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

Further supplementary memorandum submitted by the Ministry of Justice

1.  A list of which Government departments, if any, which have had problems in relation to Section 6(3)(b) HRA, including through disputes, litigation or proposed Bill amendments, since the decision of the HL in YL. We would be grateful if you could list the Government's position in any litigation, or its response to any amendments, if possible.

  The way in which section 6 of the Human Rights Act (HRA) is drafted means that the question of whether or not any given function is a "function of a public nature" is something that must be addressed on a case-by-case basis. As such, we would not necessarily agree with the Committee's suggestion that disputes, litigation or probing amendments relating to section 6(3)(b) necessarily constitute "problems" in respect of this issue. Indeed, we consider that probing amendments in particular represent a normal part of the examination of legislation, and note that litigation on this point has been rare.

  The involvement of Government Departments in each area is set out in more detail below.


  As noted above, it is rare for the point to be contested in litigation. This is illustrated by the length of time it took the Government to find a suitable case in which to intervene to argue about the status of privately-provided social care, as recommended by the Committee. In terms of disputes and litigation, the majority of the cases in which this point has arisen and in which central Government has been involved are set out in the Committee's own reports on the subject.

  To the best of our knowledge Weaver v London and Quadrant Housing Trust represents the only significant contested post-YL proceedings on the subject, although we understand that the point has also been raised in a number of minor judicial review proceedings that have, for the most part, failed to receive permission as presenting no arguable case. Weaver is not a case at this time in which the Government is involved, and as such it has taken no position in the litigation.


  To the best of our knowledge, three Government Departments have encountered proposed Bill amendments relating to section 6(3)(b) of the Human Rights Act since the judgment in YL. They are: the Department for Children, Schools and Families, the Department of Health and the Department of Work and Pensions. The Bills in question and the nature of the amendments tabled are set out below.

Children and Young Persons Bill

  The amendment tabled to the Children and Young Persons Bill concerned the status of social work providers under section 6, and was tabled by Baroness Walmsley at Committee stage in the House of Lords.

Health Bill

  An amendment was tabled in each House during the passage of the current Health Bill, seeking to clarify that the provision of healthcare services under direct payment provisions is a public function for the purposes of the HRA.

Welfare Reform Bill

  Two separate amendments were tabled in the House of Lords to the Welfare Reform Bill relating to the status of independent bodies providing services under right to control provisions, and contractors carrying out public functions on behalf of the Secretary of State.

  In each case the Government has clearly set out its view as to whether it considers the functions or bodies in question to be public for the purposes of the HRA, which is recorded in Hansard.

1.What role do human rights and, in particular, conflict risk, play in the assessment of Export Credit Guarantee applications?

  Consideration of Human Rights is incorporated into the Export Credit Guarantee Department (ECGD)'s Business Principles, which guide its practices. One objective of these is that:

    "ECGD will, when considering support, look not only at the payment risks but also at the underlying quality of the project, including its environmental, social and human rights impacts."

  The Business Principles go on to state that ECGD:

    "...will promote a responsible approach to business and will ensure our activities take into account the Government's international policies, including those on sustainable development, environment, human rights, good governance and trade."

  In carrying out its role ECGD also has to comply with various international agreements, including the Organisation for Economic Co-operation and Development (OECD) Recommendation on Common Approaches on the Environment and Officially Supported Export Credits (the Common Approaches). This requires Export Credit Agencies to ensure that the projects that they support meet international environmental and social standards. These are normally the standards of the World Bank Group, which include standards on human rights issues.

  It is ECGD policy that the projects it supports should normally comply in all material respects with the relevant international standards. ECGD has published a Case Impact Analysis Process (CIAP), which sets out how it determines whether the projects it is asked to support satisfy that policy.

  Where projects are considered to have a high potential environmental and social impact, the Common Approaches require that an Environmental Impact Assessment (EIA) is produced and made publicly available with human rights issues being indentified and included in any EIA. It is the responsibility of the project sponsor/developer/owner to produce an EIA or equivalent, not the UK supplier. Typically, the human rights issues which are considered against international standards include:

    (i) involuntary resettlement;

    (ii) compulsory land acquisition;

    (iii) Impact of imported workforces;

    (iv) job losses among local people;

    (v) damage to sites of cultural, historic or scientific interest;

    (vi) impact on minority or vulnerable groups;

    (vii) child or bonded labour; and

    (viii) use of armed security guards.

  If a project has been classified as having high potential environmental and social impacts, ECGD would normally require monitoring arrangements to be put in place during the construction and operational phases of the project to ensure compliance with international standards by the project owner.

