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)