Showing posts with label land. Show all posts
Showing posts with label land. Show all posts

Friday, September 30, 2016

DPP gov't takes important step forward on land expropriation crisis

Looks like somebody forgot to tell the printer the name of the bike...

That hideous Taoyuan Aerotropolis, with its massive land thefts, is going to be slowly strangled by red tape. An apt solution....(Taipei Times)
About 30 members of the Taoyuan Aerotropolis Local Promotion Association shouted opposition to what they called opaque “black box” drafting of possible amendments to the Land Expropriation Act (土地徵收條例), saying that only people opposed to the Aerotropolis project had been invited to a ministry meeting yesterday on the amendments.

The ministry said last week that it would propose amending several laws to increase the protections for landowners and residents, including raising the support threshold for approval of “zone expropriation” to more than 90 percent of landowners.
These associations are usually astroturf for construction/development firms. The reason the threshold is being raised to 90% is simple. The usual practice is for the construction firm to have its employees purchase homes in the area. Once it has a majority of area homeowners, it can then have its own people vote to have the land expropriated and turned over to the corporation, using public law to turn private land into corporate gold. By raising the bar to 90%, the government will end this practice.

The Aerotropolis is often said to be the largest single expropriation of the democratic era, 4700 hectares of land were being appropriated, 3200 of them farmland (in a nation where the government has been worried about losing farmland). These changes are a wonderful move forward against the terrible abuse of the land laws over the last couple of decades.

Note also how these pro-corporate protests keep attempting to appropriate the language used by the Sunflowers: the government's decision is a "black box" -- which was the Sunflower criticism of the services pact (for example).

Background: this post, follow its links. Also Solidarity's post on how KMTers had purchased ponds in the Aerotropolis area to turn into gold. Recall that each pond by regulation can only have one owner, making negotiation for purchase easy. Development in Taoyuan is killing its precious ponds.
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Friday, May 27, 2016

Taroko people vs Asia Cement: the long twilight struggle

The amazing beauty of Taroko.

FocusTaiwan on the massive Asia Cement plant disaster outside Taroko Gorge...
Economics officials said Thursday that the Asia Cement Co.'s mining project inside the Taroko National Park can be terminated next year as new Environment Minister Lee Ying-yuan (李應元) hopes, but the company's operations in the 417 hectares outside the park cannot be suspended without new legislation banning such activities.

....

His new "vision" immediately alarmed the Hualien County government, which said the livelihoods of more than 1,000 families would be affected if the minister's new policy was carried through.

Kuomintang Legislator Hsu Chen-wei (徐榛蔚), wife of Hualien County Magistrate Fu Kun-chi, said Lee should have listened to local people and should give them some time to adapt before announcing his new policy.
If you're thinking that the cement company is in bed with the pan-Blue local government...

History from the piece above....
The Ministry of Economic Affairs (MOEA) said Asia Cement obtained a license to develop a total of 442.7 hectares in Hualien in 1973. Some 25 hectares of the licensed mining district were zoned in the Taroko National Park when the park was established in 1986, but it did not affect Asia Cement's right to keep developing the land.

In 1994, Asia Cement requested government permission to continue using the mining district inside the park, a request that was granted the next year.
The News Lens also picked up on this story, but also left out an important component of the issue. When the KMT legislator mentioned "local people" she meant the jobs dependent on the plant, not the livelihoods it wiped out. Those "local people"... who could they be? They've gone completely missing from the FocusTaiwan, News Lens, and Taipei Times report, which present the case in conventional environment vs big business terms. Let's restore their existence...
In 1974, the Siou-lin District administrative office, the Hua-lien County (花蓮縣) government, and the Asia Cement Company held several meetings for residents regarding Asia Cement's desire to develop a production site in Siou-lin District. However, as the Council’s judgment clearly points out, “The meeting only highlighted the benefits of the establishment of an Asia Cement factory during these “informational meetings,” never clearly stating to attendees that they would need to desist all cultivation and use of Truku Reserved Lands.” Furthermore, the Truku people's full understanding of the meetings' proceedings cannot be taken for granted when these meetings were conducted solely within the context of the laws and language of the Republic of China, which were alien and unfamiliar to the Truku people.

Subsequently, the Siou-lin District administrative office proceeded to transfer the lease for large sections of Reserved Lands to the Asia Cement Company, soon afterward revoking the cultivation rights registrations for 146 hectares of land. Fortunately, because of errors in documentation, a few of these revocations were not completed and a few were able to retain their cultivation rights. Two of these comparatively lucky rights holders eventually became litigants in the aforementioned case. After the lease agreement between the Siou-lin District administrative office and Asia Cement was formed, the original Truku rights-holders were forced off their land. Many of the original cultivation rights’ registrants have since passed away, and the remaining few who are parties to this case are now quite elderly.

