The tax justice campaign is going great guns as teams of volunteers continue their selfless work of pub crawling all over Sydney (and beyond). Using coasters and conversations we are spreading the word about nasty tax practices of the second biggest brewing company in the world, SABMiller. People all over the country are joining in the push, coasters are being sent out interstate as we speak. You can order some for your own local here.

Punters at pubs are super-keen to chat, and are eager to discover more about SABMiller’s tax dodging and what they can do about it. Smart phones are still being whipped out at drinking holes everywhere, and the action email tally is climbing.

The online push is getting lots of hype, too, and in a new step for ActionAid, we are all over several prominent beer blogs. Boutique brewers who pay their taxes aren’t happy about this either.

But SABMIller’s local operation, Pacific Beverages, has stopped responding to online letters, and we suspect they’re a tad jumpy.

Perhaps there are too many online actions, and they can’t reply fast enough. Or maybe this is a deliberate step to try and wait out our campaign and hope it all goes away.

It’s hard to say – but either way we’ve got to keep up the pressure by making this campaign turn up everywhere they look, and ensure that SABMiller continues to hear what its customers think about its tax practices.

Together we can make this huge company pay attention and change their ways.

Heading out for a drink? Order some free coasters and leave them at your local. And then make sure the company knows by plotting the pub on our ‘Better Beer Map’.

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We are taking our campaign out where it is needed most- the pubs, bars and bottle-shops.

Last weekend we had teams out in strategic locations in Sydney- ready to do the noble deed- a pub crawl for the poor.

Out we went into the wilderness of Surry Hills, Newtown and Glebe, distributing coasters and chatting about tax dodging to the “Friday drinks after work” crowd.

People were receptive of the coasters and loved the concept of sending a message about something serious in a fun way. We spoke to Peroni drinkers, tax experts, students and pub owners.

Many punters took action straight away- sending a letter to the Aussie CEO of Pacific Beverages (half owned by SABMiller) on their smart phones. We got many more letters sent, ensuring we are keeping the pressure on!

We also got to have a chat with folks about tax dodging and what it means- seriously, 250,000 extra kids could be in school if SABMiller paid it’s fair share!

Altogether our 1,000 coasters reached over 20 pubs in Sydney.  It’s tough but someone has to do it. Our volunteers will continue to be out in force and if you want to help you can distribute coasters at your local(s) too!

Order some here

and you can send a letter too! Add your voice to the call here

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So how do money-spinning giants like SABMiller avoid paying taxes?

Here are the four tricky steps of corporate tax dodging as taught by SABMiller.

Some background first…

Peroni would have you believe it’s as Italian as Roma and Ravioli, but it’s actually owned by one of the biggest multinationals in the beer business. Peroni’s owner, SABMiller:

  • Is the 2nd biggest brewer in the world and number 1 in Africa
  • Owns over 200 brands, including Grolsch, Peroni, Bluetongue, Castle and Miller
  • Makes profits of A$3.2 billion a year

SABMiller has a massive 65 tax haven companies, more than it has breweries and bottling plants in Africa. Tax havens enable the SABMiller group to use clever accounting to siphon profits out of Africa, taking desperately needed money away from poor countries.

ActionAid estimates that it is ripping off poor countries in Africa to the tune of A$32 million a year

Step 1 – Going Dutch.

Many of the ‘local’ beer brands SABMiller sells in Africa (like Castle, Chibuku and Stone) are owned in the Netherlands.

African bits of SABMiller pay millions in ‘royalties’ to Dutch bits of SABMiller for the use of these local brands. So a large chunk of the profits are officially made in the Netherlands, rather than in the countries where the beer is brewed, sold and drunk.

Estimated tax loss to African countries: A$16 million per year.

Step 2- The Swiss Role

In this second tax dodge, SABMiller’s African and Indian subsidiaries pay whopping ‘management service fees’ to sister companies, mostly in Switzerland. Once again, the profits get made, and the taxes get paid, in a tax haven rather than the developing country where the beer was produced and sold. A SABMiller employee at the Swiss office address that receives millions of dollars each year from Africa for management services told us.

The company admits that these payments are routed through tax haven companies, which contract out the services to other companies elsewhere.

