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A | |
Bill | |
To | |
Make provision for certain companies to produce and publish reports on | |
environmental, social and economic and financial matters; to consult on | |
proposed operations of the company; to specify certain duties and | |
responsibilities of directors; to establish a right of access to information held | |
by companies; to specify the powers and duties of the Secretary of State; to | |
provide for remedies for aggrieved persons; and for related purposes. | |
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and | |
consent of the Lords Spiritual and Temporal, and Commons, in this present | |
Parliament assembled, and by the authority of the same, as follows:— | |
1 Interpretation | |
For the avoidance of doubt, any duty under this Act to report on or to minimise | |
the economic impact of any operations or proposed operations does not apply | |
to the effect of those operations or proposed operations on other companies. | |
2 Activities of companies | 5 |
A company shall carry out its activities in accordance with administrative | |
practices and laws of the countries in which it operates, as well as international | |
agreements, responsibilities and standards, including but not limited to, those | |
relating to— | |
(a) the preservation of the environment; | 10 |
(b) public health and safety; | |
(c) the goal of sustainable development; | |
(d) employment; | |
(e) human rights; and | |
(f) consumer protection. | 15 |
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3 Duty to prepare and publish reports | |
(1) It shall be the duty of every company to prepare and publish a report annually | |
containing— | |
(a) an assessment the company’s policies and performance in regards to | |
environmental, social and economic impacts of any of its operations in | 5 |
the preceding year; | |
(b) an assessment the company’s policies and performance in regards to | |
environmental, social and economic impacts of any proposed activities; | |
(c) an assessment of the company’s employment policies and | |
performance, such an assessment to include the effects of its operations | 10 |
and any proposed operations on its employees; | |
(d) the amount, or a reasonable summary thereof, of— | |
(i) taxes and other payments made to governments for any country | |
of operation; | |
(ii) grants, tax dispensations or other benefits received from any | 15 |
government or government agency in any country of operation; | |
and | |
(iii) any donations or contributions to any political party either | |
directly or indirectly; | |
(e) any relevant training, qualifications and experience the company’s | 20 |
directors have as regards— | |
(i) the environment; and | |
(ii) social matters; and | |
(f) the way in which the directors of a company have discharged their | |
duties under section 7(1); and for the avoidance of doubt it is hereby | 25 |
stated that this shall include any measures taken by the company | |
pursuant to that section. | |
(2) A company shall take reasonable steps to make the report under subsection (1) | |
publicly available. | |
4 Consultation | 30 |
(1) Companies shall take reasonable steps to consult and respond to opinions | |
expressed by stakeholders who may be affected by any proposed projects that | |
may have significant effects on them. | |
(2) A company shall produce as part of any consultation an environmental, social | |
and economic impact assessment of the proposal. | 35 |
5 Right of access to information | |
(1) The Secretary of State shall by order made by statutory instrument specify the | |
circumstances under which companies must disclose commercial information. | |
(2) The Secretary of State shall by order made by statutory instrument prescribe | |
the manner of access to information and information to be treated as | 40 |
confidential pursuant to section 1. | |
(3) Any person who is refused access to information following a request made in | |
the prescribed manner shall have a right of appeal. | |
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(4) The Secretary of State shall by order made by statutory instrument nominate | |
an existing body or establish a new body to determine the right of appeal | |
pursuant to this Act. | |
6 Parent company liability and applications to subsidiaries, mergers, disposals, | |
acquisitions and other restructurings | 5 |
(1) A parent company of a corporate group shall be liable to pay compensation in | |
respect of the classes of damage set out in subsections (1)(c)(i) to (iii) below | |
where— | |
(a) the manner in which the group’s activities are organised managed or | |
undertaken falls below the standards that can reasonably be expected | 10 |
of the group in all the circumstances of the given case; and | |
(b) the manner in which the group’s activities are organised managed or | |
undertaken fails to ensure— | |
(i) the health and safety of persons working in or affected by those | |
