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Newsbreak Special Issue: The Big Dig-Mining Rush Rakes Up Tons Of Conflict
 

Newsbreak Special Issue: The Big Dig-Mining Rush Rakes Up Tons Of Conflict

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The Philippines is not conducive to socially responsible mining—not yet. There’s a lot of cleaning up to be done. The national government can start by making mining companies pay up for the ...

The Philippines is not conducive to socially responsible mining—not yet. There’s a lot of cleaning up to be done. The national government can start by making mining companies pay up for the damages that their operations are expected to bring.

The Foundation for the Philippine Environment saw, as we did, the need to put matters in perspective before the government grants any more mining permits. They provided funding for this special issue. Editorial judgment was left to us.

Roel Landingin, our guest editor, came up with a very comprehensive lineup of stories. This is the first journalistic assessment of the mining industry since the Supreme Court upheld the mining act in 2004.

We invite you to establish with us whether miners and officials have learned from mining’s ugly past

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    Newsbreak Special Issue: The Big Dig-Mining Rush Rakes Up Tons Of Conflict Newsbreak Special Issue: The Big Dig-Mining Rush Rakes Up Tons Of Conflict Document Transcript

    • july/september 2008 special edition PhP150.00newsbreakwww.newsbreak.com.ph We Make Sense of the News the big dig Mining Rush Rakes Up Tons of Conflict inside Palparan: From Soldier to Miner Acid Drainage in Rapu-Rapu Gunning for Nickel in Zambales Why Bishops Renounce Mining Local Solutions to a National Problem
    • dear reader First, Please Clean Up In June, President Arroyo issued Executive Order 734, placing the Palawan Council for Sustainable Development under the Department of Environment and Natural Resources. To environmentalists, the new setup is not as harmless as it seems. It came at a time when a few municipalities in Palawan had made known their opposition to mining activities. The capital, Puerto Princesa City―that city internationally applauded for environmental management—has adopted a total ban on mining. The big foreign companies are keen on the huge nickel ore deposits in the province, and the green souls are convinced that these interests pushed for EO 734. The implication of the President’s order is that the PCSD, which is empowered to implement environmental laws in Palawan, will now have to bow to DENR rules, such as those on issuing environmental clearances and mining permits.newsbreakPUBlIC TRUST MEDIA GROUP InC. And we all know that the DENR has, in some cases, compromised the efforts of many local governments to seriously run after irresponsible miners.Marites Dañguilan VitugEditor in Chief One wonders why the national government would go to great lengths for the mining industry, thatroel lanDingin it would not spare even the country’s last frontier.Guest EditorglenDa M. gloria The government has touted mining as our economic hope. From $264 million in 2005, miningManaging Editor investments could reach $4.1 billion by 2010.MiriaM grace a. goAssistant Managing Editor What we have found out is that the mining industry’s economic impact remains negligible—jobslala riManDo created are only 0.4 percent of total employment, and revenue is less than 1 percent of totalBusiness Editor government collection each year.geMMa BagayauaOnline Coordinator Our research shows that many communities resist large-scale mining operations because of the costsaries rufo to the environment and the health of the locals.Senior WritercarMela s. fonBuena The Philippines’ mineral potentials make it one of the world’s five mostStaff Writer attractive mining investment destinations. Its minerals policy is alsoJesus f. llantoPurPle s. roMero one of 10 worst in the world. The legacy of the mining industry here is aJenny lynne aguilar string of abandoned mines, tailings waste pollution, and disasters.ResearchersJose y. Dalisay Jr. The Philippines is not conducive to socially responsible mining—notEditorial Consultant yet. There’s a lot of cleaning up to be done. The national government canleanne Jazul start by making mining companies pay up for the damages that theirArt Director operations are expected to bring.Buck Pago Roel landinginPhotographer The Foundation for the Philippine Environment saw, as we did, the need to put matters in perspective before the government grants any more mining permits. They provided funding for thisPublished byPublic Trust Media Group Inc. special issue. Editorial judgment was left to us.with editorial and businessoffices at Unit 202, Roel Landingin, our guest editor, came up with a very comprehensive lineup of stories. This is the firstS & F Condominium journalistic assessment of the mining industry since the Supreme Court upheld the mining act in 2004.137-B Panay Avenue,Quezon City 1103 Philippines We invite you to establish with us whether miners and officials have learned from mining’s ugly past.Telephone: +632-920-0097Fax: +632-920-3611www.newsbreak.com.phglenDa M. gloriachay florentino hofileñaMa-an B. hontiVeros Miriam Grace A. Goroel lanDinginMarites Dañguilan Vitug Assistant Managing EditorMembers of the Board gigigo_newsbreak@yahoo.com JUly/sepTeMBeR 2008 newsbreak | 3
    • c o N t e N t S 3 Dear reaDer OvERvIEW 5 unearthing strife By Roel Landingin EnvIROnMEnT 12 not fit for Mining By Chay Florentino Hofileña 17 Dirty Past By Roel Landingin and Jenny Aguilar 20 not all Minerals aiD health By Ana Marie Leung, MD COMMUnITIES 22 ProtracteD War By Aries Rufo 26 BishoPs anD actiVists By Aries Rufo 28 on shaky grounD By Carmela Fonbuena POlICy 31 local solutions By Roel Landingin 34 a safe heDge By Germelino Bautista, PhD IMAGES 36 reVisiting raPu-raPu Text by Chay Florentino Hofileña Photographs by Gigie Cruz FOCUS On lUzOn 42 gunning for nickel By Carmela Fonbuena 44 Breaching the BarricaDes By Roel Landingin 46 Defaulting on nature By Prime SarmientoFOCUS On ThE vISAyAS 49 seconD life By Earl Parreño FOCUS On MInDAnAO 52 fostering DePenDence By Purple Romero 56 surrogate state By Purple Romero 58 DiViDe anD rule By Gemma Bagayaua FIRST PERSOn 62 the Peaks of taMPakan By Purple Romero 63 Data Mining By Jenny Aguilar coNtributorS Jenny aguilar is a Newsbreak researcher. geMMa Bagayaua is Newsbreak’s online coordinator. gerMelino Bautista teaches economics at the Ateneo de Manila University. carMela fonBuena covers Congress for Newsbreak. chay florentino hofileña teaches journalism at the Ateneo de Manila University and is a board member of the Public Trust Media Group. roel lanDingin is Manila correspondent of the Financial Times and is a board member of the Public Trust Media Group. ana Marie leung is chairperson of the Department of Preventive and Community Medicine at Saint louis University in Baguio City. earl Parreño is a director of the Institute for Political and Electoral Reforms. PurPle roMero is a Newsbreak researcher. aries rufo is Newsbreak senior reporter and covers politics, the judiciary, the gigie CRuz Church, labor, health, and other social issues. PriMe sarMiento is a writing fellow of the Philippine Center for Investigative Journalism. Cover photograph by gigie cruz4 | newsbreak speCIAl IssUe
    • o v e r v i e wUnearthing strifeRising metal prices and friendly government policy spur a surge in investments and set off a spate of conflicts. Protracted disputes may hold the industry back. By Roel lAndinGin manix abReRat o friends and foes alike, retired Army Maj. Gen. Jovito Palparan was just being his usual self―rough, tough, and heavy-hand- ed―when, last April, he helped subdue the civilian security guards of a Bulacan mine whose ownership is being disputed. Then he figured in a similar incident in Zambales province, acting this time on behalf of a mining company that wanted to control the Masinloc port where mineral ores are loaded onto oceangoing ships. JUly/sepTeMBeR 2008 newsbreak | 5
    • Palparan’s involvement in mining dis- Still, there is no doubt that the mining in-putes―and his tendency to use excessive Rise And sHine dustry in the Philippines is recovering fromforce to overwhelm opponents―signals mineral prices in the last five years a prolonged slump since the mid-1990s.that conflicts over mining claims are tak- While still beneath the peak in the golD $/ounceing a nasty, vicious turn. 1980s, the number of large-scale metal- In February, security personnel from 1000 lic mines rose by more than half from 900DMCI Mining Corp. and A3Una, which 14 in 2003 to 21 in 2007. The new mines 800are parties to a dispute over huge nickel included Toronto Ventures Inc.’s goldand chromite deposits in Sta. Cruz, Zam- 700 mine in Siocon, Zamboanga del Norte,bales, almost clashed over control of ac- 600 and Lafayette Mining Ltd.’s polymetalliccess to the Balitoc pier, according to a 500 mine in Rapu-Rapu, Albay, which fig-report in the Manila Times. 400 ured in two toxic waste spills in 2005. 300 Rising tensions among mining claim- Atlas Consolidated Mining and Devel-ants prompted the Zambales police chief, 200 opment Corp. is set to reopen this year Jan00 Jan01 Jan02 Jan03 Jan04 Jan05 Jan06 Jan07 Jan08 Jul00 Jul01 Jul02 Jul03 Jul04 Jul05 Jul06 Jul07 Jul08Sr. Supt. Rolando Felix, to call for what a copper mine, which used to be Asia’she called a “peace forum” among mining coPPer ($/lb) biggest copper mine until it was closedsecurity managers, many of whom used 5.000 because of flooding in 1994, with strongto be former Armed Forces officers, to support from host communities in To-avert possible bloodshed. 4.000 ledo City in the island province of Cebu. An Australian mining company chief Benguet Corp., which used to be the 3.000told Newsbreak that there are cases where country’s biggest gold producer, has re-armed forces units are on one side of the 2.000 started gold milling operations in Aku-dispute while the police are on the other. pan, Benguet, that was closed down in 1.000 1990 after the Baguio earthquake. Lackingemerging boom 0.000 money to hire its workers back, it instead The escalation of mining-related con- JUnE 03 MAy 04 MAy 05 APR 07 MAR 08 entered into an ore-sharing agreementflicts represents the underside of a min- nickel ($/lb) with small-scale miners who deliver oreing boom that is beginning to take shape 30.000 to the company for processing.in the Philippines amid soaring global Approved mining exploration and pro-prices of valuable metals such as gold, duction permits almost doubled to 447 incopper, and nickel, which now sell at 20.000 2007 from only 294 four years before. Ap-twice or thrice the levels three years ago. plications for mining permits rose from More than three years after the Su- 2,073 to 2,458 during the same period.preme Court famously reversed itself and 10.000 Large-scale mining is beginning toupheld the 1995 Mining Act in December stimulate the economy of host communi-2004, the value of copper, gold, nickel, and ties, barangays, and towns nationwide. 0.000other precious metals mined in the Philip- JUnE 03 MAy 04 MAy 05 APR 07 MAR 08 However, the industry’s overall econom-pines more than doubled from only P41.1 Source: Kitco.com ic impact remains negligible. Mining jobsbillion in 2003 to P95 billion last year. The grew from 104,000 in 2003 to 139,000 inbulk of the increase came from higher posits in Tampakan, South Cotabato. 2007 but the proportion to total employ-global prices but volumes also went up by The actual numbers are less than the ment remained at a marginal 0.4 percent.29 percent. Nickel output surged five-fold government’s targets, with cumulative Similarly, taxes, fees, and royalties col-between 2004 and 2007. (See graph.) investments between 2004 and 2007 lected by the national government and lo- Investments in large-scale mining ven- reaching $1.4 billion, almost just half of cal government units from mining moretures also began coming in. From almost the $2.4-billion target. than quadrupled from P1.5 billion innothing before 2004, funds to explore, de- So far, it’s the relatively small projects 2003 to P6.4 billion in 2006. However, as avelop, and open up new mines averaged such as Toronto Ventures Inc.’s Canatuan proportion of total government revenue,US$264 million per year between 2004 mine, Lafayette Mining Ltd.’s Rapu-Rapu the amount was still less than 1 percent,and 2006, and rose to $605 million last mine, and Crew Gold’s Masara mine that a sign that government revenue fromyear. (See graph on page 9.) are onstream. The bigger copper and nick- mining continues to be insignificant. This Mining investments are seen to soar to el projects, such as Saggitarius’s Tampa- reinforces the view of many experts that$892 million this year, $1.8 billion next year, kan project, have been delayed because of the fiscal regime under the 1995 Miningand $4.1 billion in 2010 amid expectations technical or environmental issues. Act is heavily stacked against the statethat global mining giants, such as Xstrata of Artemio Disini, chairman of the Cham- and in favor of the mining companies.Switzerland, will invest $2 billion through ber of Mines in the Philippines, says theselocal affiliate Saggitarius Mining Inc. to de- large-scale mining ventures will likely Higher Stakesvelop what could be Southeast Asia and start operation in 2012 and 2013 instead Rising mineral prices and attractiveWestern Pacific’s biggest new copper de- of 2009-2010 as originally expected. geologic prospects have raised the stakes6 | newsbreak speCIAl IssUe
    • o v e r v i e wFLAsH POinTsa sampling of mining-related conflicts in 2007 and 2008 kasiBu, nueVa Vizcaya Apr. 2008: nueva vizcaya Gov. luisa lloren Cuaresma orders the closure of OceanaGold ltd. for refusing to pay local quarrying taxes. The provincial government issues a cease and desist order directing Delta Corp. and Oceana Gold Philippines to stop from their ongoing sta cruz, zaMBales earth quarrying activities in the Didipio Gold-Copper Project. Feb. 2008: The DEnR confiscates some May 2008: Pro-mining village leader and former OceanaGold employee 200,000 metric tons of “illegally mined” is shot to death amid rising tensions in Didipio, where Cuaresma has nickel ore worth $4 million seized in the set up a barricade to stop the company’s mining operations after it private port of mining firm A3 UnA Corp. ignored the provincial government’s tax assessment. Feb. 2008: Security personnel from DMCI Mining Corp. and A3Una, which Doña reMeDios triniDaD, Bulacan are parties to a dispute over huge nickel Apr. 2008: Retired Army Maj. Gen. Jovito Palparan subdues and chromite deposits, almost clash over civilian security guards of a Bulacan mine that is a subject of control of access to the Balitoc pier. an ownership dispute. he also figures in a similar incident in zambales a few weeks after. laBo, caMarines norte Manila Oct. 2007: The nPA attacks El Dore Mining afterMar. 2008: Anti-mining lawmakers and the company refuses to pay “revolutionary taxes.”nGOs file a new case challenging theconstitutionality of provisions in the 1995 caraga regionMining Act on Financial or Technical Apr. 2008: President Arroyo directs topAssistance Agreements (FTAA) and Mineral military officials to deploy the so-calledProduction Sharing Agreements (MPSA). Investment Defense Force to ensure theUnlike the previous case against FTAA, the safety of mining companies in the Caraganew suit could potentially hurt more mining region after a spate of nPA attacks sinceprojects because there are over 200 the start of the year.MPSAs compared to only two FTAAs. siBuyan islanD, roMBlon Monkayo, coMPostela ValleyOct. 2007: Armin Marin, a councilor Apr. 2008: Southeast Mindanao Goldknown for opposing mining, is shot Mining Corp. files a petition askingdead while leading a protest by the Supreme Court to review a 1996some 150 islanders against a nickel ruling upholding the government’sexploration project. right to take full control of Diwalwal. The firm also reveals that the siPalay, negros occiDental government has entered into a deal granting mining rights in Diwalwal to Mar. 2007: Farmers in Sipalay City, zTE International, an affiliate of the negros Occidental, urge their city Chinese firm involved in the $329- council to oppose mining operations million broadband controversy. of Colet Mining Development Corp. in Barangay Malucaboc. Apr. 2008: Monkayo village leader Franco Tito warns of fresh bloodshed if the government awards mining Brooke’s Point, PalaWan rights in the gold-rush area to Apr. 2008: The Brooke’s Point Chinese firm zTE International. Federation of Tribal Councils stages a mass action against taMPakan, south cotaBato proposed mining operations Jan. 2008: nPAs attack Sagittarius in Palawan, especially in Mt. autonoMous region in MusliM MinDanao Mines’ base camp, destroying P12 mil- Mantalingahan Protected Feb. 2008: The Moro Islamic liberation Front (MIlF) asks the lion worth of property. landscape. Arroyo administration to halt all mining applications within May 2008: B’Laan tribesmen hold for the proposed Bangsamoro territory, mostly located in the a few hours Canadian geologists and Autonomous Region in Muslim Mindanao. Jun Mantawil, the their Filipino companions, according to chief of the MILF’s peace panel secretariat, says the move the police. SMI says they were merely was meant to help restore the credibility of the Mindanao blocked from entering certain areas. peace process. JUly/sepTeMBeR 2008 newsbreak | 7
    • o v e r v i e win conflicts over mining claims, trans- May, Switzerland’s Xstrata, which has a mines, irresponsible mining waste dis-forming longstanding but relatively be- 62.5-percent interest in the prospective posal practices, and devastating miningnign disputes, quite common in the Phil- copper deposits in Tampakan, South Co- accidents, such as when Marcopper Min-ippines where recordkeeping is poor, into tabato, made a surprise bid to buy Aus- ing Corp. released 2-3 million tons of minebitter and potentially deadly clashes. tralia’s Indophil Resources, which holds waste into the Boac River in Marinduque They have also attracted higher financial the remaining 37.5 percent. province, flooding farmlands and villagesexactions from the communist New People’s Indophil resisted, and called the offer along the 26-kilometer waterway.Army (NPA), which has stepped up attacks “unrealistically opportunistic.” It said Reaching a national consensus on min-against mining companies that refused to that Xstrata wanted to acquire the entire ing amid these conflicts is harder underheed its demands for “revolutionary taxes.” Tampakan prospect, the largest undevel- these circumstances, as Department of En- On New Year’s Day this year, the NPA oped copper deposit in Southeast Asia vironment and Natural Resources (DENR)burned down several buildings at Sagit- and Western Pacific. It said Xstrata’s of- Secretary Lito Atienza knows only tootarius’s remote base camp in Tampakan, fer price of $397 million “does not reflect well. He is spending more and more of hisSouth Cotabato. An international securi- the value of Indophil.” time managing conflicts among the differ-ty consultancy that advises multinational The rise in conflicts from overlapping ent mining claimants. The former mayorfirms operating in the Philippines noted mining claims is adding to the primor- of Manila even had to personally overseethat attacks or encounters involving the dial debates on the impact of large-scale the seizure of nickel ores said to be illegal-NPA surged from only five in December2007 to 12 in January 2008 in the Davao-Compostela region, a mineral-rich area. career shift. Mining industry leaders complain maj. gen. Jovito Palparan (Ret.) oversees securitythe NPA exactions have become more forces that allegedly tooksystematic recently. A foreign mining over ore asia mining andcompany chief told Newsbreak: “The development Corp. inNPA has engineers who look at your bulacanoperations. They go to MGB (Mines andGeosciences Bureau) and get the mineraldeposit of the area and, from there, theycalculate. They also go to the companyWeb site. Then, they compute.” Indeed, vastly higher nickel priceseven turned old family and businesspartners―the Atayde and Lecaros fami-lies, for example―into bitter adversar-ies in the battle for control of low-gradenickel laterite deposits in Narra and Sof-ronio Española towns in Palawan. The Platinum Metals Group Corp.of the Atayde family is now protestingmoves by the Lecaros’s Olympic Mines, mining on the environment and local ly extracted in Zambales.the original claimant to the area, to revoke communities, and the longstanding com- Atienza is credited with opening upa longstanding operating agreement with plaints by local officials about their lack lines of communication between the min-Platinum. Olympic has assigned the min- of authority over mining projects. ing industry and the Catholic bishops. Heing rights to another company, Citinickel Across the country, residents and local also won the admiration of the mining in-Mining Development Corp. governments of communities, towns, and dustry and local government units after The dispute has involved no less than provinces hosting at least 14 large-scale he found a way for the LGUs to directlythe provincial governor, Joel Reyes, who mining projects are strongly opposed to receive their share of excise taxes on min-is facing corruption charges before the mining, according to the MGB. These in- eral production from mining companies.Sandiganbayan for granting a small-scale clude Nueva Vizcaya, Marinduque, Rom- The innovative move is widely expectedmining permit to Platinum. blon, Albay, and Zamboanga del Sur. to help address the local officials’ com- “Trouble started when nickel prices The toxic mining waste spills in Austra- plaints about not getting their fair shareskyrocketed in the last couple of years,” lian firm Lafayette Mining Ltd.’s polyme- of revenues from mining activities.said Linggoy Atayde, one of the found- tallic mine in Rapu-Rapu, Albay, in Oc- However, even before the Deparment ofers of Platinum. “Before that, everything tober 2005 perked up fresh opposition to Finance (DOF) and the Department of Bud-was smooth sailing.” large-scale mining throughout the Philip- get and Management (DBM) could put the Even global mining companies in joint pines. It raised doubts if the government new system into place, trouble erupted inventures to look for mineral wealth in the and the mining industry have indeed left Nueva Vizcaya, where the provincial gov-Philippines are not spared from strife. In behind their ugly legacy of abandoned ernor herself, Lourdes Cuaresma, is leading8 | newsbreak speCIAl IssUe
    • a blockade against OceanaGold, the Aus- slows, warn that delayed regulatory ap- ing, not even the DENR secretaries. Eventralian mining company that is set to start provals in the Philippines could force com- President Fidel Ramos said that miningcommercial operations on a copper mine in panies to rethink projects in the country. was just being tolerated. We were a voiceKasibu town next year. A big worry for mining investors is the in the wilderness in advocating that min- The provincial government, which is risk that government’s supportive policy ing still had a role to play in developmentunhappy with OceanaGold’s failure to de- could wane because of populist pressures in if properly done,” he says.liver on a promise to build a road from the the event of a big mining disaster or the exi- A foretaste of what it’s going to be like if aprovincial capital of Bayombong to Ka- gencies of political survival. Foreign mining big mining disaster happens became clear insibu, has levied a quarry tax on the com- investors generally have a low level of trust the wake of the two toxic mining waste spillspany’s earth-moving operations. When in the consistency of Philippine government in Lafayette Mining’s polymetallic mine inthe company refused to pay, the governor mining policies and regulations. Rapu-Rapu, Albay, in October 2005.led provincial officials in putting up a bar- Horacio Ramos, director of the Mines In March 2006, President Gloria Arroyoricade to prevent equipment from getting and Geosciences Bureau, recalls how the ordered a review of the 1995 Mining Act,in and out of the mining area. government turned excessively hostile which was upheld by the Supreme Court towards mining in the aftermath of the just a little over a year before, after the in-constraints 1996 Marcopper disaster. fluential Catholic Bishops Conference of the The flood of fresh and longstanding “Nobody in government wanted min- Philippines called for its repeal and for adisputes could hold back the incipient moratorium on large-scale mining. She alsomining boom that the government is hop- appointed Bishop Arturo Bastes, a Catholic buCk Pagoing will help drive economic growth, cre- prelate known for his critical stance againstate jobs, and lift millions from poverty. large-scale mining, to head an independent They add to mining investor concerns commission to investigate the disaster.about the communist guerrilla attacks and Arroyo’s actions were clearly drivenred tape that could hold back mining proj- more by short-term political consider-ects for years despite government support ations. She had just survived anotherfor the industry to attract foreign invest- attempt by disgruntled military officersments in large-scale mining projects. to oust her from power, and needed the While mining industry leaders think that Catholic bishops’ support badly amidlocal community resistance has eased some- growing calls for her to step down overwhat, they complain that the permissions allegations over corruption and cheatingprocess remains long and complex. Oceana- in the May 2004 presidential elections.Gold’s mining project in Nueva Vizcaya Still, the mining industry complainedtook 20 years and counting to get started. about what looked like a shift in govern- “The slow pace of approvals by the ment policy “from active promotion of theDENR and MGB for exploration permits, previous two years to one of cautious re-environmental clearance certificates, and consideration of policy reforms,” accordingmining permits has not improved,” says to the Chamber of Mines’ letter to Arroyo.the Chamber of Mines’ Disini. mines and geosciences bureau director Horacio Ramos In that letter, Benjamin Philip Romual- That has forced some companies to by- dez, the chamber’s president, warned:pass the national mining regulators by BOOMinG “This has led mining companies to be-securing temporary permits from local mining investments in the Philippines ($ million) lieve and confirm their early suspicionsofficials. “In nickel projects, some com- that investment policies in the Philip- 4,500.0panies resort to getting small-scale min- 4,141.0 pines are not stable and are heighteneding permits to develop and operate their 4,000.0 by high political risks.”properties earlier,” Disini says. “The Politically-motivated policy shifts haveconflict between legitimate large-scale 3,500.0 not helped improve mining investors’mines and illegitimate companies needs 3,000.0 confidence in the Philippines. The latestto be resolved at a higher level.” FORECAST survey by the Fraser Institute, a Canadian The MGB has not approved a single fi- 2,500.0 2,210.2 think tank, showed that most of the inter-nancial or technical assistance agreement 2,000.0 1,845.1 national mining company executives re-(FTAA) with a mining company since garded Philippine mineral policy as onethe landmark Supreme Court ruling. The 1,500.0 of the 10 worst in the world even thoughtwo existing FTAAs were signed back in 1,000.0 892.0 they regarded the country’s mineral po-the 1990s though there are now 53 appli- 461.3 605.0 tential as one of the five most attractive.cations compared to 40 in 2003. 500.0 139.5 191.4 Some investors, already worried by the 0 Flip-Flopsglobal credit crunch and the possible eas- 04 05 06 07 08 09 10 11 Experts trace the instability of govern-ing of metal prices as the world economy Source: Mines and Geosciences Bureau ment policies to conflicts between the min- JUly/sepTeMBeR 2008 newsbreak | 9
