Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill

• Commercial organisations and public bodies have to publish a report describing:
  • a plan of the human rights and environmental due diligence procedures to be adopted in the next year; and
  • an assessment of the effectiveness of actions taken in the previous year.
• The report must include
  • the organisations’ human rights and environmental due diligence procedures, any outcomes, and how the measures will be improved;
  • disclosure of the value chain enabling full traceability;
  • detailed reporting on scope 1, 2 and 3 greenhouse gas emissions;
  • any other information needed to evaluate the organisations’ compliance with the UN Guiding Principles;

Commercial organisations and public bodies have to conduct human rights and environmental due diligence.

• Commercial organisations and public bodies have a duty to prevent human rights and environmental harms.
• This is an obligation of result. It ham occurs, the burden then falls on the organisation to show that it took all reasonable steps to prevent the harm, including human rights and environmental due diligence.

The Bill refers to all internationally recognised human and labour rights.

The Bill refers to an organisation’s own operations, products, and services, its subsidiaries, and its value chain (upstream and downstream).

The Bill requires the Secretary of State to set a turnover threshold for the reporting requirements. This could lead to the exclusion of SMEs from reporting.

Public authorities must not carry out procurement from suppliers that do not conduct hredd. They must also set specific hredd award criteria at tender stage of procurement.

• A regulatory authority will be charged with overseeing compliance with the Bill. This includes:
  • Providing guidance;
  • Setting specific reporting requirements;
  • Hosting a public registry for the reports;
  • Enforcing compliance by investigating and issuing civil sanctions;

• Commercial organisations can receive fines of up to 10% of the global turnover and various notices for compliance, restoration, etc.
• Commercial organisations can be excluded from public procurement.
• Public bodies can be fined.

• Commercial organisations are liable for damages if they fail to prevent human rights and environmental harms in their own operations, their subsidiaries, or their value chains.
• The burden of proof is on the organisation to show that all reasonable steps were taken to prevent the harm from happening.

• Directors commit an offence if the commercial organisation did not conduct hredd.
• Directors commit an offence if the hredd report contains false or incomplete information and the director knows it or is reckless.
• It is a defence for directors that they took all reasonable steps to ensure compliance with the Bill.

• Commercial Organisations commit an offence if a serious crime (as listed in the Bill) was committed by a person associated with the organisation to obtain or retain a business advantage for the organisation.
• It is a defence for the organisation that it took all reasonable steps, including conducting hredd, to prevent the offence.