The private sector includes multinational companies (MNCs), small and medium sized enterprises, and micro-enterprises. Advocacy towards the private sector on tax justice is likely to be primarily focused on large, often foreign-owned corporations. As we saw in Chapter 1, it is MNCs that are able to secure far-reaching tax breaks from host governments as well as to structure their finances so that they get away with paying the minimum amount of tax. Of the world’s largest 150 economic entities, 95 are corporations (63.3 per cent). This gives companies both enormous negotiating power in relation to governments and a great ability to manipulate their tax liabilities.

Civil society organisations (CSOs) can target MNCs in a number of ways, for example through seeking to:

  • change the behaviour of individual companies or groups of companies, for instance through influencing their corporate social responsibility (CSR) initiatives
  • engage companies with the aim of getting them on side to lobby for regulatory standards
  • expose a company’s bad behaviour to make the case for why regulatory standards are necessary.

It is important to remember that the private sector is comprised of a range of actors – some of whom may support your agenda and will be your allies, and others who will be opposed to your agenda. There may be individuals within a company who will agree with you and can be your advocates on the inside. You may need to take an approach that exposes abusive behaviour. Whichever approach you take, it is important to think about the business case.

Can you find a way in which supporting your agenda will be beneficial to the company? Will it give them an advantage over their competitors? Or can you convince them that the reputation risk of not supporting your agenda is too high?

There are a range of tools that can be used to engage with corporates, but the choice will depend on:

  • the approach you have decided to take. Is your approach to lobby a company to voluntarily change its behaviour? Do you want to get it on side to push for regulation? Or will you mount a public campaign to expose the company’s behaviour?
  • the type of company you are seeking to engage or target. Different companies will be sensitive to different pressures. A foreign multinational requires a different approach to a locally owned company. This section focuses on engaging with MNCs.
  • where you are situated in relation to that company. Multinationals are more likely to be responsive to engagement or campaigns in their country of origin than in host countries. So southern CSOs seeking to engage or target MNCs are unlikely to make a mark on their own, as MNCs are largely accountable to their shareholders rather than the citizens in their host countries. In this case, linking up with NGOs from the MNC’s country of origin is crucial. Alternatively, southern campaigners will often find it much more productive to target their governments and call on them to regulate MNCs, rather than seeking to engage with or target their campaign directly at MNCs.

Pros and cons of regulation versus voluntary standards





All companies with certain characteristics or across a sector are obliged to change their behaviour, through mandatory regulation.

It has greater impact than individual companies changing behaviour.

It is binding and enforceable.

There’s no room for backsliding.

Depending on the type of regulation, companies can find loopholes to get around the legislation.

It may undermine efforts to change business culture from the inside.

Voluntary standards (CSR)

An individual company improves its behaviour – often in order to improve its reputation or sometimes out of genuine commitment from directors.

It can happen more quickly than regulation.

It can motivate other companies to change behaviour.

It can lead to changes in legislation if the issue becomes important for a critical mass of companies.

Voluntary approaches are often not independently audited and can sometimes be a smokescreen.

Because they’re voluntary, there’s scope for backsliding.

Research and reporting on corporate conduct

The first rule of corporate advocacy is to find out everything you can. Whichever approach you are planning to adopt to your corporate advocacy, good research on your target company will help you. A report on a company’s activities can be:

  • a highly effective way to throw the spotlight on the company, generate publicity and rouse public opinion
  • useful in direct negotiations with companies and in advocacy efforts with government and opinion-makers.

Writing a report forces you to lay out your case and document your argument. It is important that you do your research and – above all – that you are accurate. Be thorough and take the time to validate any controversial claims that you make. See Chapter 3 for detailed guidance on researching how much a company is paying in tax and to spot where tax evasion or avoidance is likely, as well as for advice on how to avoid the risk of libel.

Direct engagement with companies

Direct engagement with companies requires many of the same tools used in government lobbying (see pages 4–9 above on ‘Lobbying’).

Lobbying companies can involve identifying allies within a company with a personal commitment for change who can act as internal advocates and get the issue on the agenda of the company directors.