  During oral hearings, the Committee referred to the evidence given by ECGD at a recent Information Tribunal in regards to conflict risks on the Baku-Tbilisi-Ceyhan (BTC) pipeline project that was supported by ECGD. I understand that at the Tribunal, ECGD explained that conflict risks are in fact assessed by ECGD's Country Risk Analysts. This was certainly the case with ECGD's consideration of support for the BTC project. Such risks could impact upon the viability of projects that ECGD is asked to support and, therefore, are always assessed so that ECGD can satisfy itself that the repayment risks are acceptable. That assessment is informed by advice from the Foreign and Commonwealth Office, including overseas posts, as it has particular expertise within the Government on conflict risk issues.

2.  You promised to provide a supplementary memorandum on the Government's position in respect of public procurement and human rights. It would be helpful to know what guidance is currently provided to public authorities by central Government on public procurement and human rights. Please provide examples, if there are any, of good practice on public procurement and human rights in the UK.

  All public procurement spend must comply with the EC Treaty principles of transparency, non-discrimination and the free movement of goods, services and persons across the European Union single market. In addition, procurements over certain value thresholds must comply with specific measures contained in the EU Procurement Directives, which are transposed into UK regulations (The Public Contracts Regulations 2006).

  Public procurement decisions aim to achieve value for money and take various factors into consideration, including cost, quality and reliability. Human rights issues are taken into account where they are relevant to the subject matter of the procurement or where they relate to the performance of the contract. When human rights issues have been assessed as relevant, departments take that into account in their procurement activities.

  For example, public sector bodies consider the human rights record of companies performing services on their behalf as one important factor in the procurement process. This is particularly the case when the protection of human rights is inherent in the performance of the service being procured, such as care services, when the contract will specify standards for its performance that ensure that the human rights of service recipients are protected.

  Because there are multiple factors involved in the procurement process and the decisions taken are often the result of several different considerations, it is not possible to select examples of companies being excluded solely on the basis of their human rights record. At selection stage, Article 45(2)(D) of the Procurement Directive allows contracting authorities to exclude a supplier from the procurement process if guilty of grave professional misconduct, which could include breaching human rights legislation. In considering whether to exclude a supplier for breaches of human rights legislation, the contracting authority would need to ensure that exclusion would be relevant and proportionate. In reaching its decision, it should consider the nature of the breach, and the remedial action taken in the meantime by the supplier.

  The Regulations also list specific offences, where convictions must result in the mandatory exclusion of contractors from tendering. These cover matters such as fraud, bribery and corruption, which can be linked to abuses of human rights and are an important consideration in helping to protect vulnerable groups of people.

  Similar provisions to those contained in the EU Procurement rules apply to states outside the European Economic Area (EEA) that have signed the government Procurement Agreement. The Office of Government Commerce (OGC) is also working with the United Nations Commission on International Trade Law to extend model procurement laws to third countries. Suppliers from countries outside the EEA or from countries that are not signatories to the Government Procurement Agreement can be automatically excluded for human rights breaches, and breaches by suppliers of human rights in EEA countries will be in breach of local law and should be dealt with accordingly.

  Domestically, OGC has taken action to help contracting authorities to address issues that impact on human rights beyond minimum legal requirements in public procurement. In 2008, OGC published a guide which demonstrates, with practical examples, how social issues can be reflected at each stage of the procurement process in a manner consistent with the Procurement Directive and UK Regulations. This complements OGC's existing, more detailed guidance published in 2006 on addressing social issues through public procurement.

  As the Committee is aware, in 2005 the Department for Communities and Local Government, then the Office of the Deputy Prime Minister, produced a guide for public authorities entitled Guidance on Contracting for Services in the light of the Human Rights Act 1998. The MoJ, in partnership with the Department for Communities and Local Government, now intends to review the content, communication and distribution of this guidance, and will be working with the Improvement and Development Agency for Local Government to take this forward.

  OGC is also developing a procurement charter between Government and private sector suppliers, aimed at promoting wider policy agendas through procurement by placing voluntary commitments on its signatories. While the formal procurement process affords contracting authorities opportunities to address human rights issues, much can also be achieved on a voluntary basis through ongoing supplier relationship management that could not be included in a formal procurement.

3.  We asked the Ministers to consider the approach of the Norwegian Government to ethical public investment. Ian Lucas MP promised to consider the Norwegian position and come back to the Committee.

  The majority of UK public pension schemes, including those for the Civil Service, the NHS, teachers, police, fire-fighters and the Armed Forces are unfunded pay-as-you-go schemes. They are not therefore backed by a specific fund of monies which are then invested. This is in contrast to Norway's, "Norwegian Government Pension Fund- Global" to which Ian Lucas was being referred by the Committee.

