A decade of slavery and tax avoidance into the bargain

An enslaved Filipino maid in the United States is in a better position than a journalist in Cairo when it comes to litigation against a US based company in Egypt

Abdul Ghani Mahfouz
11 July 2012

On May 16 a major anti-corruption watchdog reported that the Middle-East Thomson Reuters Office in downtown Cairo has been under investigation for tax avoidance. The issue poses a moral as well as business dilemma for the media giant that bills itself as the world's leading source of intelligent information for businesses and professionals.

The irony of the situation is that the Company and Thomson family sponsor charity institutions such as Thomson Reuters Foundation and its affiliate TrustLaw, and contribute heavily to charity works in Canada and elsewhere. Is it clever then to cheat the Egyptians - of whom 40 percent live under the poverty line - out of their money and use it to train young journalists or help a psychiatric centre in Toronto? The wealth of Mr Thomson and family, $23bn, is almost double Egypt's foreign currency reserves. It is worth having a look at the CSR policies of the Company.

Reuters used a troop of editors in its offices in Cairo for more than ten years in circumstances tantamount to slavery. These people who worked as translators from English to Arabic in the only Arabic Service of the news agency, previously owned by the British, were deprived of their rights. No social insurance, no healthcare, not even recognition that they work for the place. They were denied replies to the emails they sent to the administration. Furthermore, they only received a small fraction of their contracted colleagues’ salaries, a closed circle of relatives and acquaintances.  

They worked for eight hours a day non-stop except for a tea break for five days a week. At the end of the month they queued up in front of a trusted employee to receive their pay envelopes like the daily labour who throng the popular cafés in the outskirts of Cairo.

Any sign of discontent and the editor was sent packing at once. The Service has always been headed up by a kind of family business where friends, relatives, and cronies can get in, out and in again at any time and with every privilege. Out of this huge pool, some people are singled out and given contracts and good salaries, not based on efficiency but on good relationships with the corrupt senior editors.

The campaign in the US press against Arif Al-Ali, the UAE naval officer who was accused last year in the United States of enslaving his Filipino maid Elizabeth Cabitla Ballesteros, led to the guy standing accused of human trafficking. But Ballestros in the States is in a better position than a journalist in Cairo when it comes to litigation against a US based company in Egypt.  The daily practice of Reuters in Cairo has never been picked up simply because the laws are routinely manipulated by lawyers on behalf of employers. The Labour Law enacted by President Hosny Mubarak strongly favours the businessmen who formed the mainstay of his rule. Things are likely to take a long time to change in the direction of a fair balance of employee-employer interests.   

Reuters, like other corrupt businesses in the circle of Mubarak and family, also found it convenient to shed some of its essential responsibilities toward the state and society. Reuters should have deducted a certain percentage of the salaries of its employees as an income tax to be relayed to the tax authorities. But instead, since employees have no formal existence or documents, it simply gave them small untaxed salaries disregarding the state coffers.

But the investigation into tax avoidance is not in itself enough. There must be a full investigation into the full details of enslaving people by a major western multinational corporation. Media advocacy and human rights organizations have to be outspoken on such cases on a par with the attention they devote to journalists persecuted or imprisoned.  

It’s almost incredible to me that my case against Reuters, credited with transforming the Cairo Office, was the first to be brought against the company. I was forced to submit my resignation on 22 February 2010 after 6 years and 11 months - despite the absence of a contract - simply because I demanded an end to corruption and corrupt practices. I asked the Company twice to conduct an investigation into the circumstances of my forced resignation, but all was in vain. 

When I began to sue the Company everything was suddenly transformed, which simply means that Thomson Reuters was heavily dependent on the generosity - or rather the corruption - of their hosts on one side and the subdued reaction of their victims on the other.

However, more than ten years of exploitation and tax avoidance can hardly be forgiven.

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