For Responsible Business

What happens when multinationals from Switzerland abuse human rights and damage the environment in the South? Often nothing at all. A broad NGO coalition has launched a popular initiative meant to fill the gaps in the legislation.

No country has more multinational corporations per capita than Switzerland. Numerous companies with their head office in this country have been caught abusing human rights or environmental standards in countries of the South. Glencore pollutes rivers in the Democratic Republic of the Congo; Triumph could not care less about trade union rights; Syngenta jeopardizes farmers through the use of pesticides that are banned in Europe. Yet head offices in Switzerland are not legally liable for the business practices of their subsidiaries or other enterprises under their control.

Besides, it is very difficult for victims to obtain legal redress. If there is no independent and fair administration of justice in their country, they should be able to bring an action in the place where the company's head office is located. As revealed by an extensive international study, numerous legal and practical obstacles stand in their way, particularly in Switzerland.

While championing the advancement of human rights and environmental standards in the international arena, back at home Switzerland is resisting the introduction of legislative measures to regulate enterprises. Instead, the Federal Council favours voluntary initiatives by enterprises. This is stated in the Federal Council's position paper and action plan on corporate social responsibility for society and environment.

Resoundingly successful petition

The unsatisfactory situation led to the 2012 launch of the "Corporate Justice" campaign. Initiated by a handful of organizations – including Alliance Sud – it was supported by some 50 NGOs and trade unions, and called on the Federal Council and Parliament to formulate a law requiring firms with headquarters in Switzerland to respect human rights and environmental standards throughout the world. The petition with over 135,000 signatures was delivered to the Federal Chancellery on 13 June 2012. It contained two demands: the introduction into Swiss law of a corporate duty of due diligence as regards respect for human rights and environmental standards, also applicable to subsidiaries operating worldwide (prevention). In addition, the obstacles in the way of victims seeking legal redress in Switzerland should be removed (compensation).

Ruggie strategy for Switzerland

In parallel to the submission of the petition, five Members of Parliament also put forward motions, including a postulate, calling on the Federal Council to draw up a Ruggie strategy for Switzerland, in other words, to table a national action plan for the implementation of the UN Guiding Principles on Business and Human Rights as they were unanimously adopted in June 2011 by the UN Human Rights Council. On 14 December 2012 the postulate was narrowly approved by the National Council (97 to 95 votes). The Federal Council was to fulfil the mandate by December 2014. There have been several delays resulting from differences of opinion within the Federal Administration. At mid-2016, the national action plan was still only at the draft stage.

E-mail avalanche for the Federal Council

Between 23 and 30 January 2013 during the World Economic Forum at Davos, over 10,000 people sent e-mails to Federal Councillors Burkhalter (FDFA) and Johann Schneider-Ammann (EAER) calling for the "Corporate Justice" petition to be implemented.

Partial victory

This extensive citizen mobilization bore fruit for both aspects of the petition. Regarding prevention, the National Council on 13 March 2013 approved a postulate that had already been approved on 30 October 2012 by its Foreign Affairs Committee (FAC-N) in response to "Corporate Justice". It called on the Federal Council to conduct a comparative law study on due diligence in respect of human rights and the environment in connection with the activities of Swiss corporations abroad. The duty of due diligence, which is central to the UN Guiding Principles, provides for enterprises to identify human rights risks, to take remedial action and to report transparently thereon.

The comparative law study was published on 28 May 2014. In it the Federal Council acknowledges the need for action and the possibility of incorporating a duty of due diligence into law. It deems justified the question of whether Switzerland ought not to play a pioneering role in implementing the UN Guidelines for Business and Human Rights. It also acknowledges that Switzerland bears a major responsibility for compliance with human rights and environmental protection, in particular in countries where the rule of law is insufficient.

For the first time the Federal Council has put forward a range of options as to how a duty of due diligence could be enshrined in law. As a consequence of the report, on 2 September 2014 the FAC-N approved a motion calling for a draft law on the duty of due diligence.

Regarding compensation, on 26 November 2014 the Council of States approved a postulate (14.3663) calling for a report on access to remedy for victims of human rights abuse by companies. The Federal Council was requested to conduct an in-depth study of how the third pillar of the UN Guiding Principles (access to remedy) could be properly reflected in Swiss legislation. At mid-2016, this report was still pending. Its recommendations are to be embodied in the national action plan.

Evasive manoeuvre by the National Council

On 11 March 2015 the "Corporate Justice" coalition came close to securing yet another important partial victory. After a tumultuous debate, the National Council decided by a wafer-thin majority (with 91 to 90 votes, including the President's casting vote) to support the motion of its FAC-N and call for a draft law on the duty of due diligence. A second vote was held after a CVP proposal for reconsideration. Several deputies then changed their minds or abstained from voting.

Launch of a popular initiative

After this National Council manoeuvre, over 65 non-governmental organizations decided to launch the Responsible Business Initiative. As with the "Corporate Justice" campaign, in which Alliance Sud had coordinated the parliamentary lobbying, Alliance Sud again played a central role in the launch of this initiative. The Director of Alliance Sud is a member of the Initiative Committee and of the managing committee of the association newly formed to coordinate the initiative. At end-April 2016, the initiative had already garnered some 140,000 signatures. Submission is expected in October 2016.