During the course of protracted litigation, the Siou-lin District administrative office and the Asia Cement Company have repeatedly produced a written document which they claim is an agreement to abandon cultivation rights to which the seals and signatures of the Truku cultivation rights-holders have been affixed as proof of the aboriginal people's voluntarily renouncing cultivation rights and receipt of compensatory payment. However, the two aboriginal plaintiffs in this case do not recall signing any such document, and the handwriting used on all the signatures appending the agreement is curiously identical.
Read the whole thing, it's a common story of what really goes on in these cases when indigenes face large government-backed resource extraction companies. The historical background is given in this piece here by the awesome Scott Simon:
In 1968, the KMT government began legal registration of Aboriginal land in Taiwan as Aboriginal Reserve Land. Although indigenous people had lived on Taiwan for 6,000 years before the first Chinese settlers arrived, Aboriginal families received only cultivation rights under the new legal system. Usage rights on the land, moreover, were granted only on the condition that crops be planted for 10 years. The stipulation effectively forced assimilation on Aboriginal people, as it made them abandon their traditional mix of hunting, gathering, and slash-and-burn agriculture. It required that they instead adopt Chinese customs of settled agriculture, presumably for the growth of cash crops. The law stipulated that land could not be sold or rented to Chinese people--it either had to be cultivated or ceded to the government as state property.

Although Aboriginal Reserve Land was supposedly reserved for indigenous people, legal loopholes actually gave the Taiwanese government as well as Han Chinese individuals and corporations access to indigenous land. The government often "rented" indigenous land to outside commercial interests if indigenous people did not cultivate the land and sign "rental" agreements for the property in question. And indigenous people themselves often rented land to each other or outside Han Chinese. Han Chinese entrepreneurs were thus able to acquire space for villas, hotels, and factories on reserve land. The legacy of these problems remains. Indigenous people have no full legal ownership rights over the land, which means that they have no right to take out loans against it, a restriction that has prevented them from developing their own lands.

The policy of Aboriginal Reserve Land thus gave corporations adequate legal loopholes through which to seize Aboriginal land during a window of opportunity from 1968 to 1978. In 1973, the Taiwanese conglomerate Asia Cement applied to rent land from the Hsiulin Township Office and held its first consultative meeting with Taroko people. Township officials encouraged Taroko people to rent the land, saying it would give them employment opportunities, prevent out-migration of young people, and bring development to the community. The original landowners received compensation for displaced crops--a mere fraction of the land’s real estate value--and the promise that the land would be returned to them after 20 years.
In sum, Asia Cement did not have to compensate the aboriginal people for the value of the land (since the government "owned" it), just for the (far smaller sum of the) value of the crops it could have grown. Theft, backed by martial law, so protest was impossible. The article notes that few jobs were given to local aborigines out of the cornucopia promised, all grotty low paying work, which eventually was given to migrant workers, displacing even those few aborigines who got work at the cement company. It also tells the story of how the case was revived, with depressingly predictable responses....
One lucky day for the Taroko people, township officials left a hearing in anger, leaving behind a stack of documents. As Igung Shiban looked through them, she found that they were filled with irregularities. Some were missing dates or official seals. Most suspicious of all, the signatures of many former owners who had supposedly given up their property rights were all written in the same handwriting. In nearly a year of research, she pulled the agreements, one by one, from the township office files and showed them to the signatories to confirm whether or not they had actually signed them. It turned out that most of the signatures on the agreements to relinquish land rights were forgeries.

Asia Cement resorted to intimidation to stop her research--Shiban and her husband were physically attacked twice, and her husband was burned on the leg—but they didn’t give up. Fortunately, local environmental activists and National Legislator Bayan Dalur, an indigenous representative given a seat through the opposition Democratic Progressive Party (DPP), helped them pursue the case by providing access to government documents.
This old report, preserved on the useful Taiwan First Nations website, describes:
"There will definitely be bloodshed next time. We'll kill you one by one," promised Chou Wei-kuen, a company spokesman, after the group stormed the gates.
Activist Igung Shiban started an organization and took its case to the United Aborigines Working Program of the UN (here) where it didn't make much progress because you-know-who across the Strait suppressed it because it was Taiwanese. Packed with useful, fascinating details, Igung Shiban wrote in her 1997 report to the UN...
This dilemma of the Taroko people is the dilemma of all the indigenous people of Taiwan: Shimen Dam in Taoyuan County drowned the villages of the Taiyal. The military air base built into the mountain near Hwalien airport displaced the villages there. The Machia Dam in Taitung County forced the Lukai people out of their homes. The forced expropriation of indigenous reserved land by the government's Retired Servicemen's Association, Forestry Department, and National Parks Service, have each contributed their part to the loss the indigenous land and extinction of indigenous culture. If the campaign for return of land from Asia Cement were to succeed, it would be a crucial turning point. So we must persist in this campaign. This is not just our struggle; it is part of the hope for indigenous people throughout the world.
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Thursday, April 28, 2016

High Mountain Tea Plantations destroyed by government...

AlishanDM_DSC01790
High mountain tea on the flank of Alishan.

UPDATE: Eco-Cha's response to this piece. And Taiwan Law Blog's.

Clarissa Wei (@dearclarissa) is emerging as a strong voice on environmental and social issues in Taiwan. Her latest piece discusses how the government is destroying high mountain oolong tea farms above 2500 meters in an environmentally-oriented move...
High mountain agriculture can be quite destructive; it erodes the landscape and causes harmful pesticides and fertilizers to contaminate water sources and the land. The additives also strip the soil of moisture, rendering it completely useless in a matter of decades. It’s a toxic industry; for every one pound of tea, roughly $9 USD is spent on pesticides and fertilizers. To discourage high mountain farming, in 2014, Taiwan tea researchers engineered a low-altitude tea—known as Taiwan Tea Number 22—that replicates high mountain tea aromas.

