► Référence complète :
Frison-Roche, M.A., The part of Compliance Law in the fight against Corruption and Climate Change,
in Paris Arbitration Week (PAW),
Compliance: Corruption and Climate Change – how legal systems adapt?, Jones Day, 29 mars 2022. Débat avec Mathias Audit, coordonné par Claire Pauly,
Vice-President of the Paris Arbitration Week. -
► Présentation générale de l'intervention: After the presentation made be Mathias Audit of the consideration of facts of corruption, notably by the red flags method, in an arbitration trial, it seems a low-performing system of proof in compliance: the more diligent a party is in showing that it tried to meet its compliance obligations, the more it is exposed to demonstrating its own failure to doing so. It seems a perversity … Therefore, I can understand why companies often so dislike Compliance Law because more they make efforts, more they put money and more they are punished… But this representation is not totally exact.
My first observation is about the definitions themselves. It is particularly important to have a precise definition of “compliance obligations”, to not confuse them with obligations coming from Criminal Law. The confusion between Criminal Law and Compliance Law is frequent, maybe because what Compliance Law want to eradicate is also prohibited by Criminal Law, for instance corruption. Indeed, technically criminal legal rules and compliance legal rules have many points of contacts, but they are not the same: the obligations are different, the legal persons obliged are different, the reasoning are different the purposes are different. Because the general definition of Criminal Law and Compliance Law are different. Criminal Law, very old branch of Law, which prohibits and sanctions corruption, does it for everyone because the singular behavior is wrong (to corrupt; to be corrupted). Compliance Law is a very new branch of Law, is a systemic branch of economic Law, which wants to eradicate in the future mechanisms because they destroy economic systems, such as corruption does. Its wants that not to protect moral values but to protect economic systems. Therefore, Compliance Law asks some entities, large companies, to do something only because they are in position to do so: to detect and to prevent this corruption, in order to obtain in the future, the protection against this systemic risk threating the economic systems. The compliance legal tools are more in Ex Ante than in Ex Post: risk mapping, audit, code of conduct, training, obtention of information through the chains of suppliers. The proof to give is not the non-corruption everywhere from everyone but this concrete action of prevention and education, companies being entities helping public authorities in this global fight. More precisely, in this definition Compliance Law is not the general obligation to obey the regulations applicable (because this is simply the definition of Law itself, applicable to everybody). Compliance Law is a very new branch of Law which exists only for some systemic “global policies” (as the title of your manifestation says) applicable only on systemic entities (large companies) in a global perspective: for instance, fighting corruption, fighting money laundering, fighting climate change, fighting discrimination between human beings. In your example, for fighting corruption, specific legal obligations are taken, such as FCPA (with extraterritorial effects) or in French legal system the so-called the 2016 “Sapin 2” Law. These obligations don’t concern everybody: they concern entities in position to do so: large companies.
My second remark is about the burden of proof. These compliance obligation or compliance duties are obligations of means. Companies are obliged to adopt Compliance plans, organize risk mapping, and so on. A lot of them organize them through code of compliance, or code of ethic, or code of corporate social responsibility, because Compliance Law is in an intimacy with Corporate Law. Because Compliance Law is a very concrete branch of law, these disposals are adopted at the level of the group and replicated in the contracts with suppliers. But he success of these compliance tools is only an obligation of means. For instance the supervisory authority does not require the company to have seen all the risks, in their existence or their exact quantification. In this sense, about money laundering, the French Financial Markets Authority said that the setup of these compliance tools must be “effective”, but after that the company must only do its “best efforts” to aim an “efficient” result (obligation
de moyens). The French Regulatory Authority for the digital space says the same about the eradication of speeches of hate that Compliance Law oblige digital companies to fight (using the term of
obligation de moyens). Moreover, about corruption, the Commission of sanction of the French Anticorruption Agency said in a decision of July 2019 that the firm is free to choose the technics to detect and to prevent the corruption (confirming that Compliance is not just following what the Regulator says), but offered a legal certainty: if the company just follows what the Regulators had said in its guideline (rule based compliance behavior), it is no more possible to punish it.
