Swiss vote shines spotlight on companies
A billboard of a runny-nosed, dour-faced girl framed by Glencore's sprawling zinc mine in Peru greets commuters at Zurich's main train station with an ominous slogan: "Water contaminated. Child poisoned. Commodities firm liable."
As the only large mining firm based in Switzerland, Glencore has become the unwilling poster child of a campaign to change the constitution so Swiss companies are liable at home for human rights abuses or environmental harm they cause abroad.
Voters will now choose in a referendum on Sunday between the new proposals and a milder government version that would force firms to step up checks on their overseas operations and supply chains but stops short of extending liability to Swiss courts. In a campaign that has polarized the nation, the government and multinationals say the Responsible Business Initiative goes too far, while activists, religious groups and various political factions say Switzerland risks falling behind other countries in tackling progressive social and economic issues without it.
Glencore for one says the accusations levelled against it by the campaign are misplaced, and wrong. Since taking a majority stake in 2017 in the Cerro de Pasco mine pictured in the billboard, Glencore said it had done much to address concerns about pollution from the site which occurred before it took over.
"It hurts us to see these accusations," Glencore Chief Executive Ivan
Glasenberg told Swiss newspaper NZZ.
SwissHoldings, which represents Swiss multinationals such as pharmaceutical giants Novartis and Roche, food company Nestle, and Glencore, says it is self-evident the issues raised by the initiative need to be addressed.
But it says the proposed measures could push up compliance costs and legal risks for companies to the point where they shun some parts of the world, potentially leaving businesses in the hands of firms that may not take the same precautions. "The worst that could happen would be that people like us who are at the forefront of sustainability ... are forced to move out of certain geographies because of a law that has a good purpose but is poorly executed," said Antoine de Saint-Affrique, chief executive of Swiss chocolate maker Barry Callebaut.
"You wouldn't solve the issue, you would make the issue bigger," he told reporters. Home to some of the world's biggest companies and a major hub for finance and commodities trading, Switzerland has become one of the world's leading commercial centres thanks to its business-friendly laws, regulations and low taxes as well as its history of political neutrality and economic stability. Yet with three days to go, polls suggest the companies and the government are losing the argument. A survey by Swiss broadcaster SRF showed 57% of those polled backed the responsible business initiative over the government proposal.
The government says it supports the ethos of the initiative but that its version is in line with international standards as it leaves foreign subsidiaries and suppliers economically controlled by multinationals liable for their own damage, usually in foreign courts. But for Florian Wettstein, a business ethics professor at the University of St. Gallen and co-organiser of the Responsible Business Initiative, it's also about Switzerland keeping up with global progress on sustainable business practices.
"Switzerland tends to fall more towards the bottom of the pack, not just in terms of human rights but also on socially economically progressive issues. The train is going very fast and, without the initiative, we risk missing it once again," Wettstein told Reuters.
A European Union proposal could bring in even more stringent liability laws for companies in the bloc while countries such as France, Britain and Canada have already enacted laws targeting liability on all or some human rights in business concerns. In Switzerland, the initiative could lead to sharper scrutiny of the country's commodities hub and the institutions that finance it, investors and non-governmental organisations (NGOs) in Switzerland and abroad told Reuters.
Besides Glencore, rival commodities traders Vitol, Gunvor and Mercuria all have head offices in Switzerland and Trafigura has a major trading operation there. Anneke Van Woudenberg, executive director of RAID, an NGO in London which exposes corporate wrongdoing, said the Swiss initiative could also have a preventive effect, by giving companies incentives to take more care.