ON Tax justice...Why tax matters to workers Global unions tackle global corporate tax avoidance...

● Why tax matters to workers● Global unions tackle global corporate tax avoidance● Protecting tax whistleblowers

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I N T E R N A T I O N A L Volume 25 Issue 1 2018

Tax justiceFOCUS ON

www.nupge.ca

Canada signs key internationalbargaining andorganising treatyOn 14 June 2017 Canada ratified ILO Convention98, the key international treaty promotingcollective bargaining and the right to organise.

“ After 60 years, Canada has ratified ILOConvention 98. Canada now recognises whystrong unions matter in creating a fair andinclusive country. We thank all those who havebeen fighting for this moment “Larry Brown, President of the National Union of Public and General Employees (NUPGE).

The Convention calls for:

● protection against acts of anti-union discrimination

● protection for unions against interference by employers

● machinery to develop and promote collective bargaining

Convention 98 has now been ratified by 165 countries, including Canada

125/1 | International Union Rights |

Contents

Editorial: Corporate tax dodging is stealing from workers and must be stopped

Daniel Bertossa and Leo Hyde

Focus: Subsidising the rich: how workers pay the price for corporate tax dodging

Daniel Bertossa

Focus: Offshore Workers Challenge Chevron’s OffshoreTax: a $10B Win for Australia & Wins for Workers

Jason Ward

Focus: Why McDonald’s Tax Practices Matter to the Global Labour Movement

Nicholas Allen and Mary Joyce Carlson

Focus: Tax avoidance hurts development – workers must fight back

Peters Adeyemi

Focus: The Marikana Massacre: wages as the blind spot in the tax evasion debate

Dick Forslund

ICTUR in Action: InterventionsAlgeria; Bangladesh; Cambodia; Greece; Kenya; Mexico;

Philippines; South Korea; Taiwan; Turkey

Focus: Why unions in Australia are looking to tax justice campaigns

Nadine Flood

Focus: The World Needs to Revamp International Tax Cooperation

José Antonio Ocampo

Focus: The case for tax justice as a whistleblower protection issue

Dany Richard, Madeline Rodriguez, and Sergio Hemsani

ICTUR in ActionUniversal Periodic Review submissions:

Mexico; Nigeria; Saudi Arabia

WorldwideBangladesh Accord; Defamation law: Andy Hall case;

European Labour Authority; Iceland; ILO; Indonesia;International Women’s Day 2018; Iran; South Korea; Thailand;

United States; Venezuela: ILO Inquiry; Working Time

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I N T E R N A T I O N A L

unionrights

Volume 25 Issue 1 2018

Journal of the International Centre for Trade Union Rights● Centro Internacional para los Derechos Sindicales● Centre International pour les Droits Syndicaux

Guest Editors Daniel Bertossa and Leo Hyde

Editor Daniel Blackburn

Editorial BoardDavid Bacon, Paul Benjamin, Lance Compa, John Hendy QC,Carolyn Jones (Chair), Eric Lee, Pascal Lokiec, Sindhu Menon, Jill Murray, Rory O’Neill, John Odah, Tom Sibley, Rita Olivia Tambunan, Charles Woolfson

Legal Editor PresidentProfessor Keith Ewing John Hendy QC

Vice PresidentsJamshid Ahmadi, Kurshid Ahmad, Jan Buelens, Anita Chan, Ericson Crivelli, Fathi El-Fadl, Professor Keith Ewing, Avalon Kent, Esther Lynch, Lortns Naglehus, Yoshikazu Odagawa, Jeffrey Sack QC,Jitendra Sharma, Surya Tjandra, Ozlem Yildirim

ICTUR InternationalE [email protected] W www.ictur.org

Director Daniel Blackburn

Researcher Ciaran Cross

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2 | International Union Rights | 25/1

EDITORIAL

Editorial:

Corporate tax dodging is stealing from

workers and must be stoppedFor decades wages have stagnated, public serviceshave been squeezed and inequality has risen whileworkers struggle to understand why the riches ofglobalisation pass them by. This edition opens the lidon possibly the single largest scam in the globalisationriddle. And one of the central barriers to organisedlabour doing better for workers. It explains whynobody has noticed how capital and the richest in theworld have hoarded and hidden the loot – becausethey shift it before they even declare it is made. Mostimportantly this edition provides a union perspectiveon these issues and outlines what is to be done.

Make no mistake, tax avoidance supresses wages.Workers cannot bargain for profits that are not there -profits that have been shifted to jurisdictionsspecifically designed to hide the cash and defend thesecrecy of the owners. Recent scandals havehighlighted how the global system has been establishedto shift profits to avoid taxes. But little attention is paidto how shifting these profits allows companies to claimthey have no money to pay workers, and is often usedto justify job cuts. If the tax office can’t find the moneywhat chance do workers have?

Recently, a few unions have understood theproblem and fought back. Jason Ward outlines howthe International Transport Workers Federation(ITF) took on Chevron, one of the largest oilcompanies in the world, who are now required topay 10 billion AUSD more in taxes. Nick Allen and

Mary Joyce Carlson explain why a coalition of publicand private sector unions lead by the SEIU pursuedMcdonalds tax practices in the Fight For 15. Perhapsnone is more chilling than Dick Forlands article onthe massacre of mine workers at Marikana, SouthAfrica - killed for demanding decent wages - and thetax avoidance and secrecy of the company.

In addition to supressing wages, Peters Adeyemifrom the Nigerian Labour Council, demonstrateshow corporate tax avoidance undermines economicand social development. It drives up inequality,starves public services and shifts taxation to thoseleast able to pay. Jose Antonio Ocampo, explains thedetails of corporate tax avoidance and what policychange is needed to stop it. In each case a conspiracyof secrecy is at the heart of the scam. Theindefensible can only be defended if never discussed.The beneficiaries deliberately keep information fromthe public. They know that each time we learn more,the foundations of the system are weakened.

Ultimately tax is about power. There is barelymore radical a project than taking from thewealthiest and most powerful on the planet for thebenefit of workers. And without the collective powerof workers organised into unions the project cannotsucceed. Nadine Flood from the Australian CPSU,explains how unions have made corporate taxavoidance a popular issue and forced progressiveand right-wing political parties to change tax policy.Dany Richard, Madeline Rodriguez and SergioHemsani argue that protecting workers fromwhistleblowing is a fundamental trade union rightand essential for ensuring that secrecy and vestedinterests cannot continue to control the agenda.

Recent union campaigns, like Chevron andMcDonalds, show how holding corporations toaccount for their tax practices can build unionpower beyond traditional union action. They makeimmediate gains for workers and simultaneouslyraise awareness of the broken tax system and how itmust be fixed.

This edition is the first attempt to bring thisknowledge together. A coalition of global unions hasjust launched an International Centre for CorporateTax Research to help unions better understand taxavoidance and profit shifting in their industry andtake action.

A global conference will be held in the secondhalf of 2018 for public and private sector unions thatwant to learn more, and do more.

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Daniel Bertossa Director Policy,Public Services

Internationaland

Leo David HydeComs Associate,Public Services

International

For decades wages have stagnated, public serviceshave been squeezed and inequality has risen asworkers struggle to understand why the riches ofglobalisation seem to pass them by. Recent leaks andtax scandals make for great headlines and expose themissing piece of the globalisation riddle – where allthe money has gone. But what is often overlooked isthat workers are the biggest losers of tax dodging.

Those who benefit put great effort into keepinginformation about tax avoidance and evasion awayfrom the public. They also relentlessly promote themyth that we cannot afford quality public services.For decades, we’ve been told that there simply isn’tenough money available. We’ve seen privatisation,cuts to education, health and public housing, theintroduction of user-pays and rising service charges.And we’ve seen wage freezes for essential frontlinestaff such as nurses.

When globalisation brings phenomenal riches butworkers are repeatedly told there is no money forwage rises or public services they look for answers.Migrants, refugees, unemployed and welfarerecipients become easy targets.

If we cannot provide bold alternatives to addressinequality, ensure universal access to public

services and require the wealthy to make a faircontribution, we risk ceding ground to the falsepromises and fear mongering of the far-right.Ending corporate tax dodging must be a centralpillar to our alternative programme.

How big is the problem?Estimates put the total value of assets held

offshore, beyond the reach of effective taxation, at$32 trillion USD, equal to about a third of totalglobal assets. Of this, it is estimated that about $11trillion is from the world’s least developedeconomies. Jeffrey Sachs calculated the cost ofending global poverty would be a fraction of thisamount: about $3.5 trillion.

The biggest losses are due to corporate taxavoidance. The Tax Justice Network estimates thatmultinational corporate tax evasion in the USA costs$188 billion USD annually. For Pakistan it’s $10billion or 30 percent of total tax revenue and Chadlose $1 billion a year, equivalent to 37 percent oftotal tax collection.

These are only estimates – the real amountremains unknown because of the secrecy which

shrouds the offshore system. The inability to getaccurate information about the size, actors and exactmethods of tax dodging is critical in underminingthe fight against it.

Tax dodging hurts workers Make no mistake, tax avoidance supresses wages.

At the heart of these avoidance schemes is a simpleconcept. Companies shift their profits to low tax andhigh secrecy countries and away from the countrieswhere the work is done or the sales are made. This isdone to demonstrate to the tax office that there is noprofit to be taxed. But it is also handy to show toworkers and unions that there are no profits to paywage rises - and is often used to justify job cuts. Ifthe tax office can’t find the money what chance doworkers have?

Starving Services hurts workersThe Paradise papers and other leaks make clear

why our public services are underfunded: far fromtrickling down, we can see that wealth is floodingoffshore. And workers pay the price. Perhaps theclearest example is healthcare. In many countries,the health budget is struggling to keep pace with anaging population and better, but more expensive,medical care. The gradual underfunding of healthsystems forces a simple but difficult choice. Weeither find funds for health care or we allowprivatisation.

The basic flaws of private provision are shockinglysimple: user pays creates a barrier to poorer peoplegetting the care they need. As the US experienceshows, highly private health systems not only drivecrippling inequality but are also highly inefficient.

Research by the Institute of Medicine shows theUS system wastes nearly one third of every medicaldollar spent - almost $750 billion a year1. That ismore than the Pentagon budget and more thanenough to care for every American who lacks healthinsurance. Most of the waste comes fromunnecessary services ($210 billion), excessadministrative costs ($190 billion) and inefficientdelivery of care ($130 billion).

National comparisons using OECD figures showthe US system is not just wasteful – it is vastly moreexpensive2. France, renowned as one of the mostcomprehensive universal public health care systemsin the world (with very low out of pocket expenses

FOCUS | TAX AND TRADE UNION RIGHTS


Until recentlyeven progressivepolitical leadersinternalised thethinking that taxrises to fundpublic servicesare economicallyand politicallyuntenable

Subsidising the rich: how workers pay the price for corporate tax dodging

Daniel Bertossa

is Director of Policy and Governance atPublic ServicesInternational in Ferney-Voltaire, France



and some of the best health outcomes) spends 10.9percent of GDP on health compared to 16.4 percentin the USA. Australia with a high quality universalsystem spends just 8.8 percent - slightly lower thanthe OECD average.

To achieve universal public healthcare, along withother vital services such as education, housing waterand more, we need to ensure that our governmentshave the resources required. This cannot happenwithout everyone paying their fair share –corporations included.

Supercharging inequality hurts workersPublic services like health, education, childcare

and public housing have a strong redistributive effectby providing services to everyone. OECD figuresshow that public services add about 75 percent inkind, to disposable income for the poorest 20percent3. Services such as child care, elder care andeducation also have a big impact on gender andethnic equality. Public infrastructure like water,sanitation, electricity and roads increase equalitybecause they make it possible for the poorest toimprove livelihoods by using these services4.

When people are denied the right to essentialservices such as health care, it can lead to personaltragedy – but it often also leads to financial hardship.The WHO estimates that over 100 million peoplesuffer financial catastrophe annually as a result ofhealth bills5. When rich and large multinationalcorporations avoid tax, workers not only face cuts tovital services, but bear a double burden as rises inregressive taxes like goods and services taxes andincome tax are needed to fund what services remain.

Undermining Development hurts workers

Quality public services are vital to the economicdevelopment of least developed countries.

Economic development relies on the provision ofcritical public infrastructure. What is often forgottenis that the industrialisation of many of today’s mostdeveloped countries occurred with governmentinvestment, public provision and substantialsubsidies to infrastructure like water, ports, roads,rail, water, electricity and telecoms. Gaps in vitalinfrastructure, often caused by a lack of publicfinance, undermine productivity and hamperinvestment.

The main cause of illicit financial flows out ofdeveloping countries is neither corruption norcrime, but the tax dodging practices of largemultinationals. Indeed, more money flows out ofAfrica because of tax dodging than the total inflowof foreign aid6. This not only harms economic andsocial development: it reinforces colonialism byremoving the ability of countries to independentlyraise revenue for self-determined purposes, infavour of aid and loans which are often tied toforeign-imposed conditions.

Corporate tax avoidance is even more harmful indeveloping countries, which tend to rely more on

corporate tax revenue as a proportion of the taxbase. This has been exacerbated by tariff cuts; arecent trend in neoliberal trade, which furtherundermines the tax base.

The sheer size of profit shifting out of developingcountries is remarkable. These examples show thepercentage of total government revenues lost fromcorporate profit shifting:

■ Zimbabwe – 31 percent ■ Congo 25 percent■ Cameroon 17 percent■ Ethiopia 16 percent■ Philippines 30 percent■ Malaysia 15 percent■ Costa Rica 22 percent

Contrary to the much-promoted myth, evidenceshows that taxation does not underminedevelopment. Developed countries have the highesttax rates – and they increase over time withdevelopment. Countries like USA and Europe haveincreased their tax rates as they developed7.

The rhetoric is constructed by the enemies of workers

When universal public services do so much goodand when tax dodging by large corporations and thevery wealthy undermine the wellbeing of so many, itcan be difficult to understand why more is not doneto stop it.

The clumsy attempt by UK Prime Minister, TeresaMay, during the election to respond to a nurseasking why she was undermining the NHS illustrateshow confident the elites are that they will gounchallenged.

When asked why real wages for nurses had gonebackwards in the last 5 years, May responded bysaying she would like to help but that there is ‘nomagic money tree’.

In fact, the UK is one of the worst tax avoidanceenablers in the world. It has built and defends themost comprehensive web of offshore tax havens –starting at the city of London, spreading out to theJersey and Guernsey islands and reaching to HongKong, Singapore and the Caribbean. All designed toshift cash offshore. There is a magic money tree, andright-wing political parties have worked to protect it.Until recently even progressive political leadersinternalised the thinking that tax rises to fund publicservices are economically and politically untenable.

But people are waking up to the massive fraudperpetrated against them. Like the nurse whoconfronted Teresa May. But it could have been afirefighter asking about job cuts in the fire brigade.Or a pensioner. Or a public housing tenant.

Corporate profits have soared, yet we still don’tpay workers living wages or properly fund ourschools, health, housing or infrastructure.Sometimes with tragic and disastrous consequences,like in Flint, USA or Grenfell, London or in Ebolaaffected West Africa…

But people arewaking up to the

massive fraudperpetrated

against them.Fixing the global

tax system is aproject to take

money from therich and give it to

the poor

The radicalnature of the

project meansthat we are

threatening themost powerfulinterests in theworld and weshould never

underestimatethe forces we are

up against: theyspend a lot of

energy andmoney trying to

avoid evenhaving a debate

about tax

But perhaps the most pernicious outcome of taxavoidance is the anti-democratic effects. The verypoint of the offshore system is to accumulate wealthand avoid scrutiny. These unprecedented levels ofunaccountable wealth both concentrate power andremove its influence from public scrutiny - capturingdecision making and hiding nefarious interests.

There is massive web of vested interests, fightingto maintain their stake. When the European Unionruled that Apple’s tax arrangements in Ireland brokeEU rules and ordered Apple to pay $16 billion intaxes, the Irish Government appealed the ruling topreserve its status as a ‘tax-friendly’ jurisdiction.

