Companies clarify position on Swiss mandatory human rights due diligence initiative

The Swiss Responsible Business Initiative (RBI) - a popular political initiative launched by an NGO coalition in 2015 seeking to introduce mandatory human rights due diligence requirements for Swiss companies - has been making its way through the Swiss parliament for the past two years (further information on the RBI is available here). Last year, the Swiss National Council (lower house) adopted a bill ("counter-proposal") which, despite including important concessions on liability and the number of companies covered, meets the initiative's key demands. For the bill to become law, it still needs the approval of the Council of States (upper house), whose decision on a counter-proposal is due in the coming autumn parliamentary session.

In this context, a group of 19 large Swiss companies in a letter addressed to the Legal Affairs Committee of the Council of States on 8 August 2019 expressed?concern that the RBI and the counter-proposal are unprecented in their scope and application when compared to other jurisdictions and would therefore expose Swiss companies to high legal risks. Swiss?media reports?criticised the letter for actively advocating against the political compromise the Swiss parliament has been striving to develop over the past two years. Business & Human Rights Resource Centre contacted the 19 companies that signed the letter asking them to clarify their position.?

Economiesuisse, the umbrella organisation of Swiss business, and SwissHoldings, the federation representing Swiss-based multinational enterprises from the manufacturing and service sector, sent us a joint response, available below, stating it should be regarded as the official reply of the companies they represent. Nestlé and Lafarge Holcim?nevertheless sent us full individual responses,?also available below. Novartis,?Sonova?and Swiss?Re?referred us?to the response from economiesuisse and SwissHoldings and provided additional information.?Bucher, Clariant,?Credit Suisse, Geberit,?Rieter,?Roche,?Schindler,?Syngenta,?UBS,?Vifor Pharma?and Zurich?referred us to the response from economiesuisse and SwissHoldings. We will indicate if Bühler, Lonza?and?Sika?respond in the near future.

Professor John Ruggie, the author of the UN Guiding Principles on Business and Human Rights (UNGPs), responded to the associations' letter, clarifying the role of legislative measures. His letter is available below. Along with John Ruggie, focusright - a Swiss consultancy who co-authored a 2018 study referenced in the associations' response - and the Global Business Initiative on Human Rights (GBI) also sent us letters in response to the associations' letter, available below.

See also our list of large businesses and associations with statements in support of human rights due diligence regulation, including from Switzerland.

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21 September 2019

Response by focusright

Author: Matthias Leisinger & Sibylle Baumgartner, focusright gmbh

[T]hank you for providing us with the opportunity to respond to [a] reference made in a response you've received from Swiss business associations to a study we conducted as co-authors for the Swiss government in 2018...

...The claim ?that large Swiss companies are well advanced in implementing the UNGPs? is a generalized conclusion that can't be drawn from our research. Within the sample of Swiss companies responding to the... survey our overall findings... included the following:

- The level of knowledge about the UNGPs and the National Action Plan on Business and Human Rights (NAP) in Switzerland is generally low...;

- A significant majority of companies is not clear what the UNGPs mean for their company and what is expected from them;

- While most companies responding to the survey have policy, codes of conducts and guidelines in place that somehow reference human rights, only 20% of the companies refer to the UNGPs...;

- Less than 50% of the large companies have processes in place to continuously assess the human rights risks and impacts of their activities and defining specific measures. This shows a gap between adopted policies and the establishment of adequate mechanisms for their implementation;

- Larger companies are more likely to have clear internal responsibilities designed for human rights, to offer training, to integrate... and to report on human rights than small and mid-sized companies;

- The biggest companies who have most faced human rights ‘crises’, civil society pressure and international markets are the most progressive in implementing the UNGPs...

We would also like to emphasize that the study had a qualitative approach.... It does not allow for general conclusions on the Swiss business community as a whole... It can be accessed here.

