Responsible Business Initiative

Article as analysis
The Responsible Business Initiative has been launched in the end of April. With it the debate about business and human rights is heatening up. Diametrically opposed positions are now shifting.

At the end of April, a coalition of over 60 civil society organizations, including Alliance Sud, launched the popular initiative "For responsible business – for the protection of people and the environment" in short, the Responsible Business Initiative. Its aim is for a legal duty of due diligence to be introduced for Swiss companies, which would also require their subsidiaries and subcontractors to observe human rights and environmental standards worldwide. Parent companies bear civil liability for damage caused by companies under their control, except where they can demonstrate that they have taken the necessary measures. The collection of signatures is progressing well, having surpassed 40,000 at the beginning of July.

A divided private sector

The business sector was quick to react. NGOs were invited to present the initiative before the Global Compact Network Switzerland, and at the general assembly of the Ethos Investment Foundation for Sustainable Development and the "Sustainability Summit" held by mass retailer Migros. The private sector is anything but united on the subject, however. A small segment welcomes a smart mix of voluntary measures and binding rules of law, as foreseen in the UN Guiding Principles on Business and Human Rights. That number includes current or former entrepreneurs such as Antoinette Hunziker-Ebneter (Forma Futura Invest and former CEO of the Swiss Stock Exchange), Marc Bloch (Managing director of La Semeuse SA) and Jacques Zwahlen (former CEO of Veillon), as well as Association or Foundation representatives like Nick Beglinger (President of Swisscleantech), and Dominique Biedermann (CEO of Ethos). The latters had also actively supported the motion by the National Council's Foreign Policy Commission (APK-N) in the spring session calling for a duty of due diligence for enterprises, and which the National Council rejected by wafer-thin margin.

The supporters of this camp are more numerous than one might suppose. A number of companies have already introduced due diligence processes and therefore have little to fear from the initiative. They are being tarnished by the actions of those companies that are bringing the Swiss economy into disrepute through their irresponsible behaviour regarding human rights and the environment. Saying this publicly is another matter, however, as no-one wants to disown the business lobby.

Officially, the Swiss Business Federation Economiesuisse and the Federation of Industrial and Service Groups SwissHoldings have not yet taken a position, but their Njet is the same as to the APK motion. Their view is that voluntary measures are enough and should be implemented internationally by everyone so that the competitiveness of Swiss companies does not suffer. What they do not say is that lobbies such as the International Chamber of Commerce have thwarted all attempts at regulation by the United Nations. Individual Swiss lobbyists such as Stéphane Graber of the Geneva Trade and Shipping Association (GTSA) are nonetheless convinced that the international trend is towards regulation. This was how he justified his support for the motion at any rate.

National Action Plan to be neutralized

On the whole, the Swiss Government has endorsed the position of the business sector and is counting on self-regulation by companies. A good example of this is its position paper on Corporate Social Responsibility (CSR) published on 1 April. It was concocted by the State Secretariat for the Economy (Seco). However, unlike the EU, there was no real multistakeholder consultation nor any analysis of the impacts of CSR practices by Swiss companies. At the level of rhetoric, the Federal Council does indeed support the smart mix, but this has not fleshed out its position. This does not auger well for the National Action Plan (NAP) for implementing the UN Guiding Principles on Business and Human Rights, which the Federal Council is now drawing up. It should have been published six months ago, but is now expected until the end of the year.

NGOs are wondering with some disquiet about the status that the NAP, which revolves around human rights, will have vis-a-vis the CSR position, which is larger and includes also topics such as environment or corruption. The Federal Council regards both papers as "complementary". If this is really so, why did Seco do its utmost for the CSR position to be published before the NAP? And why should the latter be one of the measures for implementing the former? If all is as it seems, it is (nevertheless) a matter of creating a framework to which the NAP can be subordinated and with which to better neutralize it. This is precisely how the business sector sees it, by the way.
Undermining the initiative

The Human Security Division of the Department of Foreign Affairs supports a less defensive approach when it comes to companies and human rights. Outgoing Director Claude Wild hopes that voluntary measures will one day become de facto rather than de jure mandatory. His view is that this approach, developed with commodity traders, is more promising than the arduous route of legislation. The goal is – provided one wins the trust of companies and simultaneously has the NGOs on board – to come up with a guidance for implementing the UN Guiding Principles, about which companies will have to render account.

The Swiss Agency for Development and Cooperation (SDC) recently agreed on a public-private partnership with the Global Compact Network Switzerland (GCNS), to last for three years and with a budget of CHF 1.2 million. According to Jean-Christophe Favre of the SDC, "the aim is to create the framework for a protected dialogue with the private sector and other players such as civil society and academia. It should pave the way for discussions without tactical motives and also for developing tools to help Swiss SMEs (Small and Medium-sized Enterprises) having activities abroad implement the UN Guiding Principles." These principles are one of the main thrusts of the planned activities.

This partnership is part of the re-launch of the Swiss Network, which is today supported by a mere 21 of 84 Swiss companies that are part of the UN Global Compact. It is being led by Antonio Hautle, former Director of Swiss Catholic Lenten Fund. An accompanying Stakeholder Council comprised of 5 to 9 members mostly from civil society, is to reinforce the credibility, transparency and efficiency of the GCNS. One idea is for the Swiss Network to serve as a platform for addressing issues relating to the implementation of the CSR position and the future NAP.

Conclusion: The signs are that government and private sector are working on a common strategy to counter the pressure to regulate companies. The principle: No to legislative measures. The rule: No action without the agreement of the business sector. The driver: Multi-stakeholder processes. Thus, we are experiencing at the Swiss level exactly what occurred at the international level, where the introduction of binding rules for companies was effectively thwarted business lobbies. Yet the problem of human rights violations and environmental pollution continues. With the smart mix approach at its core, the initiative represents an important step towards narrowing the gap between globalization and legislated protection of human rights and nature.