My third remarks could be a proposal for a more efficient system of proof. It is true that the burden of proof is on the company’s shoulders. But the object of proof is not the absence of corruption (it would not be possible…). The object of proof is the existence of due diligence to detect and prevent corruption. Companies must prepare that, must constitute these proofs by advance. “Due diligence” is a legal concept frequently used in Compliance Law. Regulators, supervisors, and courts ask companies to show the reality of these diligences. It would not be sufficient to present the cost of Compliance… It will be sufficient to show the effectivity of Compliance programs freely adopted, taking in consideration the guidelines released by public authorities. Public authorities say they want to help companies to diffuse an effective “culture of compliance” : a dialogue with civil and corporate courts, not only with criminal courts would be efficient, for instance for the protection of human rights.
In a second part of this debate, on Climate change and Compliance, Claire Pauly asked the question: « My question is two-fold: do you consider that climate change issues should be treated in the same way as corruption issues? And do you think that arbitrators are well suited to tackle those issues, by upholding the method applied to determine and demonstrate corruption issues? ». The response has been : Firstly, on the technical similarity between fighting Corruption and fighting Climate Change in Compliance Law, I guess it is the same perspective effectively. If we come back to the definition of Compliance Law, the Compliance tools are organized to obtain in the future systemics results, such as no more corruption, no more money laundering, what we can name “Monumental goals”. This is a political decision: to design the future for excluding some systemic catastrophes. Corruption is an example of systemic risk; but climate change is another one. Fighting against Climate Change is a Monumental Goal, of the same nature than fighting Corruption. As everyone knows, we suffer of a lack of tools to address one of this fundamental challenge of our times which is climate change (more difficult than corruption…). But we are lucky to have some Compliance legal tools: we need to use them, because we have so few techniques about this Climate issue… And Compliance Law is the more adequate branch of Law because it is an Ex-Ante branch of Law : generally, its obligations are on the future, and the Climate change drama is in the future also. We can already see that Compliance Law is applicable to Climate Change issue It is easy to see it through the legal techniques. In the French legal system, the
Sapin 2 law invented in 2016 some new compliance techniques, such as risk mapping, audit, due diligence, to detect and prevent corruption. One year after, in 2017, the so-called
Loi Vigilance took the same techniques, copying exactly the legal dispositions of Sapin 2 in this law to oblige large companies to detect and to prevent violation of human rights and environmental obligation, not only inside the corporate group but also through the supply chains. The manager will be accountable for that. On February 23, 2022, the European Commission adopted a proposal for a European Directive in the same direction of a “global policy” to impose a “corporate sustainability due diligence” on large companies, notably for fighting climate change. This new text will be effective in two years in the Internal legal systems. By a rules-based analysis and a principle-based analysis, we can see this is the same reasoning. Of course, this “corporate sustainability due diligence” is only an obligation of means. But it is extremely ambitious, linked to the direct consideration of the Corporate Social Responsibility. And I guess it will be efficient because all these tools are not only Ex Post but also Ex Ante: when the issue is to exclude the catastrophic perspective of the disappearance of the humankind on our planet, having Compliance Law, this Ex-Ante branch of law, is so precious! Secondly, about the role of Arbitration in this issue, I am tempted to say: everyone is required in this global crucial policy! It is quite difficult for a national court to decide on this sort of issue because Climate change is a global issue, while arbitrators are global judges. Technically it is necessary and technically possible that Arbitration takes its place, because these due diligences about detection, prevention, action for a better Climate balance are organized non only in corporate mechanisms, such as code of conduct, corporate commitments, or manager remuneration calculation, but also a lot of contractual dispositions. We will see a lot of new legal techniques: a lot of international public global policies will be adopted. The obligation to give information about that not only to investor but also to stakeholders will be adopted worldwide. The technique of “compliance by design” will be used on the corporate policy of fighting against Climate change. Meanwhile, the classical branch of law, were Compliance Law steps in, will remain active, such as International Law, Corporate Law, Tort Law Contract Law, where Arbitration is so central. So, in short, your question was: are Arbitrators able to deal with climate change issue? my response is: “oh, yes!” -
► Lire le compte-rendu fait par la Paris Week of Arbitration (centré sur la partie qui concerne la distinction entre le Droit de la Compliance et le Droit pénal, et leur articulation) - Pour aller plus loin⤵️
📘Frison-Roche, M.-A. (ed),
Compliance Monumental Goals, 2022.
📘Frison-Roche, M.-A. (ed),
Compliance Jurisdictionalisation, 2022. -
