Switzerland
5. National Action Plan on Business and Human Rights
5.7 Pillar 1: state duty to protect
5.7.2 Operational principles: legislative and information policy measures
Guiding Principle 3 [pages 13-21]
To an extent appropriate to the attendant risks, the federal government exercises its influence in the form of non-legally-binding and, where necessary, legally-binding instruments to encourage and to require business enterprises to respect human rights. Where appropriate, it also takes action tailored to the human rights risks specific to individual sectors or issues.
As one of the objectives of government, and a binding duty on the State, respect for human rights is laid down in the Federal Constitution (FC). Article 35 FC includes the provision that fundamental rights (Art. 7 et seqq. FC) must be upheld throughout the legal system (Art. 35 para. 1 FC), which also covers private, criminal and commercial law, and places the authorities under the obligation to ensure that fundamental rights, where appropriate, apply to relationships among private persons (Art. 35 para. 3 FC). Article 54 FC lists the federal government’s foreign policy objectives. Of particular relevance in the context of business and human rights are the alleviation of poverty, respect for human rights, the promotion of democracy, the peaceful co-existence of peoples, and the conservation of natural resources. The fight against corruption also contributes to human rights, and to ensuring the rule of law.
Based on the Federal Constitution, the Federal Council is discussing the following policy instruments (PI) to implement Guiding Principles 3a and 3b:
PI1 Human rights due diligence
Swiss legislation does not make any provision for business enterprises having to conduct general, legally binding human rights due diligence. Potential regulation in this area would have to have a broad base of international support to avoid placing Switzerland at a disadvantage as a business location. The Federal Council supports due diligence on a voluntary basis, however.
In May 2014, in fulfilment of postulate 12.3980 from the National Council Foreign Affairs Committee, the Federal Council had a report drawn up to compare legally binding due diligence obligations in other countries. It also discussed options for Switzerland in an accompanying commentary36. The report shows that no country makes any provision for a comprehensive duty to conduct human rights due diligence. In March 2015, the National Council rejected a motion from its Foreign Affairs Committee to introduce a binding obligation for business enterprises to conduct human rights due diligence.
A key concern for a number of stakeholders is the introduction of legally binding human rights due diligence. In April 2015, an alliance of 66 civil society organisations launched the Responsible Business Initiative38, which would like to see a general human rights due diligence obligation enshrined in law. The popular initiative was submitted on 10 October 2016, and on 1 November 2016 the Federal Chancellery confirmed that it will go forward to a referendum.
PI2 Regulation of private security service providers
The business context of private security service providers exposes them to an increased risk of becoming involved in human rights abuses. In September 2013, Parliament thus passed the Federal Act on Private Security Services provided Abroad. The Act and the associated Ordinance entered into force effective 1 September 2015. The Act prohibits security firms based in Switzerland from participating directly in hostilities in an armed conflict abroad, and forbids activities that support the commission of serious violations of human rights. It also contains reporting requirements for companies wishing to provide private security services abroad, and obliges Swiss-based providers to accede to the International Code of Conduct for Private Security Service Providers.
The Federal Council regards the Federal Act on Private Security Services provided abroad as an appropriate means of ensuring respect for human rights in connection with the activities of private security service providers. It will undertake an initial assessment of its effectiveness at the end of the reporting period.
PI3 Regulation of war material
Business enterprises which manufacture or trade in war material are exposed to an increased risk of becoming involved in human rights abuses by third parties. International standards on the regulation and control of international trade in conventional weapons were laid down in the international Arms Trade Treaty (ATT). It was adopted by the UN General Assembly in April 2013 and entered into force on 24 December 2014. Switzerland ratified the Treaty on 30 January 2015.
The manufacture and transfer of war material and the associated technologies is governed by the War Material Act and its Ordinance. The manufacture, brokerage, export and transit of war material for recipients abroad will be authorised if this is not contrary to international law, international obligations and the principles of Swiss foreign policy. The decision on whether or not to issue authorisation for a foreign transaction must abide by the criteria laid down in the War Material Ordinance. In addition to other factors, the domestic situation in the country of destination, specifically respect for human rights, must be taken into account. If the country of destination violates human rights in a systematic and serious manner, it is imperative that the export licence be denied. However, authorisation might still be granted in exceptional cases if there is a low risk that the exported war material will be used to commit serious violations of human rights.
The Federal Council regards the present legal foundation and practice for granting export licences as appropriate to guarantee that Swiss business enterprises that manufacture or trade in war material will respect human rights. No further measures are planned.
PI4 Regulation of technologies for internet and mobile communication surveillance
Technologies for internet and mobile communication surveillance can be used for both civilian and military purposes, i.e. they are dual-use goods. They can be an element in state repression, for example, thereby exposing the business enterprises that manufacture or trade in them to an increased risk of becoming involved in human rights abuses.
