1 INTRODUCTION
1. During the past year, in the coverage of the "credit
crunch" which led to the recession, politicians, academics
and commentators have consistently called for increased responsibility
on the part of the banking and wider private sector as corporate
citizens. Opening the G20 summit in London, the Prime Minister
advocated new "family values" for the financial sector
and argued "markets need morals". [1]
2. In this climate of renewed interest in private
sector responsibility, we decided to return to the issue of human
rights and UK business. Over the course of our work, we have
often considered how human rights obligations apply to the private
sector; what implications the private sector may have for the
human rights obligations of the UK; and how the UK should regulate
the private sector to protect individual rights. We have reported
on a number of occasions on the scope of the Human Rights Act
1998 and the circumstances in which private sector entities, performing
a public function, will be subject to the duty to act in a Convention
compatible way.[2] It
is now widely accepted, including by many businesses, that business
can affect the human rights of individuals not only when performing
public functions, but also in their everyday activities.
3. There are many reasons why we consider that this
inquiry provides a timely opportunity to consider the relationship
between the activities of the private sector and the human rights
obligations of the UK. For example, over the course of the past
year several issues have been raised in Parliament and reported
in the press raising concerns about the impact of private sector
activities on rights such as the right to respect for home and
private and family life:
- Increased repossession activity by banks and
other lenders during the recession led to the widespread publicity
of the need for effective procedural and other protection for
the right to respect for home and family life. In 2008, we raised
our concern that judgments of the UK's domestic courts had led
to the outcome that lenders being able to evict homeowners without
due process after only one missed mortgage payment. We asked
the Secretary of State for Justice whether allowing individual
lenders to enforce their own right to recovery in this way was
a disproportionate interference with the right to respect for
home and private life, as guaranteed by Article 8 ECHR.[3]
- The launch of Google Street View across Europe
led to a number of challenges, including in the UK, Switzerland
and Greece, alleging that the operation of the service was incompatible
with the right to respect for private life (as guaranteed by Article
8 ECHR) and EU data protection law.[4]
- The European Commission has begun proceedings
against the UK in respect of the operation of Phorm, (a behavioural
based advertising tool, tested by BT on its customers without
prior consent) for alleged breaches of the protection of privacy
contained in EU data protection law.[5]
- In July 2009, after an investigation by the Information
Commissioner's Office, Ian Kerr was fined for breaches of the
Data Protection Act in relation to the operation of a database
or "blacklist" of construction employees, which infringed
the employees' right to respect for their personal information.
In August 2009, enforcement notices were issued against several
companies alleged to have used the services of Mr Kerr's company,
The Consulting Association.[6]
- In July 2009, the Guardian reported that the
News of the World had settled litigation after allegations
that the newspaper had been involved in phone-tapping.[7]
The interception of communications engages the right to respect
for communications, the home and private life. Although no new
prosecutions resulted from the revelations, representatives of
News Group Newspapers and the News of the World were called to
answer questions about the allegations by the House of Commons
Culture, Media and Sport Committee.[8]
4. Most public discussion of these cases focused
on the practical impact of business activities on the right to
privacy, on the assumption that the right to privacy is just as
important where the interference is caused by a company rather
than a public body. These stories are in addition to the well
publicised human rights issues arising in the provision of social
services by private providers, particularly in the health and
social care sectors. For example, Parliament and the UK's domestic
courts have recently had to grapple with the implications for
the right to respect for private and family life when private
care home providers propose to evict elderly residents, such as
Mrs YL, who faced losing her home after her private care
providers entered into a dispute with her family members.[9]
5. It is also relevant to consider the impact of
UK companies operating overseas on the UK's international human
rights obligations. Over the past decade there have been a number
of high-profile stories about the role of UK companies in alleged
human rights abuses overseas. For example:
- In July 2006, BP settled a claim in the High
Court by Columbian farmers who had alleged that the company's
involvement with the military in the construction of the Ocensa
pipeline had led to breaches of their human rights. No admissions
of liability were made.[10]
- In August 2008, the UK National Contact Point
concluded that Afrimex UK Ltd was in breach of OECD Guidelines
for Multinational Enterprises in relation to its minerals' operations
in the Democratic Republic of Congo. The NCP's conclusion included
a decision that Afrimex had failed to respect human rights. This
finding followed separate investigations on the trade of natural
resources during the conflict in the Congo by both the United
Nations and the House of Commons International Development Committee.[11]
- In June 2009, Royal Dutch Shell, an Anglo-Dutch
company, reached a widely reported settlement in a claim in the
New York Courts under the US Alien Torts Claims Act, in respect
of its operations in Nigeria. No admissions of liability were
made.
