Switzerland’s role as an agricultural trading hub raises serious human rights issues

Zurich / Lausanne, 3. June 2019

Eight years on from its seminal study on oil, coal and metals traders, Public Eye is publishing an in-depth analysis on Switzerland’s role as a global hub of agricultural commodities. Nowadays, half of all grains, 40% of sugar and a third of cocoa and coffee traded globally are bought and sold through companies headquartered on the banks of Lake Geneva or in central Switzerland. Their growing market power and farming activities has harmful effects on producer countries, leading to abysmal pay, child labour, land grabbing and even corruption. Instead of courting traders from as far as China, Switzerland should impose binding provisions to force these companies to act responsibly.

Of the about 500 traders headquartered near Zug or Lake Geneva, approximately 150 specialise in agricultural products or include them in their portfolio. While Glencore and Trafigura have gained a certain degree of notoriety in Switzerland, companies like ADM, Bunge, Cargill or COFCO have kept a much lower profile. Nevertheless, these major agricultural traders earn revenues that are nearly as high. Formerly pure traders, their business now covers the full spectrum, ‘from field to fork’, and many of them have even purchased arable land. These companies have thus become fully-fledged managers of entire global value chains.

Their market power and profit maximization, however, lead to human rights violations in the countries that produce agricultural commodities such as soy, coffee, cotton and sugar. In reality, the trading houses determine what is produced, under which conditions and at what price, while the people who produce the commodities have no means of concluding contracts that provide fair conditions. This asymmetrical balance of power – reinforced by the extreme concentration in the sector – takes a heavy toll, leading to cases of forced and child labour, health risks linked to the use of pesticides, livelihoods being destroyed due to deforestation or land grabbing, aggressive fiscal practices and even corruption. Dozens of cases regarding agricultural traders headquartered in Switzerland have been brought to light by the media or NGOs.

These are the findings of “Agricultural Commodity Traders in Switzerland: Benefitting from Misery?", the report published today by Public Eye. It dissects the structure and activities of 16 of the world’s largest agricultural traders which have their headquarters or a significant trading arm in Switzerland. The multinationals benefit from the country’s lack of regulation around transparency and the protection of human rights abroad, as well as from discreet fiscal arrangements. The latter was the subject of a Memorandum of Understanding (MoU) between the Canton of Geneva and COFCO, China’s largest and state-owned agribusiness company. Public Eye obtained a copy through federal freedom of information legislation. Cantonal Councillor Pierre Maudet signed this agreement in Beijing on 13 May 2017, promising to support COFCO in its talks with fiscal authorities. The Chinese giant set up its main global trading centre in Geneva and is now the 5th largest “Swiss” agricultural trader, with a turnover of nearly CHF 40 million.

Players such as COFCO – whose opacity and association with human rights violations should be a cause of concern – highlight not only Switzerland’s central role in commodities trading, it underscores the need to take binding measures in terms of transparency and due diligence requirements as called for by the Responsible Business Initiative.

Get more information here or by contacting:
Oliver Classen, Media Director, +41 (0)44 277 79 06, oliver.classen@publiceye.ch 
Silvie Lang, Soft Commodities Expert, +41 (0)44 277 79 10, silvie.lang@publiceye.ch