Action Card Briefing - May 2006
Company Law Reform Bill
- Why do we need a new law?
Trade generates enormous
wealth with companies being powerful players. They are responsible for
two-thirds of global trade and therefore have enormous influence over
millions of the world's poorest people. They can provide jobs in areas
which currently have little economic hope. But companies are currently
under no legal obligation to respect people or the environment in their
activities overseas. The pressure to provide cheaper, faster goods means
poor people can be exploited and environmental protection ignored. We
need some form of basic regulation to encourage the good that companies
can do and guard against the harm.
We believe that the
Government should use Company Law to balance corporate rights with
corporate responsibility. Under current company law the primary legal
duty of company directors is to maximise profits for shareholders. There
is no general legal requirement on companies or their directors to
consider the impact of their business activities on the environment,
people, or society. Company law for the 21st century needs to create a
framework which encourages companies to be both profitable, as well as
ethical and sustainable.
We would like to see these
amendments made to the Bill that is going through the House of Lords
now: that
-
Companies are legally
required to report on their social and environmental impacts.
-
Directors are legally
obliged to minimise any damage their company does to local
communities and the environment.
-
People overseas who are
harmed by the activities of a UK company are able to take action
against them in a UK court.
Action to take
Write to Rt Hon Alun
Michael MP, Department of Trade and Industry, 1 Victoria Street, London
SW1H 0ET, asking him to back the amendments.
www.corporate-responsibility.org
www.tjm.org.uk
www.christianaid.org.uk/campaign/letters
or order postcards to send
your MP, by calling 08700 787 788.
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