New Clause 5 - Environmental and human rights due diligence: duty to publish draft legislation

Environment Bill – in a Public Bill Committee at 11:00 am on 24th November 2020.

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“(1) The Secretary of State must, within the period of six months beginning with the day on which this Act is passed, publish a draft Bill on mandatory environmental and human rights due diligence which imposes a duty on specified commercial, financial and public sector persons to—

(a) carry out due diligence in relation to all environmental and human rights risks and impacts associated with the exercise of their functions, and

(b) identify, assess, prevent, or mitigate (where prevention is not possible) the risks so that the impacts are negligible.

(2) The objective of the due diligence provided for pursuant to subsection (1) is to ensure that the target set pursuant to sub-paragraph (e) of section 1(3) is met.

(3) The due diligence must be undertaken by specified persons in relation to—

(a) risks and impacts wherever they arise, and

(b) the entire supply chain and investment chain of the person specified.

(4) In order to address, in particular, ecosystem conversion and degradation and deforestation and forest degradation (“deforestation and conversion”) the draft Bill must seek to ensure that all goods placed on the UK market are—

(a) sustainable;

(b) traceable back to source through fully transparent supply chains; and

(c) do not cause adverse environmental and human rights impacts including deforestation and conversion.

(5) The due diligence required to be carried out in accordance with subsection (1) by providers of financial services must include (but not be limited to) the risk of deforestation and conversion which may arise from or be enabled by the provision of the financial services.

(6) The provisions of the draft Bill relating to due diligence must require compliance with international standards and obligations relating to human rights, including the rights of indigenous peoples and local communities.

(7) The draft Bill must—

(a) establish or designate a body to oversee implementation of and compliance with the provisions of the Bill;

(b) provide proportionate, effective and deterrent sanctions for entities failing to comply fully and promptly with their duties under the Bill;

(c) provide for an independent, transparent and public complaints mechanism;

(d) establish a system which ensures effective and appropriate redress for any person affected by environmental impacts and human rights violations;

(e) require persons to report publicly on—

(i) their plans for due diligence,

(ii) the implementation of their plans, and

(iii) the action taken to comply with their plans including the effectiveness of the action;

(f) require the regulatory body or other appropriate institution to undertake periodic and public audits of the effectiveness of the due diligence requirements, focusing on specified persons, sectors or supply chains; and

(g) require the Secretary of State to include in the annual report on environmental improvement plans an assessment of the application of the duties imposed in accordance with subsection (1), and to review the effectiveness of those duties after 3 years (including by commissioning an independent assessment).”.—

This new clause would require the Secretary of State to publish a draft Bill on mandatory environmental and human rights due diligence within six months of the Act passing.

Brought up, and read the First time.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

I beg to move, That the clause be read a Second time.

To some extent, this is part 2 of a discussion that we had a little earlier. The new clause was tabled by my hon. Friends the Members for Bristol East (Kerry McCarthy) and for Leeds North West (Alex Sobel), former Committee members who have now gone on to other, greater things—perhaps not greater, but different. I am delighted to move it on their behalf. Opposition Members give it our full support.

My hon. Friends were very far-sighted, in the sense that they tabled the new clause before the Government came up with their own proposals. However, the new clause goes further, which is why we believe it is worth pursuing. I will go back to why this matters. Greener UK tells us that about 28% of the UK’s overseas land footprint—nearly 6 million hectares—is in countries at high or very high risk of deforestation and which often have weak governance and poor labour standards. At the same time, about 1.6 billion people depend directly on forests to secure their livelihoods. The food and everyday products that we buy could be destroying habitats for endangered wildlife and impacting livelihoods overseas. This is a big issue, which I think we all agree on, on the basis not only of the discussion this morning but of those facts.

The new clause would create a duty on the Government to publish draft due diligence legislation within six months of this Bill receiving Royal Assent, consistent with our earlier discussion, covering all environmental and human rights risks and addressing the impacts associated with the activities of specified bodies, including within business, finance and public authorities. It is the human rights risks and finance issues that we particularly add to the earlier discussion. The new clause would require any goods placed on the UK market to have fully traceable and transparent supply chains and to not cause adverse environmental and human rights impacts, including deforestation, forest degradation and ecosystem conversion and degradation.

Since the new clause was first tabled, as the Minister mentioned earlier and as my hon. Friends have also referenced, there has been a consultation on whether the UK Government should introduce a new law designed to prevent forests and other important natural areas from being converted illegally to agricultural land. As the Minister reported, there is strong support for action, with 99% of respondents agreeing that there should be legislation to make forest risk commodities more sustainable. The Government were good to their word and have introduced new schedule 1 and the associated clauses, which we discussed and agreed to earlier. However, we think this new clause would go further. Its scope is wider, which means it would have a greater impact and would do more to tackle what we sadly see as our complicity in deforestation.

The evidence base is there. The Global Resource Initiative taskforce recommended back in March that:

“The government urgently introduces a mandatory due diligence obligation on companies that place commodities and derived products that contribute to deforestation”— whether that is legal or just illegal under local laws, which is an important distinction—

“on the UK market and to take action to ensure similar principles are applied to the finance industry.”

The financial industry can be supportive in those markets. That, again, goes further than new schedule 1.

