The Future is Equal

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Oxfam calls for reform of the UN Security Council

Ahead of the UN Summit for the Future, Oxfam calls for reform of the UN Security Council to stop the “Permanent Five” from being their own “judge and jury”  

The UN Security Council (UNSC) is failing people living in conflict, with Russia and the United States particularly responsible for abusing their veto power which is blocking progress toward peace in Ukraine, Syria, and the Occupied Palestinian Territory and Israel. 

A new Oxfam report, Vetoing Humanity, studied 23 of the world’s most protracted conflicts over the past decade, including Afghanistan, Burkina Faso, Ethiopia, Libya, Niger, the Occupied Palestinian Territory (OPT), Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela and Yemen, and found that 27 of the 30 UNSC vetoes cast on these conflicts were on OPT, Syria and Ukraine.  

The report concludes that the five permanent members of the UNSC (the P5) are exploiting their exclusive voting and negotiating powers to suit their own geopolitical interests. In doing so, they are undermining the Council’s ability to maintain international peace and security.  

More than a million people have been killed in these 23 conflicts alone and more than 230 million people are today in urgent need of aid – an increase of over 50 percent since 2015. 

“China, France, Russia, the UK and the US took responsibility for global security at the UNSC in what is now a bygone colonial age. The contradictions of their acting as judge and jury of their own military alliances, interests and adventures are incompatible with a world seeking peace and justice for all,” said Oxfam International Executive Director Amitabh Behar.  

For instance, in 2023 Russia vetoed a nine-month extension of cross-border assistance to Northern Syria which left 4.1 million people with little or no access to food, water and medicine. Russia has also used its veto four times on Ukraine, despite being an aggressor in the conflict and by UN rules should therefore be disqualified from voting. 

While the UN General Assembly (UNGA) has passed at least 77 resolutions over the last decade supporting Palestinian self-determination and human rights and an end to Israel’s illegal occupation, the US has used its veto power six times to block resolutions perceived as unfavourable to its ally Israel. The US vetoes have created a permissive environment for Israel to expand illegal settlements in the Palestinian territory with impunity.  

“More often than not the Security Council permanent members’ vetoes have contradicted the will of the UN General Assembly, in which all states are represented,” Behar said. 

The report critiques another of the P5’s powers called “pen-holding”, which allows them to lead on negotiations and direct how resolutions are drafted and tabled, or ignored – again, too often according to their own interests. 

While France and the UK have not used their veto last decade, they and the US have held the pen on two-thirds of resolutions relating to the 23 protracted crises studied by Oxfam. The UK holds the pen on Yemen, for example, where it has a colonial legacy and strategic interests to maintain the maritime routes. In 2023, Mali objected to French pen-holding given what it considered “acts of aggression and destabilization” there. 

Many other initiatives are not even written up or tabled because they would inevitability be vetoed, the report says. As a result, the 23 crises studied by Oxfam are being treated in wildly different ways. Nearly half of them have been largely neglected with fewer than five resolutions each over the last decade, including just one on Myanmar and none on Ethiopia or Venezuela. 

On the other hand, the UNSC has passed more nearly 80 on both South Sudan and Sudan, 53 on Somalia and 48 on Libya. None have led to lasting peace. Despite the Democratic Republic of Congo having had 24 UNSC resolutions in the past 10 years, for instance, the UN mission there (MONUSCO) has been hindered by chronic underfunding and lack of coordination. 

“The erratic and self-interested behaviour of UNSC members has contributed to an explosion of humanitarian needs that is now outpacing humanitarian organizations’ ability to respond. This demands a fundamental change of our international security architecture at the very top,” Behar said. 

Globally, the number of people needing humanitarian assistance has risen nearly four times in the last decade, triggering massive funding needs. Between 2014 and 2023, the UN appeal has nearly tripled from $20 billion to over $56 billion – but less than half of this amount was met last year.  

The report is critical of the fact that humanitarian funding remains entirely dependent upon voluntary contributions. In contrast, UN member state funding for peacekeeping operations is mandatory. 

As the Summit of the Future kicks off this week to envision a revitalized UN, Oxfam calls for a wholesale reform of the UN Security Council, including the abolition of the P5’s veto power.  