In response to the environmental lobbyists and influenced by voter interests, the government set off to reforest high-elevation tea farms and restore them to their pre-agricultural state. Most farmland was seized and reclaimed.

“It’s a very black-and-white matter to the government,” Limei says. “They see high mountain tea trees and they want to cut it down. What about high mountain cabbage farms and hotels? Those are more destructive than tea. We didn’t even use pesticides.”
The demand for high mountain tea of course leads to the perennial problem of imports repackaged as local teas:
I think about the slew of tea shops in Taipei City alone. High mountain oolong tea is on every tea menu in town. Annual domestic production of tea in Taiwan adds up to 15,000 tons, while demand is about 45,000 tons. The math doesn’t add up.

“A lot of it is imported now from Vietnam, India, and Thailand, and then branded as Taiwan tea,” Tsay says. He says that in a load of commercially marketed Taiwanese oolong tea leaves, only 70 percent of that is real Taiwan oolong. The rest is imported and then mixed in with the batch.
Yes, that's right. Illegal planting of betel nut and even more urgently, bamboo, all over Taiwan's mountains, but what's really concerning is... tea. Although I have to admit I experienced a strong moment of skepticism at the "we don't even use pesticides" remark.

There's a lot going on here. The last few years has seen much government activity in restructuring and renewing mountain lands. I was delighted to find, a couple of years ago, that the government had gone in and demolished the scrum of illegal restaurants and hostels at Tayuling below Wuling. It has taken many years to get this far -- in the early 2000s, for example, when the government handed out subsidies for reforestation, farmers would obtain a plot of land, whack down all its trees, and replant trees to collect subsidies. Strangely, the nation cut its production of grains and let grain producing land lie fallow since it had agreed to import grain from the US... while ignoring slopeland development. Finally, hovering in the background of clarifying who owns what is the increasing assertiveness of aborigines towards lands they once owned and the bitter struggle between the Han government and the aborigines over land (examples: 2001, 2015).

MORE ON THE CLOSURE OF THINKING TAIWAN: The pro-KMT China Times says that Tsai Ing-wen's foundation couldn't decide how Thinking Taiwan should handle criticism of the Tsai Administration. As a very sharp observer of Taiwan sharply observed: they had all that time to think about it, and didn't come up with a policy?
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Daily Links:
  • Interview with Shawna Yang Ryan, writer of Green Island
  • Eurasia Review:India-Taiwan Relationship: Need To Emerge From The Chinese Shadow – Analysis. I've been saying this in print since the late 1990s, and it is really wonderful to see it finally take place.
  • Prague is expelling CCP goons who attacked pro-democracy and pro-Tibet protesters in Czech during Xi's visit.
  • Pig farmers protest in front of AIT. This lead by the TSU. Welcome to being the party in power, DPP....
  • Because there is just not enough stupid in the world: hilarity ensued this week when a group of businessmen suffering from low-altitude oxygen deprivation erected a statue of Chinese premier Wen Jia-bao as a "Taiwan hero"... the statue was replaced overnight by a tree. 
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Sunday, August 25, 2013

Tainan: But...but our land grab is different!

Art takes shape.

The Taipei Times editorialized today on the land expropriation for the rail line in Tainan....
The project, which was approved by the Executive Yuan in 2009, aimed to move an 8km long stretch of railroad track underground. To facilitate the project, the Greater Tainan Government plans to demolish more than 400 houses on the east side of the current tracks in downtown Tainan. When the project is completed, the original surface tracks are to be removed to make way for a park and a commercial district.

The land expropriation case in Greater Tainan has sparked protest from some households who accused Tainan Mayor William Lai (賴清德) of reaping the benefits of land expropriation and disregarding people’s property rights. They urged the Democratic Progressive Party (DPP) to pay as much attention to the case as it has to condemning Miaoli County Government Commissioner Liu Cheng-hung (劉政鴻) of the Chinese Nationalist Party (KMT) over his handling of the Dapu case.

Lai has insisted that the railroad project in Tainan is completely different from the Dapu case, because the expropriation of 62 hectares of land in Dapu was to benefit developers, with most of the seized land to be used to build residential and commercial complexes. The railroad project in Greater Tainan, on the other hand, is a major public construction project, with much of the land to be used for road construction to benefit the city, Lai said.
Lai's claim that Dapu is being expropriated for developers seems like a bit of misdirection. The rationale for the Dapu demolitions is that they are needed to round off a science park..... But your bullshit alarm should be going off. Read that again:
When the project is completed, the original surface tracks are to be removed to make way for a park and a commercial district.
A friend of mine present at a hearing on the issue said that Taiwan Railway officials testified that they did not have enough money to do a deeper line, and they couldn't pay higher prices for the land since they didn't have enough money for that either. So the land was expropriated and compensation was low. TRA officials also said that the underground line will help stimulate Tainan's economy, though it is hard to see how, unless they mean the commercial development which is going to take place above it. I'm trying to track down some artist's rendering of what the freed-up land is going to look like, but I've heard that includes shopping malls. We both know, dear reader, that the land is going to make some big businessman a ton of money on that "commercial district". None of which will reach the original land owners.
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Saturday, August 24, 2013

Government's repressive tactics against protesters

Over at Far Eastern Sweet Potato J Michael scribes on the government's ugly campaign of intimidation:
It gets worse. On Aug. 20, the Bureau of Energy, the Ministry of Economic Affairs and Presidential Human Rights Advisory Committee held a meeting in Taipei to discuss the matter of adequate distance for wind turbines and, we are told, to “maximize public participation.” However, there were so many procedural problems with the meeting, which was termed an “experimental hearing,” that it is difficult not to regard it as a joke — if only public money were not wasted on it.

