Right Corporate Wrongs
Company Law Reform Bill - An update for supporters 
(Summer 2006)

Overview

The Company Law Reform Bill is still passing through Parliament, and will not become law until November 2006. Since March this year, the Trade Justice Movement and Corporate Responsibility (CORE) Coalition have been campaigning for stronger laws to make UK companies accountable for the impact of their activities in the UK and overseas. As MPs have now taken a break from Parliament for the summer, this update tells you what has happened so far, where we have got to and what next for the campaign.

What have we been demanding? 
The Bill is the biggest shake up of company law for 150 years and an unprecedented opportunity for us to make laws that stop big business profiting at the expense of people and the environment. We want to see the Company Law Reform Bill amended so 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

What have we achieved?

Widespread support for our campaign
Thanks to your emails, letters, and visits to your MP, the campaign now has widespread support in Parliament. This is a massive achievement and a testament to the power of campaigning by people like you. Over 120 organisations with 9 million members support the campaign. 

• Parliamentary Petition: 225 MPs (over one-third of all MPs) have now signed Early Day Motion 697 - the Parliamentary petition tabled by Sarah McCarthy-Fry MP supporting our proposed amendments to the Bill.

• Debates: Our concerns about the social and environmental provisions dominated the main introductory debate for the Bill in the House of Commons in June. 

• Postcard campaign: MPs have told us that this is one of the biggest postcard campaigns they have ever come across.

"I've had more letters from constituents about trade justice and the Company Law Reform Bill than any other issue since I became an MP. I have written to the Minister about their concerns as a result."
Ed Balls MP, Economic Secretary to the Treasury 

Real improvements to the Bill

What has happened so far?
We will get to the part where MPs vote on our proposed amendments to the Bill in October, which is where we are likely to see the most progress. This is why we need to do a final campaigning push in September and into early October as MPs go back to Parliament after their summer break. However, your campaigning and lobbying has already helped to achieve some important improvements, including:

1. Stronger reporting requirements: Thanks to public pressure and campaigning, the Government has already strengthened the reporting requirements so that the 1,300 companies quoted on the UK stock market will have to report on social and community issues, the impact of the company's business on the environment, and the company's policies in relation to these issues and the effectiveness of those policies.

2. Link between reporting and directors' duties: The Government has also put in place a link between the reporting requirements and the directors' duties in the Bill, making it clearer that the reports must show how directors are performing in their duties, including those on environmental and social issues.

3. Strengthening of directors duties: While there is still a long way to go on directors' duties, the Government has taken out some wording which weakened this section of the Bill; has introduced a new section that recognises some companies can be run for purposes other than to make profits; and has committed to publishing advice on how directors' should interpret their duties.

What next?

MPs have now gone back to their constituencies for the summer and when they come back to Parliament in October the Bill will receive its final readings in the House of Commons and our proposed amendments to the Bill will finally be voted on.

This will be the critical time for our campaign, and the part where your MP will have the opportunity to follow-through on the commitments they have made and vote to strengthen the rules on UK companies to make them more accountable for their impacts. Some improvements have been made already, but we believe we can still achieve more with your help.

It is really important that MPs do not forget about our campaign over the summer, so we need to have one last big push between early September and mid-October to persuade them to vote in support of our proposed amendments in October.

What materials will be available?

From the start of September we will have a new email action for you to take and a new lobbying tool-kit. There will be materials for people who have not yet have the chance to contact their MP about the Bill, and much more tailored help and information for the many of you who have already worked hard to persuade your MP to support the campaign and want to take it to the next level. Further information will be available here shortly. 

Your campaigning over the last few months has already shown how real improvements can be achieved to this important area of law, and now we need to pull out all the stops and have one last push to help make UK business truly fit for the 21st century. We hope that you will continue to make a difference with us…..