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

Examination of Witnesses (Questions 460 - 477)



  Q460  Baroness Prashar: My question is about creation of yet another quango. CORE and others have recommended that they should establish a new UK Commission on the Environment, Business and Human Rights? I would just like to hear your views, whether you think that would be a good thing or not?

  Mr Wills: I think probably the answer is no, I do not. You have rightly said that we have a lot of organisations and there is very clear framework. We will look at it in the context of the work that we are doing already but my initial response is no, it is not a good idea. There are lots of avenues for doing this already. We are making good progress; this Committee is playing a valuable role in scrutinising these issues and we are going to take it forward. We never say never, but not right now and probably not soon.

  Q461  Baroness Prashar: That is what I expected. Any other views?

  Lord Malloch-Brown: I agree with Michael!

  Chairman: Michael, if you would like to go, please do.

  Q462  Lord Morris of Handsworth: My question is primarily to you, Ian. A key theme running through the evidence we have received almost in a word has been "reform". Some witnesses have called for further reform of the UK NCP, including to increase independence from government and to extend its powers of enforcement to include penalties and sanctions for misconduct. What do you think of these recommendations for reform?

  Ian Lucas: I think the difficulty with sanctions and penalties is the issue to which we referred earlier, about the principle that we want to deal with these issues within an enforceable jurisdiction that we have. If we are talking about conduct that took place in a different jurisdiction in order to take effective action it really is necessary to pursue the line of taking steps within the jurisdiction where that occurred. If we get assisted in developing the capacity of the country in which the incident occurred then that is the role that we play. So I think that there is in a sense a kind of superficial appeal to the idea of the extraterritorial sanctions—I think it is impractical.

  Q463  Lord Morris of Handsworth: International provisions are not standard so there is a variation; it varies country to country and jurisdiction to jurisdiction. What we are talking about here is not what some other jurisdiction might be doing but what is the UK Government's response.

  Ian Lucas: But we have a general principle that we will apply within our own jurisdiction the laws of our own jurisdiction. We cannot apply our own laws in respect of another jurisdiction.

  Q464  Chairman: We do in relation to various international law offences, do we not?

  Ian Lucas: We do but within those particular areas that you are describing there is a much broader consensus in terms of international opinion than there is in the area of human rights, where the perceptions are different in different countries.

  Q465  Chairman: The problem really is the complete lack of a remedy for people who are on the receiving end of some of the worst human rights abuses. You say that the remedy has to be in their own country but in practice you have a corrupt judiciary, an ineffective, weak government; you have a powerful multinational; and you have people who are peasants or worse right at the bottom of the pile who have no prospect of getting remedy in their own country. That must he self evident to most people.

  Ian Lucas: There is implicit in your question, if I may say so, a suggestion that it would be somehow easier within this jurisdiction to secure a remedy. My point is that in terms of evidence, in terms of enforcement that would be extremely difficult to secure within the UK as well as contradicting the general principle that we apply in terms of extraterritorial means.

  Q466  Chairman: The Americans manage it with the Alien Tort Claims Act.

  Ian Lucas: With respect, that is a two-hundred year old Act that actually has not secured a judgment.

  Q467  Chairman: It has proved very effective in concentrating the mind of businesses from the UK and elsewhere and the fact remains that it has proved quite an effective tool—going back to the point that Mark was making—about getting companies to do proper due diligence before they start investing in some of these operations, to make sure that they have a defence.

  Lord Malloch-Brown: May I just add to Ian? It is not that one is just relying on action in the national jurisdiction. Ian has made the case about how tough it is for us to act through our courts on these kinds of things abroad. The OECD guidelines are perhaps the primary example of the network of these arrangements which are starting to govern corporate behaviour. The Aquila G8 Summit just again referred to them as what they expected of their Member State companies in situations of weak governance operating in those countries. I think if shareholders hold companies to account and are forced to report on them you are going to get the levelling of compliance and improvement that we want, but I think over time we are going to have to keep this under continuous review because the fact is that extraterritoriality is a terribly difficult thing to do. We only like to see it happen in extremis but as companies become more global—whether it is on issues of taxation or financial regulation—we are starting to see moves towards more global answers; so I do not think one can rule out that there will not be a move towards more global answers here too. But we must not run before we can walk and set up systems which will not secure convictions.

  Q468  Chairman: We are already now looking at the Draft Bribery Bill, which is looking at the activities, I suppose, of UK companies overseas as much as anything else. And we are following here the US Foreign Corrupt Practices Act, I suppose, which in some ways we have modelled it on, to deal with the problem of corruption in the developing world, to make sure that if UK businesses are involved in that we can deal with it in the UK, and that is quite right that we should do that. So it is not much of a step to say that we should also be doing the same in relation to some of these human rights issues. The fact remains that if you have very poor people in the developing world who have their land appropriated or poisoned by chemicals emitting from a British company's plant, or at the receiving end of a regime's security forces that have been contracted to a UK company to defend their premises, or indeed in the case of certain countries in West Africa perhaps even involved in executions—allegedly—is it not about time that we provided a remedy for those people when they clearly patently cannot get a remedy anywhere else? Or are you happy to see British companies dragged through the US courts because we do not have the balls to do it ourselves?

