Human Rights and Business 2017: Promoting responsibility and ensuring accountability

Date: 14th April 2017
Category: General measures of implementation

Legislation and enforcement need to be improved to ensure adequate protection of workers' human rights, a report published by the Joint Committee on Human Rights has found.

The report proposes providing more accessible and effective mechanisms to improve access to justice in cases where human rights may have been breached.

Human rights violations, such as child labour, prevention of free association and forced and compulsory labour all occur within the realm of business activity.

Examples of multinational companies violating the human rights of their workers or of local communities are extensive. When UK companies source or manufacture goods in less developed countries where there are weaker mechanisms for protecting human rights than in the UK, serious violations can occur. Human rights are just as important abroad as they are in the UK, and we want to see UK companies being exemplary in their respect for human rights wherever they operate.

The European Convention on Human Rights and the UN Guiding Principles on Business and Human Rights place duties on the State to protect against human rights abuses by businesses and provide access to remedy for victims. They also place a corresponding responsibility on businesses to respect human rights.

The UK demonstrated its commitment to the UN Guiding Principles by publishing a National Action Plan in 2013. The Action Plan set out the Government's intention to:

• Implement UK Government obligations to protect human rights within UK jurisdiction where business enterprises are involved;
• Support, motivate and incentivise UK businesses to meet their responsibility to respect human rights throughout their operations both at home and abroad;
• Support access to effective remedy for victims of human rights abuse involving business enterprises within UK jurisdiction;
• Promote understanding of how addressing human rights risks and impacts can help build business success;
• Promote international adherence to the UN Guiding Principles on Business and Human Rights (UNGPs), including for States to assume fully their duties to protect human rights and assure remedy within their jurisdiction; and
• Ensure policy consistency across the UK Government on the UNGPs.

The Human Rights Committee commend the Government for being the first in the world to publish a National Action Plan. However, they are disappointed that the updated National Action Plan, published in 2016, is modest in scope and fails to incorporate best practice regarding having measureable objectives.

The Government must lead by example and demonstrate the same behaviour it expects from businesses. The guidance on circumstances in which human rights can be considered in public procurement processes is complicated and contradictory. Procurement officers of both central and local government should be able to exclude companies that have not undertaken human rights due diligence from all public sector contracts. Companies which have committed human rights abuses and been found responsible by the courts or the National Contact Point should be excluded from public contracts for a specified period of time so that unethical conduct has financial consequences.

There is a lack of clarity about departmental responsibilities in relation to business and human rights. Stakeholders must be encouraged to engage with the Government and we believe that giving the Cabinet Office a co-ordinating role would make this easier for businesses and victims alike.

The Modern Slavery Act in 2015 has raised the profile of the problem of modern slavery within UK companies and their supply chains abroad. However, more action is needed before any meaningful changes brought about by the Act can be evaluated. The Committee believes that the Government could make a positive start by facilitating the passage of Baroness Young of Hornsey's Modern Slavery (Transparency in Supply Chains) Bill and by introducing laws to make reporting on due diligence for all other relevant human rights compulsory for large businesses.

The Committee were concerned by some of the evidence they received which suggested that bodies with responsibilities for preventing human rights abuses and enforcing penalties were under-resourced. The Anti-Slavery Commissioner, the Gangmasters and Labour Abuse Authority, the National Contact Point, and the Equality and Human Rights Commission have important roles to play in upholding human rights in relation to business, and urge the Government to consider what extra resources they may require.

The Committee also considered whether further powers should be given to these bodies and concluded that the Gangmasters and Labour Abuse Authority should have extended licensing powers, particularly in respect of garment manufacturing and construction. These bodies should also be consulted on the development of new powers for local authorities to close down workplaces which are found to exploit workers through underpayment of wages, lack of employment contracts or disregard of health and safety regulations.

The UK is weakest in the area of access to remedy. A number of obstacles to justice exist including changes to limit legal aid provision, limits on the recovery of legal costs in these types of case, increases in court and tribunal fees, and the otherwise high costs of civil action. The Government is in the process of reviewing legal aid and we will follow closely its findings and any subsequent changes. The Committee recommends that the Government reduces fees payable by claimants when taking a case to an employment tribunal, which have had a significant impact on domestic victims accessing remedies.

The complex corporate structures of many large UK businesses also act as a barrier to victims seeking justice for human rights abuses. In order to redress the imbalance of power between potential claimants and businesses, the Committee recommends that the Government brings forward legislation to impose a duty on all companies, including parent companies, to prevent human rights abuses, with failure to do so becoming an offence, along the lines of the relevant provisions of the Bribery Act 2010.

As a non-legal alternative for providing access to remedy, the UK National Contact Point is not fit for purpose. It lacks the resources and profile needed to fulfil its role and the Committee recommends that the Government creates an independent steering board for the NCP, provides extra resources to the NCP, and finds new ways to publicise its findings.

Finally, the Committee considered the effect of Brexit on business and human rights. They heard that concerns about the status of EU workers in the UK may leave them more vulnerable to labour exploitation and urge the Government to reassure workers that all victims of human rights abuses will be protected, without reference to nationality or immigration status.

The Committee were encouraged that the Government plans to include human rights clauses in all future bilateral trade agreements and encourage it to include provisions on enforcement, and to undertake human rights impact assessments before agreeing trade agreements.

• Read the full report 'Human Rights and Business' here.