    • ing industry and the various sectors, such communities and indigenous peoplesas the indigenous peoples and local com- CROWded subsisting on swidden agriculture, hunt-munities, that are affected by an intensely Population densities of five most favored mining countries ing, and fishing.disruptive activity such as mining. 300 “The government likes to say the Phil- Formal, governmental mechanisms ippines is a highly mineralized countryfor resolving the disputes and debate are 250 and point to maps showing big gold,either ignored, do not work properly, or copper, or nickel deposits in many areasare deeply distrusted, prolonging and 200 around the country,” says La Viña. “I tell POPUlATIOn/SQ. KMintensifying the conflict over time. Policy them, yes, that’s true, but those areas arechanges and reversals reflect swings in 150 also densely populated and rich in biodi-the balance of power of the parties to the versity.” (See map on page 32.)debate, they explain. 100 The Fraser Institute survey of global “I don’t think we can have policy sta- mining company executives lists thebility on mining unless we find a way to 50 Philippines as one of the top five coun-resolve the conflicts and issues surround- tries in the world in terms of attractiveing the industry more credibly,” says An- 0 mineral potentials, along with Russia,tonio La Viña, a former undersecretary at PHiliPPineS gHana bRazil PaPua RuSSia Brazil, Ghana, and Papua New Guinea. neW guineathe DENR and now dean of the Ateneo But the Philippines stands apart from the Source: Fraser Institute for country rankings;de Manila School of Government, which other countries in the list for its extreme- World Bank for population densitiesrecently launched a research program on ly high population density of 277 peopleenvironment and natural resources gov- per square kilometer. That is eight timesernance. vested interests,” says Filomeno Sta. Ana the average population density of the The Philippine mining industry’s and other members of the Action for Eco- four other countries. (See graph.)legacy of tailings waste pollution that nomic Reforms in a critique of the govern- Canada and Australia, where most ofhas contaminated at least 14 major river ment’s mining revitalization program. the international mining companies oper-systems, abandoned mines that are now At heart, the conflicts are about com- ating in the Philippines come from, haveshowing signs of acid mine drainage, and munities’ access to land and other natu- some of the lowest population densitiesenvironmentally devastating mining di- ral resources such as forests, watersheds, in the world. In Australia, there are onlysasters have made communities distrust- and wildlife habitats that could be totally 2.6 people per square kilometer, while inful of not only of the mining companies or partially blocked by mining activities. Canada, the figure is only 3.2. That meansbut also of the government that failed to Because the Philippines is an archi- there are about 80 to 100 times more peo-properly regulate them. pelago made up of thousands of small ple per unit area in the Philippines than “Socially responsible mining cannot islands and is densely populated, many in either Canada or Australia.thrive, given the dominance of weak insti- areas with high concentrations of mineral Approved mining claims already covertutions, resulting in regulatory capture by deposits are often populated by upland almost half a million hectares of land but malaCaÑang PHoto and aSia SoCiety auStRalaSia CentRetWo faces. President arroyo visits Catholic bishop Ramon Villena to personally greet him during his 67th birthday in bayombong, nueva Vizcaya, in march 2006. Villena is leading thecampaign against mining in the province by firms such as australia’s oceanagold, whose executives posed with arroyo during her visit to australia in September last year. From left: Philippineambassador ernesto de leon, oceanagold chairman Jim askew, oceanagold chief executive Stephen orr, and oceanagold (Philippines) Chairman Jose leviste Jr.10 | newsbreak speCIAl IssUe
    • o v e r v i e wthe MGB has said that another 8 millionhectares are “highly mineralized” thatcould be explored and developed in thefuture. That could set the stage for evenfiercer conflicts between mining interestsand local communities. Germelino Bautista, in a paper writ-ten for the Ateneo School of Governmentprogram in natural resources governance,estimates that more than 80 percent ofthe 15.8 million hectares of public forestlands are already categorized as timber-land with tenure, national parks, gamerefuge and bird sanctuaries, wildlife ar-eas, and established forest reserves. “Sowhere will the prospective mineralizedareas identified by the MGB amountingto about 8 million hectares come from?” akbayan Rep. Risa Hontiveros-baraquel bayan muna Rep. teodoro Casiñoasked Bautista. Fresh Challenge The country’s laws provide for proce-dures—local government consent, socialacceptability or free, prior, and informedconsent (FPIC) in the case of indigenous speoples— to settle these conflicting ettled jurisprudence seems to be alien to judicial decisions on the mining in-claims and interests on land and natural dustry.resources. However, the government has Just 11 months after the Supreme Court declared the 1995 Mining Act un-not invested enough to empower the lo- constitutional in January 2004, the high court reversed itself and said the legis- lation was consistent with the country’s basic law after all.cal government and communities to par- In March 2008, lawmakers belonging to the Akbayan and Bayan Muna parties filed twoticipate in the processes meaningfully. new suits with the Supreme Court raising fresh questions on the constitutionality of someNeither has it put enough safeguards to provisions of the mining law.ensure that the consent-giving process This time, it’s not just the Financial or Technical Assistance Agreements (FTAA), whichwould not be subject to manipulation by allow foreign companies to own 100 percent of mining projects in the Philippines, that arepowerful parties. being assailed but also provisions that apply to Mineral Production Sharing Agreements Not many local governments have the (MPSA). That could have broader implications because there are 262 MPSAs comparedcapability to estimate the economic value of to only two FTAAs.maintaining biodiversity of a certain tract One of the suits questions the constitutionality of the mining law’s provisions on MPSAs inof forest land so this could be compared Section 80, and seeks to nullify such agreements that have been issued to mining companies.with the projected benefits of mining. The section states: “The total government share in a mineral production sharing agree- ment shall be the excise tax on mineral products.” Even the DENR has few experts on The petitioners argue that the provision is unconstitutional because it limits the govern-natural resources valuation. “We used to ment’s share in revenue from MPSAs to excise taxes only, effectively allotting nothing tohave experts in environment and natural the State as owner of the mineral resource.resources accounting at the policy and The other petition against FTAAs was prompted by then Environment Secretary Angeloplanning division but they’re all gone Reyes’s attempt to get a better deal for the government in future assistance agree-now,” said Ramon Paje, an undersecre- ments.tary at the Department of Environment In July 2007, Reyes issued Department Administrative Order (DAO) 2007-12 that re-and Natural Resources. “Most became vised the FTAA guidelines on how revenues are shared between government and theconsultants in the private sector.” mining company. Instead of allowing mining companies to choose from three options, the With no credible system to manage new order fixed the revenue sharing scheme. The government effectively receives half ofconflicts, mining policy in the Philippine net mining revenue or gross output less deductible expenses. Reyes issued the order ostensibly to simplify the process of negotiating FTAAs withwill continue to be very tentative, and mining companies but he also wanted to improve government’s revenue share frommarked by an endless series of reviews, FTAAs. he admitted that given the three options, the mining firms will likely choose theshifts, and even reversals depending on option based on excess profits, which only kicks in when the company’s profitability ratiothe prevailing political mood. exceeds 40 percent. That seldom happens. The chances of the government getting ad- Mineral prices are inherently volatile ditional revenues under the scheme are “somewhere from zero to nil,” he said.but they at least move along price cycles Still, the petitioners are dissatisfied with Reyes’s move because it applies only to futurelasting at least half a decade long. Min- FTAAs and not to the two existing agreements. Indeed, Reyes’s order gives the two FTAAing policy cycles in the Philippines tend holders—OceanaGold and Sagittarius Mines Inc.—the option to shift to the new systemto have a much shorter duration. n or stick with the old one. The order also leaves MPSAs untouched. —roel landingin JUly/sepTeMBeR 2008 newsbreak | 11
    • eNviroNMeNtnot Fit for MiningSet to resume in July, mining operations in Rapu-Rapu are stillexpected to pose threats to the environment, modern technologynotwithstanding. Strict monitoring is recommended.By ChAy FloRentino hoFileñAJ uly 1 marks another milestone in the stalled Rapu-Rapu mining project in Albay province. By then, a new group of Korean inves- tors would have taken over operations that the government, inves- tors, and anti-mining advocates are watching for different reasons. Located on the eastern side of Southern has refused to go away. It has not helpedLuzon, the Rapu-Rapu Polymetallic Proj- any that two other fish kill events wereect is expected to yield 10,000 metric tons reported afterwards―in 2006 and againof copper, 50,000 ounces of gold, 600,000 late last year.ounces of silver, and 14,000 metric tons Previously ordered by the Departmentof zinc annually. Projecting a mine life of of Environment and Natural Resourcesabout seven years from the exploration (DENR) to cease operations in 2005, andto production stages, the mining compa- after a corporate handover that saw ne-ny’s technical experts say that the project gotiations ending only in April this year,could extend all the way to 2012. the Rapu-Rapu project is racing to make Rapu-Rapu is significant because it up for lost time. Now controlled by a Ko-was, for a time, viewed as a test case of rean group that consists of LG Interna-whether “minerals investment in the tional Corp. (LGIC) and Kores Inc., a Ko-Philippines is an acceptable business rean government company, the projectproposition from a risk perspective,” ac- “will strictly follow DENR regulationscording to Roderick Watt, former coun- on the environment,” Scott Kim, LGICtry manager of Lafayette Mining Ltd., chief representative, promises.former majority owners of the project. The resignation in early June of the The success of the project is important management team led by former Envi-to a government wanting to resuscitate an ronment Secretary Carlos Dominguez ofindustry that has remained almost dor- LPI has prompted a reorganization thatmant for more than two decades. After will likely spell no changes in the com-reaching its peak in the 1970s under for- pany’s choice of technology to mitigatemer President Marcos, mining produced adverse effects on the environment.copper and gold that accounted for one- Residents of the direct impact baran-fifth of the country’s total exports in 1980. gays Malobago, Binosauan, and Pagcol-By 1992, this dropped considerably to a bon regard the mining operations withlittle more than 6 percent, thus the passage a mix of betrayal, anticipation, and dis-of the more liberal mining act in 1995. trust. They enumerate unfulfilled prom- To the Arroyo administration, Rapu- ises made by previous owners, and re-Rapu is a badly needed showcase to blunt main apprehensive about the long-termwell-deserved criticism of mining opera- effects of the spills on their livelihoodtions that have left behind mostly sordid and the safety of the project’s 17-hectaretales of devastation and destruction. open-pit mine. Close to three years after two cyanide The project is estimated to have a po-spills believed to have caused “fish kills” tential investment of US$42 million and Danger Beneath.in the area, the stigma associated with potential gross sales of $41 million a year. lafayette mining’sthe Australian mining company, Lafay- About 81 percent of the project hires come tailings dam inette Mining Ltd., and its domestic sub- from the Bicol region and Rapu-Rapu it- Rapu-Rapu islandsidiary, Lafayette Philippines Inc. (LPI), self, says Joey Cubias, vice president for gigie CRuz12 | newsbreak speCIAl IssUe
    • JUly/sepTeMBeR 2008 newsbreak | 13
    • eNviroNMeNtindustrial and community relations, em- Institute of Geological Sciences (NIGS) of measures taken by the company.phasizing how the local community has the University of the Philippines, assert In their final report, David and Rome-benefited from operations. that if applied properly, technology can ro pointed out that the mining company Cubias admits that because of the address the destructive effects of AMD. should resort to lime dosing only duringmostly negative experiences with mining Continuous “lime dosing” during op- emergency situations such as when therehere, “our challenge is to be the model of erations and “encapsulation” after the life is an overflow in settling ponds wherethe mining industry in the Philippines.” of the mine are among the most common wastes are treated. Lime dosing, accord- methods used in AMD areas. The use of ing to them, is “costly, time-consuming,acid Mine drainage alkaline chemicals like hydrated lime de- and erratic as it depends on the avail- The biggest challenge they actually face creases acidity and keeps dissolved met- ability of the material. It is also a reactiveis proving that they will be able to control als from forming solids or sediments in method rather than a preventive one,the harmful effects on the environment of waterways. and usually will be carried out when theacid mine drainage (AMD), a naturally Encapsulation entails capping AMD- problem already exists.”occurring phenomenon in the area. generating material with compacted clay David warns that when extracting re- AMD, according to Dr. Emelina Regis materials that are covered with topsoil sources, mining companies should beof the Ateneo de Naga’s Institute for En- planted to grass and trees. Vegetation conscious that a significant amount ofvironmental Conservation and Research, prevents erosion of the topsoil, which in money should go to the rehabilitationhappens naturally “when iron sulfide turn prevents the clay from drying and of the mined areas. Before counting rev-rocks are exposed to oxygen in the air cracking. Cracks are lethal because they enues, they should factor in the environ-and water resulting in a chemical reac- will allow the seepage of AMD material. mental costs which might make opera-tion that produces sulfuric acid and red In their assessment of RRPI’s AMD con- tions not worth the trouble after all.iron sulfate precipitate.” trol strategies after fieldwork in October This precipitate, according to her new- 2006, David and Rustica Romero of NIGS toxinsly released book, Impacts of Mining in an pointed out that at the time, the company In Rapu-Rapu, reported fish kills inIsland Ecosystem: The Case of Rapu-Rapu was able to manage AMD. They, howev- 2005 and 2006 were followed by anotherIsland in the Philippines, “coats rocks and er, recommended the pursuit of research occurrence in October 2007. This prompt-sediments along the river course, making on new methods of AMD treatment and ed Regis and her team to investigate.the whole expanse of the affected section “daily monitoring of surface waters.” They went to the area in November lastappear red. In addition, the acid dissolves An MGB Technical Working Group year to collect water samples and analyzeheavy metals contained in the rocks. The (TWG) tasked to monitor a test run of the them. They found tremendously highacid and heavy metals are toxic to living mining project’s operations after the two levels of copper and cadmium in sedi-organisms, thus killing them, rendering cyanide spill incidents in October 2005 ments, indicating that these metals hadthe river dead.” echoed the views of the third-party ex- already attached themselves to the silt, “In islands capable of AMD, the dam- perts about the non-sustainability of lime clay, and sand particles of the sediments.age is long-lasting in terms of agricul- dosing. The test run was intended to de- This, they attribute to the barrier createdtural productivity, clean and safe fresh- termine the adequacy of environmental by the mining company.water supply, and sustainable fishery gigie CRuzresources…. Once AMD starts, it cannotbe stopped or even remediated under thepresent technology,” Regis warns. The AMD management plan submit-ted by Rapu-Rapu Minerals Inc. (RRMI)to Mines and Geosciences Bureau Direc-tor Horacio Ramos in August 2006 con-cedes that mining activities can acceler-ate AMD. It goes on to say that AMDis “recognized as potentially the singlelargest cause of detrimental environ-mental impact resulting from mining ofsulphidic ores. The generation of AMDfrom a mine waste dump and tailingsimpoundment can cause deteriorationof [the] quality of receiving waters if it ispresent in sufficient quantities and is not hyPeraciDity.effectively managed.” Thus, the need for mouth of the Pagcolbon creek that carried mine tailings intoa good AMD management plan. the sea in 2005. Researchers Geologists like Dr. Carlos Primo Da- found an increase in acidity ofvid, associate professor at the National the water around the area.14 | newsbreak speCIAl IssUe
    • PHotogRaPHS by gigie CRuzengineeR ViRgilio PeRdigon FatHeR andy baliWaS dR. emelina RegiS “Barriers will only concentrate the tox- ceedingly high” in water at the upper and Regis recommends that the govern-ic metals during the dry season but will lower tailings ponds inside the mine. ment cancel all mining permits associ-eventually release them during heavy Cadmium and copper cause cancer and ated with the Environmental Compliancerainfall, but this time, at higher toxicity birth defects, and can alter body parts in Certificate granted to LPI. She also askslevels enough to kill marine organisms.… animals. Arsenic can affect growth and government units to stop granting min-Barrier or no barrier, pollution and fish reproduction, while zinc can cause disor- ing permits in Rapu-Rapu either now orkills will continue due to mining,” Regis ders in the nervous system and damage in the future. But no one is listening.says in her report. to the pancreas, among others. The toxic metals, Regis explains, are Also in 2006, the TWG found elevated wanted: Success Modelsgenerated by high volumes of waste levels of cadmium and lead in the Pag- In fairness to mining, David says he hasrocks, tailings, and overburden soil, colbon and Maypajo creeks. “These met- seen how strict monitoring and policingas well as the use of cyanide and other als apparently come from the adit and by government regulatory agencies canchemicals to extract metals from the ore. the seepage from the toe of the [mine tail- push mining companies to compliance― Father Andy Baliwas, parish priest of ings] dam,” says the TWG report, point- as was the case in Rapu-Rapu, which wasRapu-Rapu’s Sta. Florentina parish, says ing to the old tunnels of previous mines closed down. Blanket statements for orhe remembers the seawater smelling of in the area as a source. against mining cannot be made, he adds,chemicals and of the dead fish having the The presence of lead and cadmium because the situation in mining projectsscent of crushed ore. In the morning it was traced to “erosion of materials after are distinct from each other.was extremely hot before it rained heav- heavy rains.” Heavy rains likewise tend- Compromises may need to be made andily and caused dead fish to surface near ed to increase copper content in nearby benefits must be weighed against environ-the poblacion. creeks. The team, however, reported cya- mental destruction that mining could cause. In its defense, LPI says the mining site nide, arsenic, chromium, and mercury Monitoring and implementation of environ-could not have been the cause of the fish levels to be within standards. mental laws should be done. “If DENR can-kill last year because its operations had The polluted waterways have affected not patrol, forget it,” says David.been suspended. To this, Regis points to marine life and the people’s livelihood in Policing powers should be exercised byAMD as the culprit because it is a process Rapu-Rapu. Engineer Virgilio Perdigon Jr., government more strictly during opera-that is “self-generating.” secretary general of the Polytechnic Institute tions rather than before, with a threat of In her 2006 study, Regis says that metal of Aquinas University in Legazpi, says that closure for non-compliance with DENRanalysis done by her group showed high a decline in fish catch has also been report- standards, according to David.levels of cadmium, copper, and zinc in ed. Citing findings of Ibon Foundation, he Likewise, a significant amount of moneythe nearby Pagcolbon river and Ungay says that the decline in the weekly income should be allotted for the rehabilitation ofcreek. They also found high levels of ar- of fisherfolk was as high as over 93 percent mined areas and this should be commen-senic, cadmium, and copper in riverbank in Malobago and 33 percent in Binosauan, surate to the projected cost of rehabilita-sediments. Copper was found to be “ex- both direct-impact communities. tion. In the case of Marcopper, about $12 JUly/sepTeMBeR 2008 newsbreak | 15
    • million was left behind, says David, butthe money was not used efficiently. For Rapu-Rapu, an initial P137 million Acid islandhas been sought for mine rehabilitation, lEGAzPI CITy—From the skies above, the collapsing over their heads.but Manuel Banaag of MGB’s Mining, En- 5,600-hectare Rapu-Rapu Island in Albay A long-time critic of mining in Rapu-Rapu,vironment, and Safety Division, explains looks like an elongated lizard. It draws a few Dr. Emelina Regis of the Ateneo de Naga’sthat estimates are updated every two passenger boats that traverse the Albay Gulf Institute for Environmental Conservationyears. If AMD is not adequately controlled, daily, transporting locals who travel for three and Research, lists four reasons why miningsums for rehabilitation will increase. hours here or to nearby barangays. should not be done in the area: Rapu-Rapu is The government’s Abandoned Mines Smaller boats wait patiently for passengers in the typhoon path, has no dry season, is anProgram was given a P50-P60 million and residents who criss-cross the islands, un- island ecosystem with steep slopes, and has mindful of frequent rains that come their way. iron sulfide rocks capable of generating Acidbudget only recently and MGB has started Depending on the direction of the wind and Mine Drainage or AMD (see related story).a risk assessment of closed or abandoned the tides, travel time can be shorter. This is alarming especially for residents ofmines, many of them dating back to the While currents can be calmer in the morning, an area that, according to Regis, possessesMarcos period. Consolidation of regional the eastern side of the predominantly mountain- “unique biodiversity, streams with crystalassessments will be done, after which, pri- ous island faces the Pacific Ocean and is ex- clear waters, coral reefs that continually sup-orities for rehabilitation will be listed. posed to stronger winds and higher waves ideal ply fish for the local communities, and beach- Banaag says the rehabilitation design for surfing. es draped in white sand.”and engineering measures for the Baga- The Philippine Atmospheric, Geophysical The Philippines, she says, is one of only 17cay mine in Eastern Samar are expected to and Astronomical Services Administration megadiversity countries in the world. It hasbe completed this June. Like Rapu-Rapu, (PAGASA) characterizes Rapu-Rapu’s climate more than 52,000 species that have beenBagacay has a residual AMD problem. A as “Type II,” or having a pronounced wet pe- identified, with more than half found nowhere riod from november to February. By as early else. Its coral fauna is the richest worldwide,permit to mine the area was granted be- as May this year, however, as in most parts with 430 species, followed by Papua newcause it contains the only bauxite reserve of the country, it had already started to expe- Guinea with 380, and the Great Barrier Reefin the country, yet it was later declared rience rains. with 350.part of the Samar Island National Park, a The site of a 180-hectare mining project The country is likewise part of the Coral Trian-protected area. that was the subject of controversy first in gle that includes Indonesia, Papua new Guinea, If successful, Bagacay will be the first October 2005 because of a reported “fish and Borneo. This Triangle, Regis explains, hasrehabilitated mine in the country. Banaag kill,” Rapu-Rapu also hosts an open-pit mine the “highest coral reef diversity in the world.”says they are looking at the Brukunga that is an awesome display of human ingenu- Coral reefs are important because they servemine in Australia as a model. It was ity, color, and solid rock. The danger associ- as nursery grounds for fish resources in South-closed in 1972 and then later rehabilitat- ated with most open-pit mines is masked by east Asia.ed by the state government. Acidic water this splendor. The Philippine marine environment ecosys- At its highest point, the pit is 200 meters tem diversity is high and is believed to bewas treated and the sand-tailings dam, above sea level and at its lowest point, 40 me- greater than what is found on land. Rapu-Rapu,which was left bare, was planted to grass ters. At its longest, it stretches for 830 meters in fact, is listed among the country’s marineand native trees, which have become pro- and is about 360 meters wide. Environmental- conservation priority areas yet the nationalgressively established since 1988. ists and those who oppose open-pit mining government has given the go signal for mining If Bagacay works, it can in turn be the have been asserting that this type of mining operations here.model for Rapu-Rapu. has a strong potential of destroying nearby At the very least, this points to a clear But it appears that no amount of assur- areas because hills are leveled off to obtain conflict between conservation and mining in-ances about environmental safety or use ore deposits near the surface and because it terests, if not confused priorities for an areaof new technology can placate those who generates huge amounts of waste. possibly designed to keep miners at bay.oppose mining in the island. yet it is also the safest for workers be- —chay florentino hofileña Mining was done by the Japanese Im- cause they do not have to work underground in tunnels that are perennially in danger ofperial Army during World War II andthen by the Hixbar Mining Company,which used open pit and tunnel miningbefore abandoning the area in 1976. Theycame and made a fortune but the com-munities they left behind remained asdestitute as ever. “Mining has brought only promises,deception, and division,” Baliwas says,mirroring the cynicism of townsfolkwhose trust had been repeatedly brokenby miners who explored and exploitedthe wealth beneath them, leaving behind gigie CRuzdeep scars that have not healed. n16 | newsbreak speCIAl IssUe
