By running their operations through tax havens they can conceal transfer pricing schemes, lower their tax bills and even avoid responsibility for damages caused by companies they are invested in or supplied by.
One of the world’s biggest food traders, US-based ADM, uses a web of subsidiaries in tax havens like the Cayman Islands and Mauritius to cut its annual taxes by about half. These offshore companies also help it to obscure its close connections with the notorious palm oil corporation Wilmar International.
Wilmar, based in Singapore, amassed 600,000 hectares of oil palm plantations through deforestation and the violent eviction of local communities. Newsweek magazine ranked it as the world’s “worst” corporation in terms of environmental performance. But this criticism of Wilmar rarely spills over to ADM, one of its top shareholders. Few people appear to be aware of the offshore structure through which ADM and Wilmar are so deeply entwined.