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CAMPAIGN on TAX JUSTICE and EXTRACTIVES INDUSTRY

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Make mining companies pay 500pxThe 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

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19

 

 

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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)

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Nov 19, 2020 • 12:00 AM - 11:45 PM • Online

As the world grapples with the multiple crises of global COVID-19 pandemic, the economic recession, and the climate emergency, the need to raise the alarm on and fight the tax abuses and illicit financial flows in the extractive industry is more critical and urgent than ever.

Global Day of Action for Tax Justice in the Extractive Industry

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This political cartoon is posted on the eve of the Global Day of Action for Tax Justice in the Extractive Industry, November 19. Read the full statement

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Resource-rich countries spanning Africa, Latin America and Asia share a common ground. They continue to be targeted for natural wealth extraction, offer extensive fiscal incentives for mining investors, and are markedly sites of massive illicit financial flows.

Tax Justice in the Extractives Sector: A Renewed Call in COVID times to Stop Tax Abuse and Plunder

pdfTax Justice in the Extractives Sector: A Renewed Call in COVID times to Stop Tax Abuse and Plunder