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Tony Cunningham : Earlier today we had the successful Second Reading of the Christmas Day (Trading) Bill. It was helped through its Second Reading by a trade union, which provided support. If the Bill before us passes through the House, I hope that it would allow people to know whether companies that have dealings in other parts of the world accept and encourage trade union involvement and trade union
membership. We know that in this country that is acceptable. Would it not be as well if people knew what companies were doing in respect of trade unionism in other parts of the world?
Mr. Dismore: My hon. Friend makes an important point. When we are talking about organisations such as those in the oil industry, it is extremely important. We are not thinking only about terms, conditions and wages—we must also have regard to health and safety. Many companies operate in ways that are downright unsafe.
Recently, a multinational company was describing to me its health and safety record with particular reference to fatal accidents. In Europe, those accidents could be counted on one's fingers—that is if one still has them! However, there were more people killed by this one company worldwide than the whole of the people killed at work in the United Kingdom in a year, twice over. That shows that while in Europe we may have a strong attitude to health and safety, that does not apply in the rest of the world. My hon. Friend is right to highlight the role of the trade unions on health and safety. An inquiry into health and safety is being conducted by the Select Committee on Work and Pensions. Trade unions are important when it comes to terms and conditions, and especially important in the context of health and safety at work.
It is easy for us in the west to take for granted the right that is guaranteed by all the international conventions to organise as a trade union. We know that there are many dictatorships throughout the world that operate hand in glove with some rather despicable companies, which will deal only with sweetheart trade unions or which actively fight against trade unionism itself. Many people have died in the developing world, particularly in south America, for the right to be represented by a trade union. It is an issue on which companies should report back to their shareholders in the developed world.
Andy King : I am sure that my hon. Friend is aware that the Bill has the full support of every trade union in this country and that of the TUC, which has written to me offering its full and unqualified support because of the benefits that the Bill would bring to the very workers to whom my hon. Friend has referred.
Mr. Dismore: I am grateful to my hon. Friend for his intervention because it significantly emphasises the point made by my hon. Friend the Member for Workington (Tony Cunningham). The trade union movement is an international movement. An important reflection of the good work that our trade unions do is the attempt to promote decent labour conditions for workers internationally, often in circumstances where they are not able to look after themselves.
Amnesty International continues to be the leading source of information on human rights abuses, where business has failed to act within their sphere of influence, or sought to avoid responsibility altogether, through legal means. That includes, for example, BP's negotiation within the context of the Baku-Tbilisi oil pipeline.
If I were to draw a thread through all these different stories, including those to which I was referring before I was intervened on, I would ask what they all have in
common. Concerns have been expressed by stakeholders who have been unable to articulate their concerns by issuing reports, by media attention or by direct lobbying. Most of these issues have failed to appear in corporate social reports. Why is that? Is it perhaps because those companies are unwilling to explain what has been going on? Is it because no one wants to be seen to be taking a lead for fear of creating a disadvantage for their company?
Mr. Gardiner: My hon. Friend has been most generous in taking interventions. Does he agree that some of the very principles with regard to stores that felt a compulsion as a result of their competition opening on Christmas day on the basis of which we were earlier urging this House to pass legislation to prevent Christmas day trading are exactly the same as those that apply here? There are companies that fear the impact on their own share price and operations from doing the right thing and publishing each year a statement of their socially responsible activities. They fear that unless we act, they will be disadvantaged in the commercial arena.
Mr. Dismore: My hon. Friend makes a strong point that I was starting to develop. Blue-chip companies may like to do that, but nobody wants to be seen to be the one putting a toe in the water. All our companies and employers—not just trade unions—would also see the benefits of the Bill.
Tony Cunningham: In Burma, Aung San Suu Kyi has been under house arrest for many years and democracy has broken down. Many people would not want British and European companies to invest there, but they need to know whether companies are investing in a country with such a regime. I hope that the Bill will provide them with the information.
