PART I

A new law on the cards

It has been a long journey for the UK to bring domestic force to its endorsement of the UN Guiding Principles on Business and Human Rights (UNGPs). But now, Baroness Lola Young has attempted to close this great lag by tabling a Private Member’s Bill in the House of Lords to fill the accountability gap for corporations in relation to human rights and environmental abuses in their general operations and own activities, as well as in their supply chains.

The Corporate Justice Coalition’s report, Bridging the gap: How could a UK Business, Human Rights and Environment Act have made a difference?, lays out 15 cases of human rights abuse and environmental harm linked to UK companies and public bodies – showing why this new model of law is needed.

One case demonstrates the barriers to justice faced by more than 13,000 members of the Ogale and Bille communities in the Niger Delta as part of their case against British oil multinational, Shell, for pollution of their water sources and destruction of their way of life.

Severe abuses are also linked to products vital to our public services – including the UK Government sourcing NHS PPE from a company accused of worker exploitation in Malaysia after failing to undertake any form of adequate due diligence.

It is not just about what happens overseas – it is also about what happens in the UK. In 2020, the UK-based online fast fashion brand, Boohoo hit the headlines with allegations of modern slavery when it was revealed that workers making its clothes in Leicester factories were suffering severe exploitation – being paid less than half the legal minimum wage. A BBC Panorama investigation that aired in November 2023 revealed that Boohoo’s practices in its dealings with suppliers have not changed.

There has been a global trend towards embedding the corporate responsibility to respect human rights and the environment into law. But what has been done to put the UK’s endorsement of the UNGPs into practice?

The legal requirements that came out of the Modern Slavery Act 2015’s ‘transparency in supply chains’ provision, as well as the Environment Act 2021’s deforestation due diligence requirement have been part of the move towards embedding corporate responsibility within the law. But these efforts are far from enough – both are limited in terms of the scope of abuses covered, as well as in their failure to address what they set out to do, even within that limited context.

As Parliament’s then Business Energy and Industrial Strategy Committee reported in March 2021, the Modern Slavery Act is “not fit for purpose” in ensuring supply chains are free from forced labour. While heralded as “world-leading”, the Environment Act’s deforestation due diligence requirement focuses only on forest risk commodities that are produced illegally under the laws of the producer country. In setting it out in this narrow context, the Government wholly ignored the specific recommendation – to take a broad approach to addressing human rights and environmental harms in global value chains – of the taskforce it convened.

A Brief Overview of the Proposed Law

The Bill mentioned in the introduction, fully titled the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill, would address certain shortfalls of existing legislation. It would do so by placing a duty on commercial organisations in all sectors, including the finance sector, as well as public authorities to prevent human rights and environmental harms, so far as is reasonably practicable.

This includes an obligation to conduct and publish human rights and environmental due diligence assessments on their own operations, products, and services, those of their subsidiaries and throughout their value chains with regulatory oversight. In the context of the Bill, value chains is interpreted broadly to include all activities undertaken during the lifecycle of a good or service – both upstream and downstream. 

Part of the due diligence process would include informed, meaningful, and safe engagement with stakeholders, particularly workers, affected rightsholders, and those defending human rights and the environment. In the event that a commercial organsation or public authority decides to suspend or terminate a business relationship as a result of its due diligence assessment, the decision to terminate should be based on such engagement with stakeholders who are or may be affected by the decision to disengage.

Crucially, the Bill would create effective enforcement and redress mechanisms. Commercial organisations would face civil and criminal liability if they fail to prevent harm in their value chains.

Evie Clarke is a Policy and Advocacy Officer at the Corporate Justice Coalition.

Find articles on this topic in the Business and Human Rights Journal.