Partners in Crime: Apple Inc. and Ireland!



by Selvam Canagaratna


"Crime is a logical extension of the sort of behaviour that is often considered perfectly respectable in legitimate business."– Robert Rice, The Business of Crime, 1956

"Underneath the sleek design there’s nothing but sleaze," wrote Aidan O’Brien, a regular contributor to CounterPunch magazine, on the revelations by the European Union HQ in Brussels in early September relating to America’s Apple Inc., the world’s largest company. "And behind the blarney there’s sinister bullshit."

The giant US corporation has been working harmoniously with the Republic of Ireland since 1991 on its vast tax-dodging exercise. " No wonder they understand each other," wrote O’Brien. "Despite the ultramodern technology and the trendy little economy – Apple and Ireland are nothing but pirates attempting to pillage as much as they can from the global community."

The EU Competition Commissioner, Margrethe Vestager, nailed the corporation and the country to the wall of shame, wrote O’Brien. After investigating Apple’s tax arrangements in Ireland Vestager concluded that Dublin was breaking EU rules by giving state aid to Apple – one of the richest corporations in the world (it’s value is not far off a trillion dollars).

The ‘state aid’ that Ms. Vestager referred to is a tax arrangement that allows Apple to avoid paying international tax. The trick is the use of a shell company that is based in Ireland but which is officially ‘stateless’. By directing all the money it makes outside the US into it’s Irish shell company, Apple – thanks to the Irish government – walks away with a tax rate of 0.005%, apart from the token amount it pays to the Irish government at the usual 12.5% rate. So Apple walks away with everything it can get it’s hands on. But since this special tax package is offered ‘only’ to Apple the EU judged it to be a breach of the Union"s competition rules.

Ireland has, since 1991, been ‘subsidising’ Apple’s international profits (in October 2015 it recorded an annual profit of $53.4 billion). By offering a phantom address and turning the other way, Ireland is facilitating a world wide tax dodge. And what does Ireland get in return for this? Six thousand Apple jobs. And what can the EU do about it? It is attacking the shell company and demanding that it pay the ‘Irish’ taxes it has been avoiding all these years. The EU calculates an unpaid Apple tax bill of $14.6 billion plus interest (a world record penalty). And Ireland’s response? It claims innocence and doesn’t want any money from Apple!

Commented O’Brien: "The irony is that Ireland – a victim of the EU’s extreme financial capitalism – is making the EU look good. Neoliberal Ireland is being called to order by Neoliberal Europe. And Ireland dares to protest even though it has been caught red handed cheating Europe and the world. In the name of competition Europe wants justice. And in the name of globalisation Ireland rejects justice. It’s a right wing joke. It’s a neoliberal farce. But it’s deadly serious too. The issue is taxation. And in the age of austerity this is an explosive subject."

The Organization for Economic Cooperation and Development (OECD) has been openly targeting tax havens since 2014. When Western governments are bailing out every bank in the Western world – tax avoidance becomes a real issue. The significance of the ruling against Ireland and Apple is that it has set a strong precedent. The EU intends to hit Europe’s tax havens hard. Luxembourg and Holland beware!

And the USA? The USA, writes O’Brien, is angry. Because it’s corporations have been caught red-handed. And because its government is controlled by its corporations. The likes of Apple, Amazon, Microsoft, Starbucks and McDonalds have lodged themselves into the dark corners of Ireland, Luxembourg and Holland. And are walking away with staggering amounts of untaxed profits!

O’Brien suggests Apple may have to add it’s smug wording on the back of it’s products: Designed in California and Assembled in China, but also add: Dodging tax in Ireland.

Sociologist Nicki Lisa Cole, who writes about global supply chains and consumer culture, on reading of Apple’s woes in the EU, zeroed in on the website Cult of Mac [dedicated to all things Apple from the fan’s perspective] which had published a piece titled The Biggest Apple Stories of 2013. "The piece is a toast to capitalist greed and the smarmy, self-righteousness of the kings of Silicon Valley. Notably, other important Apple stories, listed below, were not on this list."

Sample list:

* In July protests at several Apple Stores were organized by Friends of the Earth to spotlight the implications of mining tin in Indonesia. Tin is used for soldering Apple products. Miners have been injured and killed, the silt run-off from mines poses a threat to coral and sea life, and the deforestation that follows increased mining causes acidification of soil, damaging the region’s small farms and rural communities.

* Apple continues to come under fire in the US and the UK for its tax dodging scheme, cleverly nicknamed ‘iDodge Tax’ by Irish comedian Mark Thomas. Protesters pointed out that one of Apple’s holding companies, Apple Sales International, paid only 0.0135 percent in tax on its $74 billion in earnings in 2012.

* Fueling the ‘Apple Picking’ Phenomenon. Last year Apple spent $1 billion on advertising – a small investment given its brand is valued at over $98 billion – making it the most valuable brand in the world. The iPhone, with its high price point and value as a status symbol, is a lucrative theft target. A stolen iPhone can fetch as much as $200 domestically and far more overseas. Mobile security firm Lookout estimates that the annual value of lost and stolen smartphones is $30 billion.

The Federal Communications Committee reported that 1.6 million Americans were robbed of a digital handheld device (smartphone or tablet) in 2012. Statistics from around the country reveal that most of those were Apple iPhones, and that the iPhone fuels the trend.

* Reports from Hong Kong-based SACOM (Students and Scholars Against Corporate Misbehaviour), China Labor Watch, and the newly formed New Generation of Migrant Workers Concern Programme detail systemic labour violations at eleven Chinese Apple suppliers.

These reports detail similar problems across suppliers, including very low pay, excessive and forced overtime, up to 14 hour shifts and 100-hour work weeks, standing for 11 hours at a time, increased use of insecure dispatch labourers, employment of underage and forced student workers, a military-style of management with prohibitions on bathroom breaks and inadequate lunch breaks, and unsafe work environments.

* In late November SACOM released a report detailing unsafe and sickening work conditions at Biel Crystal’s Huizhou factory, which supplies 60 percent of the glass used in Apple products. Some workers were poisoned due to high levels of acetone vapour in the factory, and some suffered eye injuries due to lack of safety goggles. According to the US Agency for Toxic Substances and Disease Registry, when not handled properly in unventilated environments acetone can be highly dangerous, causing irritation of the nose, throat, lungs, and eyes, as well as headaches, light-headedness, confusion, increased heart rate, nausea and vomiting, and even fainting and coma.

* In December, China Labour Watch announced that three Pegatron Shanghai workers died after working through peak production periods. Shi Zhaokun, 15 years old, succumbed to pneumonia. He was in good health when he passed the company’s physical examination upon his hiring in September. Between then and his death on October 9 he worked 12 hours each day on Apple product lines.


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