About ROHMA > Strategic Goals

Strategic Goals

The strategic goals are derived from ROHMA’s mandate. These set out how ROHMA meets the relevant environmental developments and any associated challenges, as well as the priorities for the years 2014 to 2017.

ROHMA’s strategy is outcome-oriented. In line with Swiss economic and development policy, as well as its position on the promotion of peace, human rights and social and environmental standards, ROHMA will implement its strategic goals over the next few years to ensure that supervised commodity producing and trading companies, as well as gold refineries, contribute to the reduction of the resource curse and enable the mobilization of resources for development and poverty reduction in commodity-rich developing countries. In this way, the reputation of the Swiss commodity trading hub will be strengthened. The central focus is the supervision of commodity producing and trade companies, and their business practices.ROHMA has set itself goals on six topics: 

  • Supervision
  • Business conduct
  • National and international cooperation
  • Regulation
  • Development of regulation on trade with soft commodities
  • ROHMA as an authority

Supervision: Contribution to the reduction of the resource curse through supervision

Some 69% of people in extreme poverty live in commodity-rich developing countries. At the same time, half of the known iron, oil and gas reserves are found in these states. If these riches could properly benefit the people of these countries, by 2030 some 540 million people could find their way out of poverty.

ROHMA prevents Swiss companies from contributing to the resource curse. Supervisory activities are undertaken in order to ensure that companies carry out due diligence on the length of their supply chains (in order to exclude trading in illegal or illegitimate commodities, commodities that have been acquired without regard to environmental and/or human rights norms, that are sold as a means to finance conflict), as well as on all business partners (to prevent trading with politically exposed persons (“PEPs”) whose position may impact the conditions of a commodity-related deal without a license). Further supervision ensures that companies meet their full payment and contract disclosure requirements, adhere to internationally relevant sanctions and refrain from engaging in aggressive tax avoidance practices. Once licensed, institutions are subject to ongoing supervision. This is to monitor continued compliance with licensing requirements and other statutory and regulatory requirements.

Strategic Goal 1

Through ongoing supervision, ROHMA ensures that Swiss companies do not contribute to the resource-curse. Supervision prevents Swiss commodity producing and trading companies from contributing to business practices or trading in commodities, which deprive the oil-producing countries from receiving a fair share of their resource wealth.

Business practices: Promoting integrity and transparency in business conduct

As the “Background Report: Commodities” (PDF, 1.0 MB) found, the commodities industry has not been spared from the scourge of corruption.  The relatively high degree of risk of corruption to which companies in that industry are exposed can be explained by a combination of several factors.  First, the majority of fuel and mineral resources come from fragile states where corruption is particularly widespread. This problem is exacerbated by the high degree of interaction between the companies concerned and the government authorities in those countries; the awarding of public contracts, the granting of licenses, the payment of royalties, the creation of monopolies, and the determination of customs policies are all procedures that tend particularly to attract corrupt practices. Finally, although the amounts at stake are quite considerable, there is little transparency in the commodities market; the complex structure of certain holding companies, and the fact that not all companies list their shares on an exchange, are conducive to the industry’s relative opacity.  

The lack of transparency as to the origin of certain natural resources is also problematic. Companies – including some that are domiciled in Switzerland – are criticized for example, for buying commodities from sources that disregard human rights, finance conflicts, harm the environment, or have unlawfully acquired the resources (e.g. Nigerian oil). The lack of transparency of financial flows between corporate group members plays a central role in aggressive tax avoidance.

Transparency of payments, meaning the publication of all payments made to governments in production countries, is an indispensable tool for the better use of commodity rents in those countries, because it enables the detection and therefore the prevention of any potential misappropriation. And it also enables the populations of these countries to hold their governments accountable for the use of these funds from this important source of income. ROHMA, through the transparency regime integrated in the Commodities Act, ensures the necessary transparency of financial flows both for listed and privately held commodity trading companies, whether active in trading or production.

Strategic Goal 2

To strengthen the reputation of the commodity marketplace and to promote fair dealing and the integrity of the market players, ROHMA authorises the activities of submitted companies. ROHMA also ensures transparency of the origin of commodities in order to combat aggressive tax avoidance and to ensure companies publish their payments to governments. In addition, ROHMA sanctions offending companies.

National and international cooperation: Joining forces at the international level and working together efficiently at the national level

International cooperation in the regulation of the commodities sector is in its infancy, but is rapidly gaining momentum. ROHMA must prioritise the deployment of its resources on international initiatives effectively. Against this backdrop, cooperation at the national level with other institutions and authorities must be streamlined so that Switzerland’s interests can be more effectively represented at the international level. Challenges arise as a result of the different mandates and objectives of the authorities involved, with responsibilities needing to be prioritised differently depending on the situation.

