ESG Enforcement Tracker

Key facts:

A coalition of environmental and indigenous peoples organisations (the coalition) have asked a French court to hold retail group Casino in breach of the “duty of vigilance” contained in French law. The coalition seeks an order that Casino implement an effective due diligence plan for preventing harms such as deforestation, so-called “cattle laundering”, and forced labour along its supply chain in the Latin American cattle industry. The coalition also seeks compensation for alleged harm already caused by Casino, its subsidiaries and its suppliers.

The duty of vigilance

Under Law No. 2017-399 of 27 March 2017 on the duty of vigilance of parent companies and ordering companies (the duty of vigilance), large French companies must “establish and effectively implement” a vigilance plan. The plan includes measures intended to identify risks and prevent violations relating to human rights and the environment, including those resulting from the company’s subsidiaries, as well as its subcontractors and suppliers where there is an established commercial relationship. The measures include:

1. Risk mapping to identify, analyse, and prioritise risks;

2. Regular assessment of subsidiaries, subcontractors, and suppliers;

3. Measures to mitigate risks or prevent serious harm;

4. A whistleblowing mechanism in relation to risks; and

5. A system for monitoring the measures implemented and evaluating their effectiveness.

The coalition alleges that Casino has failed to satisfy its duty of vigilance. Its pleading highlights a number of Casino’s shortcomings in that regard. For example, deforestation is said to have occurred on a large scale across Casino’s supply chain. One slaughterhouse, JBS, supplies Grupo Pão de Açúcar (GPA), a subsidiary of Casino. Reportedly, the farms which supply JBS have cleared more than 75,000 hectares of land across the Amazon and Cerrado areas since 2008. Estimates show that JBS’ total deforestation footprint could reach 200,000 hectares in its direct supply chain, and 1.5 million hectares in its indirect supply chain.

The coalition’s pleading further points to invasions of indigenous territories by farms supplying GPA stores in Brazil. Also cited is an Amnesty International report stating that the land invasions are often accompanied by “[t]hreats, intimidation, and violence… According to one estimate, there were seven murders, seven attempted assassinations, and 27 death threats against indigenous people in the Brazilian Amazon region in 2019”.

The pleading places emphasis on “cattle laundering”, which against the backdrop of “Conduct Adjustment Agreements” signed by slaughterhouses. The agreements require slaughterhouses to avoid sourcing from farms involved in illegal deforestation. Laundering occurs when ranchers move cattle through multiple properties in order to circumvent these agreements. Intermediaries purchase cattle from non-compliant properties and resell them to slaughterhouses, something which JBS is said to have been involved in.

Other alleged violations identified in the pleading include forced labour, and practices comparable to slavery.

Liability for breach of the duty of vigilance

The coalition argues that Casino failed to take appropriate measures to identify and prevent human rights and environmental risks and violations in its supply chain. It says that Casino has chosen to continue to procure beef from suppliers such as JBS, and has not implemented any effective due diligence process. Purportedly, there is a lack of transparency on the origin of Casino’s meat and the traceability of its supply chains, and a lack of consultation with indigenous communities affected by these supply chains.

According to the coalition, at the heart of the duty of vigilance is the presumption that parent companies have the power to influence the behaviour of companies acting in their value chain. Liability for breach of the duty requires a causal link to be established between the company’s failure in vigilance, and the harm caused by its supply chain. Ultimately, the coalition argues, Casino’s reasonable knowledge of the above-mentioned risks and harms, and its failure to adopt appropriate vigilance measures, satisfies the required causal link.

Loses claimed

The pleading identifies two types of damage allegedly caused by Casino’s actions. Firstly, loss of opportunity suffered by organisations representing indigenous peoples in Brazil and Colombia. This category of loss relates to the deprivation of the chance to fully enjoy a preserved environment, which is an essential component of the living environment of the indigenous peoples of South America. The coalition seeks an overall total of €3.25 million representing damages for loss of opportunity.

The second category of loss relates to non-material damage suffered by the coalition of organisations who brought the claim. Casino’s lack of vigilance, the coalition says, necessarily undermines the statutory mission of the plaintiff associations, thereby constituting a moral prejudice that must be compensated to the extent of €110,000.

The pleading also asks the Judicial Court of Saint-Étienne to enjoin Casino to publish a new vigilance plan containing the appropriate measures. Pending the effective implementation of those measures, the pleading also seeks an order that Casino put in place a moratorium on the distribution by its subsidiaries GPA and Grupo Éxito of beef in Brazil and Colombia from Amazonian and Cerrado farms.

Since the coalition filed its pleading in 2021, the case was transferred to the Paris civil court. In 2022, a proposal to mediate was refused, with the coalition stating that “this case does not lend itself to a negotiated solution with (Casino) without a proper public debate on its responsibility”. In 2023, the Uru-Eu-Wau-Wau indigenous community joined the legal action. According to advocacy organisation Sherpa, three illegal farms located in the Uru-Eu-Wau-Wau indigenous land are connected to the supply chain of a JBS slaughterhouse.