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| Swiss fear role as haven for secretive resource traders will cost the country | Swiss fear role as haven for secretive resource traders will cost the country |
| (4 months later) | |
| There are no oil rigs on Lake Geneva but each year enough oil to meet Swiss needs 75 times over is traded electronically in the nondescript offices that hug the shore of the largest lake in the Alps. | There are no oil rigs on Lake Geneva but each year enough oil to meet Swiss needs 75 times over is traded electronically in the nondescript offices that hug the shore of the largest lake in the Alps. |
| There aren't any coffee plantations in Switzerland either, but more than 60% of the world's coffee beans pass – electronically – through the country. And it has some of the finest pastures in western Europe, but only enough to grow a tiny fraction of the 80m tonnes of grains and oil seeds that are bought and sold by its traders every year. | There aren't any coffee plantations in Switzerland either, but more than 60% of the world's coffee beans pass – electronically – through the country. And it has some of the finest pastures in western Europe, but only enough to grow a tiny fraction of the 80m tonnes of grains and oil seeds that are bought and sold by its traders every year. |
| The traders behind these deals make the country SFr20bn (£13bn) a year – more than the GDP of Zambia – but the locals are beginning to ask if the easy money is really worth it. | The traders behind these deals make the country SFr20bn (£13bn) a year – more than the GDP of Zambia – but the locals are beginning to ask if the easy money is really worth it. |
| Switzerland's famously low taxes and light regulation have transformed the country into the world's leading wheeler-dealer in everything from oil, copper and zinc to coffee, sugar, wheat and the other staples of daily life. | Switzerland's famously low taxes and light regulation have transformed the country into the world's leading wheeler-dealer in everything from oil, copper and zinc to coffee, sugar, wheat and the other staples of daily life. |
| Now, concerned at the country's global reputation for tax avoidance and speculation in basic commodities, Swiss public and politicians are considering action against the secretive trading companies that have given it a starring role at the heart of scandals stretching from the Congo to Colombia. | Now, concerned at the country's global reputation for tax avoidance and speculation in basic commodities, Swiss public and politicians are considering action against the secretive trading companies that have given it a starring role at the heart of scandals stretching from the Congo to Colombia. |
| Carlo Sommaruga, a Swiss MP and member of the national council, the lower house of the federal assembly, says a series of controversies – Trafigura's dumping of toxic waste in Ivory Coast, Swiss traders' role in the Iraq oil-for-food scandal and, most recently, a boss at the world's biggest commodity trader, Glencore, telling investors that droughts were good for business – are dragging Switzerland's reputation through the mud. "Resource-trading companies' activities will not only result in a bad reputation for them," he said. "We are afraid the whole of Switzerland will suffer from a loss of reputation." | Carlo Sommaruga, a Swiss MP and member of the national council, the lower house of the federal assembly, says a series of controversies – Trafigura's dumping of toxic waste in Ivory Coast, Swiss traders' role in the Iraq oil-for-food scandal and, most recently, a boss at the world's biggest commodity trader, Glencore, telling investors that droughts were good for business – are dragging Switzerland's reputation through the mud. "Resource-trading companies' activities will not only result in a bad reputation for them," he said. "We are afraid the whole of Switzerland will suffer from a loss of reputation." |
| Sommaruga says the Swiss government needs urgently to introduce laws to tighten regulation on traders or there is a "great risk" that the country will be branded as "the new haven for vultures", extracting the world's resources and "propagating hunger". | Sommaruga says the Swiss government needs urgently to introduce laws to tighten regulation on traders or there is a "great risk" that the country will be branded as "the new haven for vultures", extracting the world's resources and "propagating hunger". |
| He wants the Swiss government, which is preparing to report the findings of a six-month inquiry into the secretive industry, to legislate to make Swiss parent companies "civilly and criminally liable" for human rights violations and environmental crimes abroad. | He wants the Swiss government, which is preparing to report the findings of a six-month inquiry into the secretive industry, to legislate to make Swiss parent companies "civilly and criminally liable" for human rights violations and environmental crimes abroad. |
| The investigation, which is being carried out jointly by the finance, economy and foreign ministries, was launched after Josef Zisyadis, a former MP for the Alternative Left party, stood before parliament to deliver a blistering attack on the industry. "These companies are characterised by a complete lack of transparency, human rights infringements and damage to the environment," he said last year. "They are masters of tax evasion that inflicts massive damage on resource-rich countries." | The investigation, which is being carried out jointly by the finance, economy and foreign ministries, was launched after Josef Zisyadis, a former MP for the Alternative Left party, stood before parliament to deliver a blistering attack on the industry. "These companies are characterised by a complete lack of transparency, human rights infringements and damage to the environment," he said last year. "They are masters of tax evasion that inflicts massive damage on resource-rich countries." |
| Special tax breaks for traders and companies that operate largely offshore have helped make Switzerland the perfect home for the commodity groups, and have helped them grow tenfold over the past decade. They now represent more than 3.5% of the country's GDP. | Special tax breaks for traders and companies that operate largely offshore have helped make Switzerland the perfect home for the commodity groups, and have helped them grow tenfold over the past decade. They now represent more than 3.5% of the country's GDP. |
| Sommaruga's focus is on companies that trade in food and "rejoice in drought". His demands come after a Glencore boss said the worst drought to hit the US since the 1930s would be "good for Glencore". | Sommaruga's focus is on companies that trade in food and "rejoice in drought". His demands come after a Glencore boss said the worst drought to hit the US since the 1930s would be "good for Glencore". |
