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Oxfam slams World Bank over multinational tax haven links -

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KIM LANDERS: The global charity Oxfam says the World Bank has lent money to poor nations in sub-Saharan Africa that was then channelled into tax havens.

A report by Oxfam says 68 companies funded by the World Bank's private lending arm, the International Finance Corporation, used the tax haven of Mauritius to hide wealth and to dodge tax.

The allegations from Oxfam come in the midst of a global crackdown on multinational tax evasion and the shady practices revealed in the Panama papers by the law firm Mossack Fonseca.

Oxfam Australia's chief executive Dr Helen Szoke spoke with our business editor Peter Ryan.

HELEN SZOKE: Well the 68 companies that have been identified in Oxfam's research are basically using the money that's been lent by the private lending arm of the World Bank in their overall work but are using tax havens to actually shield or make less transparent how their money is actually being used.

PETER RYAN: Just how much money is being washed through these tax havens?

HELEN SZOKE: Well we know for example that the World Bank's private sector arm has doubled its investments in companies that use tax havens so one of the statistics that's worrying is that there's about US$2.87 billion in 2015 that have gone through this way. Globally the concern is that about US$100 billion a year is being washed through tax havens.

PETER RYAN: The World Bank is meant to be helping to alleviate poverty and to help nations and also some companies to stand on their own feet but this evidence would appear to go against those aims.

HELEN SZOKE: I think it's really important to remember that the World Bank has two goals and these are also the focus of its private lending arm the IFC (International Finance Corporation) so those two goals are both to eliminate extreme poverty by 2030 and also to boost shared prosperity. Now, if the real benefit of these funds isn't being realised then this is a major challenge and it means that we continue to lose this money out of the system and one of the critical aims of the World Bank can't be realised.

PETER RYAN: Sub-Saharan Africa is the poorest region in the world, shouldn't this money that's been provided by the World Bank be used to fund basic services and infrastructure?

HELEN SZOKE: This is cruelly ironic because this is a region; Mauritius is part of a region that lacks money. We know for example that there are still parts of the country where there's not enough skilled birth attendants. We know that clean water is still a problem. And these all relate to incredibly high rates of child mortality. I mean the figures are really shocking. I mean, one child in 12 dies before their 5th birthday. And yet we're seeing huge sums of money washed in this way. If we're going to realise eradicating extreme poverty by 2030 then we need the pull of the whole of the system including the private sector and the financial institutions as well as the governments involved. And there's momentum building and I really hope that we see some significant changes soon.

PETER RYAN: What's the most common tax haven used by sub-Saharan nations?

HELEN SZOKE: We know for example, that Mauritius is one of the countries where we see that about 40 per cent of the IFC's clients that are investing in sub-Saharan Africa actually have links in Mauritius.

PETER RYAN: And you also talk about this strategy called round-tripping, what's that?

HELEN SZOKE: This is a practice where a company shifts money offshore, then it returns it disguised as foreign direct investment. And as a result of returning it, it then gets the tax breaks and other financial incentives that come with it.

PETER RYAN: It does look very much like business as usual despite the global push to crack down on tax havens by some very powerful companies and individuals.

HELEN SZOKE: Disturbingly it does look like business as usual. We've seen that our own government has made a tentative step to bring in greater transparency through the changes in legislation last year. But it's just not enough and what we need is much greater levels of transparency and we need a global push on this and you know, fresh air is the best antiseptic and if you can actually see who the people are that are the directors of these shell companies; if it's a requirement that companies globally indicate where their businesses are, who their directors are, how many staff and what their projects are, if we build the momentum for this kind of transparency then we can start to address this problem. But it needs the voices of donor countries across the world and this is particularly critical as the IMF and the World Bank will have their spring meetings in Washington in April and with the timing of the Panama papers and what we've seen about tax havens and the efforts to hide wealth and to dodge tax, it's now time to say let's look globally at what sort of reforms we can get.

PETER RYAN: And as you say this does come as the Panama papers show a web of intrigue involving shady deals and tax structures. It does appear to be disturbing that the World Bank might be implicated in having some of its money used in tax havens.

HELEN SZOKE: It is incredibly disturbing that the World Bank's private lending arm should be implicated in this way and unless we see some decisive action by this significant financial institution then these practices will be allowed to flourish and continue.

KIM LANDERS: Oxfam Australia's chief executive Dr Helen Szoke with our business editor Peter Ryan. And the World Bank says the claims contained in the Oxfam study are "flawed".