EDF / 2018 Reference document

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PRESENTATION OF EDF GROUP Legislative and regulatory environment

In France, the Directive was primarily transposed into law through the Water and Aquatic Environments Act of 30 December 2006, which stipulates the measures that are designed to ensure that the Directive’s targets are attained. These targets are determined for each river basin in the master plans for water development and management (SDAGEs). All EDF’s activities that could impact water and aquatic environments must be compatible with the targets set in the SDAGEs. The Water Act also requires the various uses of water to be reconciled. The requisite balanced, sustainable management of water resources therefore has consequences for the operating rights of hydropower plants, and indirectly for all EDF’s activities that affect aquatic environments. The EU Water Framework Directive makes provision for its re-examination by the EU Commission no later than 19 years after its entry into force i.e. by 2019. Protection of biodiversity As an occupant and user of natural land and water areas, EDF is directly concerned by biodiversity issues. Law no. 2016-1087 of 8 August 2016 on the Restoration of Biodiversity, Nature and Landscapes has improved the protection of biodiversity. The main provisions of the Law on biodiversity incorporate new guidelines that are set forth in the French Environment Code (the principle of non-regression of environment Law, the principle of prevention and the objective of “zero net loss” of biodiversity). It has created new institutions for preserving biodiversity, including the French Agency for Biodiversity (AFB). It has also introduced also introduced new rules on the compensation of environmental harm into the French Civil Code. Single environmental authorisation Order no. 2017-80 of 26 January 2017 and Decrees no. 2017-81 and 2017-82 of 26 January 2017 (codified in Articles L. 181-1 and R. 181-1 et seq. of the French Environment Code) on environmental authorisation were published in the Journal Officiel on 27 January 2017. Order no. 2017-80 of 26 January 2017 on environmental authorisations aims to perpetuate the attempts to consolidate the authorisation procedures implemented since March 2014. It definitively incorporates into the French Environmental Code a single environmental authorisation system. The comprehensive authorisation system allows for a coordinated appraisal of authorisation applications and the issuance in a single document, for a given project, of all the decisions required of the State (see section 1.5.6.2.1 “Regulations applicable to facilities classified for the protection of the environment (ICPEs)”). It is likely that the single authorisation procedure will apply to EDF projects. Whistleblowers On 8 November 2016, the French Parliament definitively passed the bill on transparency, the fight against corruption and the modernisation of economic life, and the proposed constitutional bylaw on the authority of the Defender of Rights over the guidance and protection of whistleblowers. Law no. 2016-1691 of 9 December 2016 includes rules to protect whistleblowers, who are defined as individuals who reveal or report, for no ends of their own and in good faith, a felony or a crime, a serious and blatant breach of an obligation provided for by the law or a regulation, or a serious threat or harm to the public interest. The provisions introduced by the law aim to protect whistleblowers from potential criminal or disciplinary proceedings, and provide for a set of rules on internal whistleblowing to be used in companies. This framework is completed by the provisions of Decree no. 2017-564 of 19 April 2017, which provides for a common reporting procedure for all companies in the same group and guarantees the confidentiality of the procedure. On 17 April 2018 the EU Commission published a proposal for a Directive on the protection of persons reporting on breaches of Union law without setting a timetable for debating and adopting the text. Environmental class action Law no. 2016-1547 of 18 November 2016 on the Modernisation of Justice in the twenty-first century created a general right to class action and includes an environmental class action, as provided for in Article L. 142-3-1 of the French Environment Code.

This right enables groups of individuals who are placed in a similar situation and who suffer harm to file a class action before the courts of judiciary in order to cause a breach to cease and obtain compensation for “bodily injury and damage to property that result from harm caused to the environment”. Environmental class actions may be brought via environmental protection associations that have been accredited in accordance with Article L. 141-1 of the French Environment Code, or by associations that have been accredited under the conditions defined by a decree issued following consultation of the Council of State (Decree no. 2017-888 of 6 May 2017), the purpose of which, according to their by-laws, includes the defence of victims of bodily injuries or the defence of the economic interests of their members. On 11 April 2018 the EU Commission published a proposal for a Directive on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC. The text has not yet been debated within European institutions. Social and environmental reporting obligation for businesses (RSE) Articles L. 225-102-1 and R. 225-104 of the French Commercial Code provide for the disclosure in EDF's management report of information on how the EDF group takes into account the social and environmental consequences of its activity as well as its societal commitments in relation to sustainable development (CSR reporting see chapter 3). Under Directive no. 2014/95/EU of 22 October 2014, transposed into French law by the Order of 19 July 2017 and its Application Decree of 9 August 2017, as of the 2018 fiscal year the aforementioned CSR reporting is replaced by the publication in the management report of a non-financial performance report, covering, where appropriate, all of the companies included in the scope of consolidation. In addition, the Law of 27 March 2017 on the Duty of Care of Parent Companies and Ordering Companies provides for the establishment and implementation of a vigilance plan with reasonable due diligence measures to identify and prevent risks to human rights, fundamental freedoms, serious bodily injury or environmental damage as well as the health risks resulting from their activities, those of their subsidiaries, subcontractors and suppliers, whether they are located in France or abroad (see section 3.8.1 "Vigilance Plan"). PCBs and PCTs The Group is subject to regulations on polychlorobiphenyls (PCBs) and polychloroterphenyls (PCTs) in the various countries where it operates, particularly in Europe. European Directive no. 96/59/EC of 16 September 1996 required that an inventory of equipment containing PCBs and PCTs at levels of more than 500ppm be drawn up, together with a national plan for decontamination and the gradual disposal of these substances, which are mainly found in certain electricity transformers and condensers. Decontamination of equipment containing these substances was to be completed by 31 December 2010 at the latest. EDF had a special disposal plan and has achieved this objective. Pursuant to Decree no. 2013-301 of 10 April 2013, EDF must clean up and decontaminate equipment with pollution levels of between 50 and 500ppm, with the possibility, as the holder of more than 150 pieces of equipment, of benefiting from a “specific plan” that is approved by order of the Minister for the Environment. This plan must, as a minimum, provide for the decontamination or destruction of one-half of the equipment before 1 January 2020 and all equipment before 31 December 2025. The contents of the application for the specific plan were defined by an Order of 28 October 2013. RTE’s and Enedis’ specific decontamination plans were approved by two orders of 14 April, and 3 July 2014. The Decree of 10 April 2013 also specified the new obligations in terms of identifying, labelling, declaring and using equipment with fluid containing PCBs with a volume of more than 5dm 3 . The rules for conforming to these obligations were stipulated in detail by two orders of 7 January, and 14 January 2014.

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EDF I Reference Document 2018