Sunday, February 08, 2009

Director's Report to the Tax Justice Council Meeting

What follows is the text of the Report submitted by TJN International Secretariat's director, John Christensen, to the Tax Justice Council Meeting held in Belém, Brazil, on 28th January 2009:


Overview of progress since January 2007

Over the past two years tax justice has shifted from the sidelines of the development debate to the centre stage. This was clearly demonstrated at the Monterrey review conference in November 2008, when tax related issues were a predominant theme for both the negotiation processes and at side events. TJN has played a role in making this happen.

Since the 2007 Council Meeting in Nairobi, the International Secretariat has concentrated its efforts on
(i) increasing its research effort;
(ii) network development in Africa and Latin America;
(iii) working with member organisations to agree campaign priorities and prepare for campaigning effort;
(iv) strengthening communications within the network and in the international media; and
(v) coordinating advocacy effort around the Monterrey review conference in Doha and promoting the creation of an Task Force on Financial Integrity and Economic Development.

For the greater part we have achieved the goals agreed by the global Board of Directors.

Research activities

In 2007 we secured funding from the Ford Foundation to carry out a research programme called ‘Mapping the Faultlines’, which will create the largest known online database of secrecy jurisdictions. The first stage of this research is nearing completion and the online website to host this data is under construction. We expect to make a proposal for a second research phase involving policy recommendations in late 2009.

Allied to this programme is our research leading to the construction of a Financial Transparency Index, which is scheduled to be published for the first time in September 2009. This index will rank secrecy jurisdictions according to the degree of secrecy they provide to financial intermediaries and their clients, weighted according to the size of the overall offshore financial services activity that they host.

Our annual research workshop in 2008 was held at Essex University under the theme of Tax Justice, Transparency and Accountability . The papers from that workshop are available online on the Association for Accountancy and Business Affairs ‘Offshore Watch’ website. The 2009 workshop is to be held in Mexico in September under the theme of Erosion of Public Finances in Developing Countries: Illicit flows and commercial corruption.

Network development

The Network has strengthened in most European countries, with new networks under formation in Austria, Ireland, Isle of Man and Sweden. The networks in North America remain relatively under-developed, though our colleagues in the USA have been actively involved at the International level, for example through the South-South Sharing of Successful Tax Practices Initiative and through our work in the context of the UN Tax Committee (including the promotion and development of the UN Code of Conduct on International Cooperation in Combating Tax Evasion).

Tax Justice 4 Africa has organised a series of national and regional workshops over the past 24 months, and these are expected to increase in frequency as the EU and DfID programmes gain momentum. The OECD-DAC is promoting a tax agenda for African development, which we generally approve of, but it is important that civil society in Africa and other developing countries reacts to this initiative by strengthening its own capacity to monitor the progressivity of tax policies and promote regional cooperation to tackle tax evasion and tax competition.

Our priority since the start of 2008 has been to work towards the launch of a Tax Justice Network for Latin America, and the activities at the 2009 World Social Forum, plus the workshop in Sao Paulo in February 2009, followed by our annual research workshop scheduled to be held at the Autonomous National University of Mexico in September 2009, are all part of a process of bringing together researchers, practitioners, advocacy specialists and NGO campaigners to create an integrated network.

Campaign activities

Campaign activities are progressing at national, regional and global levels. At the international level our campaign priorities are currently –

- promoting an international standard for country-by-country reporting by TNCs;
- strengthening the European Union Savings Tax Directive;
- calling for public disclosure of beneficial ownership details;
- categorising tax evasion as a predicate offence under anti money laundering laws;
- promoting the UN Code of Conduct (mentioned above).

International Communications

A new communications strategy has been introduced in incremental stages over the past 24 months. Nick Shaxson has taken on the editorship of our quarterly newsletter, Tax Justice Focus, and a wider range of contributors have been invited to submit feature articles and book reviews. Nick has also been responsible for re-organising our website and for editing our blogspot, both of which have attracted a significant growth of user rates.

Our focus on the international media, and in particular on global opinion formers has generated a huge editorial coverage over the past 24 months, including comment pieces in the FT, The Guardian, a major feature on corruption in The American Interest, plus radio and television documentaries broadcast in Australia, Austria, Belgium, Canada, France, Germany, Switzerland, UK and the USA. The October 2008 edition of New Internationalist was devoted to the theme of tax justice, including an online competition for ‘artful tax dodger’ of the year, appropriately awarded to Paul Hewson, also known as Bono.

Our work on tax havens and financial architecture flaws has been covered in several docu-films, including La Grande Evasion (Fred Brunnquell, France, 2008), Let’s Make Money (Erwin Wagenhoffer, Austria, 2008) and The End of Poverty? (Philippe Diaz, USA, 2008).

