apple-logoWe are delighted to welcome the latest in a series of cross-posts by Dr Shane Darcy from the Business and Human Rights in Ireland Blog.  The Business and Human Rights in Ireland Blog is dedicated to tracking and analysing developments relating to business and human rights in Ireland. It aims to address legal and policy issues, as well as highlighting human rights concerns raised by the activities of Irish companies or multinational corporations based in Ireland. The blog is run by Dr Shane Darcy who is a lecturer at the Irish Centre for Human Rights, National University of Ireland Galway.

Ireland is one of many countries that is being put through the mill of so-called austerity measures. Cuts all across public services, including in health and education, as well increased unemployment and personal debt are having a severe impact on society. David Stuckler and Sanjay Basu have convincingly argued in their recent book that “austerity kills”. The devastating effects of austerity can actually be measured in lives, specifically the observable increase in suicide in countries such as Greece since the enforced cutbacks. According to Dan Neville, the President of the Irish Association of Suicidology:

The recession has had a huge impact on people’s wellbeing. Those who lose their jobs, experience a drastic reduction in their income or are in danger of losing their home experience a lot of anxiety, despair and depression. Relationship difficulties and marriage breakdown can follow on from that.

The drastic cuts in public spending have been mandated by the EU and IMF as part of the bailout deal for Ireland. The size of Irish sovereign debt is owed in large part to the previous Government’s decision to socialise the huge debts incurred by the banks when the property bubble burst. In the midst one of the worst economic recessions Ireland has ever known comes the revelation that multinational corporations based in Ireland have been avoiding tax on an enormous scale.

As widely reported, a United States Senate Report has shown that Apple struck a deal with the Irish Government in the 1980s that has meant the company has paid far less corporation tax on profits in Ireland than the standard rate. For some of its Irish-based subsidiaries it has paid no corporation tax whatsoever. From 2009-2011, the Senate Subcommittee was told, Apple Sales International “paid an Irish corporate income tax rate that was consistently below far below 1% and, in 2011, was as low as five-hundreds of one percent (0.05%)”For the last four years, that subsidiary had income of around $74 billion but paid hardly any tax. Another subsidiary, Apple Operations International, made $30 billion and despite being based in Ireland, paid no tax here or indeed anywhere else.Boston Scientific paid only 4% corporation tax in Ireland on recent profits of $1.6 billion.

Ireland had been labelled a tax haven before all this emerged, and the label is bound to stick now that the US Senate has used it, despite the protestations of the Ambassador to the US andbusiness representativesOxfam Ireland have highlighted that the problem goes beyond corporate tax and considers that over €700 billion from overseas could also be hidden in Irish financial institutions. While huge sums of tax go unpaid in Ireland, ordinary citizens are forced to endure cuts to public services and increased taxes and charges for the foreseeable future.

The Government and the companies themselves will argue that they are acting within the law, that they have done nothing illegal. That may be so, but it is hardly satisfactory. One of the co-founders of Apple, Steve Wozniak, explained to an audience in Derry last month:

For a corporation there is no such thing as personal ethics, you will do anything, any scheme you can to maximise your profits, so they are just obeying the system … The system is that way because those with the power and the money, large corporations particularly, make sure that politicians can create the things that will enhance the corporations.

The Irish Government has gone to considerable lengths to ensure a low corporation tax rate in order to encourage foreign direct investment. Ciara Hackett has written that Ireland has developed such a dependency on foreign direct investment, that very little can now be done to impose any social responsibility on multinational corporations.

Seen through the lens of human rights law, Ireland is falling short of its international obligations. Ireland is obliged under the International Covenant on Economic, Social and Cultural Rights to take steps for the progressive realisation of those rights to “the maximum of its available resources”. The State will no doubt argue that the dire financial situation means less resources are available for public services. The Committee of Economic, Social and Cultural Rights has said that it will give “deliberately retrogressive measures … the most careful consideration“. In assessing a State’s performance, it will take into consideration the use of maximum available resources, the economic situation in the country, as well as “other serious claims on the State party’s limited resources”, such as conflict or a natural disaster.

The interpretation of “maximum available resources” should not be limited to public money, but must include all the wealth within a State when assessing compliance with the Convention. The connection between tax and human rights has been subject to considerable attention recently. According to the Tax Justice Network Germany:

One of the greatest obstacles to an exhaustive use of the maximum available resources is the current regime of taxing transnational corporations.

In particular, the use of transfer pricing and intra-group trading, so evident in Apple’s case, facilitates the avoidance of tax. A uniform corporate tax base would help to correct this, as would strengthening the human rights responsibilities of companies set out in the United Nations Framework and Guiding Principles on business and human rights.

This tax scandal shows that the social responsibility of business in Ireland is given the narrowest of meanings. Milton Friedman infamously said that the only social responsibility of a company is to increase its profit. Paying less taxes does just that, despite the impact on society.


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Written by Charles O’Mahony

Charles O’Mahony is a lecturer in Public Law at the School of Law, NUI Galway. His research is primarily in the area of mental health law and policy. Charles previously worked as Amnesty International Ireland’s Legal Officer on its mental health campaign. You can contact him at charles.omahony[at]