UNCTAD's two-day Global Commodities Forum on 13–14 April provided a platform for differing views on how best to reform Swiss commodities trading to benefit people in the developing countries where raw materials are grown or extracted.
Representatives of the Swiss government, commodity traders and transparency advocates clashed at UNCTAD's Global Commodities Forum on 13 April over what form of regulatory regime is needed to clean up the commodities trading sector in Switzerland.
Campaign group Berne Declaration, which advocates for more equitable relations between Switzerland and developing countries, outlined a proposed regulatory authority for the commodities sector, modelled on the regulation of the Swiss financial sector and money laundering legislation.
Olivier Bovet of the Swiss State Secretariat for Economic Affairs (SECO) said Switzerland adheres to international standards, particularly those of the European Union, and supports voluntary standards of good governance of the trading sector. He explained that trading sector accounts for 10,000 jobs in Switzerland and 3.5% of its gross domestic product (GDP).
Responding to Berne Declaration's proposal for a statutory regulatory body, Mr. Bovet said it would be "difficult" for the Swiss government to go beyond international standards.
"In a nutshell," he said, Switzerland aligns itself with EU regulations in this matter, which is the "trendsetter" in transparency regulation. He conceded, however, that some form of regulation "was the future".
Representatives of trading companies opposed to regulation said the Berne Declaration's proposal for a Swiss regulatory authority was too ambitious. Andrew Gowers, Head of Corporate Affairs of trading giant Trafigura said it was "doomed to failure" and expressed faith that the Swiss government would reject it.
Ramon Esteve, Board Member of ECOM Agroindustrial, which trades cocoa and coffee, denounced the "additional costs" that regulation would entail for companies operating in integrated value chains.
Harrison Mitchell, Head of Due Diligence and Responsible Supply Chains, RCS Global, said that public disclosure was not as "scary" as people supposed. It was often a question of companies taking the time to understand what disclosure provisions would require of them.
Trafigura has recently become the first commodities trader to join the Extractive Industries Transparency Initiative, a voluntary body that aims to raise transparency in the oil, gas, mining and minerals sector.
Mr. Gowers said that it is a myth that traders cherish a chaotic legal environment from which they profit. They understand that ultimately the rule of law is good for business, not least in terms of reputational risks, he said.
Despite airing disagreements about the form and scope of reform, all speakers agreed that reform in the commodities trading sector was inevitable. "Sunlight is the best disinfectant," Mr. Gowers said.
Commenting on the role that UNCTAD can play, UNCTAD Deputy Secretary General Joakim Reiter, said: "We see a significant opportunity to build an international, multi-stakeholder process for governance in the commodities sector."
Mr. Reiter added: "We, at UNCTAD, look forward to taking an active role in this process and to capitalizing on the opportunity for collaborative governance reform in the commodities trading sector."
The Global Commodities Forum is part of UNCTAD's Commodities Week.