Business Network promotes rule of law

The Bingham Centre for the Rule of Law’s new Business Network launched this week, with the support of several FTSE 100 leaders, including BP, BT, Diageo, HSBC, Shell, Unilever, and Vodafone.

The Bingham Centre wants to promote a clear understanding of the importance of the rule of law in facilitating trade and laying the foundations for economic growth. The Centre focuses particularly on developing states

The Business Network, chaired by Graham Vinter, formerly of BG Group, will support the think tank’s global initiatives while identifying and addressing specific challenges in the countries where they operate.

Vinter said multinational companies faced “a complex set of legal risks, including contractual enforceability, regulatory predictability and bribery and corruption in all its forms, none of which can be addressed without the rule of law”.

The majority of executives have in the past five years experienced several rule of law failures in countries in which they are investing, according to a survey of 300 senior decision-makers at Forbes 2000 companies conducted by the Economist Intelligence Unit for The Bingham Centre. Examples include expropriation by governments of key assets, retrospective taxation, poor protection of intellectual property rights and unenforceability of promises. The survey found that these had resulted in financial loss for multinational companies and damage to local economies.

Welcoming the initiative, Lord Thomas of Cwmgiedd, the Lord Chief Justice, said: “The rule of law provides the foundation for peace, political stability, human dignity and economic sustainability.

“The business community needs the firm and consistent application of the rule of law, thus contributing to economic development. Business can also play a key part in helping to build and sustain the rule of law in those countries where it has a presence, helping to make the world a safer and more equitable place.”

Some projects under consideration by the Business Network include the implications of Brexit on trade and investment, the proportionality of regulatory penalties and forms of redress, tensions between national and international human rights standards, and rule of law training and resources for boards and senior managers.