In 2008 the global Board agreed a shift in our international communications strategy to prepare an outreach programme targeted at a non-specialist public. The International Secretariat is now embarked on a three-year programme to produce an integrated package of film, book, website, online briefings, YouTube videos, and an NGO support facility to do for tax justice what An Inconvenient Truth did for climate change. This programme is currently underway: a book contract has been agreed with Random House; the film is being researched by Speak-It Films (directors of Black Gold); and a website is under construction.

In addition, the International Secretariat is also working with British comedian Mark Thomas (Belching out the devil) to develop a series of YouTube videos on tax havens and the financial crisis.

International Advocacy

An over-riding advocacy priority over the past 24 months has been to use the Monterrey review conference in Doha to push the tax justice agenda to the centre stage. We have coordinated our advocacy efforts with partner organisations, including and especially Plateforme Paradis Fiscaux et Judiciaires, CIDSE, Eurodad, and UK’s BOND. Our efforts led directly to the inclusion of strong wording about the impact of tax havens on poorer countries in the Vatican’s Reflection Paper on Doha issued in November 2008. The pressure we brought to bear during the negotiations leading up to and during the Doha conference shaped the final outcome document in several ways that are favourable to global justice.

A second advocacy priority has been to persuade the Leading Group on Innovative Sources for Finance for Development to take action against capital flight and tax evasion. An intervention by the International Secretariat at the Third Plenary Session Meeting of the Leading Group in September 2007 in Seoul, South Korea, led to the creation of an inter-governmental Task Force on Illicit Financial Flows (led by the Norwegian government). That task force met regularly in Oslo in 2008 and, having agreed a framework of priority actions, has now passed responsibility for coordinating these actions to an NGO-led coalition consisting of Global Financial Integrity, Global Witness and TJN. This coordination group will work directly with the Leading Group countries and the German government’s International Tax Compact to carry out advocacy programmes related to its five agreed priorities.

In addition to the above, TJN continues its advocacy work on the strengthening of the EU Savings Tax Directive, the adoption of a UN Code of Conduct on International Cooperation to Combat Tax Evasion, and the adoption of an international standard for country-by-country reporting by TNCs. These international advocacy efforts are complemented by our advocacy work at national levels, e.g. our focus on the UK’s policy on Non-Doms; the Swiss position on banking secrecy; Jersey’s trust law, etc.

Staffing, funding and coordination issues

The International Secretariat currently consists of a John Christensen (full-time director) and Liz Nelson (part-time administrator with effect from 1st February 2009).

In addition, we have consulting relations with –
- Richard Murphy of Tax Research LLP who directs the majority of our research programmes;
- Markus Meinzer, a PhD student who has been working on the Mapping the Faultlines and Financial Transparency Index projects since March 2008;
- Nick Shaxson, based in Zurich, Switzerland, who advises on communications and edits both Tax Justice Focus and the Tax Justice Blogspot;
- and Matti Kohonen, another PhD student, who is working on network development and capacity building in Africa, Asia and Latin America.

This core team is well advised and supported by a variety of senior advisers and specialists. We have been operating at the limits of our capacity for much of the past 24 months, and the appointment of an administrator was crucial to our continuing to sustain our core activities whilst also supporting new programmes such as the EU Towards Tax Justice project.

Over the past 24 months the International Secretariat has secured funding from a variety of sources:
· John Christensen’s activities continued to be funded through a bursary provided by the Joseph Rowntree Charitable Trust. This bursary expired at the end of August 2008. A submission has been made to JRCT for further funding.
· Funding was secured from the Global Financial Integrity Program, Misereor, the Network for Social Change, and from private donors for specific projects. Core funding has been donated by Christian Aid.
· A fee was received from the Norwegian Government for preparing the Closing the Floodgates report.
· Funding was secured from the Ford Foundation to undertake research into the role of tax havens in the global financial architecture (see above).

We continue to explore new sources of funding for our activities. A sub-committee of the global Board of TJN-AISBL was created in 2007 to raise funds for TJN’s activities. Funding remains a critical risk factor for the Company. We have been successful in securing funding for most of our projects but, on the downside, progress towards building a membership base sufficient to fund the Secretariat’s core costs has been slow, and we remain over-reliant on funding from UK sources. Fundraising will be a major part of the newly appointed administrator’s responsibilities.

The International Secretariat continues to provide key professional services to the global Network and achieved its core goals in 2007 and 2008.

John Christensen FRSA
Director, TJN International Secretariat


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