Estimated tax loss in Africa and India: A$15.2 million.

Step 3- Take a Trip to Mauritius

How would you ship goods from South Africa to Ghana? Any geography student would tell you to turn right from the Cape and head up Africa’s west coast.

And that’s what happens to the raw materials Accra brewery, Ghana, imports from South Africa. But for some reason, all the paperwork takes place on the tiny island of Mauritius, 5000 miles away in the Indian Ocean. Could it be because Mauritius has such lovely beaches? Or maybe it’s because it’s a well-known tax haven.

Estimated tax loss in Ghana: up to A$1.1 million

Step 4- Thinning on Top

In this final dodge, Accra Brewery borrowed money from Mauritian subsidiary MUBEX. By offsetting interest payments against tax, less tax is paid in Ghana.

Estimated tax loss in Ghana A$121,500

Want to do something about it?

TAKE ACTION


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Paying taxes is no fun, leaving a big hole in our wallets. But it lets us enjoy a quality of life that everyone deserves – even though sometimes it means swapping our glass of premium lager for tap water.

Yet multinationals, like beer giant SABMiller, manage to avoid taxes worth millions of dollars in developing countries.

These companies profit greatly from the community. So it’s a no-brainer that they should pay their fair share of taxes.

How do they dodge tax, and how can we stop them?

ActionAid has done extensive research all over Africa and found that SABMiller, owner of global beer brands Peroni and Grolsch, siphons millions in profits out of its overseas operations into tax havens every year.

Although this tax sidestep isn’t illegal, it deprives economies of much needed tax revenues.

ActionAid has found evidence of SABMiller practicing this kind of tax dodging in Ghana, Mozambique, Tanzania, South Africa, Zambia and India.

SABMiller is the world’s second biggest brewer. This year alone they’ve pumped out an island-floating 21 billion litres of beer, with an AUD19 billion turnover. But over the last two years, they haven’t paid one Ghanaian Cedi of corporate income tax to the Ghana government at their Accra brewery.

Not one Cedi, even though they control more than one third of the country’s beer market, with Ghanaians pouring over AUD103m into the company’s coffers since 2007.

This is news to Marta Luttgrodt , who sells SABMiller beer just outside the Accra brewery.

“Wow. I don’t believe it”, she says.

Toiling away over 12 hours a day, she makes just enough to support her family – but she pays more taxes than the brewing giant towering behind her.

ActionAid research shows SABMiller would post much larger profits if it didn’t use tax havens – and bigger profits mean more tax. The company actually reported a loss in their Ghanaian operations last year.

SABMiller’s expert tax dodging across six developing country operations has seen them avoid paying an estimated AUD32 million.

Take Action Now!

Here in Australia, SABMiller half owns a joint venture called Pacific Beverages that operates its premium brands Peroni and Grolsch, and the local brand Bluetongue.

Join beer lovers around the world in sending messages to the CEO of SABMiller – if you do they will have no choice but to pay attention and change their ways.

Take Action Now!

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And now to my sage assessment of the G20 in Seoul.

The last day of the conference proper was spent rushing out releases to anyone who would listen in three languages, shamelessly asking whether the Australian media would deign to leave the conference centre to talk to us and a marathon meeting of civil society groups planning for the G20 next year in France.

As the final communique was released, people scrambled over the precious few copies that were printed in English, trying to make sense of a 22 page document in 10 minutes. That’s those who could stand the self congratulation that went on and on and on…

I thought that NGO’s just couldn’t pull off press conferences anymore- and yet, the KCTU (Korean Confederation of Trade Unions) packed a room full of cameras and journalists. Four Korean representatives and four foreign representatives spoke to the inadequacy of the document or ‘Seoul Consensus’ that was the outcome of the G20 this week.

So it is hard to tell what, if anything was learned from this process. The utter lack of transparency is probably one. That Julia is now dressed in her ‘Australian’ power suit is another.

That the G20 has remembered what the Millennium Development Goals are is a relief. Also, interestingly, the communique cites civil society as a critical actor in poverty reduction (and hopefully, elimination) and it is acknowledged that there is no one-size-fits-all cure or solution, which is a relief and an improvement.

