International oil companies such as the U.S. giant Chevron are beginning exploration off of Liberia’s coastline. However, this new research by Global Witness and Liberian Oil and Gas Initiative (LOGI)1 suggests that while Liberia has come a long way from the devastating set of resource-financed civil wars that claimed the lives of 250,000 people between 1989 and 2003, serious governance problems persist, and the warning signs for the emerging oil sector are stark.
Curse or Cure? How oil can boost or break Liberia’s post-war recovery shows that even before a discovery is made, there are deep-seated problems in Liberia’s oil sector: government officials and at least one company have paid bribes, contracts have been awarded illegally and companies with little experience in the oil sector have received concessions.
With a crucial election upcoming in October 2011, the new Liberian government and international donors have a choice. They can reform the country’s laws and government agencies so that Liberia’s people benefit from oil. Or they can allow Liberia to continue down its present path, undermining the country’s post-war reconstruction and risking a return to the corrupt, unstable resource management that has characterized Liberia’s history. This report sets out the problems and makes recommendations for what needs to be done.
There is a lot about the world that defies explanation. But if we do know one thing it’s that the world is a complicated place. That answers aren’t always obvious. That you have to look at short-run and long-run dynamics, with the full inter-play of all the forces, to truly begin to understand why things in our world happen as they do.
The tragic famine that struck Somalia this summer is no exception to this rule, which occurred as East Africa faced one its worst droughts in 60 years, precipitated by dangerously low rainfall, depleting food supplies, and rising prices of basic necessities like grains and milk. But droughts and food shortages do not by extension lead to famines, which the United Nations conservatively will only declare when “acute malnutrition rates among children exceed 30 percent, more than 2 people per 10,000 die per day and people are not able to access food and other basic necessities.” While food shortages are, perhaps, necessary for famine, they are not sufficient. In today’s world starvation is the product of not only biological and economic forces, but political ones, too.
The draught was not confined to Somalia. In fact, food shortages are plaguing the entire Horn of Africa, which includes Kenya, Ethiopia, Sudan, and Eritrea. American officials estimate that across the region, more than 10 million people need emergency rations to survive. But the UN has declared the catastrophe an official famine in only two areas southern Bakool and Lower Shabelle, both are in southern Somalia, both are controlled by the lethal militant group, al-Shabab. There are reasons for this.
John Christensen, founder of the Tax Justice Network, a Task Force member, was profiled by the Guardian on Thursday. Bibi van der Zee writes about Christensen’s decades-long experience fighting tax evasion, talking about the impacts these illicit flows have not only on the United Kingdom, but on the developing world as well: “[T]ax avoidance is [...]
Rep. Jim Sensenbrenner (R-WI) and the U.S. Chamber of Commerce are trying to gut the world’s flagship anti-corruption legislation, but “we must stand firm in our values, our principles, and our promises,” writes Ann Hollingshead
I’m a little annoyed. I say “a little” only out of a desire to stay civil.
Today the House Judiciary committee held a hearing on the Foreign Corrupt Practices Act (FCPA), the flagship U.S. legislation that makes it illegal to bribe a foreign official. The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) have jurisdiction over the FCPA, which was unique worldwide for almost 20 years until 1997 when thirty-four OECD countries committed to put in place similar legislation. And now the House Judiciary Committee, after months of lobbying from the Chamber of Commerce, wants to “provide greater clarity” to U.S. businesses complying with the law.
I’m all for a healthy discussion about the pros and cons of certain legislation. I’m all for reform, clarification, and efficiency in our legal system. And I am absolutely in favor of intelligent discussions of how to make the FCPA work better. But this hearing wasn’t about “providing clarity.” Such a label is downright laughable. It was a one-sided conversation about dismantling the FCPA and rendering it ineffective.
Transcendent New Book Links Financial Crisis, Corruption, Crime to Offshore System
It links terrorism to the financial crisis, corporate tax evasion to Mexican drug cartels, corrupt kleptocrats in developing countries to the ruling elites in some of the biggest countries in the world. It is the very opaque offshore financial system, and it is the focus of Nicholas Shaxson‘s enlightening new book, “Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens,” which was just published in the United States this week.
