He’s got a time machine you know

Ciaran Davies says:
October 9 2015 at 8:49 am
I always thought country-by-country reporting originated in the Extractive Industries Transparency Initiative in the early 2000s – or were you involved in that initiative?

Reply
Richard Murphy says:
October 9 2015 at 9:26 am
Yes

I wrote their first demand for it – search Global Witness and Extracting Transparency

It was based on a 2003 paper I wrote for the Association of Accountancy and Business Affairs – top entry on the Jersey page of their web site

The “Extractive Industries Transparency Initiative” (EITI) was first launched in September 2002

56 thoughts on “He’s got a time machine you know”

  1. right – but that doesn’t tell us that after forming in 2002 the EITI didn’t commission Richie who wrote first call for CBC in 2003?

    I must admit I struggle to believe that this idea wasn’t knocking about for ages, but it’s possible Richie was first to pick it up and push it

  2. I seem to remember a version of CBCR for the extractive industries was floating around as an idea in the 80’s….someone care to correct/affirm that?

  3. UK GAAP in the 1970s required all quoted companies to report segmentation of turnover and profit by country with exceptions for those where *both* turnover and profit were insignificant and in cases where the information was commercially sensitive *and* reporting it would give an advantage to competitors.
    So 30 years later Murphy invented country-by-country reporting – and the wheel.

  4. Murphy also points to the UK GAAP in the 70s

    http://www.accountingweb.co.uk/topic/financial-reporting/experts-split-need-extractive-ifrs/443915

    “When it started in the 1970s, the Accounting Standards Committee identified 15 different user groups for corporate reports, and eight stakeholder groups, including civil society and government. Who owns this company and how much tax does it pay were reaonable questions to ask of accounts. Here in 2010, we’re still asking those questions on behalf of government and civil society. How far has accountancy retrenched in its broad view of society? The IASB has narrowed the reporting horizon down to the narrow view of someone who is buying or selling shares. Stewardship has been almost entirely lost within international standards.”

  5. Murphy acknowledges the GAAP in the 70s

    http://www.accountingweb.co.uk/topic/financial-reporting/experts-split-need-extractive-ifrs/443915

    “When it started in the 1970s, the Accounting Standards Committee identified 15 different user groups for corporate reports, and eight stakeholder groups, including civil society and government. Who owns this company and how much tax does it pay were reaonable questions to ask of accounts. Here in 2010, we’re still asking those questions on behalf of government and civil society. How far has accountancy retrenched in its broad view of society? The IASB has narrowed the reporting horizon down to the narrow view of someone who is buying or selling shares. Stewardship has been almost entirely lost within international standards.”

  6. John77 is correct. The US 20f filings also called on massive quantities of segmental analysis. To be honest, though, it just made life impossible for the analysts. Not many companies organise for management purposes on a narrow geographical basis. Most seem to favour a type of business approach which can then be broken down geographically. But that means that you never see a strictly country by country set of reports. At best you might get Europe, US, Asia Pacific…. Although Río Tinto does an extensive geographical breakdown of activity and tax, which I suspect is never looked at by anyone other than people like me. I bet Murph couldn’t understand it.

  7. Shape up Arnald, the quote is that rm wrote the first demand for it in 2003. That it was launched in the same year, after Blair outlined it in September 2002 makes his claim a little optimistic.

    More likely, a bandwagon was spotted and leapt upon.

  8. Murphy acknowledges the GAAP in the 70s

    here

    “When it started in the 1970s, the Accounting Standards Committee identified 15 different user groups for corporate reports, and eight stakeholder groups, including civil society and government. Who owns this company and how much tax does it pay were reaonable questions to ask of accounts. Here in 2010, we’re still asking those questions on behalf of government and civil society. How far has accountancy retrenched in its broad view of society? The IASB has narrowed the reporting horizon down to the narrow view of someone who is buying or selling shares. Stewardship has been almost entirely lost within international standards.

  9. John miller

    Which bandwagon and who was driving it? Blair?

    EITI was founded in 2003. Murphy wrote a report in 2003 for Global Witness who were involved in that process.

  10. Tim, Arnald, etc

    Tim is correct in that the evidence presented does not back RM. Arnald is correct in that EITI is founded in 2003.

    EITI developed from an earlier campaign “Publish What You Pay”. As noted below, Blair was due to push it in a speech in September 2002, but failed to deliver the speech, the formal launch of EITI was in 2003. But, the idea of PWYP was already fully formed by 2002. PWYP was launched in June 2002.

    http://www.publishwhatyoupay.org/about/history/

    This was development of a campaign based around a 1999 Global Witness report on the oil industry in Angola. Which originated the original publish what you pay idea. They went after Angola, and this was a failure.

    https://eiti.org/eiti/history
    http://www.globalwitness.org/sites/default/files/pdfs/A%20Crude%20Awakening.pdf

    So if the Murphster is claiming this element of CBC reporting (eg payments made by extractive industries) based on something written in 2003, this is nonsense. As Luis says, it is not impossible that he might have had something to do with it, but not on the basis of the evidence given here.