After a crazy week and hundreds more acronyms stuffed into my acronym crowded brain we celebrated in the only appropriate way: with a Korean barbecue and bimbimbap and Cass and makoli and kimchi and bean sprouts and shoju…. et cetera

Did someone say, “Kimchi”???

(I took this at the markets later — I just wanted any excuse to show the photo)

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I’m trying very hard for my mind not to turn to mush. I’m staring at the computer screen, focusing and slowly realising that the words are in English, not Korean, and that if I put enough effort in, I can indeed read them. So here goes why:

This morning after working furiously for other time zones deadlines we made our way to the “alternative media centre” set up for civil society groups that aren’t allowed into the business end of town where all the world leaders are.  Which is a fancy label for some spare office space in an office building in Seoul.

The fire escape has an epic view though.

A great bunch of people from Oxfam India, Russia, France and Great Britain came by and together we made our way to the second of the big rallies taking place this week. Meanwhile I sent my ActionAid colleague back to do a marathon 45 minute interview on South African radio.

The rally was great- colourful, musical, multilingual. It never ceases to amaze me how organised the Korean movement is. Amazingly, even the police didn’t provoke the crowd, so it was mostly peaceful, even though the crowd wasn’t able to march much at all. And they really do know how to chant!

Sadly, the G20 is focussed on business as usual. Nothing new, unexpected or any of the required reform has come out of the meeting of leaders so far. So it looks like the rich countries have gotten together for an agree-fest.

When the currency wars are the topic the answer should be a fundamental reform of the system- the problem is there just aren’t enough US dollars out there to meet demand for reserves. And nor should there be. The system is unsustainable and it will collapse. Again.

Instead our PM Julia Gillard has said that we should let the market decide.

And then I got caught in a thunderstorm, my shoe fell off while crossing six lanes of traffic, I ran back to the hotel in the pouring rain bare foot.  So I have no words left.

So- what they said (here’s hoping its not super offensive in Korean):

My life today: sitting in Starbucks, country music blaring, devising a French media strategy, in English, in Korea. You know, the usual.  Only to be interrupted by Al Jazeera English who want to drive half way across Seoul to talk about the ‘currency wars’.

I couldn’t make this up.

My colleague Soren did a great job of talking eloquently on currency and how it affects the poor. If you want to know what he said, keep an eye on Al Jazeera English.

I know that as a scorned NGO staff member that wasn’t granted access to the actual centre for the G20 and who is morally opposed to a deliberately exclusive elitist meeting- this Korean propaganda may have just won me over. That’s right, the government has turned its best national export- not Samsung flat screens, but K-Pop to convince people that the G20 is super awesome.

It adds to an enormous, ridiculous amount of advertising blanketing the city. Today the front (and back) page of the English language Korea Herald was dedicated to welcoming visiting CEO’s that are here for a side meeting as part of the G20. They were welcomed lavishly, and I know because the Hearld showed pictures of the 12 course meal they were served and the luxurious hotel where they were staying.

Meanwhile, the number of NGO’s represented in the summit can be counted on one hand. Outrageous much?

So the G20 proper is ready to kick off. I watched events unfold today on twitter as Julia Gillard arrived in Seoul, having the red carpet rolled out for her.

Meanwhile expectations for meaningful change at the G20 sink even lower. It seems everyone’s eyes are already on France for 2011 where there is more hope for progress. Maybe not so much with the K-Pop though….

Mesmerised by late night Korean TV I was shocked to see the weather girl point to snowflakes, SNOW (!!!) predicted for Seoul this week. And sure enough, this morning, when venturing out for my essential caffeine hit, the kind of cold that hurts struck me. Bad choice of shoes, Emily.

This makes for no more aimless wandering around Seoul. I spent my morning cooped up in my (warm) hotel room working until the afternoon when we ventured back to the Peoples Conference. I really wanted to write this whole post about the Seoul subway, but suffice to say it is shiny, high-tech and like most electronics in Korea, talks to you.

I spent my afternoon learning about different viewpoints on climate policy, all encompassing the views of the global south. Finally, a forum where I could keep up with the acronyms. The speakers were all more radical to what I’m used to and it makes me think- are we out for anything we can get in Australia? Are cap and trade policies ineffective cop outs? How do we get nature on the balance sheet?

