The Joint Committee on Human Rights – comprised of members of both Houses – has published a report calling on the U.K. government to take significant further steps to improve corporate human rights practices, including criminalising “failure to prevent human rights abuses”.

The Committee acknowledges that the U.K. Government’s introduction of reporting requirements under the U.K. Modern Slavery Act 2015, and the publication of the first National Action Plan to implement the U.N. Guiding Principles on Business and Human Rights, have effected a change in corporate behaviour.  However, the report urged the Government to introduce stronger regulation.

The Recommendations 

Reminding the Government of its National Action Plan commitment to “support, motivate and incentivise U.K. businesses to meet their responsibility to respect human rights throughout their operations both at home and abroad”, the Committee called for:

  • an obligation on large companies to put in place human rights due diligence processes both for their subsidiaries and across their whole supply chain, with appropriate monitoring and enforcement procedures;
  • civil remedies against parent companies when human rights abuses occur;
  • a criminal offence of “failure to prevent human rights abuses” for all companies, including parent companies;
  • government power to publish a list of all companies required to publish a modern slavery statement;
  • company obligations to publish a modern slavery statement in their annual reports and accounts; and
  • exclusion from public sector contracts of companies that have not undertaken appropriate and effective human rights due diligence.

The Committee recommends that the proposed new criminal offence mirror that contained in the U.K. Bribery Act 2010.  The legislation would include a defence for companies that can prove they have conducted effective human rights due diligence (“adequate procedures”). This proposal comes at a pivotal time of legislative reform for corporate accountability in the U.K..  Among other developments, the Criminal Finances Bill, which is expected to be passed in mid- to late-2017, includes a civil power to seize assets of persons who have accumulated wealth by conduct connected with the commission of a gross human rights abuse or violation.

A rapidly evolving landscape 

The Committee report reflects a global trend to tighter regulation of human rights practices, and increased transparency.  Last week, a French “duty of vigilance” came into force, requiring large French companies to implement a “vigilance plan” to assess and address adverse human rights impacts of activities in their global supply chains, including impacts linked to companies under their control and of certain suppliers and subcontractors. The Dutch Parliament recently approved a child labour due diligence law, requiring companies to declare that they have conducted due diligence on child labour in their supply chains. A new E.U. regulation on conflicts minerals may impose mandatory due diligence on importers of certain materials.  And Canadian and Australian governments are contemplating introducing reporting requirements similar to those existing in the U.K.

The report also gave a nod of approval to the investor-led Corporate Human Rights Benchmark (CHRB) initiative, published recently, which ranked the human rights practices of certain companies in the agricultural, apparel and extractives industries.  Publishers of the CHRB hope that it will contribute to a race to the top between peers in corporate human rights compliance.

Conclusions 

Imminent legislative reforms by the U.K. Government are perhaps unlikely, particularly in the midst of a packed Brexit agenda. However, the report provides further evidence of a clear direction of travel in this space.

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Photo of Christopher Walter Christopher Walter

Christopher Walter works with employer clients on domestic and international HR-legal compliance and human rights projects. Mr. Walter co-chairs the firm’s International Employment practice, and serves as Managing Partner of the London office.

Mr. Walter’s advisory practice encompasses the full range of employment…

Christopher Walter works with employer clients on domestic and international HR-legal compliance and human rights projects. Mr. Walter co-chairs the firm’s International Employment practice, and serves as Managing Partner of the London office.

Mr. Walter’s advisory practice encompasses the full range of employment and employee benefits issues that matter to leading multinational employers, including the drafting of share and other incentive plans, global mobility, privacy compliance, employment issues in M&A transactions, outsourcing, workforce integration, and the implementation of core policies/codes of conduct, with a particular focus on business and human rights.

Mr. Walter began his legal career as a UK barrister, however, and also has considerable experience as an advocate before UK courts and tribunals, securing confidentiality injunctions and defending employers against claims of unfairness, discrimination and other alleged violations of employment laws.

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Photo of Hannah Edmonds-Camara Hannah Edmonds-Camara

Hannah Edmonds-Camara

Hannah Edmonds-Camara advises on a range of both international and domestic employment and human rights issues including drafting and implementation of policies and compliance programmes, international employment and human rights aspects of global transactions and contentious employment matters.

She has particular…

Hannah Edmonds-Camara

Hannah Edmonds-Camara advises on a range of both international and domestic employment and human rights issues including drafting and implementation of policies and compliance programmes, international employment and human rights aspects of global transactions and contentious employment matters.

She has particular expertise in helping businesses manoeuvre through the growing global regulatory landscape surrounding the corporate responsibility to respect human rights, through training on international human rights law and best practice, policy design and implementation, management of supplier relationships and due diligence.

Ms. Edmonds-Camara gained valuable experience while on secondment to a large pharmaceutical client. She is a member of the firm’s Diversity Committee, Public Service (pro bono) Committee, and Africa Initiative.