| Society for Threatened Peoples Switzerland & UBS | |
|---|---|
| Lead NCP | Switzerland |
| Supporting NCP(s) | |
| Description | Specific instance alleging a non-observance of the OECD MNE Guidelines. |
| Theme(s) | General policies, Human rights |
| Date | 22 Jun 2020 |
| Host country(ies) | China (People’s Republic of) |
| Source | NGO |
| Industry sector | Financial and insurance activities |
| Status | Concluded |
| Summary | Read the Initial Assessment published 20 January 2021: English Read the Final Statement published 20 December 2021: English Read the Follow up Statement published 26 October 2022: English On 22 June 2020, the Swiss NCP received a specific instance from Threatened Peoples Switzerland (STP), an NGO, against UBS, an investment bank and financial services company, concerning alleged human rights violations in the context of its business relationship with the Chinese company Hikvision. According to the submitting party, Hikvision manufactures technology used to monitor Uighurs in the Chinese province of Xinjiang. On 20 January 2021 the Swiss NCP published the initial assessment deciding to partially accept the case, addressing the issues raised related to passive investment, for further investigation. The Swiss NCP concluded that a business relationship according to the OECD Guidelines between UBS and Hikvision and a direct link between UBS’s products and services and the alleged human rights violations could not be excluded with regard to the UBS fund sold by UBS. However, in relation to UBS’s role as custodian for Hikvision shares on behalf of clients, the Swiss NCP concluded that no business relationship between UBS and Hikvision exists. STP and UBS both accepted the NCP’s offer of good offices and three mediation sessions took place between May and August of 2021. On 20 December 2021, the NCP published the final statement with a partial agreement between STP and UBS. The parties agreed to engage in the future, potentially via a structured and continuous process of regular meetings and exchanges, to discuss human rights issues and to define measures that can significantly impact the advancement of the industry regarding the inclusion of environmental, social and governance (ESG) criteria into the management of passive investment funds. Furthermore, UBS confirmed that it would take a leading role in raising key issues related to ESG in the context of passive index funds within the industry by spearheading an initiative within a major industry association. No agreement could be found regarding STP’s request to make UBS’ existing due diligence process on passive investment more robust by including exit clauses. The NCP recommended that both parties follow through on the actions identified in the agreement. According to the planned follow up, both Parties submitted follow-up reports after 6 months of the conclusions of the Final statement, which were discussed at a meeting led by the NCP on 1 September 2022. The NCP welcomed the commitment of both Parties to continue their regular dialogue on the topic of human rights in connection with index investments and the financial sector in general. STP expressed that it would have liked UBS to take a more proactive approach to the issue of human rights in index investments within its own activities, while UBS expressed its disappointment in not having convinced STP that the issue goes beyond UBS’s own activities and needs to be discussed at the level of the entire financial industry to have a meaningful impact. #directlylinked #disengagementandde-risking #riskmanagementsystem #duediligence #civilandpoliticalrights #labourrights #investmentbanking #passiveinvestments #externalmediators #fortune500 #agreement #recommendations #follow-up |
