Update: 17.04.2013

Disappointing report by the Federal Council on the commodities sector

At the end of March, the Federal Council published its background report on the Swiss commodities sector. The government acknowledges the high risk of human rights violations and environmental pollution by Swiss commodities traders. NGO sharply criticise the report as being insufficient and fainthearted and blame the Federal Council for solely banking on voluntary initiatives when presenting its 17 recommendations.

Reaction instead of action

Various NGO studies and reports have caused the Swiss commodities sector and with it companies like Glencore, Xstrata or Holcim and their at least partially questionable business activities to increasingly enter public awareness. With their campaign for «corporate justice», around 50 organisations, including humanrights.ch, have joined up to call for stricter regulations for internationally active enterprises. In 2011 and 2012 alone, around 30 parliamentary motions have been submitted on the topic of commodities trading.
With its report the Federal Council has now reacted to this increased attention and has gone deeper into matters such as financial market regulation, the combating of money laundering, corruption as well as human rights, social and environmental standards in the commodities sector.

No new facts, unclear recommendations

The report is in no way convincing although three departments were active in its compilation (Federal Department of Foreign Affairs FDFA, Federal Department of Finance FDF, Federal Department of Economic Affairs, Education and Research EAER). The Berne Declaration (EvB) is mainly disappointed that the departments «have not been able to present new and illuminating data, despite months of intensive research. On the one hand, the government report states the immense economic importance of the sector, on the other hand it has to admit that, at the moment, there are no up-to-date figures on the tax revenue gathered from the commodities sector».

Although the background report names the most sensitive issues relating to commodities, the 17 collected recommendations fail to be truly significant, irrespective of the fact that since the «corporate justice» campaign and the petition signed by 135,000 persons the call for changes to the law has been clearly voiced. Swiss companies active abroad shall undergo a mandatory registration, live up to detailed fiscal provisions and transparency regulations, as well as a human rights due diligence examination. In addition, the enterprises shall be held responsible for human rights violations and ecological wrongdoings of their foreign subsidiaries. There is no sign of these clear demands to be found in the background report.

A simple encouragement to the companies to assume more responsibility is not enough

As a result of the fear from binding regulations, the Federal Council continues to rely on voluntary initiatives. It blocks out its own responsibility to create necessary regulations throughout the 50 page-strong background report. For the NGO coalition, this is simply absurd since experience shows that voluntary efforts by commodities companies are by no means sufficient. The Berne Declaration states in its analysis of the report that Swiss companies have repeatedly committed human rights violations abroad on a large scale over the past years. Should the foreign states not be capable of ensuring human rights, Switzerland as state of residence of these companies has to fill in these gaps by means of regulations.

Responses to various parliamentary initiatives still pending

The bottom line on the background report is rather disillusioning, but a final result has not yet been reached and several parliamentary initiatives are still awaiting discussion. Until June 2013, the Federal Council plans to present a comparative study on the introduction of a regulation of due diligence in human rights and ecology for enterprises. Such a duty of care would also have consequences for the Swiss commodities companies. It remains to be seen whether the study and the following suggestions by the Federal Council will show more tangible and satisfactory results than this present report on the commodities sector.

Documentation

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