BY Andrew Brady

Since the turn of the year there’s been a flurry of investigations and hearings by representative institutions across the Western world into the lengths that corporations go to in order to avoid paying taxes. Tax experts such as USi Advisory Board member Richard Murphy of the Tax Justice Network, and, Nick Shaxon author and blogger at ‘Treasure Islands‘ have campaigned and heightened the level of awareness of the issue of tax avoidance and evasion for years – but why now do politicians now seem interested in tackling this issue after decades of willful blindness?

The answer you may think partly lies in the folly of pursuing austerity as Governments have now squeezed working people and families as much as possible but still can’t plug the deficit that they are intent of minimising yet perversely like in the UK actually facilitating a rising national debt precisely because of pursuing the political strategy of austerity.

Corporations are rightly getting a hard time in the press such as Amazon, Starbucks, Google and Apple but surely the blame lies more with Governments who have turned their heads to the activities of corporations. Politicians are going through the motions of ‘corporate-bashing’ but they are simultaneously giving the same companies signals that things won’t be changed unless there is cross-border agreement and they won’t act unilaterally – David Cameron being the latest politician to suddenly be alarmed of billions of pounds/dollars/euros not being paid by corporations. I’m not telling anyone anything new here but it is curious why now – all of a sudden – politicians seem interested in addressing this issue.

When you scratch the surface there appears to be a coordinated Broadway show to manoeuvre companies into publicly ‘coming-clean’. Perhaps, we are being too machiavellian at USi but will the trade-off be Irish style corporation tax levels (12.5 per cent) in order to get that cross-country agreement – is that the quid pro quo? The UK headline level of corporation tax is set to fall from 24 to 21 per cent next year, before dropping to 20 per cent in 2015. Luxembourg has a corporation tax rate of 21 per cent rate, where the likes of Amazon and eBay base some of their operations, while Germany is at 29 per cent and France at 33 per cent. Of course, this doesn’t take into account numerous tax breaks across countries that reduce their overall tax liabilities.

Yet countries can act unilaterally as Singapore has done recently acting to tighten its tax evasion and avoidance laws by making it easier to share information with other countries on financial details of individuals and financial institutions. The new law will clamp down on illicit flows and money laundering as it attracts money from wealthy entrepreneurs in the fast-growing economies of southeast Asia. The Government will allow the Inland Revenue Authority of Singapore to obtain bank and trust information from financial institutions without having to seek a court order. So some progress can be made, however, I would add that this merely brings Singapore up to the already low standards of tax framework agreements so let’s not get too excited.

Amazon’s UK operation generated £4.2bn of sales in 2012 but used a subsidiary in Luxembourg to reduce its corporation tax liabilities to just £2.4m in 2012 while it received £2.5m in UK Government grants over the same period. Surely, Governments have got to stop in effect paying companies to be here through grants unless they comply with domestic tax laws – is this too much to ask? Amazon UK employed 4,191 people in 2012, and thousands more via agencies, but due to interesting technical machinations the company was registered as a service provider to its Amazon EU Sarl business based in Luxembourg in order to reduce its tax bill. Suppliers have also informed The Guardian of extensive negotiations with Amazon contributing to the perception that the company carries out trading activities in the UK hence liable for tax. A music publishing executive is quoted: “I did millions of pounds of sales to Amazon. All buying and marketing was negotiated and run through Slough. I never heard anything from Luxembourg.” A spokesman for the company said: “Amazon pays all applicable taxes in every jurisdiction that it operates within.“

At the UK’s Public Accounts Committee, its Chair Margaret Hodge, said whistleblowers had informed her that Google had sold advertising in the UK and invoiced customers in the UK. Google had previously informed the press and politicians that UK customers paid Google in Ireland. Even Ernst & Young, said that an Irish company also became liable for UK tax if agents on its behalf were in effect negotiating and closing a deal but of course wouldn’t comment on Google as the company was a client – you couldn’t make it up.

So, roll-on to the appearance of Apple CEO, Tim Cook, on Tuesday at the Senate Permanent Subcommittee on Investigations which found that Apple in 2012 alone avoided paying $9 billion in U.S. taxes using a strategy involving offshore units with no discernible tax residence. Senator Carl Levin, chairman of the subcommittee said Apple had sought “the Holy Grail of tax avoidance,” creating an Irish unit that paid no  taxes to any national tax authority for the past five years. Senator Levin asserted that Apple had shell unit which didn’t appear to have any country of residence – Apple Operations International – which acted in effect as a “ghost company” as they have no residency and disappear into the ether.

