New due diligence obligations along the supply chain

The consultation process on the draft implementing ordinance on the new due diligence obligations of companies was recently opened in Switzerland.

The draft Due Diligence and Transparency Ordinance on Minerals and Metals from Conflict-Affected Areas and Child Labour (VSoTr) is based, among other things, on the Conflict Minerals Regulation (EU) 2017/821 and regulates which companies must comply with new due diligence requirements.

Large Swiss companies are required by law to report on the risks of their business activities in the areas of the environment, social concerns, labour concerns, human rights and the fight against corruption, as well as on the measures taken against these risks, thus creating transparency. On the other hand, companies with risks in the sensitive areas of child labour and so-called conflict minerals must comply with special and far-reaching due diligence obligations.

The Ordinance sets out the import and processing levels for minerals and metals up to which a company is exempt from the due diligence and reporting obligations concerning conflict minerals. Furthermore, it contains the exemptions from the due diligence and reporting obligations for small and medium-sized enterprises (SMEs) as well as for companies with low risks in the area of child labour.  Finally, the Ordinance specifies the individual due diligence obligations and names the binding internationally recognised regulations.

The consultation period will last until 14 July 2021 and the Ordinance is scheduled to enter into force on 1 January 2022.