Published on Pambazuka News, by Khadija Sharife, Nov. 11, 2010.
As multinational food processor Nestlé attempts to patent the well-known benefits of South Africa’s fynbos plants, Khadija Sharife explains the role tax havens play in enabling corporations to protect the value of intellectual property rights.
Here in South Africa, consumption of rooibos tea, rusks and biltong (dried and spiced beef), is a national past-time. Sure, we engage in other activities – work, procreation, exercise, showering. But really, when it comes to chowing on homegrown grub, its safe to say that all other ‘musts’ take second place to our quest to be good citizens.
Of the three, it is rooibos (or ‘red bush’) endemic to South Africa – grown only in the Cederburg Mountains of the Western Cape – that is renowned amongst South Africans for its magical properties. The fynbos plants’ extraordinary properties range from curing acne to slowing ageing, inflammation and hair loss, thanks to at least one of its known – and most active, antioxidant ingredient: Aspalathin. Most scientists believe the property is available only in the rooibos plant.
Recently, Nestec SA, a subsidiary of Nestlé, based in Switzerland, applied for five patents, using water or alcohol extraction, for conditions much the same i.e.: rooibos being the ‘discovered’ property, in addition to that of the honeybush, another endemic plant.
Nestlé, which holds 30.5 per cent shares in L’Oréal (the world’s largest cosmetic producer), and 50 per cent in Inneov (a joint venture with L’Oréal), claims that it had no intention of making commercial use of the plants in the future – though it hopes for the 20 year patent. The company further claims to have contravened no national laws (despite stipulating the need for prior informed consent) or international frameworks.
Thanks to the effort of Natural Justice in South Africa, a local organisation comprised of attorneys ‘for communities and the environment’, the issue is now on the table. Thankfully, this is sooner rather than later as in Switzerland, applications are publicly available 18 months after filing. Filing the patent costs CHF200, with another CHF500 for the examination process. The European Patent Convention allows for applicants to file across more than 30 European states, with a single application … //
… As most disreputable African dictators and terribly respectable multinationals will attest in the privacy of their mansions, Switzerland is the world’s premier secrecy vault and low tax state, depending on the aggressiveness of the corporation’s ‘tax planning’. Ceding ownership of intellectual property and other intangible assets to entities in tax havens allows for companies to retain profit from royalties etc, without having to cough up taxes, as well as allowing companies to act as remote ‘contracted’ parties rather than manufacturers. McDonalds did the same following the UK’s new tax rules in 2009, while SABMiller, one of the world’s five leading beverage companies, has long since used the Netherlands for the same purpose. (full text).