“We need a new vision for a UN system that meets its original ambitions and made fit for purpose for today’s reality,” Behar said. “A Council that works for the global majority not a powerful few. This starts with renouncing the veto and pen-holding privilege of the P5 and expanding membership to more countries.” 

Notes to the Editors 

  • Read Oxfam’s “Vetoing Humanity” report (Link will go live once embargo is lifted) 
  • Oxfam looked at 23 crises that were listed in the UN Office for the Coordination of Humanitarian Affairs (UNOCHA)’s “Global Humanitarian Needs Overviews” for at least five consecutive years over the last decade. These are: Afghanistan, Burkina Faso, Burundi, Cameroon, the Central African Republic, Chad, the Democratic Republic of Congo, Ethiopia, Haiti, Iraq, Libya, Mali, Myanmar, Niger, Nigeria, the Occupied Palestinian Territory and Israel, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela and Yemen. Source: UNOCHA Global Humanitarian Overview 2024 and UNOCHA 2014-2018.   
  • Over the past decade, the UNSC has passed 454 resolutions and vetoed 30 resolutions on these 23 protracted crises. 8 out of 12 resolutions on Palestine and Israel; 15 out of 53 on Syria; 4 out of 6 in Ukraine; one on Venezuela; one on Malia; and one on Yemen, have been vetoed respectively. Sudan and South Sudan have had 79 resolutions passed since 2015. Oxfam’s vetoes calculations are based on UN data and UNSC data. Analysis of UNGA Resolutions is based on UN Dag Hammarskjöld Library. (n.d.). UN General Assembly Resolutions Tables.  
  • Russia and the United States have together cast 75% of the 88 UNSC vetoes since 1989, with the rest by China – neither France nor the UK have used their veto power over that period. Source: For details on UNSC vetoes, see UN Dag Hammarskjöld Library. (n.d.). UN Security Council Meetings & Outcomes Tables: Veto List. Accessed 20 July 2024. For details on approved resolutions see UNSC Resolutions 
  • 11 of the total 23 protracted crises (48%) had each fewer than five resolutions over the last decade. Source: see above. 
  • Oxfam calculated 1.1 million people died during 2014–23 in the 23 protracted crises using the conflict-level version of the dataset and the best estimates of battle-related deaths (as opposed to the high or the low estimates). Source: The Uppsala University Conflict Data Program Battle Related Deaths dataset version 24.1 
  • Oxfam calculated global funding needs based on the UN Office for the Coordination of Humanitarian Affairs Financial Tracking Service database coordinated appeals data from 2014 to 2023. Only 43% of the total $54.1bn appeal was met in 2023. 
  •  According to the UN Charter article 27(3), “a party to a dispute shall abstain from voting”.  
  • The number of people in urgent need of humanitarian assistance living in these 23 protracted crises has grown by 157% to 233.5 million in 2024, up from 90.84 in 2015. Source: UNOCHA’s Global Humanitarian Overview (2015) and (2024). 
  • According to UNOCHA, the global number of people in need of humanitarian assistance has risen nearly four times in the last decade – from 77.9m in 2015 to 299.4m in 2024. Source: See above. 
  • According to the Global Report on Food Crises 2024, the number of people experiencing acute or worse levels of hunger across 20 of the 23 countries was 199.6 million. Data from Iraq, Libya and Venezuela were insufficient or did not meet the requirements of the GRFC.  

Contacts 

At UNGA Nesrine Aly / Lauren Hartnett  

Oxfam and partners at UNGA79

Oxfam leaders, experts, and partners are joining the UN 79th General Assembly, Summit of the Future, and Climate Action week in New York, hosting and attending events focused on UN Security Council Reform, gender, digital rights, inequality, climate action, and humanitarian issues. They will be urging global leaders to take bold decisions and action as they deliberate the pressing issues of our time.   

This year’s theme is “leaving no one behind: Acting Together for the Advancement of Peace, Sustainable Development and Human Dignity for Present and Future Generations.” 

 
Oxfam International Executive Director Amitabh Behar said: 

“Our global systems have failed to address the unprecedented challenges we face today, leaving millions behind. Conflict is rampant, the climate crisis is at a breaking point, and inequality is soaring. As we gather at this year’s Assembly, leaders cannot squander the opportunity to restore people’s faith in the UN’s role as the flagbearer for global peace, security, and cooperation. They must move beyond mere rhetoric and make bold choices to create a system that serves all of humanity, not just the powerful few.” 

