acthub — UK legislation, beautifully read

A bill to Place a duty on commercial organisations and public authorities to prevent human rights and environmental harms, including an obligation to conduct human rights and environmental due diligence, in their own operations, subsidiaries, and value chains in line with international standards; to make provision for civil liability, access to justice for victims, an enforcement body, penalties, and a criminal offence for failures to comply with the duty; and for connected purposes.

Be it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

1 Definitions¶

For the purposes of this Act, the following definitions apply—

(a) a “commercial organisation” is—

(i) a body which is incorporated under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere),

(ii) any other body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom,

(iii) a partnership which is formed under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere), or

(iv) any other partnership (wherever formed) which carries on a business, or part of a business, in any part of the United Kingdom,

and, for the purposes of this section, a trade or profession is a business;

(b) “public authority” means a person that is—

(i) wholly or mainly funded out of public funds, or

(ii) subject to public authority oversight through the management or control of—

(A) one or more public authorities, or

(B) a board more than half of the members of which are appointed by one or more public authorities,

and does not operate on a commercial basis;

(c) a “value chain” includes all activities undertaken by any entity during the lifecycle of a good or service upstream and downstream of the commercial organisation, including but not limited to material sourcing, processing, production, manufacturing, development, sale, warehousing, logistics, marketing, finance, use and end of life disposal;

(d) “procurement” means the award, entry into and management of a public or private contract;

(e) “human rights harms” are any adverse impacts on a person’s or a group’s ability to enjoy any of the internationally recognised individual or collective human rights including but not limited to those recognised in the United Nations International Bill of Human Rights and the United Nations resolution on the Right to a Clean, Healthy and Sustainable Environment, and all internationally or locally recognised labour rights including but not limited to those recognised in the International Labour Oganization Declaration on Fundamental Principles and Rights at Work, whichever affords the greater protection for workers;

(f) “environmental harms” are any adverse impacts, including harm resulting from cumulative impacts, on the environment or ecosystems including, but not limited to—

(i) climate change;

(ii) biodiversity loss;

(iii) degradation of land, marine and freshwater ecosystems;

(iv) deforestation;

(v) air, water and soil pollution;

(vi) mismanagement of waste, including hazardous substances;

and these impacts shall be interpreted on the basis of the best available science and in line with relevant internationally recognised environmental principles and conventions, including the Paris Agreement and the target of limiting global warming to 1.5 degrees Celsius with no or limited overshoot, and locally applicable environmental laws, regulations and administrative practices;

(g) “rightsholders” means individuals, groups, or communities that have rights or legitimate interests that are or may be adversely affected by human rights and environmental harm or the credible representatives of such individuals or groups, including workers, independent trade unions, and those representing and defending human rights and the environment;

(h) “informed, meaningful and safe engagement” means a dynamic and continuous engagement process with rightsholders that involves interactive and responsive communication, timely provision of accessible, credible and accurate information, implementation of measures to address barriers to participation, especially for vulnerable or historically marginalised rightsholders, along with measures to ensure the safety of rightsholders and prevent any form of retaliation or reprisals.

2 Duty to prevent human rights and environmental harms¶

(1) Commercial organisations and public authorities have a duty to prevent human rights and environmental harms, as defined in section 1, so far as is reasonably practicable and having regard to relevant international agreements, standards and goals and the best available science, with respect to their own operations, products and services, those of their subsidiaries, and throughout their value chains.

(2) Without prejudice to the generality of the duty under the preceding subsection, the matters to which that duty extends include in particular the obligation to conduct iterative human rights and environmental due diligence.