Regarding the proposal... announced by the Swiss Federal Council, please note that this only includes reporting-, but no due diligence-requirements for companies (alignment of Swiss law with the EU Non-Financial Reporting Directive). More information on this... can be found in our commentary...?Unglückliche Vermischung zweier Vorlagen.

Download the full document here

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20 September 2019

John Ruggie responds to letter from Swiss business associations, raising concerns it misconstrues foundational elements of UNGPs

Author: John Ruggie

19 September 2019

...My concern is that [the] letter [from senior representatives of economiesuisse and SwissHoldings]?misconstrues two foundational elements of the UN 'Protect, Respect and Remedy' framework and the UN Guiding Principles on Business and Human Rights (UNGPs), which operationalize it. I am the author of both...

First, the Framework makes clear and the UNGPs elaborate that while states have existing obligations under international human rights law, companies have a responsibility to respect internationally-recognized human rights that is independent of whether or not states meet their obligations...

Therefore, contrary to the letter's assertion, there is no inconsistency in states adopting measures that require businesses to meet their responsibility to respect human rights through legislation. States similarly may adopt legislative measures to encourage, support or incentivize businesses to do so. Indeed, Guiding Principle 3 and its extensive commentary emphasize that states are expected to adopt a mix of measures - voluntary and mandatory, national and international - to foster business respect for human rights in practice. By doing so they are not ''imposing direct liability [on] companies for states' obligations," as the letter claims. They are doing what we expect governments to do: to govern, and to govern in the public interest.

Second, the letter raises the issue of extraterritorial jurisdiction. This is a complex, sensitive, and not entirely settled matter... In short, Guiding Principle 2 provides that states should make clear that the responsibility to respect applies throughout a company's operations. The commentary to Principle 2 goes on to explain that under international human rights law states are not generally required to regulate the exterritorial activities of businesses domiciled in their jurisdiction, but nor are they generally prohibited from doing so provided there is a recognized jurisdictional basis. The commentary notes that states have adopted a range of approaches in this regard, specifically including domestic legislation that may have extraterritorial effects. In short, extraterritoriality is not per se ultra vires, as the letter seems to suggest, and the UNGPs make no such claim.

I fully understand and appreciate that there will always be legitimate differences in opinion about the appropriate role and most effective forms of legislation and other measures at national levels in implementing the UNGPs. But such debates need to be distinguished from assertions about what the UNGPs do or do not say - the text is there, 31 Principles with Commentaries.

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20 September 2019

Statement by Global Business Initiative on Human Rights (GBI) in response to letter from Swiss business associations

Author: Global Business Initiative on Human Rights

The Global Business Initiative on Human Rights (GBI) wishes to clarify a statement made by economiesuisse and Swiss Holdings in a public letter printed on your website, dated September 13, 2019, that economiesuisse and SwissHoldings "continue to participate in multilateral efforts to strengthen the protection of human rights at organisations such as … the Global Business Initiative on Human Rights." While a small number of Swiss-based companies are both GBI members and members of economiesuisse or SwissHoldings, it is not correct to assert that there is or has been any ongoing participation by economisuisse and SwissHoldings in the work and activities of GBI. We have informed both organisations of this. They have also issued a clarification.

Download the full document here

Item
20 September 2019

SwissHoldings/economiesuisse letter: "Your request regarding the Swiss Responsible Business Initiative"

Author: SwissHoldings, economiesuisse

13 September

...We understand your organisation has contacted those companies which signed a letter sent to Members of Swiss Parliament dated 8 August 2019, and that you are seeking clarification regarding their position towards the Swiss Responsible Business Initiative (?RBI“). As the original letter was submitted jointly, our members again decided to submit a coordinated response. Accordingly, this letter should be regarded as the official reply of the companies that we represent.?

economiesuisse is the umbrella organisation of Swiss business. SwissHoldings represents the interests of Swiss-based multinational enterprises from the manufacturing and service sector...

