Policy recommendations

  • The European Savings Directive needs to be extended by the European Member States. The automatic exchange of information should include companies and trust funds as well. This creates the opportunity to get information on MNCs as well as individuals, and it would make it more difficult to evade taxes.
  • The European Commission should be mandated to impose strict penalties on Member States which do not comply with good governance in tax matters, like the Member States that still support tax havens on their territories.
  • The European Union, on behalf of the Member States should oblige country-by-country reporting for MNCs enlisted in the EU.
  • The European Union should oblige MNCs to disclose the beneficial ownership, which would create transparency on transfers between companies, and increase the chance of ending transfer pricing.[28]

Case: Fair Taxes

01-06-2011 MEPs request for a moratorium of the European financing for mining projects

In an open letter to the Hungarian Presidency, the President of the European Council and the European Commission on EU public funding for mining
50 MEPs from 4 different groups (S&D, ALDE, the Greens/EFA and GUE/NL). request for a moratorium of the European financing for mining projects for as long as there are no bound rules and regulations.

MEP Thijs Berman says that the added value of mining projects towards development is very little. Through beneficiary tax-regimes, bad employment conditions and the harm that is done to the environment it is rarely the host country and its people that benefit from these projects. MEP Berman does not see the need of financing these projects with public funds, especially when rules and regulations are missing which should guarantee a positive outcome for the ones who need it, the poorest countries and its people.

This letter was written following the activities around the Mopani Copper Mine (MCM) in Zambia on which Fair Politics wrote a news item before. MCM sluices away profits from Zambia to avoid paying taxes. Despite these tax avoiding practices, MCM received a 48 million Euro loan from the European Investment Bank. Read the official letter here.

Fair Politics welcomes this letter by so many MEPs as it shows the commitment of MEPs to the development policy of the EU. Fair Politics hopes for a positive reply from Mr Martonyi, Mr Van Rompuy, Mr Barroso and Mr Zourek.

Fair Politics has monitored concerns of MEPs on the Mopani Copper Mine before and will keep on doing so. Below a question by MEP Jean-Luc Bennahmias (ALDE) in which also he places his concerns around the Mopani Copper Mine.
For asking this question MEP Jean-Luc Bennahmias (ALDE) is awarded one pointing our monitoring system towards the Fair Politician of the Year Award which will be awarded on June 29th.

Monitor fair: ALDE

Parliamentary question
E-005119/2011
25 May 2011
WRITTEN QUESTION, by Jean-Luc Bennahmias (ALDE)

Subject: Mopani mining project — EIB criteria for granting loans
I have been approached by Friends of the Earth and the Counter Balance coalition of NGOs, which were the co-authors of a report published in February 2011 concerning a mining project in Mopani, Zambia, that received a loan of EUR 48 million from the European Investment Bank in February 2005.
The report raises numerous questions about the project, which has had a major environmental and social impact and given rise to dubious tax practices. More specifically, the mining project has caused massive air pollution and regular water contamination and had an adverse social impact, including on employees’ working conditions, while contributing little to the Zambian budget and generating strong suspicions of tax evasion.
Bearing in mind that the EIB’s brief is to give priority to supporting projects that contribute to poverty reduction and sustainable development, that the Commission intends, as part of its Raw Materials Initiative, to ask the EIB to increase its loans to the mining sector in Africa, and that Parliament now enjoys co-decision powers in respect of the EIB’s external mandate:
1. what is the Commission’s response to the observations made in the report?
2. how does the EIB assess the economic, social, environmental and fiscal impact of the projects for which it awards loans? Are these assessments transparent and accessible to all?
3. how does the EIB carry out ex post verification of the use of its loans and the impact of co-financed projects?