Things do occasionally move, after all!

Ever more entrepreneurs are willing to review their foreign business regularly for violations of human rights or environmental standards.
Political article
The discussion on human rights and environmental responsibility on the part of Swiss multinationals has now become mainstream. The Parliament is dealing seriously with the Responsible Business Initiative.

Guest article by Peter Niggli

Euphoria would be premature. It was a pleasant surprise however to see the Legal Affairs Committee of the National Council discuss the Responsible Business Initiative (hereinafter «Initiative») in an open-minded and flexible manner. It was also surprising that of all people, SVP National Councillor Hansueli Vogt, a specialist in corporate governance and equity law – has taken over substantive issues from the Initiative into the current review of equity law and in so doing has formulated a veritable counterproposal to the Initiative. Just months ago we were still locked in verbal combat with Vogt over the Initiative. His professional side has now obviously triumphed over the political persona, something that takes great courage in the democratic-centralist SVP Parliamentary Group. The Swiss daily newspaper Neue Zürcher Zeitung (NZZ) has already jeeringly remarked that the counterproposal would hand victory to the initiators without a referendum.

But things have not yet come to this. It remains to be seen whether the counterproposal will survive a reconciliation of differences and make it through both chambers without substantial curtailments and thus remain worthy of consideration in the eyes of the initiators. At all events, the roughly 100 civil society organizations that support the Initiative are marshalling their forces and, with growing approval, are preparing for the referendum campaign: whether in favour of the Initiative or in favour of a good counterproposal, as the die-hard opponents of the Initiative would possibly also like to see it defeated by referendum. All the organizations backing the Initiative have their own experiences of unlawful behaviour by Swiss companies. The trade unions, with the contempt shown for workers' rights in Latin America and Asia, development and human rights organizations, with human rights abuses by mining and commodity trading companies in all commodity-rich countries, environmental organizations, with environmental degradation wherever democratic controls fail and the rights of the people are weak.

Economiesuisse and SwissHoldings – the association of multinationals – have for years been opposing any legislative regulation of human rights obligations on the part of corporations – a position which the Federal Council obediently adopted. The launch of the Initiative thus met with initial scepticism on the part of some development organizations. How could a popular initiative prevail against the opposition and financial clout of all the private sector organizations? No company seemed willing at the time to come out in favour of the Initiative.

The wind has turned

That has changed. Of course the leadership of Economiesuisse and SwissHoldings did not enquire at the time whether their member companies and associations completely rejected the concerns raised by the Initiative. Meanwhile, individual companies and the Groupement des Entreprises Multinationales (GEM) have now come to expressly favour the Initiative or a substantive counterproposal. They do not want a referendum campaign that would require them to huddle like sheep behind their association's leadership and speak out against respecting human rights and protecting the environment.

The die-hard opponents stress that there is no need for action, as the companies with worldwide operations are respecting human rights, protecting the environment and complying with domestic legislation everywhere – voluntarily and without coercion. The NZZ takes the view that we cannot punish everyone collectively because of «a few black sheep», as enterprises are «not bandits».

But it is precisely the fault of the «black sheep» or «bandits» that reasonable companies are now becoming uneasy and the Initiative is finding growing public support. New cases are arising not 'isolatedly' but regularly, in which Swiss companies violate the human rights of employees or of the local people in poor countries. For the ´white sheep`, the ´black` ones are a major reputational problem. Their actions are «tarnishing the reputations of companies with exemplary behavior, thus making them 'guilty by association'», as Klaus Leisinger, former President of the Novartis Foundation, so aptly summed it up. And they are fuelling the misgivings about the «exemplariness» of companies which – without public scrutiny – may have 'voluntarily' committed themselves to respect human rights.

And not without reason. The behavioural guidelines and agreements through which companies commit to respecting human rights and the environment all came about in order to avoid any legislative regulation– whether international or domestic – of their obligations. The most ample 'voluntary' agreement is the UN Global Compact of the year 2000. It encompasses a mere one-fifth of the world's 45,000 transnational and multinational corporations. From Switzerland, all of 118 companies have acceded to it – a paltry showing when it is considered that for some years now the Federal Council has been trying hard to persuade companies to act voluntarily. Of the top ten companies by turnover in Switzerland, only four are members of the Global Compact, including two commodity trading companies with reputational problems, namely Glencore and Trafigura.

It must be acknowledged that there are individual corporations striving voluntarily to implement a human rights policy worldwide. It must also be acknowledged, however, that after at least 20 years of Corporate Social Responsibility, very little has been achieved. The Business & Human Rights Resource Centre recently began producing the Corporate Human Rights Benchmark, in collaboration with investor groups. The first report published in April 2018 on companies that have some kind of human rights policy states: «The average performer is a poor performer». In less than half the enterprises does top management take a leading role in human rights policy. And in all the companies looked at, access to compensation for damages or remedial action is the weakest aspect of their efforts.

The Initiative, and to a great extent also the counterproposal, would eliminate this.

Peter Niggli is a member of the Initiative Committee of the Responsible Business Initiative. He was Director of Alliance Sud until mid-2015.