Corporate human rights due diligence and direct liability. Switzerland gets serious.

 

In Switzerland a public initiative supported by at least 100,000 signatories can become the topic of a nationwide referendum.  Such an initiative in 2016 obtained the requisite number of signatures and put forward a wide ranging proposal which would:

require companies headquartered or registered in Switzerland to respect human rights and international environmental standards in their operations abroad, and to ensure that companies under their control respect these standards as well. makes it mandatory to conduct human rights and environmental due diligence;

introduce direct liability of companies for violations of human rights and environmental standards by companies under their control; and

reverse the burden of proof in part, requiring the company to establish that it took the requisite care to prevent such violations, or that the damage would have occurred even if the requisite care had been taken.

Under Swiss law, a counter-proposal may be provided by Parliament which if accepted by the organisers of the proposal obviates the need for a referendum. Early this month Parliament came up with a watered down version of the proposal without the provision for liability of parent companies under Swiss law for actions of their controlled companies abroad.

The organisers of the referendum proposal have rejected this. It therefore seems that the referendum will go ahead later this year along with the Parliamentary counter-proposal.

 

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