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Swiss Fall Short in Sunday's Vote to Hold Multinational Corporations Accountable

Despite winning a majority of votes, Swiss election rules—much like the US Electoral College—kills the initiative.

A man walks past a campaign banner reading in French "Contaminated drinking water, poisoned child, Multinational held responsible" displayed in the streets of Geneva, on November 29, 2020

A man walks past a campaign banner reading in French "Contaminated drinking water, poisoned child, Multinational held responsible" displayed in the streets of Geneva on November 29, 2020. - Swiss voters rejected on November 29, 2020 a plan to impose the world's strictest corporate responsibility rules, which would have made multinationals headquartered in the country liable for abusive business practices worldwide. (Photo by FABRICE COFFRINI/AFP via Getty Images)

Sunday's vote in Switzerland to make multinational companies headquartered in the country—like Nestlé, minerals giant Glencore, agribusiness company Syngenta— liable for human rights violations and environmental abuses abroad failed in a country-wide referendum on Sunday.

The initiative titled "Responsible Companies — to protect people and the environment'' won a narrow majority of votes on Sunday, with 50.7% percent backing it, but failed because a majority of the country's states (or cantons), came out against it. Under the Swiss system, because the initiative proposed a constitutional amendment, it needed the backing of both a popular majority and a majority of cantons to pass.

Organizations like Amnesty International, Greenpeace and the Swiss watchdog group Public Eye backed the proposal. Andreas Missbach, director of Public Eye, said it was a shame that the tougher proposals did not pass, considering that a majority of Swiss voters were in favor. He added that the government-backed legislation was insufficient. “The counterproposal doesn’t really bring us anything other than more glossy corporate sustainability reports,” he said. “The problems are still here; they are not going away.”

The initiative, promoted by a coalition of over 130 civil society organizations, had faced strong opposition from the business sector and the government, which claimed the rules would hurt Swiss companies.

The proposal
The initiative requires Swiss companies to examine whether they can comply with internationally recognized human rights and environmental standards when carrying out their business operations. They will not only have to consider their own activities, but also the activities of their subsidiaries, suppliers and business partners. If need be, they will have to take action and submit reports. In addition, Swiss companies will also be liable for damage caused by companies that they control. However, they will not be held liable if they can prove that they complied with their due diligence obligations. Parliament has approved an indirect counter-proposal to the initiative, which also introduces new reporting and due diligence obligations. Any failures to comply would lead to fines being imposed. The counter-proposal will come into effect if the initiative is rejected, unless the counter-proposal itself is rejected in a referendum.

The vote on Sunday had been the source of much debate in Switzerland, and was the most expensive campaign in the country’s history, according to the Swiss newspaper Tages-Anzeiger.

Separately on Sunday, an initiative on the financing of weapon manufacturers also failed. The proposal would have prevented Swiss institutions, including the central bank, from investing in companies generating more than 5 percent of their revenue from the production of war materials.

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