Australia's top court has rejected a move by global mining giant Glencore to stop government officials from using leaked documents detailing the offshore arrangements of the country's largest coal producer to assess its tax bill.
Australia's High Court ruled unanimously that giant Glencore could not rely on "legal privilege" to prevent the Australian Tax Office (ATO) from accessing emails, bank records, PowerPoint presentations and other files from the 2017 Paradise Papers investigation. Typically, documents marked "privileged" do not have to be disclosed in court.
Companies within the global Glencore group sought an injunction restraining the tax authority from making use of documents that were stolen from their Bermuda law firm Appleby on the basis that those documents are subject to legal professional privilege.
Today’s decision is not just a win for the ATO; it’s a win for the Australian community who rightly expect the ATO to use all information available to ensure large corporations and those who seek to hide money overseas are paying the right amount of tax"
The Australian High Court dismissed the proceedings, concluding that legal professional privilege is not a legal right which may found a cause of action. Instead, legal privilege is only an immunity from the exercise of powers that would otherwise compel the disclosure of privileged communications, the court held.
The files known as the ‘Paradise Papers' were provided to the International Consortium of Investigative Journalists and widely reported on in the international press.
ATO second commissioner Jeremy Hirschhorn said it would have been "perverse" for the court to find the ATO could not use information already in the public domain.
"Today's decision is not just a win for the ATO; it's a win for the Australian community who rightly expect the ATO to use all information available to ensure large corporations and those who seek to hide money overseas are paying the right amount of tax," he said.
"Once we have information we can't just ignore it - we are obliged to use all relevant information we have."
Documents from the Paradise Papers investigation showed that Glencore planned to move tens of billions of dollars "out of the Australian tax net" through an offshore web, according to the AFR.
It also revealed that Glencore's Australian arm had been involved in cross-currency swaps of up to $25bn of a type under investigation by the ATO. The swaps, although lawful, are being investigated as a means for companies to shift profits from high-tax to low-tax jurisdictions by use of unrealistic, non-commercial exchange rates.
Glencore was among about 120,000 companies and people mentioned in the Paradise Papers. The papers entail more than 13 million documents handed over to the International Consortium of Investigative Journalists, which published its first stories in November 2017. Other companies named in the documents include Apple, Facebook, McDonald's, Nike, Twitter and Uber. Individuals include Queen Elizabeth and pop singer Shakira.