Plan to boost big Swiss firms' liability fails in referendum

GENEVA — A proposal that could have stiffened penalties against companies based in Switzerland if they violate human rights or harm the environment abroad failed in a Swiss referendum on Sunday.

The initiative titled “Responsible companies — to protect people and the environment” won a narrow majority of votes, with 50.7% per cent backing it and 49.3% against, but failed because a majority of the country's cantons, or states, came out against it. Support was strongest in urban areas, much of Switzerland’s French-speaking west and Italian-speaking Ticino.

Under Switzerland's system of direct democracy, which gives voters a direct say several times each year on a variety of issues, proposals need a majority both of votes cast and of cantons to pass. The Swiss held two other referendums this year, but one in May was delayed due to the COVID-19 pandemic.

The federal government opposed the plan championed by left-leaning groups and some big civil society organizations, asserting that it went too far. Parliament has proposed a countermeasure that would also boost scrutiny of such companies’ actions.

The measure could have made large Switzerland-based companies liable in the country's courts for their flawed operations or those of their subsidiaries and subcontractors in foreign nations, unless they were able to show that they conducted proper due diligence beforehand.

It would have required Swiss-based companies to better verify their activities in foreign countries and could have made them more liable for any damage caused. It could potentially have affected multinationals like mining and minerals company Glencore, agribusiness company Syngenta, and cement firm LafargeHolcim — which have at times faced criticism over their activities abroad.

Parliament’s alternative, which should now take effect instead, won't require companies to answer to Swiss courts and will focus on issues like mining of minerals from conflict zones or child labour. It also seeks more co-operation among countries on such matters.

Another measure that would have banned the financing by the Swiss national bank or pension funds of any weapons for export, from handguns to assault rifles to tanks, also failed Sunday, with a majority of both voters and cantons opposing it.

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Eds: This story corrects an earlier version that had wrongly indicated that the measures on the ballot Sunday had originally been planned for a vote in May.

The Associated Press