3 Human rights and environmental due diligence¶

(1) Reasonable human rights and environmental due diligence includes, as a minimum—

(a) informed, meaningful and safe engagement with rightsholders throughout the entire process as outlined under subsections (2) and (3);

(b) integrating gender-responsive human rights and environmental due diligence procedures into policies and management systems;

(c) identifying, assessing and addressing actual or potential human rights and environmental harms as well as vulnerability to the impacts of climate change, through prevention, mitigation and remediation, taking into account accurate baseline environmental conditions;

(d) establishing or participating in and maintaining an effective grievance mechanism in line with the effectiveness criteria set out in United Nations Guiding Principle 31;

(e) tracking, verifying, monitoring and assessing the effectiveness of measures taken to reduce or mitigate harms and their outcomes;

(f) reviewing and improving measures based on the outcomes;

(g) communicating with stakeholders and reporting publicly on findings.

(2) Human rights and environmental due diligence must include informed, meaningful and safe engagement with potentially affected rightsholders, particularly workers, independent trade unions, and those representing and defending human rights and the environment, throughout the entire process and with particular regard to women, and any vulnerable or historically marginalised group.

(3) Where there are existing representative mechanisms or rules and processes for them, including independent or recognised trade unions and the right to free, prior and informed consent, any rightsholder engagement under subsection (2) must not undermine them but ensure compliance and co-operation through safe engagement with protections against any form of retaliation or reprisals.

(4) Whether human rights and environmental due diligence is “reasonable” is determined by, among other things—

(a) the organisation or public authority’s size, sector, operational context, ownership, structure, and country or region of operation, and the nature of the human rights or environmental harms in question;

(b) the severity of the human rights or environmental harm, as determined by the scale, scope and irremediability of the harm taking into account the best available science, including the cumulative impacts of emissions;

(c) the extent to which the commercial organisation or public authority has leverage and has exercised leverage over third parties in the value chain, and made attempts to increase leverage for the purposes of this Act;

(d) the commercial organisation or public authority’s prioritisation of human rights and environmental risks within its due diligence process and the reasonableness of such prioritisation with reference to risks to rightsholders and the environment, taking gendered impacts into account;

(e) the extent to which due diligence was heightened and proportionate to the specific circumstances such as conflict zones and other high risk areas, and the impacts on any vulnerable individuals or groups, including women, children and Indigenous Peoples, and the vulnerability of communities to the impacts of climate change;

(f) the extent to which due diligence was exercised as an ongoing process with continuous monitoring and improvement;

(g) the extent to which the measures taken by the commercial organisation or public authority have substantially mitigated or prevented human rights or environmental harm within a reasonable time, taking into account the time frames laid down in relation to international climate goals;

(h) the extent to which the commercial organisation or public authority has sought to minimise its emissions and its impact on carbon sinks both from its own activities and those in its value chains, so as to reduce to a minimum its contribution to climate change and damage to biodiversity;

(i) the extent to which a commercial organisation or public authority has examined their purchasing practices, modified them where necessary to prevent harm, and provided targeted support to Small and Medium-sized Enterprises within their value chain;

(j) the extent to which the commercial organisation or public authority has remedied any harm in agreement with affected rightsholders.

(5) Audit reports, certification schemes, and membership in industry or multi-stakeholder initiatives for dialogue and learning are not sufficient on their own to fulfil the obligation to conduct due diligence.

4 Responsible disengagement¶

(1) Commercial organisations and public authorities must suspend or terminate business relationships as part of their ongoing human rights and environmental due diligence—

(a) in contexts where the prospect of change by using or increasing leverage is possible, only as a last resort, after attempts to mitigate harm have not succeeded or mitigation is not feasible, and

(b) rapidly in contexts where the harm is severe, including where gross and systemic harm is imposed or enforced by State policy and the commercial organisation lacks the ability to use or increase leverage to prevent, mitigate, or remedy the harm.

(2) The decision to suspend or terminate a business relationship must be based on reasonable human rights and environmental due diligence as outlined in section 3, taking into account—

(a) any human rights or environmental harms that might arise from the suspension or termination of the relationship, and how such harms might be prevented or mitigated, and

(b) the severity of harm that has occurred or may continue to occur.

(3) Commercial organisations or public authorities must have transparent policies and procedures governing responsible disengagement.

(4) There must be informed, meaningful and safe engagement with rightsholders at every stage of the disengagement process.