More often, however, senior-level engagement from companies with NGOs takes place when:

  • there is a risk to the business of not engaging: for example when the company is faced with a high-profile campaign or a large-scale boycott, or even a legal challenge from the stakeholder
  • there is an opportunity that can arise through engagement: for example limiting the risk of negative media exposure, gaining access to new markets, or reducing costs – advice from NGOs on environmental issues has often saved companies money
  • they are required to do so by law or to get finance for a project: in a minority of circumstances, such as for the extractives industries, companies may also be required to engage with NGOs in order to gain access to finance from international institutions, such as the World Bank or the International Finance Corporation, its private lending arm. For example, Equator Principles Financial Institutions18 adhere to a financial industry benchmark for determining, assessing and managing social and environmental risk in project financing, which requires companies to consult with local communities in order to understand the social and environmental effects of a project. If companies are legally obliged to engage with civil society, you need to know the preconditions for such engagements, as well as the conditions the company has agreed to in order to receive funding for its project.

NGOs and CSOs engaging directly with companies must be aware of what they are up against. Companies often have vastly superior resources at their disposal. This may enable them to draw out endless meetings or use their legal experts to defend their position and ultimately to avoid making necessary changes. There are several techniques that NGOs and CSOs can use to help them clarify the terms of engagement and ensure a more balanced process of dialogue.

TOP TIP for direct engagement with companies

  • Set and agree ground rules upfront: it’s quite common for NGOs and companies to agree to engage, but then have endless meetings without making any headway on the issues at hand. The first meeting should set the ground rules for the purpose of the dialogue, the length of any subsequent meetings, the plan of action, transparency and recording, and legal representation. You should know how the company is going to engage with you and what goal you are both working towards before you agree to any further meetings. Too often, dialogue breaks down because the rules of engagement have not been agreed on from the outset.
  • Do your homework: investigate the company before you agree to meet with its staff, so that you understand its structure, how it is regulated, how its business is faring, whether it is facing stiff competition or is making record profits. Has it confronted the issue you are campaigning on somewhere else in the world? Where do you have leverage? What does it want from engagement? Does it have a CSR policy? Northern NGOs can usually assist with this research. Often, CSR is seen as an add- on to what the company does, but increasingly it is seen as a crucial part of doing business. Can you assist this process by getting the CSR team to speak to the tax team? If you can engage directly with the tax director, it is a good indication that you are speaking to the right person who can make decisions.
  • Maximise your impact: most large companies with which you are likely to engage have probably been challenged by NGOs or unions in other parts of the world over similar issues. Opportunities for sharing information with others can strengthen campaigns. But often companies will require NGOs to sign a confidentiality agreement once a deal has been reached.
  • Seek outside representation and legal advice: make sure that you have representation from outside your organisation or community throughout the engagement process. In certain situations, the company may decide to sue your organisation or even threaten the personal safety of your staff. Enlisting someone with legal expertise to accompany you in meetings can help to reduce such risk. Do not sign a pre-engagement confidentiality agreement without seeking legal advice, as this may limit your ability to campaign on the issue or keep you from sharing your experience with people in similar situations elsewhere.
  • Facilitation and translation: an independent facilitator should be appointed who is acceptable to both parties – not someone provided by the company. They may come from the local community or be a third-party facilitator from outside the area. Translation that meets the needs of all parties should also be provided. Liaison officers from the company’s headquarters may be unable to speak the local language. Try to provide your own translator and ensure that all the relevant documents are available and cross-checked, both in the language of the company and the local language.
  • Record meetings: you must always record what has been said. Ideally, you should make a tape recording; written records don’t always give the whole picture and may be open to interpretation at a later date. Do not rely on the company, either, to keep records – provide your own resources. Companies may also insist on keeping the details of meetings confidential, but this may be to your disadvantage. Seek legal advice (see the point above on seeking outside representation and legal advice).

Corporate social responsibility and voluntary standards

Many companies today have adopted CSR codes of conduct, through which they incorporate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

NGOs can help persuade MNCs to adopt such voluntary codes of conduct and to implement business practices that incorporate commitments to behave in a responsible manner. NGOs can also act as watchdogs. They can use companies’ existing CSR codes to assess corporate behaviour and expose irresponsible behaviour to the public. They can advocate for stronger codes and enforcement where national laws and regulations are weak or non-existent.

