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Corporate News - 02/10/2017

The Swiss Federal Council rejects a responsible business initiative equivalent to the French ‘Due Diligence’ law adopted in March 2017

The Federal Council rejected the grassroots initiative, stating it went ‘too far’ and could potentially deter multinational companies from headquartering in the country.

The October 2016 initiative, ‘Responsible business for the protection of humans and the environment’,  ‘Entreprises responsables – pour protéger l’être humain et l’environnement’ lodged on October 10th 2016, requests calls for companies with headquarters in Switzerland to respect international environmental and human rights standards both in Switzerland and abroad. Under the initiative companies are required to report due diligence; those failing to do so are liable for damages – even if damages were caused by companies they control and there was no direct involvement in the controversial activities (source: Business and Human Rights Center).

The Federal Council’s two issues with the initiative were ‘firstly the obligation of due diligence in addition to periodic reports, which extend to all business affiliations and all companies controlled abroad. And secondly the liability incurred is far greater than demanded by other countries’ legislations – potentially jeopardising Switzerland’s economic competitiveness.’

The Federal Council gives high importance to respecting human rights and protecting the environment, defining permanent, high-priority objectives within its 2016-2019 legislative programme. It therefore shares the initiative’s goal of creating responsible multinational companies, and already regulates the foreign operations of its companies to some extent. Action plans on economics, human rights and the environment were recently launched, including a plan on corporate responsibility in April 2015 and the UN Guiding Principles on Business and Human Rights in December 2016. The Swiss Federal Council believes the measures in place largely meet the demands of the initiative already.

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Keywords : Human Rights