World’s strictest corporate responsibility plan fails in Swiss vote

A plan in Switzerland to impose the world’s strictest corporate
responsibility rules, which would have made Swiss-headquartered multinationals
liable for abusive business practices worldwide, failed to pass in a vote on
Sunday.

The proposal would have amended
the Swiss constitution and forced such companies to ensure they and their
suppliers respected strict human rights and environmental protection standards.

But it failed to reach the
double majority required for initiatives to pass, under federal Switzerland’s
system of direct democracy.

Initiatives require support
from a majority of voters nationwide, and from a majority of Switzerland’s 23
cantons, three of which are split in half.

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While Swiss voters overall
backed the initiative by a very narrow margin, a majority in most cantons voted
against it.

Some 1,299,173 voters, or
50.7 percent, backed the initiative, according to full results published by the
ATS national news agency. The turnout was 46.7%.

However, it only achieved a
majority in eight and a half cantons — including the four major cities of
Zurich, Geneva, Basel and the capital Bern — with the rest voting against.

The initiative was launched
by an alliance of 130 non-governmental organisations and had the backing of
trade unions and church groups.

It was opposed by both the
government and parliament, which warned that while its intention was good, the
proposed legislation went “too far”.

The rejection by voters
automatically activated the government’s counter-proposal, which also requires
companies to report on rights, environmental protections and corruption issues
— but without being liable for violations.

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Supporters of the rejected
initiative plastered Swiss towns and cities with posters highlighting
environmental degradation and human suffering caused by Swiss-based companies.

Multinationals are important
drivers of the Swiss economy, which at the end of 2018 counted close to 29,000
such corporations, accounting for more than a quarter of all jobs in the
country, according to official statistics.

The Swiss business community
argued that the amendments could have been detrimental for all Swiss companies,
not just those that behave badly.

Businesses and employer
organisations voiced particular concern over a provision that would have made
Swiss-based firms liable for abuses committed by subsidiaries unless they could
prove they had done required due diligence.

Meanwhile voters rejected a
separate proposal to ban funding companies that manufacture weapons and other
materials of war — a move which could have blocked billions of dollars worth
of investments.

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The initiative would have
barred the Swiss central bank and pension funds from investing in companies
that make more than five percent of revenues from sales of war material —
while arms manufacturers would have been denied credit lines in Switzerland.

The initiative failed on both
counts.

Some 1,460,755 voters, or
57.5 percent, voted against the proposal, on a 46.4% turnout, according
to the results published by ATS.

Furthermore, a majority in
only three and a half cantons voted in favour.

Famously neutral Switzerland,
which has not been to war in centuries, already bans the production of nuclear,
biological and chemical weapons, as well as landmines and cluster munitions.

But a coalition of peace
groups and left-leaning parties sought a constitutional amendment making it
illegal to finance any companies that make any form of war material, including
assault rifles, tanks and their components.

According to a report earlier
this month by research group Profundo, the central bank, large banks like UBS
and Credit Suisse and other Swiss financial institutions have nearly $11
billion worth of loans and investments in arms companies, including BAE
Systems, Lockheed Martin and Northrop.

Backers of the initiative
claimed that the Swiss financial sector’s investments in arms companies were
“incompatible” with Swiss neutrality.

But the government said the
definition would effectively block funding of civil aviation firms such as
Boeing, Airbus and Rolls Royce, and harm pensions.