An uncomfortable issue for multinationals

The initiative “for responsible companies – protecting human rights and the environment” (Responsible Business Initiative) is backed by an alliance comprising 120 relief agencies as well as churches, trade unions, and environmental and human rights organisations, all of whom want Swiss-based multinationals – potentially around 1,500 companies – to be held more accountable.

They say that companies should not only be bound by due diligence, but should also be liable for damage that they or any of their subsidiaries have caused as a result of human rights abuses or environmental violations. Specifically, victims should be able to seek redress in the Swiss civil courts. To escape liability, defendants would have to prove that they did everything within their power to exercise due diligence.

The heat is on this autumn

The referendum campaign should heat up at the beginning of October, as soon as Switzerland’s associations and political parties have digested the mammoth round of votes on 27 September (see “Swiss Review” 4/2020). In addition to support from the SP and the Greens, the initiative is backed by a civic committee consisting of members of all political parties. Volunteers from civil society have also established committees at local grassroots level to assist with the campaign effort.

Wealthy business federation Economiesuisse is running the No campaign. It wants to rectify the “unscrupulous” image of multinationals and highlight positive factors such as job creation in developing countries.

Responsible Business Initiative website: www.corporatejustice.ch

The No campaign: www.leere-versprechen-nein.ch

Due diligence in other countries

Since 2018, companies in the EU have been held accountable for how they exercise human rights and environmental due diligence. However, the European Commission is now looking to tighten the EU’s applicable directive. There are also growing calls for the introduction of a law on supply chains, which would require a stronger commitment by companies to avoid contingent risk. At the end of 2019, the German government held out the prospect of a supply chain law after a voluntary action plan met with limited success. A “duty of vigilance” law has been in effect in France since 2017, establishing civil liability for the consequences of due diligence failures. Other European countries are planning legislation that would require companies to perform due diligence in accordance with the EU directive. In 2019, the UK Supreme Court decided to allow claims to be heard against companies with regard to human rights violations committed by subsidiaries of these companies abroad.