Seven prominent FTSE 100 companies and the lord chief justice today launched a new business network which aims to address rule of law failures in countries where multinationals trade.
BP, BT, Diageo, HSBC, Shell, Unilever and Vodafone have pledged their support for the new initiative of the Bingham Centre for the Rule of Law, part of The British Institute of International & Comparative Law. The network will be chaired by Graham Vinter, formerly GC of BG Group, who is now at Covington & Burling.
Projects already under consideration include: proportionality of regulatory penalties and forms of redress; Brexit implications for trade and investment; tensions between national and international human rights standards; public decision making – best practice and capacity building; rule of law training; and resources for boards and senior managers.
In a recent survey conducted by the Economist Intelligence Unit for the centre, most executives surveyed said they had in the past five years experienced several failures of the rule of law in countries in which they had invested. These included expropriation by governments of key assets, absence of protection for intellectual property rights, retrospective taxation and unenforceability of promises have all resulted in financial loss for multinationals and damage to local economies.
Welcoming the initiative, LCJ Lord Thomas of Cwmgiedd said: 'The rule of law provides the foundation for peace, political stability, human dignity and economic sustainability. The business community needs the firm and consistent application of the rule of law, thus contributing to economic development.
'Business can also play a key part in helping to build and sustain the rule of law in those countries where it has a presence, helping to make the world a safer and more equitable place.’
Vinter said: 'As multinational companies develop their supply chains and markets both at home and around the world, they are encountering a complex set of legal risks including contractual enforceability, regulatory predictability and bribery and corruption in all its forms, none of which can be addressed without the rule of law.
'We hope that other companies will support this important initiative, enabling us to have an even greater impact on the operation of cross-border trade and investment and the stability of commercial arrangements.’