* Government seen wary of driving companies to Asia
* NGOs had pushed for binding transparency measures
* EU and U.S. pursue tough anti-corruption rules
By Emma Farge
GENEVA, March 27 A Swiss government
investigation into the country's $20 billion commodities sector
has stopped short of proposing any new or tighter rules on
trading companies as it seeks to prevent departures to Asian
The long-awaited report published on Wednesday said that the
sector's 500 or so companies and about 10,000 employees
contributed roughly 3.5 percent of Switzerland's GDP and that
the country needs to regulate the sector without chasing them
Switzerland, home to commodities giants such as Glencore
and Cargill, commissioned the report last
year after left-wing politicians said that the traditionally
secretive sector exposed the country to risks to its reputation.
Geneva alone accounts for about a third of daily volumes of
"There is no evidence, at present, of a general trend
amongst companies to move away from Switzerland, but much will
depend on whether Switzerland succeeds, also in the future, in
providing a competitive legal and economic setting for
conducting business," the report said.
"Switzerland thus faces the challenge of maintaining and
strengthening the features that make it an attractive and
reliable business location, including the competitiveness of its
tax regime and the efficiency of its financial centres."
The content of the report is in line with previous comments
from Swiss officials, who have said that commodities companies
should police themselves.
Yet it comes as a disappointment for non-governmental
organisations that had sought tough transparency measures for
the commodities trading sector.
"Just a dialogue without a final goal for binding measures
for the trading sector doesn't make much sense," said Lorenz
Kummer, policy adviser at SWISSAID.
"There have been some threats that other centres like
Singapore are becoming more attractive and I think that is
playing a role for the government."
The Geneva Trading and Shipping Association, which had
previously said it was willing to help develop non-binding
transparency standards for the sector, said in a statement:
"Given the international character of commodity trading
activities, unilateral regulation from Switzerland would be
The report's 17 recommendations, which were adopted by
Switzerland's Federal Council, mainly sought to reinforce
existing standards and support international efforts to
strengthen transparency without promising unilateral action.
The report said the industry faces real and reputational
challenges, such as human rights, environmental protection,
transparency and corruption, but that such questions must be
dealt with "in a constructive and sufficiently nuanced manner".
Switzerland also has a strategic interest in supporting the
sustainable development of the industry, it said.
The pressure to regulate the sector comes as the United
States and the European Union pursue tough new rules for
resource companies in an attempt to reduce corruption.
The Swiss cabinet in December rejected a motion that would
force miners and private trading companies to declare payments
made to resource-rich countries.
Some Swiss commodities traders have in the past made
headlines for trading with Iraq during the United Nations'
More recently, Swiss authorities launched an investigation
last year into a former employee of Gunvor for suspected money
laundering in the Republic of Congo's oil sector.
Gunvor is a plaintiff in proceedings and is not itself a
subject of the investigation.
Switzerland also faces criticism from the European Union for
its system of cantonal, or state, tax regimes that offer lower
taxes to companies such as commodity trading houses sourcing
revenue from abroad.
It is due to present the EU with a proposal on Swiss tax
reform by the middle of this year.