Private Members’ Bill proposes wide-ranging human rights and due diligence obligations in UK

As the unexpected news broke of a provisional political agreement on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), many could be forgiven for not having noticed that a proposal had recently been put forward in the UK for a similar human rights and environmental due diligence regime. 

Although the UK government has previously announced it does not intend to replicate the CSDDD, that has not stopped Baroness Young of Hornsey introducing a Private Members’ Bill (PMB) in the House of Lords – the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill (the Bill). 

The Bill, if passed into law, would go beyond the EU CSDDD and introduce a duty for both commercial organisations (of all sizes) and public authorities incorporated or operating in the UK to prevent human rights and environmental harms in their own operations, those of their subsidiaries and in their value chains. 

Baroness Young has previous for introducing PMBs related to this topic, having co-sponsored the Modern Slavery (Transparency in Supply Chains) Bill in 2016 (see here) which ultimately did not make it far in the legislative process. 

The same fate is likely to await her latest effort as PMBs proposed without UK government backing (as in the current case)  tend to progress slowly and ultimately find very limited success. The PMB does, however, show continued willing in certain quarters for changes to be made to the (now rather outdated) reporting regime under section 54 of the UK Modern Slavery Act 2015 - amendments to which have long been promised by the UK government, most recently as part of the Queen’s Speech 2022 but was not mentioned in the 2023 King’s Speech. Although there appears to be a lack of political will on the part of the government to focus on such amends, or the topic of human rights (and environmental) due diligence more broadly (particularly heading into a crucial election year), this latest PMB adds to the similar attempt in 2021 (which did not progress beyond the first reading) and the pledge to create a new business human rights and environmental due diligence law led by Baroness Young earlier this year which was signed by 46 cross-party MPs and Peers. 

Against this backdrop, although unlikely to pass into law in its current form, the Bill may lead to further scrutiny of the UK government’s position on human rights (and environmental) due diligence and force Parliamentary debate at a time when the UK appears to be falling behind its counterparts in Europe. 

The rest of this blog post explores the key aspects of the Bill. 

Duty to prevent human rights and environmental harms

The Bill introduces a duty on commercial organisations (of all sizes and types of operation) and public authorities to prevent human rights and environmental harms “so far as is reasonably practicable" on their ‘"own operations, products, and services, those of their subsidiaries, and throughout their value chains’". 

This includes an obligation to conduct “reasonable” human rights and environmental due diligence, which must as a minimum include:

• 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; and
• communicating with stakeholders and reporting publicly.

The Bill goes onto to set out how “reasonableness” will be considered, taking into account factors such as: 

• the size, sector, operational context and nature of the harms in question; 
• the severity (scale, scope, irremediability) of the harm; 
• the extent to which the commercial organisation exercised leverage over third parties and made attempts to increase that leverage; 
• the commercial organisation’s prioritisation of risks within its due diligence process and the reasonableness of that prioritisation; and 
• the extent to which due diligence was an ongoing process with continuous monitoring and improvement. 

The Bill goes on to make clear that reliance on audit reports, certification schemes and membership of industry or stakeholder initiatives are not sufficient on their own to fulfil the obligation to conduct due diligence. 

It also requires due diligence to include “informed, meaningful, and safe engagement with stakeholders” which includes “workers, affected rightsholders, and those defending human rights and the environment, throughout the entire process”. 

These are far-reaching obligations, with the Bill appearing to go further than the UN Guiding Principles on Business and Human Rights (UNGPs) by imposing a duty to prevent harms and not delineating expectations based on the “cause, contribute, directly linked” framework. The scope of those harms is also broadly defined, in particular in relation to “environmental harms” which potentially goes further than the proposed CSDDD by making reference to climate change and ecocide, among other things.

Framework for responsible disengagement

As part of the diligence requirement, the Bill also establishes a framework by which an organisation could terminate a business relationship in a responsible manner. The Bill acknowledges that any such decision should consider the adverse impacts of the termination itself (and how they might be addressed) as well as the original harms identified leading to the decision to terminate. This process is again required to include stakeholder engagement. 

Reporting requirements 

The Bill also proposes to add to the suite of ESG reporting obligations being considered globally, by imposing a requirement on commercial organisations meeting a certain turnover threshold (to be decided) and all public departments (etc.) to report annually to a central registry. 

Responding to criticisms of reporting to date on human rights (particularly modern slavery topics), the report would be required to be both forward- and backwards-looking, with a plan describing the human rights and environmental due diligence procedures to be adopted in the next financial year and an assessment of the effectiveness of those actions taken in the previous year. 

It would also require the disclosure of the value chain (enabling full traceability, detailed reporting on Scope 1, 2 and 3 greenhouse gas emissions) and include any other information required to evaluate the adequacy of the organisation’s response to any actual or potential harms in line with the UNGPs.

Not satisfied with its wide-ranging reporting requirement, the Bill also reinforces the requirement with civil penalties (to be decided) and provides for an on-demand reporting mechanism for on-demand requests for information which can be made by any person and are to be responded to within one month. There are a number of carve-outs in respect of data privacy, confidentiality, and to defeat vexatious requests. 

The Bill also sets limitations on public procurement. Public authorities must establish human rights and environmental due diligence requirements for suppliers at the tender stage and are barred from carrying out procurement from suppliers who do not conduct (or do not have a plan to conduct) due diligence in accordance with the Bill. Public authorities must also publish 'blacklists’ of suppliers who are excluded.

Liability and sanctions

The Bill establishes various sources of liability. Similar to the CSDDD, it provides for both civil liability – but would impose liability for any failure to prevent harm occurring throughout the value chain unless the organisation could show that it has taken all reasonable steps to prevent the harm – and also for sanctions including fines amounting to up to 10% of the organisation’s global turnover. 

Organisations can also be excluded from public procurement (such processes also being required to establish due diligence requirements for suppliers) and liability can flow down to directors, who could be subject to an unlimited fine and/or imprisonment not exceeding two years.