The company didn’t have an office or any employees in Ireland and neither had it paid any tax there either. The minutes of the board meetings of AOI showed that the directors – two who are based in California and one Irish employee of Apple Distribution International an Irish company that AOI itself owns – over the last six years from May 2006 to the end of 2012 AOI held thirty-three board meetings with thirty-two taking place in California. AOI’s Irish resident director participated in just seven of those meetings, six by telephone – but none of the eighteen board meetings between 2006 and August 2012.

Senator Levin further stated that Apple is using Ireland as a focal point for offshoring and negotiated a deal with the Irish Government for a tax rate of less than 2 percent. So Taoiseach who is right – you or Senator Carl Levin? We would encourage everyone reading this article to retweet the below.

@merrionstreet #Taoiseach who’s right you or @sencarllevin re #Apple using #Ireland as offshore base with tax rate of less than 2%?

— Union Solidarity Int (@USILive) May 22, 2013

The Rick Smith Show is a union radio show that broadcasts across Pennsylvania. Tomorrow they go door to door to expose the retailers who refuse to sign the Bangladesh safety agreement.

You can listen live, or download the podcast from the website.

This Wednesday Rick Smith and guest host Pat LaMarche have invited listeners to join them as they speak to shoppers at the 15 fashion retailers in the US who refuse to sign the Bangladesh agreement which was drafted following April’s catastrophic garment factory collapse which cost 1127 workers their lives.

“Hundreds of workers are still missing and hundreds if not thousands of workers were injured and will not be able to return to work,” explained Rick.

“The West Texas Fertilizer explosion has taught us that this sort of disregard for human life is not unique to the third world, but has taken place right here in the United States. We have to start voting with our pocket books. We have to let people know that when they do business with Macy’s or Walmart or Kohl’s, they will be telling them it’s OK to risk human life to get blue jeans on their shelves.”

“And it’s not OK,” added Pat LaMarche. “We know that Americans care when other Americans die. But it doesn’t stop there. We believe that Americans care when anyone dies so that some company can reap bigger profits. And they also know that these people aren’t working in deadly conditions to save the consumer money, because the 50 cent garment manufactured in Bangladesh can cost upwards of one or two hundred times that amount here in the U.S.”

Rick agrees, “Pat’s right. This money goes right to the profit line of Target, Sears and JC Penney.  And the workers in Bangladesh, just like the shopper in Harrisburg, are just victims of these companies who can’t get stuff cheap enough at the same time that they can’t charge too much for it.”

Rick and Pat will be visiting retailers beginning Wednesday, the 22nd of May at 11:00 a.m. Because the retailers will likely not be pleased to see their names among those listed, the Rick Smith Show isn’t giving them a heads up that they will be visited or when.

Here are the bad guys:

• Macy’s
• JC Penney
• Sears
• GAP
• Target
• Kohl’s
• Sears
• KMart
• Walmart
• The North Face (Wrangler Jeans)
• Carter’s (Osh Kosh B’Gosh)
• Nordstrom
• American Eagle
• The Children’s Place
• FootLocker

- By Walton Pantland

The Rana Plaza disaster in Bangladesh has shone a light on conditions in the textile industry, and put pressure on major retailers to take responsibility for their supply chains.

Unions and campaigners have been applying pressure for years, but most companies have ignored it or paid lip service to demands to improve conditions. The outrage over this entirely preventable tragedy has changed things: a new accord on fire and safety in Bangladesh, driven by the global unions UNI and IndustriALL, has been developed, and signed by a number of the world’s biggest fashion retailers.

This New York times article gives a good overview of the issues and negotiations that lead to the signing of the accord.

But not all retailers have signed up. A number of high profile retailers, including Gap, Walmart and Debenhams, have failed to take responsibility for their supply chains. They are afraid of the legally binding clauses in the new Accord, and seem to believe that the old formula of whitewashing conditions, denying liability and kicking the issue into the long grass will continue to work.

The TUC is running an excellent campaign to keep the pressure on these retailers. The campaign invites you to write to the companies involved and demand that the sign the Accord. We urge you to do so.

We wrote to the companies, and received this response from Debenhams:

Debenhams say they agree with the intent of the Accord, and that they are “working through” the agreement, speaking to the ETI and the unions.

But they still haven’t signed it.

We need to shame them into doing so.

The ETI referred to in the email is the Ethical Trading Initiative, an alliance of unions, NGOs and companies working to improve conditions in the textile industry. Debenhams have signed up to the ETI, which commits them to implement the Base Code. This is a Code of Conduct calling for, among other things, safe working conditions, a living wage and the right to organise.