The recent leaks expose these connectionsbetween the mega-rich, high-level politicians andglobal tax avoidance. The Panama and ParadisePapers, which come from just two companies, haveimplicated over a dozen current or former worldleaders, as well as hundreds of government officials,family members and associates in countries such asChina, the UK, Australia, Malaysia, MexicoColombia, Liberia, Nigeria, Uganda, India,Indonesia, Japan, Kazakhstan, Pakistan, Austria,Montenegro, Jordan, Saudi Arabia, Turkey, CostaRica, Argentina and Brazil. They also revealed theoffshore actions of Facebook, Apple, Uber, Nike,Walmart, Allianz, Siemens, McDonalds, Yahoo,Glencore and subsidiaries of Kremlin-controlledGazProm.

And just in case you thought these tricks were thesole preserve of dodgy, far-away places and corruptdictators, these leaks have also exposed Wilbur Ross,US Secretary of Commerce, Queen Elizabeth II, U2’sBono and three former Prime Ministers of Canada.

Ever feel like there is a party going on and youhave not been invited?

We must have an alternativeIt is difficult to believe that our leaders do not

understand the problem. More likely is that they donot want to act. We must mobilise but we must alsohave a credible alternative vision.

PSI and our affiliates have worked with civil societyto identify the changes that must be made. We are afounding member of the Independent Commissionon the Reform of International Corporate Taxation(ICRICT), which has brought together eminentthinkers, including Jospeh Stiglitz, Eva Joly, ThomasPikkety and Magdalena Sepulveda, to develop andrecommend policy solutions. Many country taxcampaigns have adopted the ICRICT declarations astheir policy platform, and we encourage tradeunionists to read the ICRICT declarations tounderstand the full policy suite required.

Central to any solution is the rejection of themyth of tax competition – promoted to make itsound as if tax policy will be most efficient if it isdesigned as a race to the bottom. The reality is taxpolicy requires co-operation and co-ordinationacross national borders.

No solution is possible without challenging theoutdated international rules, based on the myth that

subsidiary companies, in the same conglomerate,trade with each other as if they are unrelated.Multinational corporations must be taxed on aunitary basis. This one simple change would almostcompletely end corporations’ ability to shift theirprofits to tax havens.

It is inexplicable that no global tax body exists toprovide the needed global tax cooperation. We haveglobal bodies for health, labour standards, trade,intellectual property and even football. But we havenever had a global tax body. At the very least werequire a global tax treaty that sets minimumstandards and an agreed minimum effectivecorporate tax rate. The European Trade UnionConfederation is advocating for 25 percent inEurope – a goal which needs to be advanced at theglobal level.

National governments require well-resourced taxagencies with well-trained staff. While the big fouraccounting firms employ more staff, and pay hugelybetter wages than the public sector, countries willstruggle to enforce even the best laws. After theGovernment in the UK fired over 3000 tax workers,a parliamentary committee estimated there was over£10 in potential tax revenue lost for every £1 saved.

But you can’t fight what you can’t see.Transparent, public country-by-country reportingshould be adopted globally as well as automaticexchange of tax information between governmenttax bodies. There should be a global-assets registerand full disclosure of beneficial ownership,including trusts.

What to doFixing the global tax system is a project whose

essential aim is to take money from the rich and giveit to the poor. The radical nature of the projectmeans that we are threatening the most powerfulinterests in the world and we should neverunderestimate the forces we are up against. Thevested interests arrayed against us spend a lot ofenergy and money trying to avoid even having adebate about tax. They tell us there is no magicmoney tree, that we wouldn’t understand thetechnicalities or that companies will always find aloophole.

Up against them is the wider public, whointuitively understand that something is very wrong,but often can’t quite put their finger on what that is.Our primary task is to explain to workers what’sgoing on and how it can be fixed. Where this hasoccurred in recent years we have been able to forcepoliticians and political parties to change their tone– and change the rules. Each time we have thedebate we win.

PSI, the Council for Global Unions and ouraffiliates recently launched a project to help unionsanywhere in the world to examine corporate taxdodging in their industries. We also work withacademics and groups of journalists such as FinanceUncovered. A global best practice conference will beheld later this year.



If your union is interestedin doing something abouttax dodging in yourcountry, or your industry, orwould like to attend theconference, please feelfree to contact Jason Ward([email protected]).

1 ‘Best Care at LowerCost’ http://iom.nationalacademies.org/Reports/2012/Best-Care-at-Lower-Cost-The-Path-to-Continuously-Learning-Health-Care-in-America.aspx

2 OECD 2015, page 167http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/health-at-a-glance-2015_health_glance-2015-en#page169

3 (Verbist 2012).4 (Hall D, Why We Need

Public Spending,2014, PSIRU)

5 http://www.who.int/mediacentre/commentaries/2016/universal-health-coverage-challenges-solutions/en

6 https://www.taxjustice.net/2017/05/24/africa-subsidises-rest-world-40-billion-one-year-according-new-research

7 (Hall D, P48, Why WeNeed Public Spending,2014, PSIRU)



Offshore Workers Challenge Chevron’s

Offshore Tax: A $10B Win for Australia &Wins for Workers

An international coalition of unions recentlyestablished a new centre for corporate taxaccountability. International research will helpunions better campaign on corporate tax issues

To fight back against a frontal assault on labourstandards in Australia, the ITF took on Chevron, theUS-based global oil giant. The ITF’s Chevroncampaign has been a huge success and should be alesson for global unions.

Unions need to avoid the temptation to bunkerdown and fight for a shrinking number of members. Ifunions are going to succeed in turning the tide againsta weakening labour movement and growing corporatedominance, we need to adopt new strategies and newtactics that will also help organise and win for newmembers. The global trade union movement mustexpand our fight against capital and directly challengecorporate power beyond the shopfloor.

Every dollar in tax avoided by multinationals ismaking inequality worse. It is a theft from ourchildren’s schools, our hospitals, care and dignity forour elders, our communities and other essentialpublic services that workers rely on everyday.

Along with actions by the Australian Tax Office(ATO), the ITF’s efforts have helped the Australiangovernment collect an estimated one billion in backtaxes from Chevron. The Australian government haspredicted that new tax rules -resulting from a majorcourt victory by the ATO against Chevron- willbring in over $10 billion in additional tax revenuefrom Chevron and other multinationals over thenext decade.

The ITF has led the way globally in teaching oneof the world’s largest and most agressivemultinationals that attacking workers and ignoringunions can have serious and costly consequences farremoved from any industrial disputes. As aconsequence of the ITF’s campaign, corporate taxdodging continues to be a major political and publicissue in Australia and even the current conservativegovernment has been forced to take action.

Chevron, Offshore Labour Standards &Maritime Unions

Chevron and other companies have operated inAustralia’s offshore oil and gas industry for decadesand have had positive working relationships with theMaritime Union of Australia (MUA) and otherunions. In 2009, when Chevron began the

constructing the massive Gorgon project off thecoast of Western Australia things changed.

Chevron and it’s contractors refused to engage inany meaningful dialogue with unions, employedexploited foreign workers and dramatically undercutexisting wages and conditions. Several actions weretaken by the MUA, culminating in a strike in 2012which shut down the project for 2 days. Chevrontook the union to court. In 2014, federal judgesruled that the strike action was illegal. Chevronpursued the union through the courts and sought$20 million in damages1. The federal courtproceedings over damages are still ongoing.

Meanwhile, the MUA won a landmark high courtdecision in mid-2016 which ruled that offshoreworkers must be covered by Australia’s labour andimmigration laws2. In mid-2017, Chevron reached alandmark settlement with the ATO to pay onebillion in back taxes and will likely pay hundreds ofmillions in additional tax payments every year3. Thehuge tax payments should make Chevron and othermultinationals think twice about taking on the MUAand other unions.

The ITF: Stand Up, Fight Back!The ITF determined that Chevron’s refusal to

engage with the union could not be leftunchallenged and that traditional labour tacticsalone would not be enough. In mid-2015, the ITFbegan work to share information about Chevron’stax affairs in Australia and more broadly challengethe global oil gaint’s social license to operate.Chevron had another large offshore gas project andseveral other offshore projects were being developed.If Chevron -when confronted with a strong militant,well organised union- could respond this way inAustralia then workers’ rights everywhere would beat risk. Other multinationals would be emboldenedby Chevron’s approach.

Through intensive research, strategic campaigningand working with a broad coalition, the ITF took theunion fight where it could not be ignored bycompany executives; it become a boardroom issue.The ITF conducted intensive research into Chevron’scomplex global corporate structures. One of the firstactions was the launch of an ITF report, “Chevron’stax schemes: piping profits out of Australia?” at thePSI sponsored Global Labour Tax Summit inGeneva in September 2015, which attracted global

Every dollar intax avoided bymultinationals

is makinginequality worse

Jason Ward

led the ITFs Chevron Tax campaign.



media attention4. The report was largely based on acritical analysis of Chevron’s global reports and theannual financial statements filed by the primarysubsidiary in Australia.

Two factors contributed to the success of thecampaign. Previous research and campaign work byother unions and the Tax Justice Network –Australia had resulted the the creation of a SenateInquiry into Corporate Tax Avoidance in late 20145.The Inquiry has been extended several times and isstill ongoing. Senate hearings and submissionshelped draw significant media attention and politicalaction and the Chair of the relevant Senatecommittee ultimately labelled Chevron as Australia’slargest tax dodger.

Secondly, the ATO had taken Chevron to courtover the high interest rates charged on a previousand relatively small offshore related party loan. Thecourt case helped the ITF put the tax question onthe front page and publicly expose the new andmuch larger loan with much bigger implications.Both loans were from a Delaware subsidiary. Hugeinterest payments eliminated profit and income taxpayments in Australia and generated tax-freeinterest income in Delaware.

Work by the ITF generated significant mediacoverage in Australia and eventually around theglobe6. Chevron executives were forced to appearmultiple times before the Australian Senate, requiredto provide additional information, and compelled torespond to ITF reports and questions raised bySenators.

Others Take High Road Approach &Abandon Chevron

The next major new offshore gas project inAustralia observed the ITF campaign on Chevron andopted to work collaboratively with the MUA, leadingto thousands of new Australian maritime jobs7.

The ITF, working with the Tax Justice Network –Australia, also challenged the ineffective offshoreroyalty tax regime, of which Chevron is the largestbeneficiary. The ITF’s work again generatedextensive media in Australia and globally8. Underpublic pressure, the government announced aspecial review of this tax regime in November 2016.

The government review, which concluded in April2017, and further Senate hearings confirmed theITF’s analysis that as Australia becomes the world’slargest exporter of Liquid Natural Gas (LNG) it isgiving away these resources to Chevron and othermultinationals for free. However, the currentAustralian government -after pressure fromChevron, Exxon and others- backed away from anyserious reforms. Others in the oil and gas industryare well aware that the broader public scrutiny ofoffshore tax and royalty arrangements began as adirect result of Chevron’s refusal to deal with unions.

Unions are working to ensure the next Australiangovernment will change the rules to make sure thatAustralians get a fair share from offshore gas exports.Reasonable proposals put forward by the ITF and Tax

Justice Network – Australia could bring in $3 billionper year in additional government revenues. Theseproposals are now part of the ACTU’s broader taxpolicy recommendations. The ITF’s work on Chevron’sglobal tax affairs has been picked up by other unionsand allies and additional campaign efforts mayemerge. In Australia, a separate labour dispute withthree unions has led to a focus on Exxon’s tax affairs.Union-led efforts set the groundwork for an explosiveMarch 2018 Senate hearing.

Global Precedent on Transfer PricingWhen Chevron abandoned an appeal of the

Australian federal court’s landmark decision ontransfer pricing and reached a settlement with theAustralian Tax Office, it locked in the ATO’s newguidelines on offshore related party debt. The newguidelines severely restrict the most commonstrategies used by multinationals to reduce taxpayments Australia and are expected to bring in anadditional $10 billion in tax revenues from Chevronand other multinationals over the next decade.

Prior to the settlement, Chevron’s global CFO andVice President said in April 2017 in a quarterlyconference call with analysts that ‘the court rulingdeviates substantially from recognised internationaltransfer pricing guidelines. And in those guidelines,the courts are to treat related parties to a transactionas if they were standalone separate legal entities.’ Shewent on to say that ‘there’s an awful lot at stake withthis ruling, not just for Chevron but for anyintercompany lending in Australia and morebroadly, around the globe, because it fundamentallychanges established transfer pricing guidelines andprinciples’.

The Australian federal court’s decision waswatched closely by multinationals and tax expertsaround the world. The decision makes a commonsense -but significant- conclusion that transactionsbetween separate legal entities of the samemultinational are not -by definition- at ‘arm’s length’.

Transfer pricing, in various forms, is the mostwidely used tool in the tax avoidance toolbox of allmultinational corporations. The Australian federalcourt’s decision and the ATO’s guidelines, offerglobal unions and civil society allies an importantprecedent.

Global Unions Should Tackle Tax Dodgingby Multinationals

Rather than relying solely on militant action andindustrial tribunals, the ITF decided to directlychallenge Chevron’s social license to operate. Thefight went far beyond the shopfloor and into theboardrooms, the Parliament and the court of publicopinion. The ITF went on the offense and took thefight where Chevron was not expecting or preparedto be challenged.

If global unions are going to lead the way toreverse the corporate takeover of our society -of

The ITF took the fight whereChevron was not expecting or prepared to be challenged

... continued on Page 23 ...



Why McDonald’s Tax Practices Matter

to the Global Labour Movement

In 2009, McDonald’s Corporation – the largest fastfood company in the world and the planet’s second-largest private-sector employer – decided to set up asubsidiary in Luxembourg to handle ‘IntellectualProperty’ for all of its European operations. EveryMcDonald’s store in Europe paid 5 percent of itsrevenue in exchange for the right to sell Big Macsand every other ‘McProduct’ – which presumablycost a great deal of money to intellectually develop –and these royalties were funnelled to this corporateentity in Luxembourg.

So this company in Luxemburg had an annualrevenue of roughly $800 million starting in 2009 andabout $1 billion each subsequent year until theyclosed it in 2016. What did they do there with allthis money? Develop new products? Perhaps specialsauces to help McDonald’s sell more burgers?

Apparently not, as the company in Luxemburgwas housed in a small, anonymous office complex,and it had a mere thirteen employees spreadbetween its head office in Luxembourg and branchesin Switzerland, the UK and in the USA. Sevenbillion dollars over seven years: not bad revenue fora company of thirteen people!

Of course, locating subsidiaries in tax jurisdictionswithin the EU that have accommodating taxagreements that allow companies to pay essentiallyno taxes is nothing new. It is a familiar strategy thatmany multinationals have been using in Europe. Theeffective rate of taxation in Luxemburg for thisMcDonald’s subsidiary was 1.7 percent between 2009and 2015.

What is particularly galling about the McDonald’scase is that it is a brick-and-mortar company, not adigital entity that makes money in series of ones andzeroes. It is highly visible to consumers, whounderstand that the money they are paying for avery tangible product is effectively being funnelledout of the country in which they are eating theirburger to executives’ pockets in Illinois, whereMcDonald’s is headquartered. Unlike consumers’paycheques, which are carefully and methodicallytaxed, corporate receipts apparently are subject to adifferent, more malleable set of rules.

Thus one of the major economic actors in Europeis not paying its share for the overstretched nurses,the exhausted fire-fighters, and the labouringsanitation workers who are meant to pick up themany McDonald’s wrappers that litter the highstreets of Europe. All this in a period of cutbacksand austerity that are stretching public budgetsacross Europe and leading to real cuts that affectpeople in real ways.

Why McDonald’s MattersMcDonald’s practices in Europe are no exception

to its conduct in the rest of the world. On thecontrary, virtually everywhere McDonald’s operatesit uses its power and influence to avoid its legalobligations. In recent years, McDonald’s has beenaccused of violating labour and tax laws in Brazil,committing antitrust violations in Asia, and illegallyharassing and firing workers in the United States.

This pattern of behaviour around the worldmatters because the company exerts a super-sizedimpact on the global economy. In addition to beingthe second-largest private employer, McDonald’s isthe world’s largest ‘employer of employers’ – smallbusinesses – with 34,000 franchised stores in morethan 120 countries. McDonald’s is the world’s biggestbuyer of beef, chicken, lettuce, and tomatoes. And itis the world’s largest food supplier, feeding 69million people a day.

McDonald’s influence is huge, but instead ofusing its global scale to support good jobs and liftstandards in the service sector, it uses its enormousfootprint for just the opposite.

