Christian Aid has been campaigning to raise awareness of the billions lost to developing countries from tax evasion and avoidance by unscrupulous companies.
The campaign calls on the International Accounting Standards Board (IASB) to introduce an international country-by-country reporting standard that requires firms to report the profits made and taxes paid in every country they operate in.The IASB is a little-known, but very powerful, body based in the UK that devises the rules covering how corporations should produce their annual accounts. More than 100 governments worldwide tend to rubber-stamp its findings into law.
The IASB is part-funded by the ‘Big Four’ accountancy firms – PricewaterhouseCoopers, Deloitte, Ernest &Young and KPMG. In 2009, Christian Aid decided to directly target the Big Four with a postcard and email campaign.There is evidence to suggest that this had a significant impact, but more pressure was needed.To increase the campaign’s momentum, Christian Aid decided to target the clients of the accountancy firms – the big names in the private sector. It was hoped that their support would make it almost impossible for the IASB and the accountancy firms to say ‘no’ to country-by-country reporting. In 2010, Christian Aid contacted the CEOs of all the 100 biggest companies registered in the UK (the FTSE 100 firms), asking them to complete a confidential online survey on country-by-country reporting. Christian Aid campaigners sent ‘reminder’ emails, so that many companies did eventually respond. However, very few companies responded in support of country-by-country reporting.
The campaign has now decided to engage supporters with four FTSE companies that are well-known brands in the UK and which have subsidiaries in developing countries. Each of the four companies selected is audited by a different one of the Big Four accountancy firms. In the next stages, the campaign will be using a number of the above-mentioned campaign tools to mobilise campaigners. Campaigners will call on these companies to speak out publicly in favour of country-by-country reporting and to ask their auditor to support this new standard too. In that way, the campaign will keep up the pressure on the Big Four accountancy firms and the IASB to push for global accounting rules that will help poor countries and their citizens trace the taxes they’re owed. In this case, public campaigning will be used to positively persuade these companies to join the drive for greater tax transparency – rather than aggressively campaigning against them.The campaign is not accusing the companies of tax dodging, nor is it asking the companies to introduce country-by-country reporting unilaterally before an international standard is introduced.The whole point is to harness the immense power of some of the world’s largest MNCs to increase political pressure on the Big Four and the IASB.