The Southern African Catholics Bishops Conference has written an open letter to 21 mining companies operating in South Africa asking each to explain why they use tax havens. Their full letter is here and it’s worth reading. They point out, “we are not accusing companies of anything. We believe it is important for companies to provide an explanation for why they use tax havens and the roles of these subsidiary companies.” Quite so. They ask mining companies pertinent questions, such as:
- Why does the company have so many subsidiaries based in tax havens?
- What purpose do these companies serve?
- How many employees does each subsidiary employ in the country where it is incorporated?
- What tax advantages does the company receive by having subsidiaries in these tax havens?
- How is the use of tax havens consistent with the company’s corporate social responsibility policies?
- Is the company willing to report its key financial figures on a country-by-country basis in all countries where it operates, including its subsidiary companies and/or holding companies in tax havens? If not, why?
We’re sharing their press release about it:
The Justice and Peace Commission for Southern African Catholics Bishops Conference (SACBC) has today written an open letter to 21 mining companies operating in South Africa asking each to explain why it is using tax havens.
New research conducted for the SACBC Justice and Peace Commission shows that these 21 companies, which include some of the largest in the country such as Anglo American, AngloGold, Ashanti, Impala Platinum, LonMin and Petra Diamonds, all have subsidiaries in tax havens, also known as secrecy jurisdictions: these include the British Virgin Islands, Cayman Islands, Mauritius, Jersey, the Netherlands and Bermuda. The 21 companies collectively have 117 subsidiaries in such tax havens.
The SACBC Justice and Peace Commission is not accusing these companies of engaging in tax avoidance. It is the case, however, that the risk that companies generally may engage in tax avoidance is heightened by their use of tax havens and the inability of outsiders to scrutinise adequately their tax affairs. The SACBC Justice and Peace Commission is asking these 21 companies what purpose is served by having some subsidiaries in tax havens.
To take two examples:
• The Anglo American group structure includes 43 subsidiaries in tax havens (Bermuda,
British Virgin Islands, Cayman Islands, Isle of Man, Luxembourg, Mauritius and the
• Petra Diamonds is itself incorporated in Bermuda and has subsidiaries in the British Virgin
Islands, Bermuda, Jersey and the Netherlands. (ii)
Of these and other companies, the SACBC Justice and Peace Commission is asking each company how many employees these subsidiaries employ, what tax advantages the company receives by having subsidiaries in these tax havens and whether the company is willing to report its key financial figures on a country-by-country basis in all countries where it operates.
Tax avoidance and tax havens present major problems to governments seeking to maximise the resources available for public spending. Globally, tax avoidance by multinational companies amounts to hundreds of billions of dollars; one recent estimate is $500 billion.
For further information, kindly contact:
Bishop Abel Gabuza.
Phone number: 053 831 1861 or 053 831 1862 or 0825494324
i Annual Report 2016, pp.167-171,
ii Annual Report 2016, p.134, https://www.petradiamonds.com/wp-content/uploads/Petra-Diamonds-