* Left-wing party pushes for change to constitution
* Political scrutiny of commodities sector rising
* Industry body GTSA says proposal is misguided
By Emma Farge
GENEVA, Oct 1 Switzerland is obliged to hold a
vote on banning speculation in agricultural commodities after a
left wing political initiative gained enough signatures to force
it to under Swiss law.
The timing of the national vote is not clear and is pending
official guidance from the government. Under the Swiss system,
parliament can propose alternative legislation which is
typically more moderate and also subject to a national vote.
The sector is worth $20 billion to Switzerland, which has
welcomed the world's top trading companies and many
international banks to its cantons, but it is unclear how much a
popular reaction can rein them in.
German banks like Commerzbank and DekaBank
have already cut investment in agriculture after
pressure from non-governmental organisations. Rothschild, which
has a wealth management business in Switzerland, said it was
pulling out of livestock and soft commodities.
Those in the industry played down any possible impact, saying
the trade was too international to suffer, and the main
commodities-trading exchanges are not Swiss.
Switzerland'a Young Socialist party, which launched the
proposal last year, said it had collected more than the 100,000
signatures required in Switzerland for a vote to change the
The exact size of investment in agricultural commodities
from wealth management hub Switzerland is unclear although the
proposal, entitled "No Speculation on Food Commodities", would
affect companies with a subsidiary in Switzerland, even if their
headquarters are elsewhere, according to the proposal.
It would also apply to firms investing in agricultural
commodities for themselves or on behalf of clients, it showed.
"We're concerned that prices are moving based on factors
that have nothing to do with the real market," David Roth, head
of the Young Socialist Party, said on Tuesday.
The Swiss direct democratic system usually has several
national referendums a year, meaning that public ire can be
translated into strong action.
Some see the proposal's success as the latest indication of
Switzerland's growing disquiet about it commodities sector which
they say is not subject to enough national regulation.
"The collection of 130,000 signatures in less than a year
shows clearly the growing unease of Swiss citizens over business
practices in the financial and the commodity sector," said
Oliver Classen of Swiss NGO Berne Declaration which campaigns
for greater oversight.
Swiss government records show that politicians have
submitted more than twenty parliamentary requests on the
commodities sector since the start of last year on topics
ranging from oil-related corruption scandals in Nigeria to tax
planning for commodity traders.
Stephane Graber, secretary general of industry body the
Geneva Trading and Shipping Association, said that he did not
expect the latest proposal on food speculation to have much
impact on Swiss companies.
"We don't see this as really changing anything since the
agricultural exchanges are not here in Switzerland," he said at
an industry conference last week.
"It's political and done without a good understanding of the
functioning of the markets," he added.
Switzerland's Cabinet is also considering a motion for a law
on transparency rules that would go beyond those in the U.S. and
EU by explicitly targeting unlisted trading houses for the first