org/newsroom/statement-of-the-oecd-working-group-on-bribery-on-france-s-implementation-of-the-anti-bribery-convention.htm 91 Ibid.

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program to prevent and detect corruption; establishment of a criminal settlement procedure;

extension of the extraterritorial application of French criminal law and increased protection of

whistleblower status.

In France, there are two types of corruption, active bribery and passive bribery. The

Sapin II law therefore generally addresses breaches of probity. These breaches constitute the

facts of: corruption; bribery; illegal acquisitions of interests; misappropriation of public funds,

and favoritism.

The Sapin II law allowed the creation of the French Anti-corruption Agency92. It is a

national authority under the authority of the Minister of Justice and the Minister of the Budget93.

The Agency has administrative powers of control. This power allows it to verify the

reality but also the efficiency of the anticorruption compliance mechanisms implemented by

companies, but also the state’s administrations or local authorities. It has a mission of consulting

and assistance but also a mission of control. It must prevent and detect the facts of corruption;

centralize and disseminate information to prevent and detect possible breaches of probity; to

draw up recommendations to help legal persons governed by public law but also those of private

law; prepare a multi-year national plan to fight against breaches of probity; and finally, to

support state administrations, local authorities and any person, whether physical or moral.

Finally, it will monitor the quality and effectiveness of the procedures implemented, as well as

the execution and monitoring of judicial measures94.

92 French Anti-corruption Agency Official Website; online: https://www.agence-francaise-anticorruption.gouv.fr/fr 93 French Anti-corruption Agency Official Website on its role; online: https://www.agence-francaise-anticorruption.gouv.fr/fr/lagence 94 French Anti-corruption Agency Official Website on its missions; online : https://www.agence-francaise-anticorruption.gouv.fr/fr/missions

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The Sapin II law has also allowed the creation of a procedure that allows the Prosecutor

of the French Republic to conclude a Public Interest Judicial Convention (PIJC) with a legal

person who has been implicated for acts of breach of probity.

This procedure makes it possible to lapse the public action when the legal entity in

question will execute the obligations for which it has committed itself through the PIJC. These

obligations will therefore consist either in the payment of a penalty, with an amount not

exceeding 30% of the average annual turnover; in the implementation of a compliance program

for its prevention and anti-corruption procedures for a maximum of 3 years; as well as in the

payment of damages to the victim of the offence95.

This convention is proposed by the Prosecutor of the French Republic, accepted by the

company in this case, and must be validated by the judge at the public hearing. This PIJC and

the judge's decision will be published on the AFA (French Anti-corruption Agency) website.

For instance, a convention in the public interest has already been established by the

French courts between the Prosecutor of the Republic and Google France and Google Ireland

in the Court of First Instance of Paris (Tribunal de Grande Instance).

The significant advantage of this technique is that it does not give rise to a judgment

of conviction, however the sanction will be a media exposure because the convention will be

published on the website of the Agency. On the other hand, if the agreement is not validated by

the Court or if the company withdraws, then the public action and criminal proceedings will

begin. It is a French translation of 'DPA'. The DPA is the Deferred Prosecution Agreement.

This principle is defined as ‘negotiated agreements between a prosecutor and a person -

frequently a corporate body – that is alleged to have committed a criminal offence96. DPAs

95 French Anti-corruption Agency Official Website regarding the Public Interest Judicial Convention; online: https://www.agence-francaise-anticorruption.gouv.fr/fr/convention-judiciaire-dinteret-public

96 Law Reform Commission, Issues Paper: Regulatory Enforcement and Corporate Offences (LRC IP 8- 2016), Issue 4, Law Reform Commission of Ireland, p. 33, at para 4.01; online:

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involve the suspension of criminal proceedings by the prosecutor in return for the corporate

body agreeing to cooperate in the investigation of the alleged offence97.

Finally, the article 6 of the SAPIN II law aims to protect whistleblowers. The law

defines them as a natural person who reveals or reports, disinterestedly and in good faith, a

crime or offense, a serious and manifest violation of an international commitment duly ratified

or approved by France, a unilateral act of an international organization on the basis of such an

undertaking, law or regulation, or a threat or serious harm to the public interest, of which it has

been personally aware. Exceptions are made on the facts, information, or documents covered

by the defense secret, the medical secret, and the information covered by the solicitor-client

privilege98.

In return, whistleblowers are protected by Article L1132-3-3 of the French Labor

Code99: nullity of reprisals; criminal non-responsibility; guarantee of confidentiality of the

identity of the whistleblower or penal and civil sanctions100. The article 8 of the SAPIN II

Law101 also provides in paragraph III that internal procedures for the collection of reports

should be encouraged to be set up by legal persons governed by public and private law.

https://www.lawreform.ie/_fileupload/Issues%20Papers/Issues%20Paper%20on%20Regulatory%20Enforcement%20and%20Corporate%20Offences%20final.pdf

97 McCarron Daniel, ‘Deferred Prosecution Agreements: A Practical Propose’ (2016), King's Inns Student L. Rev. 54, p. 54, at para 2. 98 Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 6; online: https://www.legifrance.gouv.fr/affichTexteArticle.do;jsessionid=EC1D54314195AE45F054C179A4982AAC.tplgfr38s_2?idArticle=JORFARTI000033558655&cidTexte=JORFTEXT000033558528&dateTexte=29990101&categorieLien=id 99 Article L1132-3-3 of the French Labor Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000028285724&cidTexte=LEGITEXT000006072050 100 Transparency International France Official Website regarding whistleblowers; online: https://transparency-france.org/aider-victimes-de-corruption/lanceurs-dalerte/#.XcrmHaclCfU 101 Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 8; online: https://www.legifrance.gouv.fr/affichTexteArticle.do;jsessionid=F915400C0691CA92583951B920B27096.tplgfr38s_2?idArticle=JORFARTI000033558657&cidTexte=JORFTEXT000033558528&dateTexte=29990101&categorieLien=id

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Confidentiality must first and foremost be guaranteed. Anonymity and the prohibition of direct

or indirect sanctions against them must be guaranteed, otherwise no one will do it.

Finally, a compliance program corresponds to Chapter III of the Act. This program is

particularly similar to the duty of care that could ultimately justify parallel processing. This

program will be controlled by AFA for the implementation of the procedure. In case of serious

breaches, it may refer to the Sanctions Committee102 and impose a financial penalty or order

the company to comply. It can also seize the Public Prosecutor and at the same time incur

criminal sanctions.

The article 18 of the law imposes on companies, which are concerned by the thresholds

stipulated by the law in terms of the number of employees and the amount of turnover to prevent

the commission of corruption in France or abroad, to adopt a code of conduct (§1), to set up

risk mapping (§3) and anti-corruption warning mechanisms (§2). This must be implemented,

among other things, internal or external accounting control procedures (§5) 103 as well as a

control system allowing internal control of the measures implemented. Penalties will be settled

by the AFA in case of violations.

However, it should be noticed that such compliance instruments have already been set

up in some companies for years and are unique to their self-regulatory system. Nonetheless,

these devices are made mandatory by legislation and these programs will have to be

supplemented by the measures proposed by the law. Moreover, in view of the information

102 AMF (French Authority of Stock Markets) Official Website regarding Enforcement Committed; online: https://www.amf-france.org/en_US/L-AMF/Commission-des-sanctions/Presentation?langSwitch=true 103 Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 18; online: https://www.legifrance.gouv.fr/affichTexteArticle.do;jsessionid=EC1D54314195AE45F054C179A4982AAC.tplgfr38s_2?idArticle=JORFARTI000033558667&cidTexte=JORFTEXT000033558528&dateTexte=29990101&categorieLien=id

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gathered, the SAPIN II law constitutes a law inspired by the guiding principles of the UN and

the OECD.

1.4 New regulation: The ‘Pacte’ Law

The ‘Pacte Law’104, the ‘plan d’action pour la croissance et la transformation des

entreprises’, i.e. action plan for business growth and transformation, is a recent law in France

and that has to be included in order to close our chapter on French national law. This law is a

new step for the economic transformation of France and regarding CSR. The Pacte wanted to

settle 10 main measures. Some of them are worth mentioning. First of all, the idea of

simplifying thresholds applicable to SMEs. The idea is to create obligations connected with

thresholds, to create a more favorable legal environment. Then, the law seeks to abolish

corporate contributions to employee incentive schemes and profit sharing, i.e. the law seeks to

facilitate employee incentive agreements for companies with fewer than 250 employees.

Furthermore, the law rethinks the role that companies will play in the society. Indeed,

the Civil French Code and the Commercial French Code will be modified to take more into

consideration social and environmental aspects and issues that companies face in their strategies

and their activities105. The Pacte law has the objective to change the definition of the corporate

purpose that the Civil French Code establishes, and for the first time in 215 years. The original

104 Pacte Law on action plan for business growth and transformation May 22, 2019, Law n°2019-486, JORG n°0119 May 23, 2019, text n°2 (French Official Law Journal); online: https://www.legifrance.gouv.fr/affichLoiPubliee.do?idDocument=JORFDOLE000037080861&type=general&legislature=15 105 French Government Website on Pacte Law; online: https://www.gouvernement.fr/en/pacte-the-action-plan-for-business-growth-and-transformation

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article 1833 of the Civil French Code stipulates that a ‘société’ (a corporation) must have a

lawful object and be created for the common interest of the partners. The Pacte added that

corporations must be managed in the interest of the corporation while considering the social

and environmental stakes of its activity.

Then, corporations will be able to define a purpose beyond profits. According to the

Pacte Law, corporations can expose the ‘raison d’être’, the principles guiding its policy and

strategy106.

Finally, this law created the ‘société à mission’ which can be translated as

‘corporation with a purpose’. The idea is for the corporation to stipulate its goal, such as social

or environmental ones and the creation of a second board, composed with at least one of the

employees in order to verify if this mission is fulfilled. That is a good step regarding CSR in

France. One of the major steps forward is to create fairer companies. The government decided

that companies have to do more then make profit.

There are no specific sanctions for failing to take into account social and

environmental issues. Nevertheless, if certain conditions are met, it can give rise to civil liability

for the company and even liability for its manager.

However, as this law is new, it seems hasty to establish that its application will be

uniform. For now, it is an assumption to expose a civil liability for the corporation. It can be a

point on which legislators can work. However, it seems that regarding Corporate Social

Responsibility, even at the national level, we face difficulty in order to identify a ‘real’ liability

for corporations. Even if mandatory laws are existing in France and that the legislators move

ahead during these last years to expand CSR liability, we can only observe that the

106 Stanford Social Innovation Review Website; online: https://ssir.org/articles/entry/french_law_revisits_corporate_purpose

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consequences are mainly administrative sanctions, penalty and mediatic sanctions. The

question is: is it different in Canada with a different legal system? Maybe the real answer is that

CSR is a theoretical concept and it may be too complex for now to withdraw these principles

from the company’s self-regulation.

2. France’s jurisprudence

Inside the France jurisprudence, there is an ambivalent situation regarding groups of

corporations which has been illustrated by the principle of ‘control’ in the French Commercial

Code. This existing ambivalence can be found within the French jurisprudence, particularly

regarding the liability of the parent company for its subsidiary’s actions.

2.1 Principle of autonomy of moral legal entity

For years, the French jurisprudence has consecrated the principle according to which

the subsidiary, as an independent corporation, is liable for its actions107. In that sense, the

commercial chamber of the Court of Cassation (Highest Court in the French Judicial System)

has recently reaffirmed this principle on the 15th of November 2011. According to this decision,

a group of corporations cannot, because of the absence of a moral personality, be subject to

rights and obligations, and so could not be sentenced108. The Highest Court of France settled

that it is not enough for a corporation to control another for it to be liable.