  The Local Government Pension Scheme is a funded scheme comprising of 89 separate local authority controlled pension funds in England and Wales, plus 11 in Scotland and 1 in Northern Ireland which operate on a similar basis. These funds have powers to make investments in the ordinary sense but there are prudential limits as set out by their investment framework which is broadly similar to that set out in "The Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998" and its subsequent amendments. The regulations require local authorities with responsibilities for pension funds to act prudently, seek proper advice, ensure the suitability and diversification of investments and are required to publish their policy regarding ethical investments as part of their Statement of Investment Principles.

  The Norwegian Government Pension Fund-Global is one of the largest pension funds in the world and derives its financial backing from oil profits rather than pension contributions. As of August 2008, 50% of the fund was invested in the international stock market. The fund referred to is subject to an ethical investment policy which includes measures to exercise ownership rights in order to promote long-term financial rewards, based on the UN Global Compact and the OECD Guidelines for Corporate Governance and for Multinational Enterprises. As Ian Lucas stated in his evidence, the principles of the OECD Guidelines underpins the work of the UK Government. Therefore any action by the Norwegian Government to support them is welcomed by the UK.

4.  Please confirm how responsibility for human rights and the private sector, including responsibility for corporate responsibility, is currently arranged across Government. We would be grateful if you could explain which Ministers, departments and agencies have responsibility for each area of Government policy; and set out any recent relevant joint working programmes or initiatives undertaken, specifying the departments involved.

  The subject of human rights is shared between the Ministry of Justice (MoJ), the Foreign and Commonwealth Office (FCO), and the Department for International Development (DFID) depending on whether the issues are mainly domestic, international or related to other countries' international human rights obligations. The Department for Business, Innovation and Skills (BIS) is fully engaged in initiatives taken forward by these departments which have an impact on UK businesses, consumers and employees.

  BIS's role in coordinating corporate responsibility across Whitehall effectively draws together work going on within other government departments into a coherent and cohesive agenda with a specific remit to help develop the business case for organisations to adopt and embed corporate responsibility within their operations. Other Government Departments with policy responsibilities for corporate responsibility include: the Department for Environment, Food and Rural Affairs (DEFRA) with environmental reporting, skills for corporate responsibility and liaison with trade unions in the workplace; DFID with ethical trading, the extractives industry and natural resource conflict issues; the Department for Work and Pensions (DWP) on ethical pension fund management, UK relations with the International Labour Organisation and socially responsible investment; the Department for Communities and Local Government for business brokerage and neighbourhood renewal; the Cabinet Office with the Prime Minister's Social Action Agenda, City Leader's Challenge and the Prime Minister's award for Social Technology; and the Office of the Third Sector with youth volunteering, community endowments, support for charities and faith-based organisations.

  BIS is also responsible for the reporting provisions of the Companies Act 2006; and is the home of the National Contact Point which leads on the OECD Guidelines on Multi-national Enterprises and Anti-corruption issues. Business Group's Central Team provides the BIS interface with the Office of the Third Sector. As the Committee is aware, Ian Lucas, Minister for Business and Regulatory Reform, is the Minister responsible for corporate responsibility.

5.  Please provide further information on the cross-Government steering board on corporate responsibility. In particular please tell us about its:

    — history;

    — purpose and goals;

    — membership and structure;

    — working methods and objectives; and

    — responsibilities and achievements.

  In his evidence to the Committee, Ian Lucas referred to a "steering board across government" with responsibility for the OECD Guidelines for Multinationals; an international corporate responsibility standard. This steering board includes a number of Government departments and agencies.

  The OECD Guidelines are recommendations on responsible business conduct addressed by Governments to multinational enterprises operating in or from their territories. Each signatory Government to the Guidelines, (all 30 OECD member states, as well as 11 non-OECD countries have signed up), must establish their own national Contact Point (NCP). The role of the NCPs is to promulgate the Guidelines to the business community, employee organisations and other stakeholders, and to implement the Guidelines Specific Instance, often referred to as the complaint, procedure to examine allegations that multinational enterprises have breached the Guidelines.

  The OECD does not prescribe how an NCP must be organised or run, consequently there are a number of different models in existence across different signatory countries. Following criticism of the effectiveness of the UK NCP, the Government undertook a consultation with UK NCP stakeholders. This consultation resulted in a revamp of the UK NCP, including the establishment of a Steering Board.

  The purpose of the Steering Board is to oversee the work of the UK NCP and to provide it with strategic guidance.

