National Council sticks with compromise proposal – Swiss Coalition for Corporate Justice

National Council sticks with compromise proposal

04.03.2020

The National Council leaves the door open for a political compromise. The ball is back in the court of the Council of States

Today, Switzerland’s National Council reaffirmed its counter-proposal to the Responsible Business Initiative. This proposal was forged through a compromise between the Legal Affairs Committees of both parliamentary chambers. It is also supported by an important group of business actors such as a major Swiss retail sector association (IG Detailhandel), the Multinational Companies Grouping (Groupement des Entreprises Multinationales GEM) or the Federation of Entrepreneurs of the French-speaking part of Switzerland (FER), as well as by the authors of the initiative.

The counter-proposal, however, contains a number of painful concessions for the authors of the initiative: The counter-proposal’s binding rules apply to only the largest of multinational corporations and its liability provisions were massively curbed. Notwithstanding these cutbacks, the initiative committee assured it would withdraw the initiative should the National Council’s counter-proposal be enacted into law. The committee argued that the counter-proposal allows for a faster introduction of legally binding measures than would be possible through the path of a popular vote on the initiative. The speed with which new measures can be implemented is particularly important for those whose human rights are being violated.

 

The National Council’s voting recommendation on the initiative: a narrow NO

Dick Marty (Liberal Democratic Party, FDP), former member of the Council of States for the Canton of Ticino, says about today’s decision: «Multinationals should respect human rights and environmental standards. If multinationals, however, violate human rights, they should be held responsible. The initiative’s demands are self-evident. That’s why it enjoys such wide support in parliament. Today, almost half the members of Parliament supported a YES voting recommendation on the initiative. I look toward a possible popular vote with confidence because of the large and ever-growing support for the initiative – not least from centre-right and conservative politicians. Three out of four voters support our initiative, based on the latest surveys.»

 

Council of States to decide on 9th March
This item of business will now move back to the Council of States. The Councillors of State will have to decide whether they want to reaffirm their support for the fig-leaf-like counter-proposal, which was hastily introduced by Federal Councillor Keller-Sutter. This proposal will not cause the initiative to be withdrawn, since it does not contain any binding rules that could prevent human rights violations by multinational corporations. Multinationals such as Glencore or Syngenta would not be held responsible for damages they cause, they could simply publish a yearly report on glossy paper.

 

BACKGROUND

What does the Responsible Business Initiative want?
The Responsible Business Initiative’s demands are self-evident: Multinationals such as Glencore should be held responsible when they poison the drinking water, or violently displace local people from their own land.

 

Who supports the Responsible Business Initiative?

120 organisations working in human rights, environmental protection and development aid, a business committee comprising of over 170 entrepreneurs, over 160 politicians in a centre-right political committee, Operation Libero, the Swiss Bishops’ Conference, the Protestant Church in Switzerland, the Swiss Evangelical Alliance, as well as over 350 local groups with thousands of volunteers are ready to campaign for a successful popular vote.

 

Latest surveys
In February 2020, the LINK Institute carried out two representative surveys on behalf of the Responsible Business Initiative, one over the phone and one online. The surveys found 78% of voters would support the initiative, if the vote were held today.

 

Assessment of the National Council’s counter-proposal
The counter-proposal in the National Council’s version, applies to far fewer multinational corporations than the initiative would. The liability provision is restricted in four respects: it applies only to legally controlled subsidiaries; it applies only for damages to personal integrity, life, and property; and only for human rights standards ratified by Switzerland. Before any suit can be brought, arbitration is mandatory, which increases the threshold for concerned parties.

 

Assessment of the Council of States’ counter-proposal

The counter-proposal in the Council of States’ version is a fig leaf because it consists mostly of a duty to reporting obligation. This will not reduce human rights violations or environmental destruction. Professor Christine Kaufmann, chair of the OECD Working Party on Responsible Business Conduct, confirms this. As she stated in the Swiss daily «NZZ» on 2 March: «This question was raised in an OECD conference a few days ago. The clear conclusion was that a duty to report, as is enacted in the EU, has not proven itself.»
The scope of the due diligence obligation is restricted to child labor and to four conflict minerals is also insufficient, an issue that was also raised by UNICEF in a letter to all members of Parliament.
A lawsuit against corporate headquarters already possible in many countries
A look across the border shows: The French law («Loi de vigilance») is at least as far-reaching as the Responsible Business Initiative, Italy is even pursuing criminal liability with regards to human rights violations and in Great Britain, Canada and the Netherlands cases are pending before the courts.

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