 
An overview of Oxfam’s key events, including a press conference on a report on UN Security Council Reform, media spokespeople, and products: 

 
A FEW HIGHLIGHTS FROM OXFAM’S AGENDA (all times in EST) : 

Thursday, September 19: Oxfam will publish a report titled,Vetoing Humanity,” which highlights how the five UN Security Council Permanent Member States’ (P5) have abused the veto and negotiating powers in their own geopolitical interests; and how they have paralyzed the Council’s ability to maintain international peace and security or mitigate prolonged conflicts and human suffering. 

At 8:30am, Oxfam will be hosting a photo call at an art installation in Tudor City outside the UN, featuring a large dove shackled to a “veto” weight, signifying how the Security Council veto has restrained efforts for global peace. Brooklyn-based artist Miles Giordani built the installation with Oxfam.  

At 11:00 am, Oxfam will also hold a press conference on the “Vetoing Humanity” report in the UN Correspondents Association briefing room. 

At 5:30pm, Oxfam and other civil society organizations will be hosting a media happy hour for a chance for experts and journalists to connect. Media can RSVP here: https://www.eventbrite.com/e/unga-media-civil-society-happy-hour-tickets-1009525918197 

Saturday, September 21: Oxfam and partners will host a Summit of the Future Action Days Official Side Event on Reforming the UN Security Council for an Equal and Sustainable Future” at the UN Headquarters.  Speakers will include Amitabh Behar, Oxfam International Executive Director; Anne-Marie Slaughter, CEO of the New America; Ambassador Lazalous Kapambwe former Zambia Permanent Representative to the UN and 67th President of UN ECOSOC; Wameedh Shakir, Founder and Chairperson of Itar Foundation in Yemen; Augusto Lopez-Claros, Executive Director and Chair – Global Governance Forum and Ishaan Shah co-founded Stolen Dreams. Register to participate or watch the Livestream here: Reforming the UN Security Council for an Equal and Sustainable Future (Side Event, Action Day 2, Summit of the Future) | UN Web TV 

 

Monday, September 23: Oxfam will publish “Multilateralism in an Era of Global Oligarchy: How Extreme Inequality Undermines International Cooperation,” a report highlighting how ultrawealthy individuals — often enabled by the richest countries — exert disproportionate influence over policy decision. The paper proposes the solutions needed for progress and provides new global data prepared for UNGA. On Thursday, September 26, a joint event with the Ford Foundation will outline key aspects the report; the panelists will include: Oxfam International Executive Director Amitabh Behar; Ronald Lamola, South African Minister of International Relations and Cooperation; and Nanjala Nyabola, Kenyan writer, researcher, and political analyst; moderated by The Washington Post’s Karen Attiah. 

 
Reactive Statements: 

Oxfam will be making statements regarding Summit of the Future outcomes, Heads of State Speeches during the High-Level Debate and other developments throughout. 

 
OXFAM SPOKESPEOPLE: 

  • Amitabh Behar, Oxfam International, Executive Director: Sustainable Development Goals, UN Reform, Inequality, Climate, Democracy, Human Rights, war in Gaza 
  • Abby Maxman, Oxfam America President and CEO: Sustainable Development Goals, Inequality, Humanitarian Issues 
  • Lebogang Ramafoko, Oxfam South Africa Executive Director: Summit of the Future, Climate and Inequality 
  • Brenda Mofya, Head of Oxfam New York Office: Sustainable Development Goals, The Summit of the Future, Humanitarian Issues  
  • Dr. Tawanda Mutasah, Oxfam America Vice President of Global Partnerships and Impact: Sustainable Development Goals, UN Reform 
  • Ashfaq Khalfan, Oxfam America Director of Climate Justice: U.S. position and context on climate issues in UN agenda, Climate and Inequality, Future Generations 
  • Nabil Ahmed, Oxfam America Director of Economic and Racial Justice: Economic/Wealth Inequality, Progressive Taxation, Corporate Power, Multilateralism 
  • Pauline Chetcuti, Oxfam International Head of Humanitarian Advocacy and Campaigns; Humanitarian and Climate Financing, Humanitarian Issues 
  • Neal McCarthy, Oxfam America Associate Director of Digital in Program: Summit of the Future Digital Compact  
  • Rebecca Shadwick, Oxfam International Gender Rights & Justice Policy & Advocacy Lead: Gender Justice and Rights in the Summit of the Future 
  • Abdulwasea Mohammed, Oxfam in Yemen Advocacy, Policy, and Campaigns Lead; Yemen, Inclusive Peace and Security 

