Special sectors need special rules

Commodities: Switzerland’s most dangerous business was the title of a landmark book published by Public Eye in 2012 (then still under the name of the Berne Declaration). What was true 14 years ago remains true today: Commodity trading is the Swiss economic sector where the risk of human rights abuses, environmental pollution and corruption is greatest. It is also one of the country’s most important sectors, accounting for 6.9 per cent of Switzerland’s GDP in 2025.

It’s clear that this high-risk sector should be a top priority in any effort to introduce binding rules on responsible corporate conduct – and especially in Switzerland. That’s what the majority of voters expected when they backed the first Responsible Business Initiative (which failed to reach the required majority of cantons) five and a half years ago. And after many further scandals, it is still what we expect today. Public Eye has analysed the Federal Council’s counterproposal to the new Responsible Business Initiative from that perspective and submitted its response to the ongoing consultation (only in German). Here is a summary of our analysis in the form of answers to the key questions currently being discussed.

Does the counterproposal cover Switzerland’s commodity sector?

Only the tip of the iceberg. The counterproposal puts forward a new Federal Act on Sustainable Corporate Governance and adopts the EU thresholds without changes. If a company employs 5,000 people worldwide and generates turnover of 1.5 billion Swiss Francs (about 1.87 billion US dollars), it falls within the scope of the proposed law. In that case, due diligence obligations relating to human rights and environmental standards apply. These are typically overseen by a supervisory authority, and the company can also be held liable if it breaches them.

In the Swiss economic context, this threshold is very high, meaning the law would apply only to the very largest corporations. This is particularly striking in the commodity sector, whose business model is based on generating very high turnover with very few employees. Switzerland’s nearly 1,000 commodity firms employ just 10,000 people across the country. Global giants such as Glencore, Vitol, Trafigura and Cargill, however, often also extract or produce commodities themselves, which is far more labour-intensive. But employees abroad are counted only if the corporate group is headquartered in Switzerland or if key business decisions are made here. Consequently, probably only a handful of the 1,000 commodity firms based here would reach the relevant thresholds.

Specifically: Which commodity companies are covered? Which are not?

Given the opacity of the commodities sector, in the end only the companies themselves know the precise answers to these questions. Swiss authorities know neither workforce numbers nor annual turnover – nor do they know their often complex group structures, including the specific activities of Swiss entities.

We have nevertheless tried – and reached the following assessment:

• Covered by the law under the counterproposal, alongside Glencore, would be agricultural giant Bunge, fertiliser producer Eurochem and coffee trader ECOM Agroindustrial. They all have their headquarters in Switzerland and meet the thresholds for employee numbers and turnover.

• Clearly not covered is the vast majority of the nearly 1,000 commodity companies operating in some capacity in Switzerland. While many smaller commodity traders have only a handful of employees, even global players such as Gunvor and Mercuria do not reach the 5,000 threshold.

• Potentially covered, meanwhile, are the world’s biggest oil trader, Vitol, and agricultural giants such as Cargill, Louis Dreyfus Company and China’s Cofco. In their case, the relevant figures would need to be examined more closely.

What policy changes are needed?

To bring at least a representative share of commodity companies within the scope of the future law, Public Eye is proposing lower thresholds for high-risk sectors which – as envisaged in the initiative – would be defined by the Federal Council. SMEs would still be fully excluded.

Special rules for high-risk sectors are already standard practice elsewhere

The corporate responsibility laws already in force in other countries are all ultimately based on the UN Guiding Principles on Business and Human Rights and on OECD recommendations, of which Switzerland is also a member. The corresponding EU directive is based on the same dual framework, as is Switzerland’s future law on sustainable corporate governance.

These international standards include a range of special rules for high-risk sectors, including the commodity business. They cover, for example, supply chains in conflict settings and the handling of communities affected by mining projects. In 2018, the Federal Council also published its own guidance specifying the OECD recommendations for Switzerland’s commodity sector.

Where else does the counterproposal need to be improved?

• Downstream: As in the EU, certain activities in the so-called downstream value chain would be excluded from the new rules in Switzerland. In concrete terms, there are restrictions when it comes to the sale, use or disposal of a product. Ten years ago, Public Eye’s Dirty Diesel investigation showed that Swiss commodity traders were selling fuels with high pollutant content to West African countries, contributing to air pollution and, therefore, health problems, particularly in urban areas. Despite all efforts to stop it, this practice continues unabated in countries with weak pollutant limits or poor enforcement. Corporate responsibility law should prevent Swiss companies from knowingly producing such goods and then hiding behind the fact that the harm occurs not in Switzerland but abroad.

• Climate: The counterproposal lacks clear requirements for aligning a company’s business model and strategy with the Paris climate targets. Glencore and others still largely sell fossil fuels. A 2024 analysis by Public Eye showed that these companies’ climate targets were either completely unambitious or simply non-existent.

• Supervisory authority: The Federal Council makes some good proposals for the new authority that would oversee the future sustainable corporate governance law. For example, it would not sit within the economics ministry, thereby helping safeguard its independence. But two points still need to be strengthened. First, the Federal Audit and Sustainability Supervisory Authority must be subject to the Freedom of Information Act, including in relation to its audit reports on companies. Second, there needs to be a designated use for funds from sanctions. At present, fines imposed by the authority will flow into Swiss coffers. So even if a company were penalised for breaches abroad, those affected on the ground would gain nothing from it.

Regulating the commodity sector within the framework of the counterproposal to the Responsible Business Initiative would be a coherent, Swiss-tailored application of a practice established around the world: Placing economic activity in areas that pose high risks to people and the environment under closer scrutiny and stricter due diligence obligations.

• Public Eye's response to the consultation (only in German)