Business and Human Rights Inquiry
Memoranda to the Joint Committee on Human Rights

The UN Special Representative on Human Rights and transnational corporations has said that "there are few, if any, internationally recognized rights business cannot impact -- or be perceived to impact -- in some manner".

Following this lead, the Joint Committee on Human Rights of the UK Parliament launched an inquiry into business and human rights for which it called for evidence on the State's duty to protect against human rights abuses by businesses; corporate responsibility to respect human rights; and the need for individuals to have effective access to remedies when their human rights are breached.

The Corner House submission of May 2009 to the Committee focused on the policies and practices of the UK Export Credits Guarantee Department (ECGD) in the context of the state's duty to protect human rights. It stressed that decisions taken in the UK, whether by government or business, should not adversely impact the human rights of others, whether in the UK or abroad and that the UK government has a responsibility to ensure that appropriate laws and policies are in place to give this principle practical effect and to hold to account those who breach it.

The submission focused on concerns about ECGD's screening procedures and policies on human rights before it provides taxpayer-backed insurance and financial guarantees to UK exporters. It concluded that they are totally inadequate because:

• human rights policies are considered secondary to facilitiating exports;
• policies and procedures are discretionary;
• they have limited application to business activities outside the UK;
• ECGD's due diligence before providing support is limited; and
• there is a lack of grievance mechanisms.

The Corner House believes that ECGD's duty to facilitate exports should be accompanied by a duty to uphold the UK's international human rights obligations. It believes that the ECGD's human rights' policies should be mandatory, not discretionary, and that any derogations should be permitted only in very limited circumstances that must be publicly justified. The Corner House believes that the ECGD should make its support for companies conditional on their undertaking to comply with those human rights conventions to which the UK is a party.

The Joint Committee on Human Rights subsequently called for supplementary evidence on the Draft Bribery Bill and the Industry and Exports (Financial Support) Bill 2009 (which became law in May 2009).

The Corner House supplementary submission of 30 June 2009 pointed out that most large-scale bribery is committed for the benefit and on behalf of businesses and that bribery often infringes upon a wide range of human rights, both directly and indirectly. As such, a commercial organisation's negligent failure to prevent bribery should remain a criminal offence.

The extraterritorial scope of the Draft Bribery Bill could set a precedent for other UK legislation and public policy, offering an opportunity to strengthen domestic human rights legislation. The Draft Bribery Bill proposes to give UK courts jurisdiction to prosecute acts of bribery committed abroad by British nationals, British residents, nationals of a British overseas territory and legal bodies incorporated in the United Kingdom. For the purposes of the offence of failure of a commercial organisation to prevent bribery, it is immaterial where the conduct element of the offence -- the bribing -- occurs.

On a less positive note, this supplementary submission noted that unless the Draft Bribery Bill contains additional clauses, well-founded allegations of foreign bribery offences may not be investigated properly or prosecuted and the proposed legislation could have the bizarre effect of encouraging bribery of foreign public officials rather than having a preventive effect. "If this regulatory gap is not plugged, grand corruption carried out by businesses will continue to have a detrimental impact on human rights", the submission concluded. (See also another Corner House submission to another Parliamentary Joint Committee scrutinising this Bill.)

The Industry and Exports (Financial Support) Bill amends the founding Act of Parliament of the Export Credits Guarantee Department (ECGD) in an entirely negative manner. The Department is now permitted to approve support for exporters retrospectively -- that is, after the goods or services have already been exported. This renders the Department's already weak procedures and policies (mentioned above) utterly toothless. (See also Corner House commentary on this Bill.)

Some of the written evidence submitted by others to this Business and Human Rights inquiry can be read on the Committee's website.