Companies Responsible for Overfishing and Deforestation Are Shielded by Tax Havens
Recent information reveals that those responsible for deforestation and overfishing have been funneling their money through tax havens. This means that despite the heavy environmental toll of these actions, the companies responsible cannot be held accountable in most ways, from corporate tax to fines.
Tracing the Funds
Researchers have traced billions of pounds’ worth of money that has gone through tax havens, finding that this money links back to activities related to the destruction of the environment. The report was published in Nature Ecology and Evolution in August. Those included expanding unregulated fishing vessels that operate using “flags of convenience” and growing beef and soy in areas of the Amazon that have been deforested. To make matters worse, experts suggest that the amount of money traced between these activities and offshore funds is likely just a small fraction of the total involved.
The study noted that between 2000 and 2011, up to two-thirds of the foreign capital in the beef and soy sectors in Brazil went through tax havens. These particular industries have been largely linked to Amazonian deforestation. This figure is likely highly accurate since the team actually had access to data from Brazil’s Central Bank, a rarity.
The study also noted that around 70 percent of vessels linked to unregulated, unreported, or illegal fishing had registration in tax havens. The owners of these vessels also use “flags of convenience,” which register the vessel in a jurisdiction with lax shipping regulations, making them more difficult to track. The report was careful not to name any individual companies.
Showing Another Implication of Tax Havens
The study’s lead author said this shows that the issue of tax havens is not just related to high-net-worth individuals and corporate taxes that companies want to avoid in the form of an economic challenge or sociopolitical issue. It also is an environmental issue. Essentially, the legality of tax havens makes it nearly impossible for those trying to protect the environment to analyze the way in which financial flows affect it.
Tax Evasion Hurts the Planet in Other Ways
Those speaking out on the issue of tax havens in relation to deforestation and overfishing also pointed out the other negatives of tax evasion on the planet. For example, those who aggressively avoid taxes take away funds that the community could use to help with environmental protections.
Did you find this article useful?
Subscribe to our newsletter for more!