After years of blocking progress, EU governments have now approved a draft text. Several of you contacted your governments to support the measure. This was effective, with several member states changing position which ultimately allowed the measure to pass.
But we are not finished with the process yet. The draft directive as it stands contains several loopholes which need to be closed to make it effective in tackling profit-shifting and improving profit-sharing amongst workers.
European governments, the Commission and Parliament will now have to negotiate a final directive to be implemented across the EU (trilogue process). This offers a new opportunity for unions to express their support for corporate transparency and accountability and put pressure on their MEPs and governments to approve strong public country-by-country reporting requirements. Particularly, to ensure that companies report for every country in which they operate, not just those in the EU and EU (limited) blacklist of tax havens.
To provide you with the information you need to engage with your governments and MEPs on this issue, PSI and EPSU are organising a short webinar.
Date and Time: 20 April 2021 from 11.00 to 13.00
Interpretation: EN / FR / DE and ES
Registration : Please register here
· Introduction by PSI and EPSU on why we need public CBCR
· Introduction and update on EU proposal by Evelyn Regner MEP
· Trade union experience campaigning for public CBCR
· What trade unions can do to achieve effective public country-by-reporting.
You can find out more about public CBCR in the below briefing. If you have any questions, please do not hesitate to contact Patrick Orr (email@example.com)
Public country-by-country reporting would force companies to publicly disclose key information about their finances, including earnings, profits, number of employees, taxes paid, and subsidiaries for every country in which they operate. You can find out more information in this PSI briefing.
What is happening at EU level?
Proposals for public country-by-country reporting have been on the table in the EU for several years. However, member states had blocked progress. There are currently two texts in play: one agreed in the European Parliament and the recently agreed by member states. Both contain loopholes and need strengthening to make public country-by-country reporting effective. You can find out more about the state of play in the EU in this briefing.
Why do trade unions want public country-by-country reporting?
Trade unions are demanding public country-by-country reporting for two reasons. Firstly, forcing multinationals to publish financial data for every country will make it easier to identify where corporations are engaged in shifting profits to avoid taxes. Although tax administrations sometimes have access to this data, public disclosure allows trade unions, journalists and civil society to hold big companies directly to account.
Secondly, the data will be extremely useful to trade unions when faced with cuts, offshoring and job losses. Trade unions will be able to see the real picture of a group’s finances at a global level. With this information, spurious financial arguments about wage costs or profitability will no longer hold water.
What can my union do to ensure effective public country-by-country reporting?
Member states agreed on their proposal for country-by-country reporting by a healthier majority than expected, in part due to the pressure exerted by unions. It appears that the Czech Republic and Slovenia indeed changed their positions to abstaining and supporting, respectively. Luxembourg also moved from opposing to abstaining.
Now that public CBCR, in some form, appears likely, they may be more space for countries that previously opposed it on grounds of ‘competitiveness’ to be convinced to support a more ambitious proposal. This is because the current member states’ position only obliges companies to report data for EU countries and a small number of jurisdictions on a limited EU tax haven blacklist. This could present a competitiveness disadvantage to some countries in the EU who act as tax havens vis-à-vis other non-EU countries.
Therefore, it is essential that unions redouble their efforts to pressure governments into supporting a comprehensive proposal that obliges reporting or all countries.
Your union can:
· Contact your government to ask them to support reporting for all jurisdictions in the upcoming negotiations on the final text
· Contact your MEPs to express the trade-union movement’s support for reporting for all countries, and asking them to close loopholes in the Parliament’s proposal
· Join the upcoming webinar at 1100 on 20/04/2021 where you can get more information and resources to effectively lobby your leaders.