activities; | 15 |
(ii) the protection of the environment; and | |
(c) such a failure may be regarded as a cause of— | |
(i) serious physical or mental injury to persons working in or | |
affected by those activities; | |
(ii) serious harm to the environment; or | 20 |
(iii) both. | |
(2) For the purposes of this section it shall be immaterial whether the injury to | |
persons or harm to the environment occurred within the United Kingdom. | |
(3) It shall be the duty of a company to which subsection (1)(a) applies to ensure | |
that— | 25 |
(a) any other entity which is under that company’s operational control | |
wherever registered or domiciled complies with sections 3, 4, 5, 7 and | |
this section; and | |
(b) any subsidiary undertaking of that company wherever located | |
complies with sections 3, 4 and 5. | 30 |
(4) The Secretary of State shall within one year of the passing of this Act, after | |
taking such steps as he considers reasonable to consult companies and their | |
stakeholders, lay before Parliament a report regarding companies to which | |
subsection (1)(a) applies. | |
(5) In this section— | 35 |
“corporate group” shall mean a parent company and its subsidiary | |
undertaking or undertakings as defined in section 258 of the | |
Companies Act 1985 (c. 6) (as substituted by section 21 of the | |
Companies Act 1989 (c. 40)); | |
“parent company” shall have the meanings set out in section 258 of the | 40 |
Companies Act 1985 (as substituted by section 21 of the Companies Act | |
1989); and | |
“subsidiary undertaking” shall have the meaning assigned in section 258 | |
of the Companies Act 1985 (as substituted by section 21 of the | |
Companies Act 1989). | 45 |
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7 Environmental and social duties of directors | |
A director of a company shall, when considering any matter or taking any | |
decisions, act in the way which in his opinion would be most likely to promote | |
the success of the company, but in so doing it shall be the duty of the directors | |
of any company— | 5 |
(a) to consider— | |
(i) the environmental, social and economic impacts of their | |
operations and any proposed operations; and | |
(ii) the interests of all their stakeholders | |
when making any decision in respect of those operations or proposed | 10 |
operations; | |
(b) to take all reasonable steps to minimise any negative environmental, | |
social and economic impacts of any such operations or proposed | |
operations; and | |
(c) to prepare a annual report which identifies any risks to the company as | 15 |
a result of the company’s environmental, social and economic impacts | |
and how any such risks would be managed. | |
8 Responsibilities of directors | |
The directors of any company to which this Act applies shall be liable for any | |
significant adverse social, environmental or economic impacts of their | 20 |
operations which arise from— | |
(a) any negligence by them; | |
(b) any wilful misconduct by them in relation to the duties of any company | |
under this Act; or | |
(c) any wilful misconduct by them relating to the disclosure of information | 25 |
required by this Act. | |
9 Functions of the Secretary of State | |
(1) It shall be the duty of the Secretary of State to issue guidelines regarding— | |
(a) the matters to be included in a report published pursuant to section | |
3(1); | 30 |
(b) the meaning of the term “significant” in that subsection of that section; | |
(c) what are to be regarded as “reasonable steps” under section 3(2); | |
(d) persons to be considered to— | |
(i) have an interest in, or | |
(ii) be affected by, | 35 |
any operations to which a report applies; | |
(e) matters to be included in any assessment produced under section 4(2); | |
and | |
(f) matters to be included in any considerations made under section 7; | |
and in the making of such guidelines the Secretary of State shall have regard to | 40 |
any existing standards or guidelines in operation for the time being. | |
(2) The Secretary of State shall have the power, if in his opinion his guidelines are | |
being seriously breached or ignored, to issue directions to any company or | |
companies in respect of any of the matters in subsection (1) and different | |
directions may be issued to different companies or different types of | 45 |
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companies and it shall be an offence for a company to ignore or contravene any | |
such direction. | |
(3) For the purposes of enabling the Secretary of State to determine whether his | |
guidelines are being seriously breached or ignored he shall have the power to | |
investigate the matter in question and this power includes the right to summon | 5 |
any person to give evidence and the right to require the provision of such | |
information by any person as may be reasonably required for that | |
investigation. | |
(4) For the purposes of ensuring compliance with the provisions of this Act it shall | |
