Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents



Businesses must have regard to human rights in several different contexts. In the UK, businesses which perform a public function have duties under the Human Rights Act. The regulation of UK firms may be intended to ensure that the UK complies with its international human rights obligations. The operations of UK firms overseas may have an impact on human rights, for example the rights of indigenous people. Difficult issues arise if there are weaker governance mechanisms for protecting human rights overseas, or if firms take different approaches to the protection of certain human rights in the UK and elsewhere. This report considers this complex range of issues, starting from the position that the UK should play a leadership role to ensure that all firms respect human rights wherever they operate.

The main focus of the international debate is on the work of the UN Secretary General's Special Representative on human rights and transnational corporations and other business entities, Professor Ruggie. We welcome his work, which is carefully building a global consensus on how businesses can respect and promote human rights. Professor Ruggie is due to make further recommendations in 2011 and we would support clearer guidance to states and businesses about how to meet their obligations under his "protect, respect, remedy" framework, however difficult or unwelcome his message may be. Greater clarity on the role of individuals and civil society is also needed. We call on the Government to continue to support Professor Ruggie and to encourage UK businesses and civil society to engage with his work. We are disappointed that the Government appears to have ruled out unilateral policy measures relating to business and human rights while Professor Ruggie carries out his work: international debate should not preclude innovative policies at home.

The OECD guidelines on multinational enterprises set voluntary standards for business conduct, compliance with which is monitored by National Contact Points (NCPs). The UK NCP has been much improved by recent reforms to its practices, but it still falls far short of the necessary criteria and powers needed by an effective remedial body. We recommend that the Government consider options for enhancing the NCP's ability to promote the Guidelines. We also recommend that the Government should draw up a policy for responding to Final Statements of the UK NCP which are critical of UK businesses.

We argue that an international agreement on business and human rights should be the ultimate objective, although we accept that no such agreement is likely in the near future. There is considerable scope for joint working on a regional level and globally to agree a consistent approach to business and human rights.

We welcome the commitment shown by many companies to respect human rights, wherever they operate, but few firms meet the due diligence standards recommended by Professor Ruggie. The UK Government could do more to explain the responsibility on businesses to respect human rights and the standard of due diligence work this entails.

In the UK, we have reported on a number of occasions on the scope of the Human Rights Act in relation to public functions which are undertaken by private sector entities. The Government has dealt with the issue in relation to care homes, following the YL case, but has not legislated to deal with the ambiguity in the law in other contexts. We again call on the Government to bring forward legislation.

We again draw attention to concerns that UK law on the right to strike and on collective bargaining may not comply with the UK's international obligations. We call on the Government to review the law in order to identify the legislative changes which are required and to ratify the revised European Social Charter. We also express doubts about new regulations on the blacklisting of employees involved in trades union activity and request further information from the Government about how they comply with the UK's human rights obligations.

We are critical of aspects of the Government's work dealing with business and human rights issues. Its latest Corporate Responsibility Report is unduly focused on voluntary measures and underestimates the extent to which businesses have human rights responsibilities. Although we welcome the Ministry of Justice's Private Sector and Human Rights Project it was unfortunately limited to UK firms' domestic operations. We also welcome the Foreign and Commonwealth Office's toolkit on business and human rights and recommend that the Government consider how it can be used to share knowledge and expertise on business and human rights throughout Whitehall. We conclude that a clearer and more coherent strategy is required to link the work of a number of Government departments. This should include considering the application of conditions to a parent company based in the UK, for the purposes of regulating their relationship with the UK Government or UK shareholders. We have a number of specific suggestions, including in relation to guidance, rules on public procurement, the operation of the Export Credits Guarantee Department, company law, investment policy and listing rules, and the operation of firms in conflict zones. We are not persuaded that unilateral action of this sort would undermine the competitiveness of UK businesses.

We also recommend that the UK's national human right institutions could do more, working with Government, to ensure businesses respect and promote human rights.

Many of the substantive and procedural barriers to litigation against businesses in the UK in respect of their human rights impacts overseas are generic problems with the domestic legal system. During our visit to the USA we discussed the operation of the Alien Torts Claims Act, which enables claims to be made against US firms in the US in respect of human rights abuses abroad. While the creation of such legislation in the UK is superficially attractive, cases would be beset by similar substantive and procedural problems. We have sympathy for the case for a Commission for Business, Human Rights and the Environment in the UK and call on the Government to consider whether some of its proposed tasks could be performed by Government, the UK NCP or existing national human rights institutions.. The provision of an effective remedy for abuse of human rights by businesses is one of the most difficult issues in this area and we urge the Government to work towards an international consensus, building on existing institutions such as the NCPs.

The Government should send a clear message to business on the human rights standards which the UK expects its businesses to meet in order to prevent allegations of human rights abuse and to reduce the numbers of individuals who may need to seek a remedy through judicial or other means.

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Prepared 16 December 2009