Impact Mining Vol46-n03


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Impact Mining Vol46-n03

Should Mining Be Allowed
In The Philippines

March 2012

Published in: Education, Technology, Business
    No to mining in Palawan AND other
    Key Biodiversity Areas (KBAs)
    Are you sure you want to  Yes  No
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  • Ang yaman ng Palawan ay yaman ng Pilipinas It is known as the Philippines’ Last Ecological Frontier. It has 40% of our country’s remaining mangrove areas, 30% of our coral reefs, at least 17 Key Biodiversity Areas (KBAs), 2 UNESCO World Heritage Sites, and 8 declared Protected Areas (PAs). It is unmatched anywhere in the country.
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Impact Mining Vol46-n03

  1. 1. Vol. 46 No. 3 • March 2012 Php 70.00
  2. 2. ARTICLES Mining in the Philippines A tale of two powers (2nd of three parts)Mining in the Philippines today is a taleof two powers, the Church and Govern-ment, at loggerheads with each other ontwo aspects of the issue—the legal andthe moral or geoethical. It is a tale ofincredible wealth and incredible dangerto life and health. It is a story of a captivestate showing of late a desire to be freedfrom captivity. It is a challenge of stew-ardship and an invitation to respect thenational patrimony. It is an area fraughtwith systematic human rights violationsand environmental degradation. It is anactivity crying out for a Code of Ethicsand, overall, a hope for sustainable actionand productive responsibility.By Charles AvilaA Tale of a Captive State The problem really is, again, the fact FILE PHOTOthat the State and the Filipino people donot really own and control mining as acrucial part of basic industry. In no othersector than in mining is the Philippine state It then went on to say that: “The mine “Two major issues concerning theexposed to be unarguably weak, captive tailings spills that occurred at Lafayette implementation of the Project remainand thoroughly unenlightened. Philippines Inc.’s polymetallic project site pending: the integrity of the tailings dam The organs of government often be- at Rapu-Rapu Island in Albay on October structure and the Acid Mine Drainage, orhaved like captured instruments of the 11 and 31, 2005 must be looked at from this AMD, problem.”mining companies. Because of this, one solitary and singular perspective.” Then DENR explicitly said:could never really have hoped that mineral Then it agreed with the Bastes Fact- “On the acid mine drainage, or AMD,production and development would serve Finding Commission with regard to the problem, Lafayette still has to submit athe modernization of agriculture and the major points and enumerated them thus: viable solution.launching of rural industrialization with all The two tailing spills were prevent- “In fact, an important ECC condi-that this could have entailed in terms of food able. tionality for the project is the adequacysecurity and economic self-reliance. 1. Lafayette was guilty of lapses of and effectiveness of its strategy to control This was worsened when one saw an operational/technical and manage- AMD.”that social and environmental impacts ment nature. “These perceived shortcomings per-were not really a factor in a mainly profit 2. Lafayette does not measure up to tain to such matters as the method of en-equation: verbally, yes, maybe; but really, the standards of responsible mining. capsulation to be used, the effectiveness ofnot at all. 3. DENR itself was a failure in moni- limestone in neutralizing acidic materials, Let me cite to you again the instruc- toring Lafayette and consequently did not the use of composite dry soil to seal wastetive case of Rapu-Rapu. Laugh or cry if detect the violations that would indicate the rock, the sloping terrain of Rapu-Rapuyou want. Choose your mood, but here are possibility of environmental accidents. that makes AMD treatment difficult, andthe relevant facts. In the first paragraph of 4. The sharing of benefits from the the absence of a microbial control method.their summary reaction report on the Bastes mineral exploitation of Rapu-Rapu Island In any event, the long-term effects of AMDCommission findings, the DENR said: “The was clearly grossly unfavorable to the must definitely be adequately addressed”exploitation of a country’s mineral resources Philippine government. and per DENR no less, there was no sat-can only be justified if it does not irreparably isfactory solution proposed as yet.damage the environment and if it benefits And with regard to the long-term envi- And yet, all these serious premisesthe community and the nation as a whole. ronmental risks, beyond the spills, DENR considered—here is where you want toThis is beyond all argument.”1 agreed with the Bastes Commission that: laugh or cry—DENR strikes a curve ball 8 IMPACT • March 2012
