Federal Councilor announces transparency draft law for the entire Swiss commodities sector
11 June 2013
The lower house of the Swiss parliament today reported a vote of 93:77 on a proposal that its Foreign Affairs Committee approved with a clear 17:6 vote at the end of April. The approved proposal welcomes in the legal basis for transparent financial flows in the commodities sector and explicitly requires the Swiss government to consider whether the entire industry should be included in scope. The parliament has its finger absolutely on the button: until now there was a danger that the Federal Council would enact only superficial legislation, riddled with holes and containing no new benefits for the producing countries. But Justice Minister Simonetta Sommaruga explicitly confirmed in today’s debate: "The Federal Council accepts the proposal, as it is formulated, and will now consider transparency rules for the whole sector, meaning for listed and non-listed commodity companies as well as for commodity trading and extractive activities."
As an analysis (in French) by Berne Declaration on transparency within the commodity sector shows, the extractive activities of all major Swiss commodity companies are most likely covered by EU and/or U.S. regulations. However, a huge gap still exists when it comes to commodity trading, for which Switzerland is the world leader, with almost half of global sales in this US 1900-billion-dollar market being generated by companies having their principle place of business in Switzerland, and another 29 percent by companies with key Swiss offices. The importance of its commodity trading hub goes hand in hand with Switzerland’s political responsibility to provide quickly and sustainably for more transparency in this business.
The increasing pressure on Switzerland is also reflected in the recent success of international transparency efforts. For example, EITI, the leading transparency initiative for commodity-producing countries, has recently decided to adopt stricter rules. Now all EITI member countries are required to put all relevant facts and figures concerning licenses and commodity trading transactions on the table. Complementary to this, greater transparency is being achieved in more and more home countries of commodity companies. Tomorrow, the European Parliament will adopt the new EU transparency rules for commodity companies, which were agreed in April. The Canadian government has, for the first time, also expressed a positive attitude towards mandatory transparency rules. The USA led the way here in 2012. And the UK has declared the issue a top priority for the G8 summit next week.