The Responsible Business Initiative
The initiative would amend the Swiss Federal Constitution to add a new article on liability provisions of parent companies for illegal acts of controlled companies (e.g., subsidiaries and certain suppliers) abroad. Swiss companies would be required to ensure that internationally recognized human rights (e.g., UN Guiding Principles on Business and Human Rights) and environmental standards (e.g., Montreal Protocol for the protection of the ozone layer) are respected by controlled companies.
Further, companies would be obliged to carry out appropriate due diligence to identify real and potential impacts, take measures to prevent violations, cease existing violations and account for actions taken.
Swiss companies would be liable for human rights and environmental misconduct of controlled companies (including certain suppliers), unless they can prove that all due care has been taken (reversal of the burden of proof).
The counter-proposal foresees a reporting obligation for Public Interest Entities (PIEs) on environmental (incl. CO2-targets), social and employee matters, respect for human rights and anti-corruption matters in line with the European Union (EU) Directive 2014/95/EU on nonfinancial reporting. The reporting should include a description of the business model, policies and due diligence, outcome of policies, risks, and key performance indicators. The according nonfinancial report would need to be approved and signed by the highest management and administrative body and approved by the body responsible for annual accounts (an audit is not explicitly required). Further, the counter-proposal introduces a due diligence and reporting obligation in the areas of ‘conflict minerals’ (based on Regulation (EU) 2017/821) and ‘child labor’ (based on the Child Labor Due Diligence Act of the Netherlands). Due diligence and reporting on conflict minerals and child labor will be subject to review by an independent third party.
Regarding liabilities, the law would remain unchanged. The Council of States had introduced the basis for this counter-proposal in response to the National Council's more stringent counter-proposal.