Recommendation 10

HM Government · verbatim extract Deferred

As already referenced, in the Trade Strategy 2025 the Government launched a review into the UK’s approach to responsible business conduct, focused on the global supply chains of businesses operating in the UK. This includes consideration of mandatory human rights and environmental due diligence measures. As an integral part of the review will be harnessing the insights and expertise of businesses, investors, trade unions, academia and civil society. The FCDO is carrying out a National Baseline Assessment (NBA) on the implementation of the UN Guiding Principles on Business and Human Rights. Stakeholders will be given the opportunity to feed into the NBA and the findings will contribute to the evidence base to inform the UK’s approach to tackling business-related human rights abuses, including in global supply chains. The Government has established the Office for Responsible Business Conduct (RBC) to replace the UK’s National Contact Point. This enhanced office will support industry to integrate responsible business practices into their operations. It will help victims of corporate malpractice through continuing to operate a non-judicial complaints mechanism for alleged violations of the OECD Guidelines on RBC. JCHR Recommendation 7 7. In developing its own mandatory human rights due diligence, the UK should be mindful of the outcome of the CSDDD process in the EU, in order to ensure that businesses which operate in both the UK and EU are not placed under conflicting regulatory burdens. (Paragraph 84) Government Response The RBC review will have due regard to the approaches taken by our trading partners, including the European Union. Noting the EU’s adoption of the Corporate Sustainability Due Diligence Directive, the Government has been in regular contact with the European Commission on this issue, including through the Trade Specialised Committee on Level Playing Field for Open and Fair Competition and Sustainable Development. JCHR Recommendation 8 8. SMEs should be subject to lighter mHRDD requirements than larger companies, which should be proportional and risk-based to manage the specific risks of forced labour in their supply chains. Policymakers should support SMEs with guidance, tools and resources to help them comply without excessive burdens. (Paragraph 91) Government Response The RBC review will consider the best way to promote a coordinated approach to responsible business that minimises costs to businesses, including SMEs. This will be consistent with the Prime Minister’s commitment to reduce the administrative cost of complying with regulation by 25% over the Parliament. Through the review process we will engage with SMEs to harness their insights and expertise. Alongside this, the new Small Business Plan is the most comprehensive package of support for small and medium sized businesses in a generation, designed to support the UK’s 5.5 million SMEs to achieve growth and reach their full potential. The plan contains a number of new measures which will make a real difference to the day-to-day trading operations of small businesses and give them the right support to grow. The measures include cutting the administrative costs of regulation for business by 25% to save businesses time and money so they can focus on running successful businesses; and the launch of our new Business Growth Service, a new national service making it easier and quicker for businesses across the UK to get the help, support and advice they need to start, scale and succeed. 6 Implementing mandatory Human Rights Due Diligence (mHRDD) JCHR Recommendation 9, 10 and 11 9. The Government’s newly announced Supply Chain Centre should support companies to conduct effective HRDD by providing a single point of access to verified information, guidance and resources. (Paragraph 100) 10. Government should establish effective regulatory arrangements to ensure compliance with the new rules for mHRDD, including penalties for non-compliance that are proportional to company turn over. (Paragraph 107) 11. This regulatory function could be led either by the Office for Responsible Business Conduct or the Supply Chain Centre. The chosen body must be effectively resourced to deliver these new duties. (Paragraph 108) Government Response Responsibility for government policy on forced labour in supply chains sits with the Office for Responsible Business Conduct (ORBC) rather than the Supply Chain Centre, which will focus on building the resilience of the UK’s critical IS8 supply chains. ORBC works closely with the Supply Chain Centre and other parts of government to ensure a joined-up approach. DBT will continue to use the resources at its disposal across government, as needed, to help support businesses to act responsibly. The RBC review will consider the effectiveness of the UK’s current regime and alternative means of supporting responsible business practices. Any policies developed following the review will consider a range of factors, including