Final Report

oikos Conference 2012 www.oikos-conference.org 1

Final Report

oikos Conference 2012

oikos Conference 2012

Tigerbergstrasse 2

9000 St.Gallen


Management Summary

This year’s 24th oikos Conference took place on 15 and 16 No-vember 2012 in St. Gallen and dealt with the topic: Commodity Trade - Hotspot Switzerland. Oikos is one of the leading inter-national student organizations for sustainable economics and management. A leading project of the oikos St. Gallen chapter is the annual oikos Conference. The conference is being planned and performed by five highly motivated students of the Univer-sity of St. Gallen. The objectives of this year’s oikos Conference were to raise the students’ awareness for the subject and to identify innovative and sustainable approaches to master the complex challenges of the industry. The conference sees itself as a platform that enables a dialogue between students, academics and companies.

Thanks to the collaboration of numerous international com-modity experts and renowned professors of the academy, the 120 international participants (including 33 students from the MBA program of the University of St. Gallen) enjoyed during the tow-day conference an interesting program of exciting ple-nary sessions, interactive workshops and high-level panel dis-cussions about one of the most interesting sectors in Switzer-land.


Background

Switzerland, even though poor in raw materials, plays a key role in the global commodity trade. The two cantons Geneva and Zug have become trading hubs for agricultural and min-eral commodities. There are numerous reasons for the strong position of Switzerland in commodity trade. A specialized finance sector, political stability, low taxes, modern infra-structure and well-trained professionals are just some of the arguments for the marketplace Switzerland. In addition, Geneva is perfectly linked to the presence of many multinational institutions, such as the ICRC, the UN or the WTO.

The economic importance of the commodity trade industry is enormous. The resource com-panies are among the largest companies in Switzerland. Despite the tremendous volume that is traded in this sector, it is hardly noticed by the public. The planned merger of two estab-lished commodity companies has brought the subject into public discourse. While some fear damage to the reputation of the marketplace Switzerland others see it as an opportunity to maintain Switzerland's position as a centre of commodity trading.

The commodity sector is characterized by many contradictions and controversies in which there are no easy solutions at hand. Extraction of raw materials is largely held in developing countries, trade and end products remain, however, frequently in industrialized nations. Alt-hough many jobs are being created thanks to industry, it often occurs in the context of cor-ruption, poor working conditions and exploitation of nature.

The commodity industry remains for many people a black box. Therefore, the goal of this year’s oikos Conference is to bring some light into the dark and elaborate innovative and sus-tainable solutions for the industry. In a pluriperspective dialogue with various representa-tives of the industry, academia and students a path towards a more sustainable future will emerge.


Program

The first day was dedicated to the participants’ increasing awareness of the topic of com-modity trading. In lectures and workshops, participants learned where the opportunities and challenges of the industry lie in respect to economic, financial, social and environmental as-pects. On the second day, together with the support of the MBAs of the University of St. Gallen, innovative solutions and approaches towards a sustainable development were identi-fied and developed.

Plenary sessions

Bas de Leeuw (Managing Direc-tor of the World Resources Fo-rum) opened the oikos Confer-ence with a fascinating presenta-tion on the future challenges of natural resources. The presenta-tion showed impressively, how an increasing world population and increasing global prosperity levels (especially in the BRICS countries) put growing pressure on natural resources. In his presentation, de Leeuw insisted that the students stand up for sustainable development also after having finished their stud-ies. Furthermore, he demanded less boycotts and protests, which would widen the gap be-tween business and society, but rather a life with an efficient consumption or: "doing more with less".

Urs Rybi (commodity expert from the Berne Declaration) demonstrated at the beginning of his presentation the enor-mous economic importance of commodity trading sector for Switzerland. Thus, for example, Switzerland is in the global hub for trade in oil and coffee (in particular the Geneva region). Furthermore, Rybi identified the following reasons for the increasing number of commodi-ty traders in Switzerland: a spe-cialized banking sector, gener-ous tax breaks and a very liberal

economic climate. Rybi also discussed many different sustainability risks of commodity trad-ing, particularly the controversial practices regarding tax avoidance, corruption, environmen-tal degradation and human rights abuses.