Partners:  

  • Marinel Ubaldo, Climate Activist from the Philippines; Climate and Youth Activism 
  • Hilda Nakabuye, Climate Activist from Uganda: Climate and Youth Activism 
  • Wameedh Shakir, Chairwoman of Itar Foundation for Social Development in Yemen; Yemen, Gender, UN Reform 

 
FULL LIST OF EVENTS AND MEDIA PRODUCTS: 

Wednesday, September 18: 

YEMEN JOINT NGO BRIEFING NOTE: Humanitarian Situation and Funding in Yemen on the Occasion of the 79th United Nations General Assembly 

Thursday, September 19: 

OXFAM REPORT + PRESS CONFERENCE + PHOTO CALL: Oxfam is publishing the report “Vetoing Humanity: How a few powerful nations hijacked global peace and why reform is needed at the UN Security Council.” 

Embargoed press release and report 

Public press release and report (links will go live at 00:01 EST) 

As detailed above, Oxfam will be presenting the report at a press conference and presenting a temporary art installation featuring a dove of peace shackled by the weight of the veto by Brooklyn-based artist Miles Giordani. 

 

OXFAM JOINT CIVIL SOCIETY MEDIA HAPPY HOUR: Oxfam and civil society partners are hosting a happy hour to connect policy experts with media. Media RSVP: https://www.eventbrite.com/e/unga-media-civil-society-happy-hour-tickets-1009525918197 
TIME: 5:30-8:30pm 
LOCATION: The Stag’s Head, 252 E 51st Street (at 2nd Avenue) 

 
Friday, September 20: 

FRIDAYS FOR FUTURE + OXFAM EVENT: Youth Climate Strike: Tear Down the Pillars of Fossil Fuels. Oxfam staff and partners will take part; Climate activist Hilda Nakabuye will speak at the rally 
TIME: 2:00-4:00pm 
LOCATION: Meet at Foley Square, RSVP at https://actionnetwork.org/events/youth-climate-strike-tear-down-the-pillars-of-fossil-fuels-2  
 
OXFAM + TRUST AFRICA EVENT: African Civil Society Dialogue on the Summit of the Future 
LOCATION: Jay Suites – Fifth Avenue, 15 W 38th Street  
Note: This event continues to September 21. For more information contact Gail Smith (gail.smith@oxfam.org.za). 
 
Saturday, September 21: 

OXFAM SIDE EVENT: Summit of the Future – “Transforming Economies beyond GDP: towards a caring and feminist future with people, wellbeing and planet at the center.” 
TIME: 9:00-10:45am 
LOCATION: https://us06web.zoom.us/webinar/register/WN_pmurQXRqTlqJFa4Ysp_AFA  

OXFAM EVENT: “Connecting the Global North and South in fulfilling existing legal obligations on climate finance, including loss and damage” 
TIME: 11:00am-12:30pm 
LOCATION: Oxfam NY Office, 369 Lexington Avenue 
Note: For more information contact Karelia Pallan (karelia.pallan@oxfam.org) 

OXFAM + IMPACT COALITION ON AI EVENT: Oxfam’s Neal McCarthy will be speaking on the Panel on AI & Technology Governance”  
TIME: 4:00-5:15pm 
LOCATION: UNHQ – CR12 
 
Monday, September 23: 

OXFAM REPORT: “Multilateralism in an Era of Global Oligarchy” will outline how extreme economic inequality undermines multilateral efforts to effectively respond to critical global challenges like global taxation, health, and debt and proposes the solutions needed for progress. The paper provides new global data prepared for UNGA. 

