Commodities giant GlencoreXstrata must open up its finances to public scrutiny to help reassure investors, governments and citizens about its international tax affairs, Christian Aid said on Friday. The charity’s call comes as Glencore prepares to hold its third AGM in a theatre in Zug, Switzerland, on Tuesday, 20 May.
The company has faced continuing controversy around allegations that its Zambian subsidiary Mopani Copper Mines evaded tax in Zambia, one of the world’s poorest countries – a charge it denies.
“To reassure everyone that it is paying its taxes and lead the way for other multinationals, Glencore should reveal information including the profits it makes and the taxes it pays separately for each country in which it does business,” said Joseph Stead, Christian Aid’s Senior Economic Justice Adviser.
‘This is an accounting standard, known as country-by-country reporting, which we urged Glencore to adopt three years ago. Doing so would help governments, investors and the public to tell whether it is paying its fair share of tax in all the countries where it actually does business.’
Christian Aid’s demand for openness comes a week after the charity published an investigation of secrecy among FTSE100 companies including GlencoreXstrata. The report, FTSEcrecy, found that the most secretive sector in London’s stock exchange was mining, followed by oil and gas.
The report is the result of the charity’s investigation into how much information is available about FTSE100 companies’ nearly 30,000 subsidiaries. More than 6,000 of them revealed no basic financial information at all, while only patchy data was available on many others and then only on payment of a fee. Christian Aid concluded that secrecy has created ‘a black hole at the heart of the FTSE100’.
Allegations of tax evasion against Glencore’s Zambian subsidiary Mopani Copper Mines triggered an investigation by the European Investment Bank, which had lent US$50 million to Mopani. However the Bank has so far refused to publish its report.
Christian Aid has complained to both the Bank and the European Ombudsman about the Bank’s refusal and the Ombudsman is now investigating the matter. In April, Christian Aid and other organisations including Oxfam International, Friends of the Earth France, Counter Balance and Eurodad wrote to the Bank, urging it to think again.
Swiss-based commodity traders such as GlencoreXstrata are the subject of Swissploitation, research published by Christian Aid in 2013. The study suggests that poor countries are losing billions as a result of the way commodities are priced.
This appears to be engineered so that profits accumulate in low-tax Switzerland, rather than in the source countries.
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