Economic Activity of Public Bodies (Overseas Matters) Bill (Third sitting)

Chris Stephens Excerpts

Committee stage
Thursday 7th September 2023 Public Bill Committees

[The Chair]

Mr Barrett, is there anything you want to add?

Steven Barrett: No, because I cannot answer the necessary question because I think that would be a personal and political opinion. I can say that it is lawful and that I agree that it would not breach article 10.

[Chris Stephens (Glasgow South West) (SNP)]

Q My trade union training tells me that if you have two lawyers in the room and you ask them a question, you get at least three opinions, but I am going to try one question anyway.

The Scottish Government oppose the BDS campaign, but also strongly discourage trade with companies active in the Occupied Palestinian Territories—an occupation that was recognised as illegal under international law and by the UK Government. How would you both respond to the concerns people have that the Bill effectively condones what many would regard as illegal occupation?

Jonathan Turner: First, I do not accept that it is an illegal occupation. Many international lawyers will say that the settlements are illegal. This is based on article 49 of the fourth Geneva convention, which prohibits a state—an occupying power—from transferring part of its population into an occupied territory. But conducting a business is not transferring population.

It is not just me who says this. The Supreme Court said it in Richardson v. Director of Public Prosecutions. It said that conducting a business in the west bank does not make the private operator of a factory a person who is promoting the transfer, by the state, of people into occupied territory. Running a business is not transferring people. It is sloppy thinking to say that the settlements are illegal. Companies operating in the vicinity of settlements do not normally operate in residential areas anyway; they normally operate in trading estates outside the residential areas. It is sloppy thinking to say that operating the factory, selling the goods or buying the goods is illegal under international law. It is not.

Steven Barrett: All I would say is that what you think about the situation in the middle east is a personal political opinion. As law, it is important that we get back to a healthy relationship with international law, which is understanding the role of incorporation and your role in controlling the flow of international law into this jurisdiction.

When the President of the Supreme Court corrected this for us lawyers, presumably to pass on to people like you, he speculated that it might be because we are so used to the EU. For 40 years, EU law was supreme here, which meant its being in charge. That meant that Ministers could be told, “No, Minister, that policy is illegal,” or “No, Minister, you cannot do this.” That has been going on for so long that many of us, simply by a form of muscle memory or attachment to that, are used to groping for some legal reason not to do things.

Now the EU has gone. International law has never been supreme; it is not supreme anywhere, and it has certainly never been supreme here. So you—all of you, collectively—need to come to terms with the power and responsibility that you have. If you think something about the situation in the middle east, or if you think something else about the situation in the middle east, you must sort it out. We will use democracy as a mechanism for settling the issues and seeing what the voters think, but that is the system that we have, and it is very important that we operate in it.

Really the only important part of Mr Hermer’s statement, which I saw this morning, is where he says, “You can do this.” Honestly, that is all you need to know. But groping around for just a resolution of the UN, which is a pretty weak source of international law anyway, and then looking at its wording and trying to say, “That means you can’t pass an Act of Parliament here”—no. That is constitutionally eccentric.

If somebody will allow me, I do have drafting concerns about the Bill. I do not know whether we will get to those, but I would like to raise them if I can.

[The Chair]

We are running rapidly out of time, but there is an opportunity for one very quick question.

--- Later in debate ---

[The Chair]

Q We will now hear evidence from Yasmine Ahmed, the UK director of Human Rights Watch, David Timms, the head of political affairs at Friends of the Earth, and Peter Frankental, programme director for economic affairs at Amnesty International UK. We have until 12.30 pm to conclude the session. For the record, could the three witnesses briefly introduce themselves?

Yasmine Ahmed: I am Yasmine Ahmed, the UK director for Human Rights Watch.

Dave Timms: I am Dave Timms. I am the head of political affairs at Friends of the Earth England, Wales and Northern Ireland.

Peter Frankental: I am Peter Frankental, economic affairs programme director at Amnesty International UK.

[Chris Stephens]

Q Amnesty International says that the Bill will make it impossible for public bodies to use their procurement and investment policies to incentivise ethical business conduct that is human rights compliant. Dave and Yasmine, do you agree with that statement? Peter, can you expand on that?

Yasmine Ahmed: Yes, I certainly agree with that. Essentially, what we see is that the Bill is going to restrict the ability of public bodies—a wide definition, as you know—to carry out their human rights due diligence responsibilities under the UNGPs. They have those responsibilities and international obligations, and what the Bill does is wholly suffocate the ability of public bodies to carry them out.

Essentially, the Bill does that by saying that a public body is not able to take account of the human rights record of a state, or companies operating within a state that is carrying out human rights abuses, except in specifically exempted cases. As we know, and as has been highlighted to you in previous evidence, the specific exemptions have significant loopholes, but even leaving those aside, there are still international crimes and human rights violations that are not caught. I will give you an example: suppose I am a public body and I want to stop investing in a military company that is supplying weapons to Saudi Arabia and UAE that are being used to commit war crimes in Yemen. This Bill will stop me from being able to do that. We know that the Bill will mean that public bodies cannot carry out and adhere to their due diligence responsibilities.

