In the coming weeks, Switzerland’s Council of States has a big decision to take: should Swiss companies be required to introduce human rights and environmental safeguards for their global actions? This month, prompted by pressure from a civil society initiative on Responsible Business, it will consider a bill to do just that.
Swiss businesses often source their commodities and products from far-flung countries, which puts them at risk of getting caught up in human rights abuses. One example is the supply chain for gold: again and again, human rights abuses are revealed in the gold sector. A report by the Swiss government recently confirmed that the gold mining industry can cause significant harm.
During my investigations in Ghana, Mali, Tanzania and the Philippines, I have seen children and youth dig for gold under the most dangerous conditions in small, informal mines. They work near unstable shafts and use toxic mercury to extract the raw gold from the ore. Some suffer health damage; some have even died in mine accidents. In Eritrea and Papua New Guinea, Human Rights Watch has documented how human rights violations such as forced labor and rape are linked to industrial gold mining.
To ensure that companies do not contribute to human rights abuses through their actions, they should undertake human rights due diligence — that is, take steps to identify and respond to human rights impacts in the supply chain. We recently assessed the steps taken by 13 major jewellery brands, including Rolex, Chopard, and Harry Winston (owned by the Swiss company Swatch). We found that most companies lacked transparency, traceability, and strong human rights assessments. Rolex does not make any of its sourcing practices public, and Harry Winston publishes only scant information on its due diligence. While Chopard is far more transparent about the origin of its gold and sources from small mines that are regularly checked for human rights compliance, its diamond supply chain is opaque.
There are numerous voluntary standards and certification systems to better protect human rights in global supply chains. But implementation depends on the will of individual companies, and so has severe limitations. Standards also sometimes fall short of what is called for in instruments such as the UN Guiding Principles on Business and Human Rights and the Guidance by the Organization for Economic Co-operation and Development (OECD) for the minerals supply chain.
An example from the gold sector is the Code of Practices of the international jewellery association, the Responsible Jewellery Council (RJC). The RJC’s standard falls below what is needed for effective due diligence. Therefore, RJC certification is no guarantee of clean supply chains. Several Responsible Jewellery Council certified companies, including Harry Winston, are doing nowhere near enough for supply chain transparency and human rights protection. The intergovernmental OECD published a detailed study last year that shows how standards by the Responsible Jewellery Council and other mineral supply industry associations are lagging behind international guidelines and are not adequately enforced.
Switzerland now has the opportunity to make companies in all sectors responsible for their actions. In June 2018, the National Council passed a bill obliging larger companies based in Switzerland to ensure that their activities abroad respect human rights and the environment. To comply with this, companies need to conduct human rights due diligence. In particularly grave circumstances, companies can also be held liable for the actions of subsidiaries. The National Council adopted the bill in response to the Responsible Business Initiative, a civil society initiative for a corporate responsibility law. The bill reflects key elements proposed by the Responsible Business Initiative, though it is not as comprehensive as the initiative on some issues.
In February, the Responsible Business Initiative and the bill will be considered by the Council of States’ legal commission. The commission should seize this great opportunity and recommend the adoption of a strong bill, obliging companies to protect human rights and the environment in line with international standards.The adoption of the proposed compromise bill on corporate human rights responsibility would be a big step in the right direction. If this does not happen, the electorate could bring about change through a referendum led by the Responsible Business Initiative. As long as governments leave it up to companies to take voluntary steps, systematic human rights due diligence by companies will remain the exception.