Swiss Reject Business Liability Plan, Ban on SNB Investments (2)

Nov. 29, 2020, 4:35 PM

Swiss voters rejected two proposals that had the potential to alter the corporate landscape of a country known for low taxes and light-touch regulation.

An initiative that would’ve banned the Swiss National Bank from investing in defense companies was opposed by almost 60% in a ballot on Sunday.

A second measure, the Responsible Business Initiative, was also unsuccessful. It would’ve held multinational corporations responsible for human rights and environmental lapses abroad but failed to get the requisite majority among the country’s cantons, or states.

While activists pushed for the two initiatives in a bid to force businesses and investors to adhere to higher moral standards, Switzerland’s government argued they’d hurt the economy.

Multinational corporations also campaigned against the RBI, saying it would’ve saddled them with additional bureaucracy and had the potential to cause a flood of lawsuits.

“Of course I’m disappointed,” lawmaker Mattea Meyer, who supported the RBI, told broadcaster SRF.

SNB Stocks

For the SNB, the vote result means it escapes having to offload stocks valued at almost 20 billion francs ($22 billion). The central bank holds the equities as part of its mammoth 870 billion francs in reserves, built up during a decade of currency interventions.

“The SNB can continue to pursue its tried-and-tested investment policy,” which is designed to support monetary policy, the central bank said in a statement.

The initiative would also have stopped pension funds from providing both debt and equity financing to companies that derive more than 5% of their revenue from arms sales.

The failure of the RBI paves the way for the adoption of the government’s less stringent counterproposal. It’ll institute new reporting and due-diligence for firms.

Initiatives require 100,000 signatures to make the national ballot in Switzerland. To be successful, they must get a majority of votes, as well as a majority of cantons.

Stefan Brupbacher, director of machine industry group Swissmem, said he was “relieved” that damage to the Swiss economy and employment was averted.

(Updates with SNB reaction in eighth paragraph.)

To contact the reporter on this story:
Catherine Bosley in Zurich at cbosley1@bloomberg.net

To contact the editors responsible for this story:
Fergal O’Brien at fobrien@bloomberg.net

Claudia Maedler

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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