Tuesday, October 25, 2011

Mining 2: Insurgents and Mining Companies

This is my article today in the online magazine thelobbyist.biz. Original title is shown.


Mining of various mineral and metallic products give us computers, cell phones, tv, refrigerators, cars, tricycles, tractors, boat engines, steel bars, cement, door knobs, iron roof, nails, electrical wires, coins, and so on. Thus, all buildings, schools, shops, buses, boats, factories and other means of production, will be impossible without mining.
People who oppose mining as “damaging the environment” should live in caves, or in wooden/bamboo houses with nipa or cogon roof and house joints are not connected by nails and other metallic products, and they should have no electricity. This is highly possible of course, as many people in poor rural villages still live in those structures. The question is if those vocal opponents of mining are willing to live such lifestyle, -- no computers, no internet, no texting, no tv, no electricity.  I bet they will all say No.
Hence, mining is necessary. Opponents can oppose certain mining practices, but they cannot expect zero destruction in the environment as it is simply impossible. Even those who put up an all wood/bamboo house with cogon roof and have agricultural plots outside with no electricity, still alter or damage the natural environment as they have to cut many trees and clear the land for such human settlement and their agricultural activities.

The attack by the communist rebels New People’s Army (NPA) early this month of three mining firms in Surigao del Norte where the rebels burned many trucks, mining equipment, onsite offices and other properties was totally condemnable. The rebels and their apologists cited “protection of the environment” as their main reason for their action and did not admit to plain extortion and environmental stupidity.

Extortion and banditry by the rebel NPAs is wrong. To live off on unproductive work like holding guns and shooting or burning and bombing those who do not give them money is living a purely parasitic life. The parasitism of the rebels is no different from the parasitism of many agencies and personnel in government, the institution that the rebels say they want to overthrow and replace. The only difference is that the parasitism of many organs of the State has legal basis, there are laws and regulations that allow those agencies to exist and justify their claim to taxpayers’ money which are collected by force and coercion, whereas the rebels’ parasitism has no legal basis. But both have coercive powers because both are armed and are willing to commit violence against the unarmed public if they will not oblige to the will of the two armed groups.

Since the Philippine State collects lots of direct and indirect taxes from the mining firms – corporate income tax, personal income tax of officers and staff, VAT, franchise tax, property tax, business permit tax, etc. – the State has the duty to protect the property and investments of those mining firms. The State can inflict penalties against erring companies, mining or otherwise, like closing them if they do not pay the assessed taxes, if they do not secure the necessary business and environmental permits, and so on. But if the State does not do its job of protecting private property rights, what are the penalties against the inefficiency or laziness of the State?

Sadly, there is none. While the AFP Chief of Staff has relieved several high ranking officials of the Army who are deployed to protect those areas, it is a very light penalty that is inflicted only on persons, not the institution. If I have my way, I will propose that those mining companies should be entitled to drastic tax credits, if not limited compensation from the government, for the latter’s negligence of its function and failure to enforce a contract – tax collections in exchange for protection of private property. In this case, the government simply collected taxes and various fees even if it was negligent and lazy to do its job.

If the government is truly accountable, the agencies that were tasked to do the job of protective property rights and failed to do their tasks should suffer budgetary cuts and cut in bureaucracy, and the companies that suffered huge losses from such destruction should get tax credits or compensation from the government, then the affected companies have the option to hire private or community security forces to protect their properties, subject to existing national laws on human rights and property rights.

Of course this is only a hypothetical solution as the government will never entertain such type of arrangement. The BIG government is not truly accountable. Like the rebel bandits and extortionists, the government simply wants to collect more taxes and fees, whether its agencies are doing their job or not.

Lack of promulgation of the rule of law – the law on contracts, the law on private property rights, the law on human rights, etc. – is the main cause of lack of investment and economic growth in the country. Which causes high unemployment and poverty, and poverty, the rebels say, is the main cause why they are rebelling against the State.

Since the State, not the rebels, have the official and formal contract with the people, the State should be answerable and accountable to the people. And the State here includes not only the elective officials but also the appointive personnel and bureaucrats, from the civilian to police and armed force bureaucracies. The rule of law stipulates the penalties against erring government officials and personnel for neglect of their duties. Since these are not followed, what we have actually is the rule of men, not the rule of law.

And while the rebels may have some beef and rationale in fighting the government, their means and philosophies are equally bankrupt and violent, which immediately disqualifies them from any respect of building a civilized society today or in the future.
On JANUARY 03, 2010, i wrote this:
"Leeches on both ends of the economic spectrum challenge crafters of government policy, specially when resources aren't that plentiful and have to be managed rationally. But the situation becomes even more of a challenge when these leeches are represented in the lawmaking body of the land."

I think that statement is wrong. Only leeches from the socialists and monopolist-minded capitalists applaud more government intervention. Free market capitalists want zero government intervention in business. Except in business practices that result in death and harm to people's health. Like selling counterfeit or substandard medicines. Or selling expired and adulterated food and drinks. Or selling poisonous toys. Or selling bombs. Or issuing bouncing checks. All of these are covered by existing laws and prohibitions against threats to people's health and life.

On another note, there was a suggestion that we still need the Bureau of Customs (BOC) to collect VAT and to police the entry of hazardous materials like guns and bombs through the ports. I believe that VAT collection can be done by the lean BIR, while checking the entry of guns and bombs is a police function, not BOC. Whether the guns come from Iran or Cagayan, whether from Russia or Zamboanga, the police should monitor and confiscate those whenever necessary.

On abiding simple rules, the "rule of law" is a very radical concept.
It says that the law rules over men. No one is exempted from the law, and no one can grant exemption. The law applies equally to unequal people.

When the law says no stealing, then no stealing -- whether by the President or the King or the most desperate and the poorest people. No stealing, period. No ifs, no buts, no exemption.

When the law says "No left turn" or "No counterf-flow" , then no left-turn or no counterflow should be allowed.

Unfortunately in this country, the WORST violators of the rule of law, especially of traffic rules, are the Office of the President, the Presidential Security Group, and the police (PNP).

For this group of people, there is only rule of men, no rule of law. They are the WORST violators of the rule of the law, and we call them "public servants" and we part with a big portion of our monthly income to feed those shameless and arrogant people.

The President and her military escords, they are the WORST violators of the rule of law, at least of traffic rules. Shame on them.

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