For one thing, the “experimental hearing” had no authority to enforce anything; it was just people talking. While there is nothing intrinsically wrong with that (we’re all for all sides in a dispute to sit down and try to reach a consensus), here’s the catch: Before the hearing had begun, a large number of individuals associated with InfraVest had “signed up” for the event, which left precious few seats for Yuanli residents and environmental NGOs. In other words, opponents of the project were selected out even before the hearing was held. Oddly, many of the people who had registered never materialized during the meeting.

It gets better. Several police officers and members of the Criminal Investigation Department (CID) were inside the venue during the hearing, which in itself is an odd departure from protocol. Moreover, several law enforcement officers held video cameras; individuals who were present (I failed to attend it myself) told me the cops only filmed whenever the villagers were speaking or asking questions. The inevitable intimidation associated with this act, and the selectiveness of its targets, are evidently cause for worry. It made suspects of individuals who have done no wrong, while clearly telling them that the powers that be are clearly siding with the local government and the German firm.
J Michael describes the violence in the Dapu case in this post here. The tactics may vary, but this is always the way it has been: the government has never sided with the little guy. But recently the government's tactics have been especially brutal, especially at Huaguang:
To facilitate evictions, the Ministry of Justice (MOJ), which owns the land, filed lawsuits against residents for “illegally” occupying state properties, resulting in fines to residents that range from a few hundred thousand New Taiwan dollars to several million. Most inhabitants have been forced to leave. Others have died while fighting for their right to stay."
Residents of the Huaguang community said that the police conveyed threats to themThis Taipei Times article reports on the propaganda put out by the Miaoli county government over the Dapu case. Certainly 98% of those contacted permitted the gov't to demolish their homes, because they were not told they could say no. Let me note again the missing factor: the courts. People facing demolition have no recourse to an impartial judiciary with powers that have teeth. The judicial system is not a part of this process. Hence everyone faces the same sign-or-get-nothing choice, while the government can more or less dictate terms. What this really means is that your land is yours only until someone more powerful than you wants it, and the government will support them, not you.
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Saturday, July 20, 2013

Land taxes and Dapu Demolitions

Awesome cyclist Nathan Miller rides the side roads of the side roads up Yangmingshan.

At the Far Eastern Sweet Potato, J Michael provides an excellent description of the police protests and the Dapu Demolition protests:
We all knew it was going to happen eventually, that efforts over three years by residents and their supporters, lawyers, journalists and academics to prevent a local government thug from destroying their homes would likely fail, but when the outrage was actually perpetrated on Thursday, the cold, hard reality hit home. On that day, as hundreds of people protested in front of the Presidential Office, the bulldozers rolled in and razed people’s homes in Dapu (大埔), Miaoli County, pulverizing wood, concrete, dreams, lives lived, memories — and faith in people’s ability to rectify government abuse through legal and peaceful processes.

More and more, Taiwanese are realizing that harsher, perhaps more extreme measures will be needed to unhinge a government that makes a travesty of democracy and rule of law while enriching itself and its cronies at the expense of ordinary citizens.
J Michael observes that the county government hacked on the activists and protesters, while taking out ads in major newspapers denigrating the protests and claiming a need to take the last 4 homes. He concludes:
It takes a lot to push Taiwanese to take non-peaceful measures, but from everything that has happened in recent months, and with the crime of Dapu perhaps serving as a catalyst, I believe we may soon cross a line where more direct — perhaps even violent — action will be taken. It’s always easy to regard individuals like the Rice Bomber as extremists, terrorists even, but how can we not agree with their tactics when years of rational efforts, abiding by legal and democratic rules, are simply ignored by those in power, by crooks who undo the very fabric of Taiwan’s democracy in the process of seizing valuable land to fatten their bank accounts, perhaps in expectation of the day when Taiwan will relax its regulations on Chinese purchase of land here?
Conclusions like that first sentence occur when history disappears from the discussion (and when you live in the Chinatown Bubble Taipei). The Taiwanese are not and have never been a peaceful people. In fact the 1990s and 2000s version of the "peaceful Taiwanese" is an illusion born of a rising economy and democratic legitimacy -- the last two decades have been totally anomalous. For all the rest of history, Taiwanese have been violent, ornery bastards much giving to redressing wrongs via group violence. Yea, verily, we still live on the island of "every three years a revolt...," where powerful individuals operated private armies, where villages were protected by sworn gangs of bravos, where aborigines fought against outside powers for two centuries...

