Companies responsible for unsafe cladding should face unlimited fines and permanent bans from public contracts, according to a report that also says England’s existing laws have not gone far enough to prevent future tragedies.
The thinktank Common Wealth said the law fails to effectively hold companies to account for corporate negligence, leaving the door open for another disaster like the Grenfell fire, which killed 72 people in June 2017.
The report’s author, Leela Jadhav, said England was falling behind other countries which have stronger due diligence laws.
“TheGrenfell Tower firewas a disaster caused by corporate greed, not an accident,” she said. “Justice in real terms means sanctions, prosecutions and a more robust and enforceable accountability regime. Nearly a decade has passed – accountability is long overdue.”
A police investigation into the blaze is ongoing but there have been no criminal prosecutions to date. In February, the government announced that seven companies linked to Grenfell would be investigated and face possible debarment from public contracts.
The Grenfell inquiry, which concluded last year, found that “systematic dishonesty” led the tower block to be clad in combustible material, and firms such as Arconic, Celotex and Kingspan “manipulated the testing process, misrepresented data and misled the market”.
The thinktank reportsays corporate manslaughter laws, which can lead to sanctions including unlimited fines, have a “very high threshold for liability” meaning they are ineffective – there have only been 32 convictions since the law came into force in 2008.
It called for civil and criminal penalties for Grenfell-level negligence, including unlimited fines, disqualification of directors for up to 30 years and permanent exclusion from public procurement. Under the new Procurement Act, firms can only be excluded from public contracts for five years.
The report said financial penalties should be linked to a company’s global turnover, with no fixed upper limit, to ensure “meaningful deterrence”.
“A more effective approach might involve permanent debarment, an unlimited fine that amounts to significant disruption of corporate activities, disqualification of directors for 15 to 30 years, and a rebuttable presumption of life imprisonment,” the report stated.
The Corporate Justice Coalition, a group of more than 40 civil society organisations, is campaigning for a law to legally force companies to put procedures in place to prevent human rights and environmental abuses.
The “business, human rights and environment act” would force companies to publish an annual plan of their due diligence procedures and their effectiveness, with senior managers liable to a civil penalty if they failed to do so.
“Without proper visibility into corporate behaviour, accountability becomes a game of catch-up,” Jadhav said, adding that the English legal system only kicks in after the damage is done.
Grenfell United, which represents survivors and bereaved families from the fire, said it was“a deep and bitter injustice”that many of the officials criticised in the public inquiry for their actions have continued working in related fields.
The Common Wealth report said the threshold for individual accountability is very high and it is difficult to “allocate sufficient blame” so people “can be tried under the high threshold of criminal law”.
A government spokesperson said: “We are committed to ensuring that what happened at Grenfell is never forgotten, and to deliver the change needed so it can never happen again.“We can now take tougher, broader action against supplier misconduct using the Procurement Act’s debarment powers. By holding organisations to account, we will ensure our supply chains are secure and can deliver growth and renewal for working people through our Plan for Change.”