The export or brokerage of technologies for internet and mobile communication surveillance is governed by goods control legislation. On 13 May 2015, the Federal Council decided that a licence to export or to broker such goods must be refused if there is reason to believe that the exported or brokered good will be used by the final recipient as a means of repression. The transfer of intellectual property, including expertise and the grant of rights, concerning technologies for internet and mobile communication surveillance was also made subject to licence.
The Federal Council regards the new legal foundation, and practice for granting export licences, as appropriate to guarantee that human rights will be respected in connection with technologies for internet and mobile telecommunication surveillance. No further measures are planned.
PI5 Regulation of the manufacture and import of renewable resources (biofuels)
The Mineral Oil Tax Act provides that biofuels (biogas, bioethanol, biodiesel and vegetable and animal-based oils) will be wholly or partly exempted from mineral oil tax if they satisfy minimum environmental and social requirements44. Under the Mineral Oil Tax Ordinance, the minimum requirements for socially acceptable production conditions are fulfilled if, in the cultivation of the resources and production of fuels, business enterprises comply with the social legislation applicable at the production location, but at a minimum with the fundamental conventions of the ILO.
The criteria were toughened up further with the implementation of parliamentary initiative 09.499 Agrotreibstoffe. Indirekte Auswirkungen berücksichtigen [‘Agrofuels: considering the indirect impacts’]. In the future (cf. Art. 12b para. 3 MinOTA), the Federal Council will have the right to refuse the tax exemption if biofuels have been produced in a country which does not have food security. Furthermore, the area used for cultivating the resources used to produce biofuels must have been acquired lawfully, to prevent the displacement or dispossession of the local population. Should biofuels which do not fulfil the criteria for tax relief enter circulation in large quantities in Switzerland in the future, the Federal Council may make them subject to an authorisation requirement.
The Federal Council regards the present legal foundation and practice for granting licences as sufficient and is not planning any further measures
The federal government will employ the following policy instruments (PI) to implement Guiding Principle 3c:
PI6 Clarify and communicate what the Federal Council expects of business enterprises
Governments should provide business enterprises with guidance on action to respect human rights, by clearly defining and communicating their expectations. This was one of the primary demands made by the business sector during the consultation process.
Section 4.3 of the Federal Council’s report in fulfilment of postulate 12.3503 Eine Ruggie Strategie für die Schweiz [‘A Ruggie Strategy for Switzerland’], which sets out the framework for this NAP, defines the position and expectations of the Federal Council with respect to business enterprises. Business enterprises based and/or operating in Switzerland should abide by international standards such as the UNGP, the OECD Guidelines for Multinational Enterprises, and the relevant sector and issue-specific guidelines.
This NAP sets out the position and expectations of the Federal Council with respect to business enterprises in more specific detail, and strengthens the consistency of federal government action to protect and promote human rights in the context of business activities.
The federal government will carry out awareness-raising programmes (e.g. website, workshops, publications) geared specifically to the needs of SMEs, and will help to raise consciousness about the issue of business and human rights with information events and materials. Part of the aim of these programmes is to step up federal government efforts to communicate its expectations to business enterprises. This can, for example, also be achieved by means of forums for dialogue, and participation in events and courses aimed at stakeholder groups and the general public.
PI7 Federal government contact point for stakeholder groups
Many of the stakeholders taking part in consultations expressed the desire for a better overview of the various government activities in the business and human rights sphere, and to have the relevant information accessible in one place.
As part of work to implement the CSR position paper (cf. Section 2.2.6), the federal government will establish a CSR web portal by the end of the reporting period. It is intended to make information on the federal government’s commitment to corporate responsibility (including that for human rights) available to business enterprises and other interested organisations and individuals from a central point. The portal will bundle information about instruments, international developments, and support. It will also serve as a point of contact for questions and concerns about business and human rights. These will then be passed on to the federal agencies responsible for the issues in question.
PI8 Guidelines for business enterprises on implementing the UNGP
The federal government has supported the development of a variety of guidelines on business and human rights in recent years. Further to Recommendation 11 in the Federal Council’s Background Report on Commodities, the federal government is joining forces with NGOs and commodity trading firms to draw up guidelines for the implementation of the UNGP in commodities trading. Under the terms of the mandate, the guidance should include specific recommendations concerning human rights due diligence and reporting.
