Plan to boost Swiss firms’ global liability fails in referendum

Switzerland rejects extending corporate liability over rights abuses and environmental harm caused abroad.

The initiative to change the constitution was launched by an alliance of 130 non-governmental organisations [Fabrice COFFRINI/AFP]

A proposal that could have stiffened penalties against companies based in Switzerland if they violate human rights or harm the environment abroad has failed in a Swiss referendum.

The initiative to change the constitution by the Responsible Business Initiative (RBI) won a narrow majority of votes on Sunday, with 50.7 percent backing it and 49.3 percent against, but failed because most of the country’s 23 cantons, or states – three of which are split in half – came out against it.

Under Switzerland’s system of direct democracy, which gives voters a direct say several times each year on a variety of issues, proposals need a majority both of votes cast and of cantons to pass.

It only achieved a majority in eight and a half cantons – including the four major cities of Zurich, Geneva, Basel and the capital, Bern – with the rest voting against.

The federal government opposed the plan championed by left-leaning groups and some big civil society organisations, asserting that it went too far.

The measure could have made large Switzerland-based companies liable in the country’s courts for their flawed operations or those of their subsidiaries and subcontractors in foreign nations, unless they were able to show that they conducted proper due diligence beforehand.

The rejection by voters automatically activated the government’s counter-proposal, which also requires companies to report on rights, environmental protections and corruption issues – but without being liable for violations.

Polarised campaign

The initiative was launched by an alliance of 130 non-governmental organisations and had the backing of trade unions and church groups.

Supporters of the rejected initiative had plastered Swiss towns and cities with posters highlighting environmental degradation and human suffering caused by Swiss companies.

Campaigners also underscored how pesticides long banned in Switzerland are still sold by agrochemicals giant Syngenta in developing countries, and deplored small-particle pollution spewed from a cement plant owned by LafargeHolcim in Nigeria.

The government and multinationals said the proposal went too far [Fabrice COFFRINI/AFP]

The Swiss business community, along with the government and parliament, argued that the proposed constitutional amendments could have been detrimental for all Swiss companies, not just those that behave badly.

Multinational companies are important drivers of the Swiss economy, which at the end of 2018 counted close to 29,000 such corporations, accounting for more than a quarter of all jobs in the country, according to official statistics.

Businesses and employer organisations voiced particular concern over a provision that would have made Swiss-based businesses liable for abuses committed by subsidiaries unless they could prove they had done required due diligence.

While backers of the rejected initiative acknowledged that most companies respect rights and environmental protections, they insisted that voluntary measures were not enough to bring the rest in line.

Another measure that would have banned the financing by the Swiss national bank or pension funds of any weapons for export, from handguns to assault rifles to tanks, also failed on Sunday, with a majority of both voters and cantons opposing it.

Source: News Agencies