The International Bar Association
(IBA) - the global voice of the legal profession - is the world's leading professional association of lawyers, legal professionals and bar associations.
With a membership of over 50,000 individuals and more than 200 bar associations, covering virtually every jurisdiction in the world, the IBA influences the development of international legal reform and shapes the future of the legal profession throughout the world.
As issues of current and potential national and bilateral regulation and policy continue to dominate much of the predominant thinking in the financial sector, the IBA is preparing to launch two unique, landmark reports.
Both reports examine the complex intersection of macro-economic tax policy, national and multinational finance, human rights and the rule of law. Both reports will be officially launched at the upcoming IBA Annual Conference in Boston, US, in October this year.
Tax abuses, poverty and human rightsThe tax practices of multinational enterprises and wealthy individuals are being increasingly questioned and scrutinised. Tax havens and bank secrecy are under attack. Tax abuses are in the media spotlight and on the international political agenda. But why are tax abuses becoming so important?
First, there is the immense magnitude of the issue. The best estimates tell us that tax abuses are the most significant illicit financial flow out of the developing world, eclipsing the amount of official development aid that is invested in those countries.
There is a growing understanding that countering tax abuses and improving tax enforcement in developing countries should be a key focus for international efforts to combat poverty and contribute to sustainable development. In developed countries as well, there is a strong impetus to confront tax abuses in order to shore up domestic revenues in the aftermath of recent financial crises.
Secondly, there is an important ethical dimension to the issue. Many politicians, advocacy groups and prominent individuals are questioning the fairness and morality of sophisticated tax planning strategies that result in individuals and corporations not paying a fair share of tax - and perhaps not paying any tax at all. Especially in a context of persistent poverty and rising inequality between and within nations, the fact that tax strategies that produce unfair results may be technically legal is no longer a sufficient justification for their continued use. Wealthy individuals and multinational enterprises face increased risks of public censure if their tax practices are seen to be abusive.
This leads to a number of important legal and policy questions related to tax abuses: Where does one draw the line between legal tax avoidance and illegal tax evasion? What sorts of transactions are the types of tax structures and transactions that have the greatest impact on the revenues of developing and developed countries?
What are the most effective reforms required to confront tax abuses? What are the responsibilities of States and business enterprises to implement those reforms? What is the role of lawyers and the legal profession to confront the challenge of tax abuses?
The IBA's Human Rights Institute has formed the Task Force on Illicit Financial Flows, Poverty and Human Rights to reflect upon these questions from the perspective of international human rights law. The results of the task force's initial report 'Tax abuses, poverty and human rights' will be revealed at the IBA Annual Conference in Boston.
Prepared by a group of renowned experts - and chaired by Thomas Pogge, Director of the Global Justice Programme and Leitner Professor of Philosophy and International Affairs at Yale University - the report analyses how tax abuses deprive governments from the resources needed to combat poverty and fulfil their human rights obligations, particularly in relation to economic, social and cultural rights such as food, health and education.
Report objectivesThe main objectives of the report are:
- An overview of the tax abuses of greatest concern to stakeholders, including issues related to bank secrecy and tax havens;
- An analysis of the various linkages between tax abuses, poverty and human rights while highlighting the perspectives of the representatives of governments, multilateral enterprises, civil society organisations, development experts and lawyers;
- A detailed overview of the international human rights instruments and concepts that suggest that tax abuses should be understood as a human rights issue;
- Highlighting the responsibilities of States and business enterprises to pay attention to the potential negative impacts of their tax practices and to cooperate with efforts to confront tax abuses;
- Recommendations for States, business enterprises and the legal profession to further understand the human rights dimension of taxes, to exercise greater due diligence against the negative impacts of their tax practices on human rights; and, to contribute to efforts to strengthen tax governance and transparency in order to ensure that taxes contribute to sustainable development and positive human rights outcomes.
IBA presidential task forceComplementing the IBAHRI Task Force report on tax abuses, poverty and human rights, and also due to be launched in October 2013 is the report of the second phase of the IBA presidential task force on the global financial crisis entitled 'Poverty, justice and the rule of law'. Phase two followed the phase one work led by the IBA legal practice division on financial regulation. That first phase of the task force recognised that current regulation and supervision of the financial industry were weak and unfit to deal with the challenges facing the world economy. In this connection, it reported particularly on developed markets, the actions of which had taken the world to the brink of disaster and calamity in many places, and continues its work.
Phase two sought to build on the work done in phase one, where appropriate, and directed its attention to the negative impacts of the GFC on those persons least able to manage or counteract them. Phase two would report on wider social and legal issues that have resulted from, or been highlighted by, the GFC.
Phase two of the task force will look for solutions to these problems through changes that could be made to the legal arrangements and frameworks reflecting social policy that would serve to improve the social and economic circumstances of people's lives, and avoid the worst and sometimes unforeseen consequences of laws and the social policies upon which they were based in times of financial crisis.
Project goalsThe goals of the project are to:
- Review and describe the impacts of the GFC on the poor;
- Assess the impact of the global economic crisis on the modern welfare state and posit ways to avoid or mitigate the negative consequences in the future;
- Identify and review legislation that may tend to reinforce cycles of poverty in the context of property rights, contract enforcement, labour and employment laws, as well as the impact of austerity programmes, and posit ways to avoid or mitigate such negative consequences in the future;
- Assess problems facing access to justice, good governance, human rights and civil liberties in circumstances where government changes affect groups such as women, indigenous populations and other marginalised groups, and posit ways to avoid or mitigate the negative consequences in the future;
- Identify and advocate the ways the legal profession can improve the prosperity of people throughout the world through legal and justice reform. As for the report, it was decided that the results of phase two would be collected in a book of edited papers to be published by the IBA. It also would compile the contents of the book in a relatively short time-frame of less than a year.
In addition to more than 180 working sessions covering all aspects of law and the legal profession, the findings of the phase two report will also be launched and discussed at this year's IBA Annual Conference.
The conference will also see US economist, former Chairman of the Federal Reserve and the force behind the 'Volcker Rule', Paul Volcker, as he provides a keynote address, giving unique insight into the role state officials play today in safe guarding the rule of law. Former Secretary of State of the US, Madeleine K Albright, will undertake Keynote Speaker duties at the opening ceremony.