    • eNviroNMeNt PlaCeR dome teCHniCal SeRViCeS, maRCoPPeR mine PoSt-SPill imPaCt aSSeSSment deCembeR 2001 Waste lanD. aerial view of the dredge channel in the boac river estuary where mine tailings from marcopper spilled into the sea in 1996dirty PastMany of the companies carrying out the biggest and most important miningprojects today have a history of releasing harmful wastewater and substancesinto the environment. By Roel lAndinGin and Jenny AGuilARL afayette Mining Ltd. is not the first nor will it be the last mining Pollution Law. By that time, Atlas, which company to suffer a disaster that adversely affects the environ- used to run Southeast Asia’s biggest cop- ment and surrounding communities. per mine, had already been closed since 1994 because of a flooding accident and Indeed, 10 companies or almost half of 2002 when the mining industry suffered labor and financial troubles.the 24 mining firms undertaking what the a slump. (See graph on page 18.) Three years before that, the Philip-government considers high-priority mining pines’ worst mining disaster happenedexpansion and development projects fig- disaster History in March 1996 when Marcopper Miningured in accidents or were the subject of pol- About six years before Lafayette’s twin Corp.’s open pit burst open and releasedlution investigation in the last two decades, mining waste spills in October 2005, At- 2 to 3 million cubic meters of mine tail-according to data compiled by Newsbreak. las Mining and Development Corp. dis- ings into the Boac River in Marinduque.Many were issued notices of violation by charged 5.7 million cubic meters of acidic The accident killed aquatic life in the 26-the Pollution Adjudication Board (PAB) for waste water into the Sapangkaku River in kilometer waterway and flooded farm-releasing excessive amounts of pollutants. Toledo City, Cebu. The accident, which lands and villages along its banks.(See table on page 19.) happened in August 1999, discolored the Other companies that figured in min- PAB data also shows that notices of nearby coast up to 2 kilometers from the ing accidents, according to a list com-violation are being issued once more shore and resulted in a “fish kill.” piled by Mines and Geosciences Bureauagainst mining companies after the no- The company was fined US$210,000 for (MGB) officials, include Manila Miningtices dropped to zero between 1998 and exceeding effluent limits under the Water Corp., Philex Mining Corp., and Lepanto JUly/sepTeMBeR 2008 newsbreak | 17
    • vironmental management systems,” says GOTCHA notices of violations issued by the Pollution adjudication board to mining companies Nelia Halcon, executive vice president of 12 the Chamber of Mines of the Philippines. Artemio Disini, chairman of the Cham- 10 ber of Mines, adds: “Except for the Lafay- 10 ette operational problems that were even- tually decided by the DENR, the environ- number of notices per year 8 7 mental and safety performance of operat- ing mines the past years was very good.” 6 No doubt, the regulations have become 5 5 tougher. Mining companies are no longer allowed to release mine tailings into the sur- 4 3 3 3 rounding creeks and rivers, for example. 2 But the mining waste spills in Rapu-Rapu 2 1 1 1 1 Island showed that monitoring and enforce- 0 0 0 0 0 0 ment remain dangerously inadequate. 0 Even the Department of Environment ´88 ´89 ´90 ´91 ´92 ´93 ´94 ´95 ´96 ´97 ´98 ´99 ´00 ´01 ´02 ´03 ´04 ´05 and Natural Resources’ (DENR) report Source: Pollution Adjudication Board admitted that the department “cannot also escape its responsibility of ensuringConsolidated Mining. million in projected investments, making it a monitoring system and standards that Except for Marcopper, most companies the biggest among projects in the expansion can immediately detect violations andthat figured in mining accidents continue and development phases. The first phase of indications of potential accidents is into be active in the industry. the Rio Tuba expansion project has already place.” It added that “a system that will Atlas, for example, has put the accident been completed and the second phase is set improve monitoring in terms of frequen-behind it as the company prepares to re- to go onstream by next year. cy, coverage and substance is needed.”open the giant copper mine in Toledo The independent fact-finding commis-City with the support of the residents of tougher rules sion headed by Catholic Bishop Arturothe surrounding communities, including Both the government and the mining Bastes was harsher in its indictment oflocal officials and local Catholic priests. industry say that tougher environmental the DENR and the Mines and Geosciences Similarly, Rio Tuba Nickel Mining Corp. regulations and stricter enforcement, es- Bureau (MGB). It listed seven governmentwas issued a notice of violation in 1993 for a pecially after the 1996 Marcopper disas- lapses, including MGB’s failure to imposepossible case of water pollution in its nickel ter in Marinduque, have addressed many remediation measures immediately aftermining operations in Palawan. of the lax practices that led to a string of the incidents and DENR’s decision to al- Ten years after, Rio Tuba entered into mining accidents in the 1980s and 1990s. low the resumption of mining operationspartnership with Sumitomo Corp. of Japan “I could say that the [mining compa- less than a week after the first spill.to put up Coral Bay Mining Corp. whose nies’ safety and environmental] records Independent experts observe that thenickel mining expansion project in Rio have improved over the years because DENR and the MGB have somehow im-Tuba, Palawan, is worth more than $700 mining companies have internalized en- proved monitoring and enforcement of buCk Pago dWindLinG Filled personnel positions at the mines and geosciences bureau 1460 1440 1420 1400 1380 1360 regulator. 1340 the mines and geosciences 1320 bureau building 2003 2004 2005 2006 2007 2008 in Quezon City Source: Department of Budget and Management18 | newsbreak speCIAl IssUe
    • eNviroNMeNt gigie CRuz HiGH PRiORiTY, HiGH RisK Firms carrying out priority mining projects that figured in disasters or were issued notices of pollution violation coMPany/Priority ProJect year/inciDent acoje Mining corp./ acoje 1990: Issued notice of violation by PAB for Metallic ore Mining possible water pollution in Sta Cruz, zambales* atlas Mining and Development corp./ 1999: Released 5.7 million cubic meters of camen copper Project acidic water into nearby river and open sea in Toledo City** Benguet corp./ king-king 1989: Issued notice of violation by PAB for copper-gold Project possible water pollution in Compostela Province* itogon suyoc Mines inc./ itogon 1993: Overtopping at the height of a typhoon gold Project that clogged the dams penstock and diversion in Mankayan, Benguet ** rusty. lepanto consolidated Mining corp./ 1990: Issued notice of violation by PAB for inside the Rapu-Rapu teresa gold Project/ Metallic ore possible water and air pollution in Mankayan, mineral processing Mining; far southeast gold Project Benguet * facility 1986: Collapse of tailings pond due to weakened dam embankment caused by additional loading on the original embankment limited budgets and a government-wide in Mankayan, Benguet ** freeze-hiring policy. Manila Mining corp. / Bayugo 1991: Issued notice of violation by PAB for DENR Undersecretary Ramon Paje copper-gold Project possible water pollution in Placer, Surigao del says the MGB recently lost 18 geologists, norte* mining engineers, and metallurgists 1999: Failure of decant structure in tailings to higher-paying jobs in the industry. pond “due to excessive rains resulted in “In the private sector, they get monthly release of 700,000 cubic meters of tailings in salaries of around P120,000 compared Placer, Surigao del norte** to P25,000 in government,” he explains. 1995: Collapse of tailing pond “due to heavier “So, many leave the government.” (See than normal rainfall, wave action and tectonic graph on page 18.) movement in Placer, Surigao del norte** Oddly, while more mines are opening Philex Mining corp./ sto.tomas ii 1990: Issued notice of violation by PAB for and more mining investments are com- copper expansion Project possible water pollution in Benguet* ing in, MGB’s permanent head count ac- 1995: leak in the decant tower of tailings tually fell from 1,442 in 2003 to 1,368 last pond due to pressure by impounded mine year, according to Department of Budget tailings in Benguet ** and Management (DBM) staffing data. 1992: Collapse of Tailings Pond no. 2 due The number of unfilled positions doubled to weakened dam structure caused by the July from 75 to 149 during the same period. 1990 earthquake in Benguet** Meanwhile, salaries are not going up. Philnico Mining & industrial corp./ 1991: Issued notice of violation by PAB for MGB geologists are being paid a basic nonoc nickel Project/non-Metalic possible water pollution in nonoc Island, ore Mining and Quarrying Surigao del norte * salary of P17,000 a month in 2008, exactly the same pay five years ago. lafayette Mining ltd./rapu-rapu 2005: Issued notice of violation by PAB for Polymetallic Project possible water pollution in Rapu-Rapu, Albay * Paje says the entire DENR is having trouble coping with the growth in indus- rio-tuba nickel Mining corp./ 1993: Issued notice of violation by PAB for tries and companies to monitor while the Palawan nickel Project possible water pollution in Rio Tuba, Palawan * number of its personnel remains the same * From Pollution Adjudication Board or even drops, he says. The Environment ** From “Sustainable Development in the Philippine Minerals Industry: A Baseline Management Bureau, which issues en- Study” by MV Cabalda, MA Banaag, PNT Tidalgo and RB Garces, February 2002 vironmental clearance certificates, saw permanent staff fall to 723 last year from 735 in 2006. Almost 30 percent of 1,030environmental regulations following the saster in 1996. permanent positions are unfilled, accord-Rapu-Rapu disaster. Keeping up the tough act long after ing to DBM data. a major disaster is harder, especially as “We’re thinking, perhaps, that one ap-Fewer regulators agencies such as MGB lose skilled per- proach to monitor industries properly is That may be the easy part. It’s also sonnel to industry while being prevent- to subcontract the monitoring function towhat happened after the Marcopper di- ed from hiring more people because of private entities,” Paje adds. n JUly/sepTeMBeR 2008 newsbreak | 19
    • eNviroNMeNtnot All Minerals Aid HealthMost of the health effects of exposure to mine drainage do not manifest overnight. By the timethey become noticeable, they are irreversible and incurable. By AnA MARie leunG, M.d. COMMEnTARyT he most obvious benefits from the entry of a new mining op- Another major health concern in large- eration in any community are the jobs it creates, the paved scale mining is how it exposes the surround- ing communities to heavy metals. When roads that it builds, and other infrastructure it provides, in- water and air mix with the sulfides deep un- cluding schools and hospitals. But less obvious and often derground, acids are produced. These acids left undocumented are the long-term effects of mining so dissolve the heavy metals in the rocks andmany tons of ore on the health of the communities living near such mining allow their release into the environment, es-sites as well as the mineworkers. pecially to waterways. This phenomenon is known as acid mine drainage. The effects of mining on health are sel- are supposed to employ means to recover Depending on the geology of an area,dom as dramatic as the poisoning of the the cyanide before they release their waste heavy metals that can be released into theBoac River in Marinduque or the fish kills into the environment. However, some environment include mercury, arsenic, lead,in relation to the release of cyanide in companies can be lax in their cyanide re- and copper. Mercury can severely poisonRapu-Rapu. What makes documentation covery procedures and allow cyanide to the nervous system. Arsenic can cause can-more difficult are the large populations be released into the environment. cer. Lead poisoning can lead to anemia andthat need to be surveyed and the huge Accidents, such as the collapse of a tail- nerve changes. Children exposed to leadexpenses involved in testing for various ings dam and flooding during typhoons, have been documented to have lower IQchemicals and heavy metals in the water, can also lead to massive spillage of cyanide. levels. Copper damages the lungs, liver, andsoil, and among persons. Cyanide is a very dangerous com- kidneys, and can also lead to cancer. A primary concern in large-scale min- pound. As little as 50 to 200 mg, when Mining also generates a lot of dust.ing operations is the chemicals being ingested, can be fatal. Cyanide can also Chronic exposure to dust can lead to aused. Most companies employ cyanide be absorbed through the skin. Chronic spectrum of lung diseases called pneu-and various acids to separate the gold exposure to cyanide has been shown to moconiosis or literally “dusty lungs.” Thefrom the rest of the ore. Mining companies cause damage to the brain and heart. presence of dust particles in the lungssaving Mankayan SaVe tHe abRa RiVeR moVementhistorically the district of Mankayan In September 2003, I joined anin Benguet has always been a Environmental Investigatory Mission,source of gold and copper among which was organized by various uni-the Cordilleran indigenous peoples. versities, non-government organiza-In 1936, American geologists tions, and people’s organizations toclaimed the right to mine large por- document the effects of large-scaletions of Mankayan under the lepan- mining operations in Mankayan. tainteD Water. baguyosto Consolidated Mining Corp., thus This mission sparked my inter- River, which drains downstreamdisplacing the indigenous small- est in studying the health effects of from lepanto, has turnedscale miners. Today lepanto is con- corporate mining. Through funding orange, in contrast to the cleartrolled by Filipinos and their various support from the Saint louis Univer- apaoan River, which drains fromforeign investor-partners. sity College of Medicine-Far Eastern the mountain Province. lepanto has used the tributar- University nicanor Reyes Memo-ies of the Abra River as part of rial Foundation Twinning Project 5A; and Camay, which is situated and non-intentional ingestion.its waste disposal system. The and the Philippine Council for health along the banks of Baguyos River, Cough, nasal irritation, skin symp-communities along the Abra River Research and Development, I was into which Tailings Dam 5A drains. toms (such as rash, pruritus, andhave complained about decreased able to conduct such a study. Our health research concluded burning sensation), eye irritation,agricultural and fishing yield, loss For two years, we surveyed that: and vomiting were the most com-of plant life, death of domestic three communities: Paalaban, • The residents of the three mon symptoms reported by thoseanimals, and various health com- which is nearest the mining opera- communities reported the follow- exposed to mine drainage.plaints. They attributed these to tions; Cabitin, which sits just above ing routes of exposure to mine • A statistical association be-the operations of lepanto. the lepanto Mines Tailings Dam drainage: inhalation, immersion, tween proximity of residence to the20 | newsbreak speCIAl IssUe
    • deaf from the constant exposure to noisy health effects manifest late. And by the SaVe tHe abRa RiVeR moVement machinery, such as the trucks, hoisting, time they do manifest, they are irrevers- and crushing equipment. Chronic ex- ible and incurable. Oftentimes, the min- posure to vibrating equipment, such as eworker has retired or has long been laid heavy-duty drills, can lead to damaged off before he develops difficulty breath- nerves and muscles of the hands and ing. Or a member of the community will spine. There is always the risk of being die of cancer and his relatives are left buried alive or being injured by heavy to wonder whether the proximity of his equipment while working underground. residence to mining operations had any- The damage wrought by large-scale thing to do with his illness. mining on the environment can also have When the health of entire populations long-term health consequences. When is at risk, public health professionals opt mining corporations dig tunnels deep un- to invoke the “precautionary principle.” derground they often disturb the water When one is not sure of the absolute safe- table and drive the water source deeper ty of a substance or of an activity that is Work hazarD. outlet of mine waste from lepanto. Skin lesions of a farmer who underground. This makes safe drinking going to affect a large number of people, crosses the abra River from mining opera- water less accessible and can dramatical- it is better to err on the side of “precau- tions daily (inset). ly decrease agricultural yield. Decreased tion” and not allow the release of such a crop yield can lead to malnutrition and substance or the commencement of such inflames the lungs. And when this greater susceptibility to disease. Studies an activity. Such should be the case when inflammation continues for years, the have shown that malnutrition can make it comes to large-scale mining operations.lungs start to thicken or fibrose. Breath- children more susceptible to poisoning For once these start, there is no turninging becomes more and more difficult, and from heavy metals. back―no turning back the health conse-a chronic cough develops. “Dusty lungs” The presence of a mining corporation in quences as well. ncan also make one more prone to infection an area often causes an influx of migrantsor to more frequent bouts of asthma. seeking job opportunities. Health and sani- Dr. Leung is executive director of CHEST- Even the employment opportunities tation suffer as overcrowding occurs. Un- CORE (Community Health Education, Ser-generated by mining firms have corre- healthy habits, such as cigarette smoking, vices and Training in the Cordillera Region).sponding health costs. Mineworkers are heavy alcohol intake, and unsafe sexual re- For those interested in further informationconstantly exposed to dust and become lationships also thrive in gold-rush areas. on Mining and Health, she suggests A Com-at high risk for developing silicosis and In general, the health effects of min- munity Guide to Environmental Healthtuberculosis. They experience extreme ing are hard to document as these do not as reference. The book is available for freeheat, extreme cold, and dampness under- develop overnight and are often very download at http://www.hesperian.org/pub-ground. Many miners eventually become subtle. What is worse is that many of the lications_download_EHB.php.mine drainage site and prevalence • Among the corporate mine ergonomic hazards identified at the The challenge today is greaterof symptoms was found in Upper workers studied, the most preva- corporate mining operations. than ever as zijin Mining Group Co.and lower Paalaban. Residents in lent injuries were lacerations (43.8 That mission also sparked the Ltd., China’s second-biggest goldlower Paalaban, who live nearest percent), crushing injuries (17.05 formation of a multisectoral move- miner, is finalizing an agreementthe mine drainage flow, significantly percent), bruises (14.77 percent), ment called Save the Abra River that will pave the way for Zijin’sreported more health symptoms. and fractures (13.64 percent) usu- Movement (STARM) that now spans possible US$70-million investment • At the time of the household ally involving rock or timber fall. four provinces. STARM has part- in Lepanto’s gold copper project insurvey in Paalaban (May 2003), we Twenty percent of these cases nered with universities, local gov- Benguet province, according to afound that levels of cyanide were el- required hospitalization. Personal ernment units, and peoples’ orga- news report. Meanwhile, pendingevated at the CIP Mill Outlet and at protective equipment were incon- nizations in order to document the mining applications now cover al-Tailings Dam 5A. lead and mercury sistently supplied and used. effects of Lepanto’s mining along most 70 percent of the land arealevels were elevated at the CIP Mill • Most prevalent among the work- the Abra River system. of the Cordillera Administrative Re-Outlet and at Tailings Dam 5A. associated symptoms reported by STARM has conducted several gion. —ana Marie leung, MD • Blood samples from 15 Paala- the mine workers were: phlegm seminars to educate the people onban residents were compared with production (79.55 percent), joint the effects of large-scale mining and (Editor’s Note: Results of the study,that of residents living downstream pain (78.41 percent), eye irritation the importance of caring for our en- with a recommendation for properwith little or no exposure to mine (67.05 percent), headache (55.68 vironment. Community-based water action, were sent to concerneddrainage. Those with more hours of percent), dyspnea (48.86 percent), monitoring teams have been trained government agencies and the work-exposure to mine drainage showed and dizziness (36.36 percent). and organized. Unusual events, such ers’ union. Lepanto issued a presshigher levels of cyanide and lead • Most prevalent abnormal physi- as fish kills, are reported quickly so statement denying the findings of Dr.in their blood. The Paalaban resi- cal findings [among corporate mine they can be investigated and publi- Leung’s health study. The workers’dents also had higher blood levels workers] were hypertension (21.43 cized. Through such efforts STARM union used the study as basis to pushof copper and lead as compared to percent) and perforated eardrum hopes to stop corporate practices for additional health benefits andthe residents who did not go near (19.32 percent). These were relat- that are harmful to the environment safety measures to be included in itsthe mine drainage. ed with the physical, chemical, and and to the indigenous peoples. Collective Bargaining Agreement.) JUly/sepTeMBeR 2008 newsbreak | 21
    • coMMuNitieSProtracted WarCommunities near the country’s big mineral deposits have seen some of the fiercestbattles to change people’s attitudes toward mining. By ARies C. RuFoL ocated on almost opposite ends of the Philippine archipelago, Rapu island, Albay, two widely opposed the provinces of Benguet in Northern Luzon and Zamboanga mining projects. del Norte in Western Mindanao are home to communities However, mining companies are fac- ing fresh challenges, including demands whose responses to large-scale mining represent a study in for a greater say in the regulation of min- extreme contrasts. ing activities or greater share of mining revenues from provincial and municipal While residents in and around Philex vitalization of mining in the country. governments.Mining Corp.’s Padcal Mines in Tuba Mining companies are gaining ground In Nueva Vizcaya, OceanaGold, whichand Itogon in Benguet have embraced in local communities as resistance weak- is supposed to start mining operationsmining, members of the Subanen tribal ens in the face of an all-out offensive next year, has been ordered closed by thecommunities in Siocon, Zamboanga del waged by the industry and government provincial government for refusing to payNorte, unleashed what has become one using every means, from corporate social local quarrying taxes. The South Cotabatoof the country’s best-documented battles responsibility (CSR) to harassment, in- provincial government is also consideringagainst a foreign mining company. timidation, and deceit and double-cross. a proposed environmental code that will By hiring more locals, helping create Leaders of anti-mining groups admit that ban open-pit mining, possibly undermin-livelihood, conducting regular dialogues, the mining firms are indeed winning a ing Sagittarius Mines plans to develop onesubsidizing a 5,000-seat elementary school, “significant foothold” in many commu- of Asia’s biggest copper deposits.and providing health services, Philex over- nities that used to oppose mining. Many of the mining companies maycame resistance and won over the commu- A dozen large-scale metallic mines have won community support for ini-nities. In 1995, Barangay Camp 3, which were able to open in the last five years, tial exploration activities but could facecovers the Padcal mine, was recognized as more than doubling the number of oper- opposition or heavier exactions as theyone of the “50 Model Communities in the ating mines from only nine in 2002 to 21 move to develop the mines. Unlike ex-World” by the United Nations (UN). last year. These included TVI’s gold mine ploration which has relatively minimal In contrast, members of Siocon’s Sub- in Zamboanga del Norte and Lafayette impact on the land, mine developmentanen tribe continue to oppose Toronto Mining Ltd.’s polymetallic mine in Rapu- entails the possible relocation of settle-Venture Inc.’s mining activities in whatthey claim as their sacred land and ances- alyanSa tigil minatral domain. From legal petitions to bloodyprotest actions, Subanen tribal leaders havepressed their case, and even brought theircomplaints to the United Nations (UN). Across the Philippines, big miningcompanies are waging constant andcostly battles for the hearts and mindsof local communities to win support ofindigenous peoples, village residents,barangay leaders, and local governmentofficials for potentially disruptive effortsto explore and develop the country’smineral resources. coMMunity sPirit. Residents of Sibuyan island in Community resistance, often enjoying Romblon province stage a rallymoral and financial support from anti-min- against large-scale mining aftering Catholic bishops, environmentalists, the death of Councilor arminand leftist people’s organizations, remains marin, who was shot by aone of the major stumbling blocks to the re- nickel mining company guard22 | newsbreak speCIAl IssUe
    • ments and farms, and the clearing of vast gigie CRuz swaths of land for the construction of roads, tailings dams, open pits, and pro- cessing facilities. a History of resistance Terence Osorio, national coordinator of Alyansa Tigil Mina (ATM), one of the two largest anti-mining alliances, notes that the campaign against mining two de- cades ago was initially limited to the lo- cal front, scattered in sites where mining operations were located. Resistance was waged mostly by the local community and organizations, often with the support of church groups and left-leaning cause- oriented organizations. Indigenous tribes threatened by dis- placement or environmental damage were one of the early groups to wage a determined resistance against mining. ATM and Kalikasan say that many of the proposed mining sites in the remote mountains and hinterlands encroach on the indigenous people’s ancestral do- mains. “About 80 percent of lands covered by large-scale mining overlap or are locat- ed on indigenous people’s lands,” says Vicente Garganera, National Coordinator of Philippine Development of Human Re- sources in Rural Areas (PhilDDRA). “For the indigenous peoples, land means life. If you take away their land, you take away their life,” adds Joyce Palacol, ecology program officer of the Catholic Bishops Conference of the Phil- ippines’ (CBCP) social action arm. But the anti-mining campaign soon took a national shape after Marcopper Mining Corp. accidentally released 2 to 3 million tons of mine waste into the Boac River in Marinduque province, killing the 26-kilometer river, flooding farm- lands and villages, and contaminating the residents’ water and food sources. This was a year after the 1995 mining act was approved by Congress. In 1998, the CBCP issued for the first time a collective statement that de- nounced mining and repeal of the 1995 mining act. The bishops warned that the new law “will certainly destroy both en- vironment and people and will lead to national unrest.” The bishops took note of the environmental disasters caused byDeMocracy Wall mining operations in Boac, Marinduque,Residents of Rapu-Rapu island and in Itogon, Benguet, which sufferedask australia’s lafayette miningltd to stop mining and leave spillages of mine tailings and the mud- JUly/sepTeMBeR 2008 newsbreak | 23
