The Swiss National Contact Point for Responsible Business Conduct has just released its Follow-up Statement on the complaint raised by Worth Rises and BankTrack over Swiss bank UBS’s investments in private prisons companies CoreCivic and GEO Group. This Statement assesses whether the recommendations set out in the NCP’s Final Statement were addressed by the bank in the six months it was given.

The NCP in its Final Statement had identified giant holes in the bank’s human rights controls, and called on the bank to make changes, including a full review of the risks of its existing “passively held” investments. 

The Follow-up Statement found that the bank has failed to fully meet two of the NCP’s three recommendations: according to the NCP, UBS only “partially addressed” its obligations to "include passive investments in its overall risk screening process to identify areas where Responsible Business Conduct (RBC) risks are most significant,” and “actively advocate for a multi-stakeholder approach to further clarify the consideration of RBC aspects in passive investment.” 

According to the complainants, NCP has given the bank too much credit in describing its recommendations as “partly addressed,” as the bank has taken no new action, and apparently completely refused to conduct the review of its holdings that was recommended. 

“This is a textbook example of corporate impunity. The rules are clear, the risks are clear, and yet a major bank can simply refuse to act without facing any real consequence,” reacted Ryan Brightwell, human rights campaign lead at BankTrack. “We hope this case can serve as an example of the urgent need for strong regulation for human rights due diligence that fully includes banks and investments.”

The follow-up statement effectively concludes the NCP process against UBS after over two and a half years. The bank refused to engage in the mediation process offered by the NCP, a first among European commercial banks. 

“It’s hard to have faith in the OECD process with so little recourse for violations of the organization’s business ethics guidelines. UBS has done nothing to resolve our initial complaint, which was affirmed by the Swiss NCP, and yet the process wraps today,” said Bianca Tylek, Executive Director at Worth Rises. “We await a decision out of the UK regarding similarly situated banks, and hope that the NCP there will more aggressively assert itself to demand compliance with the guidelines.” 

While the NCP reaffirmed an important point of principle – that passive holdings should be part of a bank’s human rights due diligence – the problem the complainants raised at the outset persists. UBS continues to hold investments in CoreCivic and GEO Group; two companies that the bank has never denied are connected with allegations of severe human rights abuses; but it has not set out any action taken to address these abuses.

The lack of sanctions the bank will face for its refusal to engage in the NCP’s process and its inaction in response to the NCP’s recommendations highlights the limited effectiveness of the NCP system as a whole for ensuring responsible business conduct and the need for effective regulation to ensure greater businesses respect for human rights, including among banks and investors.

The same complaint against Barclays and HSBC remains outstanding. All statements relating to the case against UBS can be downloaded from the Swiss NCP’s website here.