Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Hain Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

[Lord Hain (Lab)]

My Lords, this is another pernicious piece of legislation attacking the freedom to protest against injustice and oppression except when the Government approve. It is therefore a Bill of which Vladimir Putin would be proud as it prevents public authorities, such as local councils, local government pension funds or universities, making their own ethical choices about their spending or investment. I am sorry that this Conservative Party is on the wrong side of history, as indeed it was over the fight against the most institutionalised system of racism the world has ever seen, namely apartheid.

It is also abolishing the right of British citizens to make their own choices. Tory Ministers support boycotts against Putin’s Russia over his barbaric attacks on Ukraine but want to ban even those advocating boycotts of Israeli products from settlers in the West Bank who have stolen Palestinian land in flagrant breach of international law. Ministers have said that Russia and Belarus would be exempt, but what about public bodies wishing to take boycott action over China’s oppressive treatment of Uighur Muslims or the Myanmar junta’s genocidal banishment of Rohingya Muslims?

The Bill violates UN Security Council Resolution 2334, which the UK voted for and which declares Israeli settlements in the Palestinian territory occupied since 1967, including east Jerusalem, as legally invalid and a clear violation of international law. The Bill explicitly designates Israel for special protection and seems to encompass the illegally occupied territories within its definition of Israel. Surely local authorities should have the discretion to make ethical decisions in line with the preferences of their constituents and the freedom to align with international law and exercise due diligence in procurement.

The Conservatives, I am afraid, have previous form on authoritarian repression of such ethical boycotts. In 1988 Prime Minister Margaret Thatcher, having denounced him as a terrorist, imposed restrictions on political action by local councils in support of Nelson Mandela, by then into his 25th year in prison.

This Bill echoes a part of her Local Government Act 1988 preventing local authorities boycotting goods from apartheid South Africa as she attempted to shore up its economy. Local authorities such as Glasgow, Sheffield, Camden, Islwyn and a host of others decided not to buy apartheid goods. In 1981 Sheffield became the first to pledge to end all links to apartheid South Africa by withdrawing pension fund investments from companies with South African subsidiaries and barring its whites-only sports teams from playing on Sheffield’s sports fields. Others followed, including Cambridge, Newcastle, Glasgow and most inner London boroughs.

By 1985 more than 120 local councils had taken some form of action, from banning South African produce in their schools to granting the freedom of their city to Nelson Mandela, Glasgow City Council being the first. In London, Camden Council renamed the street where the Anti-Apartheid Movement had its office Mandela Street. Other cities, such as Leeds with its Mandela Gardens, bestowed honours on Nelson Mandela. The 1988 legislation did not work. By the time the Act came into effect, the apartheid regime was collapsing and the release of Nelson Mandela was looming.

The right to boycott is a principle that has had a massive impact for good. International pressure to cut links with the apartheid regime included disinvesting, not buying goods produced by it and not providing sporting or cultural cover for a regime that the United Nations had deemed a crime against humanity. Democratically elected local authorities should be able to use their resources in ways that do not sustain oppressive regimes where human rights are violated.

For 35 years a consumer boycott was at the heart of anti-apartheid campaigns in Britain. Hundreds of thousands of British people who never attended a meeting or demonstration showed their opposition to apartheid by refusing to buy goods from South Africa. I took part in action to plaster “Danger: Product of Apartheid” stickers on South African products in supermarkets.

The objective of local councils, joined by student unions, was to create apartheid-free zones. From the early 1970s, almost every university and college in Britain joined in. At more than half, students called on the university authorities to sell their shareholdings in British companies with South African interests and pressed for total disinvestment. Many student unions also banned South African goods from their bars and canteens, and their protests drove Barclays Bank off campuses, forcing it to close down its South African operations.

In 1964, the University of London Union made Nelson Mandela its honorary president. In the 1980s, many student unions named buildings in honour of Mandela and initiated moves to grant him an honorary degree. The British Anti-Apartheid Movement’s boycott campaign was hugely successful, lifted only in September 1993 after South Africa was irrevocably set on the path to democratic elections. Yet, and this is my key point, as Richard Hermer KC of Matrix Chambers stated clearly in paragraph 13 of his legal opinion on the Bill:

“Had legislation of this nature been in effect in the 1980s it would have rendered it unlawful to refuse to source goods from apartheid South Africa”.


Shame on this Government for introducing this shameless Bill. I trust that your Lordships’ House will dismember it through amendments and stand up for human rights worldwide.