  The constitution of the Board is currently nine Members, five representing Government departments (BIS, who also Chairs the Board, DFID, FCO, DWP and ECGD) and four representing external stakeholders (the Trades Union Congress, civil society, the business sector, and the All-Party Parliamentary Group on the Great Lakes Region). However, because the Guidelines cover a range of issues the Steering Board, with the agreement of the Chair, can call upon persons having a knowledge, experience or understanding of particular topics. These individuals can be either from external organisations or other Departments not currently represented on the Board.

  The responsibilities of the Steering Board are as follows:

    — to oversee and monitor the effectiveness of the operation of the National Contact Point, ensuring correct and fair procedures are followed in line with the established and published NCP procedures for dealing with complaints;

    — to agree any changes in procedures, and develop further procedures, where this is necessary in the light of experience;

    — to consider issues of general and specific application of the Guidelines when they arise. The Steering Board will consider requests from the NCP for guidance on the procedure to be followed, for example where there are new or contentious issues to consider. However, the Steering Board will not make decisions on the substance of Specific Instances;

    — to consider requests for review in relation to Specific Instances examinations in respect of procedural issues only;

    — to assist and advise the NCP in relation to the promotion and awareness raising of the Guidelines; and

    — to consider issues where clarifications or improvements to the Guidelines are proposed for bringing to the attention of the OECD Investment Committee. The Steering Board may make recommendations to Ministers as appropriate in this respect.

  The main achievements of the Steering Board since its conception are:

    — Review of the UK NCP's procedural handling of the Baku-Tbilisi-Ceyhan (BTC) pipeline Specific Instance, at the request of one of the complainants. The Board found that there had been procedural failings in the UK NCP's handling of this case and made various recommendations including: the withdrawal of the previously issued Final Statement; and the preparation and issuing of a new Final Statement.

    — Provided advice on how the UK NCP should handle Specific Instances which are or have been subject to legal proceedings and where there is a risk of prejudice occurring.

    — Promoted the Guidelines in various ways, including participating in events and discussions.

6.  Please explain how responsibility for human rights issues is organised across the FCO.

  The subject of human rights is mainstreamed across all of the FCO's departmental strategic objectives. This means that geographical and thematic departments and posts are responsible for ensuring that human rights are factored into their work. The FCO's Human Rights and Democracy Group (HRDG) exists to drive, guide and support this effort, while leading on work to protect and strengthen the international human rights system and develop policy on key international human rights and democracy challenges.

  Lead responsibility for the UN human rights machinery, international human rights law, and overarching human rights themes therefore rests with HRDG, but thematic and country specific issues rest with the responsible geographical or functional FCO departments. In practice departments work together to ensure coherence between different policy priorities. Likewise HRDG works closely with other government departments where they have the overall policy lead, for example on the following subjects: climate change; international development; UK compliance with international human rights obligations; and corporate responsibility.

  In line with HRDG's lead responsibility for UN special procedures we strive for credible, expert individuals such as Ruggie to be appointed as mandate holders. HRDG supports Professor Ruggie's work and has a keen interest in seeing it operationalised in a manner compatible with the international human rights framework to improve respect for human rights on the ground. In addition, the FCO's Conflict Group is seeking to improve private sector compliance with best practice frameworks in order to reduce the links between the exploitation of natural resources and conflict. As a result, Conflict Group acts as the focal point across Whitehall on business and conflict issues, but not corporate social responsibility or sustainable development. Conflict Group sits on Professor Ruggie's core steering group, which is seeking to develop a code of conduct for businesses operating in conflict zones.

7.  Please provide further details of the "support mechanisms" which currently exist within Government for the purposes of assisting businesses to develop their awareness of human rights, both in relation to their activities within the UK and overseas. We would be grateful if you could provide examples of how these mechanisms work in practice.

  The Human Rights Division within the MoJ produces a range of guidance on the subject of human rights. As well as a toolkit for public authorities, this includes both a guide and a short introduction to the Human Rights Act, which are available to the general public. The Private Sector and Human Rights Project currently being taken forward by MoJ, in partnership with the Department of Health, will consider a range of options including whether any further guidance should be provided for UK businesses on how to integrate human rights approach within their domestic policies and practices. This work will be taken forward in partnership with the Equality and Human Rights Commission (EHRC) and Race for Opportunity, a third sector organisation that works with both public and private sector employers on equality issues. The Government believes that as the protection and promotion of human rights and the Human Rights Act is a core duty of the EHRC, the Commission should actively provide leadership in promoting and raising awareness of human rights.