107 Cass. com. (Commercial Chamber of the Court of Cassation), January 16, 2001, n° 98-15.484; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000007414922

108 Cass. com. (Commercial Chamber of the Court of Cassation), November 15, 2011, n° 10-21.701; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000024821328

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However, with time, French judges settled criteria in order to put aside the autonomy

of corporations composing the group of societies in order to establish the liability of the parent

company for an act of its subsidiary. Three bases have been chosen to retain the liability of the

corporation. The first is tort law, regarding the Article 1240 of the French Civil Code109, the

‘theory of appearance’110, and the interference111.

Nonetheless, these three-basis distinctions became less clear with the 12th June 2012

case of the commercial chamber of the Court of Cassation112. To take its decision, the Court

had decided to mix the theory of appearance and the principle of interference. Indeed, the Court

of Appeal had considered that the parent company could be jointly responsible with its

subsidiary and had ‘control’ over its subsidiary. However, the Court of Cassation settled that

interference of the parent company was sufficient in this case.

Moreover, the Commercial chamber of the Court of cassation, in case of the 22th of

October 2013, has settled that the belonging of a corporation to a group can be taken into

account to appreciate if the immediate execution of a decision might lead to obvious excessive

consequences.113 In this case, the Court held that other companies of the group were able to

help it financially, that is why the financial situation had to be appreciated as a whole regarding

to the sanction114.

109 Article 1240 of the French Civil Code; online: https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000032041571&cidTexte=LEGITEXT000006070721&dateTexte=20161001 110 For example, Cass. soc. (Social Chamber of the Court of Cassation), April 30, 2014, n° 12-35.219; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000028894983&fastReqId=1691782860&fastPos=1 111 For example, Cass. com (Commercial Chamber of the Court of Cassation), February 26, 2008, n° 06-20.310; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000018204415 112 Cass. com. (Commercial Chamber of the Court of Cassation), June 12, 2012, n°11-16.109; online : https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000026028394

113 Cass. com. (Commercial Chamber of the Court of Cassation), October 22, 2013, n° 12-23.486 [Cass. com. n° 12-23.486]; online : https://www.courdecassation.fr/jurisprudence_2/arrets_publies_2986/chambre_commerciale_financiere_economique_3172/2013_4447/octobre_4744/1020_22_27670.html

114 Ibid.

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Regarding the social aspect of this relation parent company/subsidiary, in the same

spirit, the Social chamber of the Court of Cassation recognized the group of corporations as an

entity. In the case law of the 8th of July 2014115, the Court held that a parent company can be

liable for the job loss of its subsidiary’s employees as long as it is the consequence of decisions

by the parent company. This case demonstrates once more the important influence and the

recognition of the influence that a parent company can have on its subsidiary. It means that

employees of the corporation’s subsidiary can initiate a claim against the parent company for

fault and negligence in tort law.

2.2 Co-employment qualification

For many years, the French jurisprudence used the qualification of ‘co-employment’

in order to hold liable a parent company for its subsidiaries’ actions. In the case law of the 22th

of June 2011116, the Court of Cassation held that an identification between the parent company

and its subsidiary of a confusion of interest but also a confusion of activities and management,

by the interference of the parent company into the administration and management of the

subsidiary, is enough to characterize the existence of a ‘co-employment’117.

Moreover, this notion of ‘co-employment’ was discussed in the case Metaleurop. The

case of Metaleurop of the 28th September 2011 had a significant impact in CSR for the France.

First of all, this case led to a first decision on 19th April 2005118 of the Commercial

chamber of the Court of Cassation regarding environmental law. However, this case did not

lead to the liability of the parent company. But in the case of the 22th of June 2011, this time

115 Cass. soc. (Social Chamber of the Court of Cassation)., July 8, 2014, n° 13-15.573; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000029241980&fastReqId=965944292&fastPos=1 116 Cass. soc. (Social Chamber of the Court of Cassation), June 22, 2011, n° 09-69.021; online : https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000024258463 117 Ibid. 118 Cass. com. (Commercial Chamber of the Court of Cassation, April 19, 2005, n° 05-10.094; online : https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000007050495

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the Social chamber of the Court held that a situation of ‘co-employment’ exists because of the

existence of a confusion of interest, activities and management between the parent company

and its subsidiary because of an interference from one to another119. The Court notes in

particular that ‘the parent company was directly responsible for negotiating a moratorium in

the place and on behalf of its subsidiary and that the senior executives of Metaleurop Nord,

recruited by the parent company, were under the direct hierarchical control of its leader, to

whom they were regularly accountable for their management’120. The co-employment is due to

an interference, so the company had to take the responsibility for the job loss of its subsidiaries’

employees.

Finally, there is the Molex case of the 2 of July 2014121, in which the Court of

Cassation, in its Social chamber, decided to add precision to the notion of co-employment by

adding the sanction of ‘abuse of economic dominance’ by the parent company on its subsidiary,

to interference and co-employment.

To conclude, we will briefly mention that the Court of Justice of the European Union

has a vision more severe. It seems that more cases showed that the CJEU retains the liability of

the parent company more easily than the French judges. For example, in 2009 the jurisprudence

Azko122 of the CJEU settled the presumption according to the responsibility of the parent

company on its subsidiary. The CJEU settled the principle of influence of the parent company

on its subsidiary but also the idea that together they form as an economic unity. It is an inter-

economic dependence between them, that is why they should be sentenced in solidum.

119 Cass. soc. (Social Chamber of the Court of Cassation), September 28, 2011, n° 10-12.278; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechExpJuriJudi&idTexte=JURITEXT000024621540&fastReqId=695540938&fastPos=1 120 Ibid. 121 Cass. soc. (Social Chamber of the Court of Cassation), July 2, 2014, n°13-15.208; online: https://www.legifrance.gouv.fr/affichJuriJudi.do?idTexte=JURITEXT000029194325

122 C.J.C.E., September 10, 2009, Akzo Nobel/commission, aff. C-07/08 P, RTD eur., 2010; online : https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62008CJ0097 (English)

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Another example is the Competition authority in 2009 for the case Orange Caraibe123

which has imposed sanction for abuse of dominant position and recognized in the present case

the existence of the parent company’s presumption of liability established by European

Competition Law. On 6th of February 2015, the Court of Cassation held for the first time this

presumption because of anti-competitive behavior of the subsidiary.

Even if the French jurisprudence had accepted the principle of presumption, the Court

keeps the idea that it is a ‘simple’ presumption, so it is possible to reverse the direct proof as

long as it is possible to prove that the subsidiary is independent in its behavior on the stock

market124.

It is manifest that French jurisprudence and the work of the French legislation, notably

because of the importance of labor law in the country, really focus on the employee’s

relationship with the company. However, it recognizes the implication of a parent company on

its subsidiary. It means that if it can be used in commercial and labor law, theses ideas can be

linked to other incidences – as in CSR’s violations and a parent company. Nonetheless, it is

obviously difficult to hold important groups of corporations and parent companies liable for

their subsidiaries’ actions, particularly in foreign countries, notably because of the ‘sacred’

principles of limited liability and autonomy of moral legal entities in France. The jurisprudence

has to complete the law, especially if some of the French laws are not precise enough in order

to compensate the potential juridical void existing in CSR.

123 Competition Authority, December 9, 2009, decision n° 09-D-36; online: https://www.autoritedelaconcurrence.fr/sites/default/files/commitments//09d36.pdf 124 Cass. com. (Commercial Chamber of the Court of Cassation), October 18, 2017, F-P+B, n° 16-19.120; online : https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000035849114&fastReqId=705214203&fastPos=1

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Chapter 2: Canada’s application

To continue the study of CSR in terms of national legislation and to continue this

comparative study between the implementation of CSR in France and at European level and the

implementation of CSR on the American continent, and more specifically in Canada, the study

of Canadian national regulations must be considered.

Firstly, it should be noted that this study is of interest because France and Canada have

a different legal system and it is interesting to consider the implementation of CSR from

different angles.

1. Canada’s domestic legislation

1.1 Canada’s Enhanced Corporate Social Responsibility Strategy

1.1.1 Canada’s Extractive Sector Abroad

The introduction of CSR in Canada has taken a different form than France. Indeed, the

implementation of CSR in Canada is notably due to the influence of mining activity of Canada

and the environmental and social consequences, Canada's significant extractive industry

activity in the mining, oil and gas sector contributes to Canada's prosperity.

Historically, however, there have been incidents in Canada that have led the country

to consider CSR in greater depth. Indeed, an incident in Sudan concerning the company

Talisman Energy Ltd. is at the origin. The company has been involved in a human rights

violations perpetrated by the Sudanese government. It led individuals’ groups but also non-

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governmental organizations to bring complaints alleging harmful conduct which included

human rights abuses125. A report in 2009 identified 171 incidents since 1999 in which

‘international mining and exploration companies were involved in community conflict, human

rights abuses, unlawful or unethical practices, or environmental degradation in a developing

country’126. At the time of this study, Canadian mining companies recorded a total of 33% of

such incidents127.

Since the early 2000s, Canada has been criticized for its insufficient CSR efforts,

including for human rights violations that the country may have committed abroad. In 2005, a

report from House of Commons Standing Committee on Foreign Affairs and International

Trade exposed concern that Canada did not ‘yet have laws to ensure that the activities of

Canadian mining companies in developing countries conform to human rights standards’128 and

encouraged the Canadian government to focus on CSR for mining companies in order to

conform with international human rights standards. Moreover, to ‘establish clear legal norms

ensure that Canadian companies and residents are held accountable when there is evidence of

environmental and/or human rights violation associated with the activities of Canadian mining

companies’129.

125 Simons, supra note 45, p. 169, at para 1. 126 Corporate Social Responsibility: Movements and Footprints of Canadian Mining and Exploration Firms in the Developing World (2009), The Canadian Centre for the Study of Resource Conflict, footnote 4, p. 6; online: http://caid.ca/CSRRep2009.pdf 127 Ibid, p. 7. 128 Canada, Parliament, House of Commons, Fourteenth Report of the Standing Committee on Foreign Affairs and International Trade: Mining in Developing Countries - Corporate Social Responsibility, 38th Parl., Ist Sess, (2005); online: https://www.ourcommons.ca/DocumentViewer/en/38-1/FAAE/report-14

129 Ibid.

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In 2009, the Canadian government made the decision to launch its first CSR strategy

entitled ‘Building the Canadian Advantage: Canada's Corporate Social Responsibility Strategy

for the Canadian International Extractive Sector’130.

The particularity of this approach lies in the influence that Canadian extractive

activities can have abroad. Indeed, it can be beneficial for the economic activity of the countries

in which Canada operates, but also have serious consequences. This strategy reflects a Canadian

desire to promote CSR abroad.

Building on the experience and practices resulting from the first strategy of 2009, an

‘improved’ strategy announced on November 14, 2014 in Canada on CSR entitled ‘Doing

business the Canadian Way: A strategy to Advance Corporate Social Responsibility in

Canada’s Extractive Sector Abroad’131 was launched. The goal of the Canadian government is

for Canadian companies to continue to participate in the promotion of CSR abroad as well as

Canadian values. ‘It addresses some of the core shortcomings of the 2009 policy by establishing

expectations for corporate conduct, providing a more robust role for the CSR Counsellor, as

well as providing mechanisms to incentivize companies to meet the standards of conduct and

to participate in the dispute settlement mechanism’132. However, it seems that this policy ‘does

not specifically lay out the elements this responsibility as defined in the UN Guiding Principles’

and ‘nor does it meet the recommendation of the Guiding Principles by addressing the problem

of access to judicial remedies for victims of corporate-related human rights violation’133.

