Victor Galaz and Beatrice Crona at Stockholm Resilience Centre. Photo: Niklas Björling

The study, “The hidden environmental consequences of tax havens”, was going to be published in the scientific journal Nature Ecology and Evolution on 12 March 2018.

“Everything was done and we had started to give advance notice to a few journalists that the study was on the way. However, four days before the embargo would be lifted, we received an e-mail from the editors at Nature Ecology and Evolution, a journal affiliated with Nature, that we had to put everything on hold. The reason, they wrote, was that there was a risk of the journal being sued as a result of the publication, including us as authors, and that this was something that Stockholm University might have to consider as well,” says Victor Galaz.

“Nature wanted to publish, but had been advised by its lawyers to review the risks. We then initiated a dialogue with the University’s chief legal officer to figure out what we could do.”

Deforestation in the Amazon and illegal fishing linked to tax havens

In the study, the researchers reveal that environmentally destructive deforestation in the Amazon and global illegal fishing can be linked to tax havens. Eight global companies in the soy and meat industries are mentioned in the data on which the article is based, while the section about the fishing sector is more general.

“No one had made such a clear connection between tax havens and environmental destruction before. When it comes to tax havens, the main focus has been on how tax evasion affects welfare; now we were able to show that it probably has negative impacts on the environment,” says Beatrice Crona, associate professor of systems ecology at the Stockholm Resilience Centre and co-author of the study.

“What was new in our study was also the level of detail in the facts. We were able to show where the money came from by studying flows of foreign capital to companies operating in the soy and meat industries in Brazil,” says Victor Galaz.

“The financial sector often goes under the radar"

A few months have passed since the study was finally published and drew great attention on 13 August, but the time until then was marked by concerns about what might happen.  

The study shows that 68% of all investigated foreign capital to the meat and soy industries in Brazil comes from tax havens, and that 70% of all fishing vessels involved in illegal fishing around the world are, or have been, flagged in a tax haven.

“In our field, it has long been relevant to study how, for example, international trade affects our ecological footprint, but what about capital? These are major flows, but how do we understand them, and what impact do they have? This has high social relevance,” says Victor Galaz.

“The financial sector often goes under the radar, so it has been important to use this information to investigate what the financial flows look like,” says Beatrice Crona, who is also executive director of the programme Global Economic Dynamics and the Biosphere (GEDB) at the Royal Academy of Science.

Help from British law firm

The scientific journal Nature Ecology and Evolution is published worldwide, but since the journal is British, the researchers were recommended to seek the help of a British law firm with expertise in defamation lawsuits.

“The most likely scenario was that we could be sued in the United Kingdom by one of the companies mentioned in the article,” says Victor Galaz.

The message of the investigation made by the British firm, as well as the internal investigation by Nature’s lawyers, was that even if the researchers made certain changes to the article before publication, they would still risk being sued in the United Kingdom for a period of one year after publication.

“But what if we remove all the company names, we wondered. No, that could make the situation worse, was the answer. Then all major companies in the industry might feel accused. We had not realised that could happen,” says Victor Galaz.

One way forward was to contact the mentioned companies and give them a chance to give their views on the matter and then include their responses in an appendix to the article.

“We had many discussions back and forth before we decided to do that in a way that respected the scientific integrity of our work,” says Victor Galaz.

Grateful for support from colleagues and university

Both of them are grateful for the support they have received from colleagues and management at Stockholm University, but they argue that the dilemma for researchers who want to publish controversial results remains.

“This experience made us discover a fault in the system. Swedish laws are not designed for this type of publication; it is a huge problem. The scientific community is moving towards greater internationalisation, and producing socially relevant research is becoming increasingly important, but this also means that researchers suffer a greater risk of being sued abroad. Stronger protection is needed,” says Victor Galaz.

“The chance of a company winning a defamation case against a researcher is actually quite small, but the litigation process itself is costly and can ruin an individual researcher. The financial responsibility for the litigation process is unclear in Sweden and may, in the worst case, lie with the individual researcher. To avoid this, there is a risk that the researcher will avoid certain topics,” says Beatrice Crona.

Need for insurance coverage for international journals?

They argue that in order to strengthen protection for researchers who publish controversial results, there are things that need to be reviewed.

“International scientific journals would need to have insurance coverage for those who publish articles in the journal. Swedish universities would also need to review whether it is possible to support researchers by having insurance. As it is today, the researcher has to sign a private insurance policy,” says Victor Galaz.

“Never before had I imagined that this could happen to me as a researcher, but now I will always carry it with me. I might feel that one time is no time, but it could very well happen again. Right now, I do not think it will influence my choice of topics. I rather think we have embarked on a path that we want to continue to follow. I hope that I will not refrain from publishing research results in the future out of fear of being sued,” says Beatrice Crona.

“I agree. On the contrary, it feels even more important to continue what we have started. We have just published a new article about global financial flows and investments that undermine climate stability. My feeling is that we will not give in or let the field of research be affected,” says Victor Galaz.