“Putting an end to this hegemony is the essential and indispensable condition to make the rest of the necessary reforms a reality, because whoever controls copper controls Chile.”
Chile’s outgoing neoliberal administration of Sebastian Piñera seek to protect monopolistic mining companies that extract the nation’s copper by literally lowering taxes to almost nothing and legally protecting companies from the contents of the new constitution being drafted by the nation’s Constitutional Convention. An article from Chilean economist and academic Manuel Riesco was published in Chile’s Left Wing newspaper El Siglo covering this issue.
Neoliberal panic stems from the fact the Convention will shortly discuss the issue of the renationalisation of copper and other strategic raw materials. As stated in Riesco’s piece, not only there are around twenty formal citizenship’s initiatives proposing the nationalization of copper, lithium and gold, but Chile’s copper miners’ union also supports it. More than 2500 proposals to be discussed for incorporation into the new constitution draft have already been submitted to the Constitutional Convention – preface by Dr Francisco Dominquez, Head of Latin American Studies at Middlesex University.
By Manuel Riesco, Chilean Economist & Academic
The Senate Mining Commission has given the green light to the royalty bill approved by the Chamber of Deputies, which now passes to the Finance Commission. The agreement reached at the request of the mining lobby reduces the royalty approved by the Chamber to a ridiculous 1%.
It only raises it to 2% and 3%, depending on the price, for four private mining companies that produce half of the national total. By arbitrarily raising the definition of large mining from 75,000 tons today to 200,000 tons, it exempts from the increase 13 large mining companies that together produce 1.3 million tons, 28 percent of the total, including several subsidiaries of the largest ones. In addition, it modifies the current specific tax on profits, without any guarantee that the blatant evasion to which it has been subjected will continue.
These are crumbs that the mining lobby intends to approve at the stroke of midnight in order to extend the tax invariability that expires soon. Congress as a matter of minimum dignity should categorically reject it.
The referred agreement does not consider that the country no longer tolerates the private appropriation of public goods and one of the great explicit demands of the 18-October (date of social explosion in 2019, FD) is the recovery of natural resources, according to Senator Fabiola Campillai.
Nor does it take into account that the Constitutional Convention will soon discuss the renationalization of copper and strategic public assets, reserving to the State not only their ownership but also their management and care. This is the opinion of a large majority of the Convention members and it is requested by a score of popular initiatives of norm that together have already gathered tens of thousands of signatures. Among these, initiative Nº 5,602 presented by the Copper Defense Committee stands out, which has surpassed by far the 15,000 signatures required and proposes the nationalization of the large copper, lithium and gold mining companies.
It is complemented by initiative Nº15,150, presented by the Confederation of Copper Workers, CTC, backed by several thousand citizen signatures, which transfers to the highest level of the New Constitution the historic paragraph of President Allende’s nationalization, maintained in the current one, which extends it to strategic public goods, reserving their exploitation exclusively to the State and modifying the right of ownership to make their recovery possible (Gajardo 2021).
Thus, by renationalizing copper and strategic public goods, the New Constitution will incorporate in its entirety and without any changes whatsoever, the sixth paragraph of Article 24 of the current Constitution, which reproduces word for word the historic reform introduced by President Salvador Allende and approved unanimously by the National Congress, which established the Nationalization of Copper on July 11, 1971, and will be fully and coherently adapted to that provision, which establishes the absolute, exclusive, inalienable and imprescriptible dominion of the State over Chile’s minerals, extending it to strategic public assets such as lithium, water, among others.
Immediately repeal all the articles and complementary legislation entrenched in Pinochet’s constitutional order which, in flagrant contradiction with this historic provision, handed over the effective ownership of minerals to a handful of large transnational consortiums free of charge and in perpetuity.
Reserving their exclusive management to the State, which will take care of them, guaranteeing their rational and respectful use of the delicate balances that make life itself possible on the planet, for the benefit of the peoples of Chile, and their improved transfer to the care of future generations.
Guarantee strict respect for the rights that international law recognizes for the native peoples in whose ancestral territories these public goods are located.
Fully recover their revenue, moderating its use so as to maximize it over time, and investing part of it in stimulating the generation of added value, especially in the productive chains upstream and downstream of the use of these public goods.
Be inspired by the sound recommendations of the rent theory formulated by the founders of modern economic theory and followed by all subsequent schools, with the sole exception of neo-liberal extremism which, without denying them, relativizes their importance.
Consistently follow the example of the respective international legislation, recognized and applied by all the countries of the world which, for example, recognize the State’s ownership of hydrocarbon deposits, the strategic natural resource of the 20th century, and exploit 80 percent of them directly with State-owned companies.
Re-establish the basis for the development in Chile of the modern mode of social production, whose wealth is based exclusively on the value added by the work of its citizens, in the mass production of goods and services sold in competitive markets (Adam Smith 1776).
Unleash the immense productive forces of the modern, young, educated and creative labour force that today makes up the overwhelming majority of our people. It will also unleash the initiative of the thousands of entrepreneurs, mainly medium and small, that constantly emerge from the modern social structure of Chile, which is the inheritance of a century of transformations driven by the State, pushed from below by successive massive irruptions of the people in national affairs (CTC 2021, CTC-CENDA 2021, CENDA 2021, CENDA 2016).
Put an end forever to the hegemony over Chilean society of the old oligarchy restored by the counterrevolution of September 11, 1973, which betrayed its homeland by requesting and supporting the intervention of a foreign power. That managed to maintain its hegemony after the end of the dictatorship, corrupting the democratic system, in alliance with the main mining corporations of the world, to which they handed over Chile’s mining resources. Putting an end to this hegemony is the essential and indispensable condition to make the rest of the necessary reforms a reality, because whoever controls copper controls Chile.
- Manuel Riesco is a civil industrial engineer, Master in Economics from the University of Chile, PhD in Political Economy at the Institute of Social Sciences of the Russian Academy of Sciences and Vice President of the Centre for National Studies of Alternative Development (CENDA).
- This article was kindly translated by Dr Francisco Dominquez, Head of Latin American Studies at Middlesex University. You can read it in Spanish here.
- Manuel Riesco was a speaker at Latin America’s 2nd ‘pink tide’ – how the empire failed to beat rebellion; Monday 7 February 2022, organised by the Labour Friends of Progressive Latin America. You can watch the meeting in full here.