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Mineral wealth in Islam

2012-05-08
May 8, 2012

To whom does our mineral wealth belong?

Can we still accept the oft-repeated dictum that the control of key mineral resources should remain in the hands of the “private sector”, as that will ensure maximum benefit for the largest possible segment of the citizenry?

Leaving political-economic theories aside, is that what our illumined fiqh teaches us?

Some time ago, the multi‐national gold mining companies in this country, South Africa, immediately blocked a legitimate motion to open up a debate in Parliament regarding ownership of the country’s mineral wealth: Those companies were quick to deploy their usual Decalogue of canonical platitudes, first and foremost the thesis that a “neutral” private sector, “regulated by the self-balancing forces of a free market”, was best equipped to control that wealth and to ensure, in a “democratic” state, the optimal maximization of societal welfare arising from the revenues netted by its mineral operations.
This is not the place for deconstructing their web of anachronistic mendacities, even because most people nowadays recognize them to be so, and are only basking in supine passivity due to their lack the yearning to change things, in their lives and those of the people around them, not because they actually believe in the liturgy of capitalistic propaganda.

***

In this brief survey, we have chosen to focus only on the correct Islamic position regarding the ownership of mineral wealth within a geopolitical territory, and the tax that is levied thereon.

The Arabic word ma`din is applicable to all mineral wealth that is produced by the earth, whether above its surface or underground, and which requires an effort to bring it out in a polished and beneficial form. Allah says at the beginning of Sūrah Ta Ha (in āyah 5 thereof): «Everything in the heavens and everything on the earth and everything in between them and everything under the ground belongs to Him».
If such wealth is found in uninhabited land and in desert areas, and is not subject to anyone’s pre-existing ownership, it belongs to the Muslims’ Public Treasury (baytu’l‐māl) by unanimous consensus among the Muslims.  In the event that the land wherein such wealth is found is owned by a particular legal subject (and we are not even going to deal about the issue of fictitious juristic personas at this stage), it is likewise the property of the Public Treasury of the Muslims according to the soundly correct juristic view espoused by Ahl as-Sunnah.
The basis for such a rule is that evil people might chance upon any portion of such precious wealth, and if the Islamic ruler were to be divested of his authority over it, disorder and anarchical commotion, as well as brutal competition and widespread shedding of human blood, would be engendered by surrendering its ownership to them, even in a potential sense.
There could be no “gold rush”, with all its attendant pernicious spin-offs, in the Abode of Islam [The only time that mineral wealth belongs to the owner of the land wherein it is come across is when such wealth is found by the Islamic authority to be located in a land of kuffār with whom the Muslims have concluded a solemn pact enabling them to remain in their land].
There is no doubt whatsoever, and even the kuffār are growingly becoming more acutely aware of such fact, that gold mining companies and their like, i.e. harām companies controlled beyond the borders of nation‐states by pyramidal shareholding structures displaying interlaced connections with one another, and whose sole purpose is the maximization of profit for their owners regardless of the price to be paid for it in terms of human sanity and planetary wellbeing, are the most evilly villainous of wrongdoers. They extract mineral riches by exploitation of massive numbers of migrant workers, and then store them in US vaults or exchange them for other assets in volatile speculative markets without justly or even compassionately sharing them with their assistants (overworked and underpaid) or with fellow humans.
Therefore, the said classical juristic ruling applies to them with greater force, and whatever they own, in Islam, is actually the legitimate property of the rulers.
It is the prerogative of the Islamic ruler to entrust part of such wealth, at his discretion unfettered by vested interests or balances of economic power, to whoever can adroitly work on it.
The ruler can do so, not on the basis of a permanent transfer of ownership into such entrepreneur’s property, but temporarily for a demarcated period only (which is precisely what the owner of dominant fiat money, the trans-national banking system, does when leasing such a fungible it has been legislatively empowered to issue). Within such clearly defined and formally stipulated period of time, the individual or partnership vested with the right to extract the wealth of a delineated piece of land shall do so in return for payment to the Public Treasury of a fixed share thereof, such as half or one‐third [It might be remarked that one cannot know in advance how much will be extracted from it, if any. That is true, and the juristic rule we have laid out accordingly countenances the existence of a degree of gharar or material want of knowledge as to the profitability of the enterprise carried out by the concessionary, as well as the eventual extent of it. The validity of the transaction by which lucrative use of the land containing any such mineral wealth is granted by the Islamic authority is thus an exception to the general juristic prohibition of gharar, and such exception is validated by the fact that, as one cannot legitimately alienate by sale a mineral wealth that is owned by the Public Treasury, he can only exploit it in return for a predetermined percentage of any possible profit, exactly as it is done with a commenda or dormant partnership (called qirād or mudārabah in our fiqh) or with sharecropping (musāqāt), themselves two exemptions from the ban on gharar necessitated by public interest: In a qirād, for instance, the contracting parties cannot anticipate whether their trading venture will be gifted success, and if so in which degree, exactly as any mineral extraction undertaking by a concessionary of the Islamic leadership]. Moreover, the person thus extracting such wealth is enjoined to personally discharge the obligation of the zakāt on it (2,5%), provided of course it reaches the minimum nisāb. By contrast, no zakāt is charged on the mineral wealth which belongs to the Public Treasury, due to the fact that it is not owned by any specific individual on whom it might be levied.
It is alternatively possible for the Islamic leader to retain for the Public Treasury ownership of all the mineral wealth, and enter into contracts of letting and hiring of services (ijārāt) with individuals or partnerships that extract and polish such wealth in return for a contractually fixed fee, pursuant to the ordinary rules of such contractual form. In that event, no zakāt is chargeable to a mere hireling who lets his services for a fee, since not only he does not own the mineral wealth (exactly as all of us who merely rent fiat money worldwide), but he is not temporarily put in charge of its exploitation either. His only connection is the provision of services to the benefiting lessee thereof (= the Public Treasury represented by the Muslim ruler), and his sole right is to take receipt of a monetary quid pro quo or ujrah for rendering such services.
The following report is found in Al‐Muwatta’, namely, “the Messenger of Allah, Sallallāhu ‘alayhi wa-Sallam, assigned to Bilāl b. al‐Hārith al‐Muzanī the mines of al‐Qabaliyyah, a locality in the region of al‐Fur`. Nothing has been taken out of them until the present time save for the zakāt”. This narration has been reported with a full chain of transmission by Abū Dāwud in his Sunan, in the Book of Kharāj, Imārah and Fay’. It is thus clear that the Prophet, Sallallāhu ‘alayhi wa-Sallam, granted concessionary rights for the mining of that land in his capacity as the political head of the Muslims, in charge as such over their mineral wealth for the benefit of all and sundry, and not as a private owner of such land (said to be a coastal locality at a distance of five days’ conventional journey from al‐Madīnah).
Why did the present South African government have to precipitately abandon its resolution to re‐discuss the whole issue of the country’s mined wealth?
And what stops African governments with majority Muslim populations from reclaiming their resources in conformity with the right to communal riches which Allah has bestowed upon them
?





 



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