TAX JUSTICE
The extraction of natural resources in many countries in Asia has long served as a foundation for the concentration wealth and power in the hands of a few -- at the expense of communities, marginalized sectors, and the environment. Our shared experiences of large-scale mineral extraction under colonial occupation and the neoliberal drive of governments to attract foreign investments in extractives are deeply intertwined with a long history of peoples’ struggles for lands, livelihoods, and human rights in mining-affected communities across the region. These are also part of a continuing history of labor exploitation and sustained and systematic transfers of wealth, natural resources, indigenous knowledge, and other assets from the Global South to the Global North. A situation that has produced immense, profoundly immeasurable social and ecological debts owed to the peoples of the Global South.
Multinational corporations in the extractive industry and their shareholders from local elites have enjoyed long standing guarantees of profit accumulation from ownership and control of vast mineral, oil and gas reserves, boosted by generous fiscal and non-fiscal incentives. Where the collusion of corporate and elite interests dominate politics and policymaking, the capacities and political will of governments to fulfill their human rights obligations, climate commitments, and sustainable development goals are severely undermined and eroded.
Download laid-out November 26 Statement in PDF format Here
The multiple crises of health, economic recession and climate emergency present us with the urgent challenge and unique opportunity to chart a different path and reject economic policies and development paradigms that harm people and the planet. It is thus alarming when governments and international actors look uncritically at the extractive industry as part of the ‘solution’ to economic development challenges without regard for its links to illicit financial flows, human rights abuses and the climate crisis. Environmental abuses and other unjust practices of the extractive industry must be stopped; the flaws and loopholes in national and international tax systems that enable mining, oil and gas companies to shift profits, practice systematic tax avoidance, and enjoy generous tax incentives, must be corrected.
On November 26, 2021, the Asian Peoples’ Movement on Debt and Development (APMDD) joins advocates and allies on the Global Day of Action on Tax and Extractives to demand accountability for human rights and environmental abuses, to advance tax justice by transforming mining fiscal regimes, and to call on governments to make taxes work for people and the planet.
I. Stop the plunder and exploitation of labor and natural resources, environmental destruction, and other unjust practices by mining companies!
The multiple crises experienced by mining-affected communities amidst the global pandemic exposed the continuing crimes of mining corporations against peoples of Asia. In India, hazardous working conditions and underpayment of wages are persistently reported by workers in coal mines, whose toxic fumes were also proven to weaken respiratory health and increase vulnerability to COVID-19 of surrounding communities. In Indonesia, the government introduced several reforms to the Mining Law that granted automatic permit extensions and expanded the scope of tax incentives enjoyed by the mining sector despite reports on the heightened vulnerability of over a hundred mining-affected communities to natural disasters. In the Philippines, the government lifted the nine-year restriction on mining licenses, thus allowing the continuation of human rights and environmental destruction without consequence.
These incidents illustrate a very bleak picture of mining’s impacts on communities in Asia. Women in mining-affected communities are likewise facing additional threats to their livelihood and obstacles in accessing necessities such as water and food due to displacement of communities and degradation of natural resources. Mining corporations and state forces have also taken advantage of lockdown restrictions to violently bear down on the resistance of indigenous tribes and other marginalized sectors, deepening the accumulation by dispossession of lands and suppression of their rights to defend their communities from encroachment. Despite the risks and impacts faced by workers, women, and indigenous peoples, profits gained by mining corporations have skyrocketed in 2021 to higher than pre-pandemic levels.
II. Make mining corporations pay their just share of taxes! Stop corporate tax abuses and other illicit financial flows in the extractives industry!
Amidst widespread exploitation and abuses on human rights and the environment, governments have reinforced the regulatory stranglehold of the mining industry through tax and fiscal regimes that grant a range of incentives, treaties, and agreements exclusively offered to mining corporations, usually lasting more than a decade. Embedded in fundamental Mining and Investment codes of many Asian countries are several loopholes for mining companies to pay meager revenues far below baseline corporate tax rates. Massive discrepancies between profits generated by the mining industry and their paltry tax contributions reveal the magnitude of foregone revenues. This staggering revenue loss sharply undermines domestic resource mobilization in countries that direly need to rebuild essential public services that have been crippled by decades of privatization and urgency of pandemic-related social demands.
On top of fiscal incentives and legalized instruments enabling tax avoidance, mining corporations deliberately take advantage of several gaps in the broken global tax architecture, financial secrecy through tax havens, and corporate restructuring to engage in aggressive tax planning and reduce tax obligations to national governments. Legislative lobby groups of mining corporations actively plan around tax competition in Asia and globally, especially in levies specific to the mining sector such as royalties, processing and export taxes. These underline the importance of the voices and demands of resource-rich developing countriesin pushing for an inclusive, democratic, and transparent intergovernmental body on global tax rules under the auspices of the United Nations.
