Legal Affairs Committee proposes indirect counter-proposal

Legal Affairs Committee proposes indirect counter-proposal

20th April 2018. In the frame of the revision of the Swiss Corporation Law, the Legal Affairs Committee of the National Council proposes legal measures against human rights violations and non-compliance with international environmental standards by corporations based in Switzerland.

A large part of the Swiss population is convinced that compliance with human rights and environmental standards can no longer be voluntary for corporations based in our country. Since the launch of the Responsible Business Initiative, the Swiss Coalition for Corporate Justice has grown from 66 to 97 organisations with over one million members. In addition, a support committee with 88 personalities and around 30 companies are behind the initiative. The initiators welcome the fact that a large majority of the Legal Commission now also recognises the urgent need for action.

The Initiative Committee and the strategic bodies of the Swiss Coalition for Corporate Justice examined the original counter-proposal of Karl Vogler (CSP/OW and member of the National Council) closely prior to the meeting of the Committee. Compared to the initiative, the original proposal is weaker in the following respects: the new regulation would apply to fewer companies and civil liability would be restricted in a number of ways and only apply in the event of injury or harm to life, physical integrity or property.

Despite these severe restrictions, the Initiative Committee announced to the Legal Affairs Committee that the adoption of an unchanged version of this proposal would result in the withdrawal of the popular initiative. This proposal was also supported by the Groupement des Entreprises Multinationales (GEM), which brings together 90 companies operating on a transnational basis. But now the Committee has further weakened Karl Vogler’s proposal: the scope has been further reduced by doubling the thresholds. The Committee also announced that it might review the counter-proposal once again in a forthcoming meeting. Furthermore, it is puzzling that, in the parallel discussion about transparency provisions for the commodity sector, the Commission has decided to exclude commodity traders from transparency regulation.

Dick Marty, co-chairman of the initiative committee comments: «The original counter-proposal was a compromise. But it is an improvement for victims and can be implemented rapidly. Thus we have announced a withdrawal for this original version. As soon as the Commission publishes the new final text, we will examine the final proposal again carefully.»

Today it remains to be seen whether a counter-proposal will lead to a withdrawal of the initiative and if the Federal Assembly will adopt it. For this reason, the Swiss Coalition for Corporate Justice and numerous volunteers continue to prepare the voting campaign at full speed.

The Responsible Business Initiative

The initiative aims to oblige all corporations to respect human rights and the environment in their business activities. In order for all companies to comply with the new law, violations must have consequences. In the future, corporations should therefore be liable for human rights violations caused by their subsidiaries.

What is a counter-proposal?

Popular initiatives such as the Responsible Business Initiative are discussed in Parliament. The relevant parliamentary Committees may submit counterproposals to a popular initiative. In this case, both chambers deal with the counterproposal and may, for example, enact or amend a law in the sense of a popular initiative.  If the law adopted is good enough for the authors of a popular initiative, they can withdraw their popular initiative. In this case, there is no referendum.