Update following the “Three Ts” debate at Diocesan Synod in June

The debate in Diocesan Synod on the “Three Ts” was unusual in taking place simultaneously with the actual “Three Ts” summit itself. This paper provides a brief update on what happened at the G8 meetings and looks at ways of taking forward our responses to the issues.

Tax

What was needed? The main focus has been on increasing tax transparency – making it easier to find out who owns and benefits from companies, ensuring that countries share financial information with other countries’ tax authorities, and asking companies to report on their profits and tax payments in each country so that profit shifting (moving profits from high-tax jurisdictions to lower-tax jurisdictions to avoid paying what you owe) is more difficult.

What did the G8 leaders say? At the “Three Ts” summit Mr Cameron announced commitments from British Crown Dependencies and Overseas Territories to sign up to the OECD’s Multilateral Convention on tax. In the Lough Erne Declaration, G8 leaders recognised that tax systems are “essential to fairness and prosperity for all,” and:

·  committed to “establish[ing] automatic exchange of information between tax authorities as the new global standard,”

·  supported the OECD’s work on base erosion and profit shifting. In a triumph for the principles of country-by-country reporting, the G8 said that they would “work to create a common template” for multinationals to report “where they make their profits and pay their taxes across the world.”

·  agreed to support developing countries in tax collection and to give “access to the global tax information that they need.”

·  Agreed “to publish national Action Plans to make information on who really owns and profits from companies and trusts available to tax collection and law enforcement agencies, for example through central registries of company beneficial ownership.”

What does it mean? What didn’t they say? What’s happened since? And what issues arise?

The “Three Ts” summit and the “Lough Erne Declaration” show a lot of progress over the past year. They at least nod to most key areas in fighting tax dodging. But they are stronger on “should” than on “will” – details of implementation are often absent, as are timelines.

Since then, the Crown Dependencies have all signed automatic exchange of information agreements with the UK, but there are still serious issues around UK Crown Dependencies’ and Overseas Territories’ status as secrecy jurisdictions. On the wider front, the G20 provided some clarity on timings and implementation of initiatives announced at the G8: for example, automatic exchange of information should be standard among G20 countries by end 2015. And on October 31, the UK made a breakthrough commitment to a public registry of beneficial ownership, so that civil society, as well as authorities, can see who really owns companies. But questions remain here, too: most saliently, as the attached Christian Aid paper notes, whether/when other countries will follow the UK lead.

What can we do to campaign now that IF is over? – Attached is Christian Aid’s briefing paper. An action card is also available.

Trade

What did the G8 leaders say? The Lough Erne Declaration noted that the nature of international trade “is changing radically, with goods now increasingly produced within complex supply chains that use components from countries that span the globe.” This was, it said, an argument for driving forward “free trade based on a fair, strong rules-based trading system, protecting and promoting investments, and deepening integration.”

In support of this, it decried protectionism and promised more multilateral, regional and bilateral trade deals, hailing, inter alia, the launch of EU/US trade negotiations and the near-completion of the EU/Canada trade pact. It committed to strengthening the WTO and securing a deal on trade facilitation (making it easier to do cross-border trading) at the next WTO ministerial – and pledged “to keep our promises to help developing countries slash barriers to trade that impede growth.”

What does that mean? What didn’t they say? What’s happened since? And what issues arise?

In contrast with tax, this area offered little progress, especially for developing countries: there was nothing really new, and were issues with several of the proposals.

·  The proposed EU/US trade deals may contain highly controversial elements, most notably dispute settlement mechanisms which allow companies (but not communities) to appeal to international tribunals, and thereby constrain future governments’ domestic policy options. The same problem arises with other treaties that are concerned with foreign investment.

·  While the G8 leaders acknowledged the complexity of supply chains, they didn’t say anything about responsibility in supply chain management. Given that their companies control the majority of supply chains, it would be good to see a strong commitment to regulation ending unfair corporate trade practices.

·  The pledge to fix a WTO deal on trade facilitation didn’t include specific commitments on other WTO issues that are of particular interest to developing countries. Trade facilitation benefits developed countries, so movement on some developing-country issues would also have to occur for a deal to be agreed by the WTO as a whole.

·  While G8 leaders pledged to keep promises on aid for trade, they didn’t specify that the trade should be pro-poor. They also didn’t comment on what would happen to countries whose implementation plans for trade facilitation didn’t receive full funding, something that’s quite likely to happen, as current aid levels won’t fund all the adjustments poor countries would need to make were a deal agreed.

What can we do to campaign now that IF is over? – Take action with Traidcraft’s “GreedCo” campaign and encourage people to play their “Buyers Game,” take part in Fashion Revolution Day, engage with campaigns on trade agreements. (For details, see final section)

Transparency

What did the G8 leaders say? Recognising the importance of transparency in “empowering people to hold governments and companies to account,” the G8 leaders pledged action against money laundering, promised to “make progress towards common global reporting standards to make extractive industry payments more transparent” and to work with resource-rich countries on managing extractive revenues, welcomed processes that could lead to increased transparency in land deals, and “agreed a transformative Open Data Charter to make budget data and other government information public in an easily accessible way”

What does it mean? What didn’t they say? And what issues arise?

The progress made by the EU and US towards transparency in extractive industries has been extraordinary. Recent EU and US legislation requires companies to “publish what they pay” for resources, making it easier to trace money and fight corruption. The G8 events offered a chance for other G8 countries to pledge to enact parallel legislation and for all present to sign up to the new Extractive Industries Transparency Intiative (EITI) standard. Canada pledged to begin a process of developing an equivalent to the EU/US legislation, and the US, UK and France pledged to seek candidacy for the new EITI standard in 2014. . Other country commitments, though, were vague – and while the G8 declaration commits EU countries to “quickly implement” the EU Accounting and Transparency Directive, now signed into law, the US legislation on extractives remains mired in attacks from the petroleum industry.

Several G8 countries pledged to form partnerships with specific developing countries to improve governance on extractives and land or, in the case of Japan and Italy, to provide funding to implement the UN Committee on Food Security’s guidelines for land tenure. The G8 didn’t, however, commit to regulation that would require companies registered in G8 countries to be transparent about their activites relating to land transactions.

What can we do to campaign now that IF is over? – Tearfund’s “Secret’s Out” campaign takes forward action on extractives, while Oxfam is focusing on transparency and justice in land deals. (For details, see final section)

Our wider response

Our synod motion “draws attention to the wide range of resources for engaging with theseissues and encourages parishes to engage through discussion, reflection, prayerand action.” To help individuals and churches fulfil this, we’ve put together a “Tax, Trade and Transparency” page at http://www.oxford.anglican.org/mission-ministry/faith-in-action/global-issues/. It includes:

·  Downloadable copies of information sheets for all three issues and links to websites offering further information

·  Links to current campaign and advocacy resources, prayer material and theological reflections

We’re also interested in gathering materials from people within our churches who have expertise in these areas. If you have something you’d like to share, please email it to

The Synod debate wasn’t just about tax, trade and transparency as issues, though, it was also about how we as individual Christians and churches respond more generally to major issues that affect our brothers and sisters in Christ. How do we encourage significant discussion, prayer and action that springs from and informs the heart of our church life?

We’re also putting together opportunities and materials for churches that want to explore new ways of addressing complex issues together as a community. If you’re interested, please get in touch.