OXFAM STATEMENT: Oxfam will issue a media reaction to the Pact of the Future and Summit of the Future outcomes 

OXFAM STATEMENT: Oxfam will issue a statement ahead of President Biden’s address at the General Debate  

Tuesday, September 24: 

OXFAM EVENT: “Building Global Consensus for Justice in Mining for the Energy Transition: Can the UN Critical Energy Transition Minerals (CETM) Panel lead the way?” RSVP: https://www.eventbrite.com/e/un-panel-on-critical-energy-transition-minerals-toward-the-change-we-need-tickets-999360422927 
TIME: 3:00-4:30pm 
LOCATION: Oxfam NY Office – Sinatra Room (2nd Floor), 15 W 38th Street  
 
Wednesday, September 25: 

OXFAM SPEAKING ON DEVEX PANEL: “Food as a weapon in the new age of starvation.” Oxfam in Yemen’s Abdulwasea Mohammed, Advocacy, Policy and Media Lead, will speak about the food security crisis in Yemen 
TIME: 10:25-11:00am 
LOCATION: In-person in New York and online at https://pages.devex.com/devex-at-unga-79.html 
 
Thursday, September 26: 

OXFAM + FORD FOUNDATION EVENT: “Multilateralism in an Era of Oligarchy” will explore how extreme economic inequality undermines multilateral efforts to effectively respond to critical global challenges like global taxation, health, and debt; Oxfam panelists will be moderated by The Washington Post’s Karen Attiah. 
TIME: 12:30-2:30pm 
LOCATION: Ford Foundation, 320 E 43rd Street 
Note: Please contact Shelby Bolen (shelby.bolen@oxfam.org) to be added to the RSVP list. 
 
ABOUT OXFAM 

Oxfam is a global organization that fights inequality to end poverty and injustice and will highlight the urgent need in tackling the intersections of rising inequality, humanitarian emergencies, and the climate crisis. 

CONTACT INFORMATION: 

For any media requests or for more information on anything below, please reach out to Lauren Hartnett at lauren.hartnett@oxfam.org and +1 203-247-3920 or Nesrine Aly at nesrine.aly@oxfam.org or +44 750 398 9838 (WhatsApp only). 

To keep up with the Oxfam delegation’s activities, follow @Oxfam 

Amitabh Behar named Oxfam International’s Executive Director

Oxfam International is pleased to announce the appointment of Amitabh Behar as its new Executive Director. Behar is a respected global civil society leader, with three decades of experience and extensive work on human rights, economic inequalities, governance accountability, philanthropy, democracy and social justice. He was selected following a competitive recruitment process.

Behar joined Oxfam in April 2018 as the Chief Executive of Oxfam India. More recently, he served as Oxfam International’s Interim Executive Director.

“Behar is a thoughtful and creative feminist leader, with an in-depth understanding of the causes and complexities of poverty, inequality, discrimination and suffering. We are confident in his ability to convene our confederation, alongside our partners, to deliver our vision for a just and equal world,” said Dr. Aruna Rao, the Chair of the Oxfam International Board of Directors.

Behar said: “I embark on this new chapter acutely aware of the global and interconnected challenges we face in our world today. We require urgent action built on new solidarities, new imaginations, and new dreams to deliver a more equal and sustainable future for all.

“Oxfam carries a rich legacy rooted in working with communities while advocating for systemic change. I am eager to channel our collective energies, boldness, resources, and partnerships in support of peoples’ power for the good of majority of the global population.”

Behar has made valuable contributions to Oxfam’s transformation of its own confederation, decolonizing its decision-making and strengthening its collective structure and policies. He has been widely recognized for his work on people-centric advocacy, governance accountability, social and economic equality, and citizen participation.

Prior to Oxfam, Behar was Executive Director of the National Foundation for India and Co-Chair of the Global Call to Action Against Poverty. He has also served as the Vice-Chair of the Board of CIVICUS and the Chair of Navsarjan (Ahmedabad) and President of Yuva in Mumbai. He currently serves on the boards of several other organizations, including the Global Fund for Community Foundation and the Norwegian Human Rights Fund.

Contact: Rachel Schaevitz, rachel.schaevitz@oxfam.org.nz

EU outshines NZ with its vote for Corporate Due Diligence

On 1 June, 2023, the European Parliament voted in favour of the Corporate Sustainability Due Diligence Directive (CSDDD) shedding light on the lack of similar due diligence regulations here in Aotearoa, especially with regards to international supply chains which Oxfam Aotearoa says it is deeply concerned by. 

