Companies will have to comply with new obligations regarding child labor, as well as minerals and metals from conflict zones. After the rejection of the initiative on multinationals, the Federal Council wants to implement the counter-project quickly. He put a modification of the ordinance in consultation on Wednesday.
The popular initiative required companies headquartered in Switzerland to ensure respect for human rights and internationally recognized environmental standards. These companies should have carried out these checks for their activities in Switzerland, but also for those abroad.
The text failed in November, paying the price for the double majority rule. Despite 50.7% of “yes”, the initiative which wanted to impose strict rules on companies was rejected by more than half of the cantons.
Reports to publish
The counter-project goes less far. It does not explicitly regulate the responsibility of the parent company for companies controlled abroad, nor does it introduce new standards.
Our interview with Chantal Peyer, figure of the “orange flag movement”:
However, new obligations are established. Companies working with ores and metals containing tin, tantalum, tungsten or gold, as well as those suspected of using child labor will be subject to due diligence.
They will have to define their supply chain policy, establish a traceability system and develop a risk management plan. This should describe the methods used to identify, analyze and weigh the risks of harmful effects of their activity, their approach to limiting the risks and the intermediate results of the measures they have adopted.
Companies will have to report annually on the implementation of these duties. An independent expert will check their compliance in the field of ores and metals. On the other hand, no control is planned for child labor.
Exceptions are made for SMEs and companies with low risk of child labor. And volume thresholds for the import and processing of ores and metals have been set. A company importing less than 100 kg of gold per year will thus be exempt from due diligence.
Fine of 100,000 francs
Non-financial issues, including environmental, social, personnel, human rights and anti-corruption issues, will also need to be reported. The latter, which may also report on the proper implementation of due diligence duties in the field of child labor and minerals, will be published and will remain accessible to the public for at least ten years.
Only large public interest companies, employing at least 500 full-time people in their Swiss companies and abroad, will be subject to this obligation. Their balance sheet total must also exceed 20 million francs and their turnover 40 million in two consecutive financial years.
If a company does not apply a concept concerning one or the other required aspect, it will have to provide “a clear and reasoned explanation of the reasons justifying it”. This approach allows investors and consumers to judge the credibility of the explanation given, and if necessary, to turn away from a company if this explanation does not convince them, points out the government.
A fine of up to 100,000 francs is provided for in the event of non-compliance with the requirements relating to the preparation of reports.
The consultation is scheduled to end on July 14.