High time for Swiss referendum on the Responsible Business Initiative as parliament dumps compromise proposal
June 23rd, 2020

ECCJ regrets the latest parliamentary developments in Switzerland, where the National Council’s counter-proposal to the Responsible Business Initiative (RBI) was narrowly defeated despite support by a substantial part of the business community and readiness of Swiss civil society to engage in a compromise. ECCJ notes with surprise that Swiss parliament instead adopted regulation that has been officially acknowledged as not being fit for purpose by the European Commission in recent months. Swiss citizens will have their say in a popular referendum on the RBI in late 2020.

The Swiss Coalition for Corporate Justice (SCCJ) has been pushing, since 2016, for a Responsible Business Initiative to introduce Human Rights and Environmental Due Diligence obligations into the Swiss Constitution.

As a reaction to the proposed Initiative, both the National Council and the Council of States came up with their own respective counter-proposals. The National Council’s advanced broad due diligence requirements and subsequent corporate liability in line with the developments in the European Union. On the contrary the Council of State’s suggested mere issue-specific due diligence requirements limited to child labour and conflict minerals lacking any (!) enforcement mechanisms and complemented only by reporting obligations similar to those under revision in the EU (EU Non-financial Reporting Directive).

Regretfully, on 4 June 2020, a conciliation committee of both parliamentary chambers ruled the former out and opted for the latter by 11 to 15 votes, which was subsequently approved by the National Council on the 8th and by the Council States on the 9thof June.  Last Friday, the chambers reaffirmed this vote.

During the 3-year debate the support for the National Council proposition grew continuously among business associations – notably the biggest Swiss retailers and a group of 90 multinationals – and the National Council insisted on its proposal four times. But other Swiss business associations such as Swissholdings and Economiesuisse demonstrated their unwillingness to understand and implement the UNGPs which led to strong reactions from experts in the field.

Given the worrying shortcomings of the just adopted counter-proposal, the Swiss Coalition for Corporate Justice has announced that the Responsible Business Initiative will not be withdrawn but put to a referendum in late 2020, giving Swiss people the final say. The Initiative enjoys growing popular support, with 78% of eligible voters in favour, according to the most recent polls, and an increasing number of businesses behind it. If the RBI is adopted, parliament will be tasked to craft implementing legislation. If it is dismissed in the vote the minimal counter-proposal would enter into force subsequently.

Switzerland missed the train last week, but the referendum over the Responsible Business Initiative will provide a second chance to achieve mandatory due diligence legislation in line with international human rights standards, with the forthcoming EU legislative initiative on corporate due diligence announced in April, and with other relevant national developments in the field, the Netherlands being the most recent example of several Member States that are engaged in discussions about following the French model of introducing broad due diligence obligations for all human rights risks. Just last week, the Dutch government coalition member, Christian Union, and three opposition parties submitted a legislative proposal to this end.

For Switzerland, despite being one of the continent’s most thriving economies and having lagged behind for many years, it now remains open whether it will assume its responsibility to ensure corporate respect for human rights and the environment.