Twenty-nine organisations have collectively called on the UK to join its European partners in introducing corporate accountability law with the aim of upholding human rights and environmental obligations across company supply chains. Among the organisations are Friends of the Earth and Amnesty International, who have pointed out that all voluntary approaches to reduce the systemic human rights abuses in the supply chains of UK businesses have failed. Upholding human rights law can no longer be optional for UK corporations.
The EU is already making plans to introduce human rights obligations on all companies operating in the single market and several countries have recently passed laws on supply chain due diligence. France, Germany, and Norway are among the few that have taken the first steps towards corporate accountability.
France
In 2017, the French Parliament adopted the Corporate Duty of Vigilance Law which requires French companies to publish annual public vigilance plans. The law ensures that any adverse impacts of business are addressed and assessed, which includes the impacts of any company under their control as well as suppliers and subcontractors. While the law is only applicable to the largest companies, should any adverse impact be recorded, victims are encouraged to bring the issue before a judge. If a company fails to publish its plans, judges may apply fines of up to € 10 million. Should this failure lead to damages, these fines may go up to € 30 million.
Germany
On 11 June 2021, the German Parliament adopted the new Supply Chain Due Diligence Act which requires large companies to regularly identify human rights and environmental risks in their direct supply chains. German companies must publish annual reports outlining the steps they have taken to avert human rights abuse. Should companies fail to uphold their human rights obligations, national authorities will have the right to impose fines. Juliane Kippenberg, associate director of the children’s rights division at Human Rights Watch, commented:
“The German government has taken a critical step to ensure that companies operate responsibly. Respect for human rights in global supply chains is not something that should be optional.”
Norway
On 10 June 2021, the Norwegian Parliament adopted the Transparency Act which requires large and mid-size companies to carry out human rights due diligence throughout their supply chain as well as throughout all business relationships in their value chain. The law allows for Norwegian citizens to request information from the company and any non-compliance can result in fines issued by the Norwegian consumer authority. However, victims of human rights abuse still do not have the chance to seek remedy in court and the law does not provide for civil liability for harm.
As small steps are being taken towards corporate accountability in global businesses, it is vital that the UK joins in as an active defender of human rights. Mark Dearn, the director of the Corporate Justice Coalition, commented:
“It’s not possible to ensure respect of human rights without binding laws tackling business abuses of rights – which occur with impunity in the global supply chains of multinational corporations.
He went on to state:
“The UK portrays itself as a leader on business and human rights, but this simply isn’t true. There are no UK laws to hold corporations liable for human rights abuses and the Modern Slavery Act doesn’t guarantee that supply chains are free from modern slavery.”
At the recent G7 summit hosted in Cornwall, world leaders agreed to, “ensure that global supply chains are free from the use of forced labour”. By introducing comprehensive corporate accountability law, the UK would demonstrate its respect for human rights as well as ensuring its commitment to the UN’s sustainable development goals.