    • flows in Sibutad, Zamboanga del Norte. alyanSa tigil mina Bautista says the Marcopper disas-ter marked the point when the struggleagainst mining became national in scale.Mines and Geosciences Bureau (MGB)Director Horacio Ramos agrees. He says,“There was a strong sentiment that min-ing is not sustainable and not compatiblewith the environment.” The constitutionality of the 1995 min-ing act, which took years for Congress toapprove, came under challenge after theLa Bugal B’laan Tribal Association Inc.,which filed a case back in 1987 against min-ing claims in tribal lands in Tampakan inSouth Cotabato, questioned the financialand technical assistance agreement (FIAA)between the government and WesternMining Corp. in 1995. The FTAA allowedWestern Mining, a foreign company, to ex-ercise full control over the mining project. Anti-mining attitudes spread to thegovernment with the appointment of Well-PrePareD. environmental activists go through trainings to better spread the anti-mining gospelenvironmentalist politicians, such as for-mer Senator Heherson Alvarez and civil cial board of Eastern Samar imposed an The MGB has been holding regionalsociety leader Eliza Gozun, as secretaries indefinite moratorium on large-scale and consultations with the academe, NGOs,of the Department of Environment and logging operations. the Church, and the community to explainNatural Resources (DENR). Sources at In Palawan, Puerto Princesa City May- “that mining can be a win-win situationthe MGB say Alvarez gave applications or Edward Hagedorn said last year he for all stakeholders.” Initial consultationsfor mining operations a hard time during would not approve any mining permit showed that “most people are agitatedhis short stint in the environment portfo- during his term. The city council had also for no reason, and those who are againstlio. “Most of the mining applications took passed a resolution banning any mining mining play up this fear,” an MGB com-time before these were approved.” He projects. Several mining companies have munications staff member says.even canceled approved permits for ma- expressed interest in exploring the nickel Chamber of Mines executive vice pres-jor mining projects, such as the Aglubang ore potential in Puerto Princesa and the ident Nelia Halcon says that resistance toMining Corp.’s mining venture in Victo- entire Palawan province. mining only comes from NGOs “whoseria, Oriental Mindoro. Based on MGB monitoring, active LGU bread and butter is to oppose mining.” resistance is also evident in Nueva Vizca- She adds, “If you talk to the residents ofLocal officials Join Fray ya (against OceanaGold and the Oxiana- the host communities, they are for the de- After the Marcopper disaster, it did not Royal Co. Mining Project), Marinduque velopment of their area.”take very long for opposition to large-scale (non-rehabilitation of Marcopper); Rom- Government and mining companies aremining to spread to local government of- blon (over the large- and small-scale min- also playing up the CSR or corporate socialficials. The first local government units ing exploration and activities in Sibuyan responsibility card, to improve relations(LGUs) to openly declare war against island), Albay (following the Lafayette and win support of the local community.mining were in Capiz, Oriental Mindoro, disaster), and Zamboanga del Sur (over Buoyed by the CSR success of someEastern Samar, and Iloilo. large- and small-scale mining activities). mining companies the Chamber of Mines In 1999, the Capiz provincial board together with the Philippine Business forpassed a mining moratorium in reaction cSr counter-offensive Social Progress and the Minerals Devel-to the DENR’s approval of exploration Mining officials agree that abuses and opment Council have proposed to havepermits in Maayon town. Also that same neglect by mining companies in the past CSR standards for various stages of min-year, the Iloilo provincial board approved have put the industry in a very bad light ing activities.a resolution urging the DENR not to ap- and produced a PR nightmare. Artemio Disini, chairman of the Cham-prove any mining permit without prior To improve the public image of mining, ber of Mines, says one example of effectiveconsultation with the provincial officials. the government and mining companies CSR is the Philex Mining Corp. experience The provincial board of Oriental Mind- launched a massive information and com- in Boyongan, Surigao del Norte. “Theyoro followed suit in 2002, and declared a munication drive to explain the economic were able to win the residents [who] al-25-year moratorium on all forms of min- benefits of mining and efforts to prevent lowed them to explore undisturbed evening in the province. In 2003, the provin- disasters, according to the MGB’s Ramos. with the NGOs around. This was because24 | newsbreak speCIAl IssUe
    • coMMuNitieSthe residents protected the company from scored a strategic coup when he was able Aglubang and Crew Minerals Philippines.being harassed by outsiders.” to set a meeting with some anti-mining Both companies are owned and controlled The stock exchange-listed Philex is not advocates and the chairman of the Na- by Crew Gold, a Canadian company basednew to CSR, which it used effectively in tional Secretariat for Social Action (NAS- in the United Kingdom.Tuba and Itogon towns in Benguet prov- SA), Broderick Pabillo. In that meeting But who is winning on the ground?ince to win over residents who opposed held at the CBCP office, all parties agreed ATM’s Osorio concedes that mining com-its mining operations and accused the to keep talking. panies “have gained a significant foothold”company of irresponsible mining. But anti-mining groups say that the in communities but blames this on the in- Learning from its experience in Padcal, campaign against large-scale mining has dustry and government’s use of deceit toPhilex also undertook CSR in its Boyon- intensified in recent years, especially at the divide those opposing mining activities.gan project. Opposition to mining there national and international levels. Because Still, that does not mean that anti-miningwas strong because Surigao was twice a of their lobbying efforts, both the House of activists are wavering or giving up, saysvictim of irresponsible mining. In 1995 a Representatives and the Senate have held Clemente Bautista, National Coordinatorcoal mine explosion claimed the lives of on a review of the 1995 Mining Act. of the environmental group Kalikasan.13 workers. Four years later, a mine tail- Anti-mining activists have also succeed- The MGB identified 14 mining or ex-ings spill buried 17 homes and swamped ed in attracting international attention. In ploration sites where community re-51 hectares of rice lands. May 2006, Father Edwin Gariguez and sistance is strong. The number may be By painstakingly engaging Padcal resi- Ramil Baldo, a Mangyan, were invited by small compared to the almost 400 activedents in dialogue and through the use of the UK-based organization Indigenous mining claims issued by the government,generous amounts of financial aid, Philex Peoples Links to address a meeting at the but the opposition in some areas is strongtamed anti-mining sentiments and changed Houses of Parliament in London. The two enough to delay mining activities.the public mindset. In 2002, Philex got a spoke on the Mindoro Nickel Project of Bautista says that barricades put up bymining award for its Boyongan efforts. villagers with the backing of members Realizing the success of such commu- of the Bugkalot tribe have halted Oxiananity efforts, the DENR revised the imple- BUYinG PeACe and Royal Company’s exploration activi- 20 biggest Social developmentmenting rules and regulations of the min- ties in Kasibu town in Nueva Vizcaya. and management Programsing act and required mining companies It’s also where OceanaGold is facingto allot at least 1 percent of milling and coMPany aMount (P million) a blockade put up by no less than themining costs to Social Development and Rio Tuba/Coral Bay 89.9 provincial government officials led byManagement Programs. SMDPs include nickel Mining Corp. the governor, Lourdes Cuaresma, whoplans and programs for the development Philex Mining Corp. 61.1 recently issued a cease and desist orderof the host and neighboring communities. against the mining company for ignoring Rapu-Rapu Minerals Inc./ 30.3MGB data show 32 approved SMDPs, Rapu-Rapu Processing Inc. an assessment for quarrying taxes.with a total operation amount of P356.8 Even communities where tensions holcim Phils.- lugait Plant 21.9million, as of March 2006. (See table.) have eased could erupt in protest again. holcim Phils.- la Union Plant* 20.8 In Sibuyan Island, Romblon, follow-the battle continues lepanto Cons. Mining Corp. 18.3 ing years of inactivity, Sibuyanons have If mining industry executives are to holcim Phils.- Bulacan Plant 11.0 revived protest actions against miningbe believed, the opposition to mining is Taganito Mining Corp. 8.9 companies made inroads in the area. Onemainly a perception problem. protest action last year resulted in the Concrete Aggregates Corp. 8.2 Chamber of Mines’ Halcon says “op- death of Councilor Armin Marin, whoposition will always be there,” but notes holcim Phils.- Davao Plant 8.0 was shot by a guard of the Sibuyan Nick-“that the intensity has died down.” She Iligan Cement Corp./MPCC 7.8 el Properties Development Corp.credits efforts by government and the APO Cement Corp./ APO 7.8 Australia’s Lafayette Mining Ltd.private sector to engage their critics to land & Quarry Corp. seemed to have overcome local resistanceminimize confrontation. FR Cement Corp. 6.8 when it resumed operations in February LGU resistance has been waning with Phil. Mining Service/Bohol 6.0 2007 after two toxic spills in October 2005“the full support of the administration limestone Corp. forced the DENR to order its closure forin mining,” says Disini. He adds that of northern Cement Corp. 5.4 more than a year. But in March this year,all the provincial governments opposing the mining company was on the verge Solid Cement Corp. 5.3mining, only Oriental Mindoro repre- of bankruptcy and suspended paymentssents a significant enough threat to min- Ilocos norte Mining Co. 4.5 on US$300 million worth of debts in parting operations. Abra Mining & Ind’l. Corp. 3.5 because of losses suffered during its pro- The government and the industry have Phil. Mining Service/Dolomite 3.4 longed closure.also managed to engage the Catholic Mining Corp. In the battle for communities’ heartsChurch through open communication Ibalong Resources 3.2 and minds, there are no clear winners orlines with the CBCP. Recently, Atienza, and Dev’t. Corp. losers. There is also no beginning and nousing his connections with the Church, Source: Mines and Geosciences Bureau end. ―with Isobelle Yambao JUly/sepTeMBeR 2008 newsbreak | 25
    • coMMuNitieSBishops and ActivistsGetting to know who are leading the fight against large-scale mining By ARies C. RuFo President and Jaro Archbishop Angel alyanSa tigil mina Lagdameo. Stronger unity Unlike the legitimacy issues hounding President Arroyo on which the bishops are clearly divided, the 80-plus CBCP members appear to have no quarrel over mining. But in a large group such as the CBCP where bishops are considered “autono- mous” from each other, it is inevitable that there will be differences in opinion. Mining is no exception but the voices of the many drown out those of the few. Because of mining’s environmental and social component, bishops are natu- rally drawn to the issue, especially those alliance. whose dioceses host mining activities bishop deogracias and operations, says former CBCP presi- yñiguez (2nd from dent Lingayen Archbishop Oscar Cruz. left) with anti-mining In their own dioceses, Catholic bishops activists during a have taken the lead in pointing out the press conference “evils” of mining, dishing out the most vitriolic pastoral statements.i For instance, the diocese of Bayombong f there is one institution that has become the biggest stumbling in Nueva Ecjia under Bishop Ramon *Vil- block to mining, that would be the Roman Catholic Church. Non- lena issued a joint statement with other government organizations (NGOs) recognize the vital role that NGOs that lambasted OceanaGold of the Church plays in the scheme of things, without which the cam- Australia’s gold and copper project in paign against mining would not have gone beyond first base. Didipio in Kasibu town. In Palawan, the Vicar Apostolic of It was primarily the Catholic Bishops and social implications. Puerto Princesa Bishop Pedro Arigo hasConference of the Philippines (CBCP) The first was in 1998 where the bishops become the face of the anti-mining cam-that gave a national form to previously warned that the “implementation of the paign.localized struggles against mining. They Mining Act will certainly destroy both Arigo told Newsbreak that he is againstalso attracted international attention and environment and the people and will all forms of mining. Small-scale mining,censure to alleged misdeeds of some of lead to national unrest.” he says, is more destructive than large-the Western mining companies in the But in the 2006 pastoral statement ti- scale. Arigo has organized “prayer ral-Philippines. tled “A Statement on Mining and Other lies” all over Palawan to press the cam- The CBCP’s pastoral statement on min- Concerns,” the bishops went beyond a paign.ing in 2006 caught the attention of Clare simple warning to draw the battle lineShort, a Member of Parliament in the against mining. Pro-Mining MinorityUnited Kingdom who led a fact-finding They called on all religious leaders to Arigo admits there are bishops whomission here to document mining prac- strengthen the anti-mining campaign are not opposed to mining because thetices and reported abuses, especially by and raise it to the national level, demand- mining activities in their dioceses “seemglobal mining giants. ing the suspension of 24 priority mining to be responsible.” One such person is The 2006 CBCP pastoral statement was projects of the government and an abrupt Masbate Bishop Joel Baylon and one orthe second of its kind directly asking the end to ongoing large-scale mining activi- two more CBCP members.President to recall the Mining Act of 1995 ties by the global mining giants. These bishops, Arigo says, prefer large-for its potentially adverse environmental The statement was signed by CBCP scale mining in the belief that “it is the26 | newsbreak speCIAl IssUe
    • lesser evil.” But Arigo says, “Based on ex- larger network of NGOs, people’s orga-perience, there is no responsible mining.” Bishops nizations, and civil society partners. It If there are bishops, albeit few, who are has formed chapters in several regionsnot opposed to mining, how does one ex- Against where there is a large concentration ofplain the collective CBCP statement call- Mining mining activities.ing for the repeal of the mining act? The Kalikasan People’s Network for Cruz says the majority sentiment pre- Tagbilaran Bishop leonarDo MeDroso the Environment or Kalikasan-PNE actsvails when the CBCP speaks or takes a (Bohol) as its national secretariat. Acting as thestand on issues. Positions taken by the Dipolog Bishop Jose Maguiran national secretariat of ATM, on the otherCBCP are based on theological and moral (zamboanga del norte) hand, is the Philippine Partnership forgrounds, and in the case of mining, there legazpi Bishop lucilo QuiaMBao (Albay) the Development of Human Resources inis no argument that mining “defiles the Rural Areas or PhilDHRRA , a network Romblon Bishop arturo Bastesland.” of 72 NGOs. As far as Church-based groups are Boac Bishop reynalDo eVangelista On legal and human rights, Defend Pa-concerned, the Philippine Misereor Part- (Marinduque) rimony’s partner is Karapatan, a nationalnership (PMP) is the lead organization. Marbel Bishop DinualDo gutierrez organization of human rights lawyersIts partners are NGOs and people’s or- (South Cotabato) and para-legal workers.ganizations. Its grassroots organizations San Jose de Mindoro Bishop ATM was organized in January 2005,are the diocesan social action centers of antonio Palang following a two-day summit participatedthe different dioceses. Thus the PMP is Butuan Bishop Juan De Dios PueBlos in by NGOs, civil society, people’s orga-active practically nationwide. It gets its (Agusan del norte and Agusan del Sur) nizations, Church-based groups, envi-operational funding from the German ronmental groups, and indigenous peo- laoag Bishop sergio utleggovernment, the Association of German ples. The summit was called shortly after (Chairman, CBCP’s Episcopal CommissionDioceses, and the European Union. on Indigenous Peoples) the Supreme Court in December 2004 re- The Catholic Church’s position on versed its own ruling just 11 months after Manila Auxilliary Bishop BroDerick declaring provisions of the 1995 miningmining is complemented by the National PaBillo (Chairman, CBCP nationalCouncil of Churches in the Philippines act unconstitutional. Secretariat for Social Action, Justice and(NCCP), which is composed of other Peace or nASSA) To ATM’s Garganera, the meeting wasChristian faiths. well-timed because in the months that followed, the government came up withcoalitions against Mining issues of mining: the Defend Patrimony a series of policy decisions aimed at at- Beyond the Church, the revitalization and the Alyansa Tigil Mina (ATM). tracting up to US$6 billion in foreign in-of mining has led to the formation of alli- These two national alliances have taken vestments in priority mining projects inances among civil society and people’s or- a position against large-scale mining but the Philippines.ganizations. Two national alliances have offer only token resistance against small- Exactly a year after the SC declaredbeen formed to tackle the environmental, scale mining. the mining act constitutional, the coun-human rights, and indigenous peoples Of the two, Defend Patrimony has a try hosted the 6th Asia-Pacific Mining Conference and President Arroyo issued Executive Order 469 creating the Mineral alyanSa tigil mina Development Council to advance the government’s mining policy. Garganera says the government and the mining industry would have been able to push their agenda virtually unopposed if the summit was not held that time. “We would have been in the defensive, rather than the offensive,” he says. Unlike Defend Patrimony, ATM’s al- liance with its partners is still loosely based, although its core group members are PhilDHRRA, the lawyers’ group Le- gal Resource Center, and the environ- mental group Haribon. Protest Prayer. Garganera says ATM and Defend Pat- a Catholic bishop joins anti-mining activists in rimony have a loose tactical alliance in protest action against mobilizing resources in conflict sites. “If killing of anti-mining they are strong in one site, we play sup- activists porting roles.” n JUly/sepTeMBeR 2008 newsbreak | 27
    • coMMuNitieSOn shaky GroundThe tools of small-scale mining have advanced from just picks and shovels todrilling machines, excavators, and powerful explosives. Many small minersrisk running afoul of outdated laws. By CARMelA FonBuenAT he nickel-rich hills of Narra and Sofronio Española towns in mining equipment, involves minimal Palawan have a reddish color but it’s not, thank God, because investments in infrastructure and pro- of blood spilled by executives of either Platinum Group Metals cessing plants, relies heavily on manual labor, and is owned, managed, or con- Corp. and Citinickel Mines Development Corp. trolled by an individual or entity quali- The two companies are fighting a vi- in general, not just in nickel ore extraction. fied under existing mining laws, rules,cious battle in the courts, the regulatory The murky legal status of small-scale and regulations.agencies, and the press for control of mining is unfortunate because it accounts This was reinforced by RA 7076, issued2,176 hectares of land containing depos- for a sizeable share of the country’s out- in 1991 by President Corazon Aquino,its of low-grade nickel laterites. Hardly a put of metallic minerals. Last year, small- that defined small-scale mining as an ex-week passes by without the publication scale miners dug 32,282 kilograms of tractive activity “relying heavily on man-of a news item or column attacking one gold worth P33.2 billion, or more than ual labor…and does not use explosivescompany or defending the other. five times the output of the country’s big or heavy mining equipment.” Yet, the two feuding firms share one gold producers such as Philex Mining Legal experts say the laws are undulyimportant thing in common. Though Corp. or Canada’s Toronto Ventures Inc. restrictive and condemn as lawbreakersboth are fairly big companies, they have (See graph on page 30.) many genuine small-scale miners who nocome to typify the new, corporate look of At the heart of the legal ambiguity is a longer fit the definition.“small-scale mining” that used to evoke definition that no longer conforms to the re- Antonio La Viña, former environmentimages of lowland gold panners or Cor- alities of modern-day small-scale mining. department undersecretary and nowdillera natives working with picks and Two laws cover small-scale mining: Pres- dean at the Ateneo School of Govern-shovels to dig for gold nuggets. idential Decree 1899 and Republic Act 7076 ment, says, “Once you are small and you For the government, the growing num- or the People’s Small-Scale Mining Act. try to be large-scale, you are illegal.” Heber of big companies using small-scale PD 1899, which was issued in 1984 argues that the law should be amendedmining permits issued by provincial gov- by President Ferdinand Marcos, defines to allow for more flexibility and growthernors to extract nickel and other metal- small-scale mining as “artisanal,” mean- on the part of small-scale miners.lic minerals represents an unacceptable ing it does not make use of sophisticated What happens when laws are grosslyabuse of a regulatory loophole. Fromonly 70 in 2004, the number of small- CaeSaR PeRantescale mining permits issued by provin-cial governors more than doubled to 173three years later, in 2007, according to theMines and Geosciences Bureau (MGB). Small-scale mining was conceived bythe laws as an activity that largely relies onmanual labor, but the companies engagingin small-scale mining to extract nickel areusing heavy equipment such as excavators,backhoes, and dozers, among others. To close the regulatory gap, the MGBis planning to ban all small-scale miningin nickel production. “We are recom-mending a moratorium on the issuanceof small-scale mining permits (SSMP) inthe case of nickel mining,” MGB directorHoracio Ramos told Newsbreak.Legal Limbo The planned moratorium underscores thetenuous legal position of small-scale mining28 | newsbreak speCIAl IssUe
    • inconsistent with reality became appar- stop the vast sums of money from mining ing, smuggling, and employment of childent in Diwalwal, the gold-rush site on Mt. allegedly going to communist guerrillas. laborers. While existing laws provide thatDiwata near the border of Surigao del Sur all gold should be sold to the Bangko Sen-and what was then Davao del Norte. For Large-Scale Problems tral ng Pilipinas (BSP), many suspect thatdecades, Diwalwal had been a headache Diwalwal represents an extreme case. In a big part of the country’s gold output isto the national government. the absence of law and order, the unabated shipped overseas illegally. The BSP has set The miners of Diwalwal never thought use of hazardous substances, including up buying stations in Davao and Tagumthe rules on small-scale mining applied to mercury and cyanide that were used in cities but the central bank’s minimum vol-them. They viewed PD 1899 and RA 7076 backyard furnaces to separate gold from ume requirement of 300 grams is still high.as impractical laws based on the tradi- the ore, poisoned the miners and their fam- Gold buyers usually collect an average oftional gold mining practices of the Igorots ilies, and polluted Naboc River that flows only 50 to 150 grams a day, forcing them towho laboriously dug the ground for gold down Mt. Diwata into the Davao River. sell to unauthorized traders.with only their picks, irons, and bars. Fatal accidents in the poorly constructed Many small-scale miners also encroach Even before the passage of the two laws underground tunnels were common. on legal mining claims of companies who,in the 1980s and 1990s, small-scale min- The growing number of mining casual- in turn, are accused of laying claim to aners in Diwalwal were already employing ties was what finally prompted President area after informal miners have foundmethods far different from the way it was Arroyo in 2003 to order a government sizeable deposits of mineral ores.done in the Cordilleras. “Those engaged takeover of the site. Given the long history of conflict in thein small-scale mining have grown big- Nationwide, small-scale gold miners mining industry, “tolerance” had alwaysger and have began using dynamite and are notorious for being dirty, unsafe, been the attitude of the national govern-chemicals as tools,” explains Franco Tito, environmentally destructive, and funda- ment. “Considering the large numbervillage chief of Mt. Diwata. mentally unsustainable. “The small-scale of people involved in small-scale min- By banning, instead of regulating, the miner is dirtier per unit of output than ing and the difficulty of driving out theuse of explosives and chemicals, the new large and modern mining operations,” people without causing unwanted conse-law drove many miners in Diwalwal un- Ramos says. Unlike in regulated large- quences, the activities of the miners havederground, legally speaking. scale operations, rehabilitation measures been tolerated for sometime now,” MGB Miners did not apply for permits nor are not adopted by small-scale miners. mining technical division chief Lazaropay taxes because that would expose The small-scale miners’ practice of “high- Ramos told Newsbreak.them to possible criminal prosecution for grading operations,” which refers to taking But for all the troubles it is accused ofusing explosives and chemicals. Before out only the best ores while leaving be- causing, small-scale mining is an impor-it tried to assert full control in 2003, the hind lower grade ores, is seen as wasteful. tant source of income for poor Filipinosgovernment was practically blind in Di- “Only high-grade ore is extracted such that in many parts of the country. The rise ofwalwal. The little that it knew about min- conservation measures are not adopted,” settlements of small-scale miners in re-ing activities in the area came from mili- explains an MGB booklet. mote mountains and valleys has helpedtary intelligence agents sent there try to Other problems include illegal gold trad- boost the economic growth of towns and provinces. When Platinum Metal’s small-scale alyanSa tigil mina nickel mining activities were stopped by the Department of Environment and nat- ural resources (DENR) last year, Palawan province and the two towns of Narra and Sofronio Española lost an esimated P6.2 million in taxes in 2007. big to Small While mining laws limited the growth potential of small-scale miners and forced many of them to operate illegally, the Lo- cal Government Code, passed in 1991, created opportunities for big companies to seek small-scale mining permits from local officials. This allowed them to jump- start mining projects, and start earning cash, while waiting for final approvals from mining and environmental regula- tors in Manila.eVolVing. Small-scale mining no longer relies on primitive tools (such as picks and shovels) or methods (such as gold Platinum and Citinickel saw in small-panning (left). it is now done using heavy equipment such as ball mills that grind rocks into smaller bits that are treated scale mining an opportunity for a “transi-with chemicals such as mercury to extract gold. JUly/sepTeMBeR 2008 newsbreak | 29
