A “commercial organisation” is any “relevant commercial organisation”
within the meaning of section 7(5) of the Bribery Act 2020.
Explanatory notes to the Bill, prepared by Baroness Young of Hornsey, have been ordered to be published as HL Bill 17—EN.
A
bill
to
Place a duty on commercial organisations and public authorities to prevent human rights and environmental harms, including an obligation to conduct and publish human rights and environmental due diligence assessments, on their own operations, subsidiaries, and value chains; to make provision for civil liability, penalties, and a criminal offence for failures to comply with the duty; and for connected purposes.
B e it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
For the purposes of this Act, the following definitions apply—
A “commercial organisation” is any “relevant commercial organisation”
within the meaning of section 7(5) of the Bribery Act 2020.
“
Public authority” is any “public authority” within the meaning of section
2(2) of the Procurement Act 2023.
A “value chain” includes all activities undertaken by any entity during
the lifecycle of a good or service upstream and downstream of the
commercial organisation.
“
Procurement” means the award, entry into and management of a public
or private contract.
“
Human rights harms” are any adverse impacts on a person’s ability to
enjoy any of the internationally recognised human and labour rights
including those recognised in the International Bill of Human Rights
and the International Labour Organization Declaration on Fundamental
Principles and Rights at Work, 1998.
“
Environmental harms” are adverse impacts on the environment resulting
from the violation of environmental law, including internationally
established environmental principles or conventions, ecocide (meaning
unlawful or wanton acts committed with knowledge that there is a
substantial likelihood of severe and widespread or long-term damage
to the environment being caused by those acts) or as part of any
contribution to climate change contrary to the pathways for limiting
global warming to the internationally established goal of 1.5°C
according to the best available science, or any other adverse impacts
on specific environmental categories as specified by the Secretary of
State in regulations.
“
Stakeholders” means individuals, groups, or communities that have
rights or legitimate interests that are or may be adversely affected by
human rights and environmental harm or the credible representatives
of such individuals or groups, including the workers, their
representatives, the trade unions, and those representing and defending
human rights and environment.
“
Informed, meaningful and safe engagement” means a dynamic and
continuous engagement process with stakeholders that involves
interactive and responsive communication, timely provision of relevant
information, implementation of measures to address barriers to
participation, especially for vulnerable or historically marginalised
stakeholders along with measures to ensure the safety of stakeholders
and prevent any form of retaliation or reprisals.
Commercial organisations and public authorities have a duty to prevent
human rights and environmental harms, as defined in
section 1
, so far as is
reasonably practicable, with respect to their own operations, products, and
services, those of their subsidiaries, and throughout their value chains.
Without prejudice to the generality of the duty under the preceding subsection,
the matters to which that duty extends include in particular the obligation to
conduct human rights and environmental due diligence.
Reasonable human rights and environmental due diligence includes, as a
minimum—
integrating human rights and environmental due diligence into policies
and management systems;
identifying, assessing and addressing actual or potential human rights
and environmental harms, through prevention, mitigation and
remediation;
establishing or participating in and maintaining effective grievance
mechanisms;
tracking, verifying, monitoring and assessing the effectiveness of
measures taken and their outcomes;
communicating with stakeholders and reporting publicly on findings.
Human rights and environmental due diligence must include informed,
meaningful, and safe engagement with stakeholders, particularly workers,
affected rightsholders, and those defending human rights and the environment,
throughout the entire process.
Whether human rights and environmental due diligence is “reasonable” is
determined by, among other things—
the size, sector, operational context, ownership, structure, country or
region of operation, and the nature of the human rights or
environmental harms in question;
the severity of the human rights or environmental harms, as
determined by the scale, scope, and irremediability of the harm;
the extent to which the commercial organisation has exercised leverage
over third parties in the value chain and made attempts to increase
leverage for the purposes of this Act;
the commercial organisation’s prioritisation of human rights and
environmental risks within its due diligence process and the
reasonableness of such prioritisation;
the extent to which due diligence was an ongoing process with
continuous monitoring and improvement.
Audit reports, certification schemes, and membership in industry or
multi-stakeholder initiatives for dialogue and learning are not sufficient on
their own to fulfil the obligation to conduct due diligence.
In the event that a commercial organisation or public authority decides to
suspend or terminate a business relationship as a result of its due diligence
assessment to comply with this Act, this decision—
must reflect reasonable human rights and environmental due diligence,
taking into account any human rights or environmental harms that
might arise from the suspension or termination of the business
relationship, and consider how such harms might be prevented or
mitigated; and taking into account the remediation of harm that
commercial organisations have failed to prevent prior to the decision
of disengagement;
must be based upon the informed, meaningful, and safe engagement
with stakeholders that are or may be affected by the disengagement
decision;
must be taken in a timely manner—
considering disengagement as a last resort, after failed attempts
at mitigation, in contexts where the prospect of change by using
or increasing leverage is possible, and
considering rapid disengagement in contexts where the harm
is severe, including the contexts where gross and systemic harm
is imposed and enforced by State policy, and the commercial
organisation and public authority lack the possibility of using
and increasing leverage to prevent, mitigate, or remediate the
harm.
