Company Law Reform Bill [HL]

My Lords, I hesitate to make my first contribution to this mammoth debate at this stage, but one of the prices of running major legislation in the Moses Room as well as in this Chamber is that those who are engaged on other Bills are excluded from participation in mainstream Bills such as this, and I was heavily involved in the Identity Cards Bill. Having said that, I, too, am cheered by the extension that Amendment No. 196 makes to the Bill—in particular, subsection (5). That subsection seems to be completely new and to embrace many of the issues contained in Amendment No. 194B to be addressed by my noble friend Lady Northover in the next group. However, I have the sensation that if Amendment No. 196 is passed, Amendment No. 194B may fall, but no doubt the Deputy Speaker will comment on that. My questions to the Minister are twofold. First, the requirements of subsection (5) are confined to a quoted company, and in time it may be found that that is too restrictive. I believe that the majority of the British companies named in the OECD report on operations in the Democratic Republic of Congo were not publicly quoted companies. It might be interesting if the Minister would comment on that. My question concerns the formulation at the start of subsection (5), which says:"““In the case of a quoted company the business review must, to the extent necessary for an understanding of the development, performance or position””," and so on. It seems to me that the phrase ““an understanding”” is a bit limp. I would have hoped that we would be talking here of ““a rounded understanding””, ““a comprehensive understanding”” or even ““an adequate or reasonable understanding””. Without some qualifying objective, ““an understanding”” represents such a low hurdle that it is almost impossible to conceive how it will not be taken unless there is a complete ignorance of the factors mentioned in paragraph (b). Perhaps the Minister will comment on that, although I shall quite understand if he wants to do so outside the Chamber after the debate. The second point on which I ask him to enlighten us concerns the final three lines of subsection (5), which say:"““If the review does not contain information of each kind mentioned in paragraph (b)(i), (ii) and (iii), it must state which of those kinds of information it does not contain””." That is a slightly gnomic formulation. I wonder whether, if I understand it aright, it should not merely say that it does not contain that information but why it does not contain it. Again, it seems extraordinarily ineffectual to leave it at that. Finally, there is an issue which concerns the independent contractors of British companies abroad. I perfectly accept that the proposed new Clause 395 addresses the position of the company’s employees, and that that includes the company’s subsidiaries’ employees, but it does not appear to cover independent contractors. In most third world countries where there is serious abuse of overseas workers, they make sure that they are not employees but so-called independent contractors, although under British law that might be an extremely doubtful arrangement. Under indigenous law, they will indeed not be employees. This morning, I had a message from Mr Saunders who is the company secretary and general counsel of Oxfam, who said that,"““when some companies outsource parts of their business, they often try to outsource any responsibility for their social . . . impacts””." He mentioned cases where women and men are forced to work under punishing conditions in factories to meet the demands of British company employers. The question is whether the formulation in Amendment No. 196 requires a reference to those circumstances. I see that there must be information about social community issues. The Minister may be in a position to assure me that that will be sufficient to bring the position of those so-called independent contractors within the purview of the directors’ report.