During the reporting period (2016-2019), the federal government will work with the international sporting associations which are based in Switzerland (including the International Olympic Committee), with sponsors, NGOs, international organisations, other governments and the Institute for Human Rights and Business to implement the UNGP in the context of major sporting events. It is leading and supporting multi-party dialogue with the following objectives: to identify the primary challenges in respecting and protecting human rights in this context; to promote a learning process; to exchange best practices, and to strengthen responsibility. A multi-party steering committee is conducting a series of pilot projects on issues such as the integration of human rights due diligence into the awarding of major sporting events, the development of guidelines for host cities and countries, the integration of human rights in sporting association governance and in the value chains of products linked to sport, as well as the establishment of grievance mechanisms and the involvement of particularly vulnerable groups.
In the financial sector, SECO is supporting the OECD with the drafting of guidance on due diligence in this industry. Planned for the end of 2017, one of the objectives of the guidance is to support financial institutions in Switzerland to mitigate the negative impacts of their business activities on the environment on society around the world, including developing countries. The work is being supported by an advisory group of representatives of the federal government (SECO), industry (UBS), civil society (Public Eye [formerly the Berne Declaration] and the University of Zurich).
In the agricultural and food sector, the Federal Office for Agriculture (FOAG) and the Swiss Agency for Development and Cooperation (SDC), as well as the Committee on World Food Security, the UN FAO and the OECD are supporting the formulation of Principles for Responsible Investment in Agriculture and Food Systems, as well as the OECD-FAO Guidance for Responsible Agricultural Supply Chains. Both instruments stress the important role that business has to play in responsible investment, and offer relevant guidance on action. Switzerland will also actively support their implementation.
PI9 Good practice award
The Federal Council intends to promote good practice by creating an award for the Swiss Business and Human Rights Champion of the year. It will recognise business enterprises which make an outstanding contribution to the field of business and human rights. The FDFA and EAER will work alongside academic and civil society stakeholders to establish the award.
The concept for the award ceremony will be drawn up at the beginning of the reporting period (2016-2019). It is to be implemented using existing resources. No cash prize accompanies the award.
PI10 Initiative on respect for labour and human rights in value chains
The federal government promotes the implementation of the fundamental conventions of the International Labour Organization (ILO) as part of economic development cooperation, and in cooperation with the ILO itself. In this context, it designed a project with the ILO to ensure that labour rights are implemented by business enterprises in developing countries. It supports the ILO and International Finance Corporation (IFC) Better Work programme for the clothing industry as well as the ILO’s SCORE (Sustaining Competitive and Responsible Enterprises) programme, which focuses on working conditions at SMEs. Among its economic cooperation programmes, the federal government also supports projects to protect children. These projects are run jointly with the ILO, governments, the private sector and unions, and are focused on compliance with fundamental labour standards, including measures to combat child and forced labour. The federal government also pursues a wide variety of activities to support the human rights aspects of sustainable value chains. The federal government will continue these activities, as set out in its Dispatch on International Cooperation 2017-2020.
PI11 Multi-stakeholder initiatives in the business and human rights field
Switzerland is engaged and involved in multi-stakeholder initiatives in the business and human rights field. For example, it was a co-initiator of the International Code of Conduct for Private Security Service Providers (ICoC)52. It is also playing a key role in the development of an independent mechanism to manage and verify compliance with the Code on the part of business enterprises.
In the next two years, the controlling and governance mechanism for the International Code of Conduct for Private Security Service Providers (ICoCA) will implement certification and verification processes and will deal with complaints that have been received about member firms. Switzerland participates in the work of the Board of Directors of the ICoCA, and provides financial support to its secretariat. The initiative helps to implement the Federal Act on Private Security Services provided Abroad.
Switzerland is also a member of the ‘Voluntary Principles on Security and Human Rights’ (VP) initiative, and is involved in developing and enhancing the scheme. Within the framework of the VP, it promotes better and more transparent accountability for participants, and also contributed to the revision of reporting criteria. Switzerland also plays an active part in the discussions on reforming the governance of the VP initiative, which is intended to promote the practical implementation of the VP on the ground, as well as compliance. To raise awareness among Swiss companies from the mining and oil sector, as well as other interested business enterprises, Switzerland will be holding a workshop on the VP and on security and human rights in 2017.
Furthermore, Switzerland supports the policy dialogue instigated by the UN Special Rapporteur on trafficking in persons to prevent human trafficking in value chains. Within these bodies, Switzerland works towards the integration and implementation of the UN Guiding Principles on Business and Human Rights.
The federal government will employ the following policy instruments (PI) to implement Guiding Principle 3d:
PI12 Sustainability reporting standards
Reporting on the action taken by a business enterprise to respect human rights is an important element of due diligence under Pillar 2 of the UNGP53.
