No liability regulations for Swiss multinationals
The Responsible Business Initiative failed to win a cantonal majority. Nevertheless, Swiss companies are under increasing pressure to act in an ethically responsible manner abroad.
Despite losing at the ballot box, the authors of the initiative “for responsible companies – protecting human rights and the environment” (Respon- sible Business Initiative) achieved a respectable result. A narrow majority of voters (50.7 per cent) voted yes on 29 November. However, the initiative was unable to obtain the cantonal majority required for any constitutional amendment, with only nine out of 26 cantons voting in favour. In the context of Swiss direct democracy, it is extremely rare for an initiative to achieve a popular majority and fail to win a cantonal majority. It shows how well disposed voters were to the initiative, which was backed by an alliance comprising 120 relief agencies as well as churches and environmental and human rights organisations (see “Swiss Review” 5/2020).
Federal Councillor Karin Keller- Sutter (FDP) adopted a conciliatory tone after the vote. The justice minister had stood shoulder to shoulder with industry groups to oppose the initiative during a referendum campaign that was hard fought on both sides. Swiss companies must also respect human rights and the environment abroad, that’s a given, she said.
“We voted differently, but we all want the same thing.”
Due diligence to prevent child labour
With the Responsible Business Initiative having been rejected, an indirect counterproposal approved by parliament last summer automatically comes into force. Unlike the initiative, the counterproposal does not include a liability clause. However, it does oblige major companies to report every year on human rights, environmental and anti-corruption standards compliance and to conduct due diligence regarding child labour and sourcing minerals from war-torn regions. Companies that give false information or fail to report risk fines of up to 100,000 Swiss francs. “The authors of the initiative have something to show for their efforts after all,” said Keller-Sutter.
However, the people behind the initiative are disappointed. They view the measures as inadequate. “Self-policing without effective controls or liability clauses is not enough to ensure that all companies respect international environmental standards and human rights,” lamented law professor and co-chair of the initiative committee Monika Roth, adding that her coalition of supporters would continue to campaign for greater corporate accountability. This is why Swiss firms should still expect their overseas business activities to be scrutinised by a watchful civil society in future.
Voters reject ban on investments in weapons manufacturers
Switzerland rejected the popular initiative “For a ban on financing war material manufacturers”, with around 57 per cent of the electorate voting no. The authors of the initiative wanted to halt Swiss investment in the global arms industry. The Federal Council and parliament believe that existing bans on the funding of nuclear and chemical weapons as well as cluster munitions are sufficient. A decision is still to be made on a cross-party initiative calling for a ban on the export of arms to war-torn regions and to countries in which systematic human rights violations are taking place.