  Furthermore, the Private Sector and Human Rights Project has served to initiate dialogue between the Government and the UK private sector on the subject of human rights. Businesses from across the UK private sector have participated in the scoping study via questionnaire and interview, and will be kept updated on the project's findings and any next steps. Representatives of the sector, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB), have also been fully engaged; they have participated in the project's Steering Group and have made valuable contributions to the development and distribution of the questionnaire, and identifying participants for in-depth interviews. The Government will continue to work closely with these organisations to develop any next steps for the Private Sector and Human Rights Project, based on the findings of the scoping study.

  The Government supports the development of a human rights consciousness in UK companies operating overseas through a programme of Corporate Responsibility awareness-raising and the systematic promotion of international good practice guides. For example, the OECD Guidelines for Multinational Enterprises is brought to companies' attention through mainstream trade promotion services such as the UKTI and ECGD websites.

  The Government has also developed a toolkit for our overseas posts to raise awareness of how business operations may affect the enjoyment of human rights and how to promote good corporate conduct, including through the OECD Guidelines. As Lord Malloch Brown told the Committee during the oral evidence session, this is one in a series of working-level human rights guides provided to officials working overseas. In addition, the Government issues an annual telegram to overseas Posts reminding them that the OECD Guidelines constitute a useful tool when dealing with complaints brought by NGOs about the behaviour of UK companies overseas including in relation to human rights.

  The Government has also sponsored a number of multilateral intiatives to help equip UK companies with practical tools to assess and manage the impact of their international activities. For example, the UK NCP has sponsored the development of a dedicated web portal to promote the OECD Risk Awareness Tool for Weak Governance Zones.

8.  We would be grateful for examples of the circumstances in which guidance is provided by the Foreign Office to businesses on the human rights impacts of their activities.

  It is standard practice for FCO posts overseas to brief visiting business missions on the security and internal political situation in a country. Posts make every effort to ensure that UK businesses understand how local conditions might affect their activities and vice versa when conducting business in a country.

  Through posts FCO supports the work of the UK NCP, encouraging British companies to meet their obligations to their workers under these guidelines. Posts are also encouraged to promote the guidelines locally with civil society and others and to consider providing a link to the guidelines from their websites. Annual guidance is issued to posts reminding them how the guidelines can be used, and posts judge the situation on the ground to determine when an intervention might be appropriate. Training on human rights is provided for officers going to post and the Government has recently compiled a toolkit on human rights and business.

  All FCO posts are expected to monitor and report on the human rights situation in a country. They have played a key role too in promoting ethical business practice initiatives including the UN Global Compact, the Voluntary Principles on Security and Human Rights and British Government initiatives such a the Medicines Transparency Alliance and the Extractive Industries Transparency Initiative.

  FCO has on a number of occasions provided further advice to businesses, for example on the reputational risks of their activities or on appropriate local business partners. Such guidance is often provided at the business' request, and the circumstances under which the guidance is provided vary greatly from case to case.

9.  What steps, if any, has the Government taken to integrate human rights into the objectives of UKTI?

  There are no specific references to human rights principles in the objectives of UKTI. However, through the commitments of its parent departments BIS and FCO, UKTI is bound to consider human rights principles in its efforts to achieve its objectives; the FCO provides introductory and advanced level human rights training courses to officers going overseas.

  Further, UKTI is always mindful of the UK's responsibilities regarding Corporate Social Responsibility; this forms part of the thinking behind their general operational guidelines, much the same as their eligibility guidelines, the FCO tobacco guidelines, and the bribery and corruption guidance. Through overseas posts the Government actively encourages countries to establish the necessary governance/ business regulatory framework to protect human rights.

10.  Please provide further details of the scope and purpose of the Private Sector and Human Rights Project, including the working methods employed, its aims and the departments and agencies involved in the steering group for the project. In respect of each department or agency, please explain their role in the project.

  The Private Sector and Human Rights Project is currently being taken forward by MoJ, in partnership with the Department of Health. The initial phase of this project consists of a scoping study to establish an understanding of how UK businesses are currently engaging with human rights and whether they see a need for any further guidance on how to integrate human rights into their businesses practices.

  As part of the scoping study, questionnaires have been distributed to a range of companies across the UK private sector, and in-depth interviews have been conducted with selected companies. The questionnaire was distributed to companies across the sectors identified by the Office of National Statistics, in order to ensure that it engages the breadth of the UK private sector. It was also distributed to a number of companies from Scotland, Wales and Northern Ireland to ensure that the study includes all parts of the UK.

  The questionnaire has been distributed both directly to companies, and via online announcements, through:

    — the Business and Human Rights Resource Centre website and newsletter;

    — the Federation of Small Businesses newsletter;

    — the Race for Opportunity online newsletter; and

    — the CBI announcing to their members and encouraging them to respond.