    • coMMuNitieS bobby timoneRational strategy” pendingthe completion of the re- harD Work. nO sMALL MATTeR Small-scale miners Philippine gold output by size of producerquirements for either themineral production shar- in diwalwal 35,000 30,000ing agreement (MPSA)with the government and 25,000the release of the environ- 20,000mental clearance certifi- 15,000cate (ECC) for large-scale 10,000mining from the Envi- 5,000ronmental Management 0Bureau. ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 Linggoy Atayde of Plat-inum told Newsbreak that SMAll-SCAlE lARGE-SCAlEthe company planned to Source: Mines and Geosciences Bureauuse the two small-scalemining permits granted it and a part- at least 2 percent nickel content. Now, it’s unless the challenges posed by small-ner, Olympic Mines and Development at 25 dollars per kilo. At that price, you scale miners are addressed, many miningCorp., to demonstrate to Palawan Gov. can even mine for a slow as 0.7 percent. So projects could be at risk. It said: “The ex-Joel Reyes and his constituents that Plati- what used to be ignored as waste is now istence of small-scale mining in permit-num’s mining activity will be good for useful,” MGB deputy director Edwin Do- ted mining areas should be consideredthe province. “He wanted us to prove to mingo explains. as a social-political risk that warrantsthem that we are responsible miners be- In 2007, Platinum Metals’ mini-boom special attention. If the small-scale min-fore he would endorse us for an MPSA,” from small-scale mining came to an ers are neglected in the general planningexplains Atayde. abrupt end. Responding to complaints stage, the mining project with all invest- Olympic was the original claimant in by Citinickel before the Manila office of ment may have serious problems duringthe area and engaged Platinum as min- the DENR, then Secretary Angelo Reyes the development of its activities.”ing operator. Later, Olympic revoked the cancelled Platinum Metal’s environment Mining companies must find ways notoperating agreement with Platinum and compliance certificates because of large- only to co-exist with the thousands ofassigned its mining claims to Citinickel, scale operations and over-extraction. small-scale miners but to win their supportsetting the stage for the bitter legal and Palawan’s Reyes was also slapped with and cooperation, which are crucial to thePR battles that continue to this day. graft charges before the Office of the Om- success of many mining projects as they The permits issued allowed Platinum budsman for allowing Platinum Metals’ move from the exploration phase towardsto extract nickel ore from a combined 40- operations. mine development and production.hectare area for an initial two years from Shortly afterwards, the MGB began Some have devised innovative schemes2004 to 2006, later extended to 2008. thinking about proposals for banning that have not only promoted good rela- Similarly, Citinickel has this to say small-scale nickel mining. tions with small-scale miners but actuallyabout small-scale mining: “Pending the “You cannot mine nickel economically if helped boost revenues and profits.issuance of an ECC for a large-scale min- you are small-scale. It has to be with the use For example, Benguet Corp., whiching operation, Citinickel shall first op- of heavy equipment, like bulldozers,” says used to be the country’s biggest golderate on a small-scale mining capacity Domingo. “The small-scale nickel mining mining company, has entered into anusing two ECCs for small-scale mining companies are really large-scale. They go ore-sharing agreement with associationsprojects covering an aggregate area of 40 small-scale because it’s easier to start.” and cooperatives of small-scale minershectares out of the entire MPSA contract Ramos expects a lot of opposition not in Akupan, Benguet. The deal paved thearea.” The company has not yet started only from the mining companies but also way for the reopening of the company’soperations because of the ongoing dis- from local governments of nickel-rich ar- mineral-ore processing operations thatpute with Platinum. eas who like small-scale mining because were closed in 1990 after the Baguio Soaring global prices for nickel, which fees and taxes start to flow in more quick- earthquake. Small-scale miners deliverwas in great demand because of rapid ly compared to large-scale mining which mineral ore to the company for process-economic growth in China and India, con- have longer gestation periods. “The gov- ing, and revenue from the gold output isfirmed even more the soundness of using ernors are objecting, but we will settle split according to an agreed formula.small-scale mining as a transitional strat- this,” Ramos says. La Viña insists on the need to updateegy. Platinum began excavating for nick- the small-scale mining law. The story ofel laterites in 2005 and was able to ship Making room Diwalwal, he says, shows the “immedi-274,072 dry metric tons up to June 2006. Whether the government and the big ate” need to help the small-scale mining “About five or six years ago, the price mining companies like it or not, small- operations there grow into bigger andof nickel ore was just about 6 US dollars scale miners are here to stay, for sure. more competent entities to address the so-per kilogram And before, it had to have The MGB has issued a warning that cial, environmental, technical, safety, and30 | newsbreak speCIAl IssUe
    • P o L i c yhealth challenges facing modern mining. “Medium-scale mining, advancedsmall-scale mining, and mechanized Local solutionssmall-scale mining, whatever we want The search for ways to resolve the long-standing conflicts and disputesto call it, should have the real purpose of begins with empowering local communities to weigh the costs anddeveloping our small-scale mining onto a benefits of destroying the landscape to unearth precious minerals.higher level,” he says. Existing laws were designed for either By Roel lAndinGinlarge-scale mining or small-scale miningoperations, and do not have provisionsfor mining operations in between. L Franco also wants a law that addresses ike politics, all mining is local. While mining is a global industrythe needs of miners that are neither too and follows national laws and regulations, digging for mineralslarge nor too small, and supports the always takes place in someone’s backyard.growth of small miners. The key to solv-ing Diwalwal’s problems is a mechanism Not surprisingly, many of the ideas for He says that while the 1995 mining actthrough which the small can expand and resolving the long-standing debates and allows and even promotes mining, eachbecome big, he says. disputes about mining seek to empower mineral exploration and development “Small-scale mines that have the finan- local authorities to settle the clashing project requires the approval of localcial capacity and knowledge to procure interests of the mining industry and the government units.sophisticated mining equipment and use host communities. “The right to consultation is a mean-explosives are the ideal candidate for this Antonio La Viña, dean at the Ate- ingful right. It’s not a pro forma right,” hedevelopment,” he says. neo School of Government that recently argues. “It’s not a right to veto all projects La Viña is also calling for the zoning of launched a research program on natural re- but it’s a right to be consulted for eachmining sites. “The government should have sources and mining governance, says that and every project, and then raise con-implemented a very clear location. This is local governments are the ultimate judges cerns. If those concerns are not addressedthe zone for small-scale mining and this is about if and how mining projects should the project cannot move forward.”the zone for large-scale mining,” he says. be undertaken in a certain locality. What comes as a surprise is that one RA 7076 allows the DENR secretary to “National policy is set by the national of the Arroyo administration’s top min-set aside particular areas for small-scale government but decisions at the opera- ing officials shares some of these ideasmining or Minahang Bayan. But this was tional level require the concurrence of the about empowering local officials tonever implemented fully. There are only local governments” in accordance with make important decisions about miningtwo sites declared as Minahang Bayan— the Local Government Code of 1991, says projects.the Diwalwal gold-rush site and Dinagat La Viña, one of the country’s foremost ex- Ramon Paje, President Arroyo’s ad-Island in Surigao Del Norte. perts on environmental law and a former viser on mining and a DENR undersec- Of course, declaring a mining area ex- undersecretary at the Department of Envi- retary, is urging provincial governmentsclusively for small-scale miners is no assur- ronment and Natural Resources (DENR). to begin comprehensive environmentalance that all will be well, as shown by what united nationS buCk Pagohappened to sand quarrying in Pampangaafter the 1991 Mt. Pinatubo eruption. The volcanic explosion deposited mil-lions of tons of lahar or volcanic ash alongthe river banks of Pampanga, producingsand with high silica content ideal for con-struction. The authority to issue quarryingpermits became the object of a tug-of-warbetween national agencies and provincialofficials, who eventually won in 2002. Butcorruption allegations over the funds fromquarrying fees hounded then Gov. LitoLapid and his son, who succeeded him. Whatever happens, the last thing bigmining firms should do is show theirmining permits, whether these are pro-duction sharing agreements or financialand technical assistance agreements, tosmall-scale miners and expect them toleave. That’s just not the way it works. n Common gRound. denR undersecretary Ramon Paje (left) and ateneo de manila School of government dean antonio la Viña agree that local communities must be consulted before mining projects are implemented JUly/sepTeMBeR 2008 newsbreak | 31
    • P o L i c yassessments and classify areas into coastal cause of the lack of capacity and expertise damages or socio-economic risks toor marine zones, multiple-use zones, buf- of local governments to properly evalu- various stakeholders. Local authoritiesfer zones, or maximum protection zones. ate mining projects and prepare compre- should be equipped with the means to “On this basis, they can declare which hensive land use plans. evaluate these potential damages andareas are open to mining and which areas Provincial governors, in fact, are seen costs properly.are to be protected,” he says. “If locally as generally more lax in granting small- Germelino Bautista, the Ateneo de Ma-legislated, the designation of such areas scale mining permits to mining companies nila economist who wrote a paper on theshould reduce local conflict and tension.” whose applications for mining permits and economics of Philippine mining, identified Paje’s views appear to be a bit odd, environmental clearances are facing pro- 16 potential damages and risks during thecoming from an official of the DENR longed evaluation by the DENR or MGB. exploration and ore extraction stage. Thesethat is struggling to assert national laws La Viña says that building local capacity include diversion of groundwater, contam-and policies on mining against recent lo- to evaluate mining projects against other ination of surface waterways, restricted en-cal government moves to ban or block alternatives or assessing risks is something try to hunters, food gatherers, and shiftingthe operations of some mining compa- the local governments need to be good at cultivators. (See table on page 35.)nies. Environment Secretary Lito Atien- to give substance to the legal requirement He lists another set of nine potentialza recently had to order the provincial of local government concurrence. natural resource damages and socialgovernor of Nueva Vizcaya, Lourdes “Mining is inherently a risky activity. and economic risks associated with mineCuaresma, to lift a barricade she put in You cannot guarantee that nothing will waste and tailing disposal as well as mineplace to stop the operations of Australia’s not go wrong environmentally,” he says. closure and abandonment. Foremost ofOceanaGold for allegedly failing to heed Every stage of mining―exploration, these are the contamination of streamsdemands to pay quarrying taxes. ore extraction, mineral production, mine and rivers, the destruction of marine hab- But Paje says he is confident that most waste and tailings disposal, and mine itats such as mangroves, sea grass andof the country’s provinces will likely al- closure or abandonment―represents a coral reefs, and contamination of groundlow mining so long as local officials and different set of potential natural resource water from tailings dam seepages.leaders are given a role in assessing thecosts and benefits of extractive activities, nOT JUsT MininG PerManent croPsand the local governments are given an the Philippines is a highly mineralized country but anD araBle lanDsadequate share of mining revenues to help (Percentage intensity) it’s also heavily populated and extensively farmedmitigate the damages and risks. (See map.) SPARSEly vEGETATED Paje says that laws already empower golD UnDETERMInED (0-30)provincial governments to come up with 30-40comprehensive land use plans. It’s up to coPPer 40-60provincial leaders to use such plans to nickel > 60designate areas where mining can or can- WATERnot be allowed, depending on the ecolog- nO DATAical and economic characteristics of suchareas, he says. farMing systeMs “Once an area is designated as pro- lOWlAnD RICEtected, then mining cannot take place no UPlAnDmatter that billions of dollars worth of ExTEnSIvEdeposits are located there,” explains theDENR official. MIxED To be sure, that is easier said than done. hIGhlAnDPaje cites Samar Island, which was desig- ExTEnSIvEnated as a national park that should be MIxEDoff-limits to mining except for a smallarea outside the protected zone.However, environmental groups PoPulation (People per Sq km)also mention Samar as prime 0-2example of how national parklaws are followed more in 3-10the breach. 11-20 21-50capacity building 51-100 While both La Viña and Paje’s propos- 101-200als can be implemented without the need 201-500for new legislation, local participation 501-1000could be hampered or even misused be- > 1000 Sources: Mines and Geosciences Bureau for map on location of mineral deposits;32 | newsbreak speCIAl IssUe UN Food and Agricultural Organization for other maps
    • Murky Water. toronto Venture inc.’s gossan dam in mt. Canatuan, Siocon, zamboanga del norte PuRPle RomeRo The government has regulations in Filling Policy Gaps lishment of an environmental insuranceplace that require mining companies In identifying the potential environ- system to make sure that the costs fromto address and mitigate these potential mental damages and socio-economic potential damages and risks are not “ab-natural resources damage and socio- risks posed by mining, Bautista found sorbed by the environment and affectedeconomic costs. For example, during the that some national laws and policies local communities, households, andexploration, ore extraction, and produc- were clearly inadequate in ensuring members of future generation in terms oftion phase, mining firms must prepare an enough protection for vulnerable local present and future productivity, income–Environmental Work program for Explo- communities located near or far from livelihood and health losses.” He saysration (EnWP), an Environmental Protec- the mining areas. the insurance system must be funded bytion and Enhancement program (EPEP), For one, he recommends some beefing both the mining companies and the gov-and a social development and manage- up of the water code and related poli- ernment (see excerpts on pages 34 and 35).ment program (SDMP), and establish a cies to make sure that mining operations He adds that the government must alsoMonitoring Trust Fund (MTF) and Reha- will not hurt communities’ ground and prepare “multiple use valuation of pub-bilitation Cash Fund (RCF). surface water supplies, and that mining lic forestlands, as recommended in the To address issues related to mine companies are property charged for wa- Mineral Action Plan, in order to weighwastes and closure, mining companies ter withdrawals required to install pollu- and determine the alternative optionsare obliged to put up a Mine Waste and tion abatement technologies. for public forestland use.” Such plans,Tailings Fees Reserve Fund and prepare He also suggests that the government which was also recommended by Paje,a Final Mine Rehabilitation and Decom- should immediately conduct geologic the DENR undersecretary, could correctmissioning Plan (FMRDP). risk assessments in current and prospec- the historical bias in government policy Bautista says local governments and com- tive mineral areas towards identifying and law since the American colonial pe-munities should be able to judge for them- those most at risk from earthquakes, riod that gave priority to mining overselves if these funds and plans adequately landslides and disasters. “These disaster- other uses of public forestlands.address the various types of potential dam- prone areas with high seismic risks mayages and risks facing the local stakeholders. be included in the protected area system, Strategic approachThey should also be able to independently and hence closed to mining,” he says. Apart from empowering local commu-monitor and enforce compliance. Bautista also recommends the estab- nities and governments, La Viña urges JUly/sepTeMBeR 2008 newsbreak | 33
    • P o L i c ythe government to be more “strategic” or COMMEnTARyselective in approving large-scale mining A safe Hedgeprojects. Instead of evaluating, say, 20big projects at the same time, as it is try-ing to do now, the DENR or MGB shouldprocess far fewer priority prospects and Mining companies should be compelled to annually setapprove one major mine every two orthree years, he says. aside the maximum amounts to pay for the environmental “The way they are talking now about and health damages brought about by their operationsso many projects at the same time, thereis no way you can meet the demands ofenvironmental monitoring, for example,” By GeRMelino M. BAutistALa Viña argues. “Even if you impose the Professor, Economics Department, Ateneo de Manila University Aright obligations on the companies, if youdo not monitor, chances are they won’t n environmental insurance systemmeet some of their obligations.” must be established to address the In trying to process as many as 24 ma- unmitigated impacts and potentialjor mining projects almost simultaneous-ly, the government actually helps create uncompensated costs of mining (seeas many potential conflict areas as well, table). Without this compensationLa Viña points out. The mining industry source, these costs would be absorbedis also unsatisfied because of extended by the environment and affected local communities…delays in permitting and approvals that [and the] future generation in terms of…productivity,they blame on red tape. income-livelihood, and health losses. The government should be more selec-tive and focus on the few areas where If undoubtedly substantial, the costs of damages particularlymining is permitted rather than try to An envi- from a mining company’s tailings dam overflow or collapsepromote mining even in national parks, ronmental would very likely exceed the economic rents net of remittancesprotected areas, or densely populated insurance either in a disaster year or downswing period.upland communities, he says. There must therefore be an environmental insurance fund From the government side, Paje also fund established industry-wide and drawn from current and futurethinks along similar lines when he pro- must be rents in order to sufficiently cover the expected maximum an-poses that the MGB should not just pas- established nual value of uncompensated environmental, economic, andsively receive and process applicationsfor mining claims and permits. industry- social costs of the entire industry. Moreover, because the dam- ages are the liability of both the mining company and the gov- Instead, he wants the bureau to iden- wide and ernment, the share of both in compensation payments must betify priority areas for development, and drawn from determined.hold competitive tenders for mining current The issuance of Department of Environment and Naturalrights, which is how the Department of Resources-Department Administrative Order (DAO) 2005-Energy now awards oil and gas explora- and future 06 on April 6, 2005, on the “Guidelines for the Institution oftion permits. This way, the government rents a System of Mandatory Environmental Insurance Coverageearns right from the start and discour- (MEIC)” seems to have been an answer to the need.ages mining speculators who file claims According to the guidelines, objective, because the presentand just wait for big foreign companies administrative regime fails to “guarantee full environmentalto partner with them, he adds. responsibility… [t]he MEIC shall encompass payment of dam- “If you have to bid 1 million dollars, ages…and provide a facility for the alleviation and recompenseyou’re not just speculating, you have to for any kind of environmental impairment or damage by reasonbe serious about really mining the area,” of the project.”Paje says. “Right now, mining claim- Specifically, all current project proponents and applicantsants just pay 60 pesos a hectare to file a for an Environmental Compliance Certificate (ECC) and/claim.” or Certificate of Non-coverage (CNC) must obtain insurance By actively tendering mining rights, the coverage in the form of both an environmental performancegovernment could be taking its first, big bond (EPB) to “answer for all environmental damages, penal-step towards acting the part of mineral ties, and legal obligations which may arise from the failure ofresources owner. That’s not so clear right the project proponent to comply with its undertakings” andnow, considering what many consider an Environmental Pollution, Impairment and Clean-up Liabil-to be a dismally low share of net mining ity Insurance (EPICLI) to “answer for all claims arising fromrevenue after taxes, fees, and royalties. n damages to the environment, bodily injury, property damage34 | newsbreak speCIAl IssUe
    • gigie CRuz COUnTinG THe COsTs Unmitigated Potential Resource Uncompensated Economic/ and Environmental Damage Social Risks & Costs Mining exPloration, oPeration & ore extraction • Disruption, if not loss of • Restricted entry to hunters, natural habitat food gatherers, shifting • Forestland conversion/ loss cultivators • Decline in carbon • Loss of forest-based sequestration capacity livelihood (e.g. non-timber forest products) • Erosion, sedimentation • Displacement of indigenous • Reduced slope stability or and migrant households/ higher risk of landslides community • Diversion of surface or • Reduced water availability for groundwater domestic consumption and • Reduced or erratic irrigation stream flows • Higher cost of potable water • Clogged stream channels • Income losses due to • Potential acid rock landslide, farm productivity generation decline • Contamination of surface waterways Mineral ProDuction • Threat to particular species • Reduced local water supply or biodiversity loss • Higher cost or greater inavail- • Diversion of surface and ability of potable water RiSky buSineSS. groundwater • On-site and off-site decline in mineral processing • Reduced stream flow or farm yield, fish harvest (sub- pose number of groundwater depletion sistence or income sources) potential threats to • Acid rock drainage and con- • Less recreational opportunities the environment tamination of soil and water • Entry of mercury, other toxic • Surface, groundwater material into the food chain indefinitely suspended partly because of valid reasons, as well pollution • Health damage from poor as the resistance of industry associations. • Reduced fish spawning area water quality The DENR failed to immediately and comprehensively es- • Damage to aquatic life • Respiratory illnesses and loss of life tablish the necessary mechanism for liability insurance, as well • Air pollution (increased as delineate a cost-sharing arrangement among enterprises dust, PM, metal gases, • Decline in productivity, income sulphuric acid) and government. The Foreign Chambers of Commerce asserted that “the MEIC Mine Waste anD tailings ManageMent, Mine is a redundancy…” because “the existing mechanisms to insure rehaBilitation, closure or aBanDonMent environmental conservation,” like the implementation of Re- • Contamination of streams, • Immediate illnesses and long- public Act 6969 and Presidential Decree1586, are enough. And rivers, other water bodies term health damage from the “concerns and issues of environmental management are be- from tailings release contaminated water and food ing well dealt with under Multipartite Monitoring Team (MMT) • Destruction of habitats intake as a monitoring mechanism and Environment Guaranty Fund (rivers, mangroves, sea • On-site and off-site/ grass, coral reefs) downstream property (EGF) as a protective mechanism.” Moreover, in their view, • Fish kills damages, and livelihood or MEIC is merely a “new system of tax” or an “environment reg- income losses from tailings istration fee” posing in the name of an insurance coverage. • Groundwater contamination release from tailings dam seepages If the foreign mining company-members of the foreign • Off-site/downstream chambers are then only willing to shoulder the current pre- • Air pollution from dried community displacement tailings scribed obligations and not make additional environmental • Loss of particular species outlays that further impinge on rent incomes, the government must have both the technical grounds and the political will and moral capacity to promote and establish an environmental in-arising from a pollution event, including environmental reha- surance system. nbilitation, clean-up and/or remediation costs and expenses forcontamination and/or impairment of the environment.” (Excerpted with author’s permission from “Economics of Philippine The proposed MEIC unfortunately was not able to progress Mining: Rents, Price Cycles, Externalities, and Uncompensatedbeyond the April 2005 DAO issuance. On Feb. 21, 2006 it was Damages.”) JUly/sepTeMBeR 2008 newsbreak | 35
    • i M a G e SRevisitingRapu-RapuText by ChAy FloRentino hoFileñAPhotographs by GiGie CRuzOn Wednesdays, Fridays, and Saturdays at 9 a.m., a mo-torboat rented by the owners of the Rapu-Rapu PolymetallicProject transports mine workers from the pier of legazpi tothe island of Rapu-Rapu, some two to three hours away.36 | newsbreak speCIAl IssUe
    • JUly/sepTeMBeR 2008 newsbreak | 37
    • The approach to the island reveals natural beauty—from lush, verdant forests to mountainous steepslopes, clear waters, and natural rock formations.Only reddish rocks hint at a possible danger that lurksin the island: red iron sulfate precipitate.38 | newsbreak speCIAl IssUe
    • i M a G e S Previous and present mining activities have brought about scraped mountains and erosion, leaving fisherfolk and townsfolk alike either worried or oblivious to the long-term perils of mining. JUly/sepTeMBeR 2008 newsbreak | 39
    • i M a G e S Operations in the mine site are almost at a standstill. Geologists and environmental managers are extra careful about safeguards, especially in the open pit, after a deadly cyanide spill in 2005 adversely affected the livelihood of nearby barangays. By July, when operations resume, the safeguards will be put to a test.40 | newsbreak speCIAl IssUe
    • Residents of the poblacion in Barangay Malobago, one of thedirect-impact communities, are distrustful of the Australianlafayette Mining ltd. and its partners that used to operate themine. Peddled lies, unfulfilled promises, and reduced incomesare what they left behind. But the new Korean owners promiseto do better. JUly/sepTeMBeR 2008 newsbreak | 41
    • FocuS oN LuZoN PHiliPPine national PoliCe Peace talks. Security managers of several mining companies in zambales gather for a “peace forum” organized by the provincial police to avert bloodshed in mining conflictsGunning for nickelRival mining companies in Zambales province are turning to the military andthe police to supplement their private security. By CARMelA FonBuenAA rmed clashes in the hills of Zambales province in Central Lu- says that the conflict has claimed no ca- zon used to be automatically blamed on the communist New sualties so far. People’s Army, which is known to operate in towns near the close calls border with Pangasinan province. Not anymore. But there were a number of close calls, Since last year, the near-encounters deemed it necessary,” says Fe- especially between security forces of theamong security forces of mining compa- lix, who was appointed to the big mining companies and of A3 Una, a lo-nies operating in the province have be- post in January 2008. cal mining company that is involved in acome a big threat to peace and order. Turf Felix says mining conflicts number of disputes over mining claimswars between mining claimants over the are the “primary concern” of the De- with the large-scale miners such as Ben-precious nickel and chromite-rich hills partment of Environment and Natu- guet Corp. and DMCI Mining Corp.have become so bad that Zambales police ral Resources (DENR) and the Mines In June last year, “Benguethave turned to extraordinary measures. and Geosciences Bureau (MGB). But Corp. security guards on patrol Early this year, Senior Supt. Rolando Fe- when the miners’ conflicts threaten were fired upon by unidenti-lix, the province’s police chief, organized the peace and order of Zambales, fied men coming from thewhat he called a “peace forum” to establish “it becomes a police concern.” direction of A3 Una camps,”“ground rules” for mining operators. “We The Zambales police chief says Benguet Corp.’s senior42 | newsbreak speCIAl IssUe
