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Swiss companies cannot be held liable in their own country for environmental damage or human rights violations that they have caused in other countries. The initiators of a corresponding proposal failed in a referendum on Sunday.
The majority of the population narrowly agreed with the initiative. 50.7 percent of citizens said yes. However, the initiative failed because most of the cantons did not agree. In Switzerland, similar to the electoral system in the US, constitutional changes must be adopted in most cantons in addition to the majority of all votes. It is the first time in 65 years that the majority of the population has voted in favor of a popular initiative, but it fails due to the so-called more cantons.
Disappointment in environmental and human rights organizations
The result is, however, a respectable success for the initiators: that a majority of the population passes a referendum that so clearly contradicts the interests of powerful corporations and business associations and puts morality in the foreground is something new for the country. The popular initiative was also very popular with middle-class voters. And the adjusted result could be a harbinger of future votes.
The proponents included more than 130 church organizations, aid agencies, environmental and human rights organizations. He wanted to impose a new duty of care on Swiss companies when doing business abroad. If there are shortcomings, companies should be able to be sued in Swiss courts for damages caused by subsidiaries or suppliers along supply chains.
In addition to the government, the economic association Economiesuisse was among the opponents. He had condemned the initiative as “radical, unreal, and arrogant.” They put Swiss companies under widespread suspicion.
Alternative law without penalties
Instead, a weakened law comes into force that the government has already passed through parliament:
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Therefore, companies must monitor the activities of their subsidiaries and business partners abroad, act with due care and report.
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This law does not provide penalties.
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Subsidiaries and suppliers continue to be liable for damages they cause themselves and abroad in accordance with the law that is applicable to them.
In addition to corporate responsibility, another initiative was rejected: According to initial projections, 58 percent of voters voted against a “ban on financing war materiel producers.” The proponents of this initiative wanted the National Bank, foundations and pension funds to no longer be able to invest in companies that generate more than 5 percent of the sales of war material production.