130 Building the Canadian Advantage: Canada's Corporate Social Responsibility Strategy for the Canadian International Extractive Sector (2009); online : https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/mineralsmetals/pdf/mms-smm/pubr-pubr/pdf/bca-rac-eng.pdf 131 Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad (2014); online: https://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/Enhanced_CS_Strategy_ENG.pdf 132 Simons, supra note 45, p. 173, at para 2. 133 Ibid.

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Companies are increasingly aware of their social and environmental impacts around

the world and are aware of relevant international standards. As a result, they are increasingly

aware of the need to consider CSR principles in their decision-making. In spite of this, for a

company it is actually very complex to manage the challenges represented by an activity abroad

as well as the management of the environmental and social risks that can be associated with it.

As part of this new strategy, which is one of the main lines of CSR regulation in

Canada, four themes will emerge from this Canadian strategy of integrating corporate

responsibility in their activities, particularly abroad.

1.1.1.1 Promote better corporate performance in CSR

First of all, the idea is to enhance companies' CSR performance134. Indeed, the

expansion of the economic activities of Canadian companies and their exploitation abroad, with

legal and political systems that may be different from the Canadian model, have to lead them

to deal with social and environmental issues and act responsibly. In order to respond to these

complex situations, the Canadian strategy requires companies to manage these risks by

implementing the principles set out in the international standards and CSR guidelines. These

principles thus lead to potential long-term benefits, particularly to stakeholders and therefore to

communities that may suffer both positive and negative consequences from their activities. This

is promoted by the Canadian government as the 'Canadian business model'.

In addition, it is required by the strategy that companies settle this system throughout

their management structure to ensure real sustainability. Indeed, we must be aware of the impact

that an activity can have on a country, both positively and negatively. You need a balance in

the operation. The positive impacts for the company must impact the stakeholders, like a ‘win-

134 Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad (2014); online: https://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/Enhanced_CS_Strategy_ENG.pdf

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win’ system. What is positive for the company must be positive for its stakeholders. For this to

happen, companies must act responsibly and conscientiously to minimize risks. The

Government of Canada expects companies operating abroad to respect human rights and

applicable laws. Moreover, that these companies observe and even override internationally

accepted standards of responsible business conduct135.

The strategy encourages companies at the beginning of a project to respectfully engage

relevant stakeholders; understand local customs; work with stakeholders; explore all the

opportunities; to work with locals to contribute to the local development and incorporate

through their strategy and management136. Companies must try to apply Canadian values in the

host country. Otherwise, a reconsideration of investment should be done.

1.1.1.2 Promoting and strengthening CSR

Secondly, the second axis of the strategy aims to promote CSR principles and ensure

their reinforcement, while retaining the central idea that companies must be able to do better

than the minimum when the standards of a country in which they operate are less than

international requirements137.

First of all, the strategy seeks to promote the international framework that exists in

terms of CSR, in particular by bringing companies into line with international guidelines. The

implementation of this strategy will be entrusted to the DFATD, working in particular with the

135 Tchotourian Ivan, Deshaye Valérie & Mac Farlane-Drouin Romy, ‘Entreprises et responsabilité sociale : évolution ou révolution du droit canadien des affaires ?’ (2016), Vol. 57, Issue 4, Les Cahiers de Droit, p. 643, at para 1.1 [Tchotourian, Deshaye & Mac Farlane-Drouin]; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?public=true&handle=hein.journals/lcdd57&div=39&start_page=635&collection=journals&set_as_cursor=2&men_tab=srchresults 136 Canadian Official Government Website regarding Canada’s Enhanced Corporate Social Responsibility Strategy to Strengthen Canada’s Extractive Sector Abroad; online: https://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-strat-rse.aspx?lang=eng 137 Tchotourian, Deshaye & Mac Farlane-Drouin, supra note 135, at para 1.2.

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National Contact Points on the implementation of the guiding principles of the OECD. This

implementation of the results is intended to be carried out in collaboration with the office of the

CSR Councilors, the Centre for Excellence in CSR, and Canada’s network of missions around

the world138. The role of this office is to provide advice and review the CSR practices of

Canadian extractive companies operating abroad139. The goal of the Centre for Excellence in

CSR is a focal point for the development and dissemination of practical tools and information

for use by a broad range of extractive sector stakeholders140.

The Canadian government recognizes the importance of international standards in

dealing with the existing problem of globalization and the export of activities from one country

to another. In addition, it is emphasized that these standards contain information on factors that

may have the potential to improve economic, environmental and social performance. Canada is

a strong supporter of promoting these standards. The new Canadian CSR strategy therefore

promotes the OECD Guidelines for Multinational Enterprises141, the UN Guiding Principles on

Business and Human Rights142, the Voluntary Principles on Security and Human Rights143, the

eight performance criteria of the International Finance Corporation on Social and

138 Canadian Official Government Website regarding Canada’s Enhanced Corporate Social Responsibility Strategy to Strengthen Canada’s Extractive Sector Abroad; online: https://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-strat-rse.aspx?lang=eng 139 Global Affairs Canada regarding the Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor; online: https://www.international.gc.ca/csr_counsellor-conseiller_rse/index.aspx?lang=eng 140 Canadian Institute of Mining, Metallurgy and Petrolum regarding the Centre for Excellence in CSR; online: https://www.cim.org/subsites/industry-resources/centre-for-excellence-in-csr/ 141 OCDE Guidelines for Multinational Enterprises (2011); online: https://www.oecd.org/daf/inv/mne/48004323.pdf

142 Guiding Principles for Business and Human Rights (2011); online: https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

143 Voluntary Principles on Security and Human Rights; online: https://www.voluntaryprinciples.org/for-companies

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Environmental Sustainability144, the OECD Due Diligence Guidance for Responsible Supply

Chains of Minerals from Conflict-Affected and High-Risk145, and Global Reporting146.

Moreover, the Canadian government wished to share CSR guidance developed in

Canada. The idea is to develop and share in Canada and abroad the additional CSR guidelines.

For example, the Exploration and Mining Guide for Aboriginal Communities147; CSR

Implementation Guide for Canadian Business148. Or even the ones elaborated by association

such as e3Plus149 developed for explorations companies and Towards Sustainable Mining

created by the Mining Association of Canada150.

Then, the government's strategy is to insist that investors recognize the importance of

Corporate Social Responsibility.

Finally, Canadian companies need to adapt to changing practices. Companies can face

incidents and questions about security, conflict, human rights, environment, corruption, rights

of indigenous peoples, and so on151. These are many considerations to focus on and that may be

144 International Finance Corporation’s (IFC’s) Performance Standards on Social & Environmental Sustainability; online: https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-At-IFC/Policies-Standards/Performance-Standards 145 OCDE (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Third Edition, OECD Publishing, Paris; online : http://dx.doi.org/10.1787/9789264252479-en

146 Global Reporting Initiative (1997) Official Website; online: https://www.globalreporting.org/about-gri/

147 Canada’s Government, Exploration and Mining Guide for Aboriginal Communities (2013); online : https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/mineralsmetals/files/pdf/abor-auto/mining-guide-eng.pdf

148 Corporate Social Responsibility (CSR), An Implementation Guide for Canadian Business (2014); online: https://www.ic.gc.ca/eic/site/csr-rse.nsf/vwapj/CSRImplementationGuide.pdf/$file/CSRImplementationGuide.pdf

149 Prospectors and Developers Association of Canada, e3 Plus; online: https://www.pdac.ca/priorities/responsible-exploration/e3-plus 150 Towards Sustainable Mining created by the Mining Association of Canada, Progress Report (2018); https://mining.ca/wp-content/uploads/2019/02/Progress-Report-2018-English-Final.pdf

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difficult to identify however, it is up to companies to regulate themselves on this point and to

comply with best practices but also to participate in self-regulation to a true control.

1.1.1.3 Establish Networking and Partnerships

The third axis of this strategy is to foster networking and partnerships. The principle

is to connect companies and professionals in the field of CSR and establish a dialogue with

stakeholders. It is a form of responsible investment. With this in mind, the Canadian Trade

Commissioner Service (TCS) comes into play. Its role is to connect businesses with local

entities to analyze CSR risks and help them build partnerships. This will enable companies to

acquire relevant expertise and information to settle in their business relationships. TCSs

therefore have a proactive role.

1.1.1.4 Moving towards dialogue and non-judicial mechanisms for dispute resolution

This is an extremely important point to discuss. The aim of this strategy is notably to

avoid going through the 'judicial settlement of disputes'. This is reasoning that should be

highlighted as worthy because mediation and arbitration are alternative dispute resolution

techniques regularly used in business law. This technique has a real advantage of discretion and

dialogue that can avoid leading to the Court. Finally, despite the intensive search for CSR

legislation and the need to determine which Court and which law can be used in the context of

CSR, alternative dispute resolution is an excellent way to facilitate the situation. It is a method

that can be fast and effective and avoids international conflicts. The Canadian strategy

encourages businesses to behave more responsibly and promotes non-judicial mechanisms of

dispute resolution.

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Nevertheless, the use of this system is purely voluntary. In the case of a party chooses

not to participate in the process of the CSR Counselor's Office or Canada's National Contact

Point, a decision will be made public.

This supports the idea that in the absence of real judicial sanctions, one of the hardest

sanctions that can be made against a company is a mediatic sanction and a heavy fine.

The office acts as a mediator between companies and stakeholders to eventually

resolve disagreements that may emerge from business relationships. As the mediator has a

neutral role, it will then examine the CSR practices abroad of the company concerned but does

not have the power to settle the dispute. This process of non-judicial review (review process)

aims to bring the parties together to find an agreement around a discreet and private mediation.

However, this technique is not intended to replace the use of the Courts to compensate

for the damage caused, whether in the foreign country in question or in Canada. It is a

transposition of the techniques of the settlements of the disputes but concerning the principles

of CSR. If the process is inadequate for the situation, the parties can turn to the NCPs to set

their different (specific instance process)152.

This strategy has many advantages. It shows a real commitment on the part of Canada

and its government to encourage corporations, especially in the extractive sector. The main idea

is to behave more responsibly. Canada promotes the principles and international standards of

CSR.

However, even if the strategy considers a settlement of alternative disputes, which

would be less expensive, more discreet and which helps maintain good business and

commercial relations with the country in which the company is established, it does not offer

152 OECD (2019) Guide for National Contact Points on coordination when handling Specific Instances, OECD Guidelines for Multinational Enterprises; online: https://mneguidelines.oecd.org/Guide-for-NCPs-on-Coordination-when-handling-Specific-Instances.pdf

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any judicial mechanism for victims. Indeed, if the role and missions of the CSR Counselor and

the NCP were discussed, it is to emphasize the absence of a judicial power and that they can

not order compensation. Mediation is a good system. It can lead to a discreet and effective

compensation. Nevertheless, this mechanism is not a guarantee of not going to Court.

Moreover, the discretion of the technique can have its advantages, especially in the

field of business, but access to justice through the Courts also allows the mediatic exposure of

the companies. This exposure is also a way for the citizens of the world to be aware of the

existing social and environmental problems.

In addition, even if the strategy establishes certain guides of conduct, finally the room

for maneuver is still left to the companies. In other words, it encourages companies to make

every effort to implement the international guidelines on CSR, nothing is imposed here, and

CSR remains in the hands of the free self-regulation of companies.

Although the strategy sets out CSR themes, it does not propose a concrete and legal

framework. The term ‘values’ implies positive behavior but nothing legally concrete and

binding is defined. ‘It does not mandate or clearly set out the expectation that companies engage

in comprehensive and ongoing human rights due diligence’153.

Nonetheless, even though this strategy initially focuses on the behavior of mining

companies given the importance of these activities in Canadian business law, we must still

appreciate the approach taken by the Canadian government. Even though this strategy does not

provide access to justice for the benefit of victims, but it has launched a movement of corporate

accountability.

