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9 Jun 2020

Antony Crockett, Elsa Savourey, Oliver Elgie & Jerome Temme, Herbert Smith Freehills LLP

Switzerland to hold referendum on proposed human rights due diligence law

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A referendum on a Swiss civil society initiative on mandatory human rights and environmental due diligence for companies is expected to be held towards the end of the year...

Under Swiss law, a public initiative supported by at least 100,000 signatories can become the topic of a nationwide referendum. In 2016, the organisers of the “Responsible Business Initiative” obtained the required signatures for a far-reaching proposal to introduce mandatory human rights due diligence and direct liability of businesses for breaches of human rights and environmental standards (Proposal). In particular, the Proposal:

  • ...extends the application of Swiss law ... to any company under the de facto control of a Swiss company, including in some cases parts of their supply chains and subcontractors;
  • makes it mandatory to conduct human rights and environmental due diligence;
  • introduces direct liability of companies..; and
  • reverses the burden of proof in part...

[T]he Swiss legislature can prepare a counter-proposal which, if accepted by the organisers of the initiative, becomes the law. In this case, the two chambers of the Swiss parliament prepared diverging counter-proposals. The first counter-proposal would have replicated the key aspects of the Proposal; the second contains [certain] due diligence requirements ... but without the provision for liability of parent companies...

On 5 June 2020, the conciliation committee ... voted in favour of the latter, softer approach, which was approved by both chambers of parliament the following week. The members of the Responsible Business Initiative have already rejected the softer counter-proposal... This opens the door for a referendum on the Proposal and the parliamentary counter-proposal in late 2020.