Commodities

It is estimated that around 500 companies and some 10,000 employees are active in the commodities trading sector in Switzerland, which in addition to trading, also comprises shipping, transaction financing and inspection services. In 2018, revenue predominantly stemming from commodity trading amounted to CHF 33 billion, representing around 4.8 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 sector and to the favourable economic conditions for businesses across all sectors. These include stable political, economic and legal institutions, an internationally competitive corporate taxation regime and principles-based regulation. In addition to other factors that contribute to Switzerland’s appeal as a business location, such as the availability of qualified personnel and a generally high standard of living, the country’s sophisticated and stable financial system and the high density of leading companies in the freight business, trade finance and the inspection, verification, testing and certification services, also make it particularly attractive as a commodity trading centre.

As a business location, Switzerland faces intense international competition, also in the commodity trading sector, above all, from such places as Singapore, Dubai (United Arab Emirates), China (in particular Hong Kong), the USA, the UK, India and the Netherlands. Emerging markets in particular have succeeded in positioning themselves as attractive locations in the areas of taxation and regulatory costs. Switzerland therefore faces the challenge of maintaining and further strengthening its favourable business environment.

However, the growth of the sector brings with it additional responsibilities in terms of, among other things, human rights and environmental protection in commodity-exporting countries, in tackling corruption, and in connection with the phenomenon of the ‘resource curse’ in developing countries. These developments can also involve reputational risks for Switzerland, particularly when the conduct of companies domiciled in Switzerland runs contrary to positions taken and supported by Switzerland in the fields of development policy, peace promotion, human rights, and social and environmental standards.

That is why in 2015 the Federal Council adopted a position paper and action plan on corporate social responsibility (CSR), which sets out its expectations of companies with regard to their conduct, as well as the Confederation’s CSR-related activities. The Federal Council expects companies based or operating in Switzerland to take responsibility for all of their domestic and overseas activities in accordance with internationally recognised CSR standards and initiatives such as the OECD Guidelines for Multinational Enterprises. In order to promote corporate social responsibility at company level, the Confederation also supports the drafting and implementation of specific standards and initiatives for the commodity trading sector. This also includes OECD guidelines to help companies avoid contributing to conflicts or human rights violations.

On 9 December 2016, the Federal Council adopted a National action plan for the implementation of the United Nations Guiding Principles on Business and Human Rights (UNGPs) to address the human rights situation. Switzerland is one of the first countries to have such a strategy to promote coherence between economic activities and human rights.

At the end of 2018, the Confederation published the first guidelines on human rights due diligence specifically for companies from the commodity trading sector.

Due to the growing importance of the sector in terms of domestic and foreign policy, the Federal Department of Foreign Affairs (FDFA), the Federal Department of Finance (FDF) and the Federal Department of Economic Affairs, Education and Research (EAER) established an interdepartmental platform on commodities. In November 2018, as a result of the background report on commodities published in 2013, the Federal Council adopted a new report with sixteen recommendations to strengthen competitiveness and innovation; integrity and sustainability and the analytical framework; and dialogue and coordination. It commissioned the interdepartmental platform on commodities to coordinate the implementation of the recommendations and to report to the Federal Council by the end of 2020.

Last modification 05.11.2019

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