Global Day of Action for Tax Justice in the Extractive Industry

Date

Background

On 19 November 2019, the Global Alliance for Tax Justice held its first Global Day of Action for Tax Justice in the Extractive Industry to signal its commitment to push for a sustained campaign to stop tax dodging and plundering of natural and fiscal resources by extractive multinational corporations, especially in the Global South. This year, 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.

While many sectors had to stop their operations due to lockdowns, extractive corporations, especially mining, were able to continue their operations because either they were exempted from such restrictions or they violated them. Based on the June 2020 report by PwC, the top 40 mining companies are “unscathed” by the pandemic and fared the crisis better than other sectors. In fact, the top 50 biggest mining companies added US$249.5 billion in market capitalization in the first half of 2020. This propelled combined market value from US$842 billion in 2017 to US$957 billion as of end-June 2020 due to the surging share prices of gold, silver, iron ore and copper. Gold, in particular, soared close to an eight-year high as COVID fueled concerns to invest in perceived more stable assets. Hence, it is unsurprising that Barrick Gold and Newmont, both gold mining companies, landed in the list of top 100 companies prospering in the pandemic. Meanwhile, in a report by Oxfam, BHP was listed as one of the companies that profited massively during the pandemic, reaping US$7.96 billion net profits in 2020, which is US$4.80 billion higher than the pre-pandemic period.

The extractive sector thrived amidst the pandemic at the expense of the resources they plundered and communities whose rights were violated during the continued mining operations. Despite the COVID-19 risks, the uninterrupted extractive activities, especially in the Global South, resulted in the spread of COVID-19 infection among mine workers. Moreover, those who resisted and protested against mining operations faced violence and repression from state forces while environment and land defenders were persecuted and murdered.

Mining corporations also took advantage of the pandemic to urge governments to adopt policies that are favorable to them, such as granting them tax and financial concessions, while the sector is already enjoying staggering fiscal incentives that weaken domestic resource mobilization. In addition, the extractive industries are also a fertile ground for illicit financial flows as many extractive corporations had been exposed for corporate tax abuses through tax evasion and avoidance schemes and shifting of profits to low- and zero-tax jurisdictions. Such revenues foregone through wasteful tax incentives and tax abuses deprive the people, especially in mining-affected areas, from the resources that could have been used in strengthening public services, health systems, education, and other human rights.

The global health pandemic, the economic downturn, and the climate crisis exposed the urgent need to transform our tax systems — both at the national and international levels — to fix the structural flaws that enable illicit financial flows and tax abuses by multinational corporations, especially in the extractive industries. As we face the multiple crises, states should prioritize the wellbeing of the people and the planet, instead of privileging the multinational corporations and the wealthy in support of their pursuit of profit. In this regard, we continue to raise the call — Stop tax dodging and plundering!

Our objectives

On 19 November 2020, the GATJ will continue to hold a Global Day of Action for Tax Justice in the Extractive Industry to:

  1. Expose the tax abuses of extractive corporations and illicit financial flows from extractive activities;

  2. Contribute to building and shaping strong public opinion towards seeking tax and fiscal justice for tax abuses in mining and other extractive activities; and

  3. Build linkages with other movements as well as convergences with other campaigns that are focused on the extractive sector.

Our demands

On the Global Day of Action, we reiterate the following demands. We believe that addressing these demands has become more urgent amidst the multiple crises.

  1. 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 by the wealthy.

  2. Ensure a comprehensive and effective tax regime for extractive industries, 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. Apply effective anti-abuse measures to prevent corporate tax avoidance and other types of illicit financial flows.

  3. Levy just, progressive and adequate tax rates on mining and extractive activities and ensure that this revenue contributes to quality public services for all, with special priority to the needs of mining-affected communities and vulnerable groups.

  4. Scrap wasteful tax incentives granted to extractive industries.

  5. End the impunity of corporations in mining and other extractives industries in their tax abusive practices, including illicit financial flows, and hold them to account for compliance with environmental standards, human rights and fiscal policies. Ensure the financial transparency of extractive corporations, and publish all contracts and any agreements entered into by governments for the exploitation of natural resources, including Production Sharing Agreements.

  6. Ensure transparency and accountability at different levels of government and parliamentary policy-making and regulation over the extractives industry. Implement strict anti-corruption policies and punish government officials who are involved in corrupt practices in all phases of mining and extractivist activities, from exploration and licensing to production, use and final point of sale. 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.

  7. Institute and enforce tighter social, financial and environmental regulations and sanctions over the extractives sector. Close down harmful and abusive mining projects/companies.

  8. Reject or cancel provisions for fiscal stability, investor state dispute settlement, grandfathering and other lock-in clauses in treaties, agreements and contracts with extractive industries, which constrain the decision-making processes of governments, legislative and parliamentary bodies over fiscal and regulatory concerns.

  9. Uphold the rights of communities and women affected by mining and other extractivist activities, including their right to protect their communities.

  10. Protect the rights of the artisanal miners.

Call to action

Join us in making November 19th  the day to raise the issues of tax injustices and abuses in the extractive industries! This is how you can get involved and raise awareness on this issue:

  • Circulate our statement. Post it on your social media or on your website and circulate it among your networks.

  • Take a selfie holding the placard with our slogan, “STOP TAX DODGING AND PLUNDERING!”, and post it on social media. You can customize the placard by adding slogans that are specific to your regional and/or national contexts. Do not forget to tag the Global Alliance for Tax Justice on Facebook, Twitter, and Instagram in your posts. Add the hashtags #TaxJustice and #StopTaxDodging&Plundering.

  • Write a blog. Share your thoughts about tax justice in the extractives. We can publish your blog on our website.

  • Promote your existing resources on tax justice in the extractives. Share with us your publications and we will be happy to promote them during the Global Day of Action. Resources can be useful and relevant to movements on the ground.

  • Get creative in communicating our message against tax abuses by extractives. Draw a political cartoon, tell a story, write a poem, etc.

  • Watch out for the social media materials that we will release on November 19th. Repost and share them!