Commercial organisations with an annual worldwide turnover of or exceeding
the amount specified in regulations made by the Secretary of State must,
within six months of the end of the financial year, and each year after that,
publish and submit to the registry website referred to in section
7
(2)
(c)
, a
report describing a plan for the human rights and environmental due diligence
procedures to be adopted in the next financial year and an assessment of the
effectiveness of actions taken in the previous financial year.
The report must include—
information relating to human rights and environmental due diligence
as outlined in
section 3
, any outcomes achieved and how measures
will be continuously improved;
a disclosure of the value chain enabling full traceability;
detailed reporting on any scope 1, 2 and 3 greenhouse gas emissions;
any other information required to evaluate the adequacy of the
organisations’ response to actual or potential human rights and
environmental harms in line with the UN Guiding Principles on
Business and Human Rights, 1 January 2012.
All public departments, agencies, and bodies are required to publish a report
as outlined in
subsection (1)
.
Upon written request, any person has the right to information from a
qualifying commercial organisation or public authority under subsection
(1)
within one month, including general information and information relating to
a specific product or service offered by the organisation.
A request for information may be denied if—
the request does not provide adequate information to identify what
the request concerns;
the request is clearly vexatious;
the requested information concerns data relating to an individual’s
personal affairs;
the requested information concerns data regarding technical devices
and procedures or other operational and business matters which for
competitive reasons it is important to keep confidential.
The Secretary of State must make regulations establishing that a commercial
organisation to whom this section applies commits an offence if it knowingly
or recklessly causes its report under subsection
(1)
or answer to an information
request under subsection
(5)
to include any matter that is misleading or false
in a material particular including regarding the implementation of the due
diligence plan.
A public authority must establish human rights and environmental due
diligence requirements for suppliers at the tender stage, establish specific
award criteria related to due diligence policy and practice and contract
performance conditions relating to the implementation of such duties,
including provisions for remediation for those affected by human rights or
environmental harms.
Every public authority must provide a list of current suppliers, and those
who have been excluded, debarred, or terminated from procurement to the
regulatory authority, established under
section 7
, annually.
The Secretary of State must, within 6 months of the commencement of this
Act, appoint a regulatory authority with the duty to oversee compliance with
this Act.
The regulatory authority’s duties include in particular to—
provide guidance on due diligence approaches and best practices;
provide reporting requirements under section 5 ;
host a publicly accessible registry website listing all organisations
subject to
section 5
with their respective reports;
enforce compliance with this Act.
For the purpose of enforcing this Act, the regulatory authority has the
following powers—
to investigate the commercial organisation or public authority;
to take the decision that this Act was infringed and issue a civil
sanction as specified in section 10.
to refer any criminal offences under this Act to the Crown Prosecution
Service.
The regulatory authority acts on its own accord or after receiving complaints
from any interested or affected parties or their representatives.
Any decision of the regulatory authority to or not to take action with respect
to an investigation or complaint is not determinative of civil liability under
section 8, nor does it suspend, delay, or substitute the ability to institute civil
liability action under section 8.
A commercial organisation is liable for damages if it fails to prevent human
rights or environmental harms in its own operations, products, and services,
those of its subsidiaries, and throughout its value chains.
It is a defence for a commercial organisation to prove that it took all reasonable
steps to prevent the harm from occurring, including but not limited to
conducting human rights and environmental due diligence as is reasonable
in all the circumstances.
Commercial organisations can be held jointly and severally liable for the same
harm.
For the purpose of this Act, Courts of England and Wales have jurisdiction
over all commercial organisations that are alleged to have breached their
duties under
section 2
, regardless of the location of the harm or part thereof,
or the physical presence, registration, or domicile of a commercial organisation
more directly linked to the harm.
The regulatory authority or the relevant court may grant, in addition to orders
for the payment of compensatory damages, other orders to remedy the harm,
including—
preventative relief such as injunctive orders and orders to cease and
desist;
remedial orders, such as cleaning up or restitution orders;
supervisory orders that require the parties to report back on progress
and remediation after a certain period;
interlocutory orders;
other orders as necessary to effectively remedy the harm in line with
international law, including rehabilitation, satisfaction, guarantees of
non-repetition and other appropriate remedies.
A commercial organisation affected by an order under subsection
(5)
may
apply to an appropriate Court in England and Wales to set the order aside
or to vary it.
Persons on the board of directors (or its equivalent management body) of a
commercial organisation are collectively responsible for the commercial
organisation’s compliance with this Act.
A person is responsible for the human rights and environmental due diligence
of a commercial organisation if the person is—
a director (or equivalent) of the organisation if it is a body corporate
other than a limited liability partnership;
a member of the organisation if it is a limited liability partnership;
a partner of the organisation if it is any other kind of partnership.
A person who is responsible for human rights and environmental due diligence
commits an offence if—
the commercial organisation conducts no human rights and
environmental due diligence under
section 2
in a financial year;
any information in the human rights and environmental due diligence
reporting under
section 5
is false or incomplete in a material particular,
and the person either knows it is or is reckless as to whether it is.