At the bilateral level, ROHMA maintains regular contact with the supervisory bodies of foreign trading centres. The depth and frequency of these contacts are governed by the level of activity of the Swiss commodity sector in the countries in question. In the commodity sector, the main focus of cooperation between authorities is the consolidated supervision of internationally active commodity companies. As the supervisory authority, ROHMA becomes involved if Swiss companies, their branches or subsidiaries, are implicated while operating in other jurisdictions. ROHMA is also responsible for the branches and subsidiaries of foreign commodity companies operating in Switzerland.

ROHMA’s important ongoing international projects include for instance assisting the United Kingdom’s Financial Conduct Authority (“FCA”) to extend the scope of its supervisory activities to include the trading of physical commodities. In other work, ROHMA has also joined forces with the FCA and respective authorities in other EU countries as well as the United States of America’s Securities and Exchange Commission (“SEC”) to develop standards and agree on best practice for the transparency of payments made by commodities companies to governments in producing countries.

Strategic Goal 3

In its international activities, ROHMA concentrates its resources and uses them to address important core issues. ROHMA works effectively together with other federal agencies namely FINMA, the Money Laundering Reporting Office and the Public Prosecutor’s Office.

Regulation: Engaging expertise and regulating in light of its supervisory goals

The Commodity Market Supervisory Authority Act defines ROHMA’s competences in regulation. ROHMA generally regulates by way of circulars which explain how the Commodities Act is to be applied. It also regulates by way of ordinances where this is enshrined in the Commodities Act. The legislation itself, on the other hand, is a political responsibility. The legislature defines the regulatory framework binding on ROHMA. The laws are therefore the result of a political process and hence the subject of political discussions and compromises. In accordance with its supervisory mandate, ROHMA is guided by its supervisory goals, explaining its position early and transparently, but without taking part in political debates.

Strategic Goal 4

ROHMA analyses existing regulations and legal trends from the perspective of commodity industry supervision, proposes relevant amendments, uses its specialist expertise to support the proposed regulations that are important and highlights its own concerns early and transparently.

Agricultural trading: Developing the regulation of trade in agricultural goods (soft commodities)

In addition to trading in energy commodities (especially oil, coal, natural gas) as well as ores and metals, Switzerland is also an important trading center for agricultural commodities, so-called soft commodities, such as grain, cotton, coffee or cocoa. According to its risk-based approach, ROHMA has prioritized the energy and hard commodities first, where the issue of the resource curse is clearest.

From 1.1.2015 ROHMA will gradually build up the supervision and regulation of agricultural traders. In addition to the due diligence requirements on the supply chain, business partners (including politically exposed persons), tax avoidance and applicable international sanctions, the agricultural sector poses some additional challenges. These include, for example, the acquisition of or control over agricultural land in developing countries and the issue of so-called "land-grabbing", contract farming and its impact on small farmers, and market power and related physical and financial speculation. Similarly, negative impacts on the food sovereignty of producing countries can be avoided.

Strategic Goal 5

ROHMA will continue gradually expanding its regulatory and supervisory capacities for the oversight of trade in agricultural goods (soft commodities) until 2016. In this way, it will contribute to addressing the specific challenges inherent to agricultural trade.

ROHMA as an authority: Effective as an authority and open to dialogue

ROHMA is accountable for its activities to the Swiss Parliament, the Federal Council, the supervised institutions and the public. There is a justified expectation that it should comply with the principles of good corporate governance and efficient management of its operations. In particular, ROHMA must be in a position to give a credible account of the targeted and efficient use of the funds it receives. In an environment characterised by conflicting interests, ROHMA engages in clear and respectful communication with the supervised institutions. It is guided by its supervisory goals and is constantly aware of its role as a sovereign supervisory authority, acting in the public interest. In return, ROHMA expects that others respect its function and that dialogue is objective, open and direct. ROHMA requires a very diverse workforce. This ensures that ROHMA, in addition to its indispensable supervisory expertise, also gains access to up-to-date market know-how and receives fresh impetus from young experts. As an employer, ROHMA promotes the diversity of its employees and particularly encourages women in management positions.

Strategic Goal 6

By using efficient processes, ROHMA performs its function with the help of employees who have both competence and integrity. It conducts an open, objective dialogue with its stakeholders and keeps the public informed about its activities.