Swiss Vote on SNB Investments, Corporate Ethics: Decision Guide

The Swiss face two momentous votes that could alter the corporate landscape in a country known for low taxes and light-touch regulations.

A ‘yes’ on Sunday to the Responsible Business Initiative would put Switzerland at the forefront of European efforts to hold multinational corporations responsible for ethical lapses abroad.

Another proposal on the ballot, tabled by anti-war activists, would force the Swiss National Bank to sell holdings in defense stocks valued at about 19 billion francs ($21 billion).

Swiss Vote on SNB Investments, Corporate Ethics: Decision Guide

Business Opposition

Activists say the two issues currently up for a vote are crucial to ensure businesses and investors adhere to high moral standards. But Switzerland’s multi-party government has said voters should reject both proposals because they’d hurt the economy.

Multinational corporations fear the RBI will just add to bureaucracy and lead to a flood of lawsuits.

The SNB opposes the measure forbidding investments in defense companies, saying it would compromise its independence. The ban would also encompass pension funds, and the Swiss Banking Association argues it’d add to their costs.

Voting Process

Initiatives require 100,000 signatures to make the national ballot in Switzerland, part of the country’s tradition of direct democracy.

A poll by gfs.bern for national broadcaster SRG this month determined the outcome of the RBI vote was too close to call. The arms-maker measure appeared to be headed for rejection, as support had declined compared with an earlier voter survey.

There are about 5.5 million eligible voters. Most ballots are cast by post, and turnout has averaged about 40% over the past decade. To be successful, a measure must get a majority of votes across a majority of cantons.

Results are published in the course of the afternoon and the government then holds a press conference to lay out its course of action.

Political Haggling

The outcome of the vote is legally binding, and national laws will have to be modified. This process can take years and leaves room for softening the outcome.

This famously happened in the wake of a 2014 vote setting quotas for new workers from European Union countries, a move that would have put Bern on a collision course with Brussels. A 1994 initiative to cut down on trans-Alpine road traffic has also undergone a lengthy implementation process.

Citizens dissatisfied with lawmakers’ handling of the measure can trigger yet another national vote on the topic. This would be a referendum and require 50,000 signatures.

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