FTSE 100 companies invest in the rule of law
Businesses can help make the world a safer and more equitable place, says Lord Chief Justice
FTSE 100 leaders have pledged their support for the Bingham Centre for the Rule of Law’s new Business Network, launched today with the aim of identifying rule of law issues which have relevance to the business community.
The network, chaired by Graham Vinter, formerly of BG Group, is made up of founding members BP, BT, Diageo, HSBC, Shell, Unilever, and Vodafone. The network will support the think tank’s global initiatives on the rule of law while identifying and addressing specific challenges in the countries where they operate.
Projects 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.
‘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,’ said Vinter.
‘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.’
In a 2015 survey conducted by the Economist Intelligence Unit, the majority of 301 senior decision makers at Forbes 2000 companies had experienced several failures of the rule of law over the past five years in countries in which they had invested.
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 multinational companies and damage to local economies.
The Bingham Centre is working to promote a clear understanding by policymakers, business leaders, and legal practitioners of the importance of the rule of law in facilitating trade and laying the foundations for economic growth.
The Lord Chief Justice welcomed the new initiative and encouraged other global companies to get involved. ‘The rule of law provides the foundation for peace, political stability, human dignity, and economic sustainability,’ said Lord Thomas of Cwmgiedd.
‘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.’
John van der Luit-Drummond is deputy editor of Solicitors Journal