On March 27th, the Swiss government issued a report containing analysis and 17 recommendations aimed at preserving an attractive business environment for the commodity trading industry, whilst at the same time ensuring there is no reputational damage to the country’s image from an industry often criticised.
Recent criticism from certain NGOs and civil society suggests Switzerland is perceived as a regulatory safe-haven, allowing business to avoid international regulations and ignore the legitimate expectations of civil society concerning corporate behaviour. The report was at pains to clarify the role that Switzerland plays on the international stage to push forward a coherent and effective global governance model to ensure issues such as human rights, environmental protection and corruption are addressed effectively.
The deliberations at the Swiss level have concluded that these matters would not be helped by unilateral legislation. New laws or regulations in Switzerland would not necessarily address the problems caused by weak in-country governance and legal frameworks in the countries affected by the so-called “resources curse”. Rather it is important that the industry works on self-regulation and that international legislation continues to be supported by Switzerland.
The implications for the industry in Switzerland are therefore not dramatic in the short-term. Nevertheless the industry should recognise that a move to greater transparency, better communication and the need to win the trust of a broader range of stakeholders is now an imperative for their future success.