Reading like a John le Carré thriller, Treasure Islands whisks you from the echelons of power in Paris to the poverty-stricken streets of Libreville, Gabon, as the notorious Elf Aquitane corruption scandal unravels in front of your eyes. You’re presented with a front-row, first-person account of the intricate web of corruption, oil money, offshore bank accounts, kleptocracy, and neo-colonialism which implicated the highest power-brokers in both major French political parties going back decades. And, thereby, Treasure Islands begins.
How could a system so corrupt and so pervasive prosper for decades unnoticed in one of the wealthiest countries in the world? One word: offshore. A complex web of tax havens, banks and their respective enablers lies at the heart of the global financial system allowing almost anyone–or anything–to get away with whatever they so choose.
PROPUBLICA/FORTUNE – GE is in a class by itself when it comes to paring its tax rate well below the top U.S. corporate rate of 35 percent – sometimes into the single digits – using an array of strategies that include hiring top tax experts from the IRS and Treasury.
NEW YORK – Even as anger over governmental corruption has exploded into protests across the Middle East, the U.S. Chamber of Commerce has been working to weaken the law that bans companies from bribing foreign officials.
Tax Research UK published a new report this weekend on the administration of the UK’s Register of Companies by Companies House, the agency responsible for it on behalf of the UK government’s Department of Business, Innovation and Skills. The report extended the review to look at the administration of corporation tax returns by H M Revenue & Customs, the UK’s tax agency. In combination these are the two main agencies with responsibility for registering and regulating companies in the UK. The Task Force on Financial Integrity and Economic Development funded the study.
The UK is an important location to study when it comes to limited companies. Firstly, it has many more limited companies than is commonplace. There were more than 2.7 million in 2009, for example – a ratio much higher at 4.5 per one hundred people than is found in Germany, France and the Nordic states, for example. Second, as the country responsible for a great many tax havens it would seem important that the UK set a clear example of good practice in the running of such a Register.
BERLIN – Oil and gas companies have improved the transparency of how they report revenues and information about anti-corruption programmes but should take bolder actions to stop corruption, according to a new report by Transparency International (TI) and Revenue Watch Institute (RWI).
LONDON – Global Witness has learned that Teodorin Obiang, the notorious son of Equatorial Guinea’s long-ruling dictator, commissioned plans to build a superyacht worth $380 million – almost three times more than his energy-rich country spends annually on health and education programs combined. This news comes amid an increasingly heated debate about how Middle Eastern dictators and their family members have enjoyed luxury lifestyles, as well as stashing their assets in foreign countries.
Last week at the World Social Forum in Dakar, Senegal, the African branch of Task Force coordinating committee member Tax Justice Network, Tax Justice Network – Africa (TJN-Africa), released the African edition of Tax Us If You Can.
As Dereje Alemayehu, chair of Tax Justice Network’s African Steering Committee, put it in a blog last week from Dakar:
This report is a clarion call to civil society and governments across Africa to stand up against the injustice of those who dodge taxes, and the response from those attending the launch was clear: this is an injustice we can no longer tolerate.
The photo, courtesy of TJN, shows Bruno Gurtner, chair of Tax Justice Network’s global Board of Directors, with Dereje Alemayehu at the launch last week.
Egypt Losses $6 Billion Per Year in Illicit Outflows; Illicit Outflows from MENA Growing Faster than Any Other Region
Reverberations from the violent protests in Tunisia are knocking on Egypt’s door. On Wednesday, the Egyptian authorities threatened “immediate” arrest for any public gatherings or protests in response to a massive march in opposition to the current leadership, President Hosni Mubarak.
“No provocative movements or protest gatherings or organizing marches or demonstrations will be allowed,” the Interior Ministry said in a statement. According to the New York Times, on Wednesday some protesters persevered as they chanted slogans at hundreds of security officers saying “You’re protecting thieves.”
It’s clear that opposition to Mubarak’s rule stems from Egyptians angered by the corruption and economic hardship that they face. The country’s official unemployment rate is over nine percent and in actuality is likely much higher as it continues to struggle with reducing poverty. Living conditions for the average Egyptian remain poor, despite the relatively high levels of economic growth the country has seen.
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