Insight

Business and Human Rights: Swiss companies face new due diligence obligations

On the 10th anniversary of the United Nations Guiding Principles on Business and Human Rights’ (“UNGPs”) adoption, some of its most important provisions are finally being voted into law around the globe. Cases against multinationals for human rights violations within supply chains are rising globally, as are criminal proceedings for corruption relating to human rights violations. Swiss courts have traditionally taken a cautious approach but – with new legislation looming – affected businesses should take stock.

On 29 November 2020, the Swiss people accepted the Responsible Business Initiative (“RBI”) by 50.7%, but it was rejected by a majority of cantons, thus failing the double majority threshold required for an initiative to become law. The RBI called for compulsory human rights due diligence and civil liability where Swiss companies – or the entities they control – breached environmental and human rights at home or abroad. The Swiss government and parliament considered it too onerous on companies and instead worked on a counterproposal (the “Counterproposal”) as an alternative, which imposes new reporting and due diligence obligations for companies. As no referendum was held against it, the Counterproposal will now become law.

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