Quite how Debenhams square their membership of the ETI with conditions in their supply chain is beyond me: until recently, unions in Bangladesh needed the factory owners’ permission to organise, and we know exactly what safety and wages are like. Hardly compliant with the Base Code.

The ETI, while an important initiative, is a process rather than a result: companies sign up and pledge to “improve”. It seems like Debenhams are using it to provide a bit of PR cover while they get on with business as usual.

We can’t let them.

Visit the TUC campaign page and write to them.

Or send them a tweet:

Not good enough, @debenhams. You need to sign the #Bangladesh safety accord usilive.org/not-good-enoug…

— Union Solidarity Int (@USILive) May 20, 2013

Signing the accord is a major step in the right direction, but it’s not enough on its own. Agreements are only as good as their enforcement, and more than anything else, Bangladeshi workers need strong unions on the ground to monitor compliance to this agreement, and use it as an organising tool to fight for better conditions.

Poor conditions in countries like Bangladesh make it much harder for factories in countries with decent conditions to compete.

The textile industry needs effective collective bargaining, both at a national level and through the global unions, to finally put a stop to the exploitative conditions characterised by the race to the bottom, and to create quality, sustainable jobs.

Can we use the legal system to hold corporations to account in the US? Jeff Monahan looks at the opportunities and limitations.

- By Jeff Monahan

Typically an arms race is a competition between enemy states to innovate and design the most dangerous technology in order to gain the upper hand.  It requires (I imagine) meticulous testing and attention to detail on both sides of the conflict.  In the business of outsourcing product labor, however, each side competes to pay the least amount attention as possible while not innovating at all.  This arms race creates danger as the byproduct of having the upper hand in the court room.

Companies that engage in outsourcing labor do so by contracting with a foreign factory as opposed to buying the land and setting up the factory themselves.  This way they can avoid liability for accidents that happen on site.  The more contact a company like Walmart, Adidas, or Gap has with the factory that makes their products, the more likely they are to be found liable for what happens.  This stems from legal principles of agency, which essentially say that the less control a company exerts over a subordinate employee or subsidiary, the less they can say that a resulting accident was the company’s fault.  This makes sense, but it means that the companies have an incentive to keep as far away from the actual production factory as possible.  Full accountability is placed on the foreign factory.

The factories in developing countries that employ the workers have the incentive to remain profitable and stay in business, of course, but improving safety conditions can be expensive and cut away at those profits.  In many of these countries unionization is difficult or illegal, and without strong unions to keep the factory in check and demand improvements their incentive to avoid the cost runs unbridled.  Factory tragedies like the ones in Tazreen and Pakistan are the result.  It’s like the pre-union days in the U.S. and U.K: there is no remedy for on-site injuries.  And even if the factory is sued en masse their pockets aren’t deep enough to cover the damages.  That’s why we boycott and protest Walmart and Adidas until they cover the rest.  Again, there is very little accountability.

The reason that U.S. corporations cannot be sued for injuries or lost salaries is because the laws are not written to cover them.  There are only a couple federal statutes that a foreign union could sue under, but the laws are not written to cover them because corporations fork up millions of dollars to lobby legislators to draft them that way.  The rationale they offer for not holding them liable is the fear of frivolous lawsuits against the company – they think they would get sued for everything.  There is some merit to this fear: lawsuits bring bad publicity and companies may be forced to settle claims that have no basis in the first place.  But the alternative currently in place causes far greater harm.

Forced to choose between two evils, the legislature chose the one that favors corporations, and the result is that full responsibility for sweatshop safety is placed on the foreign factories that house them.  With no law designed to hold Walmart, Gap, or Adidas liable, the only hope would be for a court to interpret a law in a way that reaches them.  The workers are not a party to the contract between the corporation and the factory, however, and although courts have skewed laws to protect third party plaintiffs before, they are unlikely to do so in this context.  The court will not and should not make the laws, and without a strong indication that a law was intended to provide protection, a court would keep the burden on the lawmakers for any change.

How can we use the law?

So, it’s up to the legislature, which is heavily influenced by corporations’ deep pockets, but also controlled by the people.  This leaves two options: we can either affect the laws or we can affect the companies who exploit them.  Call your state rep and tell him or her that the Alien Tort Claims Act (ACTA) or Racketeer Influenced and Corrupt Organizations (RICO) Act should be amended to hold corporations liable for egregious accidents that they have the money, power, and moral obligation to prevent.  Doing so could potentially force companies to run their own factory abroad if the international owners are not trustworthy enough to do it themselves.

