The European Business Organization Law Review (EBOR) has published an interesting article about the needs of reforms in Swiss Legislation regarding human rights toward harmonization with EU Law.
The article explores the evolving landscape of Business and Human Rights (BHR) legislation in Switzerland and the European Union, focusing on recent developments and the potential for harmonization. The international discourse on BHR began with two significant milestones in 2011: the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. These soft law guidelines have substantially influenced subsequent regulatory frameworks.
The Swiss BHR legislative journey commenced with the Responsible Business Initiative in 2015, resulting in a phased implementation of legislation on January 1, 2021, and January 1, 2023. The Swiss framework comprises three primary sets of provisions within the Swiss Code of Obligations: regulations on non-financial reporting, reporting duties for commodity extraction companies, and diligence requirements for businesses dealing with minerals from conflict-affected areas or potentially involving child labor.
In contrast, the EU has recently undergone a significant transformation in its BHR legal framework, introducing two pivotal pieces of legislation: the Corporate Sustainability Reporting Directive (CSRD) and the Directive on Corporate Sustainability Due Diligence (CSDDD). The CSRD expanded reporting requirements for social and environmental information, while the CSDDD aims to regulate corporate due diligence through a comprehensive approach applicable to companies above a certain size, regardless of their industry.
The motivations behind these regulatory changes were multifaceted. For Switzerland, scandals involving Swiss companies and the country’s prominent role in international extractive industries prompted stricter oversight. The EU’s approach aligns more closely with the UNGPs’ principle of corporate responsibility to respect human rights across all operational contexts.
On September 22, 2023, the Swiss Federal Council demonstrated its commitment to aligning Swiss BHR legislation with EU standards by announcing an upcoming reform. A preliminary draft legislation published on June 26, 2024, proposed several key amendments: reducing application thresholds, introducing third-party assurance requirements, allowing adoption of EU standards, and exempting foreign companies operating in Switzerland from certain reporting obligations.
While these proposed changes represent a positive step, the article suggests that achieving true equivalence with EU legislation would require more ambitious reforms. The disparities between Swiss and EU BHR legislations create potential challenges for companies operating across these jurisdictions, particularly regarding compliance and potential sanctions.
The article serves multiple purposes: it provides a comprehensive overview of the current BHR legislative landscape, identifies key differences between Swiss and EU frameworks, and offers insights for sustainability teams navigating these complex regulations. Moreover, it aims to empower advocates seeking legislative equivalence by presenting a detailed comparative analysis.
Ultimately, the document underscores the dynamic and evolving nature of Business and Human Rights legislation, highlighting the ongoing efforts to create more robust, transparent, and responsible corporate governance frameworks that prioritize human rights and sustainable business practices.
The link to this article there.
