Commodities

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 2016 the commodities industry made net receipts from merchanting of 24,2 billion francs, around 3.7 per cent of Switzerland's GDP. Switzerland is one of the most important commodity trading centres in the world.

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The reasons for Switzerland’s major role in global commodity trading can be traced to the country’s long tradition in the industry and to the favourable conditions found here for doing business in all sectors. These include a stable and predictable political, economic, and legal environment, a competitive corporate taxation regime and a business-friendly regulatory climate. In addition to other factors that contribute to Switzerland’s appeal as business location, such as the availability of well-trained personnel and a generally high standard of living, the country’s sophisticated and stable financial system make it particularly attractive as a commodity trading centre.

As a business location, Switzerland faces intense international competition, also in the commodities industry, above all, from such places as Singapore, Dubai (United Arab Emirates), China (in particular, Hong Kong), the United States, the United Kingdom, and the Netherlands. Upcoming locations have succeeded in positioning themselves as attractive, as compared to Switzerland, particularly in the domains of taxation and regulatory costs. Switzerland thus faces the challenge of maintaining and strengthening the features that make it an attractive and reliable business location.

As the industry increases in size, it brings with it additional challenges that must be taken seriously, among other, in the domain of human rights and environmental protection in resource-exporting countries, in the fight against corruption, and in connection with the phenomenon of the “resource curse” in developing countries. These challenges can also involve reputational risks for individual companies, and for Switzerland as a country, in particular, where the conduct of companies domiciled in Switzerland should run contrary to positions taken and supported by Switzerland in the domains of development policy, and the promotion of peace, human rights, and social and environmental standards.

In 2015, the Swiss Federal Council adopted a position paper and action plan on corporate social responsibility (CSR). It serves to inform companies about the federal government’s expectations and the government’s CSR-related activities. The Swiss Confederation expects companies based or operating in Switzerland to take responsibility for all of the activities they perform there or abroad in accordance with internationally recognized CSR standards and initiatives such as the OECD Guidelines for Multinational Enterprises. In order to promote CSR by companies, the Swiss Confederation also the development and implementation of specific CSR standards and initiatives for the commodities sector. In this respect, the Swiss authorities published in November 2018 a first sector guidance for commodity trading, enabling companies to conduct due diligence with respect to human rights in conformity with the UN Guiding Principles for Business and Human Rights as well as related OECD Due Diligence Guidances.  

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 Federal Council is confident that it will be possible to implement the majority of the recommendations of the background report on commodities from 2013 in the next one to two years. It has therefore commissioned the interdepartmental platform on commodities with the task of conducting a fresh assessment of the state of the Swiss commodities sector by November 2018 in terms of its competitiveness, integrity, environmental and other aspects. The interdepartmental platform on commodities will remain in place and continue its current work.

Last modification 14.12.2018

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