Mr. Dismore: That is a strong point. The question is why people want to know that information. There are two or three different reasons. The first is whether they are happy with their money being invested in a country such as that. But there may be big corporate investors who are prepared to see that done for profit but also prepared to put pressure on companies in turn to pressurise the regimes to try to move towards democracy. My hon. Friend makes an important point about Burma, where a number of UK companies invest. If some of the shareholders, pension fund members and people with individual pension rights knew where their money was invested, they might well put pressure on those companies to improve standards throughout the developing world in their operations, as well as on Governments to clean up their acts.
Mr. Adrian Flook (Taunton) (Con): The hon. Gentleman may be a sponsor of the Bill and will be au fait with its contents. Companies such as Clarks of Somerset produce all their products in China and what are known as third-world countries, but comply with the Bill's provisions. What advice has he sought from such companies?
Mr. Dismore: The hon. Gentleman makes an interesting intervention. Such companies have a lot to
gain from the Bill. The same situation applies to the company that makes training shoes, in the constituency of my hon. Friend the Member for Workington (Tony Cunningham). Companies with decent labour standards and proper health and safety regimes have nothing to fear and everything to gain from the Bill.
Andy King: In addition, decent companies in this country fully support the Bill. The Co-operative Bank, which is thriving, is fully behind us, as are British Telecom and B&Q. A lot of companies are saying that the time has come to act together so that they are not undercut by the worst.
Mr. Dismore: I am grateful to my hon. Friend for that intervention, because he mentioned some important companies. The Co-op bank is a major finance business, and B&Q brings in raw materials from all over the world, particularly timber, in respect of which there are issues involving hardwood. It is interesting that BT, a high-tech company, also subscribes to the Bill, which goes back to the point that my hon. Friend the Member for South Swindon (Ms Drown) made about call centres.
Mr. Stephen Pound (Ealing, North) (Lab): I am grateful to my hon. Friend for giving way; he shows extraordinary generosity of spirit. May I add Tetley, which is based in Greenford my constituency, to the list of companies that operate ethically? Tetley has been ethically sourcing tea for not the past five or 10 years but for the past 15 years, because it recognises that it has a global duty and an imperative to act as an ethical sourcer in the growth and boxing of loose tea. It has been extraordinarily successful, even though it has had to withdraw from some of its tea-growing operations in Zimbabwe and China. Does he accept that there are some good companies and that, in a reverse of Gresham's law, the good might possibly drive out the bad?
Mr. Dismore: I am grateful for my hon. Friend's intervention. When he mentioned Tetley's, I wondered whether we were going to go down the beer route, which would have been interesting.
Mr. Dismore: Given that we debated Christmas day earlier, we seem to be having a day of religious festivals.
My hon. Friend is involved in Labour Friends of India, and has a large Indian community in his constituency, so it is important to him that the tea company in his constituency is shown to be using proper practices in the region where many of his constituents have their roots. It is a double bonus for him to have such a company on his patch.
Why do such issues not at present appear in corporate reports? Is it really because companies do not think that they are likely to have any impact on shareholder value until they pose a clear financial risk? Shareholder value, however, is the starting point of the founding principle of the Government's proposed operating and financial
review. Some people involved in the company law review process, such as civil society groups, are calling for an operating and financial review that addresses the interests of all relevant users, including shareholders, consumers, employees, communities and charities. The company law review has accepted that premise, and argues that an operating and financial review should be prepared for members and other users. However, the proposals are still aimed primarily at members' interests alone.The proposed operating and financial review must ensure that companies take into account and disclose a range of impacts on relevant stakeholders, instead of perpetuating the status quo, which is based on companies' voluntary good will. Do businesses currently report on what is important to other users? Some might, but not all. Looking at the leaders in corporate social responsibility, there are significant gaps between companies' social and environmental concerns and their financial considerations. When a business makes a decision, it must arguably consider several issues beyond financial impact, including legal implications and the risk to its brand reputation, but business decisions rarely allow a stakeholder interest to overrule financial concerns if it has no proven financial bearing. In forward-looking strategies, unless there are clear financial risks, business will do what is best for business as it perceives that in its short-term, blinkered view of the world today.
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