Despite disappointment among activists, Government policy highlights increasing pressure on businesses

On 4 September 2013, the UK Government became the first to release a national action plan to implement the UN Guiding Principles on Business and Human Rights.

The plan follows the European Commission's appeal, as part of its policy on corporate social responsibility, for EU member states to develop national action plans to implement the Guiding Principles by the end of 2013. 

The principles were formulated by Professor John Ruggie, the former Special Representative of the UN Secretary General for Business and Human Rights, and recognise, through a "protect, respect and remedy" framework, that: states have a legal duty to protect against human rights abuses; businesses have a responsibility to comply with applicable laws and respect human rights; and effective remedies are needed for victims of human rights abuses. 

The creation of national action plans extends beyond the EU and can be seen as part of a broader global movement to promote respect for human rights, which has been gathering pace since the UN Human Rights Council endorsed the Guiding Principles in 2011.  

In its plan, the UK Government does not credit the EC's appeal as its inspiration, but refers to companies' need for certainty about the Government's expectations on human rights and support in meeting those expectations, and describes its plan as a response to that need.

Despite frustration among some human rights activists about the plan's reach, it does at least carry a clear message that the Government intends to promote the Guiding Principles, both within the UK and internationally, and to encourage UK businesses to meet their responsibility to respect human rights. It outlines the principal steps the Government has taken and intends to take to comply with its legal duty to protect human rights.

In addition, it sets out a list of guidelines for businesses to follow. These are: comply with all applicable laws; respect internationally recognised human rights; carry out human rights due diligence; consult potentially affected people; influence compliance with the Guiding Principles by their supply chains; adopt effective grievance mechanisms; be transparent about human rights policies, activities and impacts; and report publicly on human rights issues. 

To that extent there seems to be little doubt about the Government's commitment to leadership on business and human rights and implementation of the Guiding Principles. Beyond this, the plan does not forecast wide-reaching legislative or regulatory reform. Indeed, the sense is that the Government does not anticipate radical change in policy, but intends to motivate and incentivise UK businesses to respect human rights, and seek the co-operation of other countries and institutions to promote good business practices globally. 

Consistent with this approach, the plan emphasises that respecting human rights "brings business benefits", including a better brand perception in the minds of ethical consumers and investors and a reduced risk of litigation.  

That does not mean that the Government will not legislate at all. Most recently, the amendments to the Companies Act 2006, which require directors of UK-listed companies to include human rights issues in annual strategic reports from 1 October 2013, demonstrate Government appetite for action. But for now the UK seems content to encourage and incentivise businesses rather than increase regulation, suggesting an intention to create the 'smart mix' of mandatory and voluntary measures advocated by the Guiding Principles. 

Human rights campaigners may, however, be disappointed with aspects of the plan. For example, while it seems clear enough that the Government's focus is not restricted to domestic human rights abuses, the plan does not confirm to what extent UK companies will be held to account for abuses committed outside the UK.  

Moreover, the emphasis in the section on access to remedies is heavily focused on businesses' own grievance processes, rather than any improvement in judicial options, notwithstanding the stated intention to keep the UK provision of remedy under review. The reference to the UK's National Contact Point (established in accordance with the OECD Guidelines for Multinational Enterprises) will be of little comfort to those who argue it is ineffective. And the possibility of the Government imposing sanctions on UK companies for human rights abuses is hardly touched upon outside the procurement process.

The accountability of businesses for human rights abuses committed abroad continues to be the focus of actions in the English courts (and elsewhere). Recalling the commentary to Guiding Principle 23, the plan calls on businesses to treat respecting human rights as a "legal compliance issue", at least where there is a risk of contributing to gross human rights abuses. The potential for legal claims against companies and individuals is given as a reason for taking this approach, and, particularly for multinational businesses operating in high-risk jurisdictions and industries, this remains a major legal risk.

Overall, the thrust of the plan seems to be to promote, rather than enforce, compliance with the Guiding Principles. Even so, the message for UK businesses seems clear: they must seek to comply with the Guiding Principles and be able to "know and show" that they can do this. 

It is also worth remembering that the plan is the first of its kind and the start of a more coherent approach by the Government to addressing human rights issues in a business context. The Government has said it will report annually on progress and update the plan by the end of 2015.  

By the end of this year, we should see the action plans of other states, which should provide a useful comparison with UK policy. With greater international momentum, we could see more robust policy in this area, but, even without this, the plan echoes increasing pressure on companies worldwide to operate responsibly, and is an important reminder to UK businesses of the need to address human rights issues.

Jehan-Philippe Wood is a partner and Stuart Neely an associate at Norton Rose Fulbright, who specialise in disputes and investigations.