    • vice president Salvador Pabalan. “The presence of several PNP SAF field,” Felix says. That same month, Benguet’s security per- personnel allegedly under the command The Zambales police chief adds: “Itsonnel in Sta. Cruz town could only watch of PO1 Acapable and Major Clarabal in was informal. We flocked them togeth-the armed guards―allegedly of A3 Una― the area equipped with an APC V-150 is er. We asked them if they can solve [theforcibly bring in mining equipment and per- simply uncalled for as we do not see any problems] on the ground.” He says hesonnel to dig for nickel ore in an area covered imminent threat or danger from lawless told the mining company representativesby Benguet Corp.’s mining permits. elements,” Simbulan added. to “minimize their movements and calm “Benguet Corp.’s security guards could The deployment of the police SAF unit down so as not to escalate friction.”not prevent their entry because they were adds to a potentially dangerous brew Looking back, Felix says the forumoutnumbered and threatened,” Wilfredo that could pit the special police forces helped ease tensions. It gave the minersAtiwag, senior manager of Benguet, said against army-supervised militias that are a chance to know each other. Previously,in a written statement. helping provide security to DMCI. they only knew each other’s names from the Sometimes, the conflict is not just be- The company has a memorandum of complaints that they heard about. Felix saystween private security forces but threat- agreement, signed in July 2007, with the the environment in the hills has become aens to involve certain units of the police Philippine Army’s 7th Infantry Division bit friendlier. The miners, after all, eat theirand the military. for the latter to “activate” a Special Citi- lunches in the same place up in the hills. In November 2007, DMCI fired off a letter zen Armed Forces Geographical Unit Ac- Still, Felix acknowledges that the un-to the regional office of the Philippine Na- tive Auxiliary (SCAA)” to fill up DMCI’s derlying conflicts over mining claimstional Police (PNP) to complain about the security requirements. that trigger encounters up in the hills willpresence of an armored personnel carrier take more than peace forums to resolve.(APC) V-150 and the police’s Special Action wild west Tensions caused by A3 Una’s allegedForce (SAF) personnel inside a disputed People cannot help but refer to the Wild illegal operations continue. The DENRport area in Barangay Bolintoc in Sta. Cruz. West when talking about the situation in and MGB themselves have ordered the seizure of A3 Una’s trucks and barges RuSina 2007 annual RePoRt fully loaded with mineral ore. But DMCI, Benguet Corp., and Eramen claim that A3 Una continues to operate illegally. “A lot of these is driven by economics,” says Coronel. “There’s a window now where metal prices are high.” enter Palparan In April, another high-profile mining conflict gripped Zambales. This time, it in- volved a notorious former Army general, Jovito Palparan. Based on news reports, Palparan supposedly led soldiers of the 24th Infantry Battalion in a takeover of the Masinloc seaport in Masinloc town. Palparan denied he led the takeover. He said he was only in charge of the secu- rity. His security agency―24 Hours Secu-sPecial Protection. dmCi mining’s nickel ore stockpile behind the export port in Sta Cruz, zambales.the Philippine army’s 7th infantry division helps guard dmCi’s mining claims from incursion by small-scale miners. rity Providers―was supposedly hired by the Faith Investment House to secure the DMCI suspects that the SAF, which is usu- Zambales, especially in the hills, which Masinloc Port in Masinloc town. “They re-ally deployed against heavily armed crimi- are so far away from the town centers it quested our assistance in providing securi-nals, terrorists, or rogue military officers, takes days for reports to filter down. ty to the area, due to the presence of armedwas brought in to intimidate the company’s “You’re talking of a very rural area. men there,” Palparan told reporters then.guards and employees. Like Benguet, DMCI There’s nobody there,” says Ed Coro- Rusina’s Coronel says all these turfalso has ongoing disputes with A3 Una. It nel, spokesman of the Australian mining wars boil down to poor governance. Andhas filed a number of cases against A3 Una company Rusina Mining, which is ex- the victims are not just the mining com-for intruding into its territory. ploring for nickel in Sta. Cruz, Zambales, panies, large or small, and their security “This is causing anxiety and fear among with local partner DMCI. guards who risk getting hurt in a firefight,our workers and in fact a number of them The police-organized peace forum was but the entire country. He warns: “If thehave tendered their resignations,” said attended by representatives of more than Philippines is not ready to accept theseDMCI Mining Corp. president Cesar 10 mining companies operating in the companies, foreign or local, they will goSimbulan in a letter addressed to PNP province. “These were the operations elsewhere. Because the incentives areregional chief Errol Pan. officers overseeing the operations in the there.” n JUly/sepTeMBeR 2008 newsbreak | 43
    • FocuS oN LuZoNBreaching the BarricadesOceanaGold is enduring the anger and resentment of Nueva Vizcaya’s provincial leaders in exchange forthe chance to develop one of the world’s highest grade gold-copper ore deposits. By Roel lAndinGinW hen executives of OceanaGold Corp., an Australia are deeply divided between those who and New Zealand-based mining company, paid a oppose OceanaGold’s project and those who are supporting it. The company courtesy call on President Gloria Arroyo in Malaca- stands accused of using improper means, ñang recently, she reportedly greeted them by saying: including bribery, intimidation, and fo- “Oh, the better Oxiana?” menting divisions, to secure community support for the mining project.. nueVa VizCaya PRoVinCial goVeRnment Everybody had a good laugh albeit at on target Oxfam Australia, the aid group, re-the slight expense of another Australian nueva Vizcaya leased last year an extensive report de-company with a similar-sounding name. gov. luisa tailing OceanaGold’s shortcomings andThe Oceana executives were terribly Cuaresma sets abuses in obtaining local community andimpressed that the Philippine president her sights against government support for the project. Ox-could tell their company apart from the oceanagold fam urged the Australian federal policeother company, called Oxiana. to investigate allegations that the Mel- But the fine distinctions do not seem to bourne-based company bribed village of-matter in Nueva Vizcaya, where Oceana- ficials in the Philipines. OceanaGold hasGold is building a US$320-million gold rejected the allegations.and copper mine set to start operations The Nueva Vizcaya provincial legisla-next year. tive board already issued a resolution in In May, no less than the provincial gov- 2005 supporting OceanaGold’s miningernor, Luisa Cuaresma, led employees and a mining project. Other permits project in Didipio.supporters in manning a barricade limit foreign ownership to noto block OceanaGold and its con- more than 40 percent. Failed Promisestractors’ trucks and earthmoving But the company’s failure to deliver onequipment from entering and leav- Local risks some promises―particularly the upgrad-ing the mining area. OceanaGold’s run-in with the Nue- ing of a road linking Bayombong town, She earlier issued a cease-and-de- va Vizcaya provincial government the provincial capital, to Kasibu―hassist order to the mining company highlights the operational and rep- created resentment against OceanaGoldafter it ignored a tax assessment utational risks to mining compa- among provincial leaders. Nueva Viz-on sand and gravel taxes nies that fail to win or maintain caya officials became even more annoyedamounting to P27 million. the support of local government when the company paved with concrete OceanaGold has spent $40 million ex- officials, a legal requirement for a stretch of the Quirino province’s Cabar-ploring and developing a gold and cop- large-scale investment projects rungis-DBB road to Kasibu town.per mine in Kasibu, Nueva Vizcaya, that under the 1991 Local Govern- The provincial government also looksis set to open next year. ment Code. like it wants to have a say on OceanaGold’s It plans to spend $280 million more Saggitarius Mining Inc., which is com- choice of private contractor to carry outfor what could be the second large-scale pleting a feasibility study on what could the earthmoving and civil works. Whenmining project to commence operations be Southeast Asia and Western Pacific’s the company asked Cuaresma to lift aafter the Supreme Court upheld the biggest undeveloped copper deposits in cease-and-desist order in December 2007,constitutionality of the 1995 mining Tampakan town, South Cotabato prov- the governor “permitted OceanaGold toact in 2004. The first―Lafayette Mining ince, is facing a related problem. The pro- resume operations on the condition thatLtd.’s polymetallic mine in Rapu-Rapu, vincial legislative board is considering an it replaced its contractor with anotherAlbay―has run into financial and regu- environmental code that will ban open- contractor, who consented to secure a per-latory troubles after toxic mining waste pit mining in the province, possibly mak- mit from, and pay the fees to, respondentspills in 2005. ing the Tampakan project more costly Cuaresma,” OceanaGold said in a petition The company holds one of only two than initially thought. filed with the Court of Appeals.financial or technical assistance agree- The bitter dispute between OceanaGold In May, the provincial board began debat-ments (FTAA) issued so far by the gov- and the Nueva Vizcaya governor adds to ing a resolution revoking support for Ocean-ernment. FTAAs are special mining per- the company’s already troubled relations aGold’s project. The provincial environmen-mits that allow full foreign ownership of with Didipio barangay residents who tal office earlier issued an assessment of P2744 | newsbreak speCIAl IssUe
    • BarricaDe. Provincial aFP/getty imageS officials trying to close down the oceanagold mining exploration site confront a phalanx of the company’s security men in barangay didipio, kasibu town in nueva Vizcaya province on may 29, 2008.million for the company’s so-called quarry- law by blocking OceanaGold’s operations. vent possible clashes following the deathing or earthmoving operations. In a statement, Cuaresma responded: of Baguilat. OceanaGold’s refusal to negotiate with “The [DENR] can charge me in court if While things have begun to settle downthe Nueva Vizcaya government on the they want. They can even bring me to jail. again in Didipio, such episodes of highquarrying tax has added to the anger of I’m ready to defend the interest of the drama and conflict are the last thing thatprovincial leaders. province.” She insists that all the actions OceanaGold needs in the final stretch to the The company ignored the tax assess- of the provincial government are man- start of commercial operations next year.ments and sought instead the help of the dated by the Local Government Code. The company recently almost doubledDepartment of Environment and Natural Tensions rose in Didipio, especially the estimated capital cost for the projectResources (DENR) to block the provin- after the village chief, Paul Baguilat, was from $178 million to $320 million, partlycial government’s moves. On April 9, the shot to death on the evening of May 29, because of the addition of fuel oil powergovernor issued an order for OceanaGold the day Cuaresma and her supporters generation plant, and higher equipmentto cease and desist operations in Didipio, tried to padlock the gates to Oceana- and contingency costs.the barangay closest to the mining com- Gold’s project site. He used to be an Early this year, a commodity fundpany’s mine site. OceanaGold employee and is known for manager, in a course of a visit to Oceana- When the company defied the order, supporting the mining company. Months Gold’s project site in Didipio, told Reu-the governor personally led scores of pro- before, another anti-mining leader was ters: “We have so many opportunitiesvincial employees and supporters in put- killed by an off-duty security guard around the world available to us. If it’sting up and manning a barricade on the working for OceanaGold. complicated, then we just couldn’t beroad leading to the mine site on May 6. The Philippine National Police immedi- bothered to worry about it.”On May 29, the governor upped the ante ately sent a battalion of policemen to pre- It’s something for OceanaGold execu-by bringing truckloads of people, includ- vent clashes between the mining company’s tives to think about. Based on a $800/ozing provincial security forces, to padlock security forces and the provincial govern- gold price and a $3.50/lb copper price,the gates to OceanaGold’s project site. ment employees and security personnel. the project has an internal rate of return Towards the middle of June, the Court of 22 percent and a payback period ofto the rescue of Appeals issued a 60-day injunction three years. Few investments offer higher DENR Secretary Lito Atienza has is- preventing the Nueva Vizcaya provincial yields and shorter payback. But with thesued an order instructing the company to governor from enforcing her cease-and- global credit crunch and economic slow-go on with its operations. He also warned desist order. Earlier, the governor or- down, OceanaGold’s window of oppor-Cuaresma that she could be breaking the dered the lifting of the barricade to pre- tunity may be not last for long. n JUly/sepTeMBeR 2008 newsbreak | 45
    • defaulting on natureThe first major metallic mine to open after the Supreme Court upheld the 1995 mininglaw almost went bankrupt. What will happen to the company’s social and environmentalcommitments? By PRiMe sARMientoe xecutives of Australia’s Lafayette Mining Ltd. may have pany’s mining operations, which were thought themselves truly blessed in the late 1990s when allowed to resume only in February 2007 after it put in place remedial measures they acquired claims over mining areas on Rapu-Rapu Is- and paid a P10-million fine to the Pollu- land that contained not one or two but four minerals. There tion Adjudication Board. was gold, but also silver, zinc, and copper beneath the hills Then, in March 2008, talks with new of the island-municipality off the province of Albay. Malaysian investors who were to inject badly needed fresh capital to the com- Nowadays, the company must In October 2005, waste water contain- pany fell through. Shortly after, the cash-be feeling particularly cursed after ing cyanide and other strapped Australian parent firm and itsa string of disasters and setbacks toxic substances from Philippine unit suspended payments ontied up Lafayette in knots and im- Lafayette’s mineral pro- some US$374 million in debt and soughtmobilized the P1.8-billion mining cessing facilities spilled judicial help for financial rehabilitation.venture. The project was supposed into nearby creeks on two sepa- Lafayette’s Korean partners―LG Inter-to last for seven years or until rate occasions, killing fish and national Corp. (LGIC) and Kores Inc., a Ko-2012, but the company’s ability to crustaceans along the water- rean government investment company―continue as a viable commer- ways that flow into the Albay have since agreed to take over the compa-cial concern from month to Gulf. The government imme- ny and pay off the creditors. It remains tomonth is no longer assured. diately shut down the com- be seen if they will live up to their promise46 | newsbreak speCIAl IssUe
    • FocuS oN LuZoN to abide by the commitments promised by ficials were deeply disappointed. of the island’s “fragile small-island eco-gigie CRuz the company to the community and local The toxic waste spills, which were system.” It also found the Environmental government officials. blamed on the company starting mining Management Bureau and the Mines and Lafayette’s close brush with bankrupt- activities ahead of the completion of the Geosciences Bureau (MGB) culpable for cy underscores the risks that financially tailings dam and spillways, quickly gal- failing to adequately monitor Lafayette. troubled mining companies pose not just vanized fresh opposition to large-scale to their owners, lenders, and employees mining in Bicol and throughout the coun- reopening but also to host communities and nature try. In January 2006, the Catholic Bishops The DENR also issued its own report a as money dires up for social and environ- Conference of the Philippines promptly month later, in June 2006. It concurred with mental programs. As the company itself issued a statement calling for a moratori- most of the findings of the Bastes commis- admitted in its petition for rehabilitation um on mining and the suspension of the sion, noting that the spills could have been filed with a Pasig City court: “No funds 1995 mining act. avoided had the company strictly followed have been reserved yet for mine closure/ In the coastal towns surrounding the its environmental action plan, especially rehabilitation, retrenchment pay for em- waters of Albay Gulf, fishermen were for the tailings management scheme and ployees, settlement of liabilities to govern- blaming Lafayette for the growing inci- tailings dam safety standards. ment for unpaid taxes and employees for dence of fish kills. “The people told me The department also asked Lafayette unpaid salaries, demobilization/pre-ter- that their fish catch is dwindling and this to implement remedial measures, such as mination costs with existing agreements is affecting their livelihood,” said Catho- the de-silting of the creeks where waste- and mothballing the plant facilities.” lic priest Rex Arjona, the chancellor of the water spilled, and the completion of Diocese of Legazpi. the rain drainage canal. It also required early warning Signal Both the company and the Department Lafayette to revise its Final Mine Reha- The Lafayette mine in Rapu-Rapu was of Environment and Natural Resources bilitation and Decommissioning Plan, one of the first large-scale mining projects (DENR) denied that the toxic spills poi- a detailed outline of steps the company to start commercial operations after the soned the waters around Rapu-Rapu Is- must take to restore the natural condition Supreme Court upheld the controversial land, citing studies by scientists from the in the site after mining operations cease. 1995 mining law in December 2004. The University of the Philippines Natural Sci- The DENR instructed the company to national government has held up the Ra- ence Research Institute and the Bureau begin building up a P137-million fund to pu-Rapu Polymetallic Mining Project as of Fisheries and Aquatic Resources. Still, finance the implementation of the plan, an example of responsible and sustainable the popular outcry against the toxic waste and deposit half of the amount within six mining in accordance with strict guide- spills convinced Arjona and Catholic lead- months of the plan’s final approval. lines laid down by the new mining law. ers in the Bicol region who are already crit- In February 2007, Lafayette was finally Instead, the mine became an early ical of large-scale mining to begin with, to allowed to operate again after it instituted warning signal for everything that could urge the government to shut down Lafay- the remedial measures that the DENR rec- go wrong amid what officials liked to de- ette’s mining activities for good. ommended and paid the P10-million fine. scribe as a “world-class” mining law and In a pastoral letter issued in December Understandably, anti-mining projects tough environmental regulations. Min- 2005, Sorsogon Bishop Arturo Bastes said were unhappy with the DENR decision. ing industry leaders and government of- the fish kill is causing an “economic disaster” Clemente Bautista Jr., coordinator of the as 70 percent of the population in the area Kalikasan People’s Network for the En- gigie CRuz depend on fishing for livelihood. He called vironment, warned that apart from fish for the closure of Lafayette “for the common kills, the people of Rapu-Rapu would good of the people of Bicol region.” also have to contend with contaminated President Arroyo, already under po- drinking water supply. litical pressure because of allegations of In December, the company submitted its cheating in the May 2004 polls, named mine decommissioning plan to the MGB Bastes to head an independent commis- after holding consultations with various sion to investigate the disaster in March stakeholders, according to company law- 2006. She also asked lawmakers to re- yer and spokesman Bayani Agabin. view the 1995 mining act to toughen even “The mine decommissioning plan was more environmental protection, just less drawn up based on the identified envi- than a year since the Supreme Court up- ronmental impacts and after consultation held the law. with all stakeholders. Consultation ses- When the Bastes commission issued a sions were conducted with the residents report in May 2006, its findings and rec- and officials of the direct-impact baran- ommendations hardly surprised anyone. gays as well as the employees,” he says. It blamed Lafayette for the accident and The plan, according to Agabin, includes uncertain future. urged the government to shut down the reforestration, a program to stabilize pit a worker at the company’s operations and declare a min- slopes, strategies to address acid mine Rapu-Rapu mine ing moratorium in Rapu-Rapu because drainage (AMD, or the outflow of acidic JUly/sepTeMBeR 2008 newsbreak | 47
    • gigie CRuz unDer neW ManageMent. korean investors are set to take over Rapu-Rapu mining operationswater from closed or abandoned mines), ent firm in Australia and the Philippine ette’s rehabilitation proceedings to makeand livelihood programs for employees and subsidiary to suspend debt payments sure that the company’s environmentalresidents of the surrounding barangays. in March. The company sought judicial and social commitments are taken care of Reynulfo Juan, regional director for help to oversee talks with creditors, con- alongside or even ahead of obligations toBicol of the MGB, reviewed Lafayette’s tractors and suppliers on extending ma- creditors and suppliers.mine decommissioning plan and pro- turities on some $374 million in loans and But the standing of environmental andposed several alternative post-mining liabilities after talks with a Malaysian in- social commitments made by a companyland uses, such as a rehabilitation center, vestors for fresh capital infusion failed. that is near-bankruptcy and undergoingretreat and study center, eco-tourism site, Lafayette’s petition for corporate reha- financial rehabilitation is legally murky.and agro-forestry projects. bilitation filed at the Pasig City Regional Agabin explains: “We have what we call Juan adds that Lafayette should hold Trial Court in March outlined an inte- preference of credits in our Civil Code wheremore public consultations, noting that grated rehabilitation plan that revolves taxes and wages enjoy preference over loans“very minimal attendance was obtained around stretching debt maturities and to banks or suppliers. There is no provisionduring the consultation.” He also recom- the entry of new investors. Without debt in the Civil Code or the mining act whichmended that the company must also en- relief and fresh capital, projected month- provides that commitments due to the com-sure the long-term stability of a tailings ly revenues of $3-$3.5 million will not be munity enjoy the same preference.”dam. And to properly manage AMD, enough to cover monthly operating costs Personally, Agabin believes that Lafay-Juan says, Lafayette should consider estimated at $4 million. ette’s commitments to the communityconstructing and maintaining an acid The petition was silent on the status of and environmental protection should beneutralization and heavy metal removal the final mine decommissioning plan, par- prioritized. “These should be paid ahead.plant to handle acid water. ticularly the P137 million needed to finance This is the position we have taken.” it. It merely mentioned company’s “legal But that is not really up to him or thedebt Suspension and moral responsibility to carry out envi- existing shareholders of Lafayette but to But just when the mine decommis- ronmentally-sustainable operations,” and the new investors bringing in fresh capi-sioning plan was being reviewed by the promised to honor these obligations. tal. “We shall try to convince the new in-MGB’s head office in Manila, financial Horacio Ramos, the MGB director, vestors to incorporate this in the amend-troubles forced both Lafayette’s par- says that the bureau intervened in Lafay- ed rehabilitation plan,” he admits. n48 | newsbreak speCIAl IssUe
    • FocuS oN tHe viSayaSsecond LifeA history of corporate benevolence is helping Atlas Mining win community support in Cebufor the reopening of what used to be Asia’s biggest copper mine. By eARl G. PARReñoW hen Atlas Consolidated Mining Corp. began bringing in the zon where opposition to mining was evi- giant bulldozers and dump trucks in 2007 in preparation dent in the communities they visited. Not long after, the fund put in US$34 million in for reopening its copper mine in Toledo City in the island Atlas. That was followed by a $100-million province of Cebu, Father Mike Hisoler was ready for them. loan from Deutsche Bank. “There are no anti-mining sentiments But the parish priest of the nearby Lu- says Dydee Zambo, the mayor of here and I think it’s becausetopan barangay was there not to block the Toledo, the sleepy town that be- most of the people whoentry of the heavy equipment. He meant to came a vibrant urban center three worked in Atlas did notsprinkle them with holy water. Indeed, un- decades after Atlas began mining originally come from To-like many men of the cloth, Father Hisoler in the area in the 1930s. “More of ledo. They were from Mas-does not look at the reopening of the mine our people will now have work, bate, Negros, Ilocos, Cordillera,as a curse but as a blessing. The Atlas mine about 3,000 [jobs]. And it will etc. Atlas did not come to grabin Toledo used to be Asia’s biggest copper have a chain effect on our their land, they came here tomine until flooding, massive losses, and a trade and commerce.” work for Atlas,” Father Hi-labor strike forced it to shut down in 1994. Community support for the mine soler explains. “When I was assigned in Lutopan in played a key role in attracting investments Even environmental groups1997, the first thing I did there was to and loans for rehabilitating and re- in Cebu City that are opposing oil drillinggo around the barangay to say mass in viving the Atlas mine. When fund manag- at the Tanon Strait in the adjacent town oftheir chapels,” he recalls. “And always ers from Crescent Asia Special Opportuni- Pinamungajan are not opposed to the re-the people would request me to pray for ties Portfolio, a private equity fund, did a opening of the Atlas mines, he says.the reopening of Atlas.” He stayed in Lu- due diligence last year, they went aroundtopan until March this year. Toledo to interview people. To their sur- Portent of revival It’s a sentiment shared by top local of- prise, everyone they met endorsed the The reopening of Atlas’s mining op-ficials. “Definitely it would bring back mining project. It was a far cry from their erations in Toledo is not only eagerly an-the vibrant economic activity in the city,” experience in Mindanao and Northern Lu- ticipated by local residents but is closely watched by mining industry leaders and government officials. It’s the second major mine to start operating after the Supreme Court upheld the constitutionality of the 1995 mining act in 2004. The first was Lafay- ette’s ill-fated mine in Rapu-Rapu Island in Albay. The Atlas mine has the potential to produce 42,000 metric tons of copper ore a year, less than half its peak annual output of 110,000 tons in the 1990s, but double the country’s current copper output. Atlas’s return is seen as a portent for the local mining industry’s revival, and raises expectations that a number of big copper, gold, and nickel mines that closed down in the 1980s because of financial losses and disasters stand a chance of re- habilitation, too. Within the Atlas mining area, workers rush. atlas mining are busy trying to beat a deadline to re- workers repair a giant habilitate the mines and start operations steel ball mill used to by the third quarter of this year. Heavy crush mineral ores. equipment had been brought in last JUly/sepTeMBeR 2008 newsbreak | 49
