The popular initiative ‘Responsible Business - to protect people and the environment’, which was rejected in the referendum of 29 November 2020, led to the adoption of Parliament's indirect counter-proposal, which came into force on 1 January 2022. This introduces new provisions into the Swiss Code of Obligations (art. 964a to 964l), imposing stricter obligations on certain Swiss companies.
Legislative context: from popular initiative to indirect counter-proposal
New legal obligations
1. Report on non-financial issues
Large companies must now draw up an annual report covering the following topics: environment, social and personnel issues, respect for human rights, and anti-corruption
2. Due diligence in sensitive areas
Companies whose activities present risks related to child labour or the use of minerals and metals from conflict zones must comply with specific duties of due diligence. These obligations are set out in the Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour (DDTrO).
With regard to child labour, companies - whose head office, central administration or principal place of business is in Switzerland - must comply with the duties of due diligence in the supply chain and report on them when they offer goods or services for which there is a well-founded suspicion of child labour. Companies subject to the law are required to put in place due diligence procedures: in particular, they must identify and assess the risks of child labour in their supply chain, and where appropriate, take measures to prevent and mitigate the risks identified.
Exceptions and specific cases
- SMEs and low-risk companies are exempt (art. 6 and 7 of the DDTrO).
- However, if a company offers goods or services that are clearly produced using child labour, it is subject to these obligations, even as an SME (art. 8).
Tools for companies
International Labour Office (ILO) and International Organisation of Employers (IOE) child labour guidance tool for businesses
Children's Rights and Business Atlas
Series of webinars on child labour due diligence
Questions and answers on companies and child labour
Other tools: course manual and online training courses
This child labour guidance tool has been created jointly by the International Labour Office (ILO) and the International Organisation of Employers (IOE) as a resource for companies to meet the due diligence requirements set out in the UN Guiding Principles on Business and Human Rights related to child labour. The tool is available in French, German, Italian and English.
This atlas was developed by the United Nations Children's Fund (UNICEF) and offers a country-specific recommendation for due diligence in the area of children's rights in the form of an online tool. The atlas Children's Rights in the Workplace Index provides information on child labour.
Developed by UN Global Compact Switzerland & Liechtenstein with the support of the Swiss Confederation, this series of four webinars explains how to implement effective due diligence procedures for child labour in value chains. Recordings of the webinars and the slides presented are available on the Global Compact website.
The ILO Helpdesk for Business is a free and confidential assistance service for businesses. It has a special page dedicated to child labour, which is regularly updated with new tools and questions/answers.
The ILO's International Training Centre offers an annual course for companies ("International labour standards and responsible business conduct: the labour dimension of human rights due diligence"). This course always includes a session on child labour, but also on other labour rights in the context of due diligence.
The ILO has created a training module to help companies, particularly SMEs, understand how to meet the requirements of labour standards. The training module focuses in particular on child labour (see pages 42-46 of the course manual). The course is also available as an e-learning course.
Public procurements and companies close to the Confederation
The revised Law and Ordinance on Public Procurement (PPA and PPO) came into force on January 1, 2021. The aim of the revised legislation is to ensure the cost-efficient use of public funds in a manner that is economically, ecologically and socially sustainable (art. 2, let. a, PPA).
When the Confederation awards public contracts, tenderers must comply with the provisions on worker protection and working conditions, and guarantee equal pay for men and women (social criteria).
For goods, work and services to be provided abroad, the contracting authority shall award a public contract only to tenderers who comply with at least the fundamental conventions of the International Labour Organisation (ILO) (art. 12, para. 2, PPA). If the legislation of the place of performance is stricter, tenderers must comply with it. In addition to the fundamental ILO conventions, the contracting authority may require tenderers to comply with the principles set out in other ILO conventions as important international labour standards, provided that Switzerland has ratified them (art. 4, para. 2, PPO).
SECO's role in implementing these provisions is to support contracting authorities and to advise requesting departments on issues relating to compliance with social criteria.
Tools for companies
The Recommendations for federal purchasing departments on sustainable public procurement provide detailed information on social criteria and how to monitor them.
The knowledge platform on sustainable public procurement is continually updated with new tools and recommendations.
Instrument for assessing the risk of violation of fundamental ILO conventions
In order to verify effective compliance with the fundamental ILO conventions, the authorities responsible for implementing these provisions must demand proof of compliance.
As a general rule, a self-declaration duly completed and signed by the tenderers is legally sufficient proof. However, where there is a risk of non-compliance, the authorities are encouraged to require additional proof or to carry out on-site checks through audits.
In order to support the public authorities responsible for implementing these provisions, SECO, in collaboration with the ILO, has developed an Instrument for assessing the risk of violation of the fundamental ILO conventions. The purpose of this instrument is to provide clear, simple and transparent information on the situation in each country with regard to the application of the ten fundamental ILO conventions, in the form of risk assessments. This information can be used, in conjunction with other elements, in the decision whether or not to conduct an on-site audit.
Access to this tool can be requested here: Social criteria (admin.ch)
Guide on Social Sustainability Standards for Public Procurement in the Textile Sector
The guide and tool on Social Sustainability Standards for Public Procurement in the Textile Sector from the State Secretariat for Economic Affairs and The International Trade Centre provide all the information needed to strengthen social sustainability in public procurement of textiles. They offer a detailed assessment of 23 private standards that cover the textile supply chain, are based on the 10 fundamental ILO conventions and require a third-party verification mechanism. The guide also presents a procedure to follow in order to integrate these standards into the tendering procedure and information about 25 other additional social standards. The standards analysis tool details the requirements of each standard.
Guidance on Social Sustainability Standards (PDF, 12 MB, 20.02.2023)
Annexe 1: Results of the Standards (XLSX, 111 kB, 16.02.2023)
Annexe 3: Mean of proof, questionnaire (XLSX, 22 kB, 16.02.2023)