  In-depth interviews have been conducted with companies across a range of sectors, and from across the UK. These interviews provided an opportunity to look below the surface and find out exactly how companies perceive human rights and how they affect their domestic operations, and whether there is a need for any further guidance on how to integrate human rights within their practices.

  The emerging findings from the scoping study were outlined in the Government's supplementary memorandum of evidence submitted to the Committee as part of this inquiry. They key messages emerging from the scoping study to date are:

    — UK companies understand human rights issues although they do not use explicitly human rights language within their practices. They instead use a variety of overarching terms including ethics, social responsibility and specific terms such as equality and diversity. Therefore, most do not have stand-alone policies or position statements on human rights, but have integrated human rights into their existing relevant policies.

    — Companies usually view human rights as risk factor only in their overseas operations, and for their UK operations see human rights as an issue only in terms of employment. Within the UK, companies are most likely to have comprehensive policies in place for occupational health and safety, harassment and most forms of discrimination. The most common ways in which these issues are integrated into policies are through codes of conduct and grievance and discipline processes.

    — The supplementary memorandum also explains that there is a significant demand for practical guidance on how UK businesses can integrate human rights into their business practices.

  A Steering Group has been established for the Private Sector and Human Rights Project, which is comprised of the relevant Government Departments, private sector organisations and Race for Opportunity, a third sector organisation that works with employers on equality issues. The Group has contributed to the scoping study through the development of the questionnaire, identifying participants, distributing the questionnaire through contacts and networks, and analysing the findings of the study. The Group will be fully engaged in considering any potential next steps of the project.

  The project's Steering Group is comprised of the following Government Departments: the Department of Health (who are jointly sponsoring the project), the Home Office, the Department for Work and Pensions, the Department for Transport, the Government Equalities Office, the Office of Government Commerce, the Foreign and Commonwealth Office, the Department for International Development, the Audit Commission, the Tenant Services Authority, the Wales Office, Scotland Office and the Northern Ireland Office. The Equality and Human Rights Commission is also a member of the Group.

  The Welsh Assembly Government, Northern Ireland Executive and Scottish Executive have been informed of the project and have asked to be kept updated regarding its progress. Officials from each are therefore copied into papers for the Steering Group.

  Although this project has a domestic focus, at the evidence session held by the Committee on 14 July we discussed the need to ensure that the Foreign and Commonwealth Office is fully engaged with the work and that the international and domestic dimensions of business engagement with human rights are fully joined up. FCO has since attended a meeting of the Private Sector and Human Rights Project's Steering Group, to discuss the findings of the project's scoping study. FCO and DFID will remain fully engaged with the project and we will continue to seek opportunities to integrate the work that both are taking forward in the area of business and human rights with that being taken forward by MoJ.

  In addition to Government Departments, the Steering Group of the Private Sector and Human Rights Project is also comprised of private sector organisations, including the Confederation of British Industry (CBI) and Federation of Small Businesses (FSB). The CBI in particular has been closely involved with this project, both through the Steering Group and through additional collaboration with the Ministry of Justice. The CBI has made a valuable contribution to the design and distribution of the questionnaire, and has participated considerably in the discussion of the study's findings. Both the CBI and FSB will continue to be fully engaged in this project, including any next steps.

  As well as public and private sector bodies, Race for Opportunity has also made a significant contribution to the scoping study, both through and beyond the project's Steering Group. Race for Opportunity is a third sector organisation that works with employers on equality issues. This organisation has a strong commitment to taking this work on the UK private sector and human rights forward, following a survey that they conducted amongst public and private sector employers last year, which showed that many participants were interested in learning more about how human rights impact on their practices. Like the CBI, Race for Opportunity has made a valuable contribution towards developing the questionnaire, identifying participants, and analysing the findings of the scoping study.

  The findings of the scoping study are currently being collated and analysed. They will be detailed in a report later in the year, which the Government intends to publish. The findings of the scoping study will inform the potential next steps of the project and thus determine its overall scope. Any potential next steps will be taken forward in partnership with the key stakeholders, including the EHRC and Race for Opportunity.

11.  How does the Government respond to the concerns of Professor Ruggie that stabilisation clauses in bilateral investment treaties impact adversely on human rights in developing countries? What is the Government's position on stabilisation clauses? How, if at all, does the Government consider their potential human rights implications?

  The UK's Bilateral Investment Treaties (known as Investment Promotion and Protection Agreements, IPPAs) do not contain stabilisation clauses. The purpose of the protections in our IPPAs is to ensure that regulation is non-discriminatory and is introduced in a fair and equitable manner, not to prevent host States from regulating in the interest of such issues such as the environment or human rights.