III. Make taxes work for people and the planet! Advance a transformative agenda for realizing social, economic, and environmental justice!
Our demands for accountability from mining corporations and governments to address peoples’ urgent needs are nevertheless rooted in the recognition that reforms in tax regimes and stricter regulations on labor and human rights are still fundamentally inadequate to address the destructive intergenerational impacts of large-scale mining on the environment and local communities. Threats to biodiversity and livelihoods, displacement, and climate impacts will continue to encroach upon peoples’ welfare and further threaten the planet’s future as long as economies remain heavily reliant on natural resource extraction for production and commodity exports. Because of these impacts inherent in the continuation of large-scale mining activities, governments in Asia must profoundly rethink industrial policies that regard extractivism as a pillar of development. We must progressively shift away from economic systems that prioritize profits of mining corporations and embedded interests of political elites over the urgent demands of mining-affected communities, workers, women, and other mining-affected sectors, and the people’s demands for just, sustainable, equitable and democratic economies.
We demand governments in Asia to:
1. Tax the Rich, not the Poor!Address the biases of tax systems that favor elite interests and impose unjust tax burdens on the people. Stop corporate tax abuses and all forms of illicit financial flows! Strengthen and enforce financial transparency mechanisms. Work for a truly inclusive, democratic, transparent and accountable intergovernmental mechanism for governance on international tax matters under the auspices of the United Nations.
2. Advance tax justice in the extractive industry!Make mining companies and MNCs pay their fair share of taxes. Probe and sanction tax abuses of mining corporations.
3. Stop the exploitation and abuse of workers in the mining and extractives industry. Uphold the rights and promote the welfare of all marginalized sectors and communities affected by the mining industry.
4. Stop environmental destruction and other abuses of mining companies!Make mining companies pay for reparations and ecological restoration.
5. Put an end to economic dependence on natural resource extraction by working towards system change and transforming our deeply extractivist economies towards a peoples’ vision of sustainable, just, equitable and democratic economies that prioritize people and planet over corporate greed and profit-driven elite interests.
https://www.apmdd.org/Nov_26_Statement.pdf
19 November 2021
The mining industry in the Philippines is built upon centuries of plunder and pillage of natural resources, exploitation of labor, environmental degradation and violations of human rights especially of indigenous peoples and other mining-affected communities. As in other extractives sectors, the mining industry across the world has also grown immensely from the accumulation of massive profits through shadowy financial deals and tax avoidance while enjoying generous tax incentives and other privileges from governments. It is of little surprise therefore that the Pandora Papers and other leaks of financial documents have consistently linked local business and political elites with mining connections to offshore accounts and shell companies that enable them to shift profits to tax havens and hide their untaxed wealth.
The massive social costs of these illicit financial flows fall heavily on the shoulders of mining-affected communities whose access to essential public services such as water, electricity, healthcare, and education has been gravely obstructed by the monopolized control of mining corporations over the use of their lands and resources. Unjust practices of tax avoidance by mining corporations revealed in the Pandora Papers thus critically erode tax revenues badly needed to provide for peoples’ urgent needs, especially the poor, women, and other marginalized sectors who are burdened with tax obligations that are systematically avoided in turn by wealthy mining elites.
Despite the meager contribution of mining and dirty energy to national output and employment, the Philippine economy continues to be held hostage by extractivist exploitation and the deep-rooted complicity of national and local political elites in the deregulation of the mining and energy sectors.
During the COVID-19 pandemic where hazards faced by Filipino workers have intensified, the Philippine government has once more exposed its allegiance to business elites who have forced their will and declared the mining sector as an “essential” economic activity, expressly allowing continued operations despite the health and safety risks inherent to the industry. Large-scale mining corporations have also taken advantage of government suppression on mobility and economic activity during the pandemic, violently silencing organizers and environmental defenders in mining-affected communities.
Far from condemnation or investigation of these unjust practices, actions taken by the Duterte administration affirmed that calls for justice and accountability have fallen on deaf ears. Government’s privileging of mining activities is given a new lease on life with Executive Order (EO) 130 that lifts the ban on new mineral agreements granting tax and non-tax incentives for mining corporations, opening several loopholes for mining corporations to cut down on tax payments for at least 25 years.
