Corporations headquartered in Switzerland should undertake appropriate due diligence procedures and be held accountable in front of Swiss courts.
Swiss based corporations have the capacity to positively or adversely affect human rights of individuals, families or communities in foreign countries. The Corporate Justice Initiative(Konzerverantwortungsinitiative, KOVI) seeks to bring justice to this constellation of global production. The idea: Corporations headquartered in Switzerland should undertake appropriate due diligence procedures and be held accountable in front of Swiss courts. This is neither radical nor redundant, but a skilful foreign-policy measure that represents a logical complement to already existing corporate self-commitments and follows the broader legal trends within a typical European home state of multinational corporations.
The Corporate Justice Initiative in addition to Corporate Social Responsibilities
The KOVI seeks to regulate, with binding effect, what large Swiss based corporations claim to have been doing all along: Respecting human rights and assuming responsibility for people directly affected by their operations. One starts to wonder why, then, corporate representatives are not celebrating the codification of their best efforts. A legal requirement to carry out due diligence does neither seek to nor is capable of replacing corporate engagements in the form of education, health, or community development programs. It rather provides a procedural structure for those endeavours. Further, the KOVI does not interfere with the playground of competitive advantage through corporate social responsibility rankings, but rather defines a minimum bar for a new level playing field. This would signal that Switzerland takes its own constitutional commitments to “promote respect for human rights” in foreign relations and “throughout the legal system” seriously.
The Corporate Justice Initiative follows the trend in Europe and elsewhere
The pure term “multinational” calls for a look beyond Switzerland’s borders. Firstly, the initiative’s idea that a parent company owns a duty of care towards people affected by the conduct of a foreign subsidiary has been extensively discussed outside of our national context. For example, an employee of a South-African subsidiary of the UK-based company Cape PLC sued the corporation for the exposure to dust and the subsequent contraction of asbestosis. The Court of Appeal in London applied a liability test, which resembles the core idea of the KOVI: It asked if the harm was foreseeable, if there was a relationship of proximity, and if it was reasonable to impose a duty of care. Further, recently on 29thNovember 2016, French members of the National Assembly adopted an ambitious draft law on the duty of vigilance for parent and subcontracting companies.
Secondly, the question of (legitimate) jurisdiction has also been debated elsewhere. In 2005, the European Court of Justice clarified that courts could not easily dismiss preceedings based on forum non conveniens, an abstention doctrine that seeks to ascertain whether there would be a more appropriate forum for the claims brought forward. Additionally, in October 2016, a Canadian court agreed to hear a tort claim against the Vancouver-based Nevsun for alleged human rights abuses in an Eritrean mine. Moreover, on 28th November, a US district court, in the decade long litigation against Chiquita for funding Colombian death squads, rejected the corporation’s argument that the case should be heard in Colombia rather than in the United States.
If Switzerland is not keen on substituting the “tax haven” label with a “corporate impunity” stamp, it should keep up with the broader development in Europe, the US and Canada. The KOVI represents a first step in the right direction.