Five organizations have filed a complaint against Glencore International AG and First Quantum Minerals Limited for violating the Organisation for Economic Co-operation and Development (OECD) guidelines.
In a joint statement, the Centre for Trade Policy and Development (CTPD) of Zambia, Sherpa of France, the Berne Declaration of Switzerland, I’Entraide Missionaire and Mining watch both of Canada filed the complaint before the Swiss and Canadian National Contact Points (NCP).
The cause of the complaint lies in the financial and accounting manipulations performed by the two subsidiary companies’ of Mopani Copper Mine (MCM), in order to evade taxation in Zambia. The allegations are based on the results of a 2009 audit performed at the request of the Zambian authorities, with support from the Norwegian government, by international accountants Grant Thornton and Econ Poyry.
Among the anomalies revealed by the report, include an unexplained increase in operating costs of about 380 million United States dollars in 2007, stunning low reported volumes of extracted cobalt and manipulation of copper selling price in favor of Glencore which constitutes a violation of OECD’s arms length principle. The five associations expect the National Contacts Points (NCP’s) to formally recognize the violations of the OECD guidelines committed and ensure by all necessary means that Glencore International AG and First Quantum Minerals Ltd refund the tax money owed to the Zambia Revenue Authority (ZRA).
According to Global Financial Integrity, multinational corporations’ tax evasion, when averaged per year over the last ten years, amounts to a global net loss of 400 United States dollars to 440 billion United States dollars for developing countries. ( Tuesday 12th April 2011 )