The Federal Council acknowledges problems and knows the solution, but stops short of implementation

The Federal Council published its report on the 28th of may in fulfillment of postulate 12.3980. The postulate arose in response to the Swiss Coalition for Corporate Justice petition, and demanded information about the ways to require businesses to undertake human rights and environmental due diligence. The Federal Council confirms that there is a need for action and that legislation on due diligence is conceivable. It is now up to Parliament to act.

Swiss corporations keep making negative headlines. The latest report was made by the Swiss television show, "Rundschau", on the Glencore subsidiary Mopani, the company which operates a copper mine in Zambia. The Mopani mine dumps huge amounts of sulphur dioxide into the environment, with emissions that exceed the WHO guideline values by almost forty times. The incidence of respiratory disease and the death rate in this area are extremely high. Such incidents show that human rights violations and pollution from corporate activities are reality. The Swiss Coalition for Corporate Justice (SCCJ)calls for binding rules for Swiss companies.

The Foreign Affairs Committee of the National Council responded to the SCCJ petition – signed by 135,000 people - with a postulate, calling for a report on the possibilities to require businesses to carry out human rights and environmental due diligence. The instrument of due diligence is the centrepiece of the United Nations Guiding Principles on Business and Human Rights, principles that were unanimously adopted by the Human Rights Council in 2011. The Federal Council has today published its report, in which it recognizes the need for action: "The density of international companies based in Switzerland is very high. The question of whether or not Switzerland should play a leading role in the implementation of the UN Guiding Principles on Business and Human Rights and other international standards in the field of human rights and environmental protection is therefore justified.” Switzerland carries therefore for "a great responsibility [regarding] the observance of human rights and environmental protection, particularly in countries with insufficient rule of law”. The Federal Council acknowledges the relevance of a combination of mandatory and voluntary measures, and sees a national and international "trend towards transparency and increased direct responsibility of companies for their impacts on human rights and the environment."

For the first time, the Federal Council demonstrates various ways in which due diligence and/or reporting requirements for companies could be enshrined in law. The variant that in the eyes of the Federal Council goes the furthest ("due diligence as a duty and responsibility of the Board, plus reporting requirements as well as an external audit") is an absolute minimum for the Swiss Coalition for Corporate Justice. The danger with any of the other options is that they will degenerate into ineffective basic declaratory principles.

The Swiss Coalition for Corporate Justice welcomes this positive review by the Federal Council and its fundamental appreciation for binding rules: "By recognizing the legislative need for action in this area, Switzerland would assume responsibility for active promotion of the observance of human rights and the protection of the environment”. It is, however, unfortunate that the Federal Council stops short in the "Foundation for Concrete Legislative Proposals" and missed the opportunity to take the next logical step by actually legislating on due diligence.

The ball is now in Parliament’s court. From the SCCJ perspective, preparations for a possible popular initiative on this issue are now well advanced. The focus of the draft text is precisely on these means of prevention, creating a duty for companies to carry out due diligence particularly on its overseas business operations, and emphasizing the responsibility of the local parent company for the entire supply chain.

For additional information contact
Rahel Ruch, SCCJ Coordinator, tel +41 76 517 02 08, rahel.ruch@alliancesud.ch 
Michel Egger, SCCJ Coordinator, tel +41 79 599 97 30, michel.egger@alliancesud.ch 
Chantal Peyer, SCCJ / Pain pour le prochain, tel +41 79 759 39 30, Peyer@bfa-ppp.ch

The Swiss Coalition for Corporate Justice is an association of 50 development and human rights organizations, environmental and women's organizations, trade unions, church groups and critical shareholder associations. The Coalition advocates for clear rules for international companies, so that they must respect human rights and environmental standards worldwide. www.rechtohnegrenzen.ch.