Commodities trading house Trafigura has pulled out of industry lobby group Swiss Trading and Shipping Association (STSA) over disagreements with the lobby’s stance to improve transparency in the commodity trading sector.

“We can confirm that Trafigura has withdrawn from membership of STSA,” Trafigura tells GTR.

“After a review of our membership, we have concluded that we will be better positioned to pursue the initiatives promoting transparency and responsible business practices to which we are committed outside the structures of the STSA.”

Trafigura will continue to intensify the active dialogue it has established with governments and other stakeholders, but in its own right and in partnership with other like-minded firms rather than through the trade association, says the company.

Trafigura, which has major trading operations in Geneva, made a stand for more transparency by being the first trading company to join the Extractive Industries Transparency Initiative (EITI) and thus disclosing some of its oil-related business with different governments.

The EITI was set up in 2002 at the World Summit on Sustainable Development, with the goal of encouraging countries to work towards a transparent global norm on the revenues received from oil, gas and minerals extractions.

EITI Standard, which consists of a set of requirements that governments and companies have to adhere to in order to be ‘compliant’, is implemented in 51 countries. Thirty-one of these are currently fully compliant.

While the EITI is intended primarily for mining companies and not traders, Trafigura is keen to adopt the principles and be a leading figure for the trading sector.

This has conflicted with the STSA, which has resisted any endorsements saying it wants EITI countries to apply the standards first.

The STSA, which represents about 170 companies in the Swiss commodities trading sector including Vitol Group, Cargill and Mercuria Energy Group, says it regrets the departure of Trafigura and that the company would always be welcome in the STSA as the association works to represent the industry in all its diversity.

The association also adds that it participated in an EITI working group in October last year where it welcomed different transparency initiatives, including the EITI.

However, according to reports at the time, STSA secretary general Stephen Graber said the EITI is not designed for the commodity trading industry, and that foreign governments and national oil companies should take the lead in deciding how to increase payment transparency.