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[Lord Hain (Lab)]

I am sorry to detain the House. Not only do I endorse everything that my noble friend Boateng said, but the American Government under President Reagan also opposed boycott action. It was only the Black Caucus in Congress forcing through the loan sanctions in the late 1980s that accelerated the decline of apartheid. Virtually every Government in Europe and right across the world, including white Commonwealth countries, opposed boycott action in every respect. If the Minister’s officials are feeding her this nonsense, she should not simply repeat it.

[Baroness Neville-Rolfe (Con)]

I am grateful for the comments of the noble Lord, Lord Hain. I will certainly look into this further and perhaps we can come back to it on another occasion.

Perhaps me could move on, in the interests of time, to climate change. I would like to clarify that the Bill will ban only considerations that are country-specific. It will therefore not prevent public local authorities divesting from fossil fuels or other campaigns that are not country-specific.

The Bill will not prevent public authorities accounting for social value in their procurement decisions, the reform mentioned by the noble Lord, Lord Collins— of course, we worked together on moving to most advantageous tenders; that is a change that has come about. For example, authorities might structure their procurement so as to give more weight to bids that create jobs or promote animal welfare. Moreover, the Bill contains an exception to the ban for considerations that relate to environmental misconduct, as I think the noble Baroness, Lady Bennett, mentioned.

To answer the question from the noble Lord, Lord Collins, there was official-level engagement with the devolved Administrations on the Bill’s provisions before it was introduced to the other place through the common frameworks working groups process. Senior official engagement on the Bill dates back to April 2022. The Minister for this Bill in the other place, who I saw witnessing our proceedings earlier this evening, has also engaged with responsible Ministers in Scotland and Wales. We intend to engage with Ministers in Northern Ireland now that power has been restored.

The Government have never set out to legislate without consent. We formally sought consent from all the devolved legislatures. Where the legislative consent process is engaged, we always tend to legislate with the support of the devolved Administrations and the consent of the devolved Parliaments. However, as the noble Lord, Lord Stevens of Birmingham, highlighted, boycotts and divestments against foreign countries or territories are a matter of foreign policy. This Bill relates to foreign affairs and international relations, which are reserved matters, but I am sure we will come back to this point in Committee.

I turn to the Bill’s enforcement powers. I start by clarifying that the Bill does not create any new criminal offences, as suggested by the noble Baroness, Lady Janke. They are not criminal offences. Moreover, these enforcement powers are not unprecedented: the regime is based on existing enforcement regimes, such as the powers given to the Office for Students in the Higher Education and Research Act 2017. Clause 7 is a necessary addition to the Bill to ensure that enforcement authorities have the necessary information to assess whether there has been a breach of the ban. It would not make sense to implement a ban with a toothless enforcement regime but, again, I am sure that we will discuss enforcement further in Committee.

The noble Baroness, Lady Chapman of Darlington, and the noble Lords, Lord Wallace of Saltaire, Lord Willetts, Lord Hannay of Chiswick and Lord Johnson of Marylebone, questioned why the ban needs to apply to universities. This ban will ensure that any public authority, including universities in scope of the Bill performing public functions, can maintain their focus on their core purpose rather than taking partisan stances that undermine community cohesion.

It is not appropriate for those institutions to have a corporate view on a matter of foreign policy in the context of their public investment and procurement functions. That risks stifling the academic freedom of individual members of staff to take positions on foreign policy. However, I note the comments made by the noble Lords, Lord Johnson, Lord Willetts, Lord Shipley, and others on the ONS reclassification of universities. I will come back to noble Lords on this issue in Committee, once I have consulted other Ministers.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Hain Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I understand the question. Of course, we now have government sanctions against Russia, so the question is wider. The suggestion made by the noble Lord, Lord Stevens, is a good one, which would perhaps help us to move forward. I have already said that I will look carefully at the questions raised by the noble Baroness, Lady Chapman. The example of the noble Lord, Lord Boateng, is of a slightly different kind, asking rather the same question. Perhaps I can come back on that at the same time.

[Lord Hain (Lab)]

May I also ask a question? I am very grateful to the Minister, who has indeed been generous in responding, even if she has been unable to offer the Committee further clarification. Virtually all training in this country is privately provided, by private organisations, but publicly funded. Where do they fit into all this? They receive public money—from the DWP, say. I remember, as the former Secretary of State, visiting a lot of private providers. Where do they fit in? Do they come under the contractual relationship to which the Minister referred, or are they caught by the Bill?

[Baroness Neville-Rolfe (Con)]

It depends, and it also depends on case law under the Human Rights Act, which I have undertaken to look at and come back to noble Lords.