Violations in ensuring workers’ occupational safety and the urgency of plugging leaks in tax revenues for essential public services alarmingly intersect in the case of Apex Mining Co. Counting billionaires Dennis Uy and Enrique Razon – both parties to key government infrastructure and logistics contracts – among its directors, Apex Mining exclusively operates gold mines in Davao de Oro and Benguet. Not only does the corporation benefit from tax holidays granted under multiple Mineral Product Sharing Agreements (MPSAs), Apex Mining’s extractivist business model is also built upon layers of financial secrecy. Its wholly-owned subsidiary – Monte Oro Resources and Energy Inc. (MORE) – owns two companies officially registered in the British Virgin Islands, a known tax haven where corporations store hidden wealth to avoid tax and legal obligations, in spite of generating profits directly from mining activities in the Philippines, Sierra Leone and Uganda where these undeclared assets are undervalued and undertaxed.
Over 20% of Apex Mining’s workforce was also reported to have contracted COVID-19 in localized outbreaks from October 2020 to January 2021, affecting even the communities surrounding the mines. The Department of Health has raised concerns that the conditions of work in enclosed spaces of mining tunnels and poor ventilation heighten the risks of virus transmission, prompting an investigation on Apex Mining’s occupational safety standards, with results remaining undisclosed thus far.
The case of Apex Mining Co. serves as a glaring emblem of many mining corporations in the Philippines whose profits flourish by depriving workers and the Filipino peoples of basic needs for survival. These unjust practices are at great risk of being brushed under the rug with the Philippine government upholding Apex Mining Co.’s MPSA until the 2030s and granting additional tax holidays and incentives to mining corporations through E.O. 130.
We thus reiterate our calls for justice and accountability for tax and labor abuses by corporations in the extractives sector. We urgently call upon government agencies to actively involve mineworkers and mining-affected communities in an independent probe of labor practices and working conditions in mines and other mining-related operations to ensure that labor, health and safety, human rights, and environmental standards are in place.
As peoples’ organizations in the Philippines and in Asia committed to tax, labor and environmental justice, we present the following calls and demands for tax justice in the extractives industry:
- Stop the plunder and exploitation of labor and natural resources, environmental destruction and other unjust practices by mining companies! Uphold the rights of workers, indigenous peoples, women and other marginalized sectors in mining-affected communities. Mining and other extractive companies that bring harm to communities and the environment and/or have a long or outstanding track record of labor and human rights abuses must be shut down while ensuring just transition for workers and communities that may be affected.
- Stop corporate tax abuses and other illicit financial flows in the extractives industry! Scrap wasteful tax incentives such as those included in the MPSA! Government agencies must also probe into mining corporations’ layers of financial secrecy to recover hidden and untaxed wealth of the elite, and channel these funds to ensure quality public services for all, especially for women, indigenous peoples, and other marginalized sectors in mining-affected communities.
- Advance tax justice in the extractives industry by ensuring a comprehensive and effective tax regime, including through resource or export taxes on the export of raw materials from extractive activities, taxation of services related to extractive industries and progressive environmental taxes. Financial transparency and accountability mechanisms and other anti-abuse measures must be strengthened and applied to prevent corporate tax avoidance and other types of illicit financial flows. Levy progressive and adequate tax rates on mining and extractive activities.
- Put an end to economic dependence on natural resource extraction by working towards system change and transforming our deeply extractivist economies towards a peoples’ vision of sustainable, just, equitable and democratic economies that prioritize people and planet over corporate greed and profit-driven elite interests.
Signatories:
Sanlakas
Oriang
Bukluran ng Manggagawang Pilipino
Asian Peoples’ Movement on Debt and Development (APMDD)
Lidy Nacpil of the Asian Peoples' Movement on Debt and Development (center) presses for new tax rules to be negotiated in a proposed United Nations Tax Body. Labor Leader Ka Leody De Guzman (left) calls for the scrapping of VAT and institution of a wealth tax in the country. Sanlakas Secretary General, Atty. Aaron Pedrosa, moderated the press conference.
PRESS RELEASE
G20-PROPOSED 15% GLOBAL MINIMUM CORPORATE TAX RATE TO GIVE MORE BENEFITS TO CORPORATIONS, MORE UNDUE BURDEN ON THE POOR — APMDD
The Asian Peoples’ Movement on Debt and Development (APMDD) today slammed the 15% minimum global corporate tax rate jointly proposed by the Organisation for Economic Co-operation and Development (OECD), G7, and G20, calling it the “tax deal of the rich” and instead called for the creation of a tax body under the United Nations (UN).
