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  • NB – Were 7 th biggest gold producer in 1980s
  • 29 operating metallic mines , up from only 16 in 2006, 23 in 2007 and 26 in 2008
  • Among world’s most mineral-rich areas Ranks 3rd worldwide in gold reserves, 4th in copper, 5th in nickel, 6th in chromite 6.7 BMT metallic (70% copper, 16% nickel)… Est. worth US$840B-US$1 trillion?!   At peak of production (‘80s): 7th in gold worldwide, 10th in copper, 11th in nickel…   à About 9 million has. (or 1/3 of country’s land area) has potential deposits and is targeted by govt for “development” only 1.4% covered by permits so far   Has the potential to be among the 10 largest mining powers of the world
  • What they are not saying…

Andy whitmore   presentation in cologne Andy whitmore presentation in cologne Presentation Transcript

  • Mining in the Philippines Presented by Andy Whitmore Indigenous Peoples Links (PIPLinks)
  • PIPLinks (Indigenous Peoples Links)
    • Our mission is to support Indigenous Peoples and other land-based communities in their efforts to defend and promote recognition of their human rights to protect their lands and culture – with a focus on the Philippines
    • We started in 1992 & are based in UK (in EU) & Philippines
    • For Indigenous Peoples it is a global problem - one estimate as much as 50% of the gold produced between 1995 and 2015 will come from indigenous lands
    • We are link from local and national to international
  • PIPLinks (Indigenous Peoples Links)
    • We now have a Philippine as well as UK office
    • Our main partners nationally are LRC, ATM, Kalikasan, PAFID, and various local partners
    • We work on advocacy, research, education & networking
    • We have helped form the UK Working Group on Mining in the Philippines, Campaign for Human Rights in the Philippines, London Mining Network
  • Philippines Mining or Food ?
  • Scope of presentation
    • My background (work for Mines & Communities as well)
    • Apologies this is in English!
    • It is difficult to know level of background (re mining / Philippines)
    • There should be plenty of time for questions at the end (but please ask / contribute)
  • Outline
    • International background
    • Mining facts and figures
    • Government / legal background
    • Issues and Concerns
    • People’s Response
  • Observations on Mining Industry
    • John Steinbeck - short story of ‘The Pearl’ & the Philippine’s ‘$1 trillion’ in mineral reserves
  • Resource curse at work
    • Experience shows that extractive industries ‘unbalance’ the economy – ‘Dutch Disease’ & encourage corruption and conflict – which is self-reinforcing – and known as the ‘resource curse’
    • Study by the University of Chile shows conventional economic measures do not take into account of the depletion of (non-renewable) long term resources in the country, let alone the costs in terms of the environment, health or in alternative development models
    • Is it possible to break the resource curse? Possibly, but with a great deal of work and sacrifice (positive examples include Norway, Chile & Botswana).
    • Given current starting point in Philippines - no optimism
  • Top 10 Multinational companies in 1995
    • Company Nationality Capital ($bn) %share in top 100
    • BHP Australia / UK 24.08 8.35
    • RTZ UK / Australia 13.62 4.73
    • Anglo-American UK (SA) 12.38 4.30
    • CVRD Brazil 9.17 3.18
    • Barrick Gold Canada 8.90 3.09
    • Alcoa US 8.28 2.87
    • CRA Australia 7.97 2.76
    • Alcan Canada 6.65 2.31
    • Placer Dome Canada 6.03 2.09
    • Western Mining Australia 5.90 2.05
    • Source:James Cappel Global index, 1995
  • Top 10 Multinational companies in 2010
    • Company Nationality Capital ($bn) %share in top 100
    • BHP Billiton Australia/UK 209.11 10.45
    • Vale (CVRD) Brazil 165.70 8.28
    • Rio Tinto Australia/UK 135.45 6.77
    • Shenhua China 83.70 4.18
    • Anglo American UK (SA) 60.99 3.05
    • Suncor Canada 58.15 2.91
    • Xstrata UK/Switzerland 57.13 2.85
    • Barrick Canada 40.98 2.05
    • FreeportMcMoRan USA 37.87 1.89
    • NMDC India 37.20 1.86
    • Source: Barry Sargant, Mineweb – 12 January 2010
  • Mining industry recovery
    • Industry has bounced back from low point in late 2008
    • It is important that the lows were very low – so this is only a relative recovery, mostly based on opportunism, but not many companies went bust – although predicted by Frasier Institute (half the companies on TSX)
    • It is important that many think we are in a new bubble, mostly based on minerals
    • The recovery is very fragile – extreme volatility & reliance on China
    • Most companies are still badly in debt – industry as a whole estimated to be over £50bn in debt, which is a weak position (although have been winners & losers)
  • Return of ‘CSR agenda’
    • During the financial crisis CSR in the mining industry was mainly ‘downgraded’
    • It is now ‘back with a vengeance’ - 2010-11 are to be the years that ‘sustainable mining’ will be discussed at the UN Commission on Sustainable Development
    • Industry body ICMM working on a number of initiatives, including a flawed process on engagement with indigenous peoples
    • Climate change is increasingly a big issue for industry & the major players have shifted from a denial position to damage limitation
  • Human Rights abuses
    • There has been a growing correlation globally between resource extraction & human rights abuses – it is getting worse e.g.
