It is a well-known fact that large corporations, above all digital companies, hardly pay any tax because they move their profits to tax havens. But how much money do Member States lose due to tax evasion by individuals? A new study of the European Commission sheds light.

The EU wants to use the European Semester to better coordinate the economic policy of Member States in order to be more effectively equipped against economic crises. In order to make in particular the euro states more competitive, the European Commission proposed in July 2019 an additional governance framework, which shall set the reform and investment priorities for the Eurozone. However, from the AK EUROPA’s point of view, this proposal goes into the wrong direction.

The AK firmly rejects the proposal for a regulation for a governance framework for the budgetary instrument for convergence and competitiveness:

Already the basis of the governance framework, the European Semester, is itself to be criticised. The country-specific recommendations represent a series of demands which, in many cases, appear to be arbitrary, objectively unjustified, socially unbalanced and at any rate run counter to the social objectives enshrined in the EU Treaties or a wealth-oriented policy.

Another round of negotiations in the Human Rights Council of the United Nations on a binding treaty, which shall impose due diligence obligations in respect of complying with human rights on companies, took place mid-October. The EU as such has no negotiation mandate and is therefore not actively involved in the negotiations. However, it is present and announced in the meeting that during the next EU Commission under Ursula von der Leyen, it would increase its attention concerning this issue.

The call for European initiatives for more tax justice is not new; however, the path towards it has been rather stony. The topic also proved to be a long-burning issue during the hearings with the Commissioners-designate, whereby the main focus was on the digital tax, which failed at European level at the beginning of the year. A global approach in the fight against shifting profits and for a minimum tax rate at OECD level has entered a decisive phase and presents opportunities.

On a global scale, violations of human rights, labour rights and environmental rights in a business context take place every day. Human Rights Due Diligence (HRDD) is a way for enterprises to manage potential adverse human rights impacts of their activities. This includes assessing actual and potential human rights impacts - including through its value chain or subsidiaries, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.

The EU needs a long-term and active industrial strategy that focuses on people - this is the key message, which the President of the Chamber of Labour Lower Austria and ÖGB Lower Austria Chairman, Markus Wieser, stressed during his talks with high-ranking representatives of the EU institutions.

The highlight of the 1st round of hearings of Commission Members-designate were those of the three executive Vice Presidents on 8th October 2019 in the EU. One of these was the Social Democrat Frans Timmermans, who, as First executive Vice President, shall above all plan and implement the Green Deal for Europe.

Human rights are universal. Nevertheless, in particular with regard to global entrepreneurial activities, they are being violated time and again, especially in countries belonging to the global South. Yet, in practice it is often not possible to hold parent companies liable for human rights violations and environmental damage. Hence, since 2014 negotiations on a binding agreement, which shall impose due diligence in view of adhering to human rights, have been going on in the Human Rights Council of the United Nations.

Event jointly organised by AK EUROPA and ÖGB Europabüro on 24 September 2019:

Human rights and environmental due diligence: The way forward for responsible business

Presentation by Claudia Saller

(European Coalition for Corporate Justice - ECCJ)