Swiss Coalition for Corporate Justice (SCCJ) Arguments

The debates around the corporate responsibility initiative are getting louder every day. More and more often we receive requests from donors who would like to see Horyzon's position in relation to the various counterarguments against the initiative. In the following we have formulated our evaluation of the arguments¹ of the opponents of the SCCJ.

Assertion 1:

«Approximately ¾ of all Swiss enterprises are internationally interlaced and support the prosperity of their partner countries substantially. Especially in developing countries, they create jobs and establish our high-class apprenticeship courses. In view of the new liability risks of the Swiss Coalition for Corporate Justice (SCCJ), they will withdraw. If multinationals from China, Russia or the USA jump into this gap, human rights and environmental protection will inevitably suffer.»

Horyzon’s answer to the assertion no. 1:

We recognize that a large proportion of Swiss companies operate internationally in a very responsible manner and thus contribute to the prosperity of developing countries. Nevertheless, it must be noted: The initiative does not restrict business activities. The initiative is based on the usual rules of Swiss procedural law: no class actions, no excessive damages and whoever loses bears the costs. Swiss civil courts are cautious when it comes to claims for damages and demand a lot from the plaintiffs, i.e. the liability risks are not per se higher and do not exist when the necessary care is demonstrated.

Anyone claiming damages arising from a human rights violation must first prove that a) there is a damage, b) there is a causal link to the organization’s business activities, c) the damage was caused unlawfully, i.e. in violation of human rights, and d) the organization’s exercises control over the company in question in Switzerland. If the Swiss civil court affirms all these points, the organization still has the possibility to exonerate itself by demonstrating that it exercised due diligence. (2)

Assertion 2:

«We don’t care about the law in other countries and postulate superiority for Swiss law and courts. But small farmers and local traders in developing countries are fighting for their livelihoods, not for compliance with Swiss standards. After a yes to the SCCJ, risk-conscious local companies will be wary of investing in poor countries - to the detriment of the people there.»

Horyzon’s answer to the assertion no. 2:

This argument is exactly the same as already mentioned above. It is argued that the liability risks have recently become extraordinarily high, making it impossible to do business in developing countries - to the disadvantage of the developing countries.

However, these liability risks are not significantly higher if the initiative is accepted, since the burden of proof and the cost risk still lie with the plaintiff. Furthermore, liability can be rejected with the necessary proven due diligence and liability is only possible, where the organization has control over the supply chain.

Moreover, it is in the best interest of the company itself and of developing countries that those companies that engage responsibly in developing countries have the same legal basis as those that ignore human rights and can thus gain a competitive advantage without liability - to the detriment of developing countries.

Furthermore, regulation in many European countries, such as France and the UK, is already much stricter than the current Swiss status quo. Switzerland, the country where the Geneva Conventions were signed, would thus only be a latecomer.

Assertion 3:

«With the SCCJ we are mocking our own development aid. With numerous state-financed development projects we currently support local producers in poor countries. With the SCCJ we would at the same time cut off their chance of vital trade with Switzerland - which would be absurd.»

Horyzon’s answer to the assertion no. 3:

It would be a mockery of development cooperation in particular if we were to promote human rights, health and education locally with numerous development projects, while multinational companies based in Switzerland were to ignore them unabashedly. A Swiss foreign policy that is coherent with development cooperation is also committed to the observance of human rights in business abroad.

Assertion 4:

«We punish the Swiss SMEs because the initiative text does not exclude them. Large corporations will hardly be affected. With their lawyers and risk managers around the world, they will adapt their supply chains without further ado. Not so Swiss SMEs; they lack resources and relationships. So they will withdraw.»

Horyzon’s answer to the assertion no. 4:

The initiative will be applied to around 1500 corporations. For small and medium-sized enterprises (SME) it explicitly provides one exception: SMEs are not affected unless they are active in high-risk sectors (e.g. gold or diamond trading):

“ regulating the due diligence obligations, the legislator takes into account the needs of small and medium-sized enterprises that have low such risks;
The initiative therefore only takes those companies whose business poses risks for human rights and the environment abroad into account.” (4, 5)

Behauptung 5:

«We should indeed help and reject the SCCJ with a loud NO. And we should stop ruling the world from the high horse of the world policeman.»

Horyzon’s answer to the assertion no. 5:

“Law and order” - imperialism is being accused here. But this is out of place. First, the human rights and environmental standards demanded by the initiative are internationally recognized guidelines and minimum standards. Secondly, the SCCJ would, without exception, impose obligations on Swiss companies and not on foreign companies. That liability should also apply to business abroad is already practice in other legal areas such as the fight against corruption. Switzerland would be just the opposite of a world policeman, in the sense that it would also give the population in developing countries the opportunity to defend themselves against injustice suffered. (6)

¹We have taken over the formulation of the assertions from the National Councilor Elisabeth Schneider-Schneiter. (Quelle 1)