“Under the guise of, or pretending to be helpful as part of COVID-19 and multiple crises responses, the OECD, which is the organization of 37 wealthiest countries in the world, in collusion with the G7 and G20, are now putting forward and promoting a tax deal that will actually result in more benefits for corporations and governments of wealthy countries rather than the Global South,” APMDD coordinator Lidy Nacpil said.
“We are taking this occasion to express our rejection because in a few hours, the G20 will be convening its summit, and this is an important time to raise our voices,” she added.
World leaders are expected today to endorse plans for a global minimum tax on corporations during the first day of the G20 summit in Rome. The policy is supposedly intended to prevent businesses from skipping from country to country in search of lower tax rates.
“It sounds progressive because in some places the taxation of corporations is below 15%, so it makes it appear that they want to increase the level of corporate taxes to a minimum of 15%. But many of us in the south are rejecting this, because in reality, the average corporate tax in Africa and in Asia is 20% to 30%,” Nacpil stressed, adding that the 20% corporate tax rate is already one of the lowest in Southeast Asia.
Nacpil further said the 15% minimum tax rate means that many countries in Asia and in Africa will be pressured to lower their current corporate taxes, which will mean more benefits for corporations rather than for people and for the government.
“We want to end inequality in global tax rules and rulemaking, and one of the important steps is to create a global democratic and transparent body in the UN, to take up global tax rules,” she said. “This should be part of sweeping changes in the global economic and financial system to address its many flaws.”
Tax justice campaigners led by the Asia People's Movement for Debt and Development (APMDD) denounce the "tax deal of the rich" at the University of the Philippines Hotel a few hours before the start of the G20 Summit in Rome.
The APMDD also rejected the second part of the “tax deal of the rich,” which is the proposed allocation of the net increase of resources raised from the minimum 15% corporate between the home countries of the corporations and where they actually earn their wealth or profits.
“Our tax experts have said quite clearly that in the proposed allocation, it is the governments of wealthy countries, where many of these corporations are headquartered or based that will get a bigger part of whatever net increases in tax revenues will be garnered from this proposed minimum tax rate,” Nacpil said.
“In the end, whatever little net resources are raised from this proposed minimum tax rate of 15% – and in some places it will not be a net benefit but a net loss – the countries in the south: in Africa, Asia, and Latin America, will be getting a smaller part of that allocation. The wealthy corporations and the governments of the wealthy countries will benefit the most from this deal,” she underscored.
Moreover, Nacpil emphasized the need to “tax the rich, not the poor.”
“What we have on our domestic tax systems in many countries in Asia and in the world are systems that are putting undue burdens on people, on communities; on women; and on many sectors of society like workers, farmers, fishers, indigenous peoples, urban and rural poor, even young people,” she said.
“These burdens come in the form of very regressive tax systems. Regressive means these tax systems put the greater weight of tax payments on poor and marginalized sectors, on communities, on women, much more than on the rich and elites,” she added.
The APMDD coordinator said this was wrong because “the very principle of taxing citizens is for the government to be able to provide services, address inequities, and lift people out of their situation of poverty and marginalization, and fulfill basic human rights.
“If these tax systems are doing the opposite – being more burdensome for the poor, the marginalized, for women – then there is something fundamentally wrong,” she stressed.
Nacpil also said for taxes should for work for women to remove gender bias, discrimination against women, and to make sure that tax revenues are used for services for women.
“In many countries, tax systems are gender-blind and gender-biased. There is bias against women – not just gender-blind, not just blind to the situations that women face that must be considered when it comes to tax policies, but also outright bias. Many of the tax systems reflect discrimination against women and non-recognition of unpaid care work,” she said.
“One of the major changes we would like to see is making taxes work for women – addressing bias, addressing discrimination, addressing undue burdens on women, and for tax systems to recognize the invisible care work that more often than not, it is the women that provide,” she added.
Nacpil further stated that APMDD is also calling for tax justice in the extractive industries, saying it is “one of the industries that has created a lot of havoc and damage in many countries in the world.”
“Our natural resources are plundered by multinational companies and yet they pay very little taxes. We want to transform the extractive industries to stop extractivism in our countries, but also to make sure thatwhatever extraction activities will be allowed should be heavily taxed,” she said.
The delegation from FDC and APMDD in front of the Department of Finance buildingPRESS RELEASE
Philippine government should reject the OECD-G7-G20 “tax deal of the rich” - FDC
MANILA, 24 September 2021 –“We have delivered our message to the Philippine government on the certain negative impact of a tax deal forwarded by wealthy countries. The Philippine government must act in the best interest of the Filipino people. This means rejecting the tax proposals of the Group of 7, the Group of 20 and the OECD,” said Rovik Obanil of the Freedom from Debt Coalition (FDC) who headed a delegation that delivered an open letter to the government through the Department of Finance on Thursday, September 23.
