03 November 2005

On the eve of the publication of the Company Law Reform Bill – that will see the biggest changes to UK company law in decades – international development agency ActionAid is calling for the inclusion of legally binding duties on company directors to improve the social and environmental performance of their overseas subsidiaries.

ActionAid says that UK executives must be held responsible for the impact that operations in developing countries have on poor communities and vulnerable environments.

ActionAid policy analyst Julian Oram said:

"Under the bill as it stands, any company’s policy that harms poor people or violates human rights in the developing world can be readily justified so long as it creates benefits for shareholders. It is appalling that the government allows UK companies to behave to one set of standards in Britain, but to another overseas. New legal obligations are needed to ensure that directors take action to prevent exploitation of the poor and vulnerable."