27.03.2013 - Press release
Federal Council publishes background report on commodities
The background report on commodities prepared under the aegis of three government departments (FDFA, FDF, EAER) highlights the economic importance of the commodities industry for Switzerland. The report shows that Switzerland already does a great deal to safeguard its competitiveness and its integrity as a business location, including the commodity trading sector. A set of targeted recommendations should further improve conditions and reduce various risks including those to reputation.
It is estimated that around 500 companies and some 10,000 employees are active in the commodities sector, which, in addition to trading, also comprises shipping, transaction financing, inspections services and product testing. In 2011 the commodities industry made net receipts from merchanting of 20 billion francs, around 3.5 per cent of Switzerland's GDP. Switzerland is one of the most important commodity trading centres in the world.
Due to the growing interest in and importance of the commodities industry, the Federal Department of Foreign Affairs FDFA, the Federal Department of Finance FDF and the Federal Department of Economic Affairs, Education and Research EAER set up an interdepartmental platform on commodities. The aim was to improve the flow of information in the federal administration and to prepare a background report on commodities in Switzerland.
The report covers a broad range of issues which are addressed from various perspectives. These include questions of financial market regulation, the fight against money laundering, sanctions, prevention of corruption, accounting standards and tax matters, as well as corporate and government responsibility with regard to human rights, social and environmental standards.
Switzerland's important role in commodities trading presents a number of challenges. The country faces intense international competition, but challenges are presented in terms of compliance with
human rights, environmental and social responsibility standards, particularly in terms of resource extraction, as well as transparency of finance flows. These challenges can also involve reputational
risks for individual companies, as well as for Switzerland as a country. The Federal Council expects all companies operating inside or outside Switzerland to conduct themselves responsibly, and with
integrity, by complying with human rights,
environmental and social responsibility standards, both in Switzerland and abroad. Compliance with international standards is particularly important in fragile states where governance is deficient.
The Federal Council has therefore approved the 17 recommendations (see chapter 6 of the report). On the one hand they contain measures which serve to safeguard Switzerland's attractiveness as a business location. On the other, possibilities should also be explored of providing greater transparency in terms of finance and production flows. Other recommendations address ways of continuing the commitment to responsible corporate governance at multilateral and bilateral levels, supporting states in good governance, ensuring early recognition of reputational risks and strengthening dialogue between all stakeholders - commodity companies, cantons, civil society, federal administration. Switzerland, in cooperation with these stakeholders, intends to draw up voluntary standards for commodity trading in the area of corporate responsibility and submit them to the relevant international bodies.
The Federal Council has given the relevant departments the task of implementing the individual recommendations and has set a timetable for their completion. The interdepartmental platform on commodities should remain in place and provide the Federal Council with a report on progress in implementing the recommendations by spring 2014.