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

Lord McNicol of West Kilbride Excerpts

2nd reading
Friday 10th May 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I start by thanking the noble Baroness, Lady Young of Hornsey, for bringing such an important Bill before the House and for giving all of us an opportunity to debate this significant topic. I also thank the many trade unions—particularly Unison and the TUC—who have campaigned so strongly in this area.

I echo the concerns raised, and that is why I am proud that Labour wants to see our businesses do all they can to make sure that they are not profiteering from the misery of others or the degradation of our environment. It is why we work both at home and internationally on this. It is why it is so important that we not only keep pace with but lead on human rights, the environment and ESG, with nations not just in Europe but across the globe.

As the noble Baroness, Lady Young of Hornsey, and my noble friend Lord Browne of Ladyton pointed out, many other nations—France, Norway, Germany and recently the EU—have been developing policy within this area. It is important that we look at the lessons they are learning and their experiences from the implementation of similar policies. We must, as the noble Lord, Lord Deben, said, be a champion for justice on the global stage, promoting human rights and environmental sustainability in everything that we do.

That is why, looking wider, Labour is committed to protecting and embedding workers’ rights in future FTAs and trade deals, including by using human rights protection clauses to tackle the use of modern slavery. The next Labour Government’s trade strategy will deliver economic growth at home, while building security and resilience into global supply chains and driving progress on fundamental issues such as climate change, anti-trafficking and workers’ rights. In line with international standards, we will assess the best ways to prevent environmental harms, modern slavery, and human and labour rights abuses in both private and public sector supply chains, including the use of due diligence rules.

As such, we are supportive of the principles of this Bill. In recent discussions on the CPTPP and other free trade agreements, we have been arguing to include them within those trade deals. Nevertheless, we have some concerns around the potential burden that this Bill could place on both businesses and public bodies, without full and proper consideration. That is why we want to properly assess the best ways to prevent these harms, while ensuring new legislation is not overly burdensome.

On the specifics of the Bill, I am keen to seek clarification from the noble Baroness, Lady Young of Hornsey, on what kind of annual worldwide turnover thresholds she envisaged for the regulations mentioned in Clause 5(1). Would it follow something like the Modern Slavery Act’s £36 million figure, for example, or would the duty be placed on a broader number of businesses? It is in no one’s interest to overly burden our SMEs or smaller organisations, which often lack the capacity to report under this or a similar duty. We must ensure that reporting mechanisms are as straightforward as possible. Currently, supply chain and scope 3 reporting is often nothing more than a guesstimate, and, as the noble Baroness, Lady Young, mentioned, there are no standards for auditing or reporting. We must look to deliver on this.

We would like to see more work done within this area, and I want to see further consultation with trade unions, businesses, NGOs and other organisations to review how best to bring this policy into action in a timely and considered manner. We want to balance the needs of these regulations with the need to minimise the burden on businesses. Although at this stage we will not be supporting the Bill, we support the principles of it. I am sure we will be back here—sooner rather than later, I hope—to put these principles into action.