Corporates under attack
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Giles Robertson, chairman of The Marketing Society’s Not For Profit group analyses the attack by ActionAid on SABMiller, a beer company that is broadly perceived to be trying its best in challenging times.
ActionAid has gone on the attack of SABMiller’s alleged tax dodging in Ghana. But a question has to be asked whether this campaigning is the best approach? Does it actually work?
ActionAid previously slipped secret messages into thousands of items of clothing at ASDA stores around the country to highlight the retailer’s poor record on paying poverty wages to factory workers in developing countries.
This time ActionAid targeted SABMiller, who brews Grolsch, Peroni, Miller, as well as African beers Castle and Stone Lager. ActionAid claims the beer company has siphoned profits from developing countries into offshore accounts, allegations strongly rejected by SABMiller.
Indeed, it states it is committed to supporting economic growth, social development and environmental protection in all of the countries in which it operates and recognise that it is the only way it will succeed as a business now and in the future.
The issue of tax avoidance has driven many young people onto the streets campaigning against the likes of Top Shop, Boots, Barclays, Lloyds, HSBC and Vodafone. The activist network Uncut claims that their collective tax avoidance is 15 times more than the benefit fraud at the bottom from individuals.
Many companies seem to be up to corporate tax avoidance and some techniques have become normal business practice among the big multinationals. SABMiller is by no means the worst offender.
The director of Business Action for Africa and founder of Business Fights Poverty, Zahid Torres-Rahman, argues on the Guardian’s Poverty matters blog that the wider benefits that big corporations bring to the developing countries in which they work need to be incorporated into any debate on tax payments.
Also, I thought SABMiller were the good guys whose ethical and sustainable work must buy them some credits? WWF thinks so and said, “SABMiller is doing some pioneering work with WWF to better understand and manage its water footprint for the benefit of communities and wildlife in various regions overseas and they have a robust 10-point sustainability plan in place”. Similarly, in terms of products, Grolsch is no laggard in the ethical beer list produced by Ethical Consumer. Although somewhat out of date, it ranks well above the likes of Budweiser.
ActionAid produced this campaign in house, but the message is confused given that the campaign wants people to write to the SABMiller’s CEO. It will be interesting to see how many letters he receives in light of other corporates like Vodafone under attack at the same time.
It’s a legitimate role for NGOs to challenge what corporates are doing, but it is a difficult balance particularly when the company in question is perceived to have done so many positive things. SABMiller is trying its best in challenging times.
Some will now fear putting their heads above the parapet about the good work they are doing. Consider, B&Q who took many years to publicly discuss its pioneering work in sourcing and selling FSC certified wood – one of the unsung champions of the sustainable world.
I believe that the best approach in this instance would be to meet in the middle, draw up an agreement and to issue a joint statement from both SABMiller and ActionAid. That would be truly inspiring to others and fitting for the challenging times we are all facing.
Giles Robertson is the founder of Green Banana Marketing Ltd.
Posted: December 7th, 2010 | Author: Glen Dower | Filed under: Green | Tags: Giles Robertson, Green Banana Marketing, Not For Profit, SABMiller, the marketing society | 1 Comment »
Hi Giles, I’m part of ActionAid’s campaigns team, so thanks for the opportunity to discuss this.
You’re quite right to point out that SABMiller has a very active CSR programme – we did too in our report: http://bit.ly/callingtime However, we think that CSR should be more than just window dressing and SABMiller’s commitment to ‘transparency and sustainability’ must extend to its core business operations – including how it manages its tax affairs.
Our research, primarily drawn from SABMiller’s own accounts, shows who the company is systematically shifting profits out of Ghana, Tanzania, Mozambique, Zambia , South Africa and India – and into tax havens. The amount African countries are losing could put and extra 250,000 children in school.
SABMiller’s Chief Executive has publically stated that “paying taxes” is one of the best ways that business can help poor countries develop. We agree, so one of the specific policy recommendations we’re making to the company is that it needs to reconcile its CSR policies, with its tax planning.
SABMiller does generate jobs in many poor countries, which we applaud. But it does great business there too. It’s making profits in excess of £2bn a year, so has a real responsibility to pay its taxes. Developing countries need jobs, but they also need health and education services for their citizens and tax revenues are the best way of paying for these.
We’ve been in discussion with SABMiller about this since July, and the company has refused to supply us with basic financial information on its tax haven subsidiaries. Indeed, at the moment, SABMiller is running increasing amounts of its business though tax havens, particularly Switzerland and Mauritius. They’re also taking steps to make their finances more secretive, for example by taking their operation in Ghana off the stock market. This will make it even easier for the company to shift profits out of developing countries. That’s a big reason why we need to challenge this now.
We’re more than happy to discuss the policy recommendations we’ve proposed to SABMiller here http://bit.ly/e3tulp at any time.