It is a defence for a person convicted of an offence under subsection
(3)
to
prove they—
took all reasonable steps to ensure that the relevant provisions were
complied with, and
A person guilty of an offence under this section is liable—
on conviction on indictment, to imprisonment for a term not exceeding
2 years, or to a fine, or to both;
on summary conviction in England and Wales, to imprisonment for
a term not exceeding 12 months, to a fine, or both;
on summary conviction in Scotland, to imprisonment for a term not
exceeding 12 months, to a fine not exceeding the statutory maximum,
or both;
on summary conviction in Northern Ireland, to imprisonment for a
term not exceeding 6 months, to a fine not exceeding the statutory
maximum, or both.
A person guilty of an offence under this section is also liable to be disqualified
as a director under the Company Directors Disqualification Act 1986.
Where a commercial organisation is found to have breached its obligations
under section
2
or
5
, the regulatory authority may issue the following penalties
or notices as it sees fit—
a fine amounting up to 10% of the organisation’s global turnover;
a compliance notice requiring steps be taken within a stated period
to ensure that an offence or breach does not continue or happen again;
a restoration notice requiring specified steps within a stated period to
secure restitution of the early position, as far as this is possible;
exclusion from participation in procedures for the award of supply,
works, or service contracts by public authorities for a period of up to
five years from the date of the regulatory authority’s decision of breach
of their obligations;
an appropriate order of costs to cover the investigation and
adjudication.
In addition to, or instead of, the penalties set out in subsection
(1)
, the
regulatory authority may also—
accept an enforcement undertaking from the commercial organisation
to undertake corrective behaviour in line with international law; or
accept a third-party undertaking to compensate those affected by
human rights violations in line with international law, guaranteed by
the commercial organisation.
A commercial organisation is guilty of an offence under this section if a person
associated with the organisation commits an act within or outside the United
Kingdom—
to obtain or retain business for the organisation, or
to obtain or retain an advantage in the conduct of business for the
organisation,
and that act would, if committed in England and Wales, constitute one of the
offences listed in subsection
(2)
.
Those offences are—
murder, kidnap, or false imprisonment under English common law,
an offence under section 1 of the Sexual Offences Act 2003 (rape),
an offence under sections 1 and 2 of the Modern Slavery Act 2015
(slavery, servitude and forced or compulsory labour; human
trafficking),
an offence under section 1 of the Corporate Manslaughter and
Corporate Homicide Act 2007,
an offence under section 18, 23, 24, 28 or 29 of the Offences Against
the Person Act 1861 (grievous bodily harm or wounding with intent;
poison; explosions),
an offence under section 1(2) of the Criminal Damage Act 1971
(endangering life by damaging property), or
genocide, crimes against humanity and war crimes under section 50
of the International Criminal Court Act 2001.
A commercial organisation is guilty of the offence in subsection
(1)
if the
person’s act was carried out—
to obtain or retain business for the organisation, or
to obtain or retain an advantage in the conduct of business for the
organisation
and was capable of encouraging or assisting a third party to do an act which
would, if committed in England and Wales, constitute one of the offences
listed in subsection
(2)
.
It is a defence for a commercial organisation to prove that at the time of the
person’s act—
it was not reasonable in all the circumstances to expect the commercial
organisation to have any due diligence procedures in place;
the organisation took all reasonable steps to prevent the offences under
subsection
(2)
from occurring including but not limited to conducting
human rights and environmental due diligence in all the circumstances.
For the purposes of this section an act includes an omission.
A person guilty of an offence under this section is liable—
on conviction on indictment, to imprisonment for a term not exceeding
2 years, or to a fine, or to both;
on summary conviction in England and Wales, to imprisonment for
a term not exceeding 12 months, to a fine, or both;
on summary conviction in Scotland, to imprisonment for a term not
exceeding 12 months, to a fine not exceeding the statutory maximum,
or both;
on summary conviction in Northern Ireland, to imprisonment for a
term not exceeding 6 months, to a fine not exceeding the statutory
maximum, or both.
Regulations under this Act are to be made by statutory instrument.
A statutory instrument containing regulations under this Act may not be
made unless a draft of the instrument has been laid before and approved by
a resolution of each House of Parliament.
The Secretary of State must lay before Parliament statutory instruments
containing regulations under this Act within six months of the day on which
this Act is passed.
This Act extends to England and Wales, Scotland and Northern Ireland.
This Act comes into force on the day on which it is passed.
This Act may be cited as the Commercial Organisations and Public Authorities
Duty (Human Rights and Environment) Act 2024.
A
bill
to
Place a duty on commercial organisations and public authorities to prevent human rights and environmental harms, including an obligation to conduct and publish human rights and environmental due diligence assessments, on their own operations, subsidiaries, and value chains; to make provision for civil liability, penalties, and a criminal offence for failures to comply with the duty; and for connected purposes.
Ordered to be Printed, .
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