Swiss voters have rejected the imposition of stringent new corporate responsibility rules, according to exit polls from Sunday's referendum.

Under the proposal, which would introduced the world's strictest corporate responsibility laws, multinationals headquartered in the country would have been liable for abusive business practices worldwide under the proposed legislation – and the vote looks to have been, as expected, tight. 

The new rules would have amended the Swiss constitution and forced companies to ensure they and their suppliers respect strict human rights and environmental protection standards.

However, exit polls suggest voters in a majority of Swiss cantons rejected the initiative, meaning the proposal fell flat – although the overall totals of votes cast for and against looks likely to have been very close.

The initiative, launched by an alliance of 130 non-governmental organizations as part of Switzerland's system of direct democracy, had the backing of trade unions, church groups and actors across the political spectrum.

But it was opposed by the government and parliament, who have warned that while the intention is good, the legislation goes "too far." 

They put forward a counter-proposal – automatically activated by the referendum's rejection of the main proposal – that also requires companies to report on rights, environmental protections and corruption issues, but without being liable for violations. 

Supporters plastered towns and cities with posters showing environmental degradation and human suffering they say have been caused by Swiss companies. Multinationals are important drivers of the Swiss economy, with close to 29,000 counted at the end of 2018. According to official statistics, they provide more than a quarter of all jobs in the country.

Backers of the new regulations accepted most companies respected rights and environmental protections, but said voluntary measures were not enough to bring the rest in line.

"It is very clearly an illusion to say that companies will do everything by themselves," said Chantal Peyer, a spokeswoman for the Responsible Business initiative. "There are responsible companies who respect human rights, but unscrupulous companies don't change."

Business opposition

On the other side of the argument, the business community claimed that constitutional changes would have a detrimental impact on all companies – including those that behave correctly. 

The campaign, according to Vincent Simon of the Swiss employers' association EconomieSuisse, has "done a lot of damage overall to our economy."

That is particularly true for the companies mentioned by name, he said: "More generally we have tarnished the reputation of our economy even though we are convinced... that Swiss companies are rather exemplary as a whole."

Businesses and employer organizations voiced particular concern over a provision that would make Swiss-based businesses liable for abuses committed by subsidiaries unless they can prove they had done required due diligence. Companies would be presumed "guilty until proven innocent," warned Nestle President Paul Bulcke. 

Glencore chief Ivan Glasenberg agreed, warning in a recent interview that "everyone could then come to Switzerland to have their case tried in court," and benefit from a "reversal of the burden of proof." But he insisted that while Glencore "would probably have to hire more lawyers, nothing would change in the way we operate our mines."

Glasenberg rejected the idea that passing the initiative would prompt multinationals to leave Switzerland, but warned that "companies that are active in developing countries will think twice before moving their headquarters to Switzerland."

Jean-Daniel Pasche, the head of the Swiss Watch Industry Federation, had warned that even when companies proved in court they acted in good faith, "there could be reputational damage" that was hard to repair.