Following the parliamentary debate on 26 February, and in line with Scottish Labour’s motion, Scottish Enterprise began a review of its human rights due diligence checks.

Scottish Enterprise wrote to update me on its review on 19 June.

That letter advised that the review included a thorough appraisal of Scottish Enterprise’s existing policy, and a retrospective assessment of checks and associated grant payments. As a result, it identified a number of opportunities for improvements to ensure Scottish Enterprise’s human rights due diligence procedures continue to align with good practice and respond consistently to the current dynamic risk environment.

Scottish Enterprise will therefore seek to enhance its approach and strengthen management assurance by taking the following steps, which will be rolled out incrementally over 2025-26:

• Establishing more explicit customer checks and assurance relating to the Export Control Act 2002, as informed by international law. These will include specific customer declarations on items, activities and end use that are controlled under the UK export control regime. Scottish Enterprise will have the right to clawback grants where false declarations have been made.
• Updating its policy to enhance the existing checks it undertakes on companies who might be in receipt of Scottish Enterprise funds or other assistance. This will include reduced exemptions from checks, increased frequency of checks, and more explicit requirements to ensure these checks address changes in risk.
• Establishing an internal Senior Review Group to provide greater strategic input and support risk-based decision-making.
• Developing a new digital platform for all due diligence checks which will improve reporting and oversight more generally.

Scottish Enterprise’s letter also confirms that its internal assessment of past practice found no evidence that grant money had gone towards funding the manufacture of munitions.

I have written to Scottish Enterprise to thank it for its work so far, and to ask for a further report after the summer recess, once it has developed detailed operational guidance. I have asked that Scottish Government officials are involved in that work, and will provide a further update to Parliament in due course. Finally, Scottish Government officials will discuss with its other Enterprise Agencies any potential implications Scottish Enterprise’s review might suggest for their processes.