In recent decades, companies like McDonald’shave faced limited resistance to this way of doingbusiness as corporate power has grown across theglobe. But starting in 2012 – a few years afterMcDonald’s in Europe set up its scheme inLuxembourg – fast-food workers in the US started arevolt that would grow into a global movement tohold the burger giant accountable.

The ‘Fight for $15’On Nov. 29, 2012, some 200 fast-food cooks and

cashiers in New York City went on strike, in adramatic and rare confrontation between precarious,low-wage workers who had historically never beenorganised in the United States, and some of thelargest employers in the post-industrial US economy:fast food companies. The revolt quickly caught theattention of the media and spread across the countrywith the support of the Service EmployeesInternational Union (SEIU). Within six monthsworkers walked off their jobs in six other majorcities; within a year they were striking in 100 citiesacross the country. The ‘Fight for $15’ was launched.

The sheer audacity of the demand – more thandoubling the federal minimum wage of $7.25 – blewaway politicians and commentators who had been atthe most ambitious end of the spectrum advocatinga minimum wage of $10.10 per hour. With workersthemselves telling their stories about what it meantto try and survive on minimum wages, and

Locatingsubsidiaries in

tax jurisdictionsthat allow

companies topay essentially

no taxes isnothing new

Nicholas Allen

is Global Coordinatorfor SEIU. He is based in

Ann Arbor, Michigan

explaining what it would mean to make a semi-decent wage of $15 (about €12.10), the idea quicklygained traction.

A Global CoalitionSEIU understood that to effectively advocate for

changing the way McDonald’s does business it wasnecessary to operate on a global scale. They knewtheir critique of the fast-food giant had to bebroader than only worker issues in the United States.Researchers found that McDonald’s was avoidingtaxes in Europe on a large scale, around the sametime that other multinationals – namely Apple,Google and Amazon – were coming under heavyscrutiny from the European Commission.

Through the IUF, the International Union of Foodand Agriculture workers, a global union federationbased in Geneva to which they are affiliated, the SEIUwas able to meet with EFFAT, the European arm ofthe IUF, based in Brussels. EFFAT’s job is to representEuropean unions in the Brussels arena through policyadvocacy and campaigning. They were verysupportive of advocating to change McDonald’sbehaviour in regards to working conditions.

While today Europe is a huge and lucrativemarket for McDonald’s (40 percent of global profits),the company had not always been so successfulthere. Present in Europe since the 1970s, in manycountries it had failed to catch on and in some it hadbeen bogged down by controversy.

In the 1990s, a French farmer cum politiciandrove his tractor into a McDonald’s, destroying it, toprotest its industrial agricultural practices. InDenmark it suffered a crippling boycott for 2 yearsfor refusing to sign on to the master collectivebargaining agreement in the restaurant sector. In theUK, it was bedevilled by the ‘Mc-Libel’ case, inwhich some environmental activists were sued bythe company for defamation, only to fight back andsee the company repeatedly embarrassed byrevelations about its =practices.

By the 2000s McDonald’s had engaged in amassive turnaround project, entrusting its Europeannational franchises to savvy local actors who weregiven leeway to find ways to improve the company’simage. In the UK, the current global CEO SteveEasterbrook came to the helm and engineered amarketing turnaround. In France the company putthe bulldozer episode behind it by aggressivelycourting the farmers’ lobby and attempting toassuage some of the labour unions by signingagreements that were slightly better than thenational norm, at least for their corporate-operatedstores (not for franchises). In Denmark, McDonald’ssigned on to a national agreement and became (andremains to this day) a decent employer in its roughlyninety Danish restaurants.

However, in many European countriesMcDonald’s remains a low-road employer, seeking toundermine unions and keep wages low as much aspossible. In the UK and Ireland, for example,McDonald’s pioneered the use of ‘zero-hour

contracts’, leading to further casualisation of theeconomy. In Italy the company routinely resistedsigning on to national agreements.

On a European scale, McDonald’s has alwaysavoided dealing with the trade union issue. Thecompany was never willing to set up a legitimateEuropean Works Council, for example, or engagewith EFFAT or the IUF in a meaningful way todiscuss raising standards for workers in the fast foodindustry. So EFFAT was quite willing to consider howto advocate for the company to change its practicesthrough discussions with elected officials in Brussels.

Through PSI, the global union federation of publicsector workers, to which SEIU is also affiliated, theunion was able to meet with EPSU, the EuropeanFederation of Public Sector Workers, the Europeanarm of PSI. PSI and EPSU had already been engagedin a long-standing campaign for tax justice,advocating for tax policies that would crack down ontax evasion by multinationals. They were interested infocusing on one particular actor, rather than onlyengaging in policy debates. Armed with the researchon McDonald’s that SEIU provided, EPSU and EFFATfelt like McDonald’s would be the perfect poster-childfor corporate misbehaviour in Europe, both for taxavoidance and its approach to labour rights.

The ad hoc ‘McDonald’s Coalition’ – Americanfast food workers and SEIU, European food unionsand European public sector unions – set out to wagea campaign to shine a light on McDonald’s failure tolive up to decent standards of corporate responsibilitywith regard to their workers. The coalition arrangedto meet with an array of stakeholders in Brussels:members of the European Parliament from acrossthe political spectrum, key staff at the relevantCommissioners’ offices, and journalists.

One of the particularities of the campaign was tohire professional lobbyists, lawyers andcommunications people to assist. This was notcommon practice for the European federations,which saw lobbying, in particular, in a dim light as itis the tool of choice for their opponents, themultinationals driving a neo-liberal agenda. But theresults of the combined actions were impressive,yielding high-level meetings in a matter of weeksand providing valuable know-how.

Politicians all expressed surprise and interest inthe fact that the coalition was composed both ofprivate and public-sector unions, that it includedAmericans, and that it sought to bring workers’voices to the fore of the discussion around taxevasion. The succession of meetings and presscoverage sent McDonald’s army of Brussels lobbyistsand lawyers into overdrive damage control mode.

Research provided by the coalition led to twosuccessive hearings of McDonald’s at the EuropeanParliament’s Special Committees on Tax Rulings andthe launching of a formal investigation intoMcDonald’s tax practices in Luxembourg by the DGCOMP, the investigative arm of the European



But this pattern ofbehaviour aroundthe world matterswhen a companyexerts a super-sized impact onthe globaleconomy

Mary Joyce Carlson

is Counsel to the Fightfor $15. She is based inWashington, DC




For decades, the development debate has beendominated by the story of foreign aid, and how ithelps developing countries, especially in Africa, toeradicate poverty and improve their populations’welfare. We have also been told that only bylowering taxes for foreign firms can we createdevelopment. But there is another story: that ofillicit financial flows, and how they ensuredeveloping countries lose more to rich countriesthen rich countries send in aid.

The UN High Level Panel on Illicit FinancialFlows, chaired by former South African PresidentThabo Mbeki estimated that between USD $30billion and $60 billion is siphoned off annually fromthe Continent, according to a report released in2015. These estimates are still fairly conservative:latest data suggests that could be as high as USD $80billion. This is much more than Africa received infinancial aid and foreign direct investment combinedbetween 2003 and 20121.

Trade unions and our civil society allies areworking hard to tell the real story and make surethat developing countries, in Africa and across theworld, can use all their resources to developindependently for the benefit of all.

What is causing these outflows?What does this haemorrhage that specialists call

‘illicit financial flows (IFF)’ consist of? While thereare proceeds from crime, money laundering andcorruption, Thabo Mbeki concluded in 2015, ‘largecommercial corporations are by far the biggestculprits of illicit outflows’, through dodgy taxpolicies that shift wealth offshore.

Astonishingly, multinationals were responsible forover 65 percent of IFFs, well ahead of organisedcrime (30 percent) and corrupt practices (5 percent)Most of these flows occur when companies that areowned or controlled within the same group buy andsell to each other. Through the manipulation of theprices they ensure that profits are not made in theAfrican country but instead in a tax haven wherelow taxes are paid.

The problem is particularly pronounced inextractive industries, important for developingcountries, which are dominated by largemultinationals that control global value chains. Theytake advantage of their complex ownershipstructures and universal presence to manipulatequantities, prices - or both - but also to disguise thedestinations and sources of their trade.

Africa is full of examples. Zambia’s national datashow that Switzerland is the top buyer of its copper,

whereas Swiss trade statistics register no copperimports from the country at all. According toNigerian authorities, the Netherlands is an importantdestination of its oil exports, but a substantial part ofthese sales does not appear in Dutch data. Timberproduction in Liberia and mineral production in theDemocratic Republic of the Congo (DRC) and SouthAfrica tell similar stories.

Illicit financial flows are not a recentphenomenon in Africa. It is estimated that thecontinent has lost over $1Trillion USD throughcapital flight since the 1970s2. But it is getting worse.In Africa, capital flight has tripled since 2001,making Africa a net creditor to the rest of the world.In total, the continent lost about USD $850 billionbetween 1970 and 2008, with Nigeria, Egypt andSouth Africa accounting for 55 percent of illicitfinancial flows over this period.

Lowering taxes does not increase investment

There are enormous pressures from foreigninvestors and foreign governments to extend furthertax concessions such as tax holidays, tax-free zones,investment and tax treaties, and acceptance ofcorporate ownership structures that facilitate taxavoidance. Such concessions are often designed tofavour foreign corporations over domestic firms, withlittle demonstrable benefit from increased investment.

In 2010, the United Nations IndustrialDevelopment Organisation (UNIDO) conducted abusiness survey of 7000 companies in 19 sub-Saharan African countries. The results suggest thattax incentive packages ranked 11th out of 12 inimportance for investment decisions; and thisimportance has fallen over time.

But the damage to the economy of the outflow isreal. Africa is the most vulnerable region in theworld when illicit outflows are compared to GDP.The average annual GDP loss of 5.7 percent has anoutsized impact on the continent, according toWashington based Think-tank Global FinanceIntegrity (GFI). This money could be used forproductive infrastructure or investment in formaljobs in business or quality public services.

The current model starves the public purse

There is an apparent paradox; capital flight fromAfrica is increasing, while the rest of the worldseems to be investing more in the Continent. This isbecause foreign investment has grown, but corporatetax revenues have not kept up.

Tax avoidance hurts development –

workers must fight back

Multinationalswere responsible

for over 65percent of illicitfinancial flows,

well ahead oforganised crime(30 percent) andcorrupt practices

(5 percent)

Peters Adeyemi

Is Vice President ofPublic Services

International (PSI),Deputy National

President of NigeriaLabour Congress (NLC)

and General Secretaryof Non-Academic

Union of Allied andEducation Institutions

(NASU)

Tax revenues are already very low in Africa,averaging 17 percent of GDP, compared to about 35percent of in rich countries. Tax authorities lackadequate resources to keep up with the increasinglysophisticated and aggressive strategies ofmultinationals to evade or avoid taxes, not tomention the corruption that buys the complacencyof some local decision-makers. When taxes are notcollected it has a big impact on the provision ofpublic services vital for social development.

Public Services International (PSI) research showsthat multinational tax dodging has massive effectson developing country revenue. Transfer pricingalone, represents a 25 percent loss of governmentrevenue in the DRC or Mali - and the percentageclimbs to 31 percent in Zimbabwe. Other continentsare not spared: the shortfall represents 22 percent ofgovernment revenue in Costa Rica and 30 percent inPhilippines. This happens because developingcountries rely on corporate tax revenue for asignificantly higher share of their total tax revenues(around 16 percent), compared to 8 percent indeveloped countries, according to the InternationalMonetary Fund (IMF).

Multinational tax avoidance effects people’s lives

Although this could all seem technical and farremoved from people’s lives, the human impact isdevastatingly real.

Across the continent, public services remaincritically underfunded, forcing women to spend hourscollecting water and children to go without adequateschooling. When crises such as the Ebola Epidemicstrike, underfunded health systems are unable torespond sufficiently, leading to severe danger forfrontline health workers and the wider public.

Although many governments are still turning topublic-private partnerships (PPPs) in the hope thatthe private sector will finance public infrastructureand public services, experience in both rich andpoor countries shows that these partnerships areexpensive and inefficient. For the citizens, it meansmore debt and higher taxes in the future, since PPPsusually conceal public borrowing, forcing priceshigher in the long term as well as driving downaccess and quality.

Private companies, on the other hand, benefitfrom long-term state guarantees - and there is noguarantee that the profits will stay in the countrygiven the huge corporate flows out of the continent.Even the European Court of Auditors decidedrecently that ‘EU co-financed Public PrivatePartnerships (PPPs) cannot be regarded as aneconomically viable option for delivering publicinfrastructure’.

Tax avoidance hurts infrastructure investment

When multinationals do not pay the taxes thatthey owe in Africa, they also curb the domesticsavings needed to reduce the continent’s annual

USD $31 billion infrastructure financing gap. Itmeans fewer resources to invest in infrastructure foreconomic development and in public services, suchas education, health care, drinking water, sanitationand environmental protection.

As a result, tax avoidance by multinationals iscontributing to the fiscal constraints preventingcountries in Africa from attaining the United NationsSustainable Development Goals (SDGs) by 2030.

For example, according to a GFI report, at thecurrent rate it would take Cameroon 135 years toreach Millennium Development Goal 4 on reducinginfant and child mortality. If illicit financial flowswere eliminated, Cameroon would be able to achievethis in just 35 years. In the case of Mauritania, theperiod needed to reach this target would go from198 to 19 years and from 218 to 45 years in theCentral African Republic.

Tax avoidance hurts women and the most vulnerable

Furthermore, when governments revenues areundermined – due to multinationals not paying thetax they owe – they are forced to increase taxes onworkers, families and small and medium-sizedbusinesses - generally by increasing sales taxes suchas VAT and income taxes. The failure to tackle taxabuse shifts taxation from wealthy individuals andmultinationals to those least able to afford it.

The implications are even more direct forwomen’s human rights and gender justice as womentend to take on a larger share of unpaid care workwhen social services are cut. Around 75 percent ofthe world’s total unpaid care work is performed bywomen, including cleaning and cooking, water andfirewood collection, and caring for people such aschildren and the elderly. The resulting dearth ofadequate and accessible health care, crèches, schoolsand basic infrastructure means that women and girlshave to fill the gap by working for no pay. Closing anursery school might force a woman to leave her jobto take care of her children, undermining hereconomic and social empowerment.

Further, cuts to public services exacerbates accessto decent employment for women as public-sectorjobs are one of the key paths to formal work forthem. UN Women affirms that 75 percent ofwomen’s work in Asia and Africa is in the informalsector, without access to a living wage, maternity orpaid leave or pensions. When a State freezes salariesin highly feminised sectors such as hospitals andschools, it hurts women workers and is a directcontributor to the gender wage gap.

Tax avoidance perpetuates dependence and colonialism

Illicit financial flows perpetuate Africa’s economicdependence on other countries through external aid.Indeed, the official development assistance numbersfor some countries amount to 70 percent of total



Tax authoritieslack adequateresources to keepup with thesophisticated andaggressivestrategies ofmultinationals.When taxes arenot collected ithas a big impacton public services




No doubt, workers across the world were shocked asstriking mine workers at the South African town ofMarikana were shot to death during their strike forhigher wages in 2012 at Lonmin Plc, the third largestplatinum mining company in the world. Thirty fourworkers were massacred by police on 16 August. Tenhad already been killed in the days before. Most ofthem when a police General ordered tear gas andshock grenades against a peaceful march1. Among theten were also two police officers and a security guard.

The Marikana death toll is in fact above 50 today,due to suicides in directly affected families. As forinjured and traumatised workers and familymembers, they can be counted in hundreds.

Most of the victims were rock drill operators(RDOs). The RDOs were paid a basic wage of about5000 South African Rand per month (correspondingto $600 at that time). They demanded a basic wage of12,500 rand per month ($1500 USD). In Septemberafter the massacre close to 200,000 mine workers inall kinds of mines were on strike for R12,500.

To workers in South Africa, also outside mining,the ‘R12500’ became a symbol for having a life. Inthe eyes of established South Africa, however, themine workers were ignorant of the realities in themining industry. The workers effectively demandedan increase of the basic wage by 150 percent! Thiswas considered outrageous and completely utopian.

‘Wage evasion’ as one deadly factorIn 2014, the power of the Marikana Commission

of Inquiry (MCI) gave two researchers from AIDCaccess to the financial statements of Lonmin’ssubsidiaries in South Africa. One question was, ifthe R12,500 demand was at all ‘affordable’, becauseLonmin had refused to negotiate. This was a smallpart of the Commission’s task to give a backgroundto the catastrophe.