    • The current assault of the Indian Government on ‘naxalites’ in the tribal areas in the North-east of the country
    • Arrests and harassment of anti-mining activists in China & Vietnam
    • Riots & community confrontations in Panama, Peru & Ecuador
    • Recent murders of activists in El Salvador, Guatemala & Mexico
    • UNSRBHR – John Ruggie – notes that the majority of the cases brought to him are on extractive industries
  • Increase in international work on mining
    • As there is a growing increase in local concern, there are more local & national groups focussing on mining (or perhaps we are just discovering them?)
    • International networks are growing & strengthening – on companies (e.g. Barrick, BHP Billiton, Xstrata…) and across the industry – Mines & Communities, FoE Mining Campaign, Extractives and Indigenous Peoples Network
    • More materials are being produced – and attempts made to summarise / bring together different resources and hand-books
      • Gold
      • Copper
      • Nickel
      • Chromite
      • Iron
      • bauxite
      • Marble
      • limestone
    Quantity of Mineral Resources per unit area
    • 3 rd in the world for gold
    • 4 th in the world for copper
    • 5 th in the world for nickel
    • 6 th in the world for chromite
      • Philippine mineral reserves :
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  • Scope of Mining Operations
      • 65 priority projects in 2009 (at the peak)
        • 10 are in full operation
        • 5 second-tier development stage
        • 8 in construction stage
        • 8 are in financing (fund-raising)
        • 9 in advanced exploration
        • 23 in early exploration
      • Over 2,000 small-scale mines and quarries – and many more that are unlicensed
      • Increase lately in Philippine capital
  • Mining Tenements (Sept. 2009)
    • 4 FTAAs (80,502 has.)
    • 297 MPSAs (480,524 has.)
    • 47 EPs (183,172 has.)
    • Total of 348 mining agreements
    • 744,199 hectares mineralized lands, up from about 515,000 hectares in January 2007, and 722,691 in 2008
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  • Philippine Mining Statistics
  • Crunching the Numbers
    • Job creation was only at 158,000 in 2008
    • Actual tax collection was only at 11%
    • GDP contribution is only 1%
    • Agriculture GDP contribution is at 16.5%
  • Minute Economic Contributions of Mining to Philippine Economy
    • Mining gross production value in 2007 was valued at Php 101.5 billion pesos ($2.2 bn)
    • Government tax collection (in 2007) was at
    • Php 10.4 billion pesos ($0.23 bn)
      • National Gov’t. (Agencies) collected Php 8.35 bn pesos ($0.18 bn)
      • BIR collected Php 942 million pesos ($20.8 mn)
      • DENR/MGB collected Php 774 million pesos ($17.1 mn)
      • LGUs collected Php 357.9 million pesos ($7.8 mn)
  • Background - Government
      • Recent legislation 1995 Mining Act (proposed by GMA as a Senator)
      • Conflicting legislation (IPRA, LGC)
      • Judicial decisions -> reversal of Jan. 2004 SC decision re constitutionality of certain provisions of Mining Act
      • Under President GMA, policy shift in 2004 -> from tolerance to “aggressive promotion”
      • Uncertain position under President N. Aquino
    • Mining Act of 1995
    • 100% foreign ownership
    • Claim of up to 81,000 has
    • Investment Guarantees
      • Repatriation of profits
      • Freedom from expropriation
      • Remittance from earnings and interest on foreign loans
      • Confidentiality of Information
    • Tax Holiday during recovery of pre-operating expenses for a maximum of 8 years from commercial production
    • Income tax carry forward of losses
    • Water rights, timber rights, easement rights
  • Conflicting laws
      • But it is not just the Mining Act – there are a number of potentially conflicting laws, the two most important being …
      • Indigenous Peoples Rights Act of 1997 (IPRA) which allows for FPIC within delineated Ancestral Domains
      • Local Government Code which allows for local government autonomy (especially re 2 of the 3 relevant LGUs decide on development projects)
  • La Bugal B’laan case on Mining Act
    • 27 January 2004
      • The FTAA held by WMCP was declared unconstitutional
    • 1 December 2004
      • Extraordinary turnaround
        • “ We must see the constitution in broad strokes”
        • Climate of anxiety scaring away foreign investors, therefore SC had to rule with urgency
    • What this means?
