The report claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.
The Chamber of Mines on Tuesday called on the United Nations Conference on Trade and Development (UNCTAD) to withdraw its report on trade misinvoicing and acknowledge its shortcomings, saying that the prestigious agency had failed to collect its data accurately.
This comes after the Chamber released the third and final report in a series commissioned to examine the July 2016 UNCTAD report that claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.
Also read Maya Forestater’s blog post Misinvoicing or misunderstanding? for an incisive explanation regarding the UN’s claims in its recent report Trade Misinvoicing in Primary Commodities in Developing Countries.
The UNCTAD report titled “Trade Misinvoicing in Primary Commodities in Developing Countries: The cases of Chile, Cote d’Ivoire, Nigeria, South Africa and Zambia”, claimed to have found widespread under-invoicing which, it alleged, was designed by commodities producers to evade tax and other entitlements due to the fiscal authorities.
UNCTAD said some commodity dependent developing countries were losing as much as 67 percent of their exports worth billions of dollars to trade misinvoicing.
For South Africa, the report calculated cumulative under-invoicing over the period 2000-2014 to have amounted to U.S.$102.8 billion; which was U.S.$620 million for iron ore, U.S.$24 billion for silver and platinum, and U.S.$78.2 billion for gold.
UNCTAD revised the report in December, though its fundamentals remained unchanged.
The Chamber of Mines also commissioned Eunomix to compile its own reports which were published in December and February respectively, focusing on UNCTAD’s gold scenarios.
The third report, which was published on Tuesday, deals with the other commodities.
The Chamber said in terms of gold, the UNCTAD study methodology compared reported exports by product and country of destination with the reported imports of the products by those same countries, and did not use other widely available data, including that of Statistics SA and the Reserve Bank.
The Chamber also dismissed all other UNCTAD findings in terms of silver and platinum, and iron ore.
The Chamber said all the factors that UNCTAD did not consider reinforced the point made in the earlier Eunomix reports regarding the lack of rigour and unreliable methodologies used in UNCTAD’s report.
“This is extremely unfortunate given the levels of credence that tend to be given to reports of this UN agency. Accusations of extensive misinvoicing and other illicit financial flows are feeding a growing lack of trust between key stakeholders in the mining industry,” the Chamber said.
“The Chamber of Mines again calls on UNCTAD to withdraw this report and acknowledge its shortcomings.” Source: The Citizen, Business News, 22 Aug, 2017. [Picture: Chamber of Mines]