The Highs and Lows of the UK’s Business and Human Rights Laws

By Anna Dannreuther, Writer 16 Jun 2017

Today marks 6 years since the UN Human Rights Council adopted the Guiding Principles on Business and Human Rights. To celebrate, we are looking at three fantastic things the UK has done to ensure that businesses respect human rights, and two areas where it could vastly improve.

But first, a bit of background…

The dramatic expansion of international commercial activity over the past 50 years has put the issue of human rights in business firmly on the global policy agenda. This explosion in cross-border activity led to the emergence of ‘governance gaps’, where corporations found that their operations were less strictly regulated in some countries than others – creating a “permissive environment for wrongful acts”. As a result, there was a string of human rights violations involving business during the 90s and early 2000s, including the Nike sweatshop allegations, the Deepwater Horizon BP oil spill, and the Rana Plaza collapse in Bangladesh.

After a few attempts at solving the problem, Harvard Professor John Ruggie was appointed by the Secretary General of the United Nations in 2005 as an expert on Business and Human Rights.

In 2011, Ruggie produced a global set of guidelines called the United Nations Guiding Principles on Business and Human Rights (UNGPs). Although the guidelines are not legally binding, they reflect the current reality that, where a company adversely affects the human rights of its employees, investors or local communities, it will suffer negative consequences through reputational damage, litigation, and a loss of profits.

The UNGPs are made up of three core ‘pillars’:

  1. The State duty to protect human rights
  2. The corporate responsibility to respect human rights
  3. Access to a remedy for those whose human rights have been affected

So what has the UK done to implement these Guiding Principles, and how could it go further?

1. The UK’s Home-Grown Human Rights Laws

The UK’s Data Protection Act 1998 and Equality Act 2010 pre-date the UNGPs, and have been instrumental in ensuring that businesses protect the rights of people affected by their operations. These laws go part of the way to fulfilling the UK’s duty, under Pillar 1 of the UNGPs, to protect human rights.

2. The Modern Slavery Act 2015

The Modern Slavery Act 2015 is a landmark piece of legislation, requiring businesses that carry out operations in the UK with a turnover of £36 million or more to publish an annual slavery and human trafficking statement on their website. This must explain the measures taken by the organisation to ensure that slavery and human trafficking are not taking place in any part of its business.

3. The Companies Act 2006

In 2016, an amendment to the Companies Act 2006 made it compulsory for public companies, banks, and insurers in the UK to deliver an annual ‘Strategic Report’, which must include information on “environmental matters, respect for human rights, and anti-corruption and anti-bribery matters”.

The report must be prepared by the company’s directors, and the information provided about human rights must be sufficient to understand the company’s “development, performance and position and the impact of its activity”. The first human rights statement from a company could be produced on 1 January 2018, so watch this space!

How can the UK do better?

1. Public Procurement

Public procurement is the purchasing of goods, services, or construction work on behalf of a public authority. In 2013 – 2014 the UK public sector spent a total of £242 billion on the procurement of goods and services. Many people have expressed dissatisfaction at the UK’s lukewarm commitment to “continue to ensure that the UK Government procurement rules allow for human rights-related matters to be reflected in the procurement of public goods, works, and services.”

Campaigners are seeking a specific commitment from government to incorporate human rights into its procurement policy. In their words:

Why should business listen to Government if [they], as a powerful economic actor, representing 20% of GDP are not modelling the behaviour they want to see in the private sector?

2. A Duty of Vigilance?

In 2017, France introduced a corporate duty of vigilance law. This requires parent companies to identify and prevent adverse human rights and environmental impacts resulting from their own activities, from activities of companies they control, and from activities of their subcontractors and suppliers. If a company fails to establish and implement a “vigilance plan” to accomplish this, it can be fined up to 10 million euros – rising to 30 million euros if any harm is actually caused.

Although the law only applies to the largest 150 – 200 companies with a presence in France, it is a huge incentive for companies to grapple with the human rights implications of their operations.

Want to know more about how human rights and business interact?

Featured image: Pixabay.com. First image: Unsplash.com. Second image: Pixabay.com. Third image: Daniel Chapman / Flickr. Final image: Unsplash.com.

About The Author

Anna Dannreuther Writer

Anna Dannreuther is a barrister at Field Court Chambers practising in public, employment, and commercial law. She is a trans ally and has worked extensively on human rights issues, including at the European Court of Human Rights and with NGO partners.

Anna Dannreuther is a barrister at Field Court Chambers practising in public, employment, and commercial law. She is a trans ally and has worked extensively on human rights issues, including at the European Court of Human Rights and with NGO partners.