A referendum is taking place next month in Switzerland that would make Swiss corporations liable for human rights abuses and environmental violations in their supply chain operations.
The initiative is part of a wave of similar legislation being proposed in other countries, based on the United Nations Guiding Principles on Business and Human Rights.
A nationwide vote is being held on 29 November on the Responsible Business Initiative (RBI), which was created by the Swiss Coalition for Corporate Justice, made up of Swiss human rights and environmental organisations, religious groups and trade unions, including IndustriAll global union affiliates Syna and Unia.
If the RBI is supported by a majority of the population, mandatory human rights and environmental due diligence will be introduced for Swiss companies, according to Ernst & Young (EY).
If not, a counter-proposal will be put in place, which will require a reporting obligation for Public Interest Entities (PIEs) on environmental, social and employee matters, respect for human rights and anti-corruption matters in line with the European Union (EU) Directive 2014/95/EU on non-financial reporting.
The reporting should include a description of the business model, policies and due diligence, outcome of policies, risks, and key performance indicators. The counter-proposal introduces due diligence and reporting obligation in the areas of ‘conflict minerals’ (based on Regulation (EU) 2017/821) and ‘child labour’ (based on the Child Labor Due Diligence Act of the Netherlands).
“It has taken almost five years of continuous campaigning to bring the initiative to the vote,” says IndustriAll. “The corporate lobby is fighting hard against the initiative, saying it will make Swiss companies “guilty until proven innocent” for abuses anywhere in their supply chains, and open the door to “blackmail” by activists. Fearing that the initiative would impose crippling legal liabilities that will make businesses uncompetitive, the government initially recommended that the initiative be rejected, before developing a watered-down counter-proposal.”
Valter Sanches, IndustriAll general secretary, adds: “For too long, multinational corporations have been able to hide their abuses behind a veneer of respectability, using plausible deniability whenever bad behaviour is highlighted. The Responsible Business Initiative is part of a global movement by unions and civil society organisations to hold companies responsible for their behaviour.”
The non-profit Transformers Foundation believes leading fashion companies “should want more regulation on these issues, not fewer so that they are not undercut by unethical players willing to do whatever it takes to get the lowest price and shortest lead times.”
Its report ‘Ending Unethical Brand and Retailer Behavior: The Denim Supply Chain Speaks Up,’ notes: “Due diligence legislation is already on the books in France, but still lacks reporting guidelines and enforcement mechanisms. There are additional discussions in the UK, US, and EU.”
To find out more, click on the following link: The denim supply chain is broken. Here’s how to fix it