One fact I learned I really feel like I should share- in the six main rice producing countries in Asia, the temperature rise that we have seen already, which is a fraction of what is estimated will happen, has affected the process of photosynthesis to the extent that rice crop yields are down 25%. Think about the implications, how do we find more land, who will farm it? How does this affect food prices all over the world?

THAT, my friends, is why ActionAid, which is dedicated to ending poverty, is involved in the fight against the climate crisis.

We were then provided with a Korean dinner to cap off the evening. Although many of the foreign guests, unfamiliar with the bibimbap with uninviting still runny egg on top, opted instead to sample the variety of unclearly labelled beverages. Which made for a much more enthusiastic uptake of participation in the Korean trade union anthems and the fist pumping that goes with it.

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So here I sit in my hotel in the financial district of Seoul, with an extensive collection of Korean junk food (umm, an essential cultural experience) to keep myself awake enough to try and process today.

The People’s Summit today was a total information overload. The G20 was the main focus of the agenda. There was in depth analysis of the pitfalls and opportunities of the G20 and the broader financial system.

The speakers were from all over the world, from Mexico, Malaysia, the USA, Germany, Ecuador and of course Korea. So if anyone has any questions regarding the impact on the precarity of labour since Korea adopted the IMF recommended reforms please let me know!

Soren Ambrose from ActionAid spoke at the civil society gathering.

The most basic lesson I learned today that I will take away is this: The G20 was established after the global financial crisis with a narrow remit- to restore stability and co-ordination to global financial markets. Instead it entrenched inequalities and its policies are repeats of those that caused all of the problems in the first place.

Let’s hope this one is different, that it includes thoughts for how these decisions affect the poor and those most vulnerable, but I wouldn’t bet even 1,000 Won on it.

Feeling a little overwhelmed by acronyms and relieved that I took a couple of globalisation classes at uni so that I actually understood some of them, I somewhat foolishly opted to walk home.

I think I really must have needed to stretch my legs, because wandering around Seoul, trying to get from one bit to the other bit (that being my total knowledge of where I was) in windy 10 degree weather, having zero words of Korean was perhaps not the most intelligent decision I’ve ever made, (I’m an expert on acronyms and the Korean labour market now though).

I inevitably got lost. But watching the sun set over Seoul, with the trees that line the streets amazing shades of red and yellow, peering into mystery shops, such as cafes with three chairs, out in the open butchers and one restaurant with a patriotic display of plastic tanks out the front I couldn’t help feel better.

Until I ate all of that junk food.

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No blog about Korea could go long without mentioning kimchi. And yes, one of the first stops after arriving in Seoul, the Korean BBQ on the corner fulfilled any kimchi cravings sufficiently- for the rest of the year. There is only so much spicy, fermented cabbage that even a vegetarian can get excited about.

More excitingly, our first whole day in Seoul was the opening of the People’s Summit, the alternative to the G20. Amazing activists from all over the world gathered to propose a different vision for the world than the enormous G20 billboards and posters on buildings that are currently all over Seoul. Speakers at the People’s Summit spoke of a world with fairness and equality at its core and paid tribute to those that had struggled to create a better world.

In Korea, this has extraordinary resonance. Today was the anniversary of a famous trade unionist who self immolated, literally, set himself on fire for the cause. An enormous rally filled the centre of town, tens of thousands gathered, wearing their union’s colours, beating drums, flying flags. It was truly a sight to see. As a special delegation, the foreign representatives were situated up the front and to my horror, paraded up on stage.

Today, I was literally up on a stage in front of tens of thousands of activists! I felt rather underqualified. Luckily, the rest of the entertainment, which was heavy in K-Pop was much more entertaining. And the speeches, although I couldn’t understand a word, were passionate and got amazing, co-ordinated chants back from the crowd.

Before today, I hadn’t thought too hard about what solidarity is. It’s an expression that I hear thrown around a lot. Today though, I thought about how a purple scarf was handed to me in the crowd (no doubt proclaiming something revolutionary in Korean) and how despite the enormous language barrier, I could understand the struggle that these people are going through. I thought about how several enormous billboards welcoming the G20 as if it was a rock band coming to town surrounded the crowd – whereas I was surrounded by like-minded people who are imagining and building a better world.

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