(5) A commercial organisation or public authority is not required to disengage where disengagement would cause greater harm to rightsholders than continuing the business relationship, provided that the organisation can demonstrate ongoing efforts to mitigate such harm.

(6) A commercial organisation or public authority must adopt and implement a transparent exit plan which—

(a) provides for the prevention and mitigation of harm arising from disengagement, and

(b) provides for the remediation of any harm the organisation has caused or contributed to.

(7) Disengagement does not absolve a commercial organisation of any obligation to remediate harm it has caused or contributed to.

5 Reporting and transparency requirements¶

(1) Commercial organisations with an annual worldwide turnover of or exceeding £36 million must, within six months after the end of each financial year, make a public submission to the searchable registry referred to in section 7 (2) with the following elements—

(a) a report on the fulfilment of its due diligence obligations;

(b) full accessible and searchable disclosure of its value chain, including geolocation, enabling end-to-end traceability of goods and services;

(d) disclosure of grievances with regard to human rights and environmental harms and status of remedy.

(2) The report under subsection (1)(a) with reference to specific operations and value chain actors, must include—

(a) information on human rights and environmental due diligence pursuant to section 3, including actual and potential impact identification, preventive and remedial measures taken, outcomes achieved, and how such measures will be continuously improved;

(b) a description of rightsholder engagement processes and how this has shaped each element of due diligence under section 3 and evidence of consent where applicable;

(d) any remediation achieved unless relevant rightsholders do not consent to the sharing of information;

(e) reporting on Scope 1, 2 and 3 greenhouse gas emissions, including methodologies, assumptions and data sources used;

(f) any other information, such as an assessment of purchasing practices, required to evaluate the adequacy of the commercial organisation’s response to actual or potential human rights and environmental harm in line with the UN Guiding Principles on Business and Human Rights.

(3) The report must be independently verified by relevant rightsholders, including workers, trade unions, Indigenous Peoples and those representing human rights and the environment, in accordance with standards prescribed by the enforcement body.

(4) Commercial organisations subject to subsection (1) shall be subject to notices and penalties under section 10 if they fail to develop, implement, publish and submit to the registry website any information required under subsection (1) to (3).

(5) Public authorities shall make a submission with the registry in line with section 6 (6).

(6) Upon written request, any person has a right to accessible, credible and accurate information from a qualifying commercial organisation under subsection (1) or a public authority under subsection (5) within one month, on how it prevents actual or potential human rights and environmental harm relating to a specific product, service, operation or value chain actor pursuant to section 2, including—

(a) human rights baseline and impact assessments;

(b) environmental baseline and impact assessments.

(7) A request for information may be denied if—

(a) the request does not provide adequate information to identify what the request concerns;

(b) the request is clearly vexatious;

(8) A commercial organisation commits an offence if it provides materially misleading or false information under subsections (1) or (6).

6 Public authority procurement duties¶

(1) A public authority must not permit any supplier to participate in a procurement of a public contract unless the supplier establishes that it, or another related entity on its behalf, has complied with section 3 of this Act.

(2) A public authority must not permit any supplier to participate in a procurement of a public contract if that supplier, or a related entity, has been excluded from any procurement of a public contract for failure to comply with section 3 of this Act within two years prior to the commencement of the procurement.

(3) In each competitive tendering procedure, a public authority must set award criteria which enable it to satisfy itself that—

(a) the products or services to be provided under the contract will not depend upon or result in human rights or environmental harms, and

(b) the supplier will remedy any such harms which do result from the products or services provided under the contract.