The financials of daughter companies areconfidential. Only the annual reports of a mothercompany that sell its shares on the stock market arepublic. This is the legal situation in South Africa,and in most countries.

Still, it is the local subsidiaries that pay taxes tothe government and wages to the workers. As a rule,they employ the whole productive workforce.Lonmin Plc is based in Britain. In 2012 it employedsome 50 managers. Lonmin’s largest South Africansubsidiary Western Platinum Ltd (WPL) employed25,000 of Lonmin’s workers in 2012 (with another3000 employed by the subsidiary Eastern PL).

The confidential financial statements showed thatWPL every year had transferred an average R245

million in ‘sales commission’ to a letter box companyin Bermuda. But there was no one in Bermuda sellinganything. The company receiving these millions hadthe exact same address as Appleby Services – the lawfirm at the heart of the Paradise Papers.

When this went public, Lonmin argued that thetransfers were shifted to its South African head officeaffiliate Lonmin Mining Services (LMS) in 2008. Theaudited financial statements of WPL showedhowever that the transfers to Bermuda continuedright up until 2012.

If the R245 million sent to Bermuda were dividedby 4000, the number of RDO workers, this alonecovered a wage increase of about 100 percent, orR5000 per month.

Another R200 million per year was sent fromWPL to LMS in ‘management fees’. This helped topay huge salaries to forty managers. From 2010-2012, they also received share based paymentsbonuses, costing WPL R100 million per year. Thatalone corresponded to an additional R2000 wageincrease per RDO worker. On top of this, a netpayment of R758 million was made from WPL toLondon in 2006. Lonmin Plc sold a South Africanmine to its own subsidiary WPL. This selling of amine to oneself, as it were, was advantageousbecause of the double tax agreement with SouthAfrica. Lonmin does not pay taxes in the UK, onlyin South Africa.

An unexamined perspectiveFor public sector workers, corporate tax dodging

represents a threat not just to their labour conditionsand livelihoods but to the essential services theydeliver to their communities every day. The publicsector is financed by taxes. Their unions should becampaigning against both legal tax avoidance andillegal tax evasion.

For private sector workers, the issue can seem moreabstract. Still, profit shifting moves much more moneyaway from them than from governments. If the tax onprofit is 28 percent in a country, a transnationalcorporation (TNC) has to move $100 million to asecret and zero tax jurisdiction (a ‘tax haven’) if itwants to evade a tax expense of $28 million. Thus, thegovernment lost $28 million. But who lost theremaining $72 million that also went off shore?

You will look very long look to find activists,academics or government officials to even ask thisquestion. Profit shifting is posed as a problem forindebted governments, struggling to deliver qualitypublic services and investment. That general taxpayers must pick up the bill when the tax base is

Unions whoorganise workers

in TNCs mustdemand accessto the financials

of thecorporation’ssubsidiaries

This is whereexcess profits

are madeinvisible to union

organisers,weakening their

hand inbargaining

Dick Forslund

is senior economist andresearcher at the

Alternative Informationand Development

Centre (AIDC) in CapeTown. He is a Swedish

national and holds aPhD in Business

Administration and aBSc in Economics from

the StockholmUniversity School of

Business.

The Marikana Massacre: wages as the

blind spot in the tax evasion debate

eroded can also be mentioned. The MCI wentfurther, to social investments. It pointed to Lonmin’sprofit shifting when asking why Lonmin had builtonly three (3) mine worker houses over five years,when it was legally obliged to hold a promise to build5500. But if rock drill wages could be much higher,was something that could not be asked, as it were.

It is the unions that have to bring the perspectiveof wage earners to the table, explaining that profitspumped offshore are a key factor in keeping all ourwages low.

Corporate Profits – The missing trillionThe Organisation for Economic Coordination and

Development (OECD) has, for decades, been settingthe agenda for economic policy issues, and led theinternational project to crack down on tax havens,transfer mispricing and corporate profit shifting. Yetfor over twenty years the amount sitting offshore hasskyrocketed.

In 2015 the OECD launched a new programmecalled the Base Erosion Profit Shifting (BEPS) project.

‘BEPS affects everyone. It harms governmentsbecause it reduces their tax revenues and raises thecost of ensuring compliance. It harms people because,when some MNEs pay low or no tax, individualtaxpayers must shoulder a greater share of the taxburden. And finally it harms businesses themselves’2.

In the dominant discourse, that covers ‘everyone’.Business is harmed, OECD argues because BEPSgives TNCs a ‘bad reputation’, and it gives domesticcompanies without offshore bank accounts acompetitive disadvantage.

As usual, the OECD project only examines thesize of tax losses. But OECD’s numbers also indicateshow much workers are losing in potential wages.The BEPS policy brief states that tax ‘revenue lossesfrom BEPS are conservatively estimated between$100 Billion and $240 billion annually’.

If we consider that this only represents the missingtax amount, we realise that the problem is at least fivetimes bigger. It depends on the effective corporate taxrate in the country. At an average effective corporatetax rate of around 22 percent, $100 Billion in taxrevenue loss means a total of $454 Billion pumped offshore. Using OECD’s higher, albeit ‘conservative’,estimate, $240 Billion in evaded corporate tax means$1090 Billion or over a trillion dollars in profitsshifted out of sight every year3.

That is enough to give more than a $300 end ofyear bonus to every single worker on earth.

This is clearly not only a tax issue. If this flow ofprofits could be stopped from flooding offshore, themoney could be more widely redistributed. Part ofthe money no longer profit-shifted would go to thegovernment. A much larger part could go toordinary households in the form of significantlyhigher wages.

But who would be the agent of such a change?The key lesson from ‘The Bermuda Connection’

was that unions who organise workers in TNCsmust demand access to the financials of the

corporation’s subsidiaries. As a rule they are theformal employer. This is where tax planning takesplace and where BEPS practices makes excess profitsinvisible to union organisers, significantly weakeningtheir hand in wage bargaining.

Both public and private sector unions wouldmassively benefit if profit shifting is brought to anend. Public services could be improved andextended, making nurses, teachers and firefighterslives easier and their wages higher. If the veils ofsecrecy are lifted, the private unions could enternegotiations with a truer picture of the company’sstructure and economy. Wage demands described asirresponsible or outrageous would suddenly appearas perfectly reasonable when the missing millionsare brought back into the picture.

Unions must fight Corporate Wage Evasion

Public and private sector unions that worktogether can stop this wage theft. Public sectorunions should have the tax expertise and alliances.Private sector unions have a direct interest in findingto where the employer is sending excess profits.When unions expose such cases we would boost thefight to once and for all fix the broken tax rules.

Unions can win by strengthening involvement atthe company level, demanding to see the books ofthe TNC’s subsidiaries. Unions can call for an end tocross border payments of ‘sales commissions’,‘management fees’ to offshore letter box companies.Dodgy corporate tax structures should be disclosedto rally the general public.

Recent advances such as mandatory country bycountry reporting of tax payments give a better ideaof where companies make their profits and wherethey are taxed. If they are public, they can be usedfor the benefit of union members. Furthermore, allunions need to increase their capacity to analyse theopaque world of corporate financial statements. ‘Taxplanning analysis’ should be a part of ourmainstream research. and be confident in our abilityto call out corporate tax dodgers.

Currently, governments replace missing corporatetax revenues by higher taxes on wages and onconsumption, such as VAT. Union members arepicking up the bill for corporate tax greed. As forVAT it affects even the poorest of the poor.

When wages are stagnating across the world,recapturing these shifted profits is an obvious way toboth bolster working class households and providethe means to boost local economic development andpublic services.

The Lonmin RDOs were told that their demandswere outrageous. When the books of all Lonmin’scompanies were opened, this was revealed as untrue.Unions ignore this lesson at our own cost. Public andprivate sector unions must step forward. The spacefor higher wages for all workers is huge. Unions canclaim this space and together we can win.



Public sectorunions have taxexpertise, privatesector unionshave a directinterest in findingto where theemployer issending excessprofits

Unions can winby strengtheninginvolvement atthe companylevel, demandingto see the booksof the TNC’ssubsidiaries.Unions can callfor an end tocross borderpayments of‘salescommissions’,‘managementfees’ to offshoreletter boxcompanies.Dodgy corporatetax structuresshould bedisclosed to rallythe general public

... notes on Page 28 ...


ICTUR IN ACTION | INTERVENTIONS

AlgeriaOn 3 December 2017 theMinistry of Labour announced –without any basis – that theindependent SNATEGS tradeunion had decided to dissolveitself. On 20 January 2018,police forcibly broke up ademonstration in Algiersorganised by SNATEGS. Unionmembers and leaders havereported further legalharassment:

• SNATEGS President RaoufMellal faces a number oflawsuits as a result of his tradeunion activities, in particular forwhistleblowing on practices atthe state-owned utility companySonelgaz. In December -January Mellal was repeatedlysentenced to a further threemonths’ imprisonment andfined in a series of hearings inabsentia.

• The general secretary ofSNATEGS, Mr AbdelkaderKawafi also faced trial on 6February 2018 on charges ofdefamation.

• Also on 6 February, KaddourChouicha, national coordinatorof the teachers' union (Syndicatdes enseignants du supérieursolidaires, SESS) faced trial -along with five other humanrights activists - on charges of‘incitement to unarmedassembly, attack on a bodycorporate and failure to complywith an administrative decision’.

• Also facing trial on 8 Februarywas Benzine Slimane presidentof SNATEGS security guardsand protection union, accusedby Sonelgaz of defamationfurther to comments regardingprecarious work at the companyand the situation of sexualharassment of female workers.

ICTUR wrote to remind thegovernment that Algeria hasratified all eight of thefundamental International LabourOrganisation Conventions. Thecriminalisation of trade unionistsfor activities related to the defenceof the interests of those they

represent constitutes a graveviolation of workers’ rights. ICTURnoted that where it concerns thearrest, detention or sentencing ofa trade union official, the ILO’sCommittee has declared that it is‘incumbent upon the governmentto show that the measures it hadtaken were in no way occasionedby the trade union activities of theindividual concerned’ (ILO Digest,paras. 92 and 94).

BangladeshWorkers at Ashiana GarmentInd., Dhaka, have facedharassment and arrestsfollowing attempts to establish aunion at the factory. The workersformed a trade union in May2017, associated with theGarments Workers’ Trade UnionCentre (GWTUC), but theauthorities refused itsregistration and since then theunion organisers have facedsustained attacks anddismissals. The GWTUC has filedseveral complaints regarding thismatter with the Labour Ministry.On 29 January 2018, a protestwas held following the unfairdismissal of a worker. On thenext day, the owners closeddown the factory, resulting infurther worker protest.

• On 31 January, workers andGWTUC leaders went to atripartite meeting with theBangladesh GarmentManufacturers and ExportersAssociation (BGMEA) and theauthorities, organised to resolvethe dispute. It is understood thatthe trade unionists began apeaceful protest outside theBGMEA building, after theywere informed that the meetingwas cancelled. They were thenset upon by a group armed withiron rods and sticks. This attackleft some thirty-seven workerswith injuries described as‘serious’ and requiringtreatment at Dhaka MedicalCollege Hospital. GWTUCbelieves that these attacks weredesigned to derail negotiations.

• It is further understood that while

the violence against the workershas not been investigated, theBGMEA subsequently filedcomplaints with the policeagainst the GWTUC leadershipand over 150 workers. Some ofthose charged maintain that theywere not even present at theincident. Two workers from thefactory were taken into custodyon 4 February, the night before ameeting arranged by theDepartment of Inspection forFactories and Establishments tonegotiate the crisis. A furtherthirty workers were dismissed on7 February. The other factoryworkers and GWTUC leadersfear that they will be arrested ordismissed.

ICTUR urged the government totake steps to ensure compliancewith international labour standards– which requires that the chargesagainst the workers and GWTUCleaders be dropped, that anyworkers still detained be released,that the dismissed workers bereinstated, and further that thedispute with the BGMEA beresolved without harassment,threats, intimidation or arbitrarydetention of workers or theirrepresentatives. ICTUR called onthe government to promptlyinvestigate the circumstancesaround these attacks, includingthe failure of the police to defendthe fundamental human rights ofthe victims.

CambodiaA series of legal actions havebeen instigated in the last fewmonths in the following cases:

• On 12 and 13 February 2018,four trade union leaders,Chhean Vannak, Moeun Chhit,Lok Neang and Phan Sary,members of the WorkersFriendship Union Federation,from the Cosmo Textile factoryin Snuol district, Kandalprovince, were arrested afterthe company claimed they hadled an illegal strike.

• Workers at the Gawon Apparelfactory in Kandal province’s

Takhmao city have been onstrike several times in the lastyear to protest unpaid salaries.In January 2018 the companybegan legal action against theCoalition of Cambodian ApparelWorkers’ Democratic Unionaccusing the union of incitementand threatening workers, whichthe union denies.

• Workers from the Meng Dafootwear factory in PhnomPenh’s Por Senchey district havebeen on strike to demand annualbonuses, unpaid since 2010. It isunderstood that in December thePrime Minister criticised thestrikers' action as ‘illegal’ due toobstruction of traffic.

• In December a criminalcomplaint was filed to thePhnom Penh Municipal Courtagainst Chea Mony, formerpresident of the Free TradeUnion of Workers of theKingdom of Cambodia(FTUWKC). It is alleged that in aradio interview in December,Mony appealed to the EuropeanUnion to stop importing clothingfrom Cambodia to protest thedissolution of the CambodiaNational Rescue Party lastNovember. He is charged withincitement, under Art. 495 ofthe Cambodian Criminal Code.The charges purport to holdMony responsible for anydamage done by the loss oftrade preferences with the EUor the US and include a claimfor USD $1million incompensation. On 18December 2017 – the day thecase was filed – a group ofunidentified men broke intoMony's house and attempted tokidnap him. Mony has reportedthat officials from the Ministryof Interior and from the courtwarned him that unless heleaves Cambodia, he will facethe same fate as his brother,Chea Vichea, the founder of theFTUWKC who was assassinatedin 2004.

• On 18 January 2018,prosecutors brought criminalcharges and an order for pre-trial detention against MoeunTola – Executive Director of theCenter for the Alliance of Labor



and Human Rights (CENTRAL) –and two other civil societyactivists (Pa Nguon Teang andBut Buntenh). They are chargedwith breach of trust over theirhandling of funeral funds,allegations they have denied.

ICTUR wrote to remind theauthorities of Cambodia’sobligations under the ILOFundamental Conventions, all eightof which the country has ratified.The prosecution against CheaMony is the most peculiar of thesecases: ICTUR is informed that thisprosecution was initiated bylawyers representing 120 differentunions and federations, including –but not limited to – unionspolitically close to the government.A significant number of‘independent’ unions alsosupported the case. While ICTURrespects that all trade unions musthave recourse to their respectivecountries’ legal systems, it is quiteclear that the burden ofresponsibility for a country’s accessto preferential trade arrangementscannot reasonably be attributed toa single individual. Any decision bythe EU or the US to suspendCambodia's access to preferentialtrade schemes will not hinge on thebasis of one individual’s commentsand any harm done to theCambodian economy as a result ofthe loss of such preferences cannotbe reasonably attributed to Mony. Itis precisely the persecution ofMony, Tola and other tradeunionists, as well as the failure torespect freedom of association,freedom of assembly and freedomof speech that ultimately makesCambodia’s loss of suchpreferences more likely.

GreeceOn December 2017,amendments were tabled inparliament – under a bill of theMinistry of Digital Policy – toraise the quorum for a validstrike ballot from 20 percent to50 percent. Due to the protestsof trade unions the amendmentwas withdrawn, only to be re-scheduled - and passed – on 15

January. This change to Greece’sstrike laws blatantly contradictsthe recommendations of theExpert Group for the Review ofGreek Labour Market Institutions(see IUR 24.1, pp11-13). ICTUR called on the Greekgovernment to implement the2016 recommendations of theExpert Group. Theserecommendations were based onILO Conventions which Greece hasratified and which are binding onGreece under international law;these were based on theprovisions of the GreekConstitution (Arts. 22 § 2, 23 § 1and 23 § 2); and on Article 28 ofthe EU Charter of FundamentalRights (Art. 28). ICTUR recalls thatworkers and employers, or theirrespective organisations, have, inaccordance with Community lawand national laws and practices,the right to negotiate and concludecollective agreements at theappropriate levels and, in cases ofconflicts of interest, to takecollective action to defend theirinterests, including strike action.