  We understand Professor Ruggie's concern was in fact with clauses in agreements between host governments and private sector investors, in which the UK Government cannot directly intervene. We are, however, looking at ways in which developing countries' own capacity to address the issues raised can be improved.

12.  During the passage of the Companies Act 2006, the Government committed to review the operation of the social and environmental requirements of the business review within two years (by 2010). We would be grateful if you could confirm the arrangements for that review, including the proposed timetable.

  The Government committed to conduct an assessment of the business review provisions under Section 417 of the Companies Act 2006 two years after implementation. These provisions came into force on 1 October 2007 for financial years beginning on or after that date. The first business reviews to be completed under these provisions have therefore been published this year and we expect to review how the provisions have worked in 2010, after two reporting cycles. A detailed timetable has not yet been set for this project.

13.  In the Government's view, are there any lessons to be drawn from the already completed business reviews for 2009?

  The Government plans to evaluate how the new provisions are working after two reporting years and we have not undertaken an analysis in advance of starting that project.

14.  In evidence, you told us that you did not see the need for a dedicated Commission for Human Rights, the Environment and Business. I would be grateful if you could provide us with more detail on the Government's position.

  The Government is confident that there exists in the UK the correct framework to protect the human rights of individuals, and therefore does not consider that the creation of any additional bodies is necessary. The Government established the Equality and Human Rights Commission (EHRC) under the Equality Act 2006 with wide range of statutory responsibilities. Section 9 of the Equality Act, states that the Commission has duties to:

    — "promote understanding of the importance of human rights",

    — to "encourage good practice in relation to human rights", and

    — to "promote awareness, understanding and protection of human rights".

  Jack Straw and I have noted on 15 June the publication of the Commission's Human Rights Inquiry, which made a number of important recommendations for the way in which it should in future carry out its responsibilities under the Equality Act 2006, which sets out the Commissions duty in relation to human rights. We think Dame Nuala O'Loan's team has produced a realistic and workable scheme for the way in which the Commission can assume a leadership role in promoting human rights, and building capacity across the public sector. We look forward to seeing how these recommendations will be translated into specific projects and outputs in their business plans and grants programmes for this and future years.

  We are pleased to note that the Commission in its Human Rights Strategy for 2009-12 has set out how it plans to take forward the recommended actions from the Inquiry. The Government believe that as part of this strategy, the Commission should become more active in the promotion and protection of human rights within the UK private sector. Therefore, the Government does not believe that it is necessary to create a new Commission which relates specifically to the private sector and human rights.

15.  Do you see any place for the existing UK human rights commissions in raising awareness among businesses of the human rights impacts of their activities or having an educative role in disseminating good practice? In the Government's view, would this role be open to any of the EHRC, the SHRC or the NIHRC within their existing mandates and resources?

  The Government believes that the Equality and Human Rights Commission (EHRC), the Scottish Human Rights Commission (SHRC) and the Northern Ireland Human Rights Commission (NIHRC) can play a valuable role in raising awareness of human rights among businesses and having an educative role in disseminating good practice.

  As a National Human Rights Institution, the EHRC has a vital role to play in raising awareness of human rights. The Commission also has statutory duties to promote and protect human rights, and encourage compliance with the Human Rights Act. One of the EHRC's key functions is to provide authoritative advice and guidance across their remit, including to business, and their recent Human Rights Inquiry found that there is a need for new guidance on human rights. The Commission is currently considering how they could best provide practical and relevant advice and guidance on human rights to private bodies, particularly those such as private detention and deportation facilities and private care homes.

  As outlined in the responses to Questions 8 and 11, the EHRC is working closely with MoJ on the Private Sector and Human Rights Project to consider a range of options including the development of any guidance for UK businesses. The Commission was created under the provisions of the Equality Act 2006 with new powers to enforce legislation and to encourage and promote equality for all, including compliance with the Human Rights Act.

  The SHRC believes that it can play a valuable role in promoting best practice to businesses, both directly and through the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights (ICC). Indeed, the SHRC has been elected as representative of the European group of NHRIs on two ICC steering committees, one of which is on human rights and the business sector. As outlined in their written evidence to the Committee, the SHRC promotes a human rights based approach to business, which seeks to integrate human rights into all business decisions and practices.

  The NIHRC engages in a regular dialogue with the Institute of Directors, CBI, FSB and local Chambers of Commerce. To date this dialogue has focused on consulting on the NIHRC's advice on a Bill of Rights for Northern Ireland, but the Commission has expressed an interest in considering options for pursuing work on the private sector and human rights with the Ministry of Justice and other relevant stakeholders.