      • 100% foreign owned companies are allowed to be involved in the extraction of minerals
      • SC upholds the Regalian Doctrine
      • Effectively calls for ‘national sacrifice’ for greater good
  • From tolerance to promotion
      • Under GMA the move to active promotion of mining took a number of forms…
      • National Minerals Policy (2003), EO 270-A (2004) & Mineral Action Plan (2006)
      • “ Mining Road Shows” overseas
      • MGB inside the DENR – you cannot serve two masters
  • New Administration, Same Old Mining Policies
    • Appointed Ramon Paje as DENR Secretary
      • Increased target mining output from 2009 to 30% for 2010 (Arroyo was 10-20% only)
      • Interfered in the South Cotabato open-pit mining ban to pursue a “win-win” solution
    • Did not act on Mt. Diwalwal mining privatization
    • Did not reverse midnight mining deals like FTAA in Palawan and MPSA in Camarines Sur (21 MPSA, 2FTAA, 13 EP)
    • Issued logging moratorium
    • Cancel 600 mining applications
  • Background – Concerns
      • Bad legacy on mining issues – pollution issues
      • Problem of conflicting land use – deforestation
      • Mining is leading to conflict and human rights abuses
  • Problems of pollution
      • In 1996 catastrophic failure of tailings (waste) dam at Marcopper led to 4 million tonnes of waste pouring into BOAC river
      • Many lesser examples – including Mankayan (Lepanto) & Rapu Rapu (Lafayette), many ongoing
      • 8 tailings dam failures since 2001
      • Landslides also lead to environmental problems and deaths
  • TVI sulphide tailings dam collapse - 2007
  • Rapu Rapu 2005 - Tailings overflow along the walkways all over the plant
  •  
    • The Philippines has 18 identified major river basins
    • 13 out of 18 major river basins have forest cover below 20% of its total area
    Major Watersheds
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  • Other risks of mining in the Philippines
    • More than half of active concessions and two-thirds of exploratory concessions are located in zones of high seismic risk
    LRC-KsK, irlg 2005
  • Killings of Environmental Activists
  •  
  • This checkpoint is manned by elements of the Special Civilian Armed Auxiliary (SCAA)
  • Company bulldozing homes – most of the homes are now cleared
  • Last house holding out against demolition
  • Councillor Armin Marin, married with 5 children, was shot dead in a demonstration by SNPDC’s head of security on 3 October 07
  • Peoples Response (local)
    • Local alliances (Task Forces in Nueva Vizcaya, Masbate, CARAGA, Zambo Norte)
    • Legal actions, such as in Gambang & Palawan
    • Local government moratoria / open pit bans
    • Barricades have been set-up in 3 communities (Nueva Vizcaya, Masbate and Surigao del Norte)
    • Moving towards armed resistance of indigenous B’laan at Xstrata Tampakan mine
  • Peoples Response (national & international)
    • At national level is filing of Alternative Mining Bills
    • CERD complaint from community leaders in Canatuan
    • OECD Complaint through Norwegian NCP
    • Complaints to UN Special Rapporteurs
  • Tribal elders who are barricading against mining in Didipio
  • Timuay Noval Lambo and Sololing Onsino Mato at the United Nations in Geneva
  • Maraming Salamat Po! LRC-KsK, irlg 2005