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27 Nov 2020

Julia Horowitz, CNN Business

Swiss to decide on mandatory due diligence and corporate liability in what is expected to be a "knife-edge" vote on Sunday

'Knife-edge Swiss vote could make businesses liable for global rights abuses'

Swiss voters are about to decide whether a business should be held liable for human rights and environmental abuses, even if the wrongdoing was committed in a foreign country by a subsidiary or a supplier it works closely with...

...A poll by Swiss broadcaster SRF in early November found 46% plan to vote in favor, while another 11% are leaning in that direction."I think it's going to be very close," said Guillaume Zumofen, a political science researcher at the University of Bern...

Supporters of the initiative say that the referendum... is essential given the global footprint of top companies in Switzerland, a hub for consumer goods, finance and commodities trading. They also point to the lack of remedies available to victims of wrongdoing. The initiative would mandate that Swiss firms assess the human rights and environmental practices not just of their own operations, but also of subsidiaries, suppliers and business partners... Companies could then be held liable in Swiss courts for violations committed by subsidiaries and suppliers they control unless management proves proper due diligence was carried out...

...The Swiss government... has instead backed a counterproposal, which would automatically go into effect if the initiative doesn't pass on Sunday. The countermeasure would compel companies to increase reporting on environmental and social issues... Those pushing the Responsible Business Initiative, however, say it would do little to compel actual change.

...Across Europe, the direction of travel is clear, according to Rachel Barrett, environmental and climate change partner at global law firm Linklaters. France has also enacted a broad law that holds companies responsible for abuses throughout their supply chains... The European Commission is expected to propose new rules for due diligence on human rights and the environment throughout supply chains in 2021. There's talk they could be the most demanding to date."The calls for this are growing louder and louder, and there's a lot of momentum behind it," Barrett said.