  11. As someone has mentioned Angola, it’s worth noting that disclosure of oil licence terms is a criminal offence under Angolan law – the production sharing contracts are negotiated separately for each licence area under a common framework, and knowing what one’s competitors are paying would lead to collusion against the government’s interests. It would also, incidentally, make it clear how much money the ruling party’s leaders are skimming off and how President Dos Santos’ daughter has become the richest woman in Africa

  12. But the quote Worstall uses is a question about the EITI.

    And PWYP at that time was only a part of the EITI framework.

    Of course the ideas were kicking about before, as John77 says, GAAP in the 70s. Murphy acknowledges this in an article in accountingweb.co.uk

    “When it started in the 1970s, the Accounting Standards Committee identified 15 different user groups for corporate reports, and eight stakeholder groups, including civil society and government. Who owns this company and how much tax does it pay were reaonable questions to ask of accounts. Here in 2010, we’re still asking those questions on behalf of government and civil society. How far has accountancy retrenched in its broad view of society? The IASB has narrowed the reporting horizon down to the narrow view of someone who is buying or selling shares. Stewardship has been almost entirely lost within international standards.

    unfortunately Worstall’s site is not publishing previous attempts at posting the link.

  13. The private bank I worked in held millions in accounts on behalf of Sonangol, originating in Switzerland and nominated out through operations in Guernsey, Jersey and London.

    The funds were constantly moving through different holding accounts and in different currencies.

    Any investigation wouldn’t stand a chance in gleaning any information whatsoever.

  14. This was development of a campaign based around a 1999 Global Witness report on the oil industry in Angola. Which originated the original publish what you pay idea. They went after Angola, and this was a failure.

    As I understand it, it was a failure because the Angolans realised that if oil companies published how much tax they paid in-country people would be able to work out how much the elites had plundered. They therefore made publishing tax payments in Angola a criminal offence, and – not being the big brutal colonisers they are made out to be – the oil companies decided to comply with Angolan law rather than do what some middle-class western hippies wanted them to do.

  15. Tim

    He’ll be peddling the myth that you are ‘restricting his ‘freedom of speech’ before you know it!

  16. john square

    I did know about it and I did ask the question, as you’re supposed to do to avoid taking responsibility if any crime is being committed, but of course it was all technically legal.

    I wasn’t the only one there who didn’t like to touch it.

    Oh, and The Kaupthing/Tchenguiz debacle.

  17. The private bank I worked in held millions in accounts on behalf of Sonangol, originating in Switzerland and nominated out through operations in Guernsey, Jersey and London.

    Now if Murph wanted to bang on about this, and how western banks allow the African ruling classes to embezzle billions of their countries’ wealth, then he might be onto something. But instead, he’s banging on about Starbucks in the UK and how corporations in Africa don’t pay enough tax to the ruling elites who embezzle it, hence poverty.

    I suspect if anyone really tried to get to grips with the problem of African elites embezzling money the result would be, in effect, a big sign on the door of each bank saying “No Africans”. And that would never do. “Look over there! Amazon! Boo!”

  18. Arnald

    in that quote I do not see Murphy saying that CBC is an old idea that would part of UK GAAP in the 1970s. Does he say that elsewhere?

    (fwiw, I think picking up an old idea and making hay with it is a perfectly creditable thing to do, my suspicion is that RM exaggerate extent to which idea originated with him but deserves credit for getting such mileage out of it)

  19. Tim N

    Murphy did use to be focussed on the secrecy jurisdiction activities before he turned overtly “grand designs”.

  20. Tim W,

    Wrong thread but as you’re reading – is there any chance at any stage of extending the “comments feed” to more than 20 items at any stage.

    Simply refreshing the comments feed and skimming is often my way to see what threads have new stuff, rather than re-open lots of different threads to check.

    And when there are lots of posters, 20 barely takes you back half an hour or so?

  21. Arnald,

    well that article does not seem to contain anything in which RM talks about how CBC is an old idea

  22. Tim N

    I didn’t read it, but didn’t Shaxson’s Treasure islands look at that kind of thing? And wasn’t Murphy involved (in some way?) with Shaxson on that?

  23. We’re talking about EITI here. Murphy acknowledges that the same questions were being asked as far back as the 70s. Surely he’s saying that it’s not an original idea, only that he had some say in the resulting framework of EITI.

    CbCR is a different set of requirements based on the theme.