CSR codes come in many forms, from vague declarations of business principles to detailed codes of conduct for managing a range of social issues in a supply chain. Good codes generally contain a set of overarching principles with details of what these mean in practice. Companies can develop principles themselves or they can endorse international codes.

A major problem with CSR codes remains that they are voluntary. This means that they cannot be enforced in any way. What voluntary standards can do is to set out principles for responsible corporate behaviour. What they cannot do is to prevent companies that choose to act irresponsibly from doing so. Therefore, enforceable regulation is necessary in the long term. But voluntary principles can be seen as an important first step.

However, CSR codes usually lack any reference to the payment of taxes! Indeed, MNCs are known to structure their activities and financial affairs so that they minimise the tax bill in relation to their worldwide operations. Some companies use CSR as a tax avoidance tool: they set up philanthropic foundations and use these to lower their tax bill. Other companies justify tax exemptions by explaining that they build schools or roads. However, it is the government’s role to provide public services in the general interest.

Governments rely on tax revenues to pay for the provision of social protection, infrastructure and basic services such as education and healthcare that are crucial for development. Paying taxes is a legal obligation. Public funding allows citizens to have a collective say in how resources are spent, and thus helps to build stable democracies. Companies cannot presume to take the place of public authorities and pick and choose their own charitable causes instead of paying taxes. They may contribute to a country’s development by building infrastructure and through philanthropy, but the empowerment of citizens and the building of a stable democracy require that the means to finance these public goods and services should come, as much as possible, from the government’s own resources.

Therefore, tax compliance should be an essential element in CSR. NGOs can press this point and call companies to account, urging them to include in their voluntary codes the conditions to ensure that they pay their fair share of taxes in the countries in which they operate. There are a number of CSO initiatives that are pursuing this agenda (see box below).

CSO initiatives on corporate accountability

Global Reporting Initiative
The Global Reporting Initiative (GRI) is a network organisation dedicated to the development of a worldwide sustainability reporting framework. Its G3 Guidelines19 include a performance indicator on tax that specifically stresses the need for country-by-country reporting. Companies should report ‘all company taxes (corporate, income, property, etc.) and related penalties paid at the international, national, and local levels. … For organizations operating in more than one country, report taxes paid by country.’OECD Watch
OECD Watch20 is an international network of CSOs promoting corporate accountability. OECD Watch analyses the implementation and effectiveness of the OECD Guidelines for Multinational Enterprises.

Publish What You Pay
The Publish What You Pay (PWYP)21 coalition campaigns for the mandatory disclosure of company payments and government revenues from the oil, gas and mining sectors. PWYP works with CSOs in nearly 60 countries, helping citizens of resource-rich developing countries to hold their governments to account for the revenues from their extractive industries. These are an important source of income which, when properly managed, can serve as a basis for poverty reduction, economic growth and development.

Revenue Watch Institute
The Revenue Watch Institute (RWI),22 which promotes transparent, accountable and effective management of natural resource wealth in the interest of development, also focuses on developing civil society capacity. RWI advocates that, in the interest of transparency, the contracts for oil, gas, mining and forestry sectors should all be on public record.

Although most companies do not currently include tax in their own CSR initiatives, there are a number of multilateral voluntary codes that CSOs can use as benchmarks to measure companies’ performance on tax payments and to hold them to account (see box below).

Voluntary codes on tax

The OECD Guidelines for Multinational Enterprisesoffer international guidelines on CSR. According to the OECD, the governments subscribing to the Guidelines represent all regions of the world and account for 85 per cent of foreign direct investments. The Guidelines include references to tax compliance. MNCs are urged to offer full disclosure on company data required for the correct determination of taxes, to refrain from harmful transfer-pricing practices, to refrain from seeking tax exemptions and to pay their tax liabilities on time.The Extractive Industries Transparency Initiative (EITI) is a voluntary standard in the extractives industry that aims to enhance transparency by publishing and verifying company payments, including taxes in all forms, and government revenues from oil, gas and mining. The EITI – a coalition of governments, companies, CSOs, investors and international organisations – says that around 50 of the world’s largest oil, gas and mining companies support and actively participate in the EITI process. However, the current level of compliance to the EITI guidelines varies, with not all signatories yet fully meeting the requirements. Critics suggest that it has had a limited impact on those perceived as the worst offenders in terms of corruption.

