Many developing countries previously only had minimal gain from economic globalisation. Multinational corporations exploit the raw materials of countries in the southern hemisphere or produce cheap clothing and electronics there. Working conditions are often appalling, child labour is rife and the population as a whole suffers from environmental pollution, displacement and social upheaval. Companies meanwhile transfer the profits to tax havens.
Voluntary initiatives are increasingly common, as are guidelines and behavioural codes that aim for more corporate responsibility. Nevertheless, these are inadequate because without the threat of sanctions companies can easily ignore them. To tackle the problem effectively, more practical and enforceable tools are required.
In May 2011 John Ruggie, UN General Secretary’s Special Representative on business and human rights, launched his Guiding Principles for business and human rights. The purpose was to close any loopholes in the guidelines for corporate violations of human rights. Businesses must implement ‘due diligence for human rights’ to do justice to their responsibility.
SWISSAID adopts the view that it should be mandatory to implement the guiding principles. We therefore support the petition “Corporate Justice” submitted in June 2012 with 135,000 signatures. This sparked an intense political debate, but the Swiss parliament rejected the adoption of any real legislative measures.
In April 2015 SWISSAID joined forces with 60 organisations to launch the Corporate responsibility initiative. The aim: mandatory rules for companies for the protection of humans and the environment – even for foreign activities. In real terms this means that all businesses must check whether overseas activities violate human rights and environmental standards; they must take appropriate action and submit reports.
This alleviates the undisputed substantial risk to reputation. Many internationally active enterprises have their head offices in Switzerland: any violation of human rights and environmental standards jeopardises Switzerland’s good reputation. Thanks to greater awareness of responsibility among the senior management of major enterprises, Switzerland could adopt a pioneering role worldwide – to protect human rights and the environment in the Third World as well.
How the Guiding Priniciples on Human Rights impact corporate responsibility
Video by Shift Project Ltd.