For many years trade unions and civil society groups, like Oxfam, have been lobbying for laws to be put in place to ensure living wages, safety and protection in supply chains owned by New Zealand companies. Whilst the conversation around the proposed Modern Slavery and Worker Exploitation law was a step in the right direction, sadly, some areas have fallen through the cracks.  

Women and men working in factories overseas, making the clothes, food and other products that we consume, can and should be treated with dignity. Dignity means upholding human rights standards in terms of paying a living wage, ensuring safe conditions, adopting gender sensitive policies and several other key human rights standards. 

Earlier this year, Oxfam visited women working in factories in Bangladesh, where – due to the lack of policy – women and men suffer severe consequences. One worker named Sabina told Oxfam about the factory where she works, “Due to the target filling pressure, sometimes I can eat and sometimes I cannot. It’s hard to drink water and use the toilet.” Sabina then goes on to say, “Yes, they abuse [me], but if I meet the target, then they don’t abuse. It happens to everyone. I feel sad and I cry for 1 or 2 hours, then I get relief.” These kinds of human rights violations should not be happening. Without fashion brands being made to do their due diligence, this will continue to happen. 

Corporate due diligence is essential to ensure we can detect, prevent and address human rights violations in supply chains. The What She Makes Campaign launched by Oxfam Aotearoa is one such step towards ensuring corporate due diligence. The campaign works with leading fashion brands in Aotearoa to pay a living wage to the women who make our clothes in hundreds of factories situated across the globe.  

Another approach to guarantee corporate due diligence is when governments enact and implement rules and regulations mandating companies to enforce human rights standards in their supply chains.  

The CSDDD, an example of the latter approach, holds the potential to require that companies address issues such as payment of a living wage, ensure human rights standards in their value chains and be held accountable for environmental and/or climate damage caused by such companies. This is a small, yet positive step towards guaranteeing that women and men working along these supply chains are ensured a living wage, safety, and most of all, are treated with human dignity. 

The CSDDD however, also has its shortfalls, such as only capturing a small proportion of companies, failing to remove significant hurdles in victims accessing justice, affording certain exemptions to the financial sector, and failing to include strong accountability measures for directors of companies. As the European Parliament along with the European Commission and the Council of Europe move forward in finalising the wording of the rules following Thursday’s vote, much work is needed to ensure that the CSDDD is made stronger. This will provide meaningful protection and redress mechanisms to millions of women and men around the world. 

As the European block, the UK and Australia move towards abolition of modern slavery, ensuring due diligence and living wage guarantees, this is a good time for Aotearoa to take stock of its own commitments. The What She Makes Campaign’s most recent Transparency Report showed certain New Zealand brands lagging behind in supply chain transparency when compared to international brands. Hence, it is high time to rekindle the conversations around due diligence and modern slavery, and take concrete steps towards holding companies in Aotearoa accountable.  

European countries water down landmark EU law to clean up business

Today, European justice ministers agreed on a proposal for a law to make companies accountable for the damage they cause to people and the planet.   

In response, Oxfam EU’s Economic Justice Policy Lead, Marc-Olivier Herman, said:

“Today, European countries watered down a landmark proposal to clean up business and stop corporate abuse. It is a loss for the women and men who work in terrible conditions around the world to make the goods that end up in our shopping trolleys. The only ones celebrating today is the regressive business lobby.

“The original proposal was already a far cry from the game-changer law we expected. Now, after EU countries played their part, it is only weaker.

On civil liability, Herman said: “There are more and more loopholes allowing companies to escape their obligations to clean up their business.”

On the financial sector: “The financial sector can continue to bankroll human rights violations and damage to the planet without being held accountable as it remains up to each European country to decide whether they want to make banks and other financial players clean up business.”

On survivors accessing justice: “The playing field has been tipped towards companies to the extent that we do not know if the law will even make a difference to survivors of corporate injustice.”

On climate obligations: “The climate crisis, the biggest challenge of our times, remains an afterthought in the Council’s version of the legislation.”

“Now the European Parliament should pick up the tab left by European ministers. They must make sure that companies, including banks and investors, are held responsible for their harm to people and the planet.”

