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French President Emmanuel Macron, Federal Chancellor Olaf Scholz, US President Joe Biden, British Prime Minister Boris Johnson, Japanese Prime Minister Fumio Kishida and European Commission President Ursula von der Leyen wait for the family photo to be taken.

From leader to laggard? Time for the G7 to protect human rights and the environment from corporate abuse

1 July 2022

Despite decades of struggle, progress toward stopping powerful corporations profiting from abuses of human rights has been slow and focused on voluntary action by businesses. 

Cases of human rights and environmental harms at the hands of UK business are extensive, and the relentless emergence of new cases in sectors including agriculture, mining, fashion, technology and energy confirms that voluntary approaches have failed to stop harm, let alone offer remedy and access to justice for the victims.

At the May G7 supply chains conference, countries including the USA, Canada, France, Italy and Germany indicated their shared belief that voluntary approaches alone have not worked. This was a clear indication that governments worldwide are waking up to this fact and are beginning to see the potential of binding obligations on companies and investors as the means to protect and fulfil our shared human rights. 

The 2022 G7 Employment Ministry Communiqué said: “Sustainable value chains are of paramount importance for achieving human rights, decent work for all and protecting the environment”, and that G7 countries play an important role in, “achieving better outcomes for people and planet through a smart mix of mandatory and voluntary measures including legislation, incentives and guidance for business.” (Our emphasis in bold.) 

And now the G7 Leaders’ Communiqué from this week builds on this through its shared commitment to “mandatory measures” to protect rights-holders and “support remedy” in the context of complying with international standards on human rights, labour and the environment: “We will coordinate to maximise the coherent implementation of and compliance with international standards relating to human rights, environment, and labour across global supply chains… We are committed to working towards an international consensus on business and human rights to strengthen compliance with international standards, including through mandatory measures that protect rights-holders, provide for greater multilateral cooperation to address abuses, and support remedy, thus enhancing predictability and certainty for business.” (Our emphasis in bold.)

Germany, France and Norway have proposed laws and initiatives around Europe, including in Austria, Belgium, Finland, Switzerland and The Netherlands, as well as Canada, Brazil and New Zealand, that go beyond current UK regulations on business. The European Commission’s proposed Corporate Sustainability Due Diligence Directive is set to apply to UK companies operating in the EU above a certain threshold – foregrounding a powerful “level playing field” argument for new legislation for those businesses.

The tide is clearly turning away from governments focusing on voluntary approaches, and while the UK is party to this G7 commitment, it nonetheless remains adrift. 

Government responses to parliamentary questions on these vital issues show it is out of step with the new international political and business consensus on the need for stronger corporate accountability laws that regulate the operations, value chains, goods and services of businesses and investors. 

Failure to even mention responsible business and supply chains, the protection of human rights and the environment in the new international development strategy illustrates how far behind the UK is on tackling abuse of UK businesses in global supply chains. And a parliamentary response given by the Minister for Business, Energy and Corporate Responsibility, Lord Callanan, only the day before the release of the G7 Leaders’ Communiqué highlights the confusion and contradiction of the UK government’s position: “It [the government] has no plans to propose additional legislation for corporate accountability, for example along the lines of the EU’s recent draft directive for cross-cutting corporate sustainability due diligence.…The government has not been persuaded that a blanket approach to mandatory due diligence in law is practical or proportionate.” In 2017, the UK parliament’s Joint Committee on Human Rights recommended the introduction of precisely such a  law, specifying that it should be modelled on the “failure to prevent” liability provisions of the 2010 Bribery Act. This has been identified as legally feasible, and modelled so as to be in line with the United Nations Guiding Principles on Business and Human Rights.

Thirty-seven UK human rights and environmental NGOs and trade unions – coming together as the Corporate Justice Coalition – are united in outlining the key principles that must underpin a new UK law. In less than a year, more than 125,000 people have signed a live petition calling for what the Corporate Justice Coalition calls a “Business, Human Rights and Environment Act” to be urgently introduced. 

Businesses and investors including Tesco, the British Retail Consortium, the John Lewis Partnership and Aviva have themselves called for binding UK regulations that “can contribute to a competitive level playing field, increase legal certainty about the standards expected from companies, ensure consequences when responsibilities are not met, promote engagement and impactful actions between supply chain partners and, above all, incentivise impactful and effective action on the ground”.

The time for meaningful engagement on this issue is long overdue, but the G7’s commitment to the “new international consensus” on business and human rights is welcome – so long as its words are matched by actions in the form of strong laws with strictly enforced duties on business to prevent harm. In crafting these new laws, it is crucial that we learn from the mistakes of the past: “tick box” laws risk giving the impression of progress while setting us up for failure. Any new UK law must cover the broad range of internationally agreed human rights, be applicable across all sizes and sectors of business, capture all tiers of the supply chain, including indirect suppliers, and pay particular attention to the rights of socially, politically, and economically marginalised groups including Indigenous peoples, women and migrants. 

Crucially, the obligation for companies, investors and the public sector to undertake “human rights and environmental due diligence” (HREDD), must be set within a broader liability and enforcement framework, within which HREDD is necessarily framed as a means to an end. HREDD must achieve just, equitable and beneficial outcomes for the rights-holders who have borne the brunt of bad investments and business practices. The only way to ensure such a law will achieve this in practice is if a place at the policy table is reserved for rights-holders to input their knowledge and experiences, accompanied by the enforcement necessary to guarantee this takes place. 

Under these conditions, a new UK law can begin to chip away at deeply entrenched power imbalances and help us finally take a small step towards holding businesses and investors to account and ending corporate impunity for the abuses of our rights, environment and climate.

In the absence of such a law, the UK will only fall further behind an increasing number of countries around the world willing to match words with actions, and to recognise the new consensus broadly supported by business, the public and civil society groups. 

It’s high time for UK leadership on this critical issue.

About the author

Corporate Justice Coalition

Ligia is the Policy and Network Officer at Corporate Justice Coalition

Corporate Justice Coalition

Mark Dearn is the Director of the Corporate Justice Coalition