#Occupy Tax Havens: every company’s reputation is a target
Posted by Adriana Tayraco on Mon, Oct 24, 2011
With the Occupy Wall Street movement in full force and spreading to every major city in the world, the voices of the 99% have never been stronger. It’s been over a month since the first “occupation” took place in New York City’s financial district and although there are several sentiments being expressed through the demonstration, one thing is clear: the masses will no longer tolerate injustice.
Demonstrations are taking place everywhere from Toronto, Canada to Mumbai, India and they are fighting everything: economic inequality, unfair government protection of corporations, protection of illegal enrichment methods and more. Whether or not their tactics and demands are valid and/or realistic is no longer the question – they are educated and they know how to find information that’s been purposely hidden – like a company’s favourite tax haven. Occupy protesters, like American economist and Director of the Earth Institute at Columbia University - Jeffrey Sachs, are demanding corporations to “pay their fair share” of taxes (watch his impassioned impromptu speech here).
Recently, one of the campaigning groups, a charity called ActionAid, released an alarming report on what it calls the “addiction” of the FTSE 100 (UK’s most valuable companies) to tax havens. It took them over a year to gather information that hadn’t been made available to the public before. The findings are alarming:
- 98 of the 100 companies have subsidiaries in tax havens
- ¼ of the FTSE 100’s subsidiaries (about 8,492) are in tax havens
- The most popular tax haven is Delaware, US. where companies can remain relatively anonymous – they do not disclose who company owners are.
While they acknowledge that there is no strong evidence of tax evasion, their findings are enough to stain a company’s reputation. Peter Truesdale, associate director of business advisory firm, Corporate Citizenship includes "And that is because there is a clean word, that people understand - 'transparency'. If your affairs are not transparent, why should I trust you? People think someone has something to hide."
The definition of what a “tax haven” is has been diluted. It means completely different things to governments, MNCs, NGOs and citizens. A tax specialist in London told BBC.co.uk that “The public debate tends to be black and white, emotive and headline-grabbing - in reality it's a much more complicated problem”. That is exactly the problem many companies are facing during the Occupy movement – collective anger is being unleashed and many are worried that this frustration could blossom into an anti-consumerism movement where companies who are doing legal business in tax havens will be wrongfully accused and see their reputation damaged.
If you have followed the Occupy movement, you will know that their social media presence is extremely organized and well timed. They have used all of the online tools available to communicate and spread their message to every corner of the world. They have done the same to smear the reputation of countless of companies and institutions who do not follow their ideology. They are using social media to provoke action, and as with anything viral on the internet, once it’s out there then it is out of their control. Here’s where having an Online Reputation Management Plan can keep you afloat.
Groups like ActionAid will continue to investigate on the wrongdoings of MNCs and the 99% will make sure this information is shared. David McNair, senior economic justice adviser at the charity Christian Aid tells us that the reason for these recent upraisings is simple “We are facing austerity, governments are cutting basic services, if companies are getting away with escaping tax, this may be legal but it's unfair."
Read on how having a Reputation Management Plan and a Social Media Policy can help you avoid being wrongfully targeted online by clicking here.