| "In terms of the outlook for the balance of the year, the environment is a good one," Chris Mahoney, head of Glencore's agricultural division, told investors this summer. "High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities [exploiting price differences in different markets]." | "In terms of the outlook for the balance of the year, the environment is a good one," Chris Mahoney, head of Glencore's agricultural division, told investors this summer. "High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities [exploiting price differences in different markets]." |
| Sommaruga said Mahoney's frank comments during the company's results presentation this summer showed that Glencore, and other trading and mining companies, were "totally dehumanised". "Profit maximisation comes before the life and health of the poorest people on our planet," he said. "That they can rejoice in a drought and the profits generated illustrates the monstrosity of the company." | Sommaruga said Mahoney's frank comments during the company's results presentation this summer showed that Glencore, and other trading and mining companies, were "totally dehumanised". "Profit maximisation comes before the life and health of the poorest people on our planet," he said. "That they can rejoice in a drought and the profits generated illustrates the monstrosity of the company." |
| Mahoney, who won a silver medal rowing for Great Britain at the 1980 Moscow Olympics, denied the company's trading drove up prices, and claims he meant the company made more from the extra logistics of moving grain to the right places during droughts. | Mahoney, who won a silver medal rowing for Great Britain at the 1980 Moscow Olympics, denied the company's trading drove up prices, and claims he meant the company made more from the extra logistics of moving grain to the right places during droughts. |
| "What we do does not drive prices higher. In fact, our agricultural products business alleviates supply shortages," he said. "We have invested billions of dollars in farms, storage and transport infrastructure to increase the global supply of agricultural products and physically get them to where they are needed in the most efficient way." | "What we do does not drive prices higher. In fact, our agricultural products business alleviates supply shortages," he said. "We have invested billions of dollars in farms, storage and transport infrastructure to increase the global supply of agricultural products and physically get them to where they are needed in the most efficient way." |
| However, the latest management statement from Glencore, which is one of the biggest companies in the FTSE 100 (meaning most pension funds are automatically required to buy its shares), show the company has benefited from a 26% rise in the wheat price over the last three months. | However, the latest management statement from Glencore, which is one of the biggest companies in the FTSE 100 (meaning most pension funds are automatically required to buy its shares), show the company has benefited from a 26% rise in the wheat price over the last three months. |
| Ivan Glasenberg, Glencore's multi-billionaire chief executive, said the company's $6bn (£3.7bn) takeover of the Canadian grain company Viterra "transforms our already strong agricultural business at a time when industry fundamentals are the most positive they have been for some time". | Ivan Glasenberg, Glencore's multi-billionaire chief executive, said the company's $6bn (£3.7bn) takeover of the Canadian grain company Viterra "transforms our already strong agricultural business at a time when industry fundamentals are the most positive they have been for some time". |
| Glencore, which already controls about 8% of the world's traded wheat market, made $146m of profit before interest and charges on $9.4bn of revenue from its agricultural business in the first six months of this year. | Glencore, which already controls about 8% of the world's traded wheat market, made $146m of profit before interest and charges on $9.4bn of revenue from its agricultural business in the first six months of this year. |
| The perceived profiteering from food trading has helped spark protests against the country's commodity firms. They had previously been able to brush off scandals such as Trafigura's toxic waste dumping, which led to 17 deaths in 2006 (Trafigura denies any wrongdoing). | The perceived profiteering from food trading has helped spark protests against the country's commodity firms. They had previously been able to brush off scandals such as Trafigura's toxic waste dumping, which led to 17 deaths in 2006 (Trafigura denies any wrongdoing). |
| "About the worst thing you can speculate with is hunger," said David Roth, president of Switzerland's Young Socialists. "If people lose their houses, it's bad; if they speculate with food and people starve, it's the worst thing you can do. | "About the worst thing you can speculate with is hunger," said David Roth, president of Switzerland's Young Socialists. "If people lose their houses, it's bad; if they speculate with food and people starve, it's the worst thing you can do. |
| "We're not playing any more. They crossed the line: something has to be done," he said as he peeled through sheets of the 45,000 signatures collected for his petition calling for Switzerland to ban all speculation in food prices. | "We're not playing any more. They crossed the line: something has to be done," he said as he peeled through sheets of the 45,000 signatures collected for his petition calling for Switzerland to ban all speculation in food prices. |
| Roth, 27, claims to have won broad political support for the petition. If he can get 100,000 signatures within 18 months, the government will be forced to hold a referendum on the issue. | Roth, 27, claims to have won broad political support for the petition. If he can get 100,000 signatures within 18 months, the government will be forced to hold a referendum on the issue. |
| "When we are collecting signatures on the street, people say 'oh you're from Juso [the Young Socialists party] – I don't like you, but it is a good issue'," he said. "People who are absolutely not on our side [politically] have signed our petition. It is a moral issue." | "When we are collecting signatures on the street, people say 'oh you're from Juso [the Young Socialists party] – I don't like you, but it is a good issue'," he said. "People who are absolutely not on our side [politically] have signed our petition. It is a moral issue." |
| Roth said Switzerland's "long tradition of looking the other way" could be about to end. "We have tried to crack down on the banks and hedge funds [which have been forced to comply with international money-laundering regulations], now it is time for the traders," he said. | Roth said Switzerland's "long tradition of looking the other way" could be about to end. "We have tried to crack down on the banks and hedge funds [which have been forced to comply with international money-laundering regulations], now it is time for the traders," he said. |
| "The bad-guy image isn't good for the rest of the country – we don't want Swatch shops to be boycotted." | "The bad-guy image isn't good for the rest of the country – we don't want Swatch shops to be boycotted." |
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