KenyaOn 13 December 2017, PhyllisKandie - Cabinet Secretary,Ministry of East AfricanCommunity (EAC), Labour andSocial Protection - ordered theresignation of eleven individualsfrom their positions of tradeunion office. On the 15December, this order wasnullified by the courts. Howeverthere are concerns that themeasure was designed to targetunion leaders - in particular theSecretary General of the KenyaNational Union of Teachers(KNUT) Wilson Sossion, who wasnominated to become a memberof parliament representingworkers in August last year

ICTUR wrote to remind thegovernment of its obligationsunder international law withrespect to freedom of association,as enshrined in the 1998 ILODeclaration on FundamentalPrinciples and Rights at Work, aswell as in the Kenyan Constitution

(Arts. 36 and 41). According to theILO's Committee on Freedom ofAssociation, ‘the determination ofconditions of eligibility for unionmembership or union office is amatter that should be left to thediscretion of union by-laws andthe public authorities shouldrefrain from any interventionwhich might impair the exercise ofthis right by trade unionorganisations’ (Digest of decisionsand principles of the Freedom ofAssociation Committee of theGoverning Body of the ILO, FifthEdition, para. 405). ICTUR took theopportunity to encourage Kenya toratify ILO Convention 87.

MexicoOn 24 January 2018 QuintinSalgado – a labour activist – waskilled by a group of armed men.A week prior to his murder, it isreported that Salgado wasthreatened and beaten while onhis way to meet strikers fromTorex Gold's Media Luna mine,where approximately 600workers have been on strikesince November 2017 to demandtheir right to join the unionSindicato Nacional deTrabajadores Mineros,Metalúrgicos, Siderúrgicos ySimilares de la RepúblicaMexicana (SNTMMSSRM). Twostriking workers (Víctor andMarcelino Sahuanitla Peña) weremurdered on 18 November.

ICTUR called on the government toinvestigate the circumstancesaround these killings, and toensure that all necessarymeasures are taken by theauthorities to protect thefundamental freedoms of workersto join and form unions and totake action in defence of theirinterests. ICTUR took theopportunity of the imminentexamination of the case of Mexicobefore the United Nations’ HumanRights Council under the UniversalPeriodic Review machinery tocommunicate the details of thesecases to the UPR review. ICTURalso raised concerns about therepression of labour protests by

teachers in 2016, and the murderof a leader of the CROC union in2014 (the previous UPR review ofMexico took place in 2013).

PhilippinesICTUR is gravely concerned by aserious deterioration in thecondition of trade union rights inthe Philippines, including anumber of murders, arrests, andstatements issued by thePresident placing trade unionistsat heightened risk:

• On 18 September 2017,Reneboy Magayano, the leaderof a local plantation workers’association, was killed

• In October 2017 the PISTONtransport workers’ unionlaunched a two-day jeepneystrike. Immediately, therefollowed a series of extremelyserious violations which havebeen recorded against theleaders of that union, including:

• PISTON and the national tradeunion centre to which itbelongs, the Kilusang Mayo Uno(KMU), were ‘labelled’ as legalfronts of the Communist Partyof the Philippines, and theallegation– without evidence –that these groups were guilty ofthe crime of ‘rebellion’, whichwas made by President Dutertein public speeches andinterviews, quoted widely inlocal media;

• George San Mateo, the leader ofthe PISTON transport workers’union, reported threats andharassement since the strikeand in the wake of PresidentDuterte’s response. In December,Sa Mateo was arrested;

• On 25 October 2017, EdwinPura, the leader of a localchapter of PISTON, was shotdead in Gubat, Sorsogon.

• in December 2017 thePresident threatened to use themilitary and ‘rubber bullets’ toend the PISTON strike;

ICTUR wrote to remind thegovernment of the Philippines ofits obligations under internationallaw and noting that the rights of



workers can only be ‘exercised ina climate that is free fromviolence, pressure or threats ofany kind against the leaders andmembers of these organisations,and it is for governments toensure that this principle isrespected’. (Digest of decisionsand principles of the Freedom ofAssociation Committee of theGoverning Body of the ILO, FifthEdition, 2006, paras. 42-45).ICTUR emphasised that the arrestof trade unionists for participatingin strike action is contrary to ILOprinciples (ILO Digest, para. 672),and recalled that the Committeehas expressed ‘deep concern’ at‘stigmatisation and intimidation’by the State (Committee onFreedom of Association of the ILO,Interim Report - Report No 374,March 2015, Case No. 2254).

South KoreaIn December 2017, Lee Young-joo, former general secretary ofthe Korean Confederation ofTrade Unions (KCTU) wasarrested after leaving theheadquarters of the rulingDemocratic Party, where she hadbeen on a ten-day hunger striketo protest working timeregulations. For the two years upuntil December, Lee had beenstaying in the refuge of the KCTUoffice in order to continue heractivity as general secretary,after police issued an unlimitedarrest warrant for her role inorganising a massdemonstration on 14 November2015. It is reported that Lee wasarrested on 27 December 2017after ending her hunger strike,and taken to hospital, where shewas questioned by police. On 30December, at the request of theprosecutor, a detention orderwas issued, and she was movedto a detention centre. Han Sang-gyun, the president of the KCTU,has been held in detention sinceDecember 2015, serving a three-year sentence for leading ‘illegaldemonstrations’ in 2015.

ICTUR wrote to the authorities tocall for the release of the arrested

trade union leaders, noting that inOctober 2017, the ILO Committeeon Freedom of Association explicitlyrequested that that the Government‘take any measures in its power forthe release of Mr Han and all othertrade unionists, if any, still indetention for the organisation of the14 November 2015 demonstrationor peaceful participation therein…[and] to provide detailed informationon the charges for which the arrestwarrant against Ms Young-joo Leehas been issued’. (Report No 383,October 2017, para. 301(d) - CaseNo 3238 / Complaint date: 30 Aug16). ICTUR further observed that inApril 2017, the UN Working Groupon Arbitrary Detention found thesituation of Sang-gyun Han’contravened at least six Articles ofbinding international human rightsinstruments ratified by South Korea.

Turkey• On 6 February, Turkish anti-

terrorism police raided the houseof Ms Elif Cuhadar, in Ankara. MsCuhadar is an executivecommittee member of the tradeunion KESK (Kamu EmekçileriSendikaları Konfederasyonu).She was arrested and taken intocustody, charged with offencesrelated to her participation in apublic panel discussion in İzmirin 2014. It is understood thatother participants who had beenpresent at the event in İzmirhave also been arrested. It isfurther understood that severalmembers of the Turkey’sMedical Association werearrested in January on thegrounds that they criticisedTurkish military operations inSyria.

• On spurious ‘national security’grounds, the government againbanned a strike organised byworkers in the metal industry inJanuary. According to themetalworkers’ union BirleşikMetal İş, this is the sixth striketo be banned during the stateof emergency. It comes in themiddle of an on-going collectivenegotiation between the unionand the Turkey MetalIndustrialists’ Union (MESS),

covering 130,000 workers. Thegovernment previously bannedworkers from striking duringnegotiations with MESS in 2015and 2017.

ICTUR urged the Turkish authoritiesto immediately and unconditionallyrelease all those who have beendetained for activities carried out intheir capacities as trade unionists,and to undertake all necessarymeasures to ensure thefundamental freedoms of workersto join and form unions and to takeaction in defence of their interests.ICTUR observed that these latestincidents add to the catalogue ofconcerns around the Turkishgovernment's serious, widespreadand on-going violations of freedomof association.

www.uniglobalunion.orgOver 60 million jobs have been lost since the beginning of the financial crisis in 2008. With the addition of new labourmarket entrants over the next five years, 280 million morejobs need to be created by 2019. Half the world’s workforceare employed in precarious work and one and three jobs payless than $1.25 per day. To just maintain the status quo 1.8 billion jobs must be created by 2030.

We are seeing levels of inequality in income distribution back to the scale of the 1920s. We are living through a boom period but only for the one percent.

There is a word missing in the world of tomorrow debate –‘solidarity’. UNI Global Union and its 20 million membersstands for solidarity in action.

Stands forSolidarity

Join with us: www.uniglobalunion.orgUNI global union, 8-10 Av. Reverdil,

1260 NYON, Switzerland

As in a Shakespearian play, we are witnessing thedemise of an old king whose rule has been based onlies, deceit and misery. Those seeking to bring aboutchanges are rushing to undermine the crumblingfoundations of the King’s stronghold. They knowthey don’t have the power required for directconfrontation, having suffered decades of beingbesieged. But they do have the skills, experience andstrategy to win. Provided they act in time. There aresigns the stronghold’s walls are cracking, but theKing’s allies are rallying ready to rebuild.

In 2016, according to businessinsider.com.au,Joseph Stiglitz stated that neoliberalism was on itslast legs, the consensus surrounding it having cometo an end1. The events leading to this apparentweakness are well documented; the global financialcrises (GFC) exposed the deceit and precariousnessof neoliberalism and created the stage upon whichthe actors entered. The waves of austerity thatfollowed the GFC have been matched by therelentless exposure of growing inequity2.

For public sector unions the effects ofneoliberalism have been close to devastating. Thisfree market ideology, driven through trade andinvestment agreements and deregulation, haveresulted in the privatisation of services andinfrastructure whilst austerity measures haveresulted in the loss of job security, positions, wagesuppression and the loss of entitlements. Tax settingsfavourable to corporations were meant to ‘trickledown’ into more jobs and wealth for the community,but they never have. Instead we’re left with aneroded tax base that makes it hard to provide decentpublic services, and job insecurity and inequality arerising. For decades public sector unions have beenspeaking out about the effects of neoliberalism,however their arguments often failed to gaintraction.

With the growing exposure of inequity, andincreasing transparency of business practises,however, there is now a growing audience for analternative to neoliberalism. Indeed, there is agrowing audience for an alternative to capitalism3,4.The analogy of neoliberalism as an old king isinstructive given the evolution of the fight forgender equality has positively decreased thetolerance for sexism. Reports identify that theimpact of privatisation is greatest on women5 andthat the majority of public sector workers inAustralia are women6.

Within these contexts there is a corresponding re-awakening of the need for, and the need to protect,publically owned and run services and infrastructure.

Some public services and infrastructure inAustralia are world renowned, such as the publichealth system backed by Medicare, our universalhealth insurance system used to ensure affordable, ifnot free, access to services. A government approachto pharmaceuticals (the PBS and PAB) ensures acollective affordability of effective and efficientmedicines. Primary and secondary school educationis technically free.

But even in these examples user co-pays andcommercialisation, are seeing affordability slipping.

Indeed, privatisation and commercialisation inAustralia have seen many services and infrastructurego to the private sector or accessed through acommercial basis. Whilst the privatisation front wasopened by a Labor government, conservativegovernments have pursued it with vigour.

Privatisation examples include the sale of theCommonwealth Bank, Qantas, Telstra(telecommunications), shipping, and energygeneration and distribution. There have been majorservice-delivery privatisations which have causedhuge issues for vulnerable communities, such as theprivatisation of the Commonwealth EmploymentService and the fracturing of services to job-seekers.Commercialisation has seen free tertiary educationconvert to AUD$100,000 degrees paid throughstudent loans. Our post-GFC world has seenprivatisation back on the agenda. To use acolloquialism; we’ve just about sold off the farm.

Between 2016 and 2017 a group of public sectorunions in Australia funded a public inquiry into theeffects of privatisation. The aim of the inquiry was tolook at the impact of privatisation on communities.

The report, Taking Back Control 7, found that, forour communities, there is decreased access to publicservices and a decrease in quality when services areobtained. Our communities are struggling to enacteffective accountability when services fail whilst atthe same time those most vulnerable within oursocieties are repeatedly, and wrongly, demonised forbeing the cause of societal woes.

For public sector workers, it is seeing job lossesand loss of job security, a decrease in the buyingpower of their wages, and increased workplace stressas more is demanded from less. For some of theirunions this means fewer members and a potentialdecreasing capacity to fight.

Governments are selling revenue-makingservices, further decreasing their capacity, and havea decreasing ability to maintain effective regulatoryprocesses. It seems that governments have lost theknowledge to formulate policy and direction without



Governments are sellingrevenue-makingservices,decreasing theircapacity and theability tomaintaineffectiveregulatoryprocesses

Why unions in Australia are

looking to tax justice campaigns

Nadine Flood

is National Secretary ofthe Community andPublic Sector Union inSydney.

She is a Vice-Presidentof the AustralianCouncil of TradeUnions and is in boardand leadership roles ina range of civil societyorganisations, includingserving as co-chair ofProgress 2017 and onthe board of the Centrefor Policy Development



the assistance of external private providers. Thisproblem is worsened by years of job cuts in theAustralian Tax Office itself, which furtherundermines our ability to collect taxes and make taxpolicy. Ironically, some of the multinationalcompanies who’ve collected outsourced jobs maythemselves have paid very little tax on theiroperations in Australia.

Government budgets are tight, with manyrunning deficits. It is easy, though perhaps lazy, totherefore make the analogous reference to familybudgets and belt tightening, particularly in post-GFCeconomies. The metaphor quickly breaks down in theface of the evidentiary inequality and inequity, bothglobally and locally. It is now clear that the currenteconomic circumstances, and therefore the socio-economic well being of our communities, are aproduct of political choice, not of inevitability.

Public Sector unions have spent decades attemptingto respond to the effects of neo-liberal policies. Theyhave fought, sometimes successfully, sometimes not,wave after wave of privatisation, job losses,casualisation, wage restraint and work intensification.

A constant refrain from communities who havebeen fed the neoliberal ideology since the 1980’s,and for apologists alike, is that as a society we can’tafford quality public services; Governments are indebt, there’s no money available and we need to payfor it somehow. Privatisation is not supported inAustralia8, but it seems to be tolerated in the absenceof a viable option.

One of the key factors that are changing the viewthat there is no option is the growing exposure of taxavoidance.

In 2014 Australia played host to the G20 at a timewhen the world was increasing its focus on taxavoidance. This period saw the first timely, albeitindependent, actions of some unions and civilsociety organisations in addition to strongleadership from trade union leaders such as SharanBurrow, General Secretary of the ITUC. This rangedfrom a group of Christians staging a mock taxhaven9, Oxfam having world leaders portrayed in‘budgie smugglers’10, and a group of nursespromoting the Robin Hood Tax11. The action toarguably have the greatest impact was a report byUnited Voice, a predominately female, hospitalityand services union, and the Tax Justice Network -Australia; Who pays for our common wealth?12

The report questioned the tax practices of theAustralian Stock Exchange’s Top 200 companies(ASX200). Key findings revealed that despite theheadline corporate tax rate in Australia being 30percent, the average paid by the ASX200 over adecade was 23 percent, equating to a staggeringAUD$8.4billion lost revenue each year. A largenumber of companies appear to have paid no tax onprofits. High profile Twentieth Century Fox wasreported to have an effective tax rate of 1 percentwith an estimated AUD$1.6billion in foregone taxesannually and was found to have a high number of

subsidiaries in secrecy jurisdictions. They alonerepresented 19 percent of foregone revenue.

Their work is publically reinforced on a regularbasis. Federal legislation now requires the AustralianTaxation Office to publish an annual report on thetaxes paid by public and foreign owned entities withtotal income of $100million or more and privateAustralian companies with total income of$200million or more. The report creates the space fortax campaigners to repeatedly highlight that averageAustralians pay more tax than some companies.Increasingly the correlation between this forgonerevenue and public services is being highlighted.

Public sector unions in particular have seen theimportance of tax reform to maintaining the revenuebase that our industries rely on. Campaigning byunions such as the Community and Public SectorUnion (CPSU) working in collaboration with thinktanks and civil society organisations have seen ideassuch as the so-called ‘Buffett Rule’ brought into therealm of the politically possible (receiving cautiousendorsement even from the conservative press). In2015, the CPSU escalated its efforts to increase thepublic debate around the Buffett rule in the lead-up tothe national conference of Australia’s major progressiveparty, the Australian Labor Party (ALP), resulting in achange to the party’s policy platform. And although theBuffett rule has not yet been implemented, the ALP hasshifted its policy to more progressive taxation policiessuch that when next the government changes there willcertainly be progress made on tax.

