2013-vinci-annual-report

3. Legal risks
3.1 Legal and regulatory compliance
Given the diversity of their activities and geographical locations, the Group’s companies operate within specific legal and regulatory environments
that vary depending on the place where the service is provided and on the sector involved.
In particular, they must comply with rules on:
ˇˇthe terms of agreement and performance of public- and private-sector contracts and orders;
ˇˇlaws governing construction activities and the applicable technical rules governing the delivery of services, supplies and works; and
ˇˇenvironmental, commercial, labour, competition, finance and securities laws.
REPORT OF THE BOARD OF DIRECTORS 129
With respect to concession operations, aside from the legislative, regulatory and tax policy changes that are always possible during such
long-term contracts, the Group is dependent on public authorities that may, as is the case in France, have the right to unilaterally alter the
terms and conditions of public service, PPP and concession contracts during their execution phase or even terminate the contract itself,
subject to compensation.
In the performance of their activities, Group companies could be held civilly or criminally liable and thus be required to bear the financial or
administrative consequences. Similarly, Group executives and employees may also be held criminally liable.
A large share of the risks of non-compliance is therefore likely to lie firstly with executives and/or company officers and with employees to
whom responsibility has been delegated.
Business lines regularly hold awareness-raising and training sessions based on the Group’s Code of Ethics and Conduct. Other than individual
ethical conduct in order to prevent internal fraud, these sessions focus in particular on preventing conflicts of interest and anti-competitive
conduct. The Group’s commitments are described in the Social Performance note, page 26.
The financial risks relating to the potential invoking of Group companies’ civil liability are covered by insurance policies described under
section 5 “Insurance cover against risks” (see below).
The Report of the Chairman of the Board of Directors on corporate governance and internal control procedures includes a paragraph on
compliance with laws and regulations in force, page 195.
3.2 Contractual relationships and disputes
The Group’s business activity is based on contracts that, as a general rule, are subject to the laws of the countries where the project is carried
out, engaging the responsibility of the contracting parties.
As mentioned in the section on operational risks, disputes may arise during the performance of said contracts.
The Group’s policy is to reduce its exposure during the proposal phase by negotiating (sometimes without success) clauses that aim to:
ˇˇpass onto the client the extra costs and/or delays stemming from changes in the client’s requests;
ˇˇallow project shutdown in case of non-payment;
ˇˇexclude indirect damages;
ˇ
ˇ
ˇ
ˇ
ˇ
ˇ
ˇ exclude or limit responsibility relating to existing pollution;
ˇ limit its contractual responsibility for the total project to a reasonable percentage of the contract’s price;
ˇ cap delay and performance penalties to an acceptable percentage of the contract price;
ˇ stipulate contractual provisions allowing for adjustments (price, time schedule) to account for legal, fiscal or regulatory changes;
ˇ obtain protection via a force majeure clause (against political risk, client’s unilateral decision) or for early contract termination;
ˇ obtain an international arbitration clause for contracts outside France.
Detailed information on the principal disputes and arbitrations in which the Group is involved can be found in section H of the notes to the
consolidated financial statements, page 276. These known disputes are examined on the date of approval of the financial statements and,
following the review by legal advisers, the provisions deemed necessary are constituted to cover the estimated risks as deemed
appropriate.
4. Environmental and technological risks
Environmental risks are those that have an impact on the natural environment. They may be directly linked to:
ˇˇthe occurrence of technological accidents;
ˇˇthe usage, handling or transport of hazardous substances;
ˇˇthe emission or release into the air or water of toxic and hazardous substances, waste or CO 2
.
Technological risk stemming from human activity entails the occurrence of accidents in industrial or nuclear installations.
4.1 Environmentally related economic and regulatory context
The sources of environmentally related risks and opportunities are essentially concentrated in two fields:
ˇˇthe competitive market with opportunities generated by growth in demand for renewable energy generation or for products that consume
less energy (low energy buildings);
ˇˇlegal and regulatory compliance resulting from international or national changes in environmental protection regulations, which are often
made stricter, in particular to reduce greenhouse gas emissions or conserve biodiversity.