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Moved by

[Lord Hain]

15: Clause 3, page 2, line 24, at end insert—
“(2A) Regulations under subsection (2) may not amend the Schedule to remove environmental misconduct as an exception from the application of section 1.” Member's explanatory statement
This amendment seeks to ensure that the Secretary of State cannot remove environmental misconduct as an exception in the Schedule by regulations.

[Lord Hain (Lab)]

My Lords, my Amendment 15 seeks to answer the question: what would happen if a public authority imposed a boycott campaign which related to Israel and arose as a result of environmental misconduct in the Occupied Palestinian Territories, illegal under international law?

Under the Bill’s Schedule, the Clause 1 prohibition on the consideration of moral or political disapproval is lifted, so far as that

“consideration … relates to environmental misconduct”.

This includes, according to the Schedule,

“consideration related to the possibility of environmental misconduct having taken place or taking place in the future”,

while the definition of environmental misconduct here

“means conduct that … amounts to an offence, whether under the law of a part of the United Kingdom or any other country or territory, and … caused, or had the potential to cause, significant harm to the environment, including the life and health of plants and animals”.

Surely such accusations of environmental misconduct should also apply to the State of Israel. There is credible evidence that Israel has engaged in such misconduct, particularly through the actions of the Israel Defense Forces, in its occupation and military actions.

In its military action in Gaza, there are serious questions to be raised about environmental misconduct. Dr Saeed Bagheri, scholar of international law at the University of Reading, stated of Israel in January this year that there may

“be evidence to suggest that they have acted contrary to the International Committee of the Red Cross … position that the prohibition on inflicting widespread, long-term and severe harm to the natural environment is a rule of customary international law”.

He added:

“The actions by the Israeli Defence Force in Gaza have left chemicals from white phosphorus weapons that could linger in the environment for years. This can have a long term impact on the soil, affecting the growth of crops, and in Gaza agriculture takes up about a quarter of land. For individual farmers and their communities, this pollution and its long-term impacts could be devastating”.


However, such questions far pre-date the current horror in Gaza. The Institute for Middle East Understanding has set out a long list of allegations of environmental misconduct. In its actions in the Occupied Territories, long-standing allegations against Israel have been made about the deliberate destruction of olive trees and olive orchards; at least 2.5 million trees have been destroyed since 1967, yet Palestinians depend on these trees as a primary source of food and income. The destruction of natural wildlife since October has been stark: a recent estimate states that around 4,300 acres of trees and plant life have been cleared around the Gaza Strip by Israeli forces, not to mention the complete devastation of the natural and built environment within the Gaza Strip.

What of Israel siphoning off water supplies from the Occupied Territories? This has caused a permanent drop in the West Bank’s water table and distorted water flows, damaging agriculture and increasing flood and drought vulnerability. In February this year, the IDF itself confirmed that it is dumping seawater into tunnels and waterways below Gaza, an act which the director-general of the Geneva Water Hub described as polluting and contaminating, and poisoning Gaza’s aquifer.

We also know that Israel discharges 52 million cubic yards of untreated sewage and other hazardous materials each year into the West Bank. The Israeli Information Center for Human Rights in the Occupied Territories reported:

“Israel’s environmental policy in the West Bank—including situating polluting waste treatment facilities there—is part and parcel of the policy of dispossession and annexation it has practiced in the West Bank for the past fifty years.”


In the West Bank, and in contravention of the Geneva convention, Israel has appropriated most water sources for itself and restricts Palestinian access to them. Of course, this is not Israeli state or Israel Defense Forces activity alone; the administration of this occupation relies on a vast number of agencies and companies. Is it not reasonable for any public authority doing due diligence on environmental matters to prefer to disengage with any companies or agencies which are involved in such acts?

Many of these instances could feasibly fall foul of international law, such as Rome statute prohibitions on inflicting damage to the natural environment, Hague regulations provisions on natural resource use, and customary international humanitarian law principles on hostilities to the natural environment, to name a few. But the matter goes beyond the practical application of these examples raised. The question is also: can we exempt Israel and the Occupied Territories from the Schedule’s considerations without denying the very real possibility, now or in the future, of Israeli state or corporate environmental misconduct?

Israel’s human destruction of Gaza is being compounded by an environmental crisis. In Rafah, large family groups have been living cramped together with no running water or fuel, while surrounded by running sewage and waste piling up. Like the rest of Gaza’s residents, the air they breathe is heavy with pollutants and the water carries disease. Beyond the city streets lie ruined orchards and olive groves, and farmland destroyed by bombs and bulldozers. Forensic Architecture, a London-based research group, has shown how family farms close to Gaza’s border with Israel, cultivated for generations, have been destroyed, their orchards uprooted and replaced by military roads. Israel has suggested it could make this sort of thing permanent to create buffer zones along the border, where a lot of Palestinian farms are sited.