153 Simons, supra note 45, p. 179-180.

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1.2.Canada’s Corporate Social Responsibility Movement

Following the implementation of this Canadian strategy, a movement of corporate

accountability has emerged. Indeed, this corporate responsibility movement has not stopped

itself at the mining sector. This movement of accountability has resulted on one hand by

legislative changes but also by judicial decisions that have helped to facilitate access to the

Courts by victims. This reflects the fact that societies can no longer ignore environmental and

social considerations.

1.2.1 Legislation

The implementation of the legislative framework was not solely devoted by the

legislator since guidelines were also introduced by the stock market authorities.

The legislator (a) was not the only one to work on the subject since these authorities

have also participated to the intensification of corporate accountability (b).

1.2.1.1 Law on sustainable development

The National Round Table on the Environment and the Economy154 that had emerged

in the late 1980s, has tried to recommend to governments, at all levels (federal, provincial or

territorial) to take sustainable development issues into account in their programs. This report

included the periodic establishment of national round tables on the environment and the

economy. However, the holding of these tables did not meet the same reception everywhere.

Some provinces have never adopted it and others have abolished it. The province of Quebec

154 National Round Table on the Environment and the Economy, Performance Report example for the period ending March 31, 2005; online: http://nrt-trn.ca/wp-content/uploads/2011/09/NRTEE-DPR-2004-2005.pdf

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wanted to go further by adopting in April 2006, the Sustainable Development Act155 (2006).

This law has attempted to integrate CSR and sustainable development concerns into policies as

well as in government actions to ensure consistency and accountability156. The law sets out

principles to guide the government in adopting its sustainable development strategy. In

addition, the SDA introduces the Article 46.1 to the Charter of Human Rights and Freedoms157.

This article aims to protect the right of everyone to live in a healthy environment that respects

biodiversity. Moreover, in 2009, the Canada’s government has enacted the Federal Sustainable

Development Act158.

The main idea here is not to develop all the details of this law, but it is mentioned here

to expose the Canadian’s sustainable development approach and how it must lead to an

application linked to the country’s activities, particularly in the activities of its companies and

the environmental impacts they may have on the country but also in the countries in which these

companies operate. It is a real tool.

1.2.1.2 Law on transparency

In August 2013, a Canadian Court decided to convict Nazir Karigar for conspiring to

bribe Indian government officials with US$450,000 following a failed attempt to secure an

airline security contract for Cryptometrics Canada, an Ottawa-based technology company159.

‘The Karigar decision is significant, as it marks the first contested trial of a charge under

Canada's Corruption of Foreign Public Officials Act (‘CFPOA’), and the first conviction

155 Sustainable Development Act (Loi sur le développement durable), Province of Québec, 2006, Chapter D-8.1.1; online: http://legisquebec.gouv.qc.ca/fr/pdf/cs/D-8.1.1.pdf 156 Tchotourian, Deshaye & Mac Farlane-Drouin, supra note 135, p. 652, at para 2.1.1.1. 157 Charter of Human Rights and Freedoms (1975), Chapter C-12, Article 46.1 (2016) c.3, s.19; online: http://legisquebec.gouv.qc.ca/en/showdoc/cs/C-12 158 Federal Sustainable Development Act, S.C. 2008, c.33; online: https://laws-lois.justice.gc.ca/PDF/F-8.6.pdf 159 R. v. Karigar, 2013 ONSC 5199, [2013] O.J. No 3661; R. v. Karigar, 2014, ONSC 3093; online: https://www.thelitigator.ca/wp-content/uploads/Karigar-Sentencing-Decision.pdf

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against an individual. Such is the natural result, however, of Canada's recent determination to

step up the fight against foreign corruption’160.

Originally, Canada adopted the Corruption of Foreign Public Official Act161 in 1998,

in order to implement the Convention on Combating Bribery of Foreign Public Officials in

International Business Transactions162. ‘The CFPOA is ‘outward oriented’ in the sense that it

focuses on bribery of foreign public officials, while domestic bribery is already the subject of

Criminal Code163 provisions’164.

In order to moralize the extractive sector, The Extractive Sector Transparency

Measures Act165 continued on the same line as the previous law and was adopted on June 1,

2015. Cheryl Gray and Daniel Kaufmann defined corruption as ‘the use of the public office for

private gain’166. The ESTMA seeks to implement Canada's international anti-corruption

commitments through the imposition of extractive sector measures167.

The purpose of this act is to implement measures that enhance transparency and

measures that impose reporting obligations with respect to payments made by entities168. Those

measures have a purpose: deter and detect corruption including any forms of corruption under

160 Hutton Susan & Beaudry Paul, ‘Canada Steps up the Fight Against Foreign Corruption’ (2014), Lexpert Business of Law, at para 1; online : https://www.lexpert.ca/article/canada-steps-up-the-fight-against-foreign-corruption-1/?p=%7C273&sitecode=DIR 161 The Corruption of Foreign Public Official Act, S.C. 1998, c. 34; online: https://laws-lois.justice.gc.ca/PDF/C-45.2.pdf 162 OECD (2011) The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; online : https://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf 163 The Criminal Code, R.S.C., 1985, c. C-46; online: https://laws-lois.justice.gc.ca/PDF/C-46.pdf 164 Bildfell Connor, ‘The Extractive Sector Transparency Measures Act: Critical Perspectives’ (2016), Vol I.2, Issue 2, JSDLP – RDPDD, p. 240, at para 2 [Bildfell]; online: https://www.mcgill.ca/mjsdl/files/mjsdl/bildfell.pdf 165 The Extractive Sector Transparency Measures Act, S.C. 2014, c. 39, s. 376; online: https://laws-lois.justice.gc.ca/PDF/E-22.7.pdf 166 Gray Cheryl W. & Kaufmann Daniel, ‘Corruption and Development’ (1998), Vol. 35, n°1, Finance & Development, p. 7, at para 3; online : https://www.imf.org/external/pubs/ft/fandd/1998/03/pdf/gray.pdf 167 The Extractive Sector Transparency Measures Act, S.C. 2014, c. 39, s. 376; online: https://laws-lois.justice.gc.ca/PDF/E-22.7.pdf 168 Ibid.

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any of sections 119 to 121 and 341 of the Criminal Code and sections 3 and 4 of the Corruption

of Foreign Public Officials Act169.

The Corruption of Foreign Public officials Act settles that:

‘Accounting:

4) (1) Every person commits an offence who, for the purpose of bribing a foreign public official in order to obtain or retain an advantage in the course of business or for the purpose of hiding that bribery, (a) establishes or maintains accounts which do not appear in any of the books and records that they are required to keep in accordance with applicable accounting and auditing standards; (b) makes transactions that are not recorded in those books and records or that are inadequately identified in them; (c) records non-existent expenditures in those books and records; (d) enters liabilities with incorrect identification of their object in those books and records; (e) knowingly uses false documents; or (f) intentionally destroys accounting books and records earlier than permitted by law.

Punishment:

(2) Every person who contravenes subsection (1) is guilty of an indictable offence and liable to imprisonment for a term of not more than 14 years.’170

The ESTMA’s application scope is established at section 8, with regard to:

“Entities:

8 (1) Subject to subsection (2), sections 9 to 13 apply to (a) an entity that is listed on a stock exchange in Canada; (b) an entity that has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:

(i) it has at least $20 million in assets, (ii) it has generated at least $40 million in revenue, (iii) it employs an average of at least 250 employees; and

(c) any other prescribed entity.”171

169 The Extractive Sector Transparency Measures Act, supra note 167 (Section 5-8), Section 6, p. 4. 170 The Corruption of Foreign Public Official Act, S.C. 1998, c. 34, Section 3-5, Sections 3 and 4, p. 3.; online: https://laws-lois.justice.gc.ca/PDF/C-45.2.pdf 171 The Extractive Sector Transparency Measures Act, S.C. 2014, c. 39, s. 376, Section 5-8, Section 8, p. 4.; online: https://laws-lois.justice.gc.ca/PDF/E-22.7.pdf

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Then, the ESTMA requires companies in the industries subject to the Act to declare

any payment of more than $ 100,000172 made to a beneficiary, i.e. a government, an agency

established by a government or other public authority defined as a beneficiary by Section 3 of

the Transparency Act173.

‘The ESTMA’s application to private companies is one factor distinguishing Canada’s

legislation from the US Dodd-Frank Act provisions, which applies only to ‘issuers’ required to

file an annual report with the Securities and Exchange Commission under the Securities

Exchange Act’174.

The ESTMA is intended to supplement the measures taken by Canada to fight

corruption. The ESTMA can be analyze as a mechanism of forcing information and contrary to

CFPOA does not directly punish corruption of bribery. The idea is to bring to light inappropriate

funds. One of the main principles of the ESTMA is to reveal corruption.

However, this legislation can be criticized from a certain point of view. Indeed, the

difficulty to enforce, like any other legislation regarding CSR, is still existing. Moreover, the

other problem is the supply chain. Indeed, even if the legislation is targeting the transparency,

especially regarding financial resources, it does not think about the other consequences that

corruption can have. For example, regarding the extractive industry, like mentioned above, this

type of activity can have many consequences such as social and environmental. So, even if the

concept of corruption is linked to financial transactions, we should not lose sight of the other

matters regarding corporations’ activities.

172 The Extractive Sector Transparency Measures Act, supra note 171, Section 8-9, Section 9, p. 5. 173 Ibid, Section 2-4, Section 3, p. 3. 174 Bildfell, supra note 164, p. 247, 4.2, at para 3.

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1.2.2 Adjustment and clarification

Canadian and provincial securities regulators have also been involved in strengthening

the implementation of CSR principles in Canada.

Canadian Securities Administrators (or ACVM – Autorité Canadienne en valeurs

mobilières in Canada’s Québec province) define themselves as an organization of Canada’s

provincial and territorial securities regulators whose objective is to improve, but also coordinate

and harmonize the existing regulations regarding Canadian capital markets. These CSA have

participated in the development of CSR in Canada and the development of Canadian legislation

related to reports and settlements175. The goal of this organization is also to identify violations

of securities laws that could be contrary to the public interest and find appropriate sanctions176.

On each website of Canadian’s province, we can find instruments, rules and policies

settle by the administrations of the CSA. Therefore, notices were issued. For example, the

Notice 51-333 of 2010 entitled ‘Indications en matière d’information environnementale’177

(Environmental Reporting Guidance) from ACVM (CSA in Québec), which illustrates the

objective of harmonizing securities regulation with CSR considerations that are gradually

imposed in the finance community, by disclosing information on environmental and social

issues.

This position statement by the Canadian authorities is a reminder of the French

‘Autorité des marchés financiers’ (Authority of stock markets), particularly regarding its reports

on listed companies.

175 Canadian Securities Administrators Official Website; online: https://www.securities-administrators.ca/aboutcsa.aspx?id=45 176 Canadian Securities Administrators Official Website regarding information on sanctions; online: https://www.securities-administrators.ca/enforcement.aspx?id=73 177 Indication en matière d’information environnementale (Environmental Reporting Guidance) (2010), Notice 51-333; online : https://lautorite.qc.ca/fileadmin/lautorite/reglementation/valeurs-mobilieres/0-avis-acvm-staff/2010/2010oct27-51-333-acvm-fr.pdf

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1.2.3 Bills

1.2.3.1 C-300

One of the most fundamental bills to mention is Bill C-300178 which has invited

resistance. ‘The heatedly debated Bill C-300, legislation designed to ensure that government

support for overseas mining industry was spent on companies that complied with international

CSR standards, was defeated in a close vote’179. The purpose of this bill was to impose on

mining companies’ best practices on the international scene, particularly with respect to

environment and respect for human rights. Therefore, the purpose of the system was to enable

victims of human rights violations to initiate a claim. This claim could be filed and addressed

to a Minister by any citizen of Canadian nationality or any citizen who comes from a developing

country with Canadian’s mining, oil, or gas activity.