Not only that, but these things go in cycles. Stay here long enough, and you'll hear again and again that such and such as case will catalyze a new movement. Anyone remember the DuPont case? Remember when the farmers locked up downtown Taipei for two days in 1988? When fisherman shut down the petroleum industry for three weeks over a pollution incident near the Linyuan Petrochemical Plant? How about them Wild Lilies? What's going on now is tame by comparison to what went on at the end of the 1980s. When Hau Pei-tsun became premier, he went after the social activists, farmers, anti-nuke activists, and others advocating progressive, human-centered values. He jailed many, but in the long run, he lost. Thankfully.

In the 1990s street protests "stopped" for a variety of reasons. The government acquired genuine legitimacy via real democracy. Activist groups became formal associations and organizations that gained traction, most illusory, within the system. And so on. We've been living in a period of relative calm for the last twenty years in which public protest is normalized and part of the System even while ostensibly opposed to it. Even though the total number of protests skyrocketed throughout the 1990s, everyone viewed this period as a calm one. This calm is totally anomalous in terms of Taiwan history.

Lurking in the background of why Dapu and these other cases probably won't catalyze anything is Taiwan's artificially low land tax. Had a long chat with an old friend and wise observer of Taiwan affairs who pointed out a couple of interesting things. First, the complete absence of the courts. They have no power to enforce injunctions and are not a meaningful part of the process of adjudicating cases like the Dapu Demolition mess. In the US the government would bring its land assessments, and the individuals whose land is being threatened with them, and compensation -- real compensation that took into account something like the actual market value of the land -- would occur. And both parties would comply.

In Taiwan, the government simply announces that it will take the land and it pays a pittance in compensation. Why does it pay a pittance? Because the assessed value of the land is used to determine how much is paid -- and as I have noted in several long posts (for example), that value hasn't changed since 1987. Landowners can delay this outcome via protests, but because there are no courts with the power to issue and enforce injunctions, they can't stop it. Hence when courts do step in, they are ignored by the government, which routinely breaks its own laws in pursuit of tracts of land for developers to make big bucks on.

Work it out: this low assessed value means that land-owners in Taiwan pay far lower taxes than they should, with all the pernicious effects of such a policy, ranging from broke local governments to real estate functioning as a tax shelter for the wealthy. Thus, the government gives land-owners a tax subsidy, until it comes time to take the land, and then it pays too low a figure.

For the compensation system to change, and land-owners to get fair value, the assessed value would probably have to rise. Given that low assessed values help the rich and help the government, and no one who owns land wants to pay higher taxes on it, how is that compensation scheme, which is at the heart of many of these protests, going to change? I suspect that most land-owners consider their risk of being punished by the System to be low, while they reap the benefits of low land taxes.....

The heartless savagery of the government towards those whose land it takes has overshadowed this key issue: no one protests because if the System changes then they will all have to pay higher taxes. The participation of a few high profile students in protests has overshadowed the fact that the vast majority of students aren't protesting -- they are too busy struggling to survive in the brutal economy their parents have created for them. People look at the Jhunan land seizures or the Dapu demolition, and say to themselves "whew, thank god it wasn't me."

Moreover, the land seized in Dapu was for (another needless) science park. Most residents of a place, upon being told that a science park was being bestowed on their area, would probably be quite happy. The Taiwanese retain their developmentist orientation: development = good, and buildings and factories and roads = development. Science parks mean business opportunities and rising land values for the vast majority of individuals around the park. No doubt local onlookers pity those who lose their homes (who wouldn't?), but this pity is tempered with the knowledge that wealth opportunities may arise. Once again, acting on their behalf means taking a hit in the pocket book. This is especially true because Taiwanese are part of extended families and there are usually family members getting benefits from local investments. That is why local government officials in cahoots with land development companies attack activists for hurting development, because that resonates with many locals whose incomes are, after all, a third of those in Taipei.

Yet another reason nobody wants the land laws looked at too closely is that Taiwan's weird, lax land laws permit powerful local groups with local political influence, like local temple organizations, to steal the land of others without compensation. Another friend of mine described to me about how his family is in the process of losing land to a local temple. The temple association simply occupied his family's land and began building on it, because it wasn't being "used." "Unused" land can be legally seized and then used (yes, there's a process for it), and then it becomes the user's land after a few years. When my friend's family attempted to get building permits so they could "use" their own land and stop the process, mysteriously, they couldn't get them from the local government. Again, social groups that might work to change the way land laws and land usage work in Taiwan benefit from the current system. Why should they change it?

Finally, the laws and land taxes aren't going to change because President Ma was installed precisely to prevent such change from occurring. The Ma Administration has been a total success, if you are not an ordinary mortal. Perhaps a DPP administration might be more amenable to progressive change, but I am pessimistic on that score.

I could go on, and talk about the problems of empathy with the Other in local society, but that's probably enough....

If you want an issue that might drive widespread public protests, look at the coming food prices problem. Rising food prices helped trigger the Arab Spring, for example. Taiwan is almost completely dependent on imported food. As humans heat the earth, warming-induced droughts are going to become normal, along with food scarcity, which means rising global food prices. At the moment, the cost of food relative to income is low in Taiwan, but that will change over the next couple of decades..... especially as incomes are failing to keep pace with economic growth.
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Sunday, December 23, 2012

*SIGH* Miramar Hotel BOT Project gets conditional EIA approval

Taitong
A list of build-operate-transfer (BOT) projects in Taitung county. Following the developer credo: there is no place so beautiful that it can't use more concrete.

