From the food on our plates to the clothes we wear, global supply chains controlled by corporations are often plagued with harmful environmental impacts and human rights abuses. These can include land grabbing from local communities and Indigenous Peoples, when forests are cleared for palm oil planations or soy crops, for use in processed foods and animal feed. And forced labour and poor working conditions are rife in garment factories churning out fast fashion.
Companies should be responsible for ensuring that their profits don’t come at the expense of people and planet. But existing laws aren’t holding them to account.
How’s the UK lagging behind?
In 2011 the United Nations adopted the ‘UN Guiding Principles on Business and Human Rights,’ introducing the concept of “human rights due diligence”. This means companies should identify, mitigate, prevent and account for human rights abuses in their supply chains. It also called on countries to introduce laws that compel businesses to take action. Since then, this approach has been extended to cover environmental harms like deforestation, pollution and climate impacts – which sadly often go hand-in-hand with human rights abuses.
Several countries are putting such laws into place, including France, Germany and New Zealand. Countries such as France and Germany already have such laws in place, while others such as Belgium are in the process of passing such laws. And the EU is bringing forward a new ‘Corporate Sustainability Due Diligence Directive,’ which UK companies will have to comply with if they’re operating in the EU. In failing to introduce its own legislation, something that UK businesses and investors themselves are calling for, the UK is falling behind.
Existing legislation is patchy and ineffective
The government claims we don’t need a new UK law because we already have the Environment Act and the Modern Slavery Act. But these existing laws are patchy and ineffective at preventing even some of the worst environmental and human rights abuses.
The Environment Act only prevents certain commodities from being imported into the UK if they’ve caused deforestation that's deemed illegal under producer country laws, which are often weak or poorly enforced. The Act does not address wider environmental damage such as climate impacts or pollution. Indigenous Peoples’ rights are ignored. And it only applies to a handful of commodities and the very biggest companies.
Meanwhile the Modern Slavery Act only covers forced labour. Even there, weak transparency requirements (alongside a lack of sanctions) have “failed to root out forced labour and exploitation from prevailing business models,” according to the Re:Structure Lab. Almost a third of companies fail to even carry out a risk assessment of their supply chains.
What would this new law require companies to do?
A new Business, Human Rights and Environment Act would hold UK companies and the public sector legally accountable if they fail to prevent human rights abuses or environmental harm in the UK or overseas.
As part of the Good Business Matters campaign, we’re calling for a law based on a “failure to prevent” approach, modelled on the existing UK Bribery Act. This law has successfully shifted corporate behaviour on bribery, and in 2017 the UK Parliament’s Joint Committee on Human Rights recommended using this model for a new UK law on human rights and the environment.
It would:
- Put the onus on companies and public bodies to carry out thorough checks on their supply chains, to identify risks and establish measures to prevent harm.
- Enable UK companies to be held liable in both civil and criminal courts if they fail to prevent foreseeable environmental harm or human rights abuses. Civil liability would allow affected people to sue companies for loss or damages, crucially the onus would be on companies to prove that they took all reasonable steps to prevent the harm from happening. Whilst criminal liability would mean company directors could face prosecution in a criminal court for the most serious offences.
- Include tough sanctions and punishments like fines that act as a deterrent.
- Give affected communities the legal right to seek redress, including potential compensation.
- Embed the rights of women, children and Indigenous Peoples throughout the due diligence process, and require companies to engage with potentially affected communities.
Brazilian meat giant JBS is involved in illegal deforestation, land grabbing and slave labour in the Amazon. HSBC, Barclays, Asda, Iceland, Morrisons and Sainsbury’s are all linked to this devastation by funding JBS and stocking its meat products.
Yet if a new law were in place, these companies would have had to follow a rigorous due diligence process beforehand, including providing evidence that their sourcing, lending or investing wasn’t contributing to deforestation or land grabbing. They would also have been incentivised to engage with potentially affected communities, which could also have prevented these violations.
Growing support for a new law from businesses and the public
There’s significant support for a new law from 50 leading businesses and investors. These businesses include John Lewis, Primark, Asos, Tesco and Aviva, while the investors, representing over £4.5 trillion in assets under management, include Legal & General and Abdrn. Alongside Friends of the Earth, 37 other civil society organisations like Oxfam and Amnesty International also support the Good Business Matters campaign.
And UK public opinion is strongly in favour, with 4 in 5 people supporting new laws requiring companies to take meaningful steps to avoid environmental damage and exploitation in their supply chains.
We also know this can work. In 2022 the Law Commission included a “failure to prevent” offence as a way for the government to improve the law and hold corporations to account for serious human rights and environmental crimes.
A growing number of MPs have joined calls for a new law on business, human rights and the environment to protect people and planet from abuse. Ask your MP to join them.
We need to hold companies to account for harm in their supply chains
We need to hold companies to account for harm in their supply chains