- In September 2009, commodities trader Trafigura
reached a settlement in a High Court claim in respect of allegations
of negligence causing serious injury and loss of life in connection
with the dumping of allegedly toxic materials in West Africa.
No admissions of liability were made, but again the case gained
widespread publicity in the UK and overseas. [12]
- In September 2009, the UK National Contact Point
concluded that Vedanta Resources Plc was in breach of OECD Guidelines
for Multinational Enterprises in relation to its mining operations
in Orissa, India. The NCP's conclusion included a decision that
Vedanta had failed to respect the rights and freedoms of the local
indigenous people affected by their operations.[13]
- In October 2009, Labour behind the Label published
its third report on respect for labour rights on the UK high street.
These reports focused on the garment industry and criticised
the performance of a number of UK retailers in relation to working
conditions in their overseas suppliers.[14]
6. These issues, all widely reported, have led to
public concern about how businesses respect human rights in their
operations and whether firms have a role to play in securing protection
for human rights, especially in countries with weak governance
systems.
Our inquiry
7. We held a mini-conference at the start of this
year to consider the scope of our inquiry, inviting representatives
of NGOs, business organisations and individual businesses.[15]
We issued a call for evidence on 6 March 2009. We asked a number
of broad questions based upon the framework proposed by Professor
John Ruggie, the UN Special Representative on Human Rights and
Transnational Corporations and other Business Entities ("the
UN Special Representative"), about the roles of UK Government
and UK business and the impact of the private sector on the fundamental
rights of individuals in the communities where UK businesses operate.
We focused on:
- the way in which businesses can affect human
rights both positively and negatively;
- how business activities at home and abroad engage
the relative responsibilities of the UK Government and individual
businesses; and
- whether the existing UK regulatory, legal and
voluntary framework provides adequate guidance and clarity to
business as well as adequate protection for individual rights.
8. We asked for information on three principal areas:
- the scope of the duty of the UK to protect human
rights;
- the responsibility of UK businesses to respect
human rights; and
- effective access to remedies for individuals
whose human rights have been affected by the activities of UK
businesses.
9. In June, we issued a supplementary call for evidence,
drawing attention to recent developments and Government proposals,
including the draft Bribery Bill and the Foreign and Commonwealth
Office ("FCO") Consultation on Private Military Security
Companies, published in April 2009. We received over 85 submissions
and supplementary submissions, from international organisations,
NGOs, businesses, business organisations, academics, individuals,
trade unions and Government.[16]
This included evidence from a range of witnesses who had not
previously engaged with our work, particularly from businesses
and individuals who have focused on the corporate responsibility
of UK companies in their activities overseas. Most of this evidence
is published in full in the second volume of this Report.
10. We held five oral evidence sessions. At our
first session, on 3 June, we heard from Professor John Ruggie.
We are particularly grateful to the UN Special Representative
and his advisors for being able to give oral evidence at relatively
short notice. We then heard from:
- NGOs and lawyers representing individuals affected
by the human rights impacts of business and from the TUC and the
Institute for Employment Rights on labour rights (9 June 2009);
- Representatives from the CBI and a number of
individual UK companies: Tesco, Associated British Foods (parent
company of Primark), Rio Tinto and BP (30 June 2009);
- The Equality and Human Rights Commission (EHRC)
and the Scottish Human Rights Commission (SHRC), on the role of
National Human Rights Institutions (NHRIs) in respect of the impact
of the private sector on human rights (7 July 2009).
- Global Witness about the particular impact of
business in areas of conflict (7 July 2009).
11. At our final session, on 14 July, we heard from
Lord Malloch-Brown, then Minister for Africa, Asia and the UN,
Foreign and Commonwealth Office (FCO), Ian Lucas MP, Minister
for Business and Regulatory Reform, Department for Business, Innovation
and Skills (BIS) and Michael Wills MP, Minister for Human Rights,
Ministry of Justice.