    • year―giant bulldozers dump trucks andother earth movers―to commence the re-habilitation program. Tons of copper ore from the open pitmine had been stockpiled although therehabilitation of the underground minesmay still take two more years to complete.The stockpiled ores will be processed intocopper concentrates when work on theconcentrator is done in June. Australiancontractors are busy installing computersand other high-tech gadgets to fully auto-mate the concentration process. Outside of the mining area, carpentersand laborers are working double time re-furbishing the staff houses, the companyclubhouse, and the recreation facilities.New water pipes are being installed allaround the area. The company hospital isbeing repaired. But amid the frenzy of preparing forthe reopening of the mine, former Atlasemployees cannot help but remember thetough times they went through after thecompany shut down 14 years ago. Theclosure was devastating not only finan-cially but also psychologically becausethe workers were dependent on Atlas foralmost all of their needs. Joventino Page, a 53-year-old ex-en-gineer in Atlas’s Carmen undergroundmine, still vividly recalls the perks that heand his wife Marysol, a nurse, used to en-joy from the company: a three-bedroombungalow; free rides on the companybus, called paray, to and from the miningsite at all hours of the day and night; freeelectricity, water and gas, as well as ap-pliances and household furniture. When the company announced it wasclosing down in August 1994, the Pageswere in shock. “It was as if my world had signeD sealeD DeliVereD. President arroyo personally hands over mineral production agreementfallen apart,” Marysol recounts in Cebua- to atlas mining and development Corp. officials. area to be initially mined by atlas mining (above).no. “I cried the whole night. I could also seesadness on my neighbors’ faces. For several Atlas. “I used to have daily gross sales of years after the mining firm closed down,days most of the women in the compound 3,000 pesos when Atlas was still operat- foreign exchange remittances at the To-were teary-eyed. No one liked to talk. No ing. When it closed down I could barely ledo branch of the Philippine Nationalone liked to smile. You can no longer hear manage to make 500 pesos a day.” Bank (PNB) has consistently been on topthe paray making the rounds. The whole among all PNB branches in the Visayas,Maria Lourdes was eerily silent. Every- Life without the Mine said Mayor Zambo.thing seemed gloomy, so uncertain.” Slowly, the former Atlas employees and Contrary to expectations, Toledo did not Even those who were not employed by residents of Toledo rebuilt their lives and turn into a ghost town, thanks in part toAtlas were hurt. “It was a very difficult their community after the closure of the Cebu’s booming economy which was beingtime for me,” says Nang Aling who owned mine. The laid-off workers built their own fueled by tourism, shipping, and industry.a general merchandise store just outside houses in Lutopan and nearby barangays. “The approval of the Local Govern-the company’s main gate in Barangay They found jobs in other companies but ment Code in 1991 helped because ofLutopan, officially called Barangay DAS thousands left to work abroad. the IRA (internal revenue allotment). Itfor Don Andres Soriano, the founder of Statistics are hard to come by but a few helped us to move on,” said the mayor.50 | newsbreak speCIAl IssUe
    • FocuS oN tHe viSayaSThe population of barangay Lutopan tinue running it. It is now an integral part tives, supporting community livelihoodonly very slightly decreased, she said. of the La Salle educational system. projects like swine and cattle dispersal,There was no exodus of people. “And Like many of the companies ran by the building classrooms for barangay schools,after a few years since the mines closed country’s traditional landowning elite, At- and subsidizing the La Salle-supervisedyou can see people building new, more las during its heyday was benevolent and Andres Soriano Memorial School.beautiful houses,” Zambo says. generous to the point of being paternalistic. “Atlas sourced a number of its mate- The mining firm also gave up other non- “Everyone depended much on the rial requirements from the cooperatives.essential properties to the government to company then, not just its employees but They produced our safety boots, oursettle its tax and other obligations. One also the local government,” says Rodrigo working gloves, the rubber bushings forproperty in Barangay Ilihan is now being Cal, Atlas’s resident manager. “During the vehicles and machineries, even somedeveloped by the city as its new govern- past [local government] administrations, of our furniture,” says Cal.ment center. A 40-hectare lot in Barangay when there was a road or a bridge to be He adds: “Atlas has actually createdSangi, which was surrendered to the So- constructed, they asked Atlas to under- a community that has its own economycial Security System to settle the compa- take the project. When a road needed re- during its 30 years of operation. It hasny’s deficiencies, is also being developed pair, they asked Atlas to repair it.” created a wide base of skilled workers.”by the city government into a special eco- He adds: ”Even with the absence of a law This somehow cushioned the economicnomic zone for light industries. then mandating mining firms to allocate and social impact of its closure. “What Atlas donated the 4.5-hectare site and the equivalent of one percent of its operat- Atlas did for the community before itall buildings and facilities of the Andres ing cost to community development, Atlas closed down has reaped the companySoriano Memorial School to the teachers was already doing so. In fact, we had an much goodwill,” he says.and non-academic personnel who de- entire department established for the pur-cided to manage the school themselves. pose of implementing our Social Develop- New realityThey incorporated the Andres Soriano ment and Management Program.” Fourteen years since shutting down,Memorial College Inc. in 1995 and con- Some of Atlas’s social programs went Atlas is reopening amid totally changedvinced the De La Salle Brothers to con- to establishing and developing coopera- circumstances. It now employs just about 4,700 workers during this phase of reha- bilitation compared to a peak of 14,000 people in the 1980s. The workforce will be trimmed down to only about 3,900 when it begins operation in the second half of this year. It will no longer be as big, and as dominant, as before. The local government will not be very dependent on the company as before. It is also empowered to strictly enforce compliance of environmental and social laws and regulations. Atlas will resume operations in a community that has now experienced life without the giant com- pany in their midst. Atlas itself has changed. The com- pany founded in 1935 by Don Andres Soriano, one of the country’s wealthiest industrialists, is no longer owned by his heirs but by Alfredo Ramos, whose fam-Blessing. a priest sprinkles holy water on atlas mining’s new vans. atlas mining’s new hauling trucks (below). ily owns the country’s leading bookstore, JUly/sepTeMBeR 2008 newsbreak | 51
    • National Book Store. Since 2001, Ramos,who has numerous mining and oil explo-ration companies, has been buying Atlas Fosteringdebt and converting them to equity, al-lowing him to acquire majority control ofthe company from the Sorianos. dependence Though Atlas’s owners have changed,the company’s links to the community Sagittarius Mines is spending close to P30 millionremain strong and deep. a year in financial aid to the B’laan tribes and host Cal is a son of a former senior manager barangays. The company, is struggling to meet theof Atlas, the company’s construction gen-eral foreman. A number of his staff now community’s rising expectations.in the human resource department, ad- By PuRPle s. RoMeRoministration, and operations are also sonsor daughters of former Atlas employees.They grew up together in the Atlas com-munity. And they know almost anybody Tand everybody in Toledo because theyare their contemporaries. he New People’s Army attack on the first day of 2008 The mayor herself is the daughter of against Sagittarius Mining Inc.’s (SMI) base camp in thea businessman who had had important mountains of Tampakan town in South Cotabato prov-transactions with Atlas. The mayor’shusband is the son of the former resident ince destroyed more than the remote site’s administra-manager of Atlas Fertilizer Corp. They tion building and bunkhouses.went to the same school where their chil- The surprise strike razed to the to B’laan tribal communities, the baran-dren are studying now. ground about P12 million worth of fa- gays and the municipal government. Perhaps a measure of how circumstanc- cilities, but it caused far greater damage It allots P2.7 million for each of the fivees have changed is that not all former At- to the company’s rosy notions about its tribal councils of the B’laans, P2 millionlas employees, who have the first crack at relationship with the B’laan tribal com- to the barangay units and P5 million tojobs, want to rejoin their old company. munities that occupy parts of the the Tampakan town government. “I’ll just stick to my present work. My 23,571 hectares of mountains The company’s benevolence paid off.job now is more secure than if I work with and hills where it is looking for Many of the B’laans initially opposedAtlas again. It’s easy for private compa- high-grade copper ore. large-scale mining. A tribal associa-nies to close down,” said Bethel Manatad, Indeed, the shock came not from tion filed the landmark case thatformerly a nurse at the company’s hospi- the timing or the extent of the prompted the Supremetal. She now works as a nurse at the To- damage but from the fact that the Court in January 2004ledo City Health Department. attack happened at all. to declare some provi- But Bobot Alcomendras, who worked Sagittarius, which plans sions of the 1995 min-with Atlas as a maintenance mechanic, to invest up to US$2 billion to develop ing act unconstitutional,has been rehired since last year. When the what could be the biggest copper although the high court re-company closed down in 1994 he was not deposit in Southeast Asia and the versed itself 11 months later.jobless for long. He applied and was hired Western Pacific, spends about However by 2004, Sagittarius hadby Toledo Power. But when he heard last P27 million a year for financial assistance signed agreements with all five localyear that Atlas was hiring workers, he ap-plied because “the pay is better.” The Pages have moved on. Joventinoworked in the Middle East shortly af-ter Atlas closed down. “Our childrenwill now be graduating from college,”Marysol says. The couple built a house inBarangay Talavera. They have no plansof again living in Maria Lourdes Com-pound. “We are happy with our presentjobs and where we are now. We are justwaiting to reach retirement age.” core oPeration. It’s just as it should be. After all, min- toronto Ventures inc.’sing should be one of many options, not facility for storing drillingthe only one. n core samples52 | newsbreak speCIAl IssUe
    • FocuS oN MiNdaNao to complete the pre-feasibility study and the proposed mining development plan. The company does not even have enough jobs for the B’laan graduates of its scholarship programs. Summer jobs for Sagittarius scholars were also sus- pended last year. Of about 40 Sagittarius scholars from Danlag who completed college, only two found jobs with the company, says Sam- ling. “They did not fulfill what they said Salina damling, the b’laan’s to us, which is that they would absorb us only woman tribal chief in after we graduate. Their qualifications are tampakan. Celso doc, another too high. They look for master’s degree b’laan tribal chief (upper right), and experience,” adds Elwee Hurralde, a and elwee Hurralde, b’laan B’laan college student from Danlag. college student (right) Jimmy Bareta, one of the members of the tribal council of S’bangken, says thatB’laan communities, which were to re- That the B’laans now tolerate the pres- of the 15 college graduates from his com-ceive financial assistance, scholarships, ence of the NPA could be a sign that not munity, only three were absorbed byand livelihood support for members of all is well in the relations between the host Sagittarius, including him. Bareta worksthe tribe. communities and Sagittarius, which came as a mechanic while the other two were The company also won praise from the under a new strategic owner, Xstrata Cop- given positions in community relationsgovernment, other mining companies, and per of Switzerland, in March last year. The and administration.the emerging corporate social responsibil- new shareholder appointed a new set of With not enough jobs to go around, Sagit-ity (CSR) industry for its innovative and top officials at Sagittarius Mining shortly tarius is reduced to rationing off contractu-highly generous support to communities after assuming control in 2007. al jobs to the members of the tribe throughwithin the mining concession. a complex system of lottery and rotation But in a single instant, on New Year’s Lack of Jobs that more or less gives even chance to ev-Day to boot, Sagittarius lost the sense of While the B’laans still largely support ery able-bodied B’laan adult male.security that company officials thought the company’s presence in the mountains Though the system was first intro-they enjoyed from the surrounding com- of Tampakan, resentment is also setting in. duced by the company’s predecessor inmunity’s goodwill. In October 2007, or three months before the area, Western Mining Co., back in The B’laans could have warned Sagit- the NPA attack, tribal leaders temporarily 1992, Sagittarius now implements thetarius about the impending attack but blocked access to the base camp because scheme through the barangay captainsapparently did not, says Tampakan Vice of complaints that B’laans were not being or tribal leaders. The company also hiresMayor Relly Leysa. Because of their given a fair crack at company jobs. Sagit- through labor contractors, some of whomknowledge of every nook and cranny tarius posted openings for 37 regular posi- also happen to be the tribal leaders.of the Tampakan highlands, the B’laans tions, mostly drivers, and another 55 con- Both the company and tribal leaderscould have easily spotted the presence of tractual jobs in the drilling program. justify the practice on grounds of secu-the NPA fighters, who needed to gather The B’laans grumbled they were be- rity and accountability. “Since the chief-at a convenient assembly point to rest ing discriminated against because the job tains know who the workers are, there isand prepare for the attack. qualifications were excessively tough, in- the assurance that they are not bandits or Dalina Samling, tribal chieftain of the cluding a college degree and long work NPA members,” says Samling, who ownsB’laans in Danlag, told Newsbreak that experience that most of the tribe mem- a labor contracting company, Dos Rey-members of the tribe are indeed aware bers did not have. nas. The tribal chiefs are also in a goodof the presence of the NPA in the area Sagittarius convinced the tribal leaders to position to discipline or shame membersbut have chosen not to confront or report lift the blockade after promising to review who shirk work, says Bareta.them to the authorities. Like the B’laans, their hiring policy and employ more B’laans. But others view the scheme as nothingthe tribe’s members recognize that the The company also offered to give P15,000 a more than a way to allow barangay andNPA guerrillas “have their own princi- month to the communities to keep the roads tribal leaders to play a powerful role inples,” she says. free of barricades. But the problem is bound recruitment in return for not creating la- Years ago, the B’laans killed a group of to erupt again and again. bor troubles for the company. The systemNPA guerrillas who sought temporary The mining project has so far created also opens village leaders who own laborshelter among a cluster of tribal households only a few hundred jobs because of pro- contracting agencies to criticism that theybecause they did not want armed outsiders longed delays in the start of massive con- are taking a cut from workers’ wages, aamong them, according to a mining securi- struction and development of the mine charge they vehemently deny.ty expert familiar with the Tampakan area. site and facilities. The company still has Sagittarius says the new hiring scheme JUly/sepTeMBeR 2008 newsbreak | 53
    • FocuS oN MiNdaNaowas based on consultation meetings with and livelihood programs. Ten of the farming animals were stolencommunity-based organizations and in- The company also allots another P1 while the rest were used for kasfala orvolved no fewer than 600 people. “We be- million for livelihood programs and payment for crimes, according to Bareta.lieve that the resultant system is fair and emergencies in each of the communities, Lechonsito says the company has littletransparent and ensures that all workers but it controls how the money is spent. power to oversee or even track the mon-are treated equally, without favoritism or “We focused on education so that even ey after it is disbursed to the tribal coun-discrimination,” says Roy Antonio, Sag- after SMI is gone, the B’laans would be able cils and their foundations. The companyittarius spokesman. to stand on their own,” says Bella Lechon- conducts periodic assessments of the sito, community relations superintendent. company’s financial assistance programsLimits of education Still, the little that tribal councils spend but the last of these was in 2004. The responsibility for creating jobs for on livelihood programs has not yieldedgraduates of its scholarship programs has favorable returns for the community. extraneous Xstratafallen, perhaps unfairly, mainly on the In 2007, the tribal councils, through the Sagittarius is supposed to complete itsshoulders of Sagittarius, forcing it to per- foundations, began lending to B’laan corn pre-feasibility study by the third quar-form a function that properly belongs to farmers. Each borrower was lent 18 kilos ter of 2008. After that, it has to preparethe government. But it also shows the lim- of seeds and corresponding amounts of a detailed mine development plan thatits of heavy corporate investments in edu- fertilizers. has to be presented to the tribal groupscation that are not matched by government But of the 40 farmers who borrowed and other communities in the company’sprograms to create or boost economic op- from the program in Folu Bato last year, mining concession area. Based on theportunities for the community at large. only eight have paid off their loans. In changes that will be suggested by the Of the P1.7 million that Sagittarius dis- Danlag and Sbangken, only half the bor- host communities, including barangayburses yearly to each of the five B’laan rowers bothered to make the loan pay- and municipal governments, Sagittariuscommunities, more than 40 percent or ments. The farmers greatly benefited will undertake a final feasibility study,P700,000 goes to scholarships while less from the program―they did not have to and decide whether the project remainsthan a fifth or P300,000 goes to livelihood spend up to P2,000 for seeds and fertil- commercially viable or not.programs. Oddly, another two-fifths of izers―but the low repayment rates could But as the period for a new round ofthis amount is allotted for the councils’ kill the program, says Celso Doc, tribal consultations comes nearer, B’laan lead-“operational and administrative” ex- chieftain of Folu Bato. ers increasingly complain that the com-penses. This suggests that overhead costs Another plan involving giving cara- pany seems to have withdrawn fartherare excessively high. The tribal governing baos to B’laan farmers did not do well, away from them.bodies appear to be spending 70 centavos either. Of the two dozen carabaos distrib- Bareta recalls that before Xstrata as-to administer each peso of scholarship uted years ago, only half are being used. sumed control last year, assemblies be- future high. a new high school building is being constructed in brgy. tablu, tampakan.54 | newsbreak speCIAl IssUe
    • ny’s detailed mining development plan. If the settlements, homes, or farms stand in the way of planned roads, dams, large open pits, or mineral processing facilities, those occupying the land will have to be compensated and resettled. Mining industry observers say that the new round of consultations and negotia- tions on compensation for land acquisi- tion could simply be another occasion for leaders of the various host communities in Tampakan to exact greater financial payments from Sagittarius. There seems to be little the company can do but bow to these demands for more fi- nancial support from leaders of the host communities. With little or no govern- ment presence in the area, the communi- exPansion. ties have no one to turn to for vital social, new storage buildings for education, economic, and even health ser- core samples vices normally provided by the state. The company, too, needs the leaders of the host communities as allies to fend offtween the Sagittarius project manager, to stock exchanges where Sagittarius’s anti-mining critics within and outside theAlan Buenavista, and the whole commu- shareholders, such as Xstrata and Indo- government. When the South Cotabatonity were held regularly. Now, the newly- phil, are listed. provincial board was about to vote on adesignated community relations director, “As owners of the land, we should at proposed environmental code that wouldRaul Farfan, meets with the tribal chieftains least know what they are doing with it. ban open pit mining in the province, a reg-less frequently, and often only to hear the How many tons of gold or copper have they ulation that could raise Sagittarius’ coststribes’ grievances. However, Farfan does found already? How much of our lands to develop the Tampakan copper depos-not regularly talk to the tribal members would their operations cover?” Doc asks. its, B’laan tribal councils and Tampakanthemselves, says the tribal leader. But Sagittarius officials insist that after barangay and town officials sent petitions “Before, in assemblies, the whole tribe Xstrata assumed management control in urging the board to drop that provision.would meet with the SMI project manager. April 2007, the company increased stake- The B’laans have also largely rejected ap-Now, only the tribal chieftains―not even holder engagement and consultation. proaches by anti-mining advocates, suchthe complete tribal council―would talk to Antonio says: “We have created a Part- as the Catholic Church in Marbel City orFarfan. How would the community know nership Development Framework, incor- the environmental non-government orga-the real situation then?” Bareta asks. porating a formal grievance mechanism nizations. “The Marbel diocese and NGOs Doc yearns for the days when no less and consulted extensively with commu- would say to us that SMI is bad. But whatthan the Sagittarius project manager would nity-based organizations.” did they do to help us? They did not lift asit down with them and explain the com- He continues: “When Sir Allan left, the finger to send us to school or to provide uspany’s plans and operations. He says: “Be- B’laans were left to the community rela- with basic needs,” Samling says.fore, Sir Allan would conduct assemblies tions personnel and to Orly Turingan, Despite the occasional irritation, mu-with us to inform us of the company’s de- their anthropologist. But when we have tual dependence between the Sagittariuscisions. He would even text us what hap- questions, they always say ‘We are not the and leaders of the host communities haspens during SMI’s meetings. Now, no one right people to answer your questions.’” worked quite well, benefiting the com-from the management talks to us.” pany and its partners in the tribal, baran- They also complain that Xstrata execu- More exactions gay, and municipal councils.tives are less accessible compared to officials Despite their complaints about lack of But some B’laan youth are beginningof Western Mining, which first explored the jobs and attention, the B’laans and other to question the comfortable arrangementTampakan area. “When WMC was here, communities in Tampakan still basically that has made many of their fellow tribeeven their managers who are foreigners go support Sagittarius’s mining activities. members excessively dependent on thedown to meet us. Now, we have yet to meet Neither can Xstrata afford to overlook company for all their needs.anybody from Xstrata,” says Doc. them, as alleged by B’laans, for long. “Before SMI came, B’laans, on their own, The tribal leaders say the company has Soon, Sagittarius will be holding con- survived by planting corn,” says Hurral-not responded to their requests for regu- sultations with the tribal communities, de, the 20-year-old college student. Now,lar reports on the status of Sagittarius’s barangays, and the municipal govern- “everybody just waits for the benefits thatoperations, which is routinely provided ment to win their support for the compa- SMI promised to the community.” n JUly/sepTeMBeR 2008 newsbreak | 55
    • FocuS oN MiNdaNaosurrogate state Canatuan mine in 2004 and quickly be- came the country’s second biggest gold producer afterwards, was accused of creating divisions among the Subanens.Five years after signing an agreement in 2003 with a group of The allegations even became the subjectSubanen leaders in Sicon, Zamboanga del Norte, Canada’s Toronto of hearings at the Canadian ParliamentVentures appears to be getting more than what it bargained for. in 2005 and were recently brought before the United Nations Committee on theBy PuRPle s. RoMeRo Elimination of Racial Discrimination. The debates in 2003 were ardent and centered on questions of Subanen iden-T tity and leadership―whether the area’s hereditary ruler, the Timuay, or the cor- he Subanen tribe in Siocon, Zamboanga del Norte is en- poration SSAI and newly-formed Siocon gaged in what many people see as an epic battle to assert Council of Elders, composed of 30 or so its indigenous way of life amid incursions by a global Subanen leaders, can rightly represent mining company―Toronto Ventures Inc. (TVI) of Cana- the tribe in dealings with TVI. da―that is seeking gold, silver, copper, and zinc deposits It is perhaps a measure of the trans- beneath their ancestral lands. formation that TVI has wrought on the Subanens that, four years and millions But sometime in November 2006, Sub- Juanito Tumangkis, allegedly blocked his of pesos in royalty payments after, theanen leader Bonifacio Patoh had more efforts and tried to claim the vehicle for two pro-mining leaders of the tribe werecommonplace things to worry about. He himself. Patoh eventually registered the fighting over a secondhand truck.is the chairman of the Siocon Subanen truck in the association’s name but onlyAssociation Inc. (SSAI), the organization with some help from the courts. royalties rise and Fallthat receives royalty payments from TVI Tumangkis was leader of a group of The dispute over the Hilux pickupin behalf of the 1,100 or so members of Subanen leaders who signed a memo- came amid rising royalty payments fromthe Subanen tribe who live on the randum of agreement in November 2003 TVI to the Subanens, which more thancompany’s mining site in Mt. Ca- that gave free prior and informed con- doubled to P14 million in 2006 from onlynatuan in Siocon. Shortly after be- sent (FPIC) to TVI over the objections of P5 million in 2005, the year after the com-ing elected to office, Patoh found traditional leader Timuay Jose “Boy” pany began producing gold and silverout that a second-hand pickup Anoy. The dispute set the stage from the Canatuan mine. The royaltiestruck, a Toyota Hilux bought for deep divisions in the tribe rose marginally to P14.6 million in 2007by the SSAI for P600,000, was that continue to this day. but is expected to fall sharply this year af-not registered in the name of TVI, which began produc- ter the TVI has exhausted the deposits ofthe association. ing gold and silver from the its current mining site and plans to move When he looked for the seller to askhim for the Hilux’s ownership pa-pers, the former SSAI chairman,sacreD.mt. Canatuan, whichthe Subanen tribebelieves is sacred56 | newsbreak speCIAl IssUe
