* This is my column in BusinessWorld last September 20, 2018.
Strong structures,
transparent and properly registered businesses are among the important
protection of people against natural calamities like strong storms. An informal
business tends to have informal physical structures in order to evade being
noticed by government regulators as doing well, that way they can evade paying
many taxes and business permits.
The tragedy of the Itogon landslide in Benguet that
buried many small-scale miners living in shanties is an example of an informal
business having little protection against big calamities like typhoon Mangkhut
and landslides last week. It is a tragedy that may have been prevented or the
damage could have been minimized if people live in stronger structures instead
of shanties.
The issue of various business regulations and taxes
affecting the mining industry is among those discussed at the Mining
Philippines 2016 at Sofitel Hotel, September 18-20 this week.
Yesterday, one of the panel discussions was on
“Opportunities and Challenges in the Mining Industry.” The speakers and their
topics were (1) Ms. Rafaelita M. Aldaba, DTI Assistant Secretary, “Roadmap for
the Mining Industry Development”; (2) Dr. Ronald U. Mendoza and Jerome Patrick
D. Cruz of the Ateneo School of Government (ASOG), “Mining Through the National
Security Lens”; (3) Mr. Gary Olivar of the Foundation for Economic Freedom,
“Impacts of Federalism on Natural Resource Extraction”; and (4) Dr. Cielo Magno
of the UP School of Economics, “Energy Cost and the Development of the
Downstream Extractive Industry Sector.”
The panel reactors were (5) Mr. Horacio C. Ramos, former
environment secretary and now president of Pacific Nickel Phils., Inc.; and (6)
yours truly.
Heavy and sometimes irrational regulations like banning
open-pit mining and closure of companies based on frivolous and non-transparent
criteria, done by an ex-environment secretary who was rejected and discredited
by the Commission on Appointments, create lots of uncertainties in the sector.
Many big mining projects worth billions of dollars cannot proceed or come with
great caution (see table).
Government does not create wealth in society. It only
regulates and taxes the wealth creators, businesses and entrepreneurs and their
workers. It is important, therefore, that government regulations should be not
too cumbersome and creating exemptions.
Government should enforce the rule of law. The law
applies equally to unequal people and players. The law applies to both
governors and governed, administrators and administered. No one is exempted and
no one can grant exemption and favoritism. Making exemptions means the rule of
men, not rule of law. And, speaking of the rule of law leading to economic
development, wealth and prosperity for the people,as developed Asian economies
exhibit this, like Japan, South Korea and Singapore.
Singapore, in particular, started as a very poor economy
after it was kicked out of the Malaysian federation in the 1960s. Its first
leader and strongman, Lee Kuan Yew, was very strict in enforcing the rule of
law to instill discipline and respect of private property. In the process, he
was able to attract lots of investors in the small and fledgling economy, make
them stay for the long term.
Mr. Jose “Joey” Leviste, Chairman of Oceana Gold, one of
the major sponsors of Mining Philippines 2018, published a book, “If the
Philippines had a Lee Kuan Yew” (2015). Joey admired LKY’s “strong, competent,
disciplined, decisive and principled leadership” and has collected volumes of
articles and books about LKY or written by LKY himself.
And we go back to mining and the rule of law. The DENR’s
and local governments’ strict regulations and monitoring of big mining
companies should also be done with small-scale mining. Not only for taxation
and environmental protection purposes, but also to protect the people’s and
miners’ lives. Rule of law can secure private property, encourage more wealth
creation, and help preserve human lives.
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See also:
BWorld 249, Reduce fares and increase passenger convenience by increasing supply, September 13, 2018
BWorld 250, E-smoking and ASEAN integration, Part 2, September 23, 2018
BWorld 251, Cure the big trade deficit, bring in the miners, September 24, 2018
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