However, this bill was not passed. ‘The Ministers were to investigate whether the

activities in question violated guidelines on human rights and environmental practices’180.

178 Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil, or Gas in Developing Countries, 3rd Sess, 40th Parl, 2011. (This bill did not become law). 179 Seck Sara L., ‘Business, Human Rights, and Canadian Mining Lawyers’ (2015), Vol. 56, Canadian Business Law Journal, p. 210; online : https://heinonline-org.uml.idm.oclc.org/HOL/Page?collection=journals&handle=hein.journals/canadbus56&id=222&men_tab=srchresults 180 Janda Richard, ‘Note : An Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (Bill C-300) : Anatomy of a Failed Initiative’ (2010), Vol. 6, Issue 2, JSDLP-RDPDD p. 100, at para 4; online: https://heinonline-org.uml.idm.oclc.org/HOL/Page?handle=hein.journals/mcgijosd6&id=103&collection=journals&index=

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1.2.3.2 C-323

Then, the Bill C-323181 was introduced in 2011 in order to modify the Federal Courts Act182.

The goal of this law was to authorize persons who do not have Canadian nationality to initiate

tort claims based on the violation of international law or treaties to which Canada is a party, if

the acts alleged occur outside of Canada. It is a question of jurisdictional competence. It sets

out the manner in which the Federal Court and the Federal Court of Appeal can exercise their

jurisdiction to hear and decide these claims183. It was introduced as a private member’s bill. For

now, this bill is still studied.

1.2.3.3 Bill C-584

Bill C-584184 intended to ensure that extractive activities of Canadian corporations in

developing countries respect Canada’s commitments under international law and the

International Bill of Rights. Moreover, it creates the Office of the Ombudsman and requires

corporations to report on their extractive activities. It gives the Ombudsman the responsibility

for developing guidelines on best practices for the activities185. Unfortunately, this bill did not

become a law. We might have thought that Bill C-584 presented more advantages regarding

the Bill C-300, in particular because the duty of corporations to report their activities was not

provided under Bill C-300186. However, it was not enough.

181 Bill C-323, An Act to amend the Federal Courts Act (international promotion and protection of human rights, 2nd Sess, 41st Parl, 2015 [Bill C-323]. 182 The Federal Courts Act, R.S.C, 1985, F-7; online : https://laws-lois.justice.gc.ca/pdf/F-7.pdf 183 Bill C-323, supra note 181. 184 Bill C-584, An Act Respecting the Corporate Social Responsibility Inherent in the Activities of Canadian Extractive Corporations in Developing Countries, 2nd Sess, 41st Parl, 2015. (This bill did not become law). 185 Ibid. 186 Nwapi Chilenye, ‘Resource Extraction in the Courtroom: The significance of Choc v. Hudbay Minerals Inc. for Transnational Justice in Canada’ (2014), Vol. 14, Asper Review, p. 130, at para 1 [Nwapi]; online : https://heinonline-org.uml.idm.oclc.org/HOL/Page?men_tab=srchresults&handle=hein.journals/asperv14&id=136&size=2&collection=journals&terms=Bill%20C-300|c-300|Bill|bill&termtype=phrase&set_as_cursor=5

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1.2.3.4 Bill C-86

Finally, the Bill C-86 was a success because the Canada Business Corporation Act187

of 1985 was modified in order to make the law evolved. Indeed, principles of CSR were in the

center of the discussion. The goal of the modifications is to take into consideration principles

of CSR, but the main idea is to take into consideration the technics used to reach this goal. This

bill had one main objective: increase transparency.

In order to implement it, an important control and the obligation to keep a register of

the individuals having a significant control over the company are established. Corporations’

shareholders and creditors have to be able to consult it. However, an affidavit must go along

the application, which will contain a declaration that the information obtained will only be used

for the purposes prescribed by law. This notion will necessarily be subject to interpretation by

the Courts.

The studies of Canada’s corporate social responsibility strategy, laws and bills show

similarities with the French system. Even if France and Canada have a different legal system

organization, it seems that both countries, facing critics from international organizations which

have established standards on CSR, have decided to go deeper into CSR’s legislation. Both of

the countries decided to go deeper into transparency’s legislation, but also legislation regarding

corruption and sustainable development.

187 Canada Business Corporations Act, R.S.C, 1985, c. C-44; online : https://laws.justice.gc.ca/PDF/C-44.pdf (Last amended in June 21, 2019).

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2. Canada’s jurisprudence

Following the study of Canadian legislation, it is important to measure the impact of

these legislative developments on case law or on the contrary maybe how these case law had

impact on the creation of legislation or even how only the growing importance of CSR had

impacts on the jurisprudence. It is not because the legislation is improving that foreign victims

make the decision to initiate a claim against Canadian multinational companies188. It can be

seen in CSR accountability that Canadian laws have not necessarily overridden corporate self-

regulation.

‘Canada has not seen much transnational litigation along the lines of the US Alien’s

action for tort, under which individuals and corporations are sued in US courts by non-US

nationals over environmental and human rights abused committed outside US territory’189. It

would appear that few victims have been successful in Canadian courts since most of them have

encountered extremely rigid rules of procedure and have not received the expected solution190.

Justice Ian Binnie, formerly oof the Supreme Court of Canada, stated: ‘This concept,

deeply rooted in corporate law, is used regularly to deny liability of the head office, with its

deep pockets, for acts of its subsidiaries in the far flung regions of the world where, it is alleged,

the wrongful acts occurred. In a corporate pyramid the profits flow up the chain to the top (or

are taken at whatever corporate level seems most advantageous) but legal liability remains stuck

at the bottom where there may be liability but shallow pockets’191.

188 Tchotourian, Deshaye & Mac Farlane-Drouin, supra note 135, p. 664, at para 2.2. 189 Nwapi, supra note 186, p. 121, at para 1.

190 Above Ground, ‘Poursuites transnationales au Canada contre les compagnies extractives: faits nouveaux dans les litiges civils’ (2016) ; online : https://aboveground.ngo/wp-content/uploads/2018/05/Causes_31mai2018.pdf

191 Tchotourian, Deshaye & Mac Farlane-Drouin, supra note 135, p. 665.

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In order to analyze the consequences of the jurisprudence regarding CSR, it will be

interesting to study three cases in particular: The Choc v. Hudbay Minerals Inc. regarding the

duty of care for parent company (a), the Chevron Corp. c. Yaiguaje regarding the recognition

and the enforcement of foreign judgement and the extension of competence of Canadian courts

(b) and the Nevsun Resources Ltd. v. Araya (c), a recent case regarding the possibility of

foreigners to bring a legal action against Canadian companies before Canadian courts for

alleged violations of the international public law committed abroad.

2.1 Choc v. Hudbay Minerals Inc.

This case has proceeded beyond the pleadings stage192. This case involved three

persons known as Margarita Caal Coal, Angelica Choc, and Germand Chub, three citizens from

Guatemala. They have initiated claims in front of the Superior Court of Ontario for civil liability

against Hudbay Minerals Inc, a corporation from Toronto. The plaintiffs alleged human rights

abuses by the company in Guatemala in 2007 and 2009. They claimed that security personnel

employed and in relation with Hudbay Minerals Inc’s local subsidiary (Hudbay’s Fenix mining

project) shot and killed one plaintiff’s husband and shot and paralyzed another plaintiff.

Moreover, along with gang-raped 11 of the Maya-Q’eqchi’ women. Because Hudbay is a

Canadian company, the plaintiffs have sought a remedy for the human rights violation in the

Canadian Courts.

Hudbay brought motions to dismiss the claims on the basis that a parent company can

never owe a duty of care to those who may be murdered, harmed, or raped by security personnel

employed by the company’s subsidiary in a foreign country. This claim was justified because

of the direct control a company can have over its subsidiary’s operations. One of the arguments

of the plaintiffs was not that the Courts should lift the corporate veil and find the parent liable

192 Simons, supra note 45, p. 203, at para 2.

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for acts of its Guatemalan subsidiary193, but rather that the parent company itself was directly

liable for its own acts and omissions that led to the egregious harm suffered by the plaintiffs194.

At the beginning, the defendants have also claimed that in accordance with the forum

non conveniens, because the violations occurred in Guatemala, these lawsuits should not be

heard by the Canadian Courtroom. But the defendants dropped their motion on forum non

conveniens. ‘The defendants’ motion to strike for failure to disclose a cause of action was

dismissed’195. The court settled that the plaintiffs had ‘properly pleaded the elements necessary

to recognize a novel duty of care’196.

In order to decide the case, the Superior Court held that, according to the allegations,

Hudbay corporation could be directly held liable for human rights violations in a foreign

territory by its subsidiary. It is the opening of a new form of liability for the parent company.

According to Hudbay, the claim had no basis because it was not going along with the

principle of separate responsibility that was established through the British Salomon’s

jurisprudence of 1897. However, the plaintiffs did not see it that way. For them, the idea was

not to go beyond this responsibility but to hold liable the corporation for negligence. Plaintiffs

were focused on the duty of care.

Originally, the common law settled a duty of care in the case of a guilty-victim

relationship. When this duty exists, it will ‘spread’ to all the relationship. However, even if this

193 Choc v. Hudbay Minerals Inc., [2013], ONSC 1414; online: https://www.amnesty.ca/sites/amnesty/files/imce/images/Hudbay%20Judgment%202013%20ONSC%201414.pdf

194 Ibid, pp. 11-12, at paras 50-53.

195 Simons, supra note 45, p. 204, at para 1.

196 Choc v. Hudbay Minerals Inc., supra note 193, at para 75.

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duty of care was new in this type of relationship, it should be a duty that has to be studied in

the parent company/subsidiary relationship.

The Anns v. Merton London Borough Council197 settled the criteria’s to establish the

existence of a duty of care. The ‘Anns Test’ establish by Lord Wilberforce is a two-stage test.

First, it required a ‘sufficient relationship of proximity based upon foreseeability’ and secondly,

considerations of reasons why there should not be a duty of care198.

Indeed, the alleged harm has to be a foreseeable reasonable consequence of the alleged

violations. That is why the plaintiffs alleged first that Hudbay Corporation knew or should have

known that violence is common when local population are evicted from local land, then that

security members were not properly prepared and were in possession of illegal weapons, and

that the corporation had no problem asking their security member to use the force against

pacifist opposition. As a statement of defense, the corporation alleged that alleged damages

were unpredictable. However, the Court settled that, because the Hudbay corporation had

authorized the security to use the force, it could reasonable know that crimes could arise from

this authorization199.

Regarding the two stages criteria established by the Anns case law, a sufficient

proximity had to exist between parties. According to the Cooper c. Hobart case, in order to

recognize the existence of a proximity relationship, ‘expectations, representations, reliance, and

the property or other interests involved’200 has to be taken into account. After the study of the

197 Anns v. Merton London Borough Council, [1977] UKHL 4, 12 May 1977; online: https://www.bailii.org/uk/cases/UKHL/1977/4.html 198 Ibid.

199 Choc v. Hudbay Minerals Inc., supra note 193, at para 65.

200 Cooper c. Hobart, [2001] 3 S.C.R. 537, 2001 SCC 79 at para 34; online: https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/1920/index.do

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situation, the Superior Court settled that plaintiffs’ allegations were composed of sufficient

elements for establishing the existence of this proximity relationship. The Court considered that

public statements of the company’s directors showed a direct relation between the company

and the plaintiff. For example, the fact that they made public statements regarding the evictions

and the manner they would handle it. On the other hand, the Court took also into consideration

the fact that Hudbay corporation and its directors and employees were directly in charge of

operation in Guatemala, on the land of the Fenix miner project, for example, security operation

and relation with the community201.

