On the 14th June, the National Council (first chamber in the Parliament) in Switzerland approved a counter-proposal to the citizen Responsible Business Initiative (RBI). The proposal, approved by a broad majority (121 votes in favour and 73 against), establishes human rights obligations for Swiss companies with respect to their overseas impacts, as well as civil liability for parent companies for the harm caused by entities under their control.

The bill approved last month is the National Council’s response to the citizen Responsible Business Initiative (RBI). The latter proposed amendments to the Federal Constitution in order to include provisions laying out the companies’ responsibility to respect internationally recognized human rights and environmental standards and to ensure that these standards are also respected by companies under their control.

In order to fulfill this responsibility, under the RBI companies would have to implement human rights due diligence (HRDD). The initiative also included civil liability for parent companies when companies under their control violated international human rights or environmental standards.

Last November 2017, the Legal Affairs Committee of the National Council considered the RBI and approved this counter-proposal. The text, which has now been approved by the entire chamber without any changes, maintains the spirit and key elements of the RBI, namely mandatory HRDD and parent company liability.  

According to the Swiss Coalition for Corporate Justice (SCCJ), which proposed the RBI, the National Council’s counter-proposal represents a compromise among the views of the RBI’s proponents, the Parliament and the business community. It has gathered the support of eminent scholars, including the creator of the UNGPs, John Ruggie, and of the business association representing 90 Swiss multinational companies (GEM).

Nonetheless, this compromise also entailed “difficult concessions” for those standing behind the RBI, as expressed the coalition in her press release. To begin with, the counter-proposal widely reduces the scope of the law, as it only applies to large companies. Civil liability provisions are also importantly restricted in comparison to what is demanded in the RBI (a table comparing the two proposals can be consulted in the SCCJ’s website).

Despite its shortcomings, the counter-proposal represents an important step forward in the regulation of Swiss large corporations’ global operations, and for the right to remedy of those affected their activities. The process to adopt and implement the counter-proposal is also quicker than the one to adopt the RBI (that would have to be subject to referendum).

For these reasons, the RBI’s committee had committed to withdraw the initiative if the counter-proposal was adopted by the National Council.

The process has not finished yet however. The Council of States (upper chamber in the Swiss parliament) has still to vote the text, something which is expected for next fall or winter.

Chantal Peyer, member of the initiative committee, comments on this decision: “The National Council’s acceptance opens the way to a compromise. Although it contains difficult concessions, it would allow a quicker implementation than in the case of a popular vote. It is now up to the Council of States to decide.”

More information on the RBI evolution , legal table and more,  on the bhrinlaw.org website.

Read the text of the initiative with explanations, here.

Swiss Coalition for Corporate  Justice’s website (in English and versions in French and German).