Something that is extremely pernicious from our perspective is that the Bill will have a significant chilling effect on public bodies. If I am a public body, what incentive do I have to do appropriate due diligence—both environmental and human rights due diligence? If I do that and something arises, and then one of the enforcement bodies imposes a notice on me that requires me to send all the information I have about the decision I made, given the fact that the Bill is so ambiguously worded that it only needs to be “a consideration”, how am I to know that I will not be penalised? As a public body, I would not be in anyway incentivised. The Bill runs a coach and horses through ESG responsibilities, human rights responsibilities and due diligence responsibilities.

I know the Government have consistently said that this is about public policy and ensuring that public bodies do not carry out their own foreign policy. What the Bill actually does is stifle public bodies and the Government from carrying out their own responsibilities and, on the face of it, complying with international law. It is totally inconsistent as well with their own business risk guidance and the implementation of their own UNGPs. It is a hammer through that. Anyone who tells you that it is not has not adequately read the Bill.

Before I hand over to my colleagues, I would just say that I am a lawyer who has been working in this jurisdiction for a number of decades now, and I can say that I have never read a piece of legislation that is as badly worded as this. It is ambiguous and runs a coach and horses completely through ESG responsibilities and business and human rights responsibilities. I think it is a very pernicious and worrying piece of legislation, and I am very happy that the Committee is seized of the matter.

[The Chair]

To the other two witnesses, it might be helpful in terms of our time constraint if you could initially confirm whether you are happy with the evidence already given, and if not, please say so. Secondly, could you raise any additional points that you do not think have come out in the first response? I hope that is clear.

Dave Timms: I agree entirely with Yasmine’s comments. Hopefully we will get to talk specifically about the environmental implications, but I would add to her answer the pernicious way clause 1 is constructed and the impact that will have on civil society organisations going about their reasonable activities to try to create environmental or social change. We have heard a lot of the witnesses say that it does not have gagging implications or free speech implications, but the actions of civil society organisations and members of those decision makers are drawn in by the nature of clause 1 and subsection (7), which talks about “any person seeking to persuade the decision-maker”.

This is the state impinging on the activities of civil society organisations that are trying to achieve meaningful social change and trying to ensure that their money, their local authority or university is not complicit in driving destructive human rights or environmental activity. In that sense, this is a direct attack on the ability of civil society to go about the activities we would consider to be legitimate.

Peter Frankental: I totally agree with Yasmine and David. Public procurement in the UK, according to the OECD, accounts for 14% of GDP. That is enormous potential leverage to incentivise ethical business. That leverage is largely being lost because of the disincentives that Yasmine referred to. Let me give you one example of why the disincentive is so great. If a public body—say, an NHS trust—were to decide not to tender with a company in Malaysia, or a contractor in the UK that sources from Malaysia, and source rubber gloves from a factory that had been linked to human rights abuses, that would implicate the state of Malaysia. Under international law, states have a duty to protect, and that means holding companies accountable. If a company is involved in human rights violations or labour rights violations, the state has to some extent failed in its duty to protect, so disapproval of foreign state conduct is invoked. I do not think that the public bodies will want to go anywhere near giving effect to their human rights due diligence findings, because the risk and cost to them would be too great.

--- Later in debate ---

[The Chair]

I am not going to bring the Minister back in. We have only 15 minutes for this session.

[Chris Stephens]

Q In the advice you gave the Labour party, you said the Bill

“effectively equates the OPT with Israel itself and is very difficult to reconcile”

with Britain’s support for a two-state solution. Will you expand on those comments?

Richard Hermer: Yes, of course. The manner in which the Bill does that is it affords a unique protection to just one category, which is Israel, the occupied territories and the Golan Heights—one protection from being placed on the list of exceptions—whereas any other country in the world can be placed on the list of exceptions and therefore subject to adverse economic decisions by public bodies through the fiat of the Secretary of State or the Cabinet Minister. That power is denied to the Secretary of State or Minister in respect of anything to do with Israel, the occupied territories or the Golan Heights. It is accorded a special status, and that can only be changed by primary legislation. In that sense, it separates out Israel and the OPT from the rest of the world.

[Wayne David]

Q Following on from that very point, your two papers make the point very strongly that the Bill contradicts, or at least strongly questions, the British commitment to international law. Could you expand slightly on that because, as we all know, the British Government are firmly committed to international law? Are you suggesting that this questions at least the Government’s commitment to international law?

Richard Hermer: Yes. I am mindful that we have only 15 minutes, probably now 10. Can I just give you a brief framework, because I think I have to disagree with the outline that Mr Barrett gave you? International law has always been key to this country, and very broadly speaking it operates on two levels. The first is on the international plane. That is our obligation to comply with international law at the international level. Secondly, in so far as it has been incorporated into English domestic law, the Government have to comply with it on a domestic level.

It is the international law level that I flagged up first in my written advice. As a country, we have always played a leading role in upholding and, indeed, creating international law. Both main parties have a proud history of that. It has fallen into slight disrepute in more recent times as we have had some legislation that expressly seeks to avoid our international law obligations, but generally speaking, that is something we can be proud of. There are two aspects in which that is relevant: first, because the Government have contended that this does comply with our international law obligations, and secondly, because the Committee will no doubt wish to ascertain whether it in fact does or there is a risk that it does not. I hope that answers your question, Mr David.