(4) Where a public authority is assessing whether or not the products or services to be provided under the contract will depend upon or result in human rights or environmental harms—

(a) the public authority shall verify the claims made by a supplier in its tender, if necessary by requiring the provision of further information by the supplier,

(b) the public authority may consult the enforcement body which shall be required, if so requested, to provide information to the public authority regarding the supplier’s compliance with sections 2 (duty to prevent human rights and environmental harms) and 3 (human rights and environmental due diligence) of this Act, and

(5) In each procurement, a public authority must—

(a) establish key performance indicators in respect of the contract which require the contractor to comply with obligations periodically to report to the authority—

(i) its compliance with section 3 of this Act insofar as relevant to the contract,

(ii) whether any human rights or environmental harms have resulted from the performance of the contract, and

(iii) if such harms have resulted from the performance of the contract, what steps the supplier has taken to remedy such harms;

(b) include in the contract sanctions including a right of termination by the authority in the event of human rights or environmental harms resulting from the supplier’s performance of the contract in accordance with responsible disengagement as outlined in section 4.

(6) A public authority shall publish, in accordance with guidance issued under subsection (10) below, information regarding the discharge of its duties under subsections (1) to (5), to include its management of contracts pursuant to subsection (5).

(7) In determining any challenge to the decision of a public authority in discharge of its duties under subsections (1) to (4), the High Court shall apply the principles for determining proceedings on judicial review.

(8) No duty of confidence shall attach to any information provided by a supplier to an authority for consideration by the authority pursuant to subsections (1) to (5) above.

(9) Any person with sufficient interest, whether or not a supplier, may challenge by judicial review a public authority’s compliance with its duties under subsections (1) to (5) above.

(10) The Secretary of State may issue guidance to public authorities on the performance of their duties under this section, to which public authorities must have regard.

(11) In this section, “public contract” has the same meaning as in section 3 of the Procurement Act 2023.

(12) In this section, the commencement of a procurement shall be the date of publication of a tender notice pursuant to section 21 of the Procurement Act 2023, the commencement of the selection process for a contract pursuant to a framework agreement or the date on which any supplier is approached for the purposes of making a direct award pursuant to section 41 of the Procurement Act 2023.

7 Enforcement body¶

(1) The Secretary of State must, within six months of the day on which this Act is passed, appoint an independent enforcement body with the functions and powers to enforce compliance with this Act.

(2) The enforcement body must have the following functions—

(a) to provide guidance on due diligence approaches and best practices;

(b) to conduct market investigations on reasonable human rights and environmental due diligence in different industries and value chains, and to recommend policies to the Secretary of State;

(d) to investigate and take enforcement actions for breaches of this Act after receiving complaints from any interested person through an accessible mechanism provided by the enforcement body;

(e) to support public authorities in complying with this Act through guidance, training, knowledge sharing and enabling collaboration between authorities;

(f) to provide for a publicly accessible registry listing all organisations subject to this Act, any enforcement decisions taken against them, and any submission by a commercial organisation or public authority subject to section 5.

(3) For the purpose of investigating and enforcing this Act, the enforcement body has the following powers—

(a) to investigate the commercial organisation or public authority using, among others, the following investigative powers—

(i) at any reasonable time, to enter and inspect the organisations’ premises, offices and commercial buildings;

(ii) to require the production of, inspect, and take copies of any documents or records from which it is possible to deduce whether this Act was breached;

(iii) to require any person whom the body has reasonable cause to believe to be able to give any information relevant to any investigation to answer questions and to sign a declaration of truthfulness;

(b) to take the decision that this Act was breached and issue penalties and notices as specified in section 10;

(4) The enforcement body must ensure it has accessible mechanisms in place to receive substantiated concerns about breaches of this Act and ensure the protection of any complainant from any form of retaliation or reprisals.

(5) Where complainants are subject to existing or imminent harm, complainants and their representatives must be involved, informed of and able to make submissions at each procedural step of the investigation and enforcement decision.

(6) Any decision of the enforcement body to take, or not to take, action with respect to an investigation or complaint is not determinative of civil liability under section 8, nor does it suspend, delay, or substitute the ability to institute civil liability action under section 8.

(7) The Secretary of State must establish an Advisory Board to the enforcement body consisting of no fewer than 12 members with an equal number of appointees representing—

(a) people with lived experience and survivors;

(b) independent trade unions;

(c) independent experts with relevant knowledge or expertise, including on environmental harm, community impacts and marginalisation of rightsholders;

(d) the interests of employers.

