Archived press release

Friends of the Earth takes Chancellor to court

11 January 2006

Friends of the Earth today (Wednesday 11^th January) launched judicial review proceedings against Chancellor of the Exchequer Gordon Brown and Alan Johnson (Secretary of State for Trade and Industry). Friends of the Earth is challenging the Chancellor's decision to abolish the Operating and Financial Review (OFR).

The decision to abolish the need for companies to report on their environmental and social impacts (under the OFR) comes into force tomorrow [1].

The environmental campaign group is pushing ahead with the legal challenge in the High Court

because it believes the Chancellor failed to properly consult before abolishing the OFR, introduced just nine months earlier following a six-year consultation process by the Department of Trade and Industry (DTI). The group also argues that the decision was irrational.

The Government U-turn was announced by the Chancellor at the CBI conference in November following talks with the CBI and anti-OFR business lobbyists. He told CBI members that while social and environmental reporting reflected best practice, he understood concerns about the extra administrative costs of the "gold-plated regulatory requirement" and that was why he was abolishing the OFR.

Friends of the Earth said it believed the Chancellor had been seeking to prove his pro-business credentials and had rushed through a radical policy reversal without following proper procedures or the Government's own consultation policy. The environmental group claims that the decision was made as a tokenistic gesture to big business. One government official described the idea as a "radical symbolic stripping down" of the OFR.

The DTI had previously described the OFR as "vital to improving corporate regulation" and the measures had been widely welcomed.

Friends of the Earth Executive Director Tony Juniper said:

"Gordon Brown's unilateral decision to abolish this important reporting requirement is bad for business, bad for democracy and bad for the environment. It also sends yet another negative signal about New Labour's commitment to the environment. We believe the Chancellor's actions are unlawful and that is why Friends of the Earth is filing a judicial review in the High Court. Good business and environmental practice must not be sacrificed for the short-term political interests of the Chancellor or his friends in the CBI."

A copy of the Grounds for judicial review have also been formally sent to the CBI.

The case is supported by evidence from Amnesty International UK, ActionAid, Traidcraft, Environmental Industries Commission and some investment bodies.

Notes

[1] The Operating and Financial Review (OFR) required the top 1,300 companies to produce an annual statement on their prospects including in relation to social and environmental issues. Companies were due to start publishing the first Operating and Financial Reviews in April 2006.

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Published by Friends of the Earth Trust