Katrin McGuaran SOMO 2013On 30 March, a report was published by SOMO, an independent research organisation based in Amsterdam, that detailed the tax avoidance scheme that Canadian mining company Eldorado Gold employs to move profits from its Greek mining operation through the Netherlands, thereby denying Greece urgently needed tax revenues. The report, Fool's Gold, received international attention, due in no small part to Greece's profound on-going financial crisis. We asked NUJ member Katrin McGauran, one of the authors of the report, to tell us about how the campaign came about.

There are a great many corporate tax avoidance schemes these days. What makes this one noteworthy?

True enough! In a report from 2013 we identified eight extractive industry companies who not only use the Netherlands to avoid tax in poor countries such as Sudan and Indonesia, but are also associated with human rights violations in these countries. Eldorado Gold is yet another example of this tax and human rights implication of the Netherlands. We got to know about the case when a group of Greek activists called Reinform protested in front of the mailbox company offices of Eldorado Gold in Amsterdam in solidarity with the local community in Greece that is opposing the mining operation there.The company is destroying old forests in a tourist region and open-pit gold mining is well-known to poison the environment beyond repair. Even small-scale gold mining in the area has led to a beach in the village of Stratoni, where the company is based, being closed for swimming since the 1980s. And whilst Eldorado Gold's investment is presented as a solution to the crisis by generating tax income and the negative side effects of the mining a necessary evil, they use these schemes to avoid paying taxes. One thing notable is that it was relatively transparent and simple. We could piece it together from public sources. In fact there is nothing illegal about it, at least until a court finds differently.

And of course this case is pertinent because Greece has a major budget deficit, the causes of which politicians and the mainstream media explain as largely internally created. At the same time, the Dutch finance minister, Jeroen Dijsselbloem, as chair of the European finance ministers (Eurogroup), demanded cuts in public expenditure as a precondition for Greece to receive credit, and speaks about necessary tax reforms in Greece, whilst his own country, together with Luxembourg, the second biggest tax leak for Greece, causes millions of euros of losses every year. The head of the EU Commission, Jean-Claude Jucker, was finance minister in Luxembourg at a time the country was became one of the world's biggest tax havens. To quote Eva Joly, MEP for the Green group, to call this hypocrisy is putting it mildly.

While companies, and the Dutch government, always point out these schemes are legal – firms have teams of expensive lawyers and accountants finding loopholes in tax laws – the effect is disastrous and of course you can question whether this is in fact legal – it is certainly against spirit of the law. Eroding the tax base of a country this way deprives its citizens of public resources, and that that has a huge negative impact on the quality of peoples' lives. Fundamentally it's a human rights issue.

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When the report was launched, Fool's Gold got a lot of media attention. How did you pull that off?

We are a research organisation with a mission to effect social change, and as such we work closely together with groups who actively promote progressive change or represent public interests. For this campaign, I'd like to highlight the role of Hellenic Mining Watch and The Press Project in Greece, both of who did fantastic work.

A first draft of the report was actually presented in Greece to the public and experts for comments already in November of last year. We worked on revising the report until February, but waited with the publication because our Greek partners were concerned that it would be overshadowed by the recent election and the new government's tortuous negotiations with the Troika. So, we held off a bit. Eventually the Greek partners decided that the time was right and we were very lucky to have Eva Joly, who has a long history in fighting corporate corruption and tax avoidance, agreed to speak at the panel debate in Athens, that generated a lot of media attention, too.

The timing was also dependent on an exclusive with a journalist from the big Dutch daily, NRC, who researched the story independently. They published it on Monday 30 March (Multinationals ontwijken belasting in Griekenland via Nederland). Once the other Dutch news channels saw a major daily going with the story, they jumped aboard too. That's usually how it works. Thanks to our Canadian colleagues at Mining Watch Canada, it also made the main Canadian news outlets. Among other things, they brought it to the attention of the well-known Canadian writer and activist Naomi Klein, who tweeted it to her 260k followers. That was great to see!

The big challenge with these kinds of fairly complex, arcane topics is of course framing the narrative, turning them into good news stories which are accessible to a wide public. In this case, the hypocrisy of Holland facilitating tax avoidance schemes that wreck the Greek economy while at the same time as preaching austerity to the Greeks turned out to be a very compelling narrative.

Any signals yet that the campaign has had an impact?

Well, the Dutch Lower House has scheduled a debate on tax avoidance sometime after May. So, that's promising. The European Parliament has decided to set up a special committee to investigate this type of tax dodging in Europe, that also helped a lot with the media coverage, and puts political pressure on the Netherlands to change its tax system. At the same time, neoliberal economic policies have become very deeply rooted in the Netherlands. I've spoken officials from the tax department who sincerely believe that attracting foreign investment, no matter if genuine in the sense of material economic activities, or mailbox company-related, which is a simple pass-through, is the best thing they can do for the country's economy. They simply have no idea of the destructive impact of these policies have on the rest of the world. Or they believe in the myth that international competition can ever be fair. The Dutch Ministry of Finance always responds to critique with the argument that if other countries' tax bases are being eroded, they simply need to change their own tax laws to close the loopholes. This was the respose of State Secretary of Finance's Eric Wiebe to our report. The fact that most countries in this world do not have the means to do so because of the major power imbalances that exist between corporations and poor states, or simply corruption in countries where the state represents only the interests of big business, is not relevant to them, even though it is the ordinary people, in this case in Greece, that suffer from the Dutch tax haven regime. So, it remains an uphill battle.

Photo credits: SOMO

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