The Taipei Times reports:
The controversial construction of Miramar Resort Village at Taitung County’s Shanyuan Bay (杉原灣) gained conditional approval from a seventh Environmental Impact Assessment (EIA) meeting yesterday, despite heated debate over the legitimacy of the project and the EIA meeting.
According to the Taipei Times, the project was created to get around the environmental impact assessment (EIA) process by making the initial building site less than one hectare in size. It was then expanded. Several years ago I heard longtime environmental activist Robin Winkler speak on EIAs in Taiwan:
Another problematic structural feature of the process is that the corporations themselves hire the outside consultants who perform the EIA -- meaning that it will probably reflect the concerns of the corporation. Further, the way the law is written, the EIA applies to projects of certain sizes -- meaning that it can be skirted simply by breaking the project up into small pieces and labeling each a separate project (fans of tax evasion in Taiwan will see an eerie echo of the subcontracting system).
The county government piously fined the construction company $300,000 NT for exceeding the 0.9 hectare land limit for the project a few years ago; activists have long accused the county government of being in collusion with the land developer. According to that Taiwan News report, the beach is rented for just $125,000 NT.

The "conditional pass" is also a feature of regulatory inaction in Taiwan; the conditions are given lip service and the construction (or media merger, in the WantWant purchase of Next Media) goes forward. As Winkler pointed out in the seminar I summarized above, no project has ever been killed by a failed environmental assessment. In fact the EPA has intervened on behalf of polluters to allow them to pollute. For example, see this post where, similar to the Miramar case, a judge apparently killed a project only to find that reports of its funeral were premature.

Wild at Heart gives a thumbnail of the case, beautifully written:
So what is it that has people so up and against the Miramar resort? Let’s start with its blatant disregard for the law. It all started in 2004 when the Taitung County government signed a BOT (build operate transfer) contract with the Miramar Group, a multi million dollar corporation which owns the Miramar Entertainment Park in Taipei, as well as a wide range of businesses including other hotels department stores, real estate and petrol stations. The developers were granted a building license which allowed them to build without an EIA (Environmental Impact Assessment); however, in order to sidestep the EIA, the construction could not exceed .9 hectares of land. With this license, the developers simply applied for an expansion permit the following year and then continued to build the resort six times the size of what the license permitted, with no EIA being conducted. This came to the attention of the Environmental Protection Administration (EPA) and they ruled that construction must be stopped until an EIA was approved. The Taitung County government then quickly pushed an EIA through, with five of the assessment members conveniently being Taitung County officials. In 2010 the High Court ruled that the EIA was flawed for this very reason along with the fact that the government had not provided sufficient scientific evidence that the project would not pollute the ocean. Then, in February of this year, the Supreme Administrative Court again ruled that the EIA was invalid and that construction “should” be stopped. The most recent verdict was just announced on September 21st, 2012, bringing news that the indigenous groups and the NGOs have won the latest injunction and the Supreme Administrative Court has ruled that construction must be discontinued.
Alas, as so many of us cynically predicted in September, construction goes on regardless. The one true sin in Taiwan is to stand between a developer and his profits; everything else is negotiable.

UPDATE: A friend points out that in the courts have no power to cite violators of injunctions for contempt and either toss them in jail or massively fine them, as US courts do.
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Wednesday, December 12, 2012

Fallow Land Rehabilitation Program in the news

Various media outlets (exampleexample) have been reporting for months on the government's plan to revitalize fallow land...

From RTI:
"Of Taiwan's 460,000 acres of farmland, more than 30,000 acres have been fallow for five years; 46,000 acres have been fallow for two years; 50,000 acres have been fallow for a year," said Chen.

The current system offers stipends to encourage land to go fallow. It was implemented when Taiwan was preparing to join the WTO in 2002. The country wanted to cut its own grain production at the time to allow an influx of imported staple foods.
In other words, the US demanded that Taiwan curtail its own rice production to permit imports of rice from the US. The results were of course pernicious, as I observed a couple of years ago:
In Taiwan the government runs a set-aside program for farmland under which large quantities of farmland lie fallow. In some years the amount set aside exceeds the amount planted in rice (!). This program has come under much criticism, since sometimes farmland becomes unusable after being set aside and land lying uncared for invites pests that affect nearby farms. This results in abandoned land, 50,000 hectares by one 2004 estimate. When land leaves the market, it drives up the price of remaining land, pushing up rents -- and many farmers are renters, not owners. Further, for many observers it makes little sense to set aside good farmland in the lowlands while permitting farming on slopes. The set aside program is also driven by shortages of water, diverted for industrial and residential needs. Everything is exacerbated by the lack of government oversight and monitoring, a persistent problem in all areas of government policy in Taiwan.
Another long-term process, still being felt, is the change in demand for rice as Taiwan's food desires changed. As demand for meat grew in the 1970s and stimulated local livestock production, this drove demand for feed crops for the animals, which in turn pushed farmers to switch from rice to feed crops for animals. This reduced the land in rice, especially since the government set a price floor for feed crops in the 1970s. Accession to the WTO slammed rice production further.This journal article has the call:
To prepare for joining the WTO in 2002, the Taiwanese government implemented a new plan in 1997, the “Adjustment of Paddy Field and Uplands Utilization Program,” to cushion the adverse effects of agricultural trade liberalization on domestic farmers. According to the negotiated schedule for opening the rice market, Taiwan was required to import a specified amount of brown rice annually, roughly 8% of annual domestic rice consumption, before the rice market was completely opened. The additional supplies of rice from imports (about 144,000 tons of brown rice) represent a need to reduce further rice production, which will be met by letting an additional 40,000 ha of paddy fields go fallow (Shi, 2002). Thus, the goal of rice production in Taiwan has changed from self-sufficiency to a demand–supply balance (Lee et al., 1997).

