Hello and welcome once again to the Pinsent Masons Podcast, where we try to keep you abreast of the most important developments in global business law every second Tuesday. My name is Matthew Magee. I'm a journalist here at Pinsent Masons. This week we'll find out about the human rights that companies have in the UK and Europe. But first, here's some business law news from around the world.
Trump tariffs could increase goods distribution to UAE and Saudi Arabia
MEPs endorsed delays to sustainability due diligence and reporting rule and
IEA report emphasises AI's environmental impact
The UAE and the Kingdom of Saudi Arabia may see an increase in imports as exporters seek alternative international markets to the US because of uncertainty over tariffs there, experts have said. Although most of the tariffs announced on the 2nd of April have been paused, other tariff increases, including a 10% baseline as well as 25% on steel and aluminium and automotive vehicles remain in place. Totis Kotsonis, a trade law expert, said that one obvious unintended consequence of the hike in US tariffs is likely to be a shift in trade flows away from the US to alternative markets. This is likely to be particularly true in relation to Chinese goods. As the US tariffs lead to potentially higher production costs as well as making it more costly to import into the US, international hubs like the UAE and the Kingdom of Saudi Arabia are likely to offer attractive alternative markets to global manufacturers and exporters as they seek to mitigate the damages caused and maintain profitability, he said.
Planned delays to EU sustainability due diligence and reporting rules have been endorsed by MEPs, who've also backed proposals to significantly reduce the number of businesses facing disclosure obligations under the legislation. In February, the European Commission announced the watering down of sustainability and reporting laws. The European Parliament voted on the 3rd of April for a two-year delay for certain companies under the new rules. While the delay will not apply to large listed EU companies already in scope of the rules, it comes into effect just in time for other large companies which were due to publish the first reports in 2026. Sustainability reporting expert James Hay said for some companies this may mean pens down for now. For others which have already carried out significant implementation activities, this two-year delay may lead to a certain degree of streamlining, but otherwise a continuation with reporting.
A new report highlights the environmental responsibilities borne by businesses using AI or developing the infrastructure to facilitate its use, as well as the significant planning needed to ensure energy generation capacity grows quickly enough to keep pace with the technological developments, experts have said. James Talbot and Michael Pocock of Pinsent Masons commented after the International Energy Agency, or IEA, warned that a surge in the use of AI over the coming years could place pressure on energy systems and lead to an increase in carbon emissions. According to the IEA, global electricity consumption for data centres will double by 2030 and represent just under 3% of total global electricity consumption in that year. In a different scenario the body considered, in which there was a more resilient supply chain and greater flexibility in data centre location, there would be faster data centre deployment and stronger growth in AI adoption, and data centres would account for 4.4% of global electricity demand by 2035. The IEA said that wind and solar power, as well as nuclear, are expected to play an increasing role in meeting the energy demands of new data centres, but that the greater number of data centres built in response to demand for AI would lead to an increased use of fossil fuels like coal and natural gas.
You might be surprised to learn that companies have human rights. It seems like a bit of a weird anomaly, but it's to do with the fact that for a very long time now, companies have had the status of a legal person. These rights are not just a nice to have, they can have real power, but many companies don't even realise that they have them. They only apply when dealing with public bodies and authorities, so it's not like you can invoke your human right to property in a dispute with a supplier. But for companies that find themselves in disputes with regulators or governments, they can be a bit of an ace up their sleeve. London-based public law expert David Thorneloe told me first what rights companies actually have.
David Thorneloe: I think the reason why companies have human rights essentially goes straight back to the fact that they are legal persons. So when you create a company, establish one and meet the legal requirements, it has legal personality. And that means just like a natural person, this legal person can have rights and duties, it can face sanctions in laws and on a day-to-day level, that's the primary reason on which companies are able to enter into contracts and go about their business. But it also means equally that as legal persons, they can benefit from rights in human rights law. If we look through the case law that's developed over the last 70 years in the UK and the European courts, there are four main rights that companies have very frequently relied upon to get remedies. The first is the right to property. The second is freedom of expression, the third is the right to a fair hearing, and the fourth is the right to privacy. The right to property is a particularly important one because property includes not just land, but it also includes cash assets. So often these cases have cropped up in a tax context. So if new tax legislation and taxation obligations are being imposed in a very unfair way, then that may be in breach of the right to property. In the context of freedom of expression, that's a right that's particularly important for online and traditional media companies. We've seen it being used by online media platforms where they've been regulated in some European nations. They have fought back and relied on human rights legislation to put a stop to particularly onerous regulation that restricts what information they're able to publish.