Visit to the United States
12. As part of our inquiry, we visited New York and
Washington DC, where we met with the UN Global Compact,[17]
a number of US businesses, NGOs, academics and attorneys representing
both businesses and claimants, politicians and policy makers in
the Departments of State and Justice.[18]
A similar debate is underway in the United States about the
responsibility of business for its impacts on the community and
on fundamental human rights. In 2008, the Senate Judiciary Sub-Committee
on Law and Human Rights conducted a series of hearings on corporate
responsibility and the rule of law. These focused principally
on the internet and the extractive industries, but otherwise covered
similar issues to our inquiry. Opening its inquiry, the Senate
Committee Chairman, Senator Durbin, stressed that the actions
of the US Government and individual US companies could impact
on the rights of individuals in countries where those companies
operate. While he did not doubt that US companies would favour
human rights protection, its inquiry intended to consider whether
Congress should take steps to convert any moral obligation to
respect the rights of the communities where US companies operate
into a legal one.[19]
US law provides an express statutory cause of action for foreign
nationals against private citizens for breaches of international
law, including certain fundamental human rights standards, in
the Alien Torts Claims Act (ATCA).[20]
We found this visit invaluable in informing this Report.
13. We are grateful to everyone who has assisted
us with this inquiry. We are particularly grateful to our hosts
and interlocutors during our visit to the United States.
Structure of this Report
14. In Chapter 2, we provide a brief introduction
to the legal framework, including how the activities of the private
sector are affected by the human rights obligations of the UK
and how those obligations may require the regulation of business.
In Chapter 3, we summarise the evidence we received on the positive
and negative impacts of business on human rights. In Chapter
4, we consider the international debate on business, responsibility
and regulation of human rights impacts. In Chapter 5, we consider
the responsibility of business to respect human rights. In Chapters
6, 7 and 8 we consider how the UK can meet its duty to protect
individual human rights within the UK and support its businesses
to take a human rights based approach to its activities in the
UK and overseas. In Chapter 9, we consider the role of National
Human Rights Institutions. In Chapter 10, we consider remedies
and next steps for the UK. In the final Chapter, we summarise
the main conclusion of this report: that the UK needs a national
strategy on business and human rights.
1 BBC News Online, Markets need 'family values' - PM,
31 March 2009. Back
2
See Ninth Report of Session 2006-07, Meaning of Public Authority
under the Human Rights Act, HL Paper 77/HC 410, Seventh Report
of Session 2007-08, Meaning of Public Authority under the Human
Rights Act, HL Paper 39/HC 382. Back
3
HC 174-I, Uncorrected transcript oral evidence of Rt Hon Jack
Straw MP and Michael Wills MP, 20 January 2009, Q43. Back
4
Information Commissioner's Office, Common sense must prevail on
Street View, 23 April 2009 (UK); BBC News Online, Switzerland
takes Google to court, 13 November 2009 (Switzerland); BBC News
Online, Greece puts brakes on Street View, 12 May 2009 (Greece).
Back
5
BBC News Online, EU starts legal action over Phorm, 14 April 2009. Back
6
The Guardian, Firms bought secret personal data on staff, 6 March
2009. Back
7
The Guardian, Murdoch papers paid £1M to gag phone-hacking
victims, 8 July 2009. Back
8
See HC 275-xiii, Uncorrected transcript of oral evidence dated
21 July 2009.Since this session, the Press Complaints Commission
has reported dismissing the concerns expressed by the Guardian.See
Press Complaints commission, Report on phone-hacking allegations,
9 November 2009. Back
9
YL v Birmingham City Council [2007] UKHL 27; Health and Social
Care Act 2008. Back
10
The Independent, BP pays out millions to Colombian farmers, 22
July 2006. Back
11
http://www.berr.gov.uk/files/file47555.doc.More
information about the operation of the OECD Guidelines, the UK
NCP and this case is provided below at paras 75-86. Back
12
Press Release, Shell, Shell settles Wiwa case with humanitarian
gesture, 8 June 2009, Press Release, Center for Constitutional
Rights, Settlement reached in human rights cases against Royal
Dutch Shell, 8 June 2009. Back
13
http://www.berr.gov.uk/files/file53117.doc.More
information about the operation of the OECD Guidelines, the UK
NCP and this case is provided below at paras 75-86. Back
14
Labour behind the Label, Lets Clean-up Fashion 2009: The state
of pay behind the UK high street, October 2009. Back
15
A full list of attendees is available at Annex 1. Back
16
The Ministry of Justice coordinated the Government submission
and supplementary memoranda, herein "the Government submission". Back
17
See Annex 3 and paragraph 73 below. Back
18
The full programme of our visit is provided at Annex 2. Back
19
Serial No JO 110-923, 20 May 2008. Back
20
We return to the Alien Torts Claims Act, below in Chapter 10. Back
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