Navigating Corporate Responsibility: Insights from a Panel on the French Vigilance Law and the German Supply Chain Due Diligence Act (LkSG)

This panel provided a compelling exploration of regulatory landscapes, compliance strategies, and the future of corporate sustainability obligations.
‍

The Legal Framework: Understanding the French Vigilance Law and the LkSG
‍

Ophelia initiated the session with an overview of the French Duty of Vigilance Law which applies to the 300 largest companies, mandating them to establish, publish, and effectively implement a vigilance plan. Unlike other regulatory frameworks that separate due diligence from reporting, the French law merges both into a single vigilance plan, serving as both a preventive mechanism and a transparency tool. A key characteristic of the French law is its lack of detailed requirements—it spans only a page and a half, whereas the German LkSG is 24 pages long. While this brevity was intended to provide flexibility, it has instead resulted in legal uncertainty and ongoing disputes over compliance expectations.
‍

Lucina Burger, Partner at Hengeler Mueller, then presented the German LkSG, which, while similar in intent, has distinct characteristics. It applies to companies with 3,000 or more employees (expanding to 1,000 in 2024) and mandates due diligence processes for human rights and environmental protection. Unlike the French model, the LkSG includes administrative enforcement through the Federal Office for Economic Affairs and Export Control (BAFA), which can impose fines and exclusions from public procurement. Lucina pointed out that BAFA has already undertaken a substantial number of controls and investigations during the first two years of application and that, although no fines have been imposed so far and reporting obligations have been postponed, many companies had to deal with extensive questionnaires and investigations initiated by BAFA.
‍

Practical Considerations: Compliance Challenges and Strategies

‍
Todd Ptak, Head of Sustainability Legal Affairs at Airbus, highlighted the practical aspects of implementing these laws, emphasizing that compliance is not merely a legal exercise but a strategic imperative. He noted the complexities of integrating due diligence into corporate structures, particularly for multinational firms operating across jurisdictions. Companies must establish robust internal processes, train staff, and engage meaningfully with suppliers.  
‍

Lessons Learned: Legal Precision vs. Practical Flexibility

‍
One of the key debates centered around the level of detail in legislation. Ophelia argued that lawmakers assumed that keeping the French law brief would allow flexibility in defining the appropriate due diligence measures. However, the lack of specificity led to disputes over compliance expectations, with one the one side civil society advocating for detailed reporting risks identified in the risk mapping and companies pushing back against excessive reporting requirements. Courts are now weighing in on these expectations.

‍
Todd added that defining the “chain of activities” is a critical challenge, as companies struggle to determine how far down the supply chain their responsibilities extend. Todd also addressed the issue of termination, noting that cutting ties with non-compliant suppliers might not always be the most ethical or practical solution, as it could worsen conditions rather than improving them.
‍

Enforcement as a Compliance Incentive

‍
Ophelia highlighted that the French law relies primarily on civil litigation for enforcement. NGOs, trade unions and affected stakeholders can bring lawsuits against companies for failing to design and publish an adequate vigilance plan. Courts can order compliance injunctions and hold companies liable for damages that appropriate due diligence could have prevented. However, this reliance on litigation has led to slow and complex legal proceedings, uncertainty in judicial interpretations, and selective case prioritization.
‍

Todd elaborated on BAFA’s role in monitoring compliance, conducting audits, and engaging with companies to ensure continuous improvement. This approach contrasts with the French model, where enforcement primarily occurs through civil litigation initiated by stakeholders.
‍

The Future: CSDDD—An Adjustment or a Regulatory Revolution?

‍
Ophelia emphasized that the CSDDD is a great opportunity to refine the French law and align it more closely with international due diligence standards like the UN Guiding Principles on Business and Human Rights. A major shift will come with the introduction of an enforcement agency, which will bring faster and more consistent oversight. From a German perspective, Lucina pointed out that while the CSDDD will broaden the scope, many companies falling under the LkSG will already have implemented certain group-wide policies and procedures and thus be familiar with the general idea of extended supply chain due diligence.

‍