Case study

The STP demands transparency in the Swiss gold trade

The STP has been striving for transparency in the Swiss gold trade for years and has taken the matter all the way to the Federal Supreme Court.

Foto: Reto Moosmann

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Switzerland plays a central role in both the trading and processing of gold. About 70 percent of the gold traded worldwide is refined in this country. The STP has been striving for transparency in the Swiss gold trade for years and has taken the matter all the way to the Federal Supreme Court. On November 15, 2023, the court rejected the STP’s request to disclose the gold suppliers of the gold refineries, thereby protecting trade secrets in an absurd manner.

The STP demands transparency in the Swiss gold trade

Switzerland plays a major role when it comes to gold: As many as four Swiss refineries, Metalor Group SA in Neuchâtel, Valcambi SA in Balerna, PAMP SA in Castel San Pietro and Argor-Heraeus SA in Mendrisio, are among the largest refineries in the world. For many years, around 70 percent of the world’s gold has been refined or traded in Switzerland. Moreover, the watch industry, in which many Swiss companies are significantly involved, is one of the most important gold buyers. Worldwide, the jewellery and watch industry requires over half of all the gold refined each year.

There is a high risk of gold being refined in Switzerland after having been mined under conditions that violate human rights and destroy the environment, as various investigations by the STP and other organisations have repeatedly shown. The STP is campaigning for light to be shed on the alleged human rights violations committed in connection with gold mining around the world, and for those responsible to be brought to justice. According to the UN guidelines, Swiss refineries have to guarantee that gold comes from socially and ecologically compatible production. In the STP’s view, this includes ensuring that raw material projects and infrastructure projects for gold production are only realised with the consent of the local population.

In order to achieve these goals, Swiss firms should either completely refrain from acquiring gold whenever its origins cannot be clearly determined or carry out in-depth due diligence. Any business relations that such appraisal shows to be problematic must be discontinued. The STP also holds the Swiss government and politicians accountable, because the current situation demonstrates that voluntary mechanisms are not enough to prevent human rights violations and environmental destruction. Due diligence must be made legally binding and the Swiss gold trade must become transparent.

All the way to the Federal Supreme Court – for transparency

For almost a decade now, the STP has been trying to create more transparency in the Swiss gold trade. In 2018, due to the complete secrecy, the STP asked the customs authority to let it see who was supplying gold to the largest Swiss refineries, based on the principle of freedom of information. The gold refineries wanted to prevent this and appealed against it. At the end of March 2022, the Federal Administrative Court rejected the STP’s request, citing tax secrecy – and thus ruled in favour of the already opaque gold trade. If dirty deals are to be stopped though, it is essential to have transparency, from the producer through to the consumer. For this reason, the STP filed an appeal with the Federal Supreme Court.

On November 15, 2023, the Federal Supreme Court decided to follow the Federal Administrative Court and thus the four major gold refineries: It rejected the STP’s request to disclose the gold refineries’ gold suppliers, thereby protecting commercial secrecy/tax confidentiality in an absurd manner. Transparency from the producer to the consumer would be essential to put a stop to dirty business. The STP is now calling on politicians to introduce a comprehensive corporate responsibility law, such as the one currently being drafted by the EU. In addition, a supervisory authority with far-reaching powers and sufficient resources is needed to monitor companies.

Demands of the STP

Demands directed at gold refineries and traders

  • Due diligence: Rigorous due diligence on all customers and suppliers in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, combined with third-party audits by independent, reliable and specialised auditing firms.
  • Transparency: Annual publication of risk-management results, names of producers and origins of gold.
  • Business relations: Immediate cessation of business relations that have been identified as problematic in the due diligence process, or stipulation that continuation of such relations is subject to clear conditions that bring about solutions to the problems.

Demands directed at the Swiss government and politicians

  • Increased transparency: Breakdown of the annual Swiss foreign trade statistics, showing gold’s countries of origin (not just source countries). Disclosure of both suppliers and recipient firms, with corresponding specification of gross/net quantities.
  • National oversight: Establishment of a national central office to monitor gold trade flows, and to license those Swiss gold refineries and traders who can demonstrate transparent, systematic and in-depth due diligence, and who comply with the OECD guidance.
  • Legal bindingness: Introduction of a due diligence obligation enshrined in law, with a corresponding list of penalties for non-compliance, as called for by the Responsible Business Initiative (see below).

Demands directed at the Swiss Association of Manufacturers and Traders in Precious Metals (ASFCMP)

  • Commitment and public statement: Commitment to the OECD guidance and a public statement on development of the association’s individual members with regard to the guidance.

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