8 Civil liability¶

(1) A commercial organisation is liable for damages if it fails to prevent human rights or environmental harms in its own operations, products, and services, those of its subsidiaries, and throughout its value chains.

(2) It is a defence for a commercial organisation to prove that it took all reasonable steps to prevent the harm from occurring including but not limited to conducting human rights and environmental due diligence as is reasonable in all the circumstances.

(3) Commercial organisations can be held jointly and severally liable for the same harm.

(4) An affected person may make a follow-on damages claim for an infringement decision by the enforcement body under section 7 (3), and this does not affect the right to bring any other proceedings in respect of the claim.

(5) For the purpose of this Act, courts in England and Wales, Scotland or Northern Ireland have jurisdiction over all commercial organisations that are alleged to have breached their duties under section 2, regardless of the location of the harm or part thereof.

(6) Trade unions, civil society organisations, or other relevant actors acting in the public interest can bring actions before a court on behalf of a victim or a group of victims of adverse impacts, and these entities have the rights and obligations of a claimant party in the proceedings, without prejudice to existing law.

(7) The relevant court may grant, in addition to orders for the payment of compensatory damages, other orders to remedy the harm including—

(a) preventative relief such as injunctive orders and orders to cease or desist;

(b) remedial orders, such as cleaning up or restitutory orders;

(d) interlocutory orders, including while the civil action or related regulatory oversight procedures are ongoing;

(e) other orders as necessary to effectively remedy the harm in line with international law, including rehabilitation, satisfaction, guarantees of non-repetition and other remedies.

(8) The limitation period to bring actions under this Act is 12 years from the date on which the infringement has ceased and the claimant knows—

(a) of the behaviour and the fact that it constitutes an infringement,

(b) of the fact that the infringement caused harm to them, and

(9) A court may not make an award of costs against a person bringing proceedings under this section except to the extent that, having regard to all the circumstances including the conduct of that person in relation to the proceedings, it is just and reasonable to do so.

(10) Nothing in this section shall be deemed to limit the power of a court to dismiss a claim for being frivolous, vexatious or otherwise an abuse of process.

9 Liability of directors and persons responsible¶

(1) Persons on the board of directors (or its equivalent management body) of a commercial organisation are collectively responsible for the commercial organisation’s compliance with this Act.

(2) A person is responsible for the human rights and environmental due diligence of a commercial organisation if the person is—

(a) a director (or equivalent) of the organisation if it is a body corporate other than a limited liability partnership;

(b) a member of the organisation if it is a limited liability partnership;

(3) A person who is responsible for human rights and environmental due diligence commits an offence if—

(a) the commercial organisation receives two enforcement decisions against it for having failed to prevent human rights and environmental harm within 5 years, or

(b) significant information in the human rights and environmental due diligence reporting under section 5 is false or misleading in a material particular, and the person either knows it is or is reckless as to whether it is.

(4) It is a defence for a person charged with an offence under subsection (3) to prove—

(a) they took all reasonable steps to ensure that the relevant provisions were complied with, and

(b) in the case of committing the reporting offence under subsection (3)(b), they informed the regulatory authority as soon as practicable after becoming aware that the report contained information that is false or incomplete in a material particular.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both;

(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months, to a fine, or both;

(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory maximum, or both;

(d) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months, to a fine not exceeding the statutory maximum, or both.

(6) A person guilty of an offence under this section shall also be liable to be disqualified as a director under the Company Directors Disqualification Act 1986.