Finally, with all the facts alleged in this case and with the ‘Anns Test’, the Superior

Court of Ontario concluded that it is not obvious that Hudbay Corporation could not be held

liable for a duty of care. For now, corporations should be more careful regarding their

commitments. They should take into consideration corporate social responsibility principles.

One of the main ideas is, if a company wants to highlight their corporate social responsibility

commitments, they should apply them wisely and not only say them and not apply them. This

case was the consecration of the judicial duty of care that parent company have in respect of

subsidiaries. Nowadays, when this duty is established, a parent company could be liable for

negligence when its direct actions caused damage202.

2.2 Chevron Corp. c. Yaiguaje

Originally, the Chevron Corp. c. Yaiguaje203 finds its history in 1964. When Texaco

Inc., which merged with Chevron in 2003, began extracting oil in Ecuador, in the region of

201 Choc v. Hudbay Minerals Inc., supra note 193, at para 67. 202 Tchotourian, Deshaye & Mac Farlane-Drouin, supra note 135, p. 670, at para 1.

203 Chevron Corp. c. Yaiguaje, [2015] 3 S.C.R., 2015 SCC 42; online : https://www.canlii.org/en/ca/scc/doc/2015/2015scc42/2015scc42.pdf

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Oriente, the issue was that Texaco’s practices caused environmental damage and pollution in

the area. For 20 years, the local community tried to gain compensation for the environmental

damages caused by the corporation’s activities. In 1993, Daniel Carlos Lusitande Yaiguaje

and other representatives of indigenous Ecuadorian villagers filed suit against Texaco for

negligence in New York, where Texaco was headquartered. However, in 2001, the New York

court dismissed the suit on a finding of forum non conveniens.

Nevertheless, the plaintiffs decided to file a claim two years later in Ecuador. In 2011,

an Ecuadorian trial court ruled in favor of the plaintiffs and this decision was affirmed by an

Ecuadorian appellate court. Finally, in 2013 the Ecuadorian’s highest court held that Chevron

was liable to pay to the plaintiffs 9,51 $ billion in damages. But in front of the United States

Court, Chevron refused to acknowledge or pay the award ordered by the trial court.

Since Chevron did not hold any Ecuadorian assets, the plaintiffs selected another

forum to get satisfaction on the debt. That is why they commenced an action in the Ontario

Superior Court of Justice for the recognition and enforcement of the Ecuadorian judgment

against Chevron, as U.S corporation and Chevron Canada, an indirect subsidiary of Chevron.

The Supreme Court of Canada settled that Canadian courts should take a liberal

approach regarding the recognition and enforcement of foreign judgements and regarding the

liability of a subsidiary in a foreign country. The Supreme Court did not focus on the substance

of the dispute, i.e. the recognition of the debt itself.

One of the main problems was whether there was a need for the applicant to prove a

real and substantial connection between the judgement and the Canadian province or between

the original dispute that led to the foreign judgement and the Canadian province in which the

foreign judgement is seeking to be registered. The Supreme Court had reminded the

jurisprudence on the recognition and enforcement of foreign judgment never required the

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existence of such connection. Moreover, the Supreme Court quoted the case Pro Swing Inc. c.

Elta Golf Inc; and Justice Marie Deschamps: ‘The foreign judgement is evidence of a debt. All

the enforcing court needs is proof that the judgement was rendered by a court of competent

jurisdiction and that it is final, and proof of its amount. The enforcing court then lends its

judicial assistance to the foreign litigant by allowing him or her to use its enforcement

mechanisms’204.

There are two mains reasons why recognition and enforcement are in conflict with the

principle of a real and substantial connection in this case.

First, it is the purpose of recognition and enforcement proceedings. The ‘Canadian law

recognizes that the purpose of an action to recognize and enforce a foreign judgement is to

allow a pre-existing obligation to be fulfilled’205. Indeed, the idea is to assist in enforcing an

adjudicated obligation which exists already rather that to evaluate the underlying claim206, that

is why there can be no concern regarding the location of the parties and the fact that they should

be on the territory of the Court or that the facts related to the dispute are addressed in another

court207. The execution was limited to measures that could be taken in the territory of the court

recognizing the foreign judgment, taking into account the property belonging to the debtor

potentially present there208. Moreover, they were no constitutional concerns that might be in

conflict with the recognition and enforcement of the foreign judgement, even if the presence of

the international private law surrounds the situation. According to Judge LeBel, ‘in Canadian

constitutional law, the real and substantial connection test has given expression to the

204 Pro Swing Inc. c. Elta Golf Inc., [2006] 2 S.C.R. 612, at para 11, mentioned in Chevron Corp. c. Yaiguaje, at para 37.

205 Chevron Corp. c. Yaiguaje, supra note 203, at para 43.

206 Ibid, at para 44. 207 Ibid, at para 45. 208 Ibid, at para 46.

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constitutionally imposed territorial limits that underlie the requirement of legitimacy in the

exercise of the state’s power of adjudication’ 209.

Secondly, the notion of comity between States in recognition and enforcement

proceedings. It helps enforcing judgements, internals and foreign ones. However,

considerations of order and fairness on which the notion of comity is based are not in

contradiction with a large and liberal application in recognition and enforcement of foreign

judgement. First, because order and fairness are protected by the real and substantial connection

between the foreign court and the underlying dispute210. Secondly, there is no unfairness

resulting to judgement debtors from having to defend against recognition and enforcement

proceedings211. Finally, ‘a requirement that the defendant have a real and substantial connection

with the enforcing court in the sense of being present or having assets in the province would

only undermine order and fairness’212. With all these arguments, the Supreme Court is clearly

rejected the theory of a real and substantial connection.

Moreover, regarding Chevron Canada the Supreme Court decided that Ontarians’

Courts had a jurisdictional competence because of the physical presence in Ontario of the

corporation.

2.3 Nevsun Resources Ltd. v. Araya

This case finds its origins in Eritrea, a country in East Africa with a “National Service

Program”. It imposed on all Eritreans who turned eighteen to work in military programs. They

are forced to work for years on project supported by military or political party officials. The

Bisha mine started in 2008 and workers from the National Service Program were forced to work

209 Chevron Corp. c. Yaiguaje, supra note 203, at para 47. 210 Ibid, at para 54. 211 Ibid, at para 55. 212 Ibid, at para 56.

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in the mines. Moreover, they were forced to work under dangerous conditions - twelve hours a

day, six days a week and in temperatures close to 50 degrees213. The Bisha mine is owed by the

Bisha Mining Share Company, which is owed by Nevsun, a Canadian company based in British

Colombia. Eritrean workers claimed that ‘they were subjected to violent, cruel, inhuman and

degrading treatment’214.

In these circumstances, they started proceedings in British Columbia against Nevsun,

and ‘sought damages for breaches of customary international law prohibitions against forced

labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity’215, but

they also ‘sought damages for breaches of domestic torts including conversion, battery,

unlawful confinement, conspiracy and negligence’216.

During the proceeding, Nevsun asked for the action to be dismissed on the basis of the

‘act of state doctrine, which precludes domestic courts from assessing the sovereign acts of a

foreign government’217. Regarding customary international law, Nevsun claimed that they

should be struck considering they have no reasonable prospect of succeed218.

However, the British Colombia Court of Appeal and the Supreme Court of Canada

dismissed the preliminary motion to strike the pleading. As a result, the claims should be

allowed to proceed219, the action will proceed in the ordinary course based upon allegations of

breach of the four customary international norms.

213 Nevsun Resources Ltd. v. Araya [2020] S.C.C 5, Case in Brief; online: https://www.scc-csc.ca/case-dossier/cb/2020/37919-eng.aspx 214 Nevsun Resources Ltd. v. Araya [2020] S.C.C 5, p. 36, at para 3; online: https://decisions.scc-csc.ca/scc-csc/scc-csc/en/18169/1/document.do 215 Ibid, p. 37, at para 4. 216 Ibid, p. 37, at para 4. 217 Ibid, p. 37, at para 5. 218 Ibid, p. 37, at para 5. 219 Ibid, p. 62, at para 69.

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Moreover, the Supreme Court settled that “Canadian Courts, like all courts, play an

important role in the ongoing development of international law”220.

According to the Chief Judge Wagner and the judges Abella, Karakatsanis, Gascon and

Martin the act of state doctrine has played no role in Canadian law and is not part of Canadian

common law221.

Whereas the English jurisprudence has reaffirmed the act of state doctrine, Canadian

law has developed its own method regarding the twin principles underlying the doctrine:

conflict of laws and judicial restraint, which have been developed separately in the Canadian

jurisprudence. In order to deal with the enforcement of foreign laws, Canadian courts will focus

on ordinary international laws principles which call for deference, however, allow for judicial

discretion to decline to enforce foreign laws such at the ones contrary to public policy, including

respect for public international law222. Moreover, it was pointed out that the modern

international human rights law was born in order to end human rights abuses, and especially

breaches of internationally accepted norms.

As to whether violations of the customary international law can serve as a basis for a

civil action under Canadian law, the majority concluded that, under the doctrine of adoption,

the customary international law is automatically incorporated into Canadian law without the

legislator’s intervention223, and so should be respected as any other law224, as long as it satisfies

the requirements of general practice and opinio juris225. Therefore, the majority exposed that

developing an action to remedy a breach of the customary international law would be a

necessary addition to the common law. It also added that remedying violation of jus cogens

and norms of customary international laws does not necessarily involve the addition of new

220 Nevsun Resources Ltd. v. Araya [2020] S.C.C 5, supra note 214, p. 63, at para 70. 221 Ibid, p. 45, at para 28. 222 Ibid, p. 53, at para 45. 223 Ibid, p. 69, at para 86. 224 Ibid, p. 75, at para 95. 225 Ibid, p. 74, at para 94.

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categories of torts but did not elucidate whether the customary international law could be a

separate branch of private law226. The jus cogens, or peremptory norms, is a subset of norms

from which no derogation is permitted, norms of a fundamental importance. Norms of jus

cogens include crimes against humanity, slavery, forced labour or inhuman treatment227.

According to that, Nevsun has not established that it was “plain and obvious” that the customary

international law claims have no reasonable likelihood of success228.

To conclude, the judgment of the Supreme Court is of a historical importance because

it confirms the possibility of foreigners to bring a legal action against Canadian companies

before Canadian Courts for alleged violations of the international public law committed

abroad.. This suggests corporations should be more careful in their respect for CSR.

226 Nevsun Resources Ltd. v. Araya [2020] S.C.C 5, supra note 214, p. 90 and 91, at para 129. 227 Ibid, p. 69, at para 83. 228 Ibid, p. 90, at para 128.

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CONCLUSION

Corporate Social Responsibility had difficulty to find its proper definition. It led to

many interpretations and is still interpreted nowadays. This difficulty led to study the

component of this concept. It appears that CSR covers many areas. It is connected directly to

environmental law, social law, competition law and criminal law. This connection can be

explained by the ultimate goals of CSR according to which corporations have to improve their

behavior regarding their activities’ impacts on the environment, but also with respect to human

rights and to competition practices. It also means that a corporation, as a parent company, has

to be conscious of its responsibility. A responsibility regarding its subsidiaries, all its

stakeholders, and regarding the country it settles its activities. This is the duty of care of

company.

