Overview

This Bill mandates that commercial organizations and public authorities in the UK take reasonable steps to prevent human rights and environmental harms within their operations, subsidiaries, and supply chains. It introduces due diligence requirements, reporting obligations, and penalties for non-compliance, including potential criminal charges for serious offenses.

Description

The Bill establishes a legal duty for commercial organizations and public authorities to prevent human rights and environmental harms. This includes conducting and publishing human rights and environmental due diligence assessments across their entire value chain (all activities involved in producing a product or service).

Due Diligence

Due diligence must include identifying, assessing, and addressing potential harms; establishing grievance mechanisms; tracking the effectiveness of measures; and engaging meaningfully with stakeholders (workers, affected communities, human rights and environmental advocates). The reasonableness of due diligence will be determined by factors such as company size, sector, and the severity of potential harms.

Reporting Requirements

Larger commercial organizations (those exceeding a turnover specified in regulations) must annually publish and submit reports detailing their due diligence plans and assessments of their actions. These reports must include information on greenhouse gas emissions and value chain traceability. Public authorities also have reporting requirements.

Enforcement and Liability

A regulatory authority will oversee compliance, with powers to investigate, issue fines (up to 10% of global turnover for commercial organizations), and refer cases to the Crown Prosecution Service for criminal prosecution. The Bill also establishes civil liability for damages caused by failure to prevent harms, including potential joint and several liability. Directors and responsible individuals within organizations can face criminal charges for non-compliance.

Responsible Disengagement

The bill outlines requirements for responsible disengagement from business relationships when due diligence reveals unacceptable human rights or environmental risks. This must be done in a timely manner after considering mitigation efforts and stakeholder engagement, with rapid disengagement considered for severe harm.

Public Procurement

Public authorities are prohibited from procuring goods or services from suppliers who don't conduct human rights and environmental due diligence. They must include due diligence criteria in their procurement processes.

Government Spending

The Bill will necessitate government spending on establishing and operating the regulatory authority, developing guidance, and potentially supporting compliance efforts. The exact figures are not specified in the Bill itself.

Groups Affected

• Large commercial organizations: Subject to new due diligence, reporting, and liability requirements. Potential impact: increased costs, legal risks, but also opportunities to enhance their reputation and reduce operational risks.
• Public authorities: Must incorporate due diligence into procurement, face fines for non-compliance, and are required to submit reports.
• Suppliers to public authorities: Must meet due diligence requirements to participate in public procurement.
• Individuals and communities affected by human rights and environmental harms: Could potentially benefit from increased corporate and government accountability and access to remedies.
• Directors and management of organizations: Face personal liability for non-compliance.

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