Swiss reject responsible business initiative and arms investment ban

The results. The responsible business initiative, a proposal to hold multinational companies based in Switzerland legally accountable for environmental and human rights abuses abroad, secured just over half (50.7 per cent) of the popular vote. However, it was rejected by a majority of cantons.

Geneva, explained in part by its large international community, was among the cantons that showed the strongest support, with 64 per cent voting in favour.

The second proposal rejected by voters would have banned investors, including pension funds - and the Swiss National Bank - from investing in companies that earn more than five per cent of their revenue from manufacturing of war materials. The initiative was rejected by 57.4 per cent of voters and the majority of cantons.

How did people react? The responsible business initiative (RBI) has polarised opinion, with activists, environmental and human rights groups, together with several political factions, on one side arguing that tougher legal incentives are needed to raise the bar and make sure Swiss-based companies take more responsibility for upholding environmental and human rights abroad, particularly in poorer developing countries.

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The proposal, if passed, would have had major implications for Switzerland’s many international corporations with extensive business overseas, such as Glencore and other commodities groups, as well as other companies including Nestle, Novartis, Syngenta. The latter has long been a target of environmental groups for practices such as the export of certain toxic pesticides that are banned in Europe and Switzerland.

Backers of the initiative, including over 130 NGOs, last night expressed their disappointment, claiming the opposition had won in large part due to spreading misleading information and fear of an American-style "wave of complaints".

Multinationals that have campaigned against the initiative have argued that it would burden them with more layers of regulation and leave them exposed to a wave of lawsuits. However, initiators have poured cold water on such fears, saying that obstacles to any procedure are very high in Switzerland.  “All in all, the destabilizing tactics of the multinational lobby have unfortunately paid off,” the initiative said in a statement.

Micheline Calmy-Rey, former Swiss President and a member of the responsible business initiative committee, told RTS she was “disappointed to fail so close to the goal”. However, she expected that it would be difficult to convince a majority of the cantons.

In a press conference announcing the results, Justice minister Karin Keller-Sutter said the federal council “was convinced that the chosen path is the right one". A watered-down counter proposal put forward by the Federal Council will now automatically come into force. Companies will have to report on human rights and environmental practices and conduct due diligence concerning child labour and conflict minerals. But it leaves out any liability clause.

Economiesuisse, a business lobby group that opposed the initiative, said the result was a “relief” for the economy.  “For all Swiss companies, this decision ends the uncertainty about impending legal risks along the entire supply chain, in an already economically demanding time.”

On the anti-arms initiative, federal councillor Guy Parmelin said the people and the cantons had “found the existing law to be sufficient," adding that acceptance of the initiative would not have prevented wars, but would have harmed Switzerland and the economy.