The growing power of corporations in the world leads to wonder if CSR should not be

more regulated. International standards were the first illustration of CSR as a soft law. They

provide guidance, advices and code of conduct that should be applied by corporation in their

self-regulation but are also basis for the states to rely on in order to establish their own

legislation regarding CSR. These domestic laws are the illustration of CSR as a hard law.

Nonetheless, legislation is not complete. There is a real lack of judicial solutions for victims.

CSR is often assimilated to the private domain; however, it is increasingly becoming

an object of public regulation.

In this thesis, I wanted to identify the main non-binding standards and to focus on how

there are implemented on the national level. This has led us to focus on France, as a member of

the European Union, and on Canada, part of the American continent. The idea was to observe

if the difference of history, cultures, legal system or business strategy could lead to different

implementations. France and Canada have both tried to be respectful of these international

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standards. They both spotlighted the need for corporations to act with respect to the

environment and human rights.

France and Canada showed that advances ultimately remain in the hands of the States

and constitute real leverage in order to push companies towards a CSR approach. States must

take the initiative of thinking, establishing and promulgating laws that would encourage

companies to move towards a more responsible approach. In order to do that, it is also necessary

that the States themselves have already taken a more responsible approach of business.

In order to improve their CSR approach, States can establish laws to ease

administrative procedures for companies, especially when they want to settle in a foreign

country, for example. We could also consider laws allowing tax relief for companies that

undertake a CSR approach. Thus, the idea is to highlight tax advantages for companies that take

a step towards CSR, while being strictly framed by state laws. The tax audits that could result

from this would also indirectly allow control and pressure on companies to encourage them to

maintain these CSR approaches. In France for example, the State can have an impact on

companies and thus it could be possible to exclude from public investment companies that do

not respect CSR or on the contrary to offer them privileged access to public order.

Therefore, it is necessary to ensure the independence of the auditors in charge of

monitoring these practices within companies in order to guarantee the transparency of

information. A real system must be created to protect the people in charge of these missions

and who are facing companies’ pressures.

Moreover, one of the major problems existing in CSR is the coordination between the

globalized space and national and international legal and political frameworks. There is a need

to create a global institutional environment. Indeed, international regulatory instruments are

objectively only of limited effectiveness. The question is if we increase the penalties, will we

have more results? I think it is something necessary but no sufficient.

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Unfortunately, many companies remain insensitive to threats of sanction. The simple

techniques of audits and inspections are not sufficient.

It would seem that if governments decide to invest in CSR, it would be useful to create

intergovernmental cooperation at the international level in order to give support to the measures

put in place at the national level. It would then also lack a world political authority capable of

genuinely enforcing international rights. We must combine constraint and incentive.

Regarding the jurisprudence, it seems that it has started to take care of this issue. Like

mentioned above, both French and Canadian jurisprudence have started to clarify this duty of

care of the corporation and especially regarding all the stakeholders, and its subsidiaries. We

can often see plaintiffs and judges themselves using conditions from other legal situation in

order to hold liable a company.

If we go back to the Bhopal’s catastrophe and the Rhana Plaza cases, we can observe

that in both cases, victims had issues regarding access to justice and they faced difficulties to

recover damages. The question of state’s territoriality and the parent company/subsidiary

relation were the main problem in those cases. However, it seems that both Canadian and

French Courts decided to focus on those issues and brought solutions for victims. Indeed, thanks

to the Choc v. Hudbay Minerals Inc.; Chevron Corp. c. Yaiguaje and Nevsun Resources Ltd. V

Araya cases, the Canadian jurisprudence evolved. These cases settled principles like the

liability of a corporation for human rights violation in a foreign territory by its subsidiary; the

liberal approach of Canadian Courts regarding the recognition and enforcement of foreign

judgments and the liability of a subsidiary in a foreign country and finally the possibility to

bring a legal action against Canadian companies before Canadian Courts for alleged violation

of the international public law committed abroad.

Similarly, the French Court in its 12th June 2012 case law, had considerate that the parent

company was jointly responsible for the sentence pronounced to its subsidiary and had a

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‘control’ on its subsidiary. In the case law of the 8th of July 2014, the Court held that employees

of the corporation’s subsidiary can initiate a claim against the parent company for fault and

negligence in tort law. Finally, the French 22th of June 2011 case law, the Metaleurop case law

and the 2009 jurisprudence Azko of the CJEU settled the existence of a ‘co-employment’ and

a principle of influence between a parent company and its subsidiaries.

If the Bhopal’s catastrophe or the Rhana Plaza take place again, I could not confirm that

the issue of the trial will be different because it will depend on the company’s nationality, the

laws and the jurisprudence of its country. However, I do think that victims would have a better

chance of success thank to the improvement of international standards, States laws and more

particularly States’ Courts orientation.

Some people see CSR as a new legal and social concept that needs a legal and political

framework. A concept that must be recognized by states, law and justice. Others, however, see

it only as a public relations operation on the part of companies to promote deregulation and

improve their brand image. The future of CSR will also depend on the most adopted approach.

The last question we can ask ourselves is: Facing with the various crises that the world

is experiencing, will CSR remain a subject of debate in the years to come or will it ultimately

be a subject left aside in favor of other economic and legal imperatives?

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• Bildfell Connor, ‘The Extractive Sector Transparency Measures Act: Critical Perspectives’ (2016), Vol I.2, Issue 2, JSDLP – RDPDD, p. 240, at para 2.

• Caroll, A.B., ‘A Three-Dimensional Conceptual Model of Corporate Performance’ (1979), Vol. 4, Academy of Management Review, pp. 497-505.

• Caroll, A.B., ‘Corporate Social Responsibility – Evolution of a Definitional Construct’ (1999), Vol. 38, Business & Society, pp. 268-295.

• Caroll, A.B., ‘A History of Corporate Social Responsibility: Concepts and Practices’ (2008), The Oxford Handbook of Corporate Social Responsibility, pp. 19-46.

• Danis-Fatôme Anne, La responsabilité civile dans la loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre (2017), Recueil Dalloz, p. 1610 (Civil liability regarding the duty of care of parent companies).

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• Davis Keith, ‘Understanding the social responsibility puzzle’ (1967), Vol. 10, Issue 4, Business Horizons, pp. 45-50.

• Friedman, M., ‘The Social Responsibility of Business is to Increase its Increase its Profits’ (1970), New York Times Magazine, September 13th, pp. 32,33,122,126.

• Gallie, W.B, ‘Essentially Contested Concepts’ (1956), Vol. 56, pp.167-198, Proceedings of the Aristotelian Society, JSTOR.

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• Hutton Susan & Beaudry Paul, ‘Canada Steps up the Fight Against Foreign Corruption’ (2014), Lexpert Business of Law, at para 1.

• Janda Richard, ‘Note: An Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (Bill C-300): Anatomy of a Failed Initiative’ (2010), Vol. 6, Issue 2, JSDLP-RDPDD p. 100, at para 4.

• Laine Anniki L., ‘Integrated Reporting: fostering Human rights Accountability for Multinational Corporations’ (2015), Vol. 47, The Geo. Wash. Int’l L. Rev., p. 654, at para 1.

• Lantos Geoffrey P., ‘The boundaries of strategic corporate social responsibility’ (2001), Vol. 18, n°7, Journal of Consumer Marketing, pp. 595-632, Abstract.

• Levitt, T., ‘The Dangers of Social Responsibility’ (1958), Vol. 36, Harvard Business Review, pp. 41-40. • McCarron Daniel, ‘Deferred Prosecution Agreements: A Practical Propose’ (2016), King's Inns Student

L. Rev. 54, p. 54, at para 2. • McMahon Thomas F., ‘Models of the Relationship of the Firm to Society’ (1986), Vol. 5, Issue 3, Journal

of Business Ethics, pp. 181-191, Abstract. • McWilliams Abagail & Siegel Donald, ‘The corporate social responsibility: a theory of the firm

perspective’ (2001), Vol. 26, N°1, Management Review, pp.117-127. • Meyer William H. & Stefanova Boyka, ‘Human Rights, the UN Global Compact, and Global

Governance’ (2001), Vol. 34, Cornell International Law Journal, Introduction, p. 501, at para 1. • Nwapi Chilenye, ‘Resource Extraction in the Courtroom: The significance of Choc v. Hudbay Minerals

Inc. for Transnational Justice in Canada’ (2014), Vol 14, Asper Review, p. 130, at para 1. • Okoye Adaeze, ‘Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a

Definition Necessary?’ (2009), Vol. 89, Issue 4, Journal of Business Ethics, Introduction. • Oshioneno Evaristus, ‘The U.N Global Compact and Accountability of Transnational Corporations:

Separating Myth from Realities’ (2007), Vol. 19, Florida Journal of International Law, p. 21, at para 3.

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• Oshionebo Evaristus, ‘The OECD Guideline for Multinational Enterprises as Mechanisms for Sustainable Development of Natural Resources: Real Solutions or Window Dressing?’ (2013), Vol 17:2, Lewis & Clark Law Review, p. 578, at para 2.

• Seck Sara L., ‘Canadian Mining Internationally and the UN Guiding Principles for Business and Human Rights’ (2011), 49 Can. Y.B. Int'l L. 51, p. 100, at para 2.

• Seck Sara L., ‘Business, Human Rights, and Canadian Mining Lawyers’ (2015), Vol. 56, Canadian Business Law Journal, p. 210.

• Simons Penelope, ‘Canada’s Enhanced CSR Strategy: Human Rights Due Diligence and Access to Justice for Victims of Extraterritorial Corporate Human Rights Abuses’ (2015), Vol. 56, n°2, The Canadian Business Law Journal, p. 175, at para 1.

• Tchotourian Ivan, Deshaye Valérie & Mac Farlane-Drouin Romy, ‘Entreprises et responsabilité sociale : évolution ou révolution du droit canadien des affaires ?’ (2016), Vol. 57, Issue 4, Les Cahiers de Droit, p. 643, at para 1.1.

• Ward Halina, ‘The ISO 26000 International Guidance Standard on Social Responsibility: Implications for Public Policy and Transnational Democracy’ (2011), Vol. 12;665, Theoretical Inquiries in Law, p. 666, at para 2.

Books

• Bowen H. R., Social Responsibilities of the Businessman (New York: Harper & Row, 1953). • Charkham Jonathan, Keeping Good Company: A study of corporate governance in five countries

(Oxford: Oxford University Press, 1995). • Elkington John, Cannibals with forks: The triple bottom line of the 21st century business (New Society

Publishers, 1998).

International documents – International and European Standards (Chronologically)

¨ International:

• Charter of Human Rights and Freedoms (1975), Chapter C-12, Article 46.1 (2016) c.3, s.19. • Global Reporting Initiative (1997). • Global Compact of United Nations (2000). • ISO on guidance on how businesses and organizations can operate in a socially responsible way (2010). • OCDE Guidelines for Multinational Enterprises (2011). • OECD (2011) The Convention on Combating Bribery of Foreign Public Officials in International

Business Transactions. • OCDE (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from

Conflict-Affected and High-Risk Areas, Third Edition, OECD Publishing, Paris. • OECD (2019) Guide for National Contact Points on coordination when handling Specific Instances,

OECD Guidelines for Multinational Enterprises. • Guiding Principles for Business and Human Rights (2011).

¨ European Union:

• Green Paper: Promoting a European framework for corporate social responsibility COM 2001 266

(2001). • European Commission Communication COM 2002 347 Commission Communication on Corporate

Social Responsibility: A Business contribution to Sustainable Development (2002). • Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003 amending

Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated

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accounts of certain types of companies, banks and other financial institutions and insurance undertakings, Official Journal of the European Union, L178/16.

• European Commission Communication COM 2011 681 Final on European Union’s strategy for Corporate Social Responsibility.

• Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013, on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC, Official Journal of the European Union, L.182/19.