    Christ I didn’t realise Worstall’s posted all the failed attempts.

  24. Arnald & PF,

    I know people accuse the secrecy jurisdictions of helping the developing world elite embezzle money (although I’ve never read Treasure Islands), but I’ve never come across anyone seriously tackle the issue of non-secrecy jurisdictions doing it (the Nigerian who went from working at B&Q to being governor of one of the oil-producing states ran his cash through a British high-street bank) or suggesting what any bank should do short of refusing to deal with Africans. I wish they would, tbh.

  25. TIm N

    But according to the TJN Almost every country in the world is ‘a secrecy jurisdiction’ which is why I don’t treat much of their output with any seriousness. How the devil can Denmark (For example) warrant a place on any list? Norway? New Zealand? It makes discussion of genuine tax havens somewhat a moot point. A couple of organizations have also pointed out that having these jurisdictions at least prevents taxation rising to near confiscatory levels – I have absolutely no doubt Murphy would like to raise the base rate to 90% – ‘Secrecy jurisdictions’ at least attempt to put a brake on that aggregation of power (although I recognize they have disadvantages also)

  26. Van_Slattern

    Murphy has never advocated extremely high tax. IIRC nothing above 50% for high income.

    As for those jurisdictions influencing ‘onshore’ tax regimes, well that’s just the same as forcing another sovereign state to act in a certain way by military force or terrorism. You’ll find those organisations you mention are those with global reach, so no surprises really. If that tax rate influence causes the sovereign state to start cutting services, the military, and everything else the state does, is that not anti-democratic, and simply a war-by-attrition? And eating your own tail?

    You can say that the Transparency Index is ‘without any seriousness’, but surely you ought to read its methodology on the website before commenting.

    And a moot point is a point to have a meeting about, not a point that’s redundant.

  27. He wrote the budget submission for the TUC one year calling for, can’t quite recall, 75 or 80% top end on income.

  28. “well that’s just the same as forcing another sovereign state to act in a certain way by military force or terrorism.”

    Arnald, you know as well as anyone that that is complete nonsense!

    When the UK legalised abortion, was that really the same as using military force or terrorism against the Republic of Ireland?

  29. Lawrence

    I’ve read the methodology on TJN before – remind me who elected them to sit in judgement over every country?

    ‘We still think the terms ‘secrecy jurisdiction’ and ‘tax haven’ are useful, however. What is a secrecy jurisdiction? The Tax Justice Network does not want to offer a hard and fast definition, but we do offer the following form of words as a useful way of thinking about the phenomenon:

    “A secrecy jurisdiction provides facilities that enable people or entities escape or undermine the laws, rules and regulations of other jurisdictions elsewhere, using secrecy as a prime tool.”

    Are you seriously contending there is large scale financial secrecy being abetted by Denmark, Norway or New Zealand? For real?

    The organizations I mention pointing out the positive aspects of tax havens are usually organisations based in the US or UK – though you could argue their influence is global. I agree there is a risk state revenue could be reduced – though I think to be frank the idea that in the UK (for example) there is no waste or potential for cuts in a budget of over £600 billion is a strange one.

    Though I think Murphy a little rash in how he commits to a blog before thinking it through I don’t think even he is daft enough to commit to a 90% base rate on paper – Imagine the hay the media would make with that in the light of his higher profile these days.

    However I think you can safely say that he looks for rates well above 50% for the very well-off (which encompasses a large part of society by his ever – shifting criteria) – check out the paper by him and Howard Reed advocating a minimum income (for example)

    RE; A moot point – isn’t it an auto-antonym which can be used in both senses (although you definition is correct and older)

  30. Arnald

    The original claim made by RM is that CBC is based on a 2003 paper he wrote. This is clearly not the case since the concept as applied to extractive industries clearly goes back to the 1999 Global Witness report. As Luis noted it is possible that RM might have been involved in this, but not on the basis of the claim shown here.

    Whether EITI was founded in 2002 or 2003 is moot (in the sense of having no relevance) since the concept clearly predates the RM claim. You get a technical point for correctly noting the official start of EITI, but have not undermined the substantive claim made by Tim that RM has no claim on the CBC (extractives) on the basis of evidence proffered.

  31. @arnauld

    “Murphy has never advocated extremely high tax. IIRC nothing above 50% for high income earners.”

    You and I clearly disagree on what constitutes extremely high levels of taxation. If I don’t keep 75% of what I earn at minimum, I switch accountants

  32. @ Arnald
    five years ago we had tax of 52% for high income earners who were employees (?did that make it 58% for those who were self-employed, or – since one cannot reclaim input VAT on one’s earnings – 65%).

