Luke Holland ■ Ireland (again) in crosshairs of UN rights body

The tech sector in Dublin, Ireland

Ireland has once again found itself in the crosshairs of a United Nations human rights body due to its ongoing facilitation of international tax abuse. Following concerns raised just last year by the Committee on the Rights of the Child, another UN body – the Committee on Economic, Social and Cultural Rights – has also weighed in, demanding that Ireland account for the human rights impacts of its tax haven policies.

The Committee, which reviewed Ireland at its 75th session last month, focused six separate recommendations on the country’s nefarious fiscal regime, calling for measures to address human rights impacts at both domestic and international levels. As part of a wide-ranging interrogation of its compliance with its economic and social rights obligations, it called on Ireland to:

“Strengthen measures to combat illicit flows, cross-border tax evasion, and tax fraud, in particular by wealthy individuals and business enterprises operating or domiciled in the State party’s jurisdiction, including through the adoption and enforcement of mandatory due diligence mechanisms, in order to contribute to international efforts to that effect and to enable other countries to secure the resources necessary for the realisation of economic, social and cultural rights.”

It also enjoined the country to “take all necessary measures to avoid a situation which allows for shell companies to be used for profit-shifting, tax evasion and fraud.”

The Committee went on to echo a long-standing call of civil society organisations in Ireland by calling for the country to carry out an independent assessment of the impacts of its tax policies on the economies of developing countries and, importantly, requested that it report back on the same in its next periodic report.

The Committee drew upon inputs provided by both national human rights organisations concerned about Ireland’s tax havenry and international civil society, including the Tax Justice Network and our partners at the Government Revenue and Development Estimations initiative.

Significantly, Ireland’s human rights ombudsman also raised serious concerns over the deleterious impacts of the country’s facilitation of crossborder tax abuse in its submission to the Committee. National Human Rights Institutions are mandated to protect and promote human rights, but as state bodies with a close, legally-defined relationship to the government they often take a more conservative approach than their civil society counterparts. In the past the Irish Human Rights and Equality Commission (IHREC) has generally shied away from overt criticism of Ireland’s tax havenry, so its decision to address the issue head-on at the review is particularly significant. In its input to the Committee, IHREC stated “we are concerned that Ireland’s tax policies facilitate corporate tax avoidance and profit-shifting from low-income countries… While the State denies that this occurs, the evidence underpinning this assertion is not sufficiently comprehensive and it does not align with the issues raised by Irish and international experts.”

Rising pressure on Ireland to take responsibility for its role as a tax haven comes at a critical moment, as the country has emerged as a key blocker of progress in negotiations at the UN. Talks over the terms of reference for the new tax convention are underway following the Africa Group’s historic resolution in November last year, which effectively ended the Organisation for Economic Cooperation and Development’s six-decade dominion over international tax talks.

The UN process promises to deliver a more just and inclusive regime for international tax cooperation, in contrast to the OECD process which was widely condemned for ignoring the voices of developing countries. Some Global North countries – including Ireland – are already seeking to limit the UN talks, however.

Just a few days ago in providing input for the ‘terms of reference’, Ireland called for the new UN framework convention to prioritise consensus-based decision-making, which tends to deliver weak ‘lowest common denominator’ outcomes, rather than majority voting, which would favour the interests of the Global South.

It is to be hoped that Ireland will heed the calls of the UN Committee on Economic Social and Cultural Rights both with regard to its own fiscal policies and its participation in the UN negotiations. While the Committee did not explicitly reference negotiations over the new convention, it did call on Ireland to “redouble efforts to ensure effective implementation of the Covenant obligations in the negotiation of international agreements pertaining to fiscal policy”. These obligations include that it should participate in good faith in such spaces so as to ensure third countries can raise the maximum of available resources for the realisation of human rights within their borders.

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