The open letter of the FDC and the Asian Peoples’ Movement on Debt and Development (APMDD) asked the Philippine government take a stand against tax abuses and block tax deals put forward by the OECD, G7, and G20 that will benefit only rich countries, multinational corporations and the global elite.
The open letter noted that “in 2020, illicit financial outflows from corporate tax evasion and avoidance by multinational corporations (MNCs),in the Philippines was estimated at PhP 94.3 billion, nearly equivalent to the budget allocated by the Bayanihan to Heal as One Act for social amelioration and wage subsidies. While MNCs continue to engage in these abusive tax practices, the burden of revenue generation is passed on to the poor through regressive taxes such as the Value-Added Tax (VAT) and excise taxes on necessary goods.”
The letter was delivered at the DOF by a small delegation at the same time as a rally was being held at the Welcome Rotonda by APMDD, FDC, Oriang and Sanlakas. The delegation coming from the DOF office and another delegation that delivered a similar open letter to the Embassy of Indonesia only arrived at Welcome Rotonda to see the tail-end of the public action which police forcibly though peacefully dispersed.
The rally dubbed Day of Action for Tax Justice was held as representatives of 193 member States met at the 76th session of the United Nations to deliberate on ‘COVID-19 recovery’ and how to rebuild sustainably.
Earlier, APMDD’s Lidy Nacpil noted that “Despite official statements on strengthening domestic resource mobilization, the Two-Pillar “solution” of the OECD Inclusive Framework on Base Erosion and Profit-Shifting (BEPS) opens numerous loopholes for multinational corporations (MNCs), especially those operating in developing countries, to continue abusive tax practices detrimental to revenue generation.
“These false solutions yield an unjust share of revenues to headquarter countries of MNCs and accelerate a global race to the minimum corporate tax rate of 15%, further eroding our revenue bases. The Inclusive Framework is no more than a “tax deal of the rich,” favoring a few countries that have long benefitted from our flawed global tax system,” Nacpil said. . -30-
The letter to the Government of the Philippines:
The Open Letter adopted by and co-signed by the Freedom from Debt Coalition -Philippines is delivered to the Department of Finance on September 23, 2021
As peoples and organizations committed to the transparent, accountable, and just restructuring of tax systems, we call on governments to take urgent measures to make tax and fiscal policies more responsive to the needs of people and the planet and reject policies and initiatives that will exacerbate inequalities within countries and across countries such as the OECD-G7-G20 Tax Deal.
The COVID-19 pandemic and its impacts on our citizens present a historic opportunity to transform tax systems. Given the urgency of providing solutions to these pressing needs, it is lamentable that proposals by the world’s richest nations fail to address fundamental inequities in our global tax architecture.
Despite official statements on strengthening domestic resource mobilization, the Two-Pillar “solution” of the OECD Inclusive Framework on Base Erosion and Profit-Shifting (BEPS) opens numerous loopholes for multinational corporations (MNCs), especially those operating in developing countries, to continue abusive tax practices detrimental to revenue generation. These false solutions yield an unjust share of revenues to headquarter countries of MNCs and accelerate a global race to the minimum corporate tax rate of 15%, further eroding our revenue bases. The Inclusive Framework represents no more than a “tax deal of the rich,” favoring a few countries that have long benefitted from our flawed global tax system.
These high-income countries and legislative lobbies for MNCs are expediting the adoption of the agreement globally to forestall demands by developing countries and civil society. This underlines the essential responsibility of governments in disadvantaged countries to assert equal rights to decide on global tax rules in an intergovernmental platform where all countries sit at the table as equals.
The Asian Peoples’ Movement on Debt and Development (APMDD) strongly urges governments in Asia to reject the OECD-G7-G20’s “tax deal of the rich” and heed civil society demands for democratic, inclusive, and transformative global tax architecture. Under the banner of the 2021 Nobel Peace Prize Nominee – the Global Alliance for Tax Justice (GATJ) – civil society reiterates the call for the establishment of a universal, intergovernmental UN tax commission and negotiating a UN tax Convention to comprehensively address tax havens, tax abuse by multinational corporations and other illicit financial flows.
Make taxes work for people!
Yours in tax justice,
Lidy Nacpil
Coordinator, Asian Peoples’ Movement on Debt and Development
NOTE: The Open Letter in PDF is available here: 
An Open Letter to Asian Governments: Reject the Tax Deal of the Rich PDF