be the duty of the Secretary of State to carry out random audits of companies | 10 |
to which this Act applies and the powers given to the Secretary of State by | |
subsection (3) above shall apply to any such audit. | |
(5) It shall be an offence for any person to obstruct any investigation by the | |
Secretary of State under this section. | |
(6) The Secretary of State shall publish an annual report on the way in which he | 15 |
has discharged his functions under this section during the preceding year. | |
(7) The Secretary of State may by regulation nominate or establish a body (“an | |
appointed body”) to carry out his functions under this section and in such a | |
case references to the Secretary of State in this section shall be construed as | |
references to that body. | 20 |
(8) Regulations made under this section shall be by statutory instrument which | |
shall be subject to annulment by resolution of either House of Parliament. | |
10 Remedies of stakeholders | |
(1) If a stakeholder is of the opinion that a company is in breach of this Act he may | |
make a complaint to the Secretary of State (or to any appointed body) and the | 25 |
Secretary of State (or appointed body) shall subject to subsection (2) consider | |
any such complaint. | |
(2) The Secretary of State (or appointed body) need not consider a request made | |
under subsection (1) if it considers it to be frivolous or without merit and in any | |
such case the Secretary of State (or appointed body) shall publish the reasons | 30 |
for that decision. | |
(3) Where the Secretary of State (or appointed body) receives an application under | |
this section the powers given to him or it under section 9(3) shall apply as if | |
they were powers under this section. | |
(4) Any stakeholder shall subject to any provisions of this Act have a right of | 35 |
action against a company to which this Act applies and any directors thereof | |
for any breach of duty owed towards him as a result of this Act and the courts | |
in the United Kingdom shall have jurisdiction to hear any such case. | |
11 Penalties | |
(1) A person who breaches any provision of this Act commits an offence. | 40 |
(2) An offence under this Act shall as appropriate be punishable by— | |
(a) imprisonment or a fine or both; | |
(b) a person being prohibited from being a director of a company for a | |
specified period of years; | |
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(c) a person being required to make redress to any other person who has | |
suffered as a result of any offence; | |
(d) a company being suspended from trading on the Stock Exchange; or | |
(e) in cases of persistent serious breaches of this Act a company being | |
directed to cease operations or certain of its operations. | 5 |
(3) The Secretary of State shall, after consulting such persons as he considers | |
appropriate, specify in regulations the scale of punishments that shall apply in | |
relation to offences under this Act. | |
(4) Regulations made under this section shall be made by statutory instrument | |
and no such regulations shall be made unless a draft of those regulations has | 10 |
been laid before and approved by a resolution of each House of Parliament. | |
12 Definitions | |
(1) In this Act subject to this section “company” means— | |
(a) all companies registered in the United Kingdom, and | |
(b) all companies operating within the United Kingdom | 15 |
but with the exception of subsection (3) does not include a company with an | |
annual turnover of less than £5 million. | |
(2) It shall be the duty of the Secretary of State to determine a transitional period | |
for which this Act shall apply to certain UK companies. | |
(3) In the case of— | 20 |
(a) subsection (1)(a) this Act shall apply to all operations of those | |
companies wherever taking place; | |
(b) subsection (1)(b) this Act shall apply to those operations of those | |
companies taking place in the United Kingdom. | |
(4) Subject to this section this Act shall apply to any subsidiary of any company. | 25 |
(5) In this Act a stakeholder is an individual, community or organisation that is | |
materially affected by the operations of a company. | |
(6) The Secretary of State shall by order specify the definition of “materially | |
affected”. | |
(7) In this Act, “transitional period” means the period beginning with the | 30 |
commencement of this Act and ending on such date as the Secretary of State, | |
after consultation, may determine. | |
(8) An order made under this section shall be by statutory instrument which shall | |
be subject to annulment by resolution of either House of Parliament. | |
13 Expenses | 35 |
There shall be paid out of money provided by Parliament— | |
(a) any expenditure incurred by the Secretary of State in consequence of this Act; | |
and | |
(b) any increase attributable to this Act in the sums payable out of money so | |
provided by virtue of any other Act. | 40 |
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