Swiss Disclosure Proposal Would Promote Global Transparency

NEW YORK—A proposal introduced today in the Swiss parliament to require Swiss commodity companies to make public the payments they make to governments could help citizens of countries rich in natural resources hold their governments accountable, the Revenue Watch Institute said.

“With the United States and the European Union embracing stronger transparency rules, countries like Switzerland risk becoming outliers where companies could go to avoid scrutiny,” said Alexandra Gillies, head of governance at Revenue Watch. “By advancing this proposal, the Swiss government would advance making transparency a truly global standard for this sector.”

The proposal calls for the development of a disclosure standard that would apply to natural resources companies  based in Switzerland, including firms active in Switzerland’s commodity trading sector. The measure was introduced by a Social Democrat MP with support of 28 other MPs including liberal and center parties.

It comes less than a week after the European Parliament’s Legal Affairs Committee voted to require certain EU-based oil, gas, mining and logging companies to disclose their payments to governments, on a country-by-country and project basis. Rules issued in August by the U.S. Securities and Exchange Commission require companies on U.S. stock exchanges to make similar disclosures.

The Swiss proposal explicitly covers commodity trading, a sector of Switzerland’s economy attracting growing scrutiny. Switzerland is home to many of the world’s largest commodity trading companies, such as Glencore, Trafigura and Vitol, which buy and sell resources around the globe. These companies engage in large transactions with many developing countries but, as documented by Revenue Watch, with minimal disclosure requirements.

“When commodity traders buy oil or minerals from governments, they are purchasing resources that essentially belong to the public,” said Gillies. “Transparency is essential to help safeguard these transactions against abuse.”