In line with the Grüne Wirtschaft [‘Green Economy’] report (2016) and the Federal Council’s national action plan on corporate social responsibility54, the federal government campaigns at both national and international levels for the promotion and harmonisation of corporate sustainability reporting. This also covers human rights. Switzerland is a member, among others, of the Group of Friends of Paragraph 47 (GoF47), which promotes sustainability reporting internationally. Within the GoF47, Switzerland works in particular with the Global Reporting Initiative (GRI) and the United Nations Environment Programme (UNEP).
The Federal Council will continue its work within the GoF47. It also supports the drafting of sector-specific guidance and practical examples.
PI13 Corporate sustainability reporting
The EU decided at the end of 2014 to introduce mandatory sustainability reporting. Member States have until the end of 2016 to put this obligation into effect. EU Directive 2014/95/EU determines that certain large undertakings and groups must publish non-financial information on respect for human rights, diversity, and combating corruption and bribery in connection with environmental, social and employee matters. According to the comply or explain principle, business enterprises must also disclose why they have not published certain information. The Federal Council is closely monitoring developments with regard to the legally binding reporting of non-financial information in the EU. It is prepared to examine possible action, which would be as congruent as possible with international regulation, and intends to draw up a consultation draft on sustainability reporting that will be based on the EU instrument. Work will begin when more is known about the way in which EU Member States intend to implement the Directive.
Swiss business enterprises are not obliged to report on sustainability issues. However, in line with the 2030 Agenda and its Sustainable Development Goals (SDGs), which were adopted by all UN Member States, and in particular to achieve SDG 12.6, companies are encouraged to introduce sustainable practices and to include sustainability information in their reporting.
Accounting legislation requires all companies that are subject to an ordinary audit pursuant to Article 727 of the Swiss Code of Obligations (CO) to include a general assessment of risk in their management report. This also includes human rights risks, where these are present. Listed companies are also obliged by Article 53 of the SIX Swiss Exchange Listing Rules to report on human rights matters where these might affect the company’s share price. The Federal Council recommends incorporating the human rights risks which business enterprises identify in their due diligence processes, for example, in their sustainability reports.
PI14 Child protection in tourism
In collaboration with Austria and Germany, in 2012 Switzerland launched a trinational campaign to combat the sexual exploitation of children in connection with tourism.
Entitled nicht-wegsehen.ch (‘Don’t look away’), the campaign draws public attention to the sexual exploitation of children and minors in the context of the tourism industry. The campaign website provides a publicly accessible form with which suspicious activities can be reported to the Federal Office of Police. The campaign is being extended to an increasing number of European countries.
To date, the campaign has been funded by public offices and child protection authorities, in close collaboration with the travel industry (SECO and the Swiss Foundation for the Protection of Children).
PI15 Obligation to disclose payments to governments
Fulfilling Recommendation 8 of the Background Report on Commodities and postulate 13.3365 Mehr Transparenz im Schweizer Rohstoffsektor [‘Greater transparency in the Swiss commodities sector’], in May 2014 the Federal Council produced an interpretive framework for the commodities sector. It subsequently integrated a transparency requirement compatible with EU provisions in its draft revision of company law in Switzerland. The Federal Council is proposing that listed and major companies in the extractive sector must disclose the payments they make to governments. The Dispatch on Amending the Code of Obligations (Company Law [including transparency provisions]) was adopted and referred to Parliament on 23 November 2016. The Federal Council will also continue to support international transparency standards, through vehicles such as the Extractive Industry Transparency Initiative (EITI).
PI16 Reduction in human rights risks attached to gold extraction and trading
In view of the important position that Switzerland occupies in gold trading, as well as in processing and refining, there is the risk that gold from illegal mines, used in some cases to fund armed groups or organised crime, will find its way into Switzerland. This might impact negatively on the protection of human rights in gold-producing countries.
The passing of postulate 15.3877 Recordon – Goldhandel und Verletzung der Menschenrechte [‘Recordon – gold trading and human rights abuses’] resulted in the Federal Council being mandated to present a report examining the gold sector and its human rights risks in connection with Switzerland, as well as any options for action. The postulate should be fulfilled by the end of 2017.
The Better Gold Initiative launched in 2013 created a value chain for sustainably produced gold from small Peruvian mines. Since then, over a tonne of gold from certified mines has been imported into Switzerland, and sold at a fair price.
SECO is currently working alongside the Swiss Better Gold Association to plan the second phase of the scheme – the Better Gold Initiative for Artisanal and Small-Scale Mining – which is scheduled to start at the beginning of 2017. The second phase should see the Initiative extended from Peru to Columbia and Bolivia, and an increase in the traded volumes of responsible gold from small-scale mining. This is to be achieved by means of greater private-sector involvement, the introduction of entry standards, and by intensifying the political dialogue.