Scandal of land grabs and tax dodging continues at expense of the world’s poor – G8 leaders must act to end hunger

During the two days of the G8 Summit, which starts today, $2.2 billion in illicit flows will have hemorrhaged from developing countries into tax havens1 and land one and a half times the size of Manhattan sold off to foreign investors2.

International agency Oxfam says the G8 must act to stop land grabs and close tax loop-holes if it is serious about tackling global hunger – and on the eve of the Summit, leaders have left themselves a lot to do.

Secretive land investments mean vulnerable communities are at risk of losing their homes and the farmlands they need to grow food, without compensation and often violently. The $2.2 billion flowing illicitly into tax havens could pay the entire education budgets of Kenya and Tanzania or help 2.5 million farmers in Indonesia provide food for themselves and their families.

Oxfam Ireland’s Executive Director Jim Clarken said: “G8 leaders have their work cut out to ensure this Summit tackles the scandals of land grabs and tax havens that are keeping poor people poor and hungry. The G8 must change the rules so that no corporation or rich individual can avoid paying their fair share of taxes, and so that no company can take land from poor families without facing repercussions.”

Stopping tax evaders

Of the estimated $18.5 trillion now hidden by wealthy individuals in tax havens, 40% is in those under the G8’s jurisdiction. This means the G8 is also responsible for 40% of the revenue ordinary people around the world are losing as a result – $66 billion in tax revenue is being lost right under the noses of the G8 countries in their tax havens.

Oxfam says that the G8 must make sure any new tax deal includes tax havens and developing countries, so that all countries can tax companies and individuals fairly to rescue struggling public budgets3. The G8 must also support a public registry of companies and trusts that will stop tax evaders, corrupt officials and the beneficiaries of illicit funds from hiding their wealth in tax havens.

Tackling land grabs

Already, G8 companies and investors have bought land in developing countries more than the size of the whole of Ireland since the year 20004. This land could grow enough food for 96 million people5. Oxfam wants the G8 to tackle land grabs by supporting the UN Voluntary Guidelines, which would protect poor communities’ land rights, and establish a Land Transparency Initiative (LTI), where investors would share details on all their land deals. The G8 can start this by regulating all companies it is linked to and ensuring that affected communities are involved and heard in the negotiations.

Clarken said: “In a world of austerity, and where inequality is getting worse and 1.2 billion people remain living in extreme poverty the G8 must take action to redress the balance and ensure that everyone has enough to eat.”

Notes to editors

  1. ^ Global Financial Integrity estimates that 44.2% of illicit financial flows are absorbed by offshore tax havens, which is the latest analysis available. This estimate was based on a list of 46 tax haven jurisdictions. (Global Financial Integrity, The Absorption of Illicit Financial Flows from Developing Countries: 2002-2006).
    The 48-hour figure was calculated on estimates of illicit financial flows for the year 2012, which is $892 billion. (Global Financial Integrity: Illicit Financial Flows from Developing Countries: 2001-2010): We divided this by 365 then multiplied by two to get to the 48 hour figure.
    This figure was then multiplied by the percentage absorbed by offshore tax havens (44.2%) to arrive at the $2.2 billion.
  2. ^ According to the Land Matrix Partnership (downloaded 10 June): Manhattan covers an area of 8,750 hectares. Between 2000 and 2013, concluded land deals by foreign investors (for all purposes) covered a land area of 33 million hectares, or 13,900 hectares every two days. This is equivalent to 1.6 times the area of Manhattan being acquired every two days.
  3. ^ This crucial sharing of information can be achieved by signing up to the existing transparency convention called the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and by making sure any new multilateral tax information exchange deal (such as FATCA) includes developing countries.
  4. ^ The amount of land is 11 million hectares, calculated from the new figures from the Land Matrix Partnership. This is a third more than the amount of Northern Ireland (1.4 million hectares) and the Republic of Ireland (7.0 million) combined.
  5. ^ According to the Land Matrix, land deals in developing countries concluded for the primary purpose of agriculture or forestry, where the primary investors are from G8 countries, cover a land area of 11 million hectares. The potential annual cereal production on acquired land was calculated by multiplying the area acquired by the average cereal yield for that country (FAOSTAT). The food energy available from this potential harvest was calculated by multiplying the potential production volume by the kcal available from one tonne of cereal in the given country (obtained by dividing the annual food energy supply by the annual food supply quantity, in both cases for cereals excluding beer – FAOSTAT). The number of people that could potentially be fed from acquired land in each country was then calculated by dividing the potential annual supply of food energy by the annualized average dietary energy requirement for people in that country (FAO food security indicators). Totals for individual deals were then summed to arrive at a global total of 96 million people potentially fed.

Contact information

Oxfam has a team at the G8 in Northern Ireland. For details and to arrange briefings or interviews, contact:

  • Lucy Brinicombe, +44 (0) 7786 110054 / lbrinicombe@oxfam.org.uk

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