In the lecture by Marta Lado (Manager RepRisk), the analysis of the reputational risks of commodity traders was in the center of the presentation. Lado explained on the basis of the RepRiskIndex, how the exposure of the company towards environmental, social and reputa-tional risks is measured. Using the data from the RepRiskIndex, controversial businesses can be identified and financial as well as compliance risks avoided and benchmarked.

Workshops

In the workshop of Dr. Bernd Balkenhol (former Director of the ILO Social Finance Program), the social dimension of sustaina-bility was the focus of discussion. Using case studies from China, Dr. Balkenhol showed how precarious working conditions are in Chinese mines. Based on global standards (e.g. the ILO convention), Dr. Balkenhol ex-plained which measures and instruments can be used by employees to defend them-selves against human right abuses.

Prof. Clay Wescott (Director of the Asia-Pacific Governance Institute and consultant to the World Bank) spoke about the challenges of good governance and anti-corruption in dealing with natural resource exports. He described the resource curse of many commodity-exporting countries, where despite abundant natural resources there is neither a rise in national income nor an increase in quality of life of its in-habitants. In the second part of his workshop Prof. Wescott described a number of measures that countries could implement to counteract the resource curse (e.g. participation in EITI).

Prof. Frédéric Jenny (Professor at ESSEC Business School in Paris) spoke about the com-modity markets from an economic perspective. Prof. Jenny described at the beginning of his workshop the similarities of commodity markets and existing market distortions. Other dis-cussion topics of his workshop included price instability of commodity markets, increasing vertical integration of commodity traders and corporate strategies to ensure sustainable competitive advantages.

In the workshop of Norbert Ruecker and Carsten Menke (Directors of Bank Julius Bär), prices of raw material were in the centre of debate. In partic-ular the question was discussed, if and how speculation influences the prices of raw materials and which new regu-latory measures could affect commodi-ty prices in the future. Finally, the in-creasing resource nationalism was examined.

Alexander Lorch (PhD student at the Institute of Business Ethics at the Uni-versity of St. Gallen) moderated an

interactive summary of the day and provided the opportunity to clarify questions and discuss controversial issues.


Panel discussion

The organizers of the oikos Conference succeeded to put together a top-notch public panel discussion. Moderated by Daniel Ammann, Clea Kaske (Corporate Responsibility, Cargill In-ternational), Martin Fasser (President, Zug Commodity Association), Peter Sigg (President, Commodity Club Zurich), Urs Rybi (commodity expert, Berne Declaration), Martin Saladin (Deputy Head of trade Promotion, SECO), and Prof. Dr. Stefan Grotefeld (Professor, Univer-sity of Zurich) the illustrious group discussed on the role of Switzerland as hub in global commodity trading. The focus lied on the question whether commodity trading represents an opportunity or a risk for Switzerland and if commodity trading should be more regulated by the state or other international organisations.

MBA Workshops

The second day of the conference was organized in collaboration with the MBA program of the University of St. Gallen. Eight groups of four MBA students moderated in interactive presentations discussions about innovative solutions and approaches towards a more sus-tainable development of the commodity sector. The first lecture groups presented an over-view of the environmental and social challenges of the extraction industry. The following two groups discussed the suitability of existing risk management tools and offered an introduc-tion in new business models in the natural resource industry. After a short lunch break two presentations explored best practices in stakeholder management and the necessity of im-plementing global standards. The last two groups debated on the controversial role of Swit-zerland in commodity trade and explored where the future opportunities and challenges of the industry lie.

The oikos Conference concluded with a short summary of the workshop chairs (Prof. Simon Evenett and Dr. Arthur Braunschweig) and a brief review of Sascha Bianchi (OC member of the oikos Conference 2012).

Autor: Sascha Bianchi


Impressions from the oikos Conference 2012

Photos: Robert Stürmer – stuermerfoto.ch


Thank You!

Paula Debek, Sascha Bianchi, Miriam Kaufmann, Mark Tilly & Fabienne Meienberger

[email protected]

Final Report

Documents

Transcript of Final Report