  The SHRC and the NIHRC are being kept informed of the progress of the Private Sector and Human Rights Project and will consider how they can engage with any next steps.

  On 9 June 2009, the Committee issued a supplementary call for evidence, focusing on a number of recent Government activities or initiatives. These included:

    — HM Government, Corporate Responsibility Report, February 2009;

    — Foreign and Commonwealth Office, Consultation on Promoting High Standards of Conduct by Private Military and Security Companies (PMSCs) internationally, April 2009;

    — Industry and Exports (Financial Support) Bill 2009; and

    — Draft Bribery Bill, May 2009.

  16. If the Government would like to submit supplementary evidence on the human rights implications of any of these proposals, or other recent Government initiatives affecting the private sector and human rights this would be welcome.


  Our vision, as outlined in the Government's Corporate Responsibility Report of February 2009, is to see UK businesses take account of their economic, social and environmental impacts. In particular it outlines ways in which Government is working with businesses to reduce poverty and promote human rights overseas. A copy of the report is enclosed.


  On the conduct of Private Military and Security Companies, the Government has seen James Cockayne's submission to the Committee and is pleased to enclose its formal response to the recommendations made, which is attached at Annex 1. The Foreign and Commonwealth Office would be happy to answer any further questions the Committee might have.


  We do not propose to submit supplementary evidence on the draft Bribery Bill. We are carefully considering the views of the Committee on the issues referred for its consideration by the Joint Committee on the Draft Bribery Bill as part of our preparation of both the Government's response to the Report of that Committee and the Bill referred to in the Government's draft legislative programme for the next session of Parliament. The Explanatory Notes accompanying that Bill will include a section dealing with human rights issues.


  The Industry and Exports (Financial Support) Bill 2009 made amendments to the Export and Investments Guarantees Act 1991, these in no way affected the operation of ECGD's Business Principles including in relation to human rights.


  Since the Committee met with Ministers, ECGD has decided to launch a new product, the Letter of Credit Guarantee Scheme. This was the subject of a recent public consultation which among other things considered the application of ECGD's Business Principles to the exports that would be covered under the scheme. Following that public consultation, the Government decided that it would not be appropriate to undertake such assessments. This is consistent with OECD Common Approaches on the Environment and Officially Supported Export Credits which applies only to exports involving repayment terms of two years or more. A copy of the consultation document and the Government's response can be found at

17.  We would be grateful if your officials could provide us with copies of all submissions on behalf the UK to Professor Ruggie and with any submissions made by the United Kingdom intervening in any proceedings in the United States against UK companies under the Alien Torts Claims Act (Alien Torts Statute).

Submissions to Professor Ruggie

  The UK played a leading role in setting up Professor Ruggie's mandate. The Government has been impressed by the work he has done in bringing understanding and coherence to the subject area. We continue to support his mandate and co-sponsored the resolution in 2008 to renew it. Through EU and national statements we have registered broad support for his approach and proposed tripartite framework.

  Beyond Council statements, we maintain a policy of not seeking to influence the views of UN special procedure mandate holders in order to show respect for their independence. We have therefore not submitted UK views to Professor Ruggie, except for a recent letter from the FCO Legal Adviser on a technical legal question. We are pleased to enclose this letter and Professor Ruggie's response, attached at Annexes 2 and 3 [not printed with this volume].

  Separately we have recently accepted an invitation from Professor Ruggie to join his core steering group seeking to develop a code of conduct for businesses operating in conflict zones (which will hopefully be available by the end of 2010).

  The UK has a standing invitation for UN special procedures to visit. Professor Ruggie has not visited the UK in his formal capacity as the mandate holder, but did meet with Lord Malloch Brown during an informal visit in May 2008. We are pleased to attach at Annex 4 the record of this meeting.


  The Government has submitted to intervene in ATS proceedings on three occasions:

    — In 2007 the ATS came before the 9th Circuit Court of Appeals on a case involving Rio Tinto. The UK and Australia together submitted an amicus brief;

    — In 2007 the UK submitted a letter to the US Secretary of State at the petition-for-certiorari stage in the Khulumani case which was then attached to the amicus brief by the US Solicitor General along with two joint UK-German Note Verbales to the US State Department;

    — In 2004 the UK filed a joint amicus brief with Australia and Switzerland in the case of Sosa v Alvarez-Machain before the US Supreme Court.

  I am pleased to enclose these documents, attached at Annexes 5, 6 and 7 [not printed with this volume].

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