Vitol – another Swiss commodities group that does not respect human rights
«Vitol cares too little about the human rights of its workforce». This is the finding from a study done by the Swiss Catholic Lenten Fund and Bread for All on the largest Swiss corporation in terms of revenue. The study conducted by the two relief organisations analysed Vitol's engagement in coal mining in South Africa. In northern South Africa, further expansion of two mines threatens to lead to serious human rights violations. As the relief organisations show, the Swiss commodities group uses poorly justified arguments to relinquish its responsibility for the local population.
Economic interests in South Africa…
Apparently Vitol controls the exclusive purchase contracts for coal produced by the Australian mining company Coal of Africa Limited (CoAL). CoAL’s mines in South Africa threaten to endanger both the health and fundamental existence of the local population. The main opposition by locals is directed at two mining projects which are expected to lead to severe water pollution and health risks due to coal dust. In addition, massive losses are to be expected in agriculture and tourism, the two main sources of income for the affected villages. The region, which is seen as a fertile garden and the bread basket of South Africa, is expected to lose several thousand jobs.
The relief organisations reiterated that due diligence obligations apply to the entire business relations of a company, in particular to the risk of human rights violations by an affiliate.
…but no readiness to assume responsibility
In this case the relief organisations referred to the UN Guiding Principles on Business and Human Rights. In their opinion, Vitol has to exert its influence as CoAL’s shareholder and trade partner «in order to prevent or ease negative effects on human rights».
However, the Geneva-based company argues that it only owns a minor portion of the CoAL's shares (1.4%) and therefore has no influence.
«Although due diligence obligations applies to all business relationships and depends on the risk a company poses to human rights, Vitol argues purely as if due diligence depended merely on the share proportion of one company in another», says Chantal Peyer, team leader at Bread for All. Furthermore, as a private company, Vitol is not obliged to guarantee a certain degree of transparency. Chantal Peyer continues «Vitol states that it follows both EITI (Executive Industries Transparency Initiative) and UN Global Compact as well as its own code of conduct, but all the same the commodities group refuses to publish even the slightest detail on this field. And, what’s more, it is not an official member in these two initiatives. Thus Vitol wants to discuss on salary transparency and human rights behind closed doors without having to communicate anything. This shows that Vitol still has a long way to go with regards to transparency and social dialogue».
Importance of the Responsible Business Initiative
Along with almost 70 other organisations, among them humanrights.ch, the relief organisations are calling for statutory rules instead of voluntary pledges regarding international companies based in Switzerland. The Vitol case shows that the Responsible Business Initiative launched in April 2015 by the civil society is more relevant than ever.
On 24 August 2015 Lucrezia Meier-Schatz, head of the organisational forum of the Swiss Catholic Lenten Fund, at a press conference in Bern called for statutory bases to force Swiss companies to do business with the necessary diligence. «The regulations of the Responsible Business Initiative will help to make companies stop violating human rights and destroying the environment». She also takes a clear position against voluntary measures: «In the end, voluntary measures allow companies to define for themselves as to what extent they want to implement human rights and the protection of the environment».
- Vitol und die Menschenrechte
Media release by the relief organisations (in German), 24 August 2015
- Vitol and coal trading: Challenges of human rights due diligence in the supply chain
Study by the Swiss Catholic Lenten Fund and the Bench Marks Foundation (pdf, 62 pages)
- Fastenopfer und Brot für alle kritisieren Rohstoffhändler Vitol
Article on the Aargauer Zeitung website, 24 August 2015
- Responsible Business Initiative
Initiative committee website