Business model of agricultural traders in Switzerland raises human rights concerns, according to NGO report urging tougher rules

In June 2019, the Swiss NGO Public Eye published a report titled "Agricultural Commodity Traders in Switzerland: Benefitting from Misery?" looking at Switzerland’s role as a global hub of agricultural commodities. According to the report, the agricultural traders' market power, activities and business model can lead to human and labour rights abuses particularly in low-income countries, where many of the commodities traded by Swiss-based companies are produced. The report also calls on Switzerland to better regulate the sector.

Business & Human Rights Resource Centre invited the 16 companies analysed by Public Eye to comment on the report.

1. Alvean Sugar did not respond

2. Archer Daniels Midland did not respond

3. Bunge response

4. Cargill did not respond

5. Chiquita response

6. COFCO International response

7. ECOM response

8. Glencore Agriculture response

9. Louis Dreyfus Company response

10. Neumann Kaffee Gruppe did not respond

11. Olam response

12. Paul Reinhart response

13. Socotab Frana response

14. Sucafina response

15. Sucocitrico Cutrale did not respond

16. Volcafe response 

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NGO rejoinder
5 July 2019

Public Eye rejoinder to company reactions in response to our report “Agricultural Commodity Traders in Switzerland: Benefitting from Misery?”

Author: Public Eye

28 June 2019

We welcome the chance to issue a rejoinder to the companies’ reactions in response to our report. Considering the responses, we would like to make the following observations and comments: 

Out of the 11 company responses [...], 5 can be considered rather generic statements... It seems that those companies prefer to highlight and point to existing policies or codes of conduct rather than deal with actual allegations or demonstrate actions taken to address the root causes of the issues portrayed in our report. While many admit that there remains a lot to be done to tackle issues in this sector, the focus still seems to lie largely on policies and standards...

Moreover, companies should [...] move from showing commitment and output to demonstrating actual impacts... A crucial instrument towards achieving their corporate responsibility to respect human rights, the UNGPs and its core piece, Human Rights Due Diligence, is absent. It is shocking that all but one company that responded to our report fail to mention the UNGPs...

We welcome the responses of the companies that provided a bit more detail regarding the contents of our report. Some have clarified inaccuracies when it comes to certain data used such as the size of their landholding or ownership of plantations. Due to the opacity of the sector, the available sources which we had to rely on might not have reflected the current state of affairs. Others point to the fact that our report relies on dated information about cases that are mostly resolved. Without more current information or evidence as to the satisfactory resolution of the mentioned violations, however, we must rely on said public data. While some companies accuse us of failing to provide context, hardly any have provided evidence themselves as to the alleged remediation of the cases. We welcome any evidence-based information provided by the companies with a view to updating specific data on our website if justified. 

We therefore reaffirm that the key findings of our report, none of which were contested by any of the companies, are valid and that after decades of failed corporate self-regulation, binding measures to tackling the issues in the sector are long overdue. 

[Business & Human Rights Resource Centre invited the 11 companies that sent statements to respond to this rejoinder...]

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Company response
19 June 2019

Response by COFCO International

Author: COFCO International

COFCO International is committed to the International Bill of Human Rights and the eight International Labour Organization Core Conventions. We also adhere the Environmental and Social Performance Standards of International Finance Corporation, a shareholder of COFCO International. Extending to our contractors, our Human Rights and Labour Policy outlines our standards for freedom of association, no forced or child labour, diversity and equal opportunities, no harassment and fair employment practices. These principles are strictly adhered to across our global operations through country-level policies and procedures, while regular internal due diligence is conducted to ensure compliance. Our global grievance mechanism is available for any concern related to human and labour rights abuse. 

Furthermore, in 2017, we created our Supplier Code of Conduct with principles that we expect all our suppliers to adhere to. These include compliance with applicable laws and regulations, respect for labour rights, sound environmental, health and safety practices and protection of native vegetation and biodiversity. Based on the Supplier Code of Conduct principles, we are developing commodity-specific policies to specify sourcing criteria and guide the suppliers in complying with our Code. These sourcing policies are fully implemented in our business activities. 

We publish annual sustainability reports outlining progress made towards our mission to meet rising demand for food in a sustainable way at www.cofcointernational.com   

Company response
19 June 2019

Response by Sucafina

Author: Sucafina

We thank you for sharing below reports.

We can share with you that Sucafina fully supports the Swiss commodity sector guidance on implementing the UN Guiding Principles on Business and Human Rights, and asks all its counterparties to do the same.

Click link for more information.

Company response
17 June 2019

Response by Bunge

Author: Bunge

For more than 200 years Bunge has cultivated strong relationships with our stakeholders—from the communities where we operate to our employees, customers, business partners and suppliers worldwide. As we seek to feed a growing global population, we work to do so in a sustainable manner.

The report by Public Eye relies on both current material and sources up to two decades old. In the spirit of transparency and engagement, we are providing a response.

...

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  • This is a response from the following companies: Bunge
Company response
17 June 2019

Response by Glencore Agriculture

Author: Glencore Agriculture

Thank you for providing the Glencore Agriculture with the opportunity to address the report by Public Eye, "Agricultural Commodity Traders in Switzerland – Benefitting from Misery", published in June 2019.

