Mr. Hugh Lovatt:

I am happy to take that. Much of this legislation builds on the UN guiding principles, which I am sure the Senator is aware of, but seeks to take that to the next level. The effort to pass legislation requiring enhanced human rights due diligence, especially due diligence reporting, is still a new area that is being legislated and is developing. When we look at initiatives in some Scandinavian countries, Finland has been talking about it. Germany, Denmark and Norway have looked at it. There are some criticisms of it. In my view, some of the legislation does not go far enough. Some of the technical criticism is that it only applies to medium or larger businesses and so exempts a stratum of smaller businesses. I presume that is because of the burden of the reporting requirements. The second technical criticism is that these reporting requirements are still mostly voluntary. I would add my personal assessment, which is that there is a question of follow through. It is one thing to say the company has to do its human rights due diligence reporting, but what is the standard of that reporting and how does the business actually reflect its due diligence in its practices? That is a more difficult area. It is not just about writing a report, but ensuring it is correctly applied on trading relations in businesses.

The Senator asked about best practices. There are examples of legislation that have been discussed, but my view is that these are still very much imperfect. When it comes to specific situations of occupation and annexation, including Israel's annexation and occupation of Palestinian territory, these Bills can do more to specifically target those instances of unlawful practices. It is not just about doing. Most of the legislation is about also looking at whether the chains involved in producing material conform to human rights standards. This is also a question of whether it conforms to international law and international humanitarian law, IHL, standards.

The final point is that when it comes to settlements, if one is doing effective due diligence, the only outcome or conclusion of due diligence for a foreign business is that it has to withdraw from those settlements. I do not believe there is any way to mitigate a foreign company's business relations with the settlements in a way that can avoid Israel's internationally unlawful practices. In other words, if a business wants to respect international law and human rights, the only way to do that in the case of the settlements is to withdraw one's business practices.