Responsibility in partnership instead of confrontation

By Thomas Wellauer, Chairman of ICC Switzerland and Chairman of Board of Directions SIX Group

This was published as an article in the Bündner Tagblatt on Friday 13 November 2020. See article here.

The vote on the Corporate Responsibility Initiative (UVI) has a special significance for ICC Switzerland. For over one hundred years, the "International Chamber of Commerce" ICC has been working for "peace and prosperity through trade and investment". Today it is represented in almost 100 countries and is the only private organization to be an observer member of the UN. ICC Switzerland forms the bridge from Switzerland to this global network.

Responsible entrepreneurship is important to ICC Switzerland. ICC thus supports the high standards of due diligence associated with it. For example, the ICC guidelines for international investments call on investing companies to respect the human rights of those affected by their activities worldwide in accordance with UN principles.

ICC Switzerland therefore supports the indirect counter-proposal (CDR) to the UVI of the Federal Council and Parliament. This proposal tightens the duty of care for companies. It goes beyond the EU rules and combines the rules of the UK and the Netherlands, for example. It is based on well-known instruments. With the new mandatory reporting, the measures become verifiable for third parties. The CDR thus positions Switzerland in an internationally coordinated manner. It comes into force if the initiative is rejected.

ICC Switzerland, however, firmly rejects the Corporate Responsibility Initiative. The duty of care is defined much less precisely than in the counter-proposal. This creates liability risks that are difficult to assess. Moreover, the initiative must be transposed into law by parliament and would therefore only take effect much later than the counterproposal. No country in the world has an enforcement mechanism with direct liability actions in Switzerland, even for subsidiaries and economically controlled companies. This makes investment more difficult, because partners abroad are confronted with a foreign instrument that is difficult to deal with. It would put Swiss jurisdiction above that of the host countries. Such parallel justice is presumptuous and cannot be supported from the perspective of an international economic organization.

Responsibility must not be equated with liability suits in Switzerland. Lawsuits must be based on proven legal rules. In concrete terms, this means that the local courts should have jurisdiction, and in a corporate group the responsible subsidiary should be the defendant. It makes no sense and leads to conflicts if, for example, the Cantonal Court in Chur were to rule on human rights violations in China or Brazil by a company operating there. This must be a matter for the local courts. However, if damage is caused directly from within Switzerland, legal action can already be taken in Switzerland under current law. This is the case, for example, if a damage is caused by instructions of the board of directors or the management of the parent company in Switzerland.

But the role of the state in protecting human rights is also important. The enforcement of these rights also requires the governments in the target countries, i.e. at the site of any violations. Without their cooperation, the situation cannot be improved. This responsibility cannot be shifted onto the companies.

*Thomas Wellauer is Chairman of ICC Switzerland and Chairman of the Board of Directors of SIX Group, which operates the Swiss stock exchange. He has been a member of the management boards of various international companies in industry and insurance