We think that a mandatory due diligence framework would formalise and obligate responsible practices throughout the UK market-related supply chains and could ensure comprehensive accountability and help prevent deforestation and other global environmental damage. The Government are right to set their sights high. We had discussions earlier about how ambitious—or not—the legislation is. We think we should be world leaders; the problem is that we are not entirely convinced that this does enough.

Greener UK says of what we have already agreed in the Bill:

“This does not accord with the urgency needed to tackle deforestation and falls short of the government’s ambition for a world leading approach.”

That is the view of the major environmental organisations. They also think—and we reflect this point—that there should be more dialogue, both with themselves and others who understand how the processes emerge. They are also concerned that, because this was a late addition to the Bill that came in through a Government amendment, it would have been helpful to have produced more detailed explanatory notes as to how it should work. They have a range of detailed questions, which I will not trouble the Committee with this morning. However, it suggests to me that there is more work to be done and that our new clause would help with much of that.

We hope the Government will go further in future, but it is striking that, Greener UK draws a comparison between the due diligence system and the approach taken to the EU timber regulation, which we have brought across through secondary legislation. It thinks that our approach is weaker by comparison.

That feeds into my overall sense of what is happening with the Bill: sadly, the rhetoric is good but the delivery and actuality is weaker. We wish to make the Bill stronger. Again, this is an important point for us so we want to divide on it, but I want to hear why the Minister thinks we should not be strengthening in that kind of way.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I assure the hon. Gentleman that we are already one step ahead and, in fact, voted to include the world-leading legislation in the Environment Bill this very morning. We are making more progress than any other country. I understand his sentiments but, yet again, he is being negative about the enormous step we are taking.

Our amendments will help us protect the world’s most precious forests. They will allow us to set mandatory requirements on businesses that use agricultural commodities associated with deforestation. As we have said before, there are other regulations that deal with timber; our amendments will deal with other products where trees are cut down to grow crops such as palm oil, soya, rubber, beef and the associated leather, and cocoa. The hon. Gentleman will agree that those are crucial crops to be looking at as we proceed, and that that will make a genuinely big difference. We have heard the great example of what happened in Indonesia when timber was tackled. The same thing could happen with other crops in reducing the cutting down of forests. I have seen some of those on my travels.

Our framework is designed to work with Governments around the world, who are the custodians of the world’s precious forests, by requiring businesses to ensure that commodities they use have been produced on land that is legally occupied and used. I have pointed out previously how so many countries are not even adhering to their own legislation, so that is the crux of where we are placing our intentions. Our amendments will become part of the Bill now, allowing us to act quickly on this important issue, as opposed to within six months of Royal Assent, as in the new clause.

The hon. Member for Cambridge mentioned the consultation, which had a fantastic response. It highlighted that we need to act urgently, which is why we are taking action. That is in line with the recommendation of the Global Resource Initiative to introduce due diligence legislation. That is what we are doing urgently, as was called for. We are listening to feedback and I reassure the Committee that we intend to move swiftly to take forward this legislation, laying the necessary secondary legislation shortly after COP26. We hope that our setting this path will be a big talking point at COP26, potentially encouraging others to follow.

The hon. Gentleman made a sound point on human rights. We agree that, in some circumstances, there is a relationship between commodity production and human rights. It does not necessarily follow that the best solution is to tackle those two issues at the same time. Tackling human rights abuses requires an approach that is tailored for that purpose, rather than through the narrow lens of the subset of commodities, examples of which I have just listed, chosen for their impact on forests.

The Government support the United Nations guiding principles on business and human rights—an internationally agreed framework for addressing human rights risks in all kinds of business activities. Those principles encourage businesses to adopt due diligence approaches and to address any negative impacts, where appropriate. The UK was the first state to produce a national action plan for the guiding principles, and we have already announced measures to strengthen the approach of the UK’s Modern Slavery Act 2015, as part of that plan. I am sure the hon. Gentleman is fully aware of that really important step.

The hon. Member for Cambridge touched briefly on finances. I want to clarify that the due diligence legislation is designed for a specific purpose, which is to ensure that companies in the UK are not using products that have come from illegally used or occupied land. We anticipate that information included in the reports published by the regulator will provide data, which others, including the finance sector, can use, thus helping inform investors of the extent to which the companies they invest in are involved in illegal deforestation. That is the way in to what the hon. Gentleman was addressing. I hope that is helpful. I will wind up and ask the hon. Gentleman, in the light of my assurances, to withdraw his proposed new clause.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

Frankly, I do not think that the Government are one step ahead, given that our proposal was tabled long in advance and is far more extensive and far reaching. I heard what the Minister said, and I know she is very proud of what is being done. We just need to go further.

I gently point out that I am not the one saying that what is being done is not achieving what was hoped for. It is many environmental organisations, some of which the Minister cited earlier. I suspect she will find that the debate will continue. No one is saying the matter is easy; it is complicated and difficult, and this has to be done in some cases through international negotiation. We understand and appreciate that, but we believe it is better to be more optimistic and ambitious.

Again, I heard what the Minister said on the linkage to human rights, but the evidence is pretty clear that environmental degradation and disrespect for human rights go hand in hand. That is why we believe the new clause would give a sensible way forward. On that basis, Mr Gray, we will divide the Committee.

Question put, That the clause be read a Second time.

Division number 50 Environment Bill — New Clause 5 - Environmental and human rights due diligence: duty to publish draft legislation

Aye: 5 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 5, Noes 9.

Question accordingly negatived.