activism corporate responsibility

The tax haven secrets of the FTSE 100

Did you think BP was a British oil company? There’s a good reason why they’re just called ‘BP’ now, and are only formerly known as British Petroleum – there’s not much British left about the company.

BP is a global conglomerate of 1,568 subsidiary companies. Of those, 276 of them are registered on the British mainland. So where else can BP be found?

Well, 364 companies are registered in Delaware, a small inland US state not noted for its oil prospects. Among the companies there are Amoco Japan, Arco British International, BP Egypt, and Burmah Castrol. Korea Energy Investments and 72 others are registered in the Netherlands. A further 21 companies are found in the Bahamas – Arco Denmark is sunning itself here. Greater Pacific Limited is registered in Bermuda, which is a little ironic given that Bermuda is in the middle of the Atlantic.

Is it just me, or are some of those companies a long way from home?

What Delaware, the Netherlands, Bermuda and the Bahamas have in common is that they are tax havens. 34% of BP’s subsidiary companies are based in these offshore territories, depriving both developed and developing countries of tax income, and obscuring lines of accountability. No doubt it’s all in the name of shareholder value, but it’s socially irresponsible and morally dubious.

That’s one example of the many things to discover in ActionAid’s new FTSE 100 tax haven tracker. It’s an online tool that shows FTSE 100 companies international holdings, plotting the various companies and subsidiaries on the map. It is the first time this information has been made public, despite it being a legal requirement. And as it turns out, 98 out of FTSE 100 are using tax havens.

Raise an eyebrow at Tesco’s color-coded companies in the Cayman Islands – Tesco Pink, Tesco Purple, Tesco Fuchsia. The ethical ice cream brand Ben and Jerry’s was founded in Vermont, but owner Unilever have registered it in Delaware. Famous Manchester-based television company Granada also mysteriously finds itself in Delware, for the convenience of ITV’s accounts department. Question for Rio Tinto: What is QIT Madagascar Minerals doing in Bermuda, when Madagascar could do with the tax income for its minerals?

Tax havens matter. If the government collected all of the tax that it is owed from companies and rich individuals, it wouldn’t need to make such drastic budget cuts to control the deficit. They deprive developing countries of revenues from their natural resources. They destabilise the global economy and facilitate capital flight. The G20 promised to fix the situation, but appear to have forgotten. As the next G20 gathering rolls around, it’s time to remind them that they have some loopholes to close. There’s a petition to sign here.

Tax havens are in the news today and getting plenty of attention, so well done to ActionAid, who have pressured Companies House to make this information available. The detail is in their report, Addicted to Tax Havens (pdf) which I shall read in due course.

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