Campaigners pointed to a blind spot in David Cameron's compassionate conservatism today (Sunday) as it emerged that Conservative MPs are attempting to weaken legislation that would make UK companies more accountable for their social and environmental impacts.

Groups campaigning to toughen up the Companies Bill - which MPs will vote on next week - have criticised the Conservative Party for seeking to undermine a legislative approach to corporate accountability; making companies more responsible for their impacts on poor people and the environment where they operate around the world.

This move is in stark contrast to David Cameron's recent pledges to `stand up to big business' [1] and his support for corporate social responsibility (CSR).

Cases uncovered by ActionAid and Friends of the Earth, including the activities of Shell in Nigeria and a subsidiary of Anglo American in Ghana [2] show that a voluntary approach to CSR has not been enough to stamp out abuses by UK companies overseas. Basic minimum legal obligations are needed to guarantee a level playing field for companies to act on these issues.

After pressure from campaigners, MPs have tabled amendments to the Bill which would make meaningful reporting on social and environmental issues a legal requirement, as well as making company directors more responsible for the social and environmental impacts of their businesses around the world [3]. Some of these now have cross-party support.

The amendments have been warmly welcomed by campaigners as representing an important step towards making UK business truly fit for the 21st century.

The Government has so far been responsive to the concerns of MPs and campaigners, making some improvements to the Bill while it was in the House of Lords in May. However, there is still a long way to go to ensure the Bill - the biggest shake up of UK company law for 150 years - is not a missed opportunity to make corporate responsibility a legal duty, not an optional extra.

Julian Oram, head of trade and corporates at ActionAid, said, "The Conservatives' position on the Companies Bill is at odds with its new 'compassionate' credentials. David Cameron said he did not want to be a mouthpiece for big business, but these amendments make him just that. Case after case shows that voluntary corporate social responsibility drives are often not worth the glossy paper they're written on."

Craig Bennett, Head of Corporate Accountability at Friends of the Earth said, "The Conservatives have taken the lead on environmental issues, helping to get climate change much higher up the public policy agenda. But their moves to weaken the Companies Bill raise questions about whether their policies will deliver real improvements in corporate environmental performance. Cameron still has a massive job to do to ensure that parts of the Conservative Party don't retreat to their old ground. He should act now or risk undermining this once in a lifetime opportunity to improve the accountability of UK plc, as well as his own party's green credentials."

NOTES

1. Speech by David Cameron MP to Business in the Community, 9 May 2006: http://www.bitc.org.uk/events/annual_conference_the_reason_for_vision/index.html

2. For details of Shell's environmental abuses overseas see:

'Broken Promises' - A review of Shell's non-compliance with the OECD guidelines on multinational companies: http://www.foe.co.uk/resource/briefings/broken_promises.pdf

'Lessons not Leaned - The Other Shell Report' (June 2005) - A comprehensive review of how Shell's social and environmental performance differs from its CSR rhetoric: http://www.foe.co.uk/resource/reports/lessons_not_learned.pdf

***Representatives from communities in South Africa and Ireland affected by Shell's operations will be in the UK next week for a speaking tour to draw attention to the hypocrisy surrounding the oil company's CSR rhetoric and will be visiting Parliament to observe the Companies Bill debate. Desmond D'Sa from Durban and Terry Clancy from County Mayo will also be available for interviews and photos. Contact Hannah Griffiths: 07855 841994. More information: www.foe.co.uk/shell

For details of ActionAid's report on Anglo Gold Ashanti's mining activities in Ghana click here

3. Amendments to the Companies Bill supported by Friends of the Earth and ActionAid:

Amendments on social and environmental reporting tabled by Jon Trickett MP and Colin Burgon MP:
- Contents of directors' business review (No. 2)
http://www.publications.parliament.uk/pa/cm200506/cmbills/190/amend/60720a01.htm
- Reporting standards
http://www.publications.parliament.uk/pa/cm200506/cmbills/190/amend/60725a01.htm

Amendments on directors' duties in relation to environmental and social issues tabled by Patrick Hall MP and Sarah McCarthy-Fry MP:

- Duty to promote the success of the company (No. 2)
http://www.publications.parliament.uk/pa/cm200506/cmbills/218/amend/61005a01.htm

Probing amendment on access to justice for affected communities tabled by John Battle MP:

- Civil actions and foreign subsidiaries http://www.publications.parliament.uk/pa/cm200506/cmbills/218/amend/61005a01.htm