Additionally, as a developed economy, Taiwan was required to reduce its AMS [ag subsidies] by 20%. To achieve this goal, the Taiwanese government reduced the land growing forage crops at a guaranteed price, and further encouraged diversion to different plants and fallow lands. The area planted with feed maize decreased accordingly and fell to the level it was in the late 1960s.
Finally a 2007 a revision to the village rebuilding law permitted the further conversion of 160,000 ha of farmland for the construction of "idyllic communities."

A FocusTaiwan piece offers a few pertinent observations from Agricultural Minister Chen on what is driving the new law:
Chen said the total acreage of local rice paddies has decreased from some 600,000 hectares 30 years ago to about 250,000 hectares at present.

In contrast, the acreage of fallow farmland has increased steadily since Taiwan's accession to the World Trade Organization in 2002 and has exceeded 200,000 hectares by now.

Which large plots of farmland are left idle, their owners can still receive subsidies. "The phenomenon violates the principle of fairness and justice," Chen said, adding that the Council of Agriculture (COA) needs to take actions to improve the situation.
The piece then offered a translation of a UDN article on the new policy giving details:
At present, farmland owners are entitled to receive NT$90,000 (US$3,072) per hectare in two installments annually if their farmland is left fallow.

Under the COA's new fallow farmland revitalization project, land owners can only receive NT$45,000 in subsidy annually for fallow farmland.

The restriction is aimed at encouraging landlords to plant crops for at least some months instead of leaving their land plots fallow all year long.

If landlords are unable to plow their farmland, the COA-backed farmland bank will help mediate leasing deals for them during a grace period from 2013 to 2014.

During this period, landlords will be given an additional NT$20,000 in farmland maintenance subsidy.

Owners of land plots that are unsuitable for farm produce plantation or are reserved for ecological conservation will be offered NT$68,000 in subsidy in two installments annually. The COA will also help landlords to transform their land plots for other usage.

Chen said the new project will need a annual budget of NT$11 billion, the same amount needed for the current project.
Under the new laws, the government promotes production while reducing fallow land without a change in budget. This is ok if you are a young farmer, but older farmers who leased land long-term and invested in new equipment to farm it expecting X amount of subsidy, as the UDN piece goes on to point out, will now be getting 1/2X. Ths policy might encourage land sales by debt-stressed farmers to developers, which unfortunately Taiwan has no shortage of.

Lawmakers criticized the new policy (TT) which places control of production in the hands of local governments (read: patronage networks and local clan and faction systems):
However, the council is failing to control production and supply under its current policy, which leaves 60 percent of activated fallow land for local governments to decide which crops to grow and does not regulate the plantation of import substitution crops, such as flint corns, sugarcanes, soybeans and wheat, the lawmaker said.

The council’s planning and seasonal adjustments would be crucial for the farmers, otherwise the farmers could be exploited by middlemen or farmers in various regions could cultivate the same crops, which would result in lower prices, he added.

DPP Legislator Huang Wei-cher (黃偉哲) said the central government would be in a better position to monitor and control production and supply than local governments.
The new policy also encourages farmers to plant corn and wheat, two crops not particularly suited for northern Taiwan. The policy -- of course not, why even say it? -- also appears to contain no promotion of sustainable, organic, or permaculture farming. Hope I am wrong....

REF: Experimental Forestry Project to restore fallow land.
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Thursday, October 04, 2012

Income gap/income stagnation

Ta-ken, Taichung.

On one of the lists I frequent we were discussing the reasons for Taiwan's stagnating income and slowing economic performance, stimulated by a recent short piece in WSJ which touches on some of the issues. A friend point me to this MUST READ article in Commonwealth on the tax situation here in Taiwan.... as I've noted before, the wealthy simply don't pay taxes:
Jim Huang is 35 years old, a member of the third generation of a powerful political family in Taiwan. He does not have a job, but he's doing just fine.

In Taiwan, he lives in a 660 square-meter luxury apartment on ritzy Renai Rd. that he inherited from his father, and he also owns property in Los Angeles, Shanghai and Germany.

Through overseas trusts, Huang also holds stocks in the United States, Hong Kong and Taiwan worth more than NT$1 billion. With the help of two private banking advisers and their use of hedging techniques in the equity and futures markets, he earns a 6 percent return, or roughly NT$50 million a year, on his investments regardless of whether markets are bullish or bearish.

But Huang now faces a major decision. The United States Internal Revenue Service has aggressively pursued overseas assets of Americans in recent years to boost tax revenues, and Huang, who has American citizenship, is thinking about giving it up.

"The United States is cracking down hard. I've been thinking that it might be better to come back and be Taiwanese," says Huang, which is not his real name. "In any case, when you add it all up, the tax burden here is really low."