• Directive 2014/94/EC of the European Parliament and of the Council of 22 October 2014, on the deployment of alternative fuels infrastructure, Official Journal of the European Union, L307/1.

Jurisprudence

¨ France:

• Constitutional Council, Decision n°2017-750 DC, March 23, 2017.

• Cass. com. (Commercial Chamber of the Court of Cassation), January 16, 2001, n° 98-15.484. • Cass. com. (Commercial Chamber of the Court of Cassation, April 19, 2005, n° 05-10.094. • Cass. com. (Commercial Chamber of the Court of Cassation), November 15, 2011, n° 10-21.701. • Cass. com. (Commercial Chamber of the Court of Cassation), June 12, 2012, n°11-16.109. • Cass. com. (Commercial Chamber of the Court of Cassation), October 22, 2013, n° 12-23.486. • Cass. com. (Commercial Chamber of the Court of Cassation), October 18, 2017, F-P+B, n° 16-19.120.

• Cass. soc. (Social Chamber of the Court of Cassation), June 22, 2011, n° 09-69.021. • Cass. soc. (Social Chamber of the Court of Cassation), September 28, 2011, n° 10-12.278 • Cass. soc. (Social Chamber of the Court of Cassation), April 30, 2014, n° 12-35.219. • Cass. soc. (Social Chamber of the Court of Cassation), July 2, 2014, n°13-15.208. • Cass. soc. (Social Chamber of the Court of Cassation)., July 8, 2014, n° 13-15.573.

¨ EU:

• C.J.C.E., September 10, 2009, Akzo Nobel/commission, aff. C-07/08 P, RTD eur., 2010. • Competition Authority, December 9, 2009, decision n° 09-D-36.

¨ Canada:

• Cooper c. Hobart, [2001] 3 S.C.R. 537, 2001 SCC 79 at para 34. • Pro Swing Inc. c. Elta Golf Inc., [2006] 2 S.C.R. 612, at para 11. • R. v. Karigar, 2013 ONSC 5199, [2013] O.J. No 3661; R. v. Karigar, 2014, ONSC 3093. • Choc v. Hudbay Minerals Inc., [2013], ONSC 1414. • Chevron Corp. c. Yaiguaje, [2015] 3 S.C.R., 2015 SCC 42. • Nevsun Resources Ltd. V Araya, [2020] S.C.C 5

¨ UK:

• Anns v. Merton London Borough Council, [1977] UKHL 4, 12 May 1977.

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Legislation (Chronologically)

¨ France:

Ø Law :

• NRE Law (New Economic Regulations) May 15, 2001, Law n°2001-420, JORF 16, May 2001, p. 7776, text n°2 (French Official Law Journal).

• Grenelle I Law August 3, 2009, Law n°2009-967, JORF n°0179 of August 5, 2009, p.13031, text n°2 (French Official Law Journal).

• Grenelle II Law July 12, 2010, Law n°2010-788, JORF n°0160 of July 13, 2010, p. 12905, text n°1 (French Official Law Journal).

• Energy Transition Law August 17, 2015, Law n°2105-992, JORF n°0189 August 18, 2015, p. 14263, text n°1 (French Official Law Journal).

• Sapin Law II on Transparency, December 9, 2016, Law n°2016-1691, JORF n°0287, December 10, 2016, text n°2 (French Official Law Journal).

• Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 6. • Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 8. • Sapin II Law, December 9, 2016 on Transparency, Law n°2016-1691, article 18. • French Law on the duty of care March 27, 2017, Law n°2017-399, JORF n°0074 March 28, 2017, text

n°1 (French Official Law Journal). • Pacte Law on action plan for business growth and transformation May 22, 2019, Law n°2019-486, JORG

n°0119 May 23, 2019, text n°2 (French Official Law Journal).

Ø Article :

• Article L225-102 of the French Commercial Code. • Article L225-102-1 of the French Commercial Code. • Article L225-102-3 of the French Commercial Code. • Article L225-102-4 of the French Commercial Code. • Article L225-102-5 of the French Commercial Code. • Article L233-16 of the French Commercial Code. • Article 233-16 II of the French Commercial Code.

• Article 1240 of the French Civil Code. • Article 1241 of the French Civil Code.

• Article L1132-3-3 of the French Labor Code.

• Article 42 of the French Judicial Procedure Code.

Ø Decree :

• French Decree of February 20, 2002, JORF n°44 of February 21, 2002, p. 3360, text n° 16 (French Official

Law Journal). • French Decree n°2012-557 of April 24, 2012, JORF n°0099 of April 26, 2012 p. 7439, text n° 18 (French

Official Law Journal). • French Decree of 13 May 2013 determining the procedures under which the independent third-party body

conducts its mission, JORF n ° 0136 June 14, 2013, p. 9861, text n°7 (French Official Law Journal). • French Law on the orientation, development policy and international solidarity July 7, 2014, Law n°2014-

773, JORF n°0156 July 8, 2014, p. 11242, text n°4 (French Official Law Journal). • French Law fighting against unfair social competition July 10, 2014, JORF n°0159 July 11, 2014,

p.11491, text n°1 (French Official Law Journal).

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¨ Canadian:

Ø Strategies/Guides :

• Building the Canadian Advantage: Canada's Corporate Social Responsibility Strategy for the Canadian

International Extractive Sector (2009). • Indication en matière d’information environnementale (Environmental Reporting Guidance) (2010),

Notice 51-333. • Canada’s Government, Exploration and Mining Guide for Aboriginal Communities (2013). • Corporate Social Responsibility (CSR), An Implementation Guide for Canadian Business (2014). • Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s

Extractive Sector Abroad (2014).

Ø Statutes :

• Alien Tort Statute (also called Alien Tort Claims Act ACTA), 28 U.S.C. § 1350. • Canada Business Corporations Act, R.S.C, 1985, c. C-44. • The Criminal Code, R.S.C., 1985, c. C-46. • The Federal Courts Act, R.S.C, 1985, F-7. • The Corruption of Foreign Public Official Act, S.C. 1998, c. 34. • Sustainable Development Act (Loi sur le développement durable), Province of Québec, 2006, Chapter

D-8.1.1. • Federal Sustainable Development Act, S.C. 2008, c.33. • The Extractive Sector Transparency Measures Act, S.C. 2014, c. 39, s. 376.

Ø Bills:

• Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil, or Gas in

Developing Countries, 3rd Sess, 40th Parl, 2011. • Bill C-323, An Act to amend the Federal Courts Act (international promotion and protection of human

rights, 2nd Sess, 41st Parl, 2015. • Bill C-584, An Act Respecting the Corporate Social Responsibility Inherent in the Activities of Canadian

Extractive Corporations in Developing Countries, 2nd Sess, 41st Parl, 2015.

Online materials

• Above Ground, ‘Poursuites transnationales au Canada contre les compagnies extractives: faits nouveaux

dans les litiges civils’ (2016) ; online : https://aboveground.ngo/wp-content/uploads/2018/05/Causes_31mai2018.pdf

• AFNOR Certification Website; online: https://certification.afnor.org/en • AMF (French Authority of Stock Markets) Official Website regarding Enforcement Committed; online:

https://www.amf-france.org/en_US/L-AMF/Commission-des-sanctions/Presentation?langSwitch=true • Canadian Institute of Mining, Metallurgy and Petrolum regarding the Centre for Excellence in CSR;

online: https://www.cim.org/subsites/industry-resources/centre-for-excellence-in-csr/ • Canadian Official Government Website regarding Canada’s Enhanced Corporate Social Responsibility

Strategy to Strengthen Canada’s Extractive Sector Abroad; online: https://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-strat-rse.aspx?lang=eng

• Canadian Securities Administrators Official Website; online: https://www.securities-administrators.ca/aboutcsa.aspx?id=45

• Canadian Securities Administrators Official Website regarding information on sanctions; online: https://www.securities-administrators.ca/enforcement.aspx?id=73

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• Corporate Social Responsibility: Movements and Footprints of Canadian Mining and Exploration Firms in the Developing World (2009), The Canadian Centre for the Study of Resource Conflict, footnote 4, p. 6; online: http://caid.ca/CSRRep2009.pdf

• French Anti-corruption Agency Official Website; online: https://www.agence-francaise-anticorruption.gouv.fr/fr

• French Anti-corruption Agency Official Website on its role; online: https://www.agence-francaise-anticorruption.gouv.fr/fr/lagence

• French Anti-corruption Agency Official Website on its missions; online : https://www.agence-francaise-anticorruption.gouv.fr/fr/missions

• French Anti-corruption Agency Official Website regarding the Public Interest Judicial Convention; online: https://www.agence-francaise-anticorruption.gouv.fr/fr/convention-judiciaire-dinteret-public

• French Government Website on Pacte Law; online: https://www.gouvernement.fr/en/pacte-the-action-plan-for-business-growth-and-transformation

• Global Affairs Canada regarding the Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor; online: https://www.international.gc.ca/csr_counsellor-conseiller_rse/index.aspx?lang=eng

• International Finance Corporation’s (IFC’s) Performance Standards on Social & Environmental Sustainability; online:https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-At-IFC/Policies-Standards/Performance-Standards

• International Labour Organization exposed the Rana Plaza incident and its aftermath; online: https://www.ilo.org/global/topics/geip/WCMS_614394/lang--en/index.htm

• ISO 26000, Terms and definitions, at para 2.18; online: https://www.iso.org/obp/ui/#iso:std:iso:26000:ed-1:v1:en:term:2.18

• ISO Platform for Guidance Official Website; online: https://www.iso.org/obp/ui/#iso:std:iso:26000:ed-1:v1:en

• Law Reform Commission, Issues Paper: Regulatory Enforcement and Corporate Offences (LRC IP 8- 2016), Issue 4, Law Reform Commission of Ireland, p. 33, para 4.01); online :Website: https://www.lawreform.ie/_fileupload/Issues%20Papers/Issues%20Paper%20on%20Regulatory%20Enforcement%20and%20Corporate%20Offences%20final.pdf

• National Law Review Website; online: https://www.natlawreview.com/article/sapin-ii-law-new-french-anticorruption-system

• OECD Working Groupe on Implementation of Anti bribery in France Official Website; online: https://www.oecd.org/newsroom/statement-of-the-oecd-working-group-on-bribery-on-france-s-implementation-of-the-anti-bribery-convention.htm

• Prospectors and Developers Association of Canada, e3 Plus; online: https://www.pdac.ca/priorities/responsible-exploration/e3-plus

• Reporting definition: https://dictionary.cambridge.org/fr/dictionnaire/anglais/reporting • Soft law definition: https://definitions.uslegal.com/s/soft-law/ • Stanford Social Innovation Review Website; online:

https://ssir.org/articles/entry/french_law_revisits_corporate_purpose • Transparency International France Official Website regarding whistleblowers; online:

https://transparency-france.org/aider-victimes-de-corruption/lanceurs-dalerte/#.XcrmHaclCfU • VIGEO Certification Website; online: http://www.vigeo-eiris.com/#panel3 • Voluntary Principles on Security and Human Rights; https://www.voluntaryprinciples.org/for-companies

Report

• Canada, Parliament, House of Commons, Fourteenth Report of the Standing Committee on Foreign Affairs and International Trade: Mining in Developing Countries - Corporate Social Responsibility, 38th Parl., Ist Sess, (2005).

• National Round Table on the Environment and the Economy, Performance Report example for the period ending March 31, 2005.

• Potier D., Rapport n° 2628, 11 mars 2015, AN, p. 70 (Report from the French National Assembly). According to the terms of the article L233-16, is taking into consideration notion of ‘dominant influence of the corporation’.

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• Towards Sustainable Mining created by the Mining Association of Canada, Progress Report (2018).