SOMO report examines records of 8 extractive companies on human rights & tax avoidance (2013)

In July 2013, Centre for Research on Multinational Corporations (SOMO) published a report that analyses the tax avoidance & human rights records of 8 big extractive companies (see press release and full report "Private Gain - Public Loss: Mailbox companies, tax avoidance and human rights").  Either the parent company or "an important subsidiary" of all 8 firms is incorporated in Netherlands, according to report.  The report argues that Dutch tax and investment policy does not adequately take into account the potential human rights impacts of the companies it attracts.

According to the research, the companies or their subsidiaries “are responsible for or associated with serious human rights violations, ranging from environmental pollution damaging the health of local communities to militia violence, killings and displacements.”

Moreover, the report examines how companies use their structures and fiscal planning to avoid taxes: The 8 companies’ “structure allows for profit shifting to low-tax jurisdictions, indicating that the [they] use the Netherlands for tax planning purposes. By actively facilitating and attracting these companies, the Dutch state contributes to the loss of revenue that is economically destructive to poor countries and undermines obligations of these states in protecting and fulfilling human rights.” (See here for more information about the link between tax avoidance & human rights)

The Dutch Government has discussed the report with SOMO.  In September 2013, it issued a statement on its tax rules (available here, only in Dutch).  In response, SOMO welcomed its commitment to tackle tax avoidance at the national & international level (see SOMO's press release here).

Company responses

Business & Human Rights Resource Centre invited the following companies to respond to the report:

- Barrick Gold response [PDF]
- China National Petroleum Corporation (CNPC) declined to respond (see here for CNPC's previous response to allegations related to Shwe Gas Project)
- Freeport-McMoran Copper & Gold response [PDF]
- Glencore response (also refers to Mopani Copper Mines) [PDF]
  Additional materials submitted by Glencore:
   - submission on inquiry into link between taxation and development & Addendum [PDF]
   - comments on Mopani tax payments [PDF]
   - letter from Mopani Copper Mines Auditors [PDF]
- Oil and Natural Gas Corporation Limited (ONGC) did not respond
- Oilinvest did not respond
- Pluspetrol response [PDF]
- Trafigura response [DOC]

In addition, we also invited Mozal to respond to allegation mentioned in the report. It did not do so.

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