The right to a fair hearing is a right that crops up in all sorts of contexts when companies are engaging with public bodies. The fair hearing relates to the entire process of engaging with a regulator, for example, that may be taking decisions. What is the process that is being applied? Does the council have a right to have its say, put its arguments, is the regulator's decision, can that be fully challenged in court? So there's a case it the company does have the right to be heard by an independent judge sitting in a court if it feels that regulator has reached an unfair decision. And then the right to privacy. This is something that quite often is relevant where we talk about regulators like competition authorities, perhaps they've been raiding a company premises, then that needs to be done so in a way that operates within strict safeguards so that there are limits on what the regulator can do when raiding a company's offices, what data it can access, what it can do with it and how the whole process is managed and there's a great deal of case law about that as well.
Matthew Magee: The rights stem from the post World War 2 establishment of the European Convention on Human Rights. David says that the extension of these rights to companies was almost certainly deliberate, but nonetheless they remain quite unknown.
David: The European Convention on Human Rights that was put in place after World War 2, it simply refers to persons having these rights. So it wasn't restricted to natural persons. And then when cases started coming before the courts, the courts made clear that yes, these were rights that were available to legal persons like companies. I think it's fair to say it wasn't first and foremost in their mind, but I think it must have been intended because it would have been so more straightforward to have restricted the wording of it, to define it more narrowly by reference to human beings or natural persons and the choice was taken not to do that. Most companies probably are not aware of this, and that's probably just because it's just not something that really falls within their normal day-to-day operations for them to be thinking about human rights legislations. Usually when they're thinking about legal obligations, it will be much more in the standard commercial context, contractual issues, intellectual property issues, all those sorts of things. So for many, they simply won't turn their mind to human rights issues. But where they become more relevant for a company, and they really do need to be aware of them, is when they're having to engage with public bodies, with regulators, with new regulatory regimes. And those are when those human rights can be engaged. So it's not, it's quite a, relatively speaking, a small proportion of a company's activities but these, of course, can be very significant interactions that affect the whole way that the company goes about running its business.
Matthew: This is a good reminder from David that these rights only apply in dealings with the state, and some of them are a bit on the nebulous side. Company rights to freedom of expression or a right to a fair hearing don't immediately strike you as having obvious commercial impact, but companies have used them to their advantage in disputes, and those that don't consider these rights may be missing a trick, says David.
David: Bringing human rights into the picture increases the scrutiny which a court will place an exercise over a public body's decision making. So it definitely helps to put an onus much more a public body to defend and justify its actions and to explain its decision making, its actions that much more. So it's very important for, I think in from that perspective to think about bringing human rights in as part of its strategy. The other reason for doing so is that it opens up extra legal processes and legal remedies. Most notably, that means not just being able to challenge or a public body or regulator is saying, but also perhaps it can be a basis for challenging the legislation that the regulator is relying on. Because otherwise the regulator may simply say, well, I've done what this legislation allows me to do. And part of this broader picture about extra legal processes and remedies is that as well as going through the full process of the UK courts, it opens up the possibility that if that is not successful, then you can appeal to the European Court of Human Rights in Strasbourg as well.
Matthew: David thinks companies should make more use of these rights and ensure that they're more widely understood, especially those in heavily regulated industries such as maybe energy or telecoms or financial services, because they're more likely to be involved in negotiations and disputes with regulators.
David: I think there certainly is more scope for companies to be using human rights in their litigation strategies. And even before then, because goodness knows most discussions, disagreements, disputes with a regulator do not end up in court. But quite often it's important in those discussions to know the legal context in which they're operating in and perhaps as part of the influencing and the discussions that go on in those exchanges between a company and its regulator, then bringing human rights as well as other legal obligations into those discussions can just help to manage that relationship and perhaps put a little bit more onus on that regulator to play ball and justify its actions in a way. So I think they could be more helpful in all sorts of contexts, even when things don't get quite so far as a litigation strategy.
Thanks once again for listening, and please do share this with anyone you think it might be useful to. Like it, review it if you have the time. It helps us reach other people who might be interested in our news and analysis from the whole world of business law. And remember, you don't have to wait for every fortnight for the podcast. You can get your daily dose at pinsentmasons.com, where our team of specialist reporters produce news and analysis every day on the topics that matter most to you. You can get a personalised E-newsletter every week. Just go to pinsentmasons.com/newsletter and up there. But until next time, thanks for your time and goodbye. The Pinsent Masons Podcast was produced and presented by Matthew Magee for international professional services firm Pinsent Masons.