This work has been supported through the globalexposure of tax havens and secrecy jurisdictions.Both the Panama Papers and the Paradise Papersreceived significant coverage in Australia13,14,15

increasing the pressure on politicians andgovernment agencies to act.

A campaign designed to question the taxpractices of Chevron in Australia, instigated by alabour dispute with the Maritime Union of Australia(MUA) and led by the International TransportWorkers’ Federation (ITF), generated communityoutrage, parliamentary hearings, changes tolegislation and a significant tax bill for Chevron. Thecampaigning drew attention to the deficits inresource rent taxes, comparing Australian revenueoutcomes with that of Qatar, and the structures ofsome companies within the extractive industry; thincapitalisation, profits allocated to off shoresubsidiaries and arm’s length loans. This campaignand the resultant community awareness has allowedprogressive political parties in Australia to developprogressive tax policies.

These efforts are collectively shifting the taxdebate in Australia, and tax policy reformspreviously considered too radical to be realistic arebecoming part of mainstream discussion.

But in the face of all of this, the old king’s alliesare rallying. Corporate Australia is demanding thatthe Federal government follow through on its

Unions areshifting the tax

debate inAustralia such

that radical taxreform proposals

are becomingpart of

mainstreamdiscussion




The international system of taxing companies, whichwas designed in the early twentieth century by thedeveloped world, has become obsolete in ourcurrent globalised world. These days, almost half ofworld trade takes place between parent companiesand subsidiaries of multinational companies and theservice sector represents the lion share of globalGDP. But the system of international corporate taxesstill follows rules that were set a century ago. Since2015, the Independent Commission for the Reformof International Corporate Taxation (ICRICT) haspromoting major changes of these rules.

Established by a broad coalition of civil society andconsisting of members from all continents and diversebackgrounds, the Commission aims to foster thecorporate tax reform debate at the international level,and to promote institutions appropriate for this cause.

Contrary to the high levels of internationalintegration we have reached, the internationalcorporate tax system is based on the separate entityprinciple, according to which every firm that is partof a multinational group, whether it be parentcompany or subsidiary, is treated as an independentlegal entity when it comes to paying taxes. Thisgenerates important problems in accounting andtaxation, given that the price at which a businesstransaction between two companies from the samegroup is valued, known as the transfer price, may bevery different from the value of a businesstransaction between non-related companies, a fullycompetitive price known as the arm’s length price.

In theory, the transfer prices should be similar tothe arm’s length prices. However, it is difficult, oreven impossible, to guarantee this fact. Moreover, theimportance of this problem has increased due to thegrowing proportion of intangible assets companieshave, including their intellectual property – patents,royalties, brand names, registered trademarks –, theirmanagement system and their business networks.

When transactions within the same group involvethese intangible assets, the principle of the arm’slength price does not work, since these transactionsare not comparable to others on the market. Thisstructure creates huge opportunities for tax abuses.

To this we need to add the loans between parentcompanies and subsidiaries and the way they

distribute the fixed costs of the administration ofthe multinational group. The more complex thenetwork of companies tied to the same group is, theeasier it is, therefore, to avoid paying taxes.

On top of that, it is difficult for tax authorities,even the most efficient ones, to call such transactionsand transfers into question. What this implies is that

the present focus on separate legal entities and itssystem of transfer pricing is inconsistent with aneconomy that is globalised and knowledge-based.

The abusive tax practices of many multinationalshave arisen indignation in the public eye and ledvarious governments and parliaments to investigatemany of the most emblematic corporations in theworld. The inquiries are bringing to light theaggressive tax engineering employed by the largemultinationals, as well as the tax competitioncountries enter into to attract investment.

Even more, in many cases the tax benefitsmultinationals take advantage of ‘tax holidays’,customs-free zones, investment agreements, or theacceptance of complex corporate ownershipstructures. All of these practices stem from lobbyingby corporations, and from competition betweengovernments to attract investments. The symbols oftax competition are the classic tax haven, offering lowor zero tax rates, and the extensive networks of specialeconomic zones with generous exemptions fromdirect taxation as well as various other tax advantages.

The benefits are accompanied by secrecy toprotect owners and prevent financial and regulatoryauthorities from other countries from checking thesecompanies’ balance sheets. The irony of all this isthat these offshore centres only exist because theyare tolerated by the major developed countries oreven created by them.

The leaking of the ‘Panama Papers’, the ‘BahamaLeaks’ and, most recently, the ‘Paradise Papers’ haverevealed the global scope of these networks, which areenabled and supported by a chain of banks,accounting firms and legal advisers. When tax secrecyis combined with special exemptions, this may attractand facilitates money laundering and a broad range ofillicit activities, as the ‘Panama Papers’ have shown.

In addition, as the leaks from Luxembourg andthe European debates about the tax benefits awardedby Ireland have revealed, the tax authorities ofdestination countries can adopt norms that facilitatethe shrouding of earnings and corporate structuresin secrecy.

Corporate income tax exists in every country, inlarge part as a mechanism to tax earnings that aredifficult to capture at the individual level, as a largenumber of major shareholders are residents abroador have their property registered in trusts or offshorecentres. The combination of conservative taxpolicies, the growing mobility of capital and thecompetition between countries to attract investment(and retain that of their own companies) has led tolower rates and numerous other benefits.

If multinationalspaid taxes assingle, unifiedcompanies,transfer priceswould disappear,because theirglobal assetswould beconsolidated andthey would not beable to gain orlose throughinternaltransactions

José Antonio

Ocampo is Professorand Director of theEconomic and PoliticalDevelopmentConcentration atColumbia UniversityHe is also Chair of theCommittee forDevelopment Policy ofthe United NationsEconomic and SocialCouncil (ECOSOC), andChair of theIndependentCommission for theReform of InternationalCorporate Taxation(ICRICT).

The World Needs To Revamp

International Tax Cooperation



According to World Bank data, the revenue fromcorporate income tax makes up around 8 percent oftax revenues in developed countries and 16 percent indeveloping ones, which implies this tax is ofparticular importance for the developing world. Sincethe 1980s, the statutory corporate income tax rate hasgone down from a typical level of 45 percent to 25-30percent. Furthermore, as a consequence of the varietyof exemptions awarded, the effective tax rates aremuch lower than the statutory ones. On a global level,the average corporate income tax burden is calculatedto be close to 14 percent of all declared earnings.

According to conservative calculations by theOrganisation for Economic Cooperation andDevelopment (OECD), the erosion of the tax baseand the transfer of benefits generate losses of betweenUSD 100 and 240 billion per year worldwide,equivalent to between 4 percent and 10 percent ofglobal revenue from corporate income taxes.Estimates by International Monetary Fund (IMF)researchers produce even higher amounts: a revenueloss close to USD 200 billion, or 1.3 percent of GDP,for developing countries, and between USD 400 and500 billion, or 1 percent of GDP, for OECD countries.

When corporations do not pay the taxes theyowe, governments can see themselves obligated tocut essential services to the public or raise regressivetaxes, such as VAT, leading to growing inequality inincome distribution. Moreover, the tax abuses ofmultinational corporations produce unfaircompetition with national companies, many ofwhich are small and medium-sized enterpriseswhich generate a great deal of employment.

ICRICT, which I chair, has an alternative proposalto this defective system and expounded in our 2015Declaration and in a recent report. If multinationalspaid taxes as single, unified companies, transferprices would disappear, because their global assetswould be consolidated and they would not be able togain or lose through internal transactions. In turn,all countries would obtain fiscal revenues from themultinational group in proportion to the activitiescarried out in them – that is, to the real economicactivities that take place in each territory.

This system would require reaching an agreementon how to divide taxes levied from these companiesamong the countries where they operate. Factorssuch as sales, employment and resources used couldbe used to bring this about. The experience offederal countries using similar systems at thenational level would be useful to agree on what arethe best rules in this regard.

In this system, countries could still enter intocompetition with each other by lowering corporatetaxes rates to encourage investment or reallocatingactivities, just as they do now. For this reason, ourproposal is also for countries to establish aminimum corporate tax rate of between 15 percentand 25 percent.

What will probably generate a fiery debate is whatlevel to set the minimum effective tax rate at, asseveral countries (including the USA) have adopted

or announced much lower percentages or even moregenerous reductions in the tax base. To reach aglobal agreement on a minimum effective tax rate, itwill probably be necessary to have an overarchingglobal tax body in place.

However, minimum effective tax rates could beestablished in some regions in the short term, as afirst step towards a global convergence. If countriessuch as the USA – or the members of the EU – set aminimum tax rate affecting companies operating(producing or selling) inside their territories, itwould de facto imply the introduction of a minimumglobal tax rate. In turn, developing countries coulduse the system currently implemented in Brazil, inwhich local subsidiaries are subject to minimumamounts of taxable revenue based on the grossmargins of the transactions they engage in.

So far, the international organisation that hascontributed the most to tax cooperation among itsmembers is the OECD, whose activities have beenreinforced by recent support from the G20. Its ‘BaseErosion and Profit Shifting’ (BEPS) Action Plan wasapproved in 2013, and its first agreements wereannounced in 2015. This has been an important stepin the right direction, as it initiated a country-by-country report on the profits and tax payments of thelargest multinationals, as well as facilitated theexchange of information between countries.Unfortunately, this norm will only apply to very largemultinationals and their reports will not be publiclyavailable, contrary to the essential transparency weneed. Furthermore, the plan failed to address the rootof the problem: the transfer price system. It stillallows companies to move their profits to whereverthey like to take advantage of the jurisdictions withthe lowest taxes. Global regulations continue workingagainst developing nations.

These efforts also leave the basic question ofglobal governance wide open, and particularly thelack of equal, effective and timely participation ofdeveloping countries. The OECD is not a globalorganisation, as it is made up first and foremost ofdeveloped countries. For that reason, the mainresponsibility for the issue of tax cooperation mustlie with the United Nations, by turning the currentCommittee of Experts on International Cooperationin Tax Matters into a truly global intergovernmentalorganisation, and allocating adequate resources for itto promote and improve global tax cooperation.ICRICT has also proposed that UN member statesinitiate negotiations to draft a UN convention tocombat abusive tax practices.

The Group of 77 and China presented a proposalto upgrade the UN Committee to the ThirdInternational Conference on Financing forDevelopment, held in Addis Ababa in July 2015, butmajor developed countries blocked this proposal.Nevertheless, the project continues, as the UN is theonly legitimate arena for this discussion. And toachieve that goal, civil society, and in particularlabour unions, need to press their governments tomove in that direction.

The OECD ismade up first and

foremost ofdeveloped

countries. For thatreason, the mainresponsibility forthe issue of tax

cooperation mustlie with the United

Nations, as theonly legitimate

arena for thisdiscussion

With the revelations of the Panama Papers andParadise Papers, tax justice has become a hot topicfor governments, media and NGOs. Trade unionistsshould use this emerging issue as an opportunity toremind governments of the impact tax exploitationhas on the average workers; the integral roleworkers, especially in the judiciary, tax, and customssectors, play in exposing tax exploitation; and theway in which this is inextricably tied to the need forimproved whistleblower protections.

Tax exploitation, including evasion and avoidance,increases the tax burden on average citizens,exacerbates income inequality and erodes resourcesneeded to fund essential public services and fightpoverty. When large multinational organisations andthe ultra-rich use complex tax avoidance schemes ortechniques such as tax loopholes and shellcorporations to avoid paying their fair share of taxes,they are doing so at the expense of the averageworker. This is no longer a surprise for anybody butit is unusual that those harmed by these practices (99percent of the population) do not actively react to theway in which these practices undermine basic publicservices and reduce the resources available for publicpolicies. Tax exploitation drains the pool of resourcesgovernments draw on to fund public services such astransit, infrastructure, highways, schools andhealthcare. Tax abusers take advantage of publicservices without contributing back their fare share,eroding the quality and accessibility of these services.The burden for supporting public services is thenshifted to the shoulders of the average worker.

The vital role of whistleblowersTax justice is also tied to another emerging labour

issue: whistleblower protection. Due to their positionwithin institutions, workers, specifically those in thejudiciary, tax, and customs sectors, are uniquely placedto uncover and expose tax abuses, fraud andcorruption. In fact, a recent Global Fraud Report foundthat whistleblowers were the single most effective wayto uncover fraud. In 32 percent of cases where fraudwas uncovered, an employee had blown the whistle toprovide information that facilitated an investigation. Incases where a senior or middle manager wasimplicated, that number increased to 41 percent .

Workers are on the frontline for uncovering taxexploitation, fraud and corruption. But comingforward to expose wrongdoing can come at a cost.Whistleblowers can suffer professional reprisalsincluding demotion or dismissal, as well as isolation,character defamation, imposition of hardship ordisgrace, exclusion and harassment in their

workplace. Workers’ fear of these consequences andtheir fear that they will not be protected by existinglegislation can have a significant chilling effect ontheir willingness to expose wrongdoing. In fact,research has shown that fear of reprisal is the numberone deterrent to workers blowing the whistle.

Unfortunately, this fear is well-founded: a recentsurvey of over 10,000 workers in the public, privateand non-for-profit sectors across 13 countries foundthat 36 percent of workers who observed and thenreported misconduct suffered formal retaliation.

An example of the direct tie between tax justiceand the need for strong whistleblower protectionscan be found in the recent issues surrounding theCanada Revenue Agency, the federal agency thatadministers tax laws for the Government of Canada.Starting in 2013, the government implementedsweeping austerity measures including a $250-million budget cut to the Canada Revenue Agencyover four years, resulting in a massive loss ofcapacity and institutional knowledge. Theconnection between austerity and declining taxrevenue couldn’t be more clear: austerity begetscuts, which emboldens tax evaders, which leads tomore cuts.

Around the same time, employees disclosed to thetax justice organisation Canadians for Tax Fairnessthat they were aware of corporate and politicallobbying at the higher levels of the CRA and of anunofficial quota of cases they were expected toresolve. The combined result of these two factors wasthat employees were encouraged to target simpler,less time-consuming cases and to avoid complexinvestigations into large-scale tax fraud.

Some CRA employees were concerned about thepressure on employees to move away from large-scale, high-profile investigations. However, out offear for their position, they were only able todisclose their concerns to Canadians For TaxFairness under the condition of total anonymity andcould not come forward to publicly disclose thewrongdoing they observed.

After the revelations of the Panama Papers andParadise Papers, governments around the world havedeclared their intentions to crack down on taxevasion and aggressive tax avoidance. Tradeunionists must remind their governments that, ifthey are truly serious about ending tax exploitation,they must also strengthen whistleblower protections.Financial control workers, like those at CRA, whouncover tax exploitation must feel empowered tocome forward and safe in the knowledge that theyand their jobs will be protected.



The case for tax justice as a

whistleblower protection issue

Workers are onthe frontline foruncovering taxexploitation, fraudand corruption.But comingforward to exposewrongdoing cancome at a cost

Dany Richard

is President andMadeline Rodriguez

is Researcher with theAssociation ofCanadian FinancialOfficers (ACFO-ACAF)in Ottawa

Sergio Hemsani

is InternationalRelations Secretarywith the Asociación delPersonal de losOrganismos de Control(APOC) andCoordinator with theUnión Internacional deTrabajadores deOrganismos de ControlPúblico (UITOC) inBuenos Aires

Sergio Hermansi



Protections we deserveThe specific form whistleblower protection

legislation takes will vary from jurisdiction tojurisdiction, but there are some several best practicesall trade unionists should advocate for: incomeprotection; reverse onus of the burden of proof incases of reprisal and a broad definition of the termwhistleblower.

As discussed above, workers take a significant riskwhen they agree to come forward and disclosewrongdoing. A concrete, meaningful step legislatorscan take to alleviate that stress and suffering is toensure workers receive interim relief (sometimesreferred to as ‘income protection’). Interim reliefensures that a whistleblower does not suffer furtherfinancial distress as a result of job loss, demotion orother punitive measures. It protects whistleblower’sincome as they await a new position, a transfer to anew department or the outcome of a reprisal case.

Interim relief is a widely-accepted whistleblowerprotection measures cited as a best practice by severalglobal institutions and experts, including TransparencyInternational and The Council of Europe’sParliamentary Assembly Resolution on WhistleblowerProtection. Currently whistleblower protection regimesin countries such as United States, South Korea andSouth Africa include interim relief protections.