    • to another area. However, both TVI and the tribal as-sociation have little to show for all themoney handed over to the SSAI whichwas first led by Tumangkis and thenPatoh. The total amounts could havereached about P34 million between 2004and 2007. Lawyer Pablo Bernardo, a Subanen andthe legal counsel of SSAI, says that about60 percent of the money went to help de-fray tribal members’ medical expenses,costs of travel to and from seminars andconferences attended by Subanen lead-ers, and investments in livelihood proj-ects. The remaining 40 percent was usedfor SSAI’s administrative expenses. Under Tumangkis, SSAI planned to conscientiousinvest P1.5 million to bring about 1,000 oBJector Subanenhectares of land under cultivation for tribal chief timuay Joseabaca. However, almost half of the mon- ‘boy’ anoyey went instead to buy the Toyota Hiluxpickup; the rest is unaccounted for. Patoh tried to restart the project, erly manage livelihood projects fundedspending P200,000 to have abaca seed- from the royalty payments it is gettinglings planted in about 20 hectares by from the company.2008. That was just 2 percent of the origi- The Subanens still have a “low level ofnal target of a thousand hectares. Rubber competence in organizational and projecttree seedlings were also planted in about development or management,” TVI saysa hectare of land that cost SSAI about in its revised social development plan.P22,000 to get cleared. TVI has had modest success with liveli- Under TVI’s social development and hood programs that trained and gave cap-management program, the company was ital to Subanen women to engage in goat-supposed to provide P2 million to help raising program and handicraft making.plant more abaca and rubber seedlings in The programs, which were partly fundedthe last quarter of 2008. It also promised kaingin was still being practiced during a by the Canadian government, did not justto extend P55,200 in financial assistance to visit to the Subanen settlements in April help the Subanen women earn a living orbuy vegetable seeds for Subanen farmers. 2008, an indication that a TVI-sponsored provide for their families’ needs but also But Patoh says that bringing more land program to train and equip Subanen worked to lessen domestic violence.under abaca and rubber tree cultivation has farmers to shift to modern agriculture But the bulk of what TVI spent forbeen halted because of lack of money for was not making much of a headway. community assistance programs went tosalaries of the plantation employees. “The what it calls “hardware” projects, such asplanting was stopped because the produc- Shift in tvi Strategy building a school, houses, the water sys-tion of TVI has stopped, too,” he says. The sad state of livelihood programs tem, health center, sanitary toilets, and The failure or delay of the livelihood for Subanens has prompted TVI to re- farm-to-market roads. The company alsoprograms means the Subanens will have think its community relations strategy spent heavily on scholarship programslittle to lean on when TVI slows down its as the company enters a new phase in its for Subanen children.gold and silver mining activities this year mining operations in Canatuan. The com- TVI built just a 12-room school butas it shifts to mining for copper and zinc. pany revised its new social and develop- Subanen parents appreciate it for makingOf the 300 Subanens employed by the ment management program following it easier for their children to learn how tocompany, most are contractual laborers consultations with Subanen leaders, host read and write.working in the milling, mining, construc- communities, and non-government orga- “The nearest elementary school is 28tion, and security departments. nizations. kilometers away. Our children could not As mining jobs become more scarce, Henceforth, TVI will give more atten- attend classes because of the distance andSubanens are returning to their tradition- tion to the so-called “software” compo- transport difficulties,” says Patoh. Fromal sources of livelihood―slash-and-burn nent of its community assistance pro- the upland, youngsters have to endureor kaingin farming. grams to help SSAI and its members de- a three-hour ride in a habal-habal or mo- This reporter saw plenty of signs that velop the skills and know-how to prop- torcycle across what turns into a muddy JUly/sepTeMBeR 2008 newsbreak | 57
    • path during rainy days in order to reachthe elementary school in the town of Ro-seller T. Lim. TVI is also sending 28 students 20 ofwhom are Subanens, to college or voca-tional schools. Three scholars who madeup the very first batch just graduated inApril 2008. One finished midwifery, an-other computer technology, and the thirdtrained to be an automotive mechanic.a Surrogate Government Company-funded projects to providebasic services such as education, health,and roads have won TVI the goodwill ofmany Subanen leaders who have cometo regard the company as a substitute forinaccessible government officials in thetown center. “We have become a surrogate govern-ment,” Feliece Yeban, vice president ofTVI’s corporate social commitments de-partment, says. “The company has helpedthe Subanens with everything they need, golD factory.from the cradle to the grave.” the roads of diwalwal are The company even subsidizes the wag- narrow, rough and dirty butes of a paramilitary unit organized by the the structures on both sidesPhilippine Army that helps maintain se- of the street house smallcurity not just around the mining site and gold processing facilitiesinstallations but also other areas outside that produce a sizeable portion of the country’sthe mining concession. output of the precious metal In 2005, TVI signed a memorandum ofagreement with the Army’s 1st InfantryDivision on the organization of a specialcivilian armed auxiliary (SCAA) “to ren-der security guarding services, maintainpeace and order, guarding and protect- divide and Rule A new ‘social accord’ between a state mining company and small-scaleing the installations and properties of the miners and tribal communities of Diwalwal could be the government’s bestcompany…and such other places thatmay agreed upon…from theft, pilferage, chance for imposing order in the gold-rush site. But old mining disputes androbbery, arson and other unlawful acts by fresh controversies could break the deal. By GeMMA BAGAyAuAemployees and/or other threat groups.” But even the company is now growing Luncomfortable in its role as the de-factogovernment in Mt. Canatuan. It wants ike Gaul, which was divided into three parts, thethe SSAI to set aside at least half of the government’s latest attempt to enforce its authority overroyalty payments in a trust fund to pro- Diwalwal near the border of Surigao del Sur and Davaovide for future needs and gradually re- del Norte calls for splitting the country’s most famousduce the Subanens’ dependence on the gold-rush site into three segments.company for all their requirements. When Subanen leaders recently asked And like the ancient Romans who Early this year, the government-P50,000 from TVI for a sacred ritual, com- failed to subdue the hardy tribes of owned Philippine Mining Develop-pany officials knew the right thing to do Gaul, the government has been trying ment Corp. (PMDC), which has nomi-was to refuse. But the culture of depen- without success to regulate the thou- nal authority over the 8,100 hectaresdence apparently works both ways. If sands of small-scale miners who, since that make up the Diwalwal mineralasking is addicting, so is giving. In the the 1980s, had been digging for gold on reservation area, unveiled a new planend, the company agreed to provide the Mt. Diwata using crude and environ- for developing and sharing the mineralanimals for the ceremony. n mentally harmful mining methods. wealth that lies beneath Mt. Diwata.58 | newsbreak speCIAl IssUe
    • FocuS oN MiNdaNao ganon, Letter V, and Higanteng Bato―will bobby timoneRa be awarded through competitive tender to large-scale mining companies. Key events The third zone, the Tribal Mining Area, will be controlled by the tribal commu- 1983 – Camilo Banad, a Mansaka tribal nities with ancestral domain claims over chief, discovers gold in Mt. Diwata, files portions of Diwalwal such the Manobos, mining claims over the area, and subse- Mandayas, Babawans and Manguangans. quently enters into an agreement with Tribal leaders are reportedly in talks with Apex Mining Corp. mining companies that will help them March 10, 1986 – The DENR issues Ex- develop the mines. ploration Permit 133 to Marcopper Min- ing Corp. The permit, covering 4,491 Social accord hectares, includes the area claimed by At the heart of the proposal, which the Banad and his group. PMDC has been referring to as a new “so- cial accord,” is a partnership between the Dec. 21, 1991 – DENR Secretary Ful- state company and small-scale miners in gencio Factoran Jr. issues Admin. Order an ore-sharing scheme that was first tried no. 66, declaring 729 hectares of the in the Akupan mines of Benguet province. Diwalwal gold-rush area as non-forest According to the plan, government land open to small-scale mining. will oversee the design, construction and management of the tunnel system in the 1994 – Marcopper assigns its rights first zone, the Diwalwal Integrated De- over the area to Southeast Mindanao velopment Area. PMDC even promised Gold Mining Corp. to provide training to upgrade the small- scale miners’ skills. But portions of the June 24, 1997 – DENR Secretary Vic- system will be auctioned off to existing tor Ramos issues Memorandum Order mining groups, including the mining co- no. 97-03, declaring that the depart- operatives and the so-called “Big Three.” ment shall study thoroughly and exhaus- tively the option of direct state utilization Presented to the locals early this year, of the mineral resources in the Diwalwal the plan was favorably received by min- gold-rush area. ing groups and the tribal communities. Franco Tito, village chief of Barangay July 16, 1991 – In Apex Mining vs. The idea, according to PMDC Mt. Diwata and a small-scale miner him- Marcopper, the Supreme Court (SC) up- president Oliver Butalid, is to di- self, told Newsbreak that the small-scale holds the validity of the exploration per- vide the entire area into three zones, miners of Diwalwal accepted the proposal mit granted to Marcopper Mining. one for each of the powerful because the ore-sharing system gives peo- but often feud- ple hope of making it big someday. The april 2002 – The SC rules that while ing groups that plan also secures their place in the mines. Marcopper Mining’s exploration permit are laying claim If the new “social accord” works, Diwal- is valid, it does not vest in the company to Mt Diwata’s wal can be the big turnaround story, the any permanent or irrevocable right. The mineral riches. country’s mining show case, Butalid says. state, according to the high court, “may The first zone, alter, modify or amend the same, in ac- called the Diwalwal In- Failed attempts cordance with the demands of the gen- tegrated Development The government’s latest plan for Di- eral welfare.” Area, covers the original 729 hectare walwal represents its best chance yet forgold-rush site on Mt. Diwata. It contains imposing order in what is often called the nov. 25, 2002 – President Arroyothe highly mineralized Balite Vein and signs Proclamation no. 297 establish- Philippines’ own version of the “Wild ing the 8,100-hectare Diwalwal Mineralwill be developed by the PMDC in close West” since 2003 when President Arroyo Reservation which paved the way for thecooperation with the small-scale miners ordered the Department of Environment government takeover of the mines.and mining companies already active in and Natural Resources (DENR) to takethe area. over the gold-rush site after almost two June 23, 2006 – The SC settles unre- The second zone, the Mining Investment decades of unregulated mining frenzy. solved issues in consolidated cases in-Areas, covers parts of the reservation that The year before that, on Nov. 25, 2002, volving the Diwalwal mines and declaresare generally unpopulated but believed the president signed Proclamation 297 es- that mining operations in the area lieto be highly mineralized. Rights to mine tablishing the Diwalwal Mineral Reserva- within the full control of the executivethe investment areas―which include Up- tion which set aside 8,100 hectares out of the branch of the state.per Ulip, Paraiso, Buenas Tinago, Agtuu- Davao-Agusan-Surigao forest reservation. JUly/sepTeMBeR 2008 newsbreak | 59
    • FocuS oN MiNdaNao Social services were introduced. The for ore sharing, the government has final-army was brought in to regulate the entry ly won a chance to impose order in Di-of explosives and other environmentally Fast Facts walwal and possibly end decades of dan-hazardous substances used in the mines. n The 729-hectare gold-rush area (now gerous and environmentally unsoundGovernment tried to win the miners over known as the Diwalwal Integrated De- mining practices.to their side. velopment area), where the small-scale But re-establishing government au- miners live and work, is located in Mt. old disputes, Fresh controversiesthority in an area long used to its absence Diwata, Monkayo, Compostella valley.was easier said than done. Locals have But old disputes over mining rights inlittle or no trust in government entities n The area is currently dominated Mt. Diwata and fresh controversial dealsand every official initiative is suspect. by the so-called “Big Three,” the with Chinese state firms threaten to un- Natural Resources Mining Develop- three mining companies which control dermine the government’s new “socialment Corp. (NRMDC), the precursor of the biggest of existing tunnels in the accord” with the small-scale miners andthe PMDC, initially thought about sell- mines. These are JB Management Min- tribal communities of Diwalwal.ing shares to the public to raise money to ing Corp., Blucor Mineral Resources In April 2008, Southeast Mindanao Golddevelop Diwalwal. But the idea proved Corp., and helica Gold Mining Corp. Mining Corp. (SMGMC), which is pressingunworkable because only companies that Apart from the Big Three, 21 small- a decades-old mining claim over hundredshave a track record of profits can launch scale mining cooperatives also oper- of hectares in Mt Diwata, filed a petition ate in the area.initial public offerings. urging the Supreme Court to review a June The government then thought of auc- 2006 decision that upheld the government’s n The area is part of the Davao-Agu-tioning mining rights to portions of the right to take full control over Diwalwal. san-Surigao forest reservation whichentire reservation to local and interna- used to be covered by the 184,000- The high court also ruled that SMGMC’stional investors. Among those that ex- hectare timber license agreement mining rights were void because they werepressed interest, according to an Oct. 6, awarded by government in the 1960s based on mining claims that had lapsed.2006 press release of the DENR Public to PICOP Resources Inc. The petition, if granted by the high court,Affairs Office, were Chinese investors could rip apart the government’s new “so-behind ZTE International, RT Mineral n Southeast Mindanao Gold Mining cial accord” with small-scale miners andResources Inc., CITIC-UAAP Investment Corp. and Marcopper Mining Corp. are tribal communities of Diwalwal which isCorp., and South African investor Har- now both allegedly controlled by busi- legally based on the government takingmony Gold Mines. nessman Teodoro Bernardino, presi- full control over the gold-rush area. But the bidding, set for March 2007, did dent of PICOP Resources Inc., whose But even as SMGMC’s petition has yetnot push through. The reason, as always, logging concession used to include the to be considered by the Supreme Court,was social unrest. The small-scale miners, Diwalwal area. it is already beginning to create intriguesfearing that new investors would threaten and sow discord between the governmenttheir continued stay in the area, began bobby timoneRamobilizing to block the bidding process. The ore body that the small-scale min-ers have been working on for the past 20years is nearly exhausted, and they want-ed their future source of income assured. Proclamation 297 allowed the small-scale miners to continue mining the areathat is 600 meters above sea level withinthe 729-hectare Minahang Bayan or “peo-ple’s mining” zone. But the ore bodiesbelow that were assigned exclusively tothe NRMDC. The miners wanted “a pieceof the action” in the development of thispart of the mines, Butalid explains. Neither did the small-scale miners ac-cept offers of possible jobs in NRMDC.“It’s a dead end,” says barangay chairmanTito. “What we want is ore sharing.” An ore-sharing scheme, Tito explains,gives an ordinary miner a good chance toescape a life of poverty and hardship. “If heis lucky, he could hit high grade,” he says. By finally giving in to the small-scale diwalwal barangay captain Franco titominers and tribal communities’ demands60 | newsbreak speCIAl IssUe
    • and other stakeholders of Diwalwal. bobby timoneRa In its petition, SMGMC alleged that the government has entered into a memo- randum of understanding granting min- ing rights over parts of Diwalwal to ZTE International, an affiliate of the Chinese firm that figured in the US$329-million national broadband network project that was tainted by alleged bribery of top of- ficials, including former Economic Plan- ning Secretary Romulo Neri. The PMDC denies any formal deal with ZTE. The memorandum of under- standing, according to a PMDC official, was simply an “agreement to explore the possibility.” Had it been made final, he says, the company would not have contemplated bidding out the project anymore. “Why would we go on public bidding if there was already an agreement?” a ranking official of the company told Newsbreak. The MOU actually covered a package of investments that ZTE International entered into with the Philippine govern- ment. It was signed by Department of Trade and Industry Secretary Peter Favi- la. “We do not even have an official copy of the MOU,” the PMDC official says. Still, shortly after the deal with ZTE became public, local officials in Diwalwal and Compostela Valley province began warning anew of renewed conflict and questioned the government’s sincerity in dealings with small-scale miners and tribal communities. Tito, according to the Sun Star Davao newspaper, warned: “They should refrain from interfering with Diwalwal to avoid conflict. I’m sure there will be bloodshed if a mining firm were allowed to mine there.” The governor of Compostela Valley, while refusing to criticize PMDC without more information about the exact nature of the deal with ZTE, nonetheless urged the state company to be “transparent with the provincial government on [its] plans in Diwalwal,” according to the Davao newspaper. Full disclosure on the memorandum of understanding with ZTE International is the least the government can promise to regain the Diwalwal stakeholders’ trust and confidence. But it also seems thelooking for golD. hardest thing for the Arroyo administra-a miner in diwalwal tion to do, judging by its efforts to keepprocesses sludge Neri from being questioned by the Senateto extract gold on the President’s role in approving the broadband deal with ZTE. n JUly/sepTeMBeR 2008 newsbreak | 61
    • FirSt PerSoNThe Peaks of TampakanBy PuRPle s. RoMeRo yearly P5-million royalty from the company, four times their initial royalty fee and higher than the P2.7-million royalty de- On the rough road towards the B’Laan manded by the other communities. He justified his council’s settlements up in the Tampakan high- higher demand on the grounds that Folu Bato has higher grade lands in South Cotabato, it felt like I ores than other areas in Tampakan. was part of a Fernando Amorsolo Call them the rock stars of Tampakan. The B’laans know that painting. they have power, and are not averse to using it to extract maxi- Large patches of green coconut trees mum gains from the mining company. mixed with yellowing corn plants and This has caused some resentment against the B’laans among palay line the 40-kilometer stretch to- lowlanders and non-indigenous peoples. “B’laans always de- ward the hamlets of Folu Bato, Dan- mand a higher royalty payment from SMI than us. The company lag, and Tablu. These are the homes of always gives in to them,” a woman barangay leader told me. tribal communities hosting Sagittarius Still, in countless other ways, the B’laan traditional way of Mines, Inc. (SMI), which is developing life continues amid the modernist incursions facilitated by the in Tampakan what could be Southeast presence of the mining company and its generous royalties.Asia’s biggest copper mine. The preeminence of the tribe’s traditional leaders is as strong The lush coconut and corn farms are a sign the land is fertile as before. Their role was even bolstered by their being seenstill. However, fewer and fewer members of the B’laan tribe as the intermediaries between the B’laan communities and theare engaging in farming, the traditional occupation along with mining company that gives employment, livelihood, and roy-hunting and food gathering. alty payments. Since the 1990s, when mining companies began exploring On a lighter note, the native chicken tinola that I had in sepa-B’laan lands for gold and copper, a growing number of tribes- rate dinners with Samling and Doc was unlike any other I hadmen had been working for the mining companies as guides, tasted before. Doc’s tinola was a cross between the Tagalog ti-drillers, laborers, and even security guards. nola and sinigang. After more than a decade of close encounters with foreign However, I’ll never know if that was the traditional B’laanmining companies, members of the B’laan tribes have changed way of cooking the dish or just the cook’s improvisation. Doc’sremarkably from their traditional ways. wife told me with a smile as we were having dinner that the cook In their attire, language, and behavior, all the tribal leaders could not join us because he was tipsy from too much beer.I interviewed were not much differ- The B’laans still practice polygamyent from the typical Filipino urban but unlike the Muslim men, who candweller. One carried a mobile phone marry only up to four wives, the menfar more sophisticated than those we of the tribe can have as many wives asuse at the office. they can afford to comfortably sup- They also had hectic schedules. port.Many work in Marbel City, which is One of the B’laan chieftains I wasa two-hour ride away, but are often in supposed, but failed, to interview re-Tampakan for meetings with officials portedly had three wives.of Sagittarius Mining. A local from Tampakan who knows When I went to Danlag, I had to wait the B’laans far more than I do laterfor five hours until 7 pm to be able to told me that visiting the tribal lead-talk to one of them, Dalina Samling, ers was a brave thing to do. “You’rethe lone woman tribal chief, who had a courageous girl, going to the moun-just come from a meeting with the tains alone and talking to the chief-mining company’s officers. tains,” he tells me. “Some of them, In the case of Celso Doc of Folu Bato, when they happen to fancy you―evenI had to go back at night to the hamlet if you’re a stranger― would make youfrom Marbel and hurdle a rain-soaked their wife.”two-hour ride in a habal-habal, a retro- Could I have come home to Manila afitted motorcycle that can carry up to married woman? It was an intriguingsix people, because that was his only thought but one that never occurred toavailable time to see me. me while trekking through the B’laan At that time, Doc and the Folu Bato settlements in the mountains of Tam-tribal council were negotiating for a b’laan farmer pakan. n62 | newsbreak speCIAl IssUe
    • data MiningBy Jenny lynne AGuilAR My, was I wrong. Since I faxed my first set of letters asking for information last Looking for mining-related data, es- April 14, I made it a point to call regularly the EMB and PAB pecially environmental clearances and their regional offices to check the status of my requests. I and pollution warnings issued to was afraid the routine would turn out to be boring but each day mining companies, can be as difficult yielded a new experience and a lesson in how the government as digging up the precious metals bureaucracy is averse to disclosing information to the public. themselves. The initial responses from contact persons in the regional of- At first, I thought, “How hard fice of the EMB―usually a secretary or executive assistant―are could it be?” After all, the Environ- perfectly understandable. They usually ask for some time to mental Management Bureau and the study the request and to check if they actually have the infor- Pollution Adjudication Board (PAB) mation. already published the information in After a few more calls, the responses start to get interesting. their Web sites. Newsbreak just want- Many would say they have forwarded my letter to the legal ed additional details such as the dates, officer or to the regional office of the Mines and Geoscienceslocation, description of the project being cleared, and summary Bureau (MGB). Of course, the MGB regional offices wouldof the alleged pollution violation. say it’s not their call because the notices of violation were is- sued by the EMB regional units. Releasing information on ac- tions they have taken is clearly within the powers of directors WAiTinG GAMe of government regional offices, but many want to have their Responses to requests for information backs covered by asking for clearances from the central office. agency/unit request sent status as of This was the tack taken by the EMB regional directors or of- ficers in charge in Regions 8 (Eastern Visayas) and 13 (Caraga), enVironMent ManageMent Bureau nCR 16-Apr Referred to MGB 18-Apr who asked me to ask for clearance from Jonas Leones, assistant CAR 16-Apr Pending 15-May head of the EMB’s central office in Manila. I 16-Apr Pending 14-May I wrote Leones asking for this clearance and he promptly II 16-Apr Pending 14-May wrote back that the central office does not―or is not―in a posi- III 23-Apr Pending 15-May tion to―grant such clearances because notices of violation are Iv-A 20-Apr Pending 15-May issued on the sole authority of the EMB’s regional units. He Iv-B 16-Apr Approved 6-May told me to fax his letter to regional directors who ask for such v 16-Apr Approved but documents 27-Apr clearances from the national office. for pick up in Bicol Despite Leones’s letter, the people I talked to in EMB Re- vI 16-Apr Approved 27-Apr gions 8 and 13 still refused to release the information to me. As vII 16-Apr Pending 15-May for Region 13, Reynaldo Digamo, the officer in charge, refused vIII 20-Apr Waiting for clearance 14-May from the central office to recognize Attorney Leones’s letter to me. He said they were Ix 16-Apr Approved 7-May still waiting for communication from the central office about x 16-Apr Approved 6-May the matter, especially because Digamo himself wrote them a xI 20-Apr Referred to MGB; Pending 15-May letter asking for clearance. xII 16-Apr Responded 7-May When I called Leones’s office to ask them to write Region 13 di- xIII 16-Apr Waiting for clearance 14-May rectly, I was instead asked to contact the office of EMB director Ju- from DEnR lian Amador. Somebody in the office said they would forward the Pollution aDJuDication BoarD letter to the Department of Environment and Natural Resources Central Office 14-Apr Approved 2-May director for public affairs, who is in charge of media relations. enVironMent iMPact assessMent As of early June, I managed to gather information from only Central Office 14-Apr Pending 5-Jun five of 13 regions: Regions 4B (Southwestern Luzon), 6 (West- Bureau of Mines anD geosciences Central Office 14-Apr Approved 2-May ern Visayas), 9 (Zamboanga Peninsula), 10 (Northern Mind- house of rePresentatiVes anao), and 12 (Soccsksargen). Committee 28-Apr Approved 5-May The response from EMB Region 5 (Bicol) is one for the on natural books―they asked me to come to their office in Legazpi City, Resources Albay, to look for the data myself. Complying with my request Archives 28-Apr Approved 5-May would entail too much time and effort that they--apparently senate very busy people―could not spare. Archives 28-Apr Approved 6-May One of these days, I just might take them up on it. n JUly/sepTeMBeR 2008 newsbreak | 63
    • GROUNDBReAKING JOURNAlIsM FiRsT-RATe ReseARCH w w w . n e w s b r e a k . c o m . p h newsbreak Public Trust Media Group, Inc. UNIT 202 S&F CONDOMINIUM, 137-B PANAY AVENUE, QUEZON CITY