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World Swiss vote on making firms liable for rights abuse

03:51  28 november  2020
03:51  28 november  2020 Source:   bbc.com

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Swiss voters decide on Sunday on a law that would make Swiss businesses financially and legally liable for human rights violations or environmental damage. The new law seeks to enforce these standards, allowing victims of alleged human rights violations or environmental damage to sue Swiss

In a historic vote , the Swiss will determine if multinationals should be held liable for global abuses . In a nationwide referendum on Sunday, Swiss voters will decide whether companies headquartered there should be held legally liable for whatever environment wreckage and human rights abuses

Swiss voters decide on Sunday on a law that would make Swiss businesses financially and legally liable for human rights violations or environmental damage.

a close up of a book: The No campaign message (L) is: © BBC The No campaign message (L) is: "Help by all means but not like this"; the Yes campaign poster reads: "Drinking water contaminated, child poisoned and commodities firm liable"

The law would affect their supply chains anywhere in the world.

Switzerland may be a small country, but its business reach is long.

Companies such as Nestlé, Syngenta, Glencore or Novartis source products all over the world and Switzerland is a world centre for commodity trading.

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Swiss voters look set to get the final say on whether Swiss -based companies should be liable for human rights abuses and environmental violations in operations even outside Switzerland . Both chambers of parliament still have to vote on the compromise next week.

Swiss voters are about to decide whether a business should be held liable for human rights and environmental abuses , even if the wrongdoing was committed in a foreign country by a subsidiary or a supplier it works closely with. Today at 2:17 PM www.cnn.com.

A third of all commodities consumed worldwide are traded by companies based in Switzerland.

Aren't firms already liable for damage they cause?

Corporate responsibility is a priority for multinationals and companies such as Nestlé say they scrutinise their supply chains from start to finish to ensure fair working practices, and to prevent child labour or environmental damage.

The new law seeks to enforce these standards, allowing victims of alleged human rights violations or environmental damage to sue Swiss companies in Swiss courts. The companies would have to prove they had taken all necessary measures to prevent any harm.

a man riding a skateboard up the side of a mountain: A third of the world's commodities are traded by Swiss-based companies such as Glencore, which is also one of the world's biggest miners © Christian Lombardi/Public Eye A third of the world's commodities are traded by Swiss-based companies such as Glencore, which is also one of the world's biggest miners

"Many companies do the right thing already," says campaigner Andreas Missbach, "but in cases where they don't then [under this new law] victims of a subsidiary of a Swiss company abroad could sue the Swiss parent company for damages."

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As the only large mining firm based in Switzerland , Glencore has become the unwilling poster child of a campaign to change the constitution so Swiss companies are liable at home for human rights abuses or environmental harm they cause abroad.

As the only large mining firm based in Switzerland , Glencore has become the unwilling poster child of a campaign to change the constitution so Swiss companies are liable at home for human rights abuses or environmental harm they cause abroad.

He points specifically to the extractive industry as an area of concern. Mines in Latin America that supply Swiss companies are, he claims, causing serious harm.

"Communities are mistreated, people are put off their land, water poisoned, and we have this with companies that are headquartered in Switzerland."

Switzerland's role in global commodities trade

  • Global trading hub for oil and petroleum, metals, minerals, agricultural products, sugar, cotton, cereals and oilseed
  • Employs 35,000 people and generated annual revenue of 25bn Swiss Francs (£21bn; €23bn) in 2017
  • There are 550 commodities trading companies in Switzerland

Source: Swiss Foreign Affairs Department

What do Swiss business leaders say?

Most are very wary of the proposed new law, particularly because they believe it will put Switzerland on a different and more radical path than the rest of Europe, and therefore put Swiss businesses at a disadvantage.

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As the only large mining firm based in Switzerland , Glencore has become the unwilling poster child of a campaign to change the constitution so Swiss companies are liable at home for human rights abuses or environmental harm they cause abroad.

As the only large mining firm based in Switzerland , Glencore has become the unwilling poster child of a campaign to change the constitution so Swiss companies are liable at home for human rights abuses or environmental harm they cause abroad.

Erich Herzog of Swiss business federation Economiesuisse argues it's not the right moment to introduce strict, and in his view experimental, new laws.

"It would put Swiss companies already weakened by the pandemic in great difficulties. Switzerland is a very small country. We shouldn't be a petri dish where there is no guarantee those experiments will result in a positive outcome."

He believes this sort of decision has to be made on an international level and there is political backing for that point of view.

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The Swiss government and both houses of parliament have rejected the new law, promising instead to introduce new rules requiring companies to strengthen checks on their overseas operations, and to tie Switzerland to responsible business laws being considered by the European Union.

"This proposal goes too far, it's too radical," said Swiss Justice Minister Karin Keller-Sutter. The government, she said, was especially worried about the law's provision to make Swiss companies liable for the actions of their independent suppliers.

Switzerland: a referendum to make multinationals more responsible abroad

 Switzerland: a referendum to make multinationals more responsible abroad The Swiss must decide on Sunday whether multinationals based on its soil should do more to ensure respect for human rights and the environment in their activities abroad. © SRF The Swiss must decide on Sunday whether multinationals based in the Alpine country should do more to ensure respect for human rights and the environment in their activities abroad, but also those of their suppliers and even their business partners.

graphical user interface, text © Provided by BBC News

But some Swiss business leaders are in favour of the initiative.

Thomas Rauber, the CEO of an investment firm, believes it could be a positive move.

"It would send a signal to the world that Switzerland is a liberal and economically stable country, where you can do business with a clear framework, in a society that upholds human rights. Our economy is not successful if it's only about profits."

But aren't Swiss voters cautious about money?

Traditionally, yes. If urged by both government and business leaders to reject a proposal because it's financially risky, Swiss voters tend to toe the line.

Moves to crack down on money laundering were resisted for many years, and the Swiss clung fiercely to banking secrecy despite the reputational damage to their banking sector.

But the responsible business initiative seems to have garnered support from wide swathes of Swiss society, from left and right, urban and rural, and from Church groups.

Opinion polls show a majority of voters may say yes to the new law. Far from being too radical, says campaigner Nina Burgharz, the polls show the political class is out of touch.

"Social reality has changed," she says. "We had a huge development in the last 10, 20 years, and sometimes I have the feeling that our politicians just close their eyes and they don't see what is actually going on. This initiative is really just a way to conform that social reality into our law."

In the run-up to the vote, the gap in the opinion polls has narrowed and the result will be tight. Switzerland is in the grip of a bitter coronavirus winter, with all its accompanying economic woes.

But the fact that Switzerland is voting on such a law at all is a reflection of changing attitudes. So too is the other proposal on Sunday's ballot paper: to forbid Swiss financial institutions from investing in any form of arms production, from nuclear weapons all the way down to bullets.

Switzerland has rejected plans to impose stricter responsible business regulations, despite a majority of voters approving them .
Swiss voters on Sunday rejected sweeping responsible business standards that would have held multinational companies liable for their conduct abroad, reports Swissinfo. The Responsible Business Initiative would have amended the constitution, adding penalties for Swiss-based companies committing human rights abuses abroad. A razor-thin majority of voters approved of it, with 50.7% in favour vs. 49.3% against, but the measure also needed support from the Swiss canton voting system, according to public data. Visit Business Insider's homepage for more stories.

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