Posts Tagged ‘mining’

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Government shares wealth with MILF

July 18, 2013

The central government of the Philippines has brokered a deal with the radical Moro Islamic Liberation Front to split revenues generated in the breakaway southern island of Mindanao.  The MILF (or “Bangsamoro”) will receive 75 percent of tax revenues, 75 percent of mining revenues, and 50 percent of fossil fuel revenues, with the central government retaining the balance.  The “crown jewel” of the agreement is that the MILF will receive their whopping cut through an automatic, annual, haggle-free grant from the central government.

It remains to be seen which taxes, such as zakat, jizya, or kharaj, the MILF may seek to impose on Mindanao residents.  The agreement is reminiscent of a truce between the government of Pakistan and militants in the tribal belt that resulted in the imposition of jizya against Sikhs in that country in 2009.

From the Philippine Star on Tuesday:

MANILA, Philippines – A wealth-sharing deal with the Moro Islamic Liberation Front (MILF) is advantageous to the country and “will stand the test of legality and constitutionality,” the chief of the government panel negotiating peace with Muslim rebels said yesterday.

In a press briefing at Malacañang, chief negotiator Miriam Coronel-Ferrer said a wealth-sharing scheme approved on Saturday was justified as it would make the envisioned Bangsamoro entity self-sustaining and progressive.

The Bangsamoro is also entitled to automatic appropriation from the central government.

Based on the agreement, the Bangsamoro entity gets 75 percent share in taxes and revenues from natural resources and metallic minerals and 50 percent from energy and other mineral resources.

Ferrer said that of all the provisions in the wealth-sharing annex, “the jewel in the crown” was the provision entitling Bangsamoro to automatic appropriation and regular release of budget.

The allocation will be in the form of an annual “block grant” from the central government similar to the internal revenue allotment (IRA) received by local government units.

“The formula for the automatic appropriation of block grant will be provided in the basic law. Many of us have not focused on this detail because much of the reporting on media have concentrated on the sharing arrangements with regard to natural resources but, as I said, this is the jewel in the crown,” Ferrer said.

At the same time, Ferrer said the agreement provided that revenues collected by the Bangsamoro from additional taxes and their share in government income from natural resources would be deducted from the annual block grants on the fourth year of the operation of the regular Bangsamoro government.

“This provision came from the MILF. It indicated that behind the haggling for more share is the intent to be less and less dependent on the national government,” Ferrer said.

“It indicated that the intention is not to get the ‘lion’s share’ for its own sake but to be able, in the future, to stand tall as a progressive and peaceful region; an equal partner of the central government in an equally peaceful and progressive country,” she said.

“This, indeed, is the true meaning of partnership – a partnership that is not based on dependency and patronage, but on the strength and capacities introduced by both for the benefit of the whole,” she added.

Ferrer said this was a unique provision because there would be automatic appropriation that would spare the region from the constraints of central budgeting process.

“I would like to say that this is a structural difference. This is not just an add-on in terms of additional percentage or whatever but this, basically, redefines the whole structure with regard to the financing of the Bangsamoro government,” Ferrer said…

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Afghan mining deal could fund terror

December 16, 2012

Taliban may tax supply routes

A business deal for copper mining rights at Aynak in Afghanistan by a Chinese consortium poses the risk of inadvertently funding local conflict and increasing the likelihood of extortion by armed groups, according to a November report from the human rights organization, Global Witness.

Excerpts from Witness’s report on the secret Aynak contract follow (with internal citations omitted):

The development of the mine and associated infrastructure brings with it a host of valuable supply and sub-contracts.  The international aid experience over the past ten years has shown that, without appropriate safeguards, the management of such supply and sub-contract can end up inadvertently funding conflict.  Aynak is a high-profile target for attacks which could be aimed at gaining attention or extorting money…

The risk of off-budget gains by, for example, security forces or powerbrokers controlling supply routes also needs to be guarded against.  [In the Democratic Republic of Congo] they do this by imposing illegal taxes at mine sites and along transportation routes, or by confiscating and trading minerals directly.  Companies sourcing minerals from the DRC are now required to carry out due diligence to ensure that their mineral purchases do not contribute to conflict or human rights abuses.

In the Afghan context, where conflict is ongoing and mines have traditionally played a role in providing financing to armed groups, supply chain due diligence by companies is an important step.

Indeed, given the Taliban’s history of profiting from flawed subcontracting measures and by levying taxes dictated by sharia law, including Taliban taxes on the mining sector (see here and here), the importance of forestalling Taliban infiltration in the Afghan-Chinese supply chain cannot be overstated.

Islamic law imposes a zakat tax of 20 percent (also known as khums) on rikaz, which Islamists regard as any source of wealth discovered underground, including oil, minerals, and buried treasure (Sahih Bukhari 2.24.575).

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Pak Taliban taxes miners per the Hadith

June 23, 2011

The Hadith (Sahih Bukhari 2.24.575) says, “Khumus is compulsory on Rikaz.”  Khumus, or khums, means one-fifth–here referring to a one-fifth tax.  Whether it’s a pirate’s chest or oil & minerals, rikaz means buried treasure.

This is why Islamists love to see 20 percent oil royalties or 20 percent taxes on mineral discoveries (see here and here for related coverage).

Consequently, the news that the Pakistani Taliban has been levying a tax on coal miners, and abducting or killing them if they don’t pay it, comes as little surprise.  The “experts” in Washington, D.C., will continue telling us that we need to worry about “criminal activity” used to fund terrorism.  The real concern should be about “Koranic activity” which is used to fund terrorism on a far wider basis.

From Dawn (h/t Rantburg) on June 12:

Militants kidnap 18 miners from Darra

KOHAT, June 11: About 100 armed militants belonging to Tehrik-i-Taliban Pakistan (TTP) attacked heavily-guarded Darra Adamkhel and kidnapped 18 coalminers from Akhorwal area late on Friday night.

0fficials said that the TTP of Tariq Afridi group, which supports Hakeemullah Mehsud, penetrated into the area in the night from Tora Chinna area, which connects Darra Adamkhel with Khyber Agency.

They abducted 26 miners some of whom were also armed. Some people showed resistance and fired at the militants and escaped from their custody, but 18 men were taken away to Khyber Agency.

The security forces and political administration learnt about the incident on Saturday morning and conducted a search operation for the recovery of the kidnapped miners, who were taken across the tribal borders by that time.

The coalmines were taken over by the armed lashkar of the area when the TTP started collecting monthly tax from the miners and asked them to stop providing any kind of assistance to the army or the political administration. The sources said that the TTP had been killing and kidnapping people of those tribes in the past, who ferried food and water to the security forces trenched in the high mountains.

They said that lashkar men had refused to fulfill their demands and challenged their atrocities in Darra Adamkhel. They said that the opponent Momin Khan Afridi group, which leads the lashkar, had been asking the TTP to end their terror in Darra and threats to the local parliamentarians and businessmen because they were innocent and could not afford to support any side.

The sources said that the TTP of Tariq Afridi tried to kill his opponent, Momin Afridi, and his commanders in a suicide attack at a mosque during Friday prayers in Atariwal area. But Momin Afridi was not present in the area on that day.

Later, the TTP in a telephonic message warned the tribesmen of Atariwal to stop supporting Momin Afridi otherwise more attacks would be conducted against his tribe. The Atariwal sub-tribe of Momin Afridi group lives in the main Akhorwal area of Darra Adamkhel from where 18 miners had been kidnapped.

Momin Khan Afridi group formed a parallel Islami Taliban Momin Afridi Group in 2008 to flush out the TTP.