  Ian Lucas: I am not happy for the picture that you have described to take place. What I am pointing out to you is that there is a much broader consensus, for example on bribery, within the international community than there is upon what the human rights that we would be compelled to take action on actually are. There is a much broader range of agreement on those rights than there is on the fact that bribery is wrong. So it is a much more difficult step to take. What Mark has said about the future is correct; it may be that in the longer term these are issues that we may need to look at, but we have to recognise that we are also making progress through operating the policy that we are at the moment, and that that is bringing about improvement too.

  Q469  Chairman: So what would you advise the poor innocent person whose parents have been poisoned by the emissions of a UK company in the developing world, where there is a corrupt judiciary and a weak government hand in hand with a major multinational? What would you advise him to do?

  Ian Lucas: As you have described it that individual does not have a remedy.

  Q470  Chairman: So it is tough luck, is it?

  Ian Lucas: I certainly would not describe it in that way and I do not think it helps for you to present it in that way because clearly that individual does not have a remedy within the UK at the present time. You are suggesting that somehow that person would have a remedy if we introduced the Alien Torts Act—

  Q471  Chairman: They would.

  Ian Lucas: That is not necessarily the case and for you to suggest that is not a helpful way of trying to assist that person.

  Q472  Chairman: It has worked in the United States—

  Ian Lucas: I am not sure that it has.

  Q473  Chairman: These scenarios have actually happened involving multinational companies—some not US companies have been on the receiving end of Alien Torts Act claims in precisely those circumstances.

  Ian Lucas: I am not sure that it is quite that simple and quite that pat. I think it is for us to try to work to improve the governance of countries where the reprehensible behaviour that you are describing is actually happening.

  Q474  Chairman: I have no argument with you that we need to do what we can to improve good governance around the world—that is a given. But we have a long way to go in doing that, before that is achieved.

  Lord Malloch-Brown: Mr Chairman, is it not the case that what you have yourself heard in testimony to this Committee is that corporations are improving their performance. I have to say I think there is a big difference between publicly listed corporations and small privately owned mining companies, but, nevertheless, the trend is the right way. But we are all also agreeing that the kind of example you have described is definitely still prevalent out there, so improvement prize but we are nowhere near where we need to be. So the debate is how do you go that next step? It is not about standing on the status quo and saying that that is okay; it is about saying that we are doing better than we used to do on this.

  Q475  Chairman: That is the point, is it not? I put this to BP and we have heard a lot from BP and about BP and how they have really cleaned up their act, but things still do go wrong—even in the best run companies mistakes, problems and disasters will happen. The question is when they do happen what do you do about it to put it right?

  Lord Malloch-Brown: Equally in the case of BP you can take two extreme cases: one was their use of security companies in Columbia, something that was hugely damaging to their reputation and was one of those events which made this company really accept the importance of changing its corporate behaviour. The second hit, if you like, on that scale that happened to BP was in a market which is the most regulated, where there is most legal redress and that is the pipeline and refinery problems they had in the US, where it is said—and I believe it has been affirmed in court judgments—that there was under investment in certain parts of that operation. So it is a bit more complicated than just saying that these things only happen in situations of weak governance. Where they do I think there has been—

  Q476  Chairman: I agree with that, but the difference is that when things go wrong in the US there is a remedy in the US courts; when things go wrong in Colombia there is not. We have heard about how BP cleaned up their act in relation to their security on the Baku pipeline and all the rest of it and all very positive stuff, but things still go wrong. So how do the people on the receiving end of these things go wrong get around it?

  Lord Malloch-Brown: Again, our argument is that the combination of national improvements—because after all the Bhopal people finally did get a remedy very late and all the rest—plus this issue of getting these companies signed up to these different standards and getting them to promise their shareholders and board of directors compliance with them, and having transparency in the reporting is for now a more effective way of raising the standard than getting involved in an extraterritoriality which is hard to sustain. That is, if you like, the root of our argument. It is not to disagree with you on the fact that there are a lot of problems out there; it is what is the best way of addressing them.

  Q477  Chairman: I think we have finished. Do either of you want to add anything to what you have said to us? We have one or two memos to come.

  Ian Lucas: No thanks.

  Lord Malloch-Brown: If I may, the only thing I would say is that I think we owe you a comprehensive memo on procurement, both national and European because obviously I felt rather under-prepared on that issue but recognise that it is a very major way of pushing this forward; so perhaps we could come back with something suitable on that point.

  Chairman: Thank you very much; the Committee is adjourned.

previous page contents

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2009
Prepared 16 December 2009