Another way to protect workers who make adisclosure of wrongdoing and to counter the chillingeffect of fear of reprisal is to institute a reverse onusof the burden of proof in cases of reprisal. Despitethe prevalence of reprisal in cases of whistleblowing,it can be incredibly difficult to establish proof ofreprisal so long as the employer does not explicitlymention whistleblowing. Reverse onus of burden ofproof of reprisals requires that it is the respondent’sresponsibility to prove that measures taken against awhistleblower are unrelated to their disclosure.

Reverse onus of proof is a whistleblower protectionmechanism with broad support from anti-corruptioninstitutions and experts and with legal precedents inlegislation across the world. Reports prepared forPublic Services International (PSI) and TransparencyInternational (TI) call for reverse onus of proof ofreprisals, as does the G-20’s Anti-Corruption ActionPlan for the Protection of Whistleblowers.

Finally, trade unionists should advocate for abroad definition of the term whistleblower thatextends both the protections and the implications ofthe legislation beyond current, permanent, full-timeemployees.

Comparisons of whistleblower protection fromaround the world show that protections which applyonly to disclosures made by permanent employeesfall far short of the ideal. Legislators are cautionedagainst ‘loopholes’ in whistleblower legislation thatwould exclude contracted, term employees andformer employees and would not allow the mandateof enforcement bodies to extend to these individuals.

The standard definition of the termwhistleblowing cited in a report published by PublicServices International - is ‘the disclosure byorganisation members (former or current) of illegal,immoral, or illegitimate practices under the controlof their employers, to persons or organisations thatmay be able to effect action’1. It is important to notethat the all-encompassing term ‘member’ (ratherthan ‘employee’) is used, and according to thisdefinition, former organisational members are alsoto be understood as whistleblowers. The G-20 Anti-Corruption Action Plan for Protection ofWhistleblowers has also argued in favour of ‘noloopholes’ to whistleblower protection that includescontractors, temporary employees, formeremployees and volunteers.

A broad definition of whistleblower would extendnot only the protections but the force and implicationsof whistleblower legislation. This would preventcontractors, former employees and others fromstymying and refusing to participate in investigations.

Unions must engageBoth tax exploitation and whistleblower

protections are integral labour issues. Taxexploitation by large multinational corporations andthe super rich erodes the quality and availability ofpublic services and shifts the burden for supportingthese services to the average worker. When taxexploitation does occur, workers in the tax, judiciaryand customs sectors are often at the frontline foruncovering and exposing it, and they do so at greatrisk to themselves. If governments are truly seriousabout addressing tax exploitation, they must providerobust and wide-ranging whistleblower protections.Labour activists and trade unionist must remindgovernments of the importance of whistleblowerprotections and hold them to account to ensure thatthese protections are wide-ranging and effective.

For instance, PSI, together with the InternationalUnion of Control Bodies’ Workers (UITOC), theControl Bodies Workers’ Network of Argentina(UEJN, APOC and AEFIP), and the Association ofCanadian Financial Officers (ACFO), among others,have been working for many years now in thisdirection. PSI organised, with the support of the FES,an international Symposium on the Protection ofWhistleblowers, in Geneva, Switzerland, in 2017. Thesymposium dealt with the complexities of thewhistleblower situation and protection measures. Ithas become very clear that whistleblowers have acrucial role in the fight against corruption but thatthey also run risks. Participants expressed their dismayat the situation of workers who have lost their jobsand, in some cases, their lives, after denouncingcorrupt practices at their workplace. The symposium’smain message focused on the importance ofintroducing wide-ranging and uniform legislation thatprovides equal protection to all informers. This will

Trade unionistsmust remind

theirgovernments

that, if they aretruly serious

about ending taxexploitation, they

must alsostrengthen

whistleblowerprotections



only be possible if there is an international frameworkfor the effective protection of whistleblowers2.

After the Symposium, it was agreed that the PSI,together with affiliates and partners, will workproactively for the adoption of instruments and otherways to protect whistleblowers and, particularly, forthe adoption of an international instrument for theprotection of whistleblowers, especially thoseemployed by independent regulatory agencies. Thereis a petition and there have been contacts with theInternational Labour Organisation (ILO) to requestfor a labour standard that protects whistleblowers, sothey can work with independence.

In addition, PSI and affiliates are forming aninternational alliance to defend whistleblowers,especially workers in the tax, judicial and customsectors, with the aim of bringing together tradeunions, civil society organisations and other socialactors, to fight corruption and promote tax equityfrom a common platform of objectives and ActionPlan coordinated by the PSI and that includes theseworkers as well as others in the private sector.

We aim to promote the efficient management ofpublic policies through timely, efficient and sociallyuseful regulation; provide quality public servicesfunded by fair, equitable and progressive taxation;fight tax evasion and avoidance as well as tax havens;maintain institutional quality with an impartialjudiciary that is not subject to pressures orinfluences; and defend labour and trade union rightsand decent working conditions.

Both public and private sector trade unions,NGOs and civil society organisations must worktogether for this challenge and coordinate at globallevel to reach different international agencies, suchas the ILO, the UN, the OECD and others. Decentworking conditions, the economy and the quality oflife of all citizens depends on this.

Notes1 Checkmate to corruption: Making the case for a wide-ranging

initiative on whistleblower protection, available athttp://www.world-psi.org/en/checkmate-corruption-making-case-wide-ranging-initiative-whistleblower-protection

2 http://www.world-psi.org/sites/default/files/en_psi_spw_conclusions_final.pdf

which the rollback of union rights and power is asymptom- we must expand the terrain of our fights.Unions need to build broader alliances to directlychallenge corporate power. Unions need to expandour fights to encompass broader ways thatcorporations impact peoples’ lives. In the case ofChevron, the ITF’s campaign garnered huge publicand political support that would not have been thereif the focus had remained strictly on labour issues.

Tax is a vulnerability for many multinationals.The ability for multinationals to avoid taxes -whileworkers and small businesses continue to pay theirshare- is also one of the clearest examples ofcorporate power and increasing global inequality.Campaigning on specific cases of multinational taxavoidance can build solidarity between unions andwith broader social movements that also see theneed to take on corporate power.

Unions must organise in larger numbers andcontinue to fight more effectively in the workplace,but we also need to be more creative and moreaggressive and take our fights into corporateboardrooms. The growing global dominance ofcorporate power cannot be addressed on theshopfloor alone. Tax campaigns are one approach.

Notes1 Andrew Burrell, 16 August 2014, The Australian, “Maritime Union

slapped with $20m claim by Chevron”. https://www.theaustralian.com.au/national-affairs/industrial-relations/maritime-union-slapped-with-20m-claim-by-chevron/news-story/411eebcd0ff4fc12ee534ea9ebd575e1

2 Babs McHugh, 1 September 2016, ABC Rural, “Martime unions inHigh Court win over foreign oil and gas worker visas”.http://www.abc.net.au/news/rural/2016-09-01/maritime-unions-in-high-court-win-over-work-visas/7805128

3 Jamie Smyth, 18 August 2017, Financial Times, “Chevron settleslandmark Australia case on transfer pricing: Court victory could seecountry claiming back A$10bn in tax from multinationals”.https://www.ft.com/content/813fb836-83cf-11e7-a4ce-15b2513cb3ff

4 http://www.world-psi.org/en/chevrons-tax-schemes-piping-profits-out-australia

5 https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Corporate_Tax_Avoidance

6 Reports produced and the media coverage generated can be foundhere: http://www.chevrontax.info

7 David Marin-Guzman, 2 March 2017, Australian Financial Review,“Inpex strikes landmark union deal for Aussie jobs’ in return forindustrial peace”. http://www.afr.com/news/policy/industrial-relations/inpex-strikes-landmark-union-deal-for-aussie-jobs-in-return-for-industrial-peace-20170302-guotz6. MUA Media Release, 3 March2017, “2000 Australian Jobs Boost After Maritime Unions SignHistorice Work Arrangement with INPEX”. http://www.mua.org.au/2000_australian_jobs_boost

8 A specifc ITF campaign website has been removeved, but some ofthe reports and media coverage specific to the Petroleum ResourceRent Tax (PRRT) issue can be found here: http://www.taxjustice.org.au/prrt

... continued from Page 7 ...

Dany Richard

Madeline Rodriguez



promise to drop the corporate tax rate to 25 percent.This includes advertising from the Business Councilof Australia targeting cross bench politicians whoare key for getting the vote passed in the Senate. Inthe face of repeated public criticism of the tax cut17,the Government and their allies are clinging to theneoliberal mantra of trickle-down economics. Onesuch criticism appeared as an opinion piece by thegovernment owned ABC’s Chief EconomicsReporter. The piece was controversially pulled by theABC for being factually incorrect, breachingeditorial guidelines. Public outrage at the piece beingpulled saw it re-posted; without any notablechanges18. A policy approach that just a decade agowould have faced little opposition is now a talismanfor the future, with a growing number of champions.

Times are changing. There is now a growingcounter trend as private and public-sector tradeunions, and their members, in partnership with civilsociety organisations, turn their attention to thecause of austerity and inequity rather than thesymptoms. It is within this context that a group ofAustralian public-sector unions, through their globalunion federation, Public Services International, areworking together to undermine the tenants of neo-liberalism. They continue to criticise free tradeagreements and de-regulation. The People’s Inquiryinto Privatisation, and the resulting report TakingBack Control, were the first response.

One of the key recommendations in that reportwas that companies involved in tax avoidancemeasures, should be exempted from tendering torun, or buy, government services. And so, tax justicecampaigning is the next front. They recognise thatreal change in this context requires local change witha global view. They will focus on obtaining changesto Australian taxation laws and target the globalloopholes that allow billions of dollars in forgonerevenue. They will be doing so with a strong messagefor the need for quality public services, and theaffordability of a better world.

It will take a combination of work. If Stiglitz is tobe proven correct about the old king being on his last

legs. Unions and their members have a key role toplay in partnership with civil society organisations.Together they will need to generate and maintain thesocial movement that pressures progressive politiciansto implement tax justice measures. To paraphraseJohn E. Lewis; if not us then who, if not now…

Notes1 Read more at https://www.businessinsider.com/joseph-stiglitz

-says-neoliberalism-is-dead-2016-8#UrXjKsQVkj4sh6Yw.99 2 https://www.oxfam.org.au/what-we-do/inequality 3 https://www.nytimes.com/2017/06/16/opinion/sunday/sanders

-corbyn-socialsts.html 4 https://www.theguardian.com/us-news/2017/sep/02/socialism

-young-americans-bernie-sanders 5 http://www.actionaid.org/australia/privatisation-womens-rights 6 https://www.theaustralian.com.au/news/inquirer/census-2016

-where-the-private-and-public-sector-towns-are/news-story/e8721845ac32bef39155dfcd9828cee3

7 http://www.world-psi.org/en/taking-back-control 8 http://www.essentialvision.com.au/tag/opinion-of-privatisation 9 http://www.micahaustralia.org/blog/n/christians-create-mock-tax

-haven-in-brisbane-prior-to-g20-141111 10https://www.theguardian.com/world/video/2014/nov/14/protesters

-world-leaders-lifesaver-protest-oxfam-g20 11https://thesourcenews.com/2014/11/15/nurses-take-to-the-water

-to-call-for-robin-hood-tax/ 12http://pandora.nla.gov.au/pan/148721/20141007-0940/

taxjustice.org.au/wp-content/uploads/2014/09/Who-Pays-ASX-200-Full-Report.pdf

13https://www.smh.com.au/business/the-economy/australians-identified-in-panama-papers-could-be-up-for-criminal-charges-ato-20160511-goskti.html

14https://www.huffingtonpost.com.au/2017/11/05/the-australians-embroiled-in-the-paradise-papers-tax-haven-leak_a_23267530

15http://www.abc.net.au/news/2017-11-11/what-did-we-learn-from-the-paradise-papers/9138790

16https://www.smh.com.au/politics/federal/government-targets-one-nation-on-company-tax-20180318-p4z4xr.html

17https://www.theguardian.com/business/grogonomics/2017/sep/10/tax-cuts-for-the-rich-dont-help-the-rest-dont-take-my-word-for -it-ask-the-imf

18http://www.abc.net.au/news/2018-02-22/more-to-jobs-and-growth-than-a-corporate-tax-cut/9471856


ICTUR's Researcher Ciaran Cross has writtena new discussion paper, Legitimising anunsustainable approach to trade, whichexamines the incorporation of labour,environmental and sustainable developmentprovisions in the EU’s free trade agreements(FTA). The paper has been co-published withGerman NGO Powershift and several otherpartners, and is available to download fromthe Transnational Institute website(www.tni.org).

The paper examines whether the overallobjectives of these FTAs are truly compatiblewith a meaningful approach to labour rights,environmental protection and sustainabledevelopment? And if not, what are theseprovisions actually doing? Often the inclusionof labour clauses in particular seemsdesigned for little more than promoting the‘buy-in’ of trade unions to agreements thatthreaten not only jobs, but also public goodsand the environment.

Trade handbook


ICTUR IN ACTION

In 2015-16 ICTUR agreed to place renewedemphasis on engagement with the UN,seeking to make effective use of theUniversal Periodic Review and the SpecialRapporteur on Freedom of Assembly andAssociation. ICTUR submitted three papersto the UN’s Universal Periodic Review in2017 on Japan, the Republic of Korea, andGuatemala. In 2018, ICTUR has submittedpapers on labour and trade union rights inSaudi Arabia, Mexico and Nigeria:

Universal Periodic Review

Concerned in particular by the series ofrecent killings reported at the Media Lunamine, ICTUR submitted a paper to the UPRprocess concerning: the killing of tradeunionists; the repression of protests; and aseriously flawed collective bargainingrecognition system, which underlies muchanti-union violence. ICTUR highlighted thekilling of at least 12 people since 2014:

• Víctor and Marcelino Sahuanitla, two strikingminers who were killed on 18 November2017 at the Peña Torex Gold's Media Lunamine, while participating in a recognitiondispute at the mine.

• Quintin Salgado, a labour activist and formerminer who was involved in the recognitiondispute at the Media Luna mine, who waskilled on 24 January.

• The killing of eight people on 16 June 2016during protests over educational reformsorganised by the Coordinadora Nacional deTrabajadores de la Educación (CNTE). TheCNTE demonstrations were fiercelyrepressed, resulting in violence, manyarrests, and eight deaths.

• Jorge Zarco Reyes, a local leader of theVanguardia Obrera section within the CROC

Mexico: summary of ICTUR submission to UPR

national trade union body, who was shot andkilled in Tierra Blanca on 15 November 2014.

• Claudio Castillo Peña, a teacher who diedafter a violent beating by police officers on25 February 2014.

ICTUR raised the problem of Mexico’s tradeunion recognition system, under whichthousands of small and medium sized locallevel unions are said to exist only on paper, aphenomenon known as ‘ghost’ unions. Sinceonly one union can be recognised at eachworkplace, and since bargaining over payand conditions takes place at workplacelevel, there is an incentive for employers tomake agreements with these ‘ghost’ unionsin order to lock-down a trade union contractat workplaces and thus bar the possible entryof more militant or representative unions.Large numbers of workplaces are believed tohave agreements with unions that barelyexist or that would be unable to demonstratemajority worker support. A crucial argumentput forward by ICTUR was that Mexico mustreform its collective bargaining system andhonour promises it made in 2015 to ratify ILOConvention No. 98 on the Right to Organiseand Collective Bargaining (1949).

ICTUR raised the following as key concerns forlabour and trade union rights in Saudi Arabia:absolute barriers to freedom of associationand trade union rights, the limited applicationof labour rights to migrant workers, and thesituation of domestic workers.

ICTUR noted that only a highly restricted formof workers’ organisations exist in the country,in the form of ‘workers’ committees’, whichcan only exist in larger workplaces, andwhich are legally required to give copies oftheir minutes of meetings to managementand to the Labour Ministers. In practice veryfew such associations exist. ICTUR notedrecent reforms for migrant workers anddomestic workers but argued that thesituation in practice remained very poor andthat practical efforts to improve the rights ofthese workers remained an urgent priority forSaudi Arabia’s human rights compliance.

Saudi Arabia:

summary of ICTUR

submission to UPR

ICTUR also drafted a submission to the UPRprocess examining human rights in Nigeria.ICTUR’s paper emphasised concern for thekilling of at least four trade unionists since2016 - including:

• Okaye Igali (2018) of the local governmentunion NULGE in Bayalesa State, who on 9February was killed in the street during thedaytime in an apparent targetedassassination.