10 Penalties and notices¶

(1) Where a commercial organisation is found to have breached its obligations under this Act, the enforcement body may issue the following penalties or notices as it sees fit—

(a) a fine amounting up to 10% of the organisation’s global turnover;

(b) a compliance notice requiring steps be taken within a stated period to ensure that an offence or breach does not continue or happen again;

(c) a restoration notice requiring specified steps within a stated period to secure restitution of the early position, as far as this is possible;

(d) a stop notice which will prevent a person from carrying on an activity until it is undertaken properly;

(e) exclusion from participation in procedures for the award of supply, works, or service contracts by public authorities for a period of up to five years from the date of the enforcement body’s decision of breach of the duty to prevent;

(f) an appropriate order of costs to cover the investigation and adjudication.

(2) A commercial organisation which fails to comply with a penalty or notice under subsection (1) commits a criminal offence.

(3) Public authorities found to have breached their obligations this Act may receive an appropriate fine or order for remediation, as specified in regulations made by the Secretary of State.

(4) The enforcement body established under section 7 must set up a remedy fund to support rightsholder-led monitoring and remedy processes.

(5) No less than 80% of the fines collected under subsection (1)(a) shall contribute to a remedy fund set up by the enforcement body under subsection (4).

11 Criminal offence: human rights harms in the conduct of business¶

(1) A commercial organisation is guilty of an offence under this section if a person associated with the organisation commits an act within or outside the United Kingdom—

(a) to obtain or retain business for the organisation, or

(b) to obtain or retain an advantage in the conduct of business for the organisation,

and that act would, if committed in England and Wales, constitute one of the offences listed in subsection (2).

(2) Those offences are—

(a) murder, kidnap, or false imprisonment under English common law,

(b) an offence under section 1 of the Sexual Offences Act 2003 (rape),

(c) an offence under sections 1 or 2 of the Modern Slavery Act 2015 (slavery, servitude and forced or compulsory labour; human trafficking),

(d) an offence under section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007,

(e) an offence under section 18, 23, 24, 28 or 29 of the Offences Against the Person Act 1861 (grievous bodily harm or wounding with intent; poison; explosions),

(f) an offence under section 1 (2) of the Criminal Damage Act 1971 (endangering life by damaging property), or

(g) genocide, crimes against humanity or war crimes under section 51 of the International Criminal Court Act 2001.

(3) A commercial organisation is guilty of the offence in subsection (1) if the person’s act was carried out—

(a) to obtain or retain business for the organisation, or

(b) to obtain or retain an advantage in the conduct of business for the organisation

and was capable of encouraging or assisting a third party to do an act which would, if committed in England and Wales, constitute one of the offences listed in subsection (2).

(4) It is a defence for a commercial organisation to prove that at the time of the person’s act—

(a) it was not reasonable in all the circumstances to expect the commercial organisation to have any due diligence procedures in place;

(b) the organisation took all reasonable steps to prevent the offences under subsection (2) from occurring including but not limited to conducting human rights and environmental due diligence in all the circumstances.

(5) For the purposes of this section an act includes an omission.

(6) The capacity in which a person performs services for or on behalf of a commercial organisation is irrelevant for the purposes of this section.

(7) A person may perform such services in any capacity, including as an employee, agent, or subsidiary.

(8) Whether a person performs services for or on behalf of a commercial organisation is to be determined by reference to all the relevant circumstances, and not solely by reference to the nature of the relationship between them.

(9) An employee of a commercial organisation is presumed, unless the contrary is shown, to perform services for or on behalf of that organisation.

12 Regulations¶

(1) Regulations under this Act are to be made by statutory instrument.

(2) A statutory instrument containing regulations under this Act may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(3) The Secretary of State must lay before Parliament statutory instruments containing regulations under this Act within six months of the day on which this Act is passed.

13 Review¶

(1) The Secretary of State must review the effectiveness of this Act, including the effectiveness of the enforcement body in preventing and remediating human rights and environmental harm, every three years and lay a report of the findings of the review before both Houses of Parliament.

(2) This is without prejudice to any existing rules and processes for post-legislative scrutiny including in Parliament.

14 Extent, commencement, and short title¶

(1) This Act extends to England and Wales, Scotland and Northern Ireland.

(2) This Act comes into force on the day on which it is passed.

(3) This Act may be cited as the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Act 2026.