Because Huang's investments are channeled through a complicated array of overseas trusts and multilayer reinvestment structures, Taiwan's National Tax Administration has him classified as a "low-income household." In 2011, he paid less in taxes than his driver, just one example of how Taiwan has become a low-tax paradise for the wealthy.
Some stats from the article:
  • "...Taiwan's ratio of tax revenues to GDP, known as the national tax burden ratio, fell from 20 percent in 1990 to 11.9 percent in 2010, the world's sixth lowest and even below those of Singapore (13.5 percent) and Hong Kong (13.9 percent), which are known as low-tax havens." 
  • "Taiwan's effective personal income tax rate is only 5.96 percent, the 10th lowest in the world."
  • "In 2010, the central government budget was 18.9 percent of GDP, the sixth lowest of any country around the globe."
  • "...[estimates] there are 96,000 high net-worth individuals in Taiwan. Their assets have grown by 30 percent over the past four years to NT$10 trillion, or roughly 10 percent of all the wealth in Taiwan. Banking executive: "According to our internal numbers, private banking customers pay about 8 to 10 percent of their income in taxes every year."(highest marginal personal income tax rate is 40 percent and alternative minimum tax is 20%).
  • In the five years from 2006 to 2010, household wealth in Taiwan grew by NT$24.6 trillion, according to DGBAS figures. Of that, NT$16.6 trillion, or nearly 70 percent, resulted from capital gains on stock transactions, which are not taxed in Taiwan, and profits from property transactions, which are taxed at very low rates.
Yes, that's right. I blogged on this before (Chen Shui-bian died for your sins). As the Commonwealth article notes, many rich investors have never paid taxes on their capital gains. The recent capital gains tax is a mere fig leaf and changes little. The assessed value on land, the real prize in the game, has not been changed since 1987. The result of the low assessed land value is described in the article as it talks about a luxury apartment sale:
On a profit that was in fact NT$82 million but assessed by the government at NT$15.25 million, the investor paid a land value increment tax of NT$3.05 million, an effective tax rate of 3.71 percent. Even when deed taxes and other fees are added, the investor's tax liability was still under NT$4 million, or lower than 5 percent, the lowest marginal rate on personal income taxes.
The effects of this non-taxation of wealth are totally pernicious. In the go-go days of the 70s and 80s Taiwan's thriving small and medium-sized businesses (SMEs) were funded by informal methods, since the banks were government-owned and generally didn't lend money to SMEs. In other words, local savings were sourced through a variety of methods as local start-up capital for manufacturing businesses which in turn generated growth and new savings, leading to a virtuous cycle of savings and investment. Today Taiwan's wealthy park their wealth overseas -- instead of capital staying local and driving new business growth, it enters vast international pools of global capital and is invested in securities which are backed by other securities or by global stocks, producing no new business growth at home. Taiwan's incorporation into the global financial system has meant that it is essentially being strip mined of its growth capital, siphoned off to global financial networks. Untaxed, too.

The wealthy also invest in land and real estate at home. The assessed value the government uses to calculate the tax on the land has not changed since 1987. This means that real estate is effectively a tax shelter. That's why the $82 million in profits on that house above were only taxed at $15 million. Observe, dear reader, that the government's pious moves to keep government property on or off the market or to play with the interest rates or to assure the public that those big Chinese buyers are just around the corner are just diversions meant to keep the public's eye off the ball, which is the assessed value. That has to be raised. Note also that the luxury building boom is not a construction boom of future apartments for buyers with money returning from China or from Chinese investing in Taiwan. The construction companies are building tax shelters for the rich.

Of course there are a number of other issues. The economy has transitioned from manufacturing to low paying service McJobs. A big chunk of capital has gone off to China, where many businesses struggle to survive and few really make it rich. This is one reason that Korea has done better than Taiwan, it has less exposure to China (and a much bigger domestic economy with global-scale manufacturers). One of the rich ironies of the Ma Administration's China Cargo Cult is that as Taiwan ties itself closer to China Taiwan's trade with that nation is actually in decline. Even worse, the article notes:
Tung Chen-yuan, a professor with the Graduate Institute of Development Studies at National Chengchi University and a former deputy chairman of the Mainland Affairs Council, says that over the past 10 years, Taiwanese businesses in China have paid nearly NT$3 trillion to the Chinese government, roughly twice Taiwan's total annual tax haul.
The article ends with a former finance minister noting how completely stupid it is to believe that tax cuts for the wealthy stimulate the economy -- actually, they simply transfer wealth to holders of wealth while killing economic growth. As we have seen in the US, and are experiencing now in Taiwan.

The China Times offered an editorial last week after the Labor Minister resigned in the wake of the failure to raise the minimum wage, and offered some dramatic stats on the stagnant income....
Official statistics show that income recipients in Taiwan earned NT$611,134 on average in 2011, down NT$3,882 from the previous year and declining to the level of 1998. The level is now 52 percent lower than South Korea, which had lower salary levels than Taiwan in the past, and barely half of Singapore's.
Now you can see one reason why we have a constant flow of foreign-directed controversies -- the Diaoyutai insanity, the Ractobeef mess with the US  -- keeping the media and public looking outward rather than inward towards the true source of the nation's problems -- because a lot more people are going to die from lack of an adequate income than from eating ractobeef.
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