An analysis of satellite imagery, reported by the Guardian newspaper recently, showed the destruction of nearly half of Gaza’s tree cover and farmland—mainly because of the military onslaught by the Israel Defense Forces but also because, starved of fuel, desperate Gaza residents have cut down trees to burn for cooking or heating. Not only have olive groves and farms been reduced to rubble but soil and groundwater have been contaminated by munitions and toxins. The sea is full of sewage and waste. The air is polluted by smoke and particulates. The impact on Gaza’s ecosystems and biodiversity is colossal, leading to calls for it to be recognised as ecocide and investigated as a possible war crime.

United Nations environmental experts report massive amounts of debris and hazardous material in Gaza, with harmful substances such as asbestos, heavy metals, fire contaminants, unexploded ordnance and hazardous chemicals. When Israel cut off fuel to Gaza after the 7 October terrorist pogrom, power cuts meant that wastewater could not be pumped to treatment plants, leading to 100,000 cubic metres of sewage a day spewing into the sea. The sheer scale and long-term impact of all this environmental destruction has led to calls for it to be investigated as a potential war crime, and to be classed as ecocide, which covers damage done to the environment by deliberate or negligent actions.

Under the Rome statute, which governs the International Criminal Court, it is a war crime to intentionally launch an excessive attack knowing that it will cause widespread, long-term and severe damage to the natural environment. The Geneva conventions require that warring parties do not use methods of warfare that cause

“widespread, long-term and severe damage to the natural environment”.

Forensic Architecture argues that:

“The destruction of agricultural land and infrastructure in Gaza is a deliberate act of ecocide”.


I put Amendment 15 to your Lordships’ Committee with the intention of asking: how should a public authority act if it wishes to disengage with a company or enterprise which may be involved in acts such as these, which could amount to environmental misconduct under UK or international law, if that company is Israeli or if it engages in alleged misconduct overseen by the State of Israel?

The Bill is clear that the Schedule considerations override Clause 1 prohibitions on boycotts. However, it is not clear whether the Schedule also applies to Clause 3, which likewise overrules Clause 1. This could present a glaring contradiction in the current formulation of this Bill, and one which I very much hope the Government and the Minister will respond to. It needs to be resolved through this amendment. I hope the Minister will come back on Report having accepted the amendment to deal with this matter.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to my Amendments 32A and 32B. Amendment 32A would expand the environmental grounds on which a public body is allowed to make certain economic decisions. Amendment 32B would extend the definition of environmental misconduct to include damage, regardless of whether it is legal or illegal, and to include species, habitats and the natural world.

It is quite positive that this Bill at least recognises that public authorities should be able to consider environmental issues when deciding whether to spend taxpayers’ money on goods and services purchased from outside the UK, or when deciding how to invest the pensions of public sector workers and retirees. However, this environmental carve-out is far too narrow. I do not understand how public authorities can be forced to ignore environmental destruction as long as that destruction is not a criminal offence. I have worked closely with Friends of the Earth on these amendments, and they were also tabled in the Commons by my honourable friend Caroline Lucas.

We are all deeply concerned about this fundamentally flawed Bill and the impact it will have on public bodies’ legitimate procurement or investment decisions about companies or products that are destroying the natural environment, including pollution overseas and climate breakdown. All public bodies must be free to avoid investment in fossil fuels, which are contributing to climate breakdown.

This Bill sets out an uneven treatment between local or UK-based businesses and foreign enterprises, particularly where they are owned or controlled by a foreign state. A local council will remain entitled to refuse to purchase timber from a business that is clear-cutting the local woodland, but if it is in a foreign country linked to a foreign Government then the council will be prohibited from even considering the impact of clear-cutting woodlands and rainforests around the world. These types of considerations—so-called ESG criteria—are now quite routine, even mundane, among both the public and private sector. Public authorities should be entitled to consider the same types of environmental issues that they would consider if interacting with a UK-based business. There is no justification for it to be any other way, other than a totally misguided belief that the nature, land, air and water in the United Kingdom is inherently more valuable or deserving of protection than that outside the United Kingdom. That sounds slightly colonial to me.

Why have the Government chosen to draft this so tightly, so that the only environmental considerations are whether or not the environmental damage constitutes a criminal offence? I hope the Minister can see the glaring flaws in this approach and the obvious harms it will lead to. I ask noble Lords across the Committee, including the Minister, to work with us on this issue so that we can bring something that we can all support to Report. Environmental crime must not be set as a bar beyond which anything goes in public procurement and the investment of public pensions.