• Mallam Abdulmmini Yakubu (2017),Chairman of the Kogi State branch of theNon-Academic Staff Union of SecondarySchools (NASU) at the Science andTechnology Education Board (STEB), whowas killed at his home by a gunman on 1November 2017, while was involved innegotiations with the Kogi governmentregarding strike action of non-academicuniversity staff in the state.

• Aliyu Abdullahi Umbugadu and RabiuMohammad Hamza, both members of theNigerian Labour Congress (NLC), who wereshot dead by police outside the gates of

Nigeria: summary of ICTUR submission to UPR

Nasarawa State Government House, whileparticipating in a protest against an arbitrary50 percent pay cut and threats to dismissand replace striking workers.

ICTUR also raised cases of arrests of tradeunionists, impunity in these proceedings, andfailure to investigate or respond to seriousviolations. ICTUR also called for aninvestigation into the death of another tradeunionist, and noted several barriers to theexercise of trade union rights, includingsectoral and other bans on organiing, andbans on strike action. ICTUR also submittedconcerns about legal restrictions to tradeunion rights and freedom of association andcalled for greater efforts to sensitise police tointernational principles on the use of forceand firearms and on the policing of tradeunion demonstrations generally.

Following the publication of a new ModelLabour Chapter by the Friedrich EbertStiftung last year, the paper looks at thepitfalls of piecemeal attempts to attach‘model’ provisions to FTAs.

It concludes by proposing a more radicalunderstanding of how trade union rights canbe linked to FTA negotiations, which putsworkers' fundamental rights at the forefrontof this debate.


WORLDWIDE

Bangladesh AccordOver 100 fashion brands have signedup to the 2018 Transition Accord onFire and Building Safety in Bangladesh,which will come into effect when the2013 agreement expires in May thisyear. The original Accord wasdeveloped in the aftermath of the2013 Rana Plaza disaster in whichover 1,100 workers were killed. Thearbitration framework requiressignatory brands to address workersafety issues in supplier factories; itcovers some 2 million workers in over1200 factories in Bangladesh’sgarment industry.

In 2017, Industriall and UNI initiatedarbitration proceedings under theAccord against two unnamed brands.Both cases resulted in settlementsproviding substantial funds to remedyhazards identified in factories. Thedetails of the first settlement –reached in December – were notpublicly disclosed. In the second,agreed in January, the brand acceptedto pay US$2 million towardsremediation of hazards in more than150 factories, as well as US$300,000to Industriall and UNI’s Supply ChainWorker Support Fund.

Defamation law: Andy Hall caseIn March, a Bangkok court ruledagainst Andy Hall in a civil defamationsuit concerning allegations of labourrights violations at a pineapplecanning company, Natural Fruit. Thecourt ordered Hall pay the company 10million baht (euro 260,000). The rulingwas announced just days prior to apre-planned visit to Thailand by theUnited Nations Working Group onBusiness and Human Rights, whichnoted, at the conclusion of its mission,that: ‘more must be done to protectcivic space, including protectinghuman rights defenders against civiland criminal defamation law suits filedby companies to silence those whostand up for the victims of abuse’.

European Labour AuthorityIn March the EU Commissionpresented a legislative proposal for aEuropean Labour Authority (ELA),which should be established by 2019and fully operational by 2023. The ELAaims to facilitate access to

among the global trade unions. Weregret to say that with this action PSIhas lost confidence and trust in theWorkers’ Group leadership… [we]believe that an urgent discussion toaddress these issues well in advanceof the ILC 2018 and the next ILOGoverning Body is now required.’

IndonesiaAs reported in IUR Vol. 24.4, 2017witnessed mass terminations inretaliation for strike action atFreeport’s Grasberg mine in WestPapua – the second largest coppermine in the world. In February 2018,Lokataru, an Indonesian law firmspecialising in human rights, produceda damning report on the conduct ofthe company and the governmentduring the strike. The report concludesthat manifold rights violations havebeen committed and recommends theestablishment of a special committeeto help reach a settlement in thedispute, and investigations into theblocking of strikers’ access to theirhealth and banking services, as wellas into allegations of police torture.The report – Freeport’s Workers InLimbo – can be downloaded fromIndustriall’s website: www.industriall-union.org

International Women’s Day 2018On 8 March, protests and strikesaround the world were held tocelebrate International Women’s Day(IWD). Some five million workers tookto the streets in Spain to join anationwide ‘feminist strike’ intended tohighlight sexual discrimination,domestic violence, the gender wagegap and the disproportionate amountof domestic and care work carried outby women. The Spanish unionconfederations Comisiones Obreras(CCOO) and Unión General deTrabajadores (UGT) described it as ‘anunprecedented strike in our country’strade union movement’.

The WFTU marked IWD with a three-day World Working Women's Congressin Panama. Hosted by the CentralNacional de Trabajadores de Panama(CNTP), the Congress was attended bydozens of delegates from around theworld, including Vietnam, Peru, SouthAfrica, Cuba and Palestine.

information, support cooperationbetween EU countries, and mediate incases of cross-border disputesbetween national authorities or labourmarket disruptions. The EuropeanTrade Union movement cautiouslywelcomed the proposal, insisting thatthe ELA must tackle social dumping inthe EU. In a statement, Luca Visentini,the General Secretary of the EuropeanTrade Union Confederation (ETUC)commented: ‘A European LabourAuthority is clearly needed to combatcross-border social fraud. It must beabout protecting workers - not be yetanother internal market tool - andrespect national industrial relationssystems’.

IcelandIn January Iceland passed legislationrequiring employers of more than 25people to take pro-active steps todemonstrate that they are achievingpay equality. Companies that fail todemonstrate they are meeting thisobjective will be fined. This approachtakes responsibility for enforcing payequality away from the worker andplaces it into the employer to operatea fair pay system.

ILO On 22 March 2018, the ILO GoverningBody adopted a pay cut for the ILO’sprofessional staff. The pay cut for UNstaff was put forward by theInternational Civil Service Commission(ICSS) in a proposal that was widelycriticised for being based on a flawedmethodology, developed without anyconsultation with staff or unions. ILOstaff went on strike on 22 and 23March. In an open letter to theinternational trade union movement,PSI General Secretary Rosa Pavanellisaid that the fact that the Chairpersonof the ILO Workers' Group supportedthe Governing Body’s decision to adoptthe ICSS proposal was ‘troubling andunacceptable’: ‘For those whoparticipated in the [Governing Body], itwas clear that preventing or deferringthe implementation of the pay cut waspossible. An alternative text wasdiscussed, which did take intoconsideration the concerns anddemands of ILO staff… The methodand content of the actions of theWorkers’ Group leadership is the latestepisode revealing a structural lack ofcooperation, solidarity and democracy

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This year in June the InternationalLabour Conference will discuss alandmark international labour standardon ‘violence and harassment againstwomen and men in the world of work’.

Iran Workers at the Haft Tapeh sugarcompany who have been campaigningfor wages unpaid since July 2017,succeeded in securing the payment ofwage arrears in February. ICTURreported on their case last year.According to the IUF, the company hasstill not recognised the union, but thepayments represent an importantsuccess for their campaign, followingconsistent harassment by theemployer and the authorities.

South KoreaThe civil servant’s trade unionaffiliated to the KCTU has finally beenrecognised by the authorities as alawful organisation – after more than adecade during which its registrationhas been repeatedly rejected. Duringthe years in which the KoreanGovernment Employees Union (KGEU)operated without registration severalof its leaders were arrested and theunion suffered a series of violent raidsby the authorities who forced entryinto the union’s premises andconfiscated trade union property. Theauthorities long claimed that the unionhas violated Korean law requiring civilservants to remain politically neutral,while labour law provisions barred theunion from affiliating dismissed andformer officials. IUR will report in moredetail on the decision to register theKGEU and its implications for tradeunion rights in Korea in a futureedition.

ThailandHuman Rights Watch have published anew report, Hidden Chains: ForcedLabor and Rights Abuses in Thailand’sFishing Industry. Based on interviewsbetween 2015 and 2017 with nearly250 current and former workers -largely from Myanmar and Cambodia -the report details how migrant workersare not protected by Thai labour lawand do not have the rights to unionise.Under international pressure, Thailandhas in recent years introduced reformsin the fishing industry ostensibly toimprove labour regulation. The reportalleges that abuses are still ongoing,

from the protected right to organise’.Workers and activists are nowcampaigning for a Farmworker FairLabor Practices Act, which wouldextend standard workplace protectionsto farmworkers in the state.

Venezuela: ILO InquiryThe ILO’s Governing Body has decidedto appoint a Commission of Inquiryinto long-running allegations of‘interference, aggression, andstigmatisation’ directed againstFEDECAMERAS, the Venezuelanemployers’ association. IUR’s readerswill recall that a former leader of thisorganisation was installed as head ofthe coup government following theattempted overthrow of thedemocratically elected president HugoChavez in 2002 – and may besurprised to contrast this with theILO’s failure to take any such actionagainst neighbouring Colombia duringthe 2000s, during the worst anti-unionviolence anywhere, ever, whenhundreds of trade unionists were bringmurdered every year.

Working TimeUnions in Germany and the CzechRepublic have been renegotiatingworking arrangements with anincreased interest in reducing workingtime as a collective bargaining goal,backed by workers. In February, IGMetall secured workers’ the right toreduce their working time by 20percent for two years, with atemporary wage reduction. The Czechand Moravian Confederation of TradeUnions (CMKOS) are also planning toput forward demands for a collectivereduction of the working week (by 2.5hours, with no reduction in pay) in theCzech Republic in the next few years.The European Trade Union Instituterecently published a guide, The whyand how of working time reduction, byresearchers Agnieszka Piasna andStan De Spiegelaere.

In advance of the 2018 InternationalLabour Conference, the ILO has alsoprepared a General Survey concerningworking-time instruments: Ensuringdecent working time for the future.

due to failures to properly implementthe reforms, the lack of any effectiveor systematic inspection, andresistance from the industry.

United StatesA legal case with potentially hugeimplications for organised labour ispending in the US Supreme Court:Janus v ACSFME, which will determinewhether or not public sector workerswill continue to be required to pay anagency fee to unions than representthem in bargaining. If the status quo(agency fees are currently enforceable,since a 1970s ruling) is overturnedworkers will be able to enjoy thebenefits but not the costs of unionrepresentation, enjoying a so-called‘free rider’ status. This situation isalready familiar to many in Europe,where several States have no traditionof agency fees, while the EuropeanCourt of Human Rights ruled against‘closed shop’ rules that played asimilar role in other EU States. But inthe US agency shop traditions aremore deeply embedded, and publicsector trade unionists to fear a majorimpact on their funding, stability, andmembership. The Janus case is thethird major US court challenge inrecent years to agency fees in thepublic sector, however, there is seriousconcern that this time the court mayrule against the unions.

In New York State, a legal challenge tothe exclusion of farmworkers from theState Employment Relations Act,which protects the rights to organiseand collective bargaining, wasdismissed in January. The case wasfiled in 2016 after a worker at one ofNew York’s largest dairies was fired formeeting with co-workers and a unionorganiser (after hours and in aworker’s home) to discuss workplaceconditions. The claimants –represented by the New York CivilLiberties Union – argued that thestatutory exclusion of farmworkerswas racially discriminatory andcontravened the state Constitution.The state Supreme Court ruled that thestate legislature must decide on anychanges to the 80-year old statute.Rebecca Fuentes, lead organiser at theWorkers' Center of Central New York,commented: ‘it’s a shame that thejudge has decided to continue the JimCrow era exclusion of farmworkers

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Commissioner for Competition, Margrethe Vestager(the ‘Iron Lady’ of Denmark, who had already madeher mark pursuing Apple and Google). At the time ofwriting this investigation was still on-going. Ultimatelythe outcome will hopefully be a sanction forLuxembourg’s overly generous treatment ofMcDonald’s’ European intellectual property subsidiary.

We can’t predict the outcome of reviews byregulatory bodies, but the campaign to exposeMcDonald’s tax practices and behaviour towardsworkers in Europe has already made its mark,sending a clear signal that no matter how big andpowerful multinationals may be, the labourmovement can fight to hold them accountable byforging ties across borders.


Notes1 This incident on 13 August is the only case opened against South

African police after the Marikana events. 2 OECD, October 2015, Policy Brief No 3 on BEPS. Visit URL:

http://www.oecd.org/ctp/policy-brief-beps-2015.pdf (2018-03-21).3 The 22 percent average effective global tax rate is a conservative

assumption. Profit shifting from developing countries takes placewhere statutory and therefore effective tax rates are lower. See:http://businessroundtable.org/sites/default/files/Effective_Tax_Rate_Study.pdf (a study by Price Waterhouse Coopers) or https://www.pgpf.org/blog/2017/11/what-is-the-difference-between-the-statutory-tax-rate-and-the-effective-tax-rate, based on a reportfrom the US Congress. (2018-03-31)

... notes from Page 13 ...

government revenue and its rising. In 2011, forinstance, total official development assistance inflowsinto Africa amounted to USD $50 billion, comparedto $17.4 billion in 2002.

Low-income countries are reduced to a cycle ofexternal borrowing and debt service payments. Itmeans less capacity to increase public expenditure aswell as the loss of political autonomy, as aid andinternational loans often come with strings attached,such as austerity measures and neoliberalconditions. This often leads to lower wages as well ascuts to and privatisation of necessary public services.

Fighting backThis is why unions are taking up the fight for tax

justice in Africa and other developing countries. InAfrica and across the globe PSI and local unions areestablishing national tax platforms with civil societyto fight for tax justice.

In Nigeria, the Nigeria Labour Congressestablished a national platform with PSI to mobiliseunions, both in the private and public sectors, andcitizens to take action against illicit financial flowsand tax dodging. They have led rallys to the Ministryof Finance, demanding that the issue of IFFs receiveurgent attention while multinational headquartershave been occupied by protesters demanding theypay their fair share.


In 2015, six pan-African organisations, launcheda unified African campaign platform on IllicitFinancial Flows named ‘Stop The Bleeding’. In 2017,PSI and our partners launched a Global Week ofAction in the lead up to Public services day.Tanzanian unions organised young workers todemand the Tanzanian revenue authority raise thefunds for public services and in Zimbabwe unionsraised awareness in the community and demandedmore transparency in tax paid by extractives.

In Latin America trade unions from twelvecountries have formed a union network to partnerwith civil society to campaign for tax justice withyoung workers in Brazil joining the campaign andmass distributing tax justice information directly tothe public. They have trained hundreds of unionactivists, distributed movies, podcasts and onlinevideos showing how tax dodging hurts us all,organised days of action and lobbied governmentsand the UN.

As the campaign continues to grow, it’s up tounions across the world to support these calls.

Notes1 African Economic Outlook report.2 As Léonce Ndikumana, Director of the African Development Policy

Program at the University of Massachusetts showed in a recentstudy.


PublicServicesInternational

PSI is a global trade union federation representing 20million working women and men who deliver vital public services in more than 150 countries.

PSI works with our members and allies to campaign for social and economic justice, andefficient, accessible public services around theworld. We believe these services play a vital role insupporting families, creating healthy communities,and building strong, equitable democracies.

Our priorities include global campaigns for water,energy and health services. PSI promotes gender equality, workers’ rights, trade union capacity-building, equity and diversity. PSI is also active in trade and development debates.

PSI welcomes the opportunity to work co-operativelywith those who share these concerns.

Visit our website www.world-psi.org

Uniting Food, Farm and Hotel Workers

Worldwide

www.iuf.org

Building global solidarity

International Union of Food, Agricultural, Hotel,Restaurant, Catering, Tobacco and Allied Workers’

Associations

8 Rampe du Pont-Rouge, CH-1213, Petit-Lancy, SwitzerlandTel: + 41 22 793 22 33 Fax: + 41 22 793 22 38 Email: [email protected]

General Secretary: Sue LongleyPresident: Hans-Olof Nilsson

Promoting qualityeducation for all anddefending human andtrade union rights in ourunions, in our schoolsand in our societiesEI is the global union federation representing 30million teachers and education workers in 171countries and territories around the world.

To learn more, please visit: www.ei-ie.org

Education International

● ICTUR in Action● Universal Periodic Review● Worldwide union news

● ICTUR web site: www.ictur.org

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