Once you have called your state rep, e-mail the company themselves and ask them why they don’t take the responsibility to manage a factory.  We would be thrilled to hear their responses.  And finally, if all else fails, join organizations like ours and help us raise awareness and activate a change.  The law may not be on our side, but if we work together in solidarity we will make the difference.

Objectifying women is now prime time entertainment in Denmark. A new TV show objectifies women by allowing two men to critique their bodies while the woman remains silent. The ‘chat show’ entitled ‘Blachman’ is possibly the most sexist show in television history.

Who is the brains behind this TV show you may ask? Thomas Blachman – a Danish X Factor judge who is named the ‘Simon Cowell’ of Denmark. But, the best of it is that a woman commissioned this TV show and gave it the go ahead. Sofia Fromberg, the shows producer, states that “The first time I got the idea from Blachman on email I thought, ‘you can’t do that’. I then looked into it more and the programme’s proposed intentions.”

According to Fromberg, “Blachman wanted to look into why men were saying beautiful things about women’s bodies – but not to women themselves. He wanted to discover if there was place in between puritanical style discussions and pornography to discuss women’s bodies decently. I see how women are portrayed in the media – perfectly slim and with silicon breasts. And I agreed with Blachman that it was an issue worth debating.”

Blachman is right to a point where he was women in the media are portrayed as slim, young and cosmetically enhanced. However, does that mean creating a TV show which fundamentally demeans and objectifties somehow liberates women and makes them feel better about themselves? According to Blachman and Fromberg apparently so.

The media notoriously has portrayed women as young, slim and pretty. At a recent conference, Miriam O’Reilly who won a landmark case against the BBC was unfairly dismissed for being ‘too old’ to be on Countryfile, discussed her experience as an older woman in the world of the media. One day she recalled being on set interviewing someone for Countryfile when the camera man and the producer stopped filming and went away to have a private discussion. When they returned they took Miriam aside, only to her horror, to be told that her grey roots were showing and if she didn’t mind putting on some of this black hairspray to cover them up. And the sad thing is, I’m sure that the BBC is not the first to make an older women feel like she is inadequate and they won’t be the last.

In a recent survey it was highlighted that people tend to view women as older when they reach 30. Women also stated that “opportunities are not always presented to ‘older women’. Once you hit a certain age it’s assumed you have no drive or ambition left.” The perceptions of older women in society is disgraceful. The older a man gets he seems to gain knowledge, experience and looked upon as a mentor whereas the older a women gets she is less capable, attractive and incompetent. This is not the case. Both sexes gain knowledge and experience – there should not be inequalities here.

The way in which women are portrayed in the media reflects societal views. From being objectified from a young age to being cast aside as older after the age of 30. Attitudes and values must change and the media must include older women as TV presenters at peek times. 

- By Peter Kenworthy

According to a statement today from PUDEMO national spokesperson, Zakhele Mabuza, Wonder Mkhonza has been granted a bail of 15 000 emalangeni, approximately $1,650. Wonder Mkhonza was arrested on April 12 for allegedly possessing 5,000 political pamphlets, and the international ACT Now: Free Wonder Mkhonza campaign started by Africa Contact has called for his release ever since.

“This is quite a huge ransom to pay for ordinary poor Swazis who live on under $1 per day,” says the statement. “But Leo Gama, Wonder’s lawyer has been able to convince the court and secure the release on bail.”

Mabuza thanked those who had campaigned for Wonder’s release, but insisted that Wonder remained a political prisoner even though he was released on bail. “The ransom he is to pay for his freedom is only meant to keep him away from the prison while out there he is still a prisoner. He joins a growing list of many political prisoners who are all our members that have been out on bail, but their cases are deliberately not finalized. In the process these are suffering from the extremely stringent conditions that are imposed on them. Such include unreasonable reporting at a police station and the removal of their freedom to travel outside Swaziland.”

The fight for the release of political prisoners such as Wonder is linked directly to the fight for democracy and human rights in Africa’s last absolute monarchy, said the statement. “However difficult the route to democracy might be, we are never intimidated and we shall continue to call for the release of all political prisoners; respect for people’s rights; unbanning of all political parties; and the democratization of the country’s politics.”

- Peter Kenworthy is a correspondent for Africa Contact

On 28 October 2012, he was arrested over HotDoc’s publication of a document which claimed to be the Lagarde list, a list of 1,991 names of Greek citizens with accounts at the Swiss branch of HSBC, suggesting that they could be tax evaders. The published list according to the magazine, “matched a list of 2,059 people” on the Lagarde list. Vaxevanis was released from Athens police headquarters a few hours after his arrest.

Watch the video to hear more.

Download

You can watch the video:

Or download the podcast:

Download