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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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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.

Company response
14 June 2019

Response by ECOM

Author: Ecom

Following are our comments to references to the ECOM Agroindustrial Group of companies made in the Public Eye Report dated June 2019 entitled “Agricultural Commodity Traders in Switzerland – Benefitting from Misery?”

I would like to point out that Public Eye did not contact us (or any other trading company to my knowledge) before issuing their report which contains mostly dated information relating to issues mostly resolved.

...

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Company non-response
13 June 2019

Cargill did not respond

Author: Cargill

Cargill declined to respond.

  • This is a non response from the following companies: Cargill
Company non-response
13 June 2019

Neumann Kaffee Gruppe did not respond

Author: Neumann Kaffee Gruppe

Neumann Kaffee Gruppe declined to respond.

Company response
11 June 2019

Response by Chiquita

Author: Chiquita

Since 2001 Chiquita is the only international banana company to have an International Framework Agreement in place with IUF and COLSIBA.  This agreement includes labor standards covering workers’ rights, freedom of association and right to collective bargaining.  This, along with our more than 35 workers representative bodies collective efforts,  helps protect the rights of thousands of banana workers across the region. It is disappointing when we learn about issues elsewhere the industry where others have not acted as we strive to do. 

We continue to work closely with stakeholders, certifiers and also sit on the steering committee of the World Banana Forum of the FAO to try and promote collaborative efforts to raising standards throughout the worldwide industry on which, according to the FAO, 400 million people depend for a staple food or source of income.

  • This is a response from the following companies: Chiquita
Article
4 June 2019

NGO urges tougher rules for agricultural traders

Author: Swissinfo

Switzerland’s leading investigative NGO is calling for greater transparency and regulation of agricultural traders..., pointing to the wide range of human and labour rights issues that arise in the low-income producing countries. 

“Switzerland, as a home state to many of the globally significant agricultural traders, has a central role to play in ensuring more balanced power relations along global agro-food value chains,” notes Public Eye...

The organisation wants Switzerland to issue stringent regulations to tackle the range of human rights violations  - ranging from the lack of living wages and incomes, to forced and child labour, as well as health and safety hazards - that arise along the value chains of Swiss-based companies.  

Switzerland still relies largely on corporate social responsibility – not enough in the view of Public Eye...  

Corruption and tax-dodging are other issues of concern in the agricultural sector.  

“Switzerland must ensure there is sufficient transparency in the commodity trading sector as well as mandatory Human Rights Due Diligence that covers high-risk activities and ensures respect for human rights wherever Swiss companies do business,” says the organisation.

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Report
3 June 2019

Agricultural Commodity Traders in Switzerland - Benefitting from Misery?

Author: Public Eye

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Article
3 June 2019

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

Author: Public Eye

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 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...

Agricultural Commodity Traders in Switzerland: Benefitting from Misery?" [...] 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... 

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