Andy whitmore presentation in cologne


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

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