The Christian Democratic Party and the Liberal party may secure a majority vote for extended country-by-country reporting on June 15

Kjell Ingolf Ropstad fra Krf (t.v.) og Ola Elvestuen fra Venstre argumenterte begge for utvidet land-for-land rapportering under Stortingsdebatten 5. juni. Foto: Christine Amdam

The Christian Democratic Party and the Liberal Party express their support for extended country-by-country reporting, but have not yet supported the Socialist Left Party’s note to the national budget.

Friday June 5, the Norwegian Parliament was the scene for a debate on extended country-by-country reporting. With the only exception of the Center Party and the Green Party, all the political parties delivered statements.  

The background for the debate was an interpellation from Truls Wickholm (Labour Party) to the Minister of Finance, Siv Jensen (Progress Party):

 “From 2003 to 2012, developing and newly industrialized countries were drained of 6600 billion USD by illegal capital flight. In the period, illegal capital flight increased by an average of 9,4% per year, twice as fast as the global GDP. IMF figures show that some countries loose as much as 15% of their tax income. The International Bar Association thinks that actions by jurisdictions that ‘encourage or facilitate the abuse of tax regulations may constitute a breach of international human rights commitments’. When companies pay too little tax, regular people have to pay more. Norwegian companies, employees and investors are the losers. Extended country-by-country reporting will expose unwanted tax adjustments by requiring that income, costs, tax, production and investments for all countries has to be declared in notes to the financial accounts.

Is the Government willing to fight the problem and introduce these transparency demands of extended country-by-county reporting?”

Read: "5th of June: Parliamentary debate about extend country-by-country reporting" 

An appeal to vote for the note

Snorre Valen from the Socialist Left Party began his statement by saying that this is a very important issue, and that the Parliament at the moment has several opportunities to tackle it. As last year, the Socialist Left Party has added a note about extended country-by-country reporting to the revised national budget.

Valen highlighted some important reasons for fighting for financial transparency:

- The loss inflicted on poor countries from illegal tax avoidance, capital flight and exotic company structures is greater than the aid and foreign investments to the same countries put together. In reality, many of the world’s poorest countries loose more than they gain because of the presence of western and rich commercial actors who drain the countries’ resources, Valen said.

From the podium, Valen encouraged the Christian Democrats and the Liberals to get behind the Socialist Lefts’ and Labour’s proposal. If these two parties vote in favor of the note, there will be a majority in favor. 

Interpellant Truls Wickholm (Ap). Foto: Christine Amdam

The interpellant Truls Wickholm (Labour Party) also encouraged the Christian Democrats and the Liberals to support the note for financial transparency. He highlighted that there is a public consensus on the matter. The politicians are the ones that stand in the way of progress. 

- This is not a situation where we have to win over the public opinion. Worldwide movements fight for transparency in these tax havens. The financial crisis and the scandals that have risen to the surface in its wake have reinforced the arguments. Of course, we all want to avoid financial crises and instable markets. The huge global inequality we have today is not just a matter of poor and rich countries, said Wickholm.

The Liberals and the Christian Democrats want to extend the demands

Kjell Ingolf Ropstad from the Christian Democrats said that his party has worked to extend the demands in the country-by-country reporting for a long time.

- The Christian Democratic Party wants even better regulations than the ones we have today. Enormous amounts disappear from developing countries. In the fight for a more just world, it is important for Norway to take the lead, he said.

Ola Elvestuen from the Liberal Party also made it clear that his party supports the demands.

- Extended country-by-country reporting can counter the secrecy offered by tax havens, he said. 

Important debate, important issue

All the politicians present, including the Progress Party and the Conservative Party, agreed that corruption and capital flight is intolerable. However, so far only the Labour Party has gotten behind the note proposed by the Socialist Left Party.

The Minister of Finance, Siv Jensen’s main argument is that the current regulatory framework will be evaluated after three years.

- It is a shame if this is to be Norway’s attitude in the work against corruption, unwanted tax adjustments and unwanted tax evasion, PWYP Norway states.

Finansminister Siv Jensen (Frp) lytter til de andre partienes innlegg under interpellasjonen. Foto: Christine Amdam

The Christian Democrats and the Liberals have explanation issues

In the last agreement over the revised national budget for 2015, the Government and the supporting parties have agreed to a demand for unanimity.

In the demand for unanimity in the agreement, it says: “The parties to the agreement may not create a majority for any verbal suggestions or notes beyond what is listed in this agreement, unless all parties to the agreement are in accordance”.

The parties that have signed the agreement have previously promised their support for increased transparency and the fight against corruption and capital flight.

PWYP Norway believes that the demand of unanimity opposes the expressed will of these parties on the issue concerned, and not least the object of the law to avoid tax adjustments. This is a peculiar situation. The agreement signed by the government partners is potentially going to hinder the work against corruption and tax avoidance.

- Extended country-by-country reporting could hinder the secrecy, which all the parties claim they want to get rid of. The purpose of extended country-by-country reporting is to expose unwanted tax adjustment and to make it possible to discover corruption and potential tax evasion. Extended country-by-country reporting is the tool that is needed to reach the goal, says Mona Thowsen, secretary general of PWYP Norway.

In light of this, Thowsen thinks it is unreasonable for the government partners to enter into an agreement that hinders the political parties to work for the objective of the law. 

The last chance: Will they vote for what they believe in?

PWYP Norway believes that the Christian Democrats and the Liberals have to explain themselves. Why don’t they vote in accordance with their views? 

Previously, Hans Olav Syversen (Christian Democratic Party) has proposed several written questions concerning extended country-by-country reporting. In these questions he has addressed the issue of complex and unclear company structures, and how the use of tax havens enables multinational companies to evade tax and hide important information from authorities and investors.

The final opportunity before the summer is for a majority in Parliament to vote in favour of the note when the law proposals of the revised national budget are to be adopted on June 15.

In 2013 all the parties, with the Progress Party, the Conservatives and the Christian Democrats in the lead, supported extended country-by-country reporting in the Parliament’s Foreign and Defence Committee.  

Read: "The Standing Committee on Foreign Affairs and Defence is backing extended country-by-country reporting requirements"

Then the question is: Why should the Christian Democrats and the Liberals be concerned about a demand to live up to the agreement, when the Government parties don’t return the commitment?