Tax Transparency of Extractive Industries welcomed
The agreement was passed without any exemptions, highly contentious in negotiations, as companies claimed that in some countries they would have to break national criminal laws which prohibit the disclosure of such information.
11th April 2013
11th April 2013
Issued by: Just Forests
Forest Campaigning Group Welcomes EU Step Toward Tax Transparency of Extractive Industries
Irish Charity, Just Forests, today welcomed a landmark EU agreement on greater tax transparency in the extractive industries sector.
While the agreement is modelled on the ‘Cardin-Lugar’ amendment of the 2010 U.S. Dodd-Frank Act, which will require European public and private oil, gas, mining companies, to publish what they pay the governments of ‘resource-rich’ nations around the world for their natural resources, this EU legislation goes beyond the US version by including logging companies as well.
“This is a most welcome initiative and will greatly enhance the new EU Timber Regulation (EUTR) which deals with illegal-logging and which became law on 3rd March 2013. This law places responsibility on EU timber importers to put ‘due-diligence’ procedures in place to ensure their timber and wood-based products are both legal and sustainable”, according to Tom Roche of Just Forests.
Roche goes on to say, “The report "Green Carbon, Black Trade" released by UNEP and INTERPOL on 27 September 2012 reveals that contrary to recent beliefs, the international illegal timber trade persists unabated at an annual value of 30 billion USD or more. The global timber scam has just taken on new forms as illegal logging syndicates employ increasingly sophisticated methods of log laundering and tax fraud. Illegal timber trade is so pervasive that it could offset the impact of the REDD scheme.”
Nessa Ní Chasaide of Debt and Development Coalition Ireland said, “While the agreement does not go far enough in terms of industries covered, or levels of information disclosure required, it is welcome that the Irish Government has succeeded in taking Europe a step toward greater tax transparency during its EU Presidency.”
Through obliging companies to report at a project level in addition to government level, and on all payments over €100,000, the agreement will expose whether companies are paying their fair share of tax for the resources they extract, and help citizens in resource-rich countries, like Nigeria and the Democratic Republic of Congo, to hold governments to account for their use of natural resource revenues relating to projects in their communities.
Ms Ní Chasaide continued, ”We must build on this momentum for tax justice. The next step should be to extend this agreement to focus on a greater number of industries that have a major impact on developing country economies, such as telecommunications and construction. And fight for disclosure of more financial information such as production or sales volumes, numbers of employees and profits.”
The agreement was passed without any exemptions, highly contentious in negotiations, as companies claimed that in some countries they would have to break national criminal laws which prohibit the disclosure of such information. However, companies did not provide any such examples and EU member states finally agreed to remove that exemption which would have been a massive loophole.
The text will be adopted by the Parliament and the Council in the coming months.
For further information on forest/timber matters contact:
Tom Roche, Coordinator, Just Forests, 0469 737545, 086 8049389 email@example.com http://www.justforests.org/development-education-blog
Notes to the editor:
The importance of the world’s forests to global efforts to reduce carbon emissions and fight poverty cannot be underestimated. While living forests are vital to reducing carbon in our atmosphere, deforestation accounts for an estimated 17 per cent of global carbon emissions – around 1.5 times greater than those from all the world’s air, road, rail and shipping traffic combined.
‘When Ireland’s tropical timber imports are aggregated over the last 50 years, they represent a sizeable area of forest destruction. For example, to produce the country’s (1996) imports on a sustainable basis would require an area of natural forest some 200 times the size of the Phoenix Park in Dublin. In 2000, Ireland’s trade in tropical hardwoods increased by 140% in value over the 1999 figure. Levels of consumption have made Ireland one of the highest per capita consumers of tropical hardwoods in the EU.’ TEAK 21. http://www.justcarbon.net/just_carbon/Why_Phoenix_Park.html
For further information on tax justice contact:
Nessa Ní Chasaide, Coordinator Debt and Development Coalition Ireland, 01 6174835, 087 7507001 firstname.lastname@example.org <x-msg://email@example.com> ; http://www.debtireland.org <http://www.debtireland.org/>
An analysis of the strengths and weaknesses of the agreement can be found at the European Network on Debt and Development (Eurodad), of which Debt and Development Coalition is a member: http://eurodad.org/1545087/
A Debt and Development Coalition Ireland commissioned report on Ireland and international tax justice: Killian, Sheila, Driving the Getaway Car? Ireland, Tax and Development, March 2011, can be found here: http://www.debtireland.org/download/pdf/driving