The purpose of the letter to Swiss Parliament is to convey the view of the signing companies within the Swiss domestic political dialogue and process. As laid out in the letter, our members are concerned about how the initiative and the ?indirect counterproposal“ (?GGV“) aim to implement obligations of companies related to human rights protection in Swiss national law. In fact, both proposals are incompatible in key aspects with related approaches followed by important other jurisdictions, in particular the European Union...

Again, we would like to stress that this position does not conflict with our commitment to participating in further developing the agenda on business and human rights. To this end, we welcome the proposal recently announced by the Swiss Federal Council to fully align the Swiss regulatory approach with the policies and instruments implemented by the EU and some of its member states, in particular regarding human rights due diligence processes...

***economiesuisse and SwissHoldings sent the following update on 20 September***

We are referring to our letter to you dated 13 September 2019 and thank you for the publication of our response to your request on your website. As part of our response, we have provided you with a list of examples on the broad involvement of our member companies in important initiatives that promote human rights in business. In this context, we want to clarify that the specific nature of each of these initiatives determines whether our member companies are represented through their associations economiesuisse or SwissHoldings, or whether the companies are participating directly. Specifically, the latter applies to the Global Business Initiative for Human Rights, in which member companies participate.?

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Company response
19 September 2019

Response by Nestlé

Author: Nestlé

12 September 2019

As a responsible company, we are committed to respecting human rights and the environment.?

As part of our longstanding commitment to have a positive impact on society we have voluntarily integrated human rights and environmental due diligence processes into our policies and procedures throughout our value chain for more than a decade. Every year, we communicate the progress made and the actions motivated by such due diligence process in our Creating Shared Value Report.?

Our approach is aligned with international standards, including the United Nations Framework and Guiding Principles on Business and Human Rights (UNGPs). Its underlying principle of respecting human rights and the environment are part of our Corporate Business Principles and guide the behavior of our employees and business partners worldwide.?

We believe that appropriate legislation could provide further incentives for companies to address their potential impacts on human rights and the environment. Such legislation should typically include the obligation to conduct human rights due diligence as defined in the UNGPs. The ultimate goal of such regulatory framework should not be to increase litigation, but to advance corporate awareness on human rights and environmental responsibility, which should translate into collaborative, impactful and effective actions.?

We also believe that supra-national regulations would be more efficient than approaches country by country. The expertise of well-recognized bodies such as the OECD national contact points could play an important role to provide standardized global solutions beneficial to all parties in a leveled playing field.?

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Company response
19 September 2019

Response by Novartis

Author: Novartis

Thank you for the opportunity to provide further comment regarding Novartis’ position on the Responsible Business Initiative. Further to the consolidated statement prepared by economiesuisse and SwissHoldings which was sent to the Business & Human Rights Resource Centre previously, we refer you to our additional supporting independent statement at the following link, which you are welcome to post on BHRRC’s Weekly Update:?https://www.novartis.com/sites/www.novartis.com/files/responsible-business-initiative-novartis-attitude-context.pdf

Download the full document here

Company response
19 September 2019

Response by Rieter

Author: Rieter

Thank you for having given us the opportunity to comment. For our official?response, we would like to refer to the consolidated response from
SwissHoldings and economiesuisse, which you have received on 13 September?2019.

Company response
18 September 2019

Response by Clariant

Author: Clariant

Thank you for your email. You received a consolidated answer from Swissholdings und economiesuisse last Friday.

Company response
18 September 2019

Response by Roche

Author: Roche

Kindly ask you to take note that with the enclosed letter dated September 13, 2019 SwissHoldings has provided?an official reply?on behalf of the companies, including but not limited to Roche, to your letter dated August 8, 2019. Roche has nothing to add to this official reply from SwissHoldings.

Company response
18 September 2019

Response by Swiss Re

Author: Swiss Re

Thank you for your email. For our official response, we would like to refer you to the consolidated response from SwissHoldings and economiesuisse, which you should have received on 13 September. Further to this, our?2018 Corporate Responsibility Report?and?Sustainability Risk Framework brochure?both explain Swiss Re's approach on human rights.