  33. @ Arnald
    Murphy attacks IFRS for being designed to, inter alia, protect the interests on investors. Since IFRS only applies to quoted companies, it seems to me entirely reasonable that it should be designed to, inter alia, protect investors. UK GAAP was designed to, principally, protect creditors. The Inland Revenue demands a different set of accounts anyhow so why should IFRs (or GAAP) be designed to protect the taxpayer?
    NB Accounts only deal with money and/or monetary values – anyone who attacks accountants for failing to protect the interests of workers and the environment is either an empty-headed windbag or a dishonest mob orator.

  34. “And a moot point is a point to have a meeting about, not a point that’s redundant.”

    God, you’re a fucking idiot, Arnald. Seriously, are you just so used to making stuff up that it doesn’t occur to you to google before making assertions like that?

  35. Not making stuff up, Rodney, just saying. In the context that Van-o was using moot:

    “How the devil can Denmark (For example) warrant a place on any list? Norway? New Zealand? It makes discussion of genuine tax havens somewhat a moot point.”

    Which is implying that discussing tax haven activity is irrelevant because other jurisdictions have various layers of financial opacity, then I disagree. It is precisely because those seemingly clean jurisdictions such as Denmark have that opacity that the “genuine tax havens” can claim their own affairs are justifiably normal. Something that the Crown Dependencies bring up all the time.

    Therefore the discussion around tax havens is indeed a moot point.

    So Rodney, fuck off.

  36. Bloke not in Cymru

    Certainly CBC segmentation was discussed when I did accountancy training back in the 80’s
    Also Murphy attacks IFRS, but has admitted to not being up to date with current standards and seems to conveniently forget that it doesn’t stop you from providing additional reporting.

  37. Arnald>

    Look, Wormtongue, we all understood what you were trying to say the first time around. But your definition is just plain wrong, because you’re a lazy idiot who doesn’t bother to check their facts. Repeating your nonsense, explaining it at length, doesn’t stop it being total rubbish with no basis in fact.

  38. Tell me, little David, where I have strayed so that I may share the wonder of your tremendous intellect.

    [citation needed]

  39. Lawrence

    Your definition was correct – I was using the American sense of the term which seems to have superseded the older sense. I do see what you’re trying to say – And no doubt living in the Channel Islands you have seen examples when they have probably made the comparison with Denmark (for example) .

    Nevertheless Again I ask on what basis do the TJN sit in judgement over the entire world? Who elected them? And their methodology – ‘we don’t offer a hard and fast definition’ lays them open to a charge that they are casting the net too wide……

  40. vp

    Not sure that TJN are sitting in judgement. They’ve designed and backed up an open study of how various financial systems work and they have reached conclusions. They then use it to produce evidence and lobby where appropriate.

    On what basis do you disagree?

  41. Wormtongue>

    Really, it’s not that hard to use Google, is it? I know you’re a being of very little brain, but surely even you can manage that? You attempted a bit of poncy linguistic pendantry and failed. You are wrong about the meaning of ‘moot point’.

  42. Arnald quoted:
    “The organisation was founded at a conference in London in 2003”

    But the EITI says that “the EITI was launched in 2002”
    (https://eiti.org/faqs#OECDcountries)

    And again:
    “From 2002 to 2006, the EITI had been valiantly run by a small team in the UK Government’s Department for International Development”
    (https://eiti.org/eiti/history)

    And that the initiative actually dated back further:
    “The civil society campaign slogan of “Publish What You Pay” (PWYP) was drawn from a Global Witness report, “A Crude Awakening” launched in December 1999”
    (https://eiti.org/eiti/history)

    Which takes us back to where we started; although the formal organisational structure may have come along a bit later, the concept was formed well before Murphy started writing about it.

  43. I wrote a couple of posts on Forbes about the Angolan elites and their oil interests – prompted by Nick Shaxson, I confess, but it was a fascinating investigation. I backed off sharpish when I was invited to meet the leader of the Angolan opposition. I was already living quite dangerously because I was writing about corruption in Bulgaria, but the Bulgarian mafia are pussycats compared to the Angolan Presidential heavies. I want to stay alive.

    However, I still have an interesting tale to tell about Equatorial Guinea’s SWF (which is of course its dictator’s personal wealth, as with most SWFs) and a Portuguese bank.

  44. Dave
    You are forcing me to state on this blog that Arnald is correct (in his definition of “moot point”). You are being as obnoxious as you claim him to be.

  45. Lawrence

    Sorry for late reply – Your statement is again unobjectionable as it stands – The TJN is a lobby group- however, if that is all it is – from whence does it aggregate supreme moral authority? How does it represent ‘society as a whole?’

    If I tell them, and by extension Murphy that thanks for their opinion, we’ll stick to the status quo? Is that, as he contends, a ‘denial of democracy?

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