Press Release 18 October 2006

Improvements to Companies Bill - movement towards corporate responsibility

Changes to the Companies Bill, announced by the Government in the House of Commons could improve the accountability of UK companies, campaigners said today. But members of the Trade Justice Movement and the Corporate Responsibility (CORE) Coalition said that although the new moves were welcome, much more is needed to ensure people and the environment are protected from corporate abuses.

The Government today gave a commitment to review, within two years, whether or not voluntary reporting standards had resulted in meaningful reports and to consult with NGOs as well as business in this assessment. If not, the Government has undertaken to use the powers it will have within the Bill to introduce mandatory reporting standards.

The Companies Bill will now require some companies to report on their environmental and social impacts and on employee and supplier issues. In addition, company directors will have a duty, not only to maximise profit, but also to consider the impacts of their business on people and the environment. These changes follow a huge public campaign involving church groups, campaigners and trade unions.

The Corporate Responsibility Coalition and the Trade Justice Movement believe these provisions will not go far enough in ensuring UK business always behaves responsibly and will continue to campaign for strengthening of the environmental and social provisions of the Companies Bill as it enters the Lords later this month.

Hannah Ellis, Coordinator of the Corporate Responsibility Coalition said:
“The Corporate Responsibility Coalition welcomes the new legislation outlined in the Companies Bill – this is one step forward in ensuring British business does not legally operate at the expense of people and the environment.  However this is only the first step – Britain still has a long way to go if it wants to be an international leader in responsible business.”

Glen Tarman, Coordinator of the Trade Justice Movement, said:
“The Trade Justice Movement welcomes the Government’s recognition that regulation is needed to empower communities and protect the environment yet the Companies Bill could have gone a lot further. People power and public pressure have already made a massive difference. Our campaigning to ensure that British businesses are responsible and accountable, no matter where in the world they operate, will continue until we have all the rules in place to right corporate wrongs and make poverty history.”

Whilst CORE and the Trade Justice Movement welcome the measures in the Bill to take account of social and environmental impacts, they call for the Bill - the largest shake up in UK company law in over a century – to be further strengthened to make UK companies international leaders in responsible and competitive business.

Campaigners have been calling for further provisions that would require companies to comprehensively report on their environmental and social impacts, that company directors be legally accountable for these impacts, and that the Government examine barriers which prevent UK companies for being liable for abuses committed overseas [1].

Media contacts: 
Hannah Ellis, The Corporate Responsibility (CORE) Coalition: 0202 566 1601 or 07952 876929
Sarah Jayne Clifton, Friends of the Earth: 0207 566 4080 or 07980599002
John Coventry, ActionAid UK: 0207 561 7633 or 07984 108027

Notes

1. A comprehensive summary of all the Corporate Responsibility (CORE) Coalition and the Trade Justice Movement proposals for reforming the Companies Bill, ‘Companies Bill: Making Corporate Irresponsibility History’ is available here www.tjm.org.uk/corporates/briefingOct06.pdf.

2. The Corporate Responsibility (CORE) Coalition (www.corporate-responsibility.org) is the UK’s most active voice on corporate accountability, supported by over 130 organisations, including campaigning organisations, faith-based groups, community organisations, academic institutions and trade unions. The Trade Justice Movement (www.tjm.org.uk) is a coalition of over 80 UK organisations campaigning for fundamental changes to the unjust rules and institutions governing international trade, so that trade is made to work for the benefit of poor people and the environment. Member organisations that together have over 9 million individuals members include development and aid agencies, Fairtrade bodies and companies, environmental organisations, trade unions, student and faith groups.   

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