We are disappointed Public Eye did not contact either Glencore International AG (the Swiss based headquarters of Glencore plc, our main shareholder) or Glencore Agriculture during the drafting of their report and as a result the report is an unbalanced portrayal of Glencore Agriculture and the industry.

...

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  • This is a response from the following companies: Glencore
Company response
17 June 2019

Response by Louis Dreyfus

Author: Louis Dreyfus

Louis Dreyfus Company (LDC) takes human rights issues extremely seriously, as part of its commitment to fair and sustainable value creation along the agricultural supply chain. It has policies and actions in place, often in partnership with specialist organizations like the International Labour Organization (ILO) and specific commodity experts like the Better Cotton Initiative, to ensure continuous improvement where issues may exist, including in the areas of human and labour rights.  

Our commitments and actions can be found in the public domain on our website, including regular reporting:

We are convinced that agricultural supply chain issues can only be solved through the collaboration of all the parties concerned: governments, companies, civil society and farmers themselves, and – although we are not farmers - we continue to work extensively to improve farmer practices and reduce poverty. Any specific allegations are investigated and  action taken, including termination of contracts when there is no change.

Company response
17 June 2019

Response by Olam

Author: Olam

Olam has put sustainability at the heart of our business. Conducting business in an ethical, socially responsible and environmentally sustainable manner is intrinsic to our company Purpose of Reimagining Global Agriculture and Food Systems. We are proud of our leadership to create and sustain living landscapes where prosperous farmers and growers, thriving rural communities, and healthy ecosystems can coexist.

We are committed to developing agricultural supply chains that protect forests and areas of high conservation value, eliminate unacceptable land use practices and respect people and human rights, where no children or adults are subject to illegal, forced or abusive labour practices.

Around the world we support activities that are delivering meaningful benefits to raise the incomes and livelihoods of farmers and their families; improve education, healthcare and social conditions for rural farming communities; support small-scale producers to adapt to climate change; and protect forests and areas of high conservation value. The development and roll-out of our AtSource sustainable sourcing solution is enabling us to leverage social and environment data from our supply chains to focus on transformative actions and create transparency for each stage of the supply chain journey.

We acknowledge there is still much work to do, and delivering real and lasting progress will require collaboration amongst a number of stakeholders. We continue to engage with governments, industry, civil society and communities as part of our commitment to make further progress.

Further details about our actions and progress are available on www.olamgroup.com

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  • This is a response from the following companies: Olam
Company response
17 June 2019

Response by Paul Reinhart

Author: Paul Reinhart

Please find here below our comments related to the Public Eye report which has been published:

Page 28:

Governments in Central Asian Republics have focused on investments in local cotton processing and nowadays cotton is mainly exported as yarn and textiles. As a consequence only limited quantities of raw cotton are available for export and Paul Reinhart AG has thus either closed or greatly reduced its local presence. Concerns related to labor practices in the cotton fields of Central Asia have been addressed by the cotton trader community since several years. By remaining engaged with countries and conducting solution-orientated dialogues with all parties involved, including the ILO, our leverage could be strengthened and the situation on the ground has improved in recent years.

Page 30:

Reinhart’s philosophy is based on dialogue, commitment and partnership with all organizations involved. We recognize the human rights challenges along the agricultural value chain. In Africa, we collaborate with expert organizations and initiatives such as the  Better Cotton Initiative (BCI) and the Aid by Trade Foundation (Cotton made in Africa – CmiA). These organizations aim to improve the living conditions and sustainable agriculture practices of farmers and their families. 

All cotton purchased by Reinhart in Burkina Faso is certified by the label “Cotton made in Africa” (seewww.cottonmadeinafrica.org). The CmiA standards aim to improve the farmers education and agriculture knowledge which is key for sustainable development from which the children benefit directly. The standards are comprehensive and regularly checked through verification missions by independent and qualified third-party auditors.

In addition, Reinhart founded the African Cotton Foundation in 2018 together with partners from various interest groups aiming to work with international donors to improve the living conditions of small holder farmers in Sub Saharan Africa.

Company response
17 June 2019

Response by Socotab Frana

Author: Socotab Frana

Thank you for reaching out to us for feedback on the report “Agricultural Commodity Traders in Switzerland – Benefitting from Misery?” We welcome the report and the type of facts that it tries to bring to light.

However, we would like to highlight several facts on the way we operate and separate ourselves from the sweeping statements made in the report, none of which refer to Socotab and none of which are supported by the sources quoted in the report:

...

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  • This is a response from the following companies: Socotab
Company response
17 June 2019

Response by Volcafe

Author: Volcafe

Thanks for giving us the possibility and time to comment on the report. We would like to point out the following inaccuracies:

Page 17 - Neither Volcafe nor ED&F Man is family owned, both are privately owned by shareholders.

Pages 24 and 26 -  Volcafe does not own any plantations or hectares. The source of these claims has been misunderstood. We did not purchase any of the land belonging to Custodia Forzza and that still exclusively belongs to the CF family.  We do not farm coffee and currently we have no plans to do so.

Throughout - Our name is Volcafe, not Volcafé

Volcafe’s global business is fully compliant with the laws and regulations of the countries where we operate. Through our part in ED&F Man’s CSR programme and in particular our work to support coffee producers to farm sustainably and profitably, The Volcafe Way, we are committed to the longevity and viability of the coffee supply chain.

Should you have any interest in learning more about the Volcafe Way, we are gladly at your disposal.