SWITZERLAND Law and Practice Contributed by: Liburn Mehmetaj, Roxane Allot and Andreas Hösli, Walder Wyss Ltd
In both cases, the company can be punished with a criminal fine of up to CHF5 million. In addi - tion, the prosecutor (typically in such cases, the Office of the Attorney General, OAG) may order the forfeiture of assets (in particular, seizure of illicit profits), which often far exceeds the fine. In most cases, criminal proceedings under Arti - cle 102 SCC relate to bribery of foreign officials and/or money laundering. As mentioned (see 2.2.6 Other ), the alleged crimes are in some cases related to BHR issues, including ille - gal destruction of primary forests and related adverse human rights impacts (eg, threats to local communities, expropriation, dislocation). With respect to civil corporate liability, general norms and concepts of liability (typically, extra- contractual liability) may apply in a BHR context. Notably, the Responsible Business Initiative, rejected by a narrow margin in 2020 (see 2.2.2 Corporate Human Rights Due Diligence Leg- islation ), proposed specific liability for Swiss- based parent companies in relation to BHR and environmental-related damage occurring abroad (eg, caused by a subsidiary based abroad). The following general norms and concepts of liability could potentially serve as a basis for liability in a BHR-related context: • Extra-Contractual Liability: Article 41 CO and Article 28 of the Civil Code provide that anyone who unlawfully causes harm to another (personal injury or property dam - age), whether wilfully or negligently, is liable. For example, in the context of BHR, affected communities or workers could in theory sue a company in Switzerland for human rights- related harms (injuries, illnesses, etc). How - ever, major legal challenges would need to be overcome, including jurisdiction. Another challenge is the burden of proving the breach
of duty and causation, especially for abuses occurring abroad by subsidiaries. Another potential basis for extra-contractual liability is Article 55 CO, which provides that a principal (eg, a company as an employer) can be held vicariously liable for harms caused by auxil - iary persons (eg, employees), under certain conditions. • Contractual Liability: In case of breach of contract, a company may be held liable according to the provisions of the con - tract and mandatory Swiss liability law. For instance, if a company has contractually committed to adhere to certain BHR stand - ards and breaches them, those with rights under the contract could seek remedies. Overall, enforcement of claims in a BHR con - text is rather rare, but plaintiffs have repeatedly attempted (and continue to attempt) to hold companies liable. Accordingly, criminal or civil liability in a BHR context remains a real possi - bility. 3.2 Director and Officer Liability Directors and officers of Swiss companies can potentially be held personally liable for involve - ment in or failure to prevent human rights abuses by the company, though such cases would be framed in terms of breaches of their duties or direct participation in wrongful acts. Under Swiss corporate law, directors and sen - ior officers owe fiduciary duties (duty of care, duty of loyalty) to the company they oversee (Article 717 CO). If they breach these duties and cause damage, they can be liable (Article 754 CO). In practice, this means directors and offic - ers must manage the company’s affairs with the diligence of a prudent business person and in the company’s best interest, including comply - ing with the law. If a company suffers a loss due
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