APMDD Campaign on Tax Justice in the Extractives Industry

Built on centuries of environmental pillage and wealth extraction in mineral-rich areas, the extractive industry has historically thrived in environments of financial secrecy, corruption, tax abuses and other illicit financial flows (IFFs). Social movements and mining-affected communities have long been waging fierce campaigns directed at the extractive industry, especially in the mines and mineral sector, calling attention to the destruction of livelihoods, unjust labor policies, environmental impacts, among others. 

There is an urgent need to stop abusive practices by corporations in the extractive industry such as tax avoidance and leakages in domestic resource mobilization due to tax privileges and other incentives given to the extractives industry.  This should be part of a thoroughgoing critique of regressive tax systems that heavily favor corporate and elite interests and enable illicit financial flows. Because of these abusive practices, the extractive industry not only contributes to the destruction of community livelihoods and the environment, and to increased exposure to climate change and its impacts, it is also a major factor in draining economies of the Global South of foregone revenues that could and should be used for funding public services. 

APMDD’s campaign for tax justice in the extractives industry is based on the following key assertions:

As part of the shift away from EXTRACTIVISM, which is a key feature of the capitalist system

A major aim of our campaign on tax and extractives is exposing and resisting EXTRACTIVISM – exploitation, plunder, and destruction of natural resources to the huge detriment of people, communities and the planet – which is primarily driven by corporations, especially MNCs, in collusion with local elites, governments, and international financial institutions (IFIs) – in order to fundamentally reorient our economies towards prioritizing people and the planet.

As part of the fight against flaws of the tax system, abusive tax practices, and illicit financial flows that erode public revenues and pave the way for intense profiteering of corporations – especially of MNCs

The campaign is aimed at exposing the flaws of domestic and international tax systems and policies, the tax abuses of corporations – especially MNCs in oil, gas and mineral industries – that result in massive erosion of public revenues and intense profiteering at huge costs to people, communities, workers, the economies, and environment of Asian countries.  It aims to achieve political (or other) wins, which shall serve to weaken the ability of corporations for IFFs, for plunder and greater accumulation of profits.

As part of the struggle for the democratization and redistribution of wealth and resources

The campaign for tax and fiscal justice, of which curbing illicit financial flows forms an important part, is in line with the peoples’ struggle for sustainable, democratic access to and control over wealth and natural resources. The campaign also aims at strengthening the voices of local communities, calling on governments to uphold the rights of communities and women affected by mining and other extractivist activities, including their right to defend their communities.

As part of efforts to effect changes in norms and standards, laws, and policies 

  • to correct flaws in the tax system that diminish tax revenues from extractives industries and allow/facilitate tax avoidance and abuses by corporations;
  • to curb and penalize tax abuses and tax avoidance by corporations and illicit financial flows from the extractive industries;
  • to transform regulatory mechanisms over the extractives industry at different levels of governance;
  • to build and shape strong public opinion towards seeking tax and fiscal justice for tax abuses in mining and other extractivist activities; and
  • to strengthen movements and linkages among movements, build convergences and synergies across campaigns on IFFs, tax incentives, and public spending with human rights, gender justice, climate justice.

Ten Demands for Tax Justice in the Extractives Industry

The campaign advances the following demands:

  1. Scrap tax incentives granted to extractives industries and curb illicit financial flows.
  2. Impose resource taxes on the export of raw materials from mining and other extractivist activities.
  3. Ensure financial transparency of and accountability from corporations in the extractive industries.
  4. Hold governments/parliaments, sub-national state bodies and their agencies to account for the tax abuses of mining companies and the complicity of local elites.
  5. Shut down harmful and abusive mining projects/companies.
  6. Institute and enforce tighter social, financial and environmental regulations and sanctions over the extractives sector.
  7. Cancel fiscal stability and other lock-in clauses in agreements with extractive industries, which restrict the fiscal and regulatory space of governments.
  8. Uphold the rights of communities and women affected by mining and other extractivist activities, including their right to defend their communities.
  9. Stop the plunder and exploitation of natural and human resources and move away from reliance on extractivist economies characterized by over-production and over-consumption.
  10. End the impunity of corporations in mining and other extractives industries in their tax abusive practices, including illicit financial flows.

Key Activities in the Campaign on Tax Justice in the Extractives Industry (2019-2021)

Primer on Potential Channels for Revenue Erosion, Profit Shifting, and Illicit Financial Flows in the Philippine Mining Industry

Through a research initiative, APMDD developed a comprehensive account of the institutional and legal environment that enables illicit financial flows in the Philippine extractives industry. The primer also presented cases of how this environment enabled abusive tax practices of three mining corporations in the Philippines.

Research on Harmful and Abusive Tax Incentives in Asia

As part of the Financial Transparency Coalition (FTC) Report entitled “Use and Abuse of Tax Breaks: How Tax Incentives Become Harmful,” APMDD conducted a case study on an Indonesian coal mining corporation to illustrate the channels through which fiscal incentives embedded in government-awarded mining agreements become vehicles of cross-border profit-shifting and tax avoidance.

DEEPENING UNITIES with members and partners on a campaign and advocacy agenda

APMDD participated and led activities in the Global Days of Action on Tax and Extractives as part of the Global Alliance for Tax Justice (GATJ) from November 2019 until November 2021. APMDD is also one of the convenors of the Tax and Fiscal Justice Asia (TAFJA) Tax and Extractives Working Group, which has held press briefings and discussions on tax justice issues in India, Indonesia, and the Philippines.

Together with the Tax and Fiscal Justice-Asia (TAFJA), and with the Alternative Information & Development Centre (AIDC) in South Africa and Churches and Mining Network (CaM) in Brazil, APMDD has co-organized webinars and information dissemination activities to promote demands of tax justice in the extractive industry in regional and global arenas. 

PARTNERSHIPS with labor groups and communities to work together on tax and labor abuses in the extractives industry

Efforts to build constituencies in linking issues of tax abuses and violations of workers’ rights by mining corporations were strengthened in 2021, as APMDD co-organized the Asian Day of Action in November 2021 with workers’ movements jointly calling for strengthening tax and labor regulations in the industry.

APMDD continues to support country-level campaigns and advocacy work, with a view of holding mining corporations to account, ensuring financial transparency, and strengthening local communities’ voices in calls to transform tax and fiscal systems governing the extractives industry.

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