© Reuters. FILE PHOTO: A small banner reading: “Responsible Business Initiative – Yes on November 29” is fixed to the frame of a bicycle in Zurich

By Brenna Hughes Neghaiwi

ZURICH (Reuters) – A vote setting up Swiss companies for higher scrutiny over human rights and environmental abuses looked set to fail on Sunday, according to early counts, despite backing from nearly half the population in a historically divisive vote.

In a referendum on Sunday, voters are choosing between proposals by the Responsible Business Initiative (RBI) to extend companies’ liability over human rights abuses and environmental harm caused abroad, and a milder government version.

The government proposal would force firms to step up checks on their overseas operations and supply chains, but stops short of extending liability to Swiss courts.

Demonstrating unusual support for a politically and economically progressive initiative in the traditionally staid country, just under 50% of voters accepted the RBI’s proposals, according to government interim voting results.

But regional results showed the initiative was no longer able to gain backing in a majority of cantons, a necessary condition for a public initiative to be enacted in Switzerland.

Broadcaster SRF earlier in the day projected that for the first time in more than six decades the initiative could fail on the basis of regional rejection while gaining a narrow public majority.

Final results remain outstanding in a number of left-leaning cantons.

The RBI initiative would have led to sharper scrutiny of the country’s commodities hub and the institutions that finance it, as well as major multinationals like food company Nestle and pharmaceutical giants Novartis and Roche.

“Human rights is such a fundamental issue. People understand you can’t justify human rights violations by economic considerations,” Florian Wettstein, a professor for business ethics at the University of St. Gallen and co-organiser of the initiative, told Reuters.

In a polarizing campaign, the government and multinationals said the RBI proposal went too far, while activists, religious groups and various political factions said without it Switzerland risked falling behind other countries in tackling progressive social and economic issues.

Both supporters and opponents have criticised each other’s tactics in the emotionally charged campaign.

“It was the most aggressive campaign I’ve ever experienced in my 20 years in politics,” parliamentarian Christa Markwalder told SRF, saying she opposed the initiative but would have supported a stronger government counter-proposal.

Meanwhile, voters looked set to reject a proposal seeking to impose a ban on funding arms makers, the latest anti-military referendum in a nation that has not fought an external war for 200 years.

The vote holds implications for major Swiss banks and investors including the central bank, as well as industry.

Both the Swiss National Bank (SNB) and Swiss commercial banks have opposed the initiative, with the Swiss Banker Association saying it would weaken Switzerland as a business location and unnecessarily restrict the SNB, pension funds, banks and insurance companies.

It also faced opposition from the government and the country’s most important industrial lobby, which estimated it could affect around 3,000 companies employing 50,000 people.