Notes to editors

Read our media briefing which breaks down the key issues in the proposal, and what the EU needs to do to make it better.   

Read Oxfam’s report, Not in this Together, which details slavery-like conditions in the coffee industry in Brazil, workers in the Indian tea sector not able to make a living wage, and rice workers in Pakistan working up to 12 hours daily in extreme temperatures amongst others.

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EU Energy Windfall Tax: European countries must aim for 50 – 90 percent rate

Today, European energy ministers agreed on a package of emergency measures to curb the surge in energy prices. The package includes two measures to capture extraordinary profits from energy and fossil fuel companies. This follows the European Commission’s proposal on 14 September.   

In response, Chiara Putaturo, Oxfam EU Tax expert, said: 

“It is great news that European countries have, for the first time ever, agreed to capture some of the extreme excess profits of companies. But now they need to be far more ambitious. This means taxing all sectors profiteering off the global crises at a higher tax rate of between 50 and 90 percent and go beyond 2022.

“If European countries fail to be ambitious, they will only get the crumbs of the colossal corporate profits. Some European countries are already leading the way like Greece with a rate of 90 percent and Spain which is planning to capture excess profits made by banks. European countries must also design the tax in a way to capture the profits hidden in tax havens.

“In the long-term, work must be done at the global level to implement permanent windfall taxes that capture all excess profits and redistribute the revenues fairly to countries where companies have their real economic activity rather than funnelling them away in tax havens. This is the way to fight inflation and inequality. It is sheer madness that we are living in a world where companies are cashing in on the pain of ordinary people, people who are struggling to put food on the table and heat their homes.”

 

Notes:

Oxfam experts are available for interview or comment.

Today, European Energy Ministers agreed on a package of emergency measures to curb the rise in energy prices. This follows the European Commission’s proposal on 14 September. The final package includes: 

  • A “temporary solidarity contribution” on fossil fuel companies to recoup one-third (33 percent) of excess profits made in 2022 and/or 2023. Excess profit is defined as profit exceeding the average of the last four years (2018 – 2021) by 20 percent. This is a threshold rate and EU countries can apply a higher rate. Revenue will be funnelled to consumers and companies to cushion the impact of high energy bills, and to invest in green energy. 
  • A price cap on revenue made by non-gas energy companies (wind, solar, nuclear, etc): The cap will be set at 180 euros per megawatt hour and the price difference will be recycled back to consumers and decarbonisation technologies, like renewable energy.   

Countries have until 31 December 2022 to implement the measures if they do not already have an equivalent measure in place.

Oxfam recently published a new media briefing, The Case for Windfall Taxes. It includes new data on how much excess profits companies have made and how much revenue a global windfall tax could recoup.  

  • 1000 of the world’s biggest companies have recorded excess profits of 1.15 trillion dollars in 2020 and 2021 compared to the pre-pandemic period – an increase of 68.5 percent. 
  • We could raise more than 1000 billion dollars globally with a tax of 90 percent on the windfall profit of 1000 of the world’s biggest companies.

Many European countries have already introduced or are in the process of introducing a windfall tax – for a full list, see the table in Oxfam’s recent media briefing, The Case for Windfall Taxes. Oxfam recommends countries implement their own measures if they are more ambitious than the EU proposal.

Oxfam calls for a windfall tax that:

  • is ambitious, sector-wide, and automatic;
  • has a rate between 50 – 90 percent (if the tax base is calculated only on excess profit and exceeds 10 percent of the average of the previous years);
  • prevents an increase in consumer costs by stopping companies from passing on the costs to consumers;
  • redistributes revenues to those most affected by the crisis, both at home and abroad;
  • uses a tax base that captures the most excess profit and takes into account the real economic activity of a company in a country. A 2020 analysis showed that some EU countries would capture more excess profit by designing a tax base that takes into account the real economic activity of the company rather than profit.

The IMF recently suggested a permanent coordinated windfall tax (a) targeting economic rents (defined by the IMF as returns in excess of the opportunity cost of the investment – this means an amount of money earned that exceeds that which is economically necessary) and (b) based on the globally consolidated profit of multinationals (global profit of the entire group) allocated to countries according to sales.