Corporate accountability in Scotland

It is vital that corporations in Scotland are operating with human and environmental rights in mind, and are held to account by the Scottish public. This blog by Line Christensen, Partner Advocacy Officer at SCIAF, looks at corporate accountability in Scotland.

The growing economic power of corporations is undeniable. Today, 69 of the world’s 100 largest economic entities are corporations, and 80% of global trade is conducted through corporate ‘global value chains.’[1] However, as corporate wealth and influence have surged, regulations to ensure corporate accountability have lagged behind, leaving a dangerous imbalance between corporations, states, and societies. This gap allows corporations to operate with impunity, particularly in the Global South, where communities and environments bear the brunt of abuses. Scotland is tied to these abuses through products consumed daily – from the clothes we wear to the food we eat.

Research from the Business & Human Rights Resource Centre points to a persistent connection between well-known UK companies and serious corporate abuse.[2] Financial institutions and public bodies are complicit as well, through their investments and procurement choices. The list of abuses is severe: worker exploitation, modern slavery, child labour, illegal deforestation, and land-grabbing. These violations devastate both people and the environment: we see, for example, extreme lead poisoning in Zambian children due to mining, water contamination in the Democratic Republic of Congo from palm oil production, and the infringement of indigenous rights by mining companies in Colombia.

Justice remains elusive for many communities affected by corporate abuse. However, we increasingly see people speaking up against these companies. A notable example is the 7,000 Malawian tobacco farmers who have brought a case against British American Tobacco and Imperial Brands. The claim alleges that these UK companies profited from child labour, exploitation and dangerous conditions and forced families into debt bondage.[3] Children as young as three years old allegedly work on the farms.[4] This case has reached the UK High Court and will go to trial in 2025.[5] It will be an interesting test of corporate accountability.

The UK was once a leader on corporate accountability, being among the first to legislate based on the 2011 UN Guiding Principles on Business and Human Rights. It was also one of the first to pass a domestic supply chain law, in the form of section 54 of the Modern Slavery Act. However, these efforts are now out of date and toothless, leaving current UK laws inadequate to tackle corporate human rights abuses and environmental damage. Meanwhile, the EU has moved forward with a mandatory human rights and environmental due diligence law. Once a trailblazer, the UK is now lagging behind.

A 2022 YouGov poll[6] revealed that four in five people in Britain support stronger laws to prevent environmental damage and exploitation by businesses. Scotland must heed this call by supporting higher levels of corporate accountability, ensuring transparency, and supporting access to justice for those harmed by corporate misconduct. Scotland must advocate for those whose rights have been violated or whose environments have been destroyed. SIDA’s new Corporate Accountability Group[7] will explore how Scotland can use its devolved powers, and influence, to play such a role. Please join the group, and let’s work together to increase corporate accountability!