Shareholder action

Shareholder action involves existing investors in a company using their power as owners of the company to influence its behaviour.

The potential for shareholder action is growing, in particular in the global South. Stock exchanges are emerging in an increasing number of developing countries. In Africa, governments have begun to demand that subsidiaries of foreign companies, especially extractives, register with local stock exchanges. Most Asian multinationals are shareholder companies; and pensions and insurance companies, as institutional  investors, are ever more common as points of pressure.

Shareholders are the individuals or institutions who buy shares in companies that are listed on public stock exchanges. They have different powers in different countries – this may affect your choice whether to work with them. For example shareholder action in the US tends to be much more effective than shareholder actionin the UK.

Most companies allow shareholders to raise issues of concern directly at their annual general meetings. Many multinationals have adopted CSR programmes, which offer scope to raise tax compliance. A campaign to influence a company’s tax policy may also focus on institutional shareholders as a target. These often have more clout than individuals because of their large portfolios.

In addition, investor groups such as FTSE4GOOD determine criteria for companies. Many ethical investors will only invest in companies within this group – therefore getting tax on their agenda could have a real impact.

Public campaigning towards corporates

Public campaigning has been used effectively in a number of countries to mobilise public opinion and put pressure on a company to change (for example various campaigns in Europe over the past 15 years targeting exploitation in the global supply chains of major retailers and leading to changes in certain companies’ policy and practice). Negative publicity can have a direct impact on a company’s sales, on staff morale and, in some cases, even on share prices. The threat of consumer action or critical comments about corporate behaviour from politicians spell anxiety for companies. And that in turn can be an incentive for change.

Much of the public campaigning towards corporates starts with public exposure of an individual company’s alleged wrongdoing – requiring a big investment in research and investigation prior to launching the public campaign. Legal costs also have to be budgeted for, as a lawyer will need to scrutinise any text
for public consumption in order to avoid or reduce the risk of libel action by the company. Further legal costs could be incurred if the company decides to take legal action (see the section on Libel in Chapter 3). But public exposure of corporate malpractice can be very powerful (see the ActionAid case study on page 32).

Recently in the UK, some tax justice campaigners have opted for direct action in order to draw public attention to the issue of tax and directed at certain well-known companies they perceive to be dodging tax (see the UK Uncut campaign case on page 32). This direct action on the streets has received huge media coverage in UK newspapers, radio and TV and sent ripples through the entire private sector.

An alternative approach – currently being piloted by Christian Aid in the UK (see the Trace the Tax case study on page 32) – is to appeal to a company’s stated commitment to corporate social responsibility and publicly challenge the company to put this commitment into practice. Challenging a company in public – even if you are simply calling on the company to support your campaign – may well have more impact than simply engaging with the company privately – especially if the company prides itself on its CSR profile.

Expand your impact: from local to global

Campaigns often start locally but can gain momentum by going global. Look for ways to tie in the issue or problem in your area to what is happening elsewhere. Make connections with other campaigns, or with local governments or institutions tackling similar problems with the same or other corporations. Adding up all the examples can help build an international campaign to bring the company into the spotlight.

Involve the public

Remember: public campaigns can’t work without the public! The public is your target audience, not the company, so think about what information and language will generate public action towards the company. Generally, campaigners will take action if they think an injustice has been done. But bear in mind that the company will also be reading your campaign materials and may fight back with its own negative publicity about your campaign or threaten legal action to defend its name and reputation if it thinks your public allegations are false. Information should be accurate but easy to follow. People have to know exactly what actions they can take to support the campaign – whether it be boycotting a particular product, writing to company directors or staging demonstrations or stunts outside company outlets or offices (see the table on pages 22–25 above for some examples).