  3. 3. Mining in the Philippinesand says, “Taking into consideration all From the very outset, then, the objec- They did not analyze mercury in the orethe facts and findings, and all the opinions tive of any country that seeks to derive any because the law does not require themexpressed on the various issues, DENR good from the mining industry should be even if, ethically speaking, responsiblefeels that the best option to take is to allow to ensure that mining is done the right way. mining does.Lafayette to resume operations subject to Only such a view stands to reason, which Likewise, Lafayette did not feel anycertain stringent pre-conditions.” posits that mining is not purely an economic legal obligation to make a disclosure on The former members of the Bastes nor merely a legal issue. It is primarily an the initiation of AMD (acid mine drainage)Commission simply could not find any environmental issue and as such, must be in the open pit, in the tailings and run-offrhyme or reason for the DENR conclusion/ governed and justified within the context of pyretic materials. They may have beendecision since the Commission’s findings of environmental ethics or what is now less than honest, and even cruel in theiron the serious violations of environmental called geo-ethics. In fact, underlying any non-disclosure because once AMD isand legal safety standards for responsible mining law and the economics that ap- initiated, it is difficult to control, but theymining had not been negated. pertain to it should be a solid geo-ethical were proud they did nothing illegal—the foundation—a foundation of rules for law does not require them even if, ethicallyWhy not “No More Wang2?” Focus on the use of mineral resources, which are speaking, responsible mining does.the Moral designed to protect people against envi- A given mining operation, therefore, And so the Bastes commission said: ronmental catastrophes. will have to be viewed by people and theWhy not just follow the rule of law rather For a while the officers of Lafayette State according to this perspective and firstthan a culture of privilege and impunity? were exploiting to the maximum the pro- be evaluated as either ethically right orIn accordance with the spirit and letter paganda line that since they used cyanide wrong, good or bad, before it could evenof the law, DENR should just cancel the for their carbon-in-leach or CIL process, be considered legal or illegal, before itEnvironment Clearance Certificate (ECC) and not mercury—how could there be can be judged economically profitable orof a recidivist firm, and if allowed to re- mercury in the waters around the island non profitable, before it can be tested asapply, let it undertake the drawing up of attributable to them? The presence of socially acceptable or not. Without a fullan Environmental Impact Statement (EIS) mercury had to be the fault of someone respect for the principles of geo-ethics,and propose an Environmental Manage- else, not theirs. The scientists of the the exploitation of mineral resources canment System (EMS), precisely as the Bastes Commission patiently reiterated be very dangerous requires, and then let an awakened the simple fact that mining as an activity In the course of economic develop-citizenry watch a reformed DENR do its frees heavy metals like cadmium, lead ment and growth, many human acts canjob. That is what the Bastes Commission and mercury, which are harmful to people be either right or wrong relative to theirlogically recommended which the DENR and fish, even at low concentrations, in a effects on the house of life we call theso illogically ignored. chain reaction that can go on for a long environment. Human acts are rarely value- Talk of a failed state, or maybe time so that the more relevant question free or ethically neutral. They are always a captive state—and we was—and the Commission was now ask- either right or wrong. And when they may be looking at ing Lafayette: do they know if there was are wrong—no matter what great profits one here. mercury in the ore that they mined? The they had brought to some corporations, or reply was they do not and would not know. revenues to some states, and prosperity to FILE PHOTO Volume 46 • Number 3 9
  4. 4. ARTICLES the ugliness—perhaps, at the very least to build a decent urban patch—not to mention caring for a populace rendered medically ill by irresponsible mining’s effluents and tailings? And what would happen to indig- enous peoples, peasants and fisher folk left without their rivers, croplands, forests and bodies of water that now would surely lead to disease and food insecurity and even worse poverty? Generally, in any case, past mining methods have had, and methods used in countries with lax environmental regula- tions continue to have, devastating envi- ronmental and public health effects. Worst of all, because of the weakness of the Philippine state, mining was not banned where it should never have been allowed any time at all, namely in high environmentally critical areas such as FILE PHOTO small island ecosystems with steep slopes and heavy rainfall patterns in typhoon belt and acid mine drainage areas – in areassome individuals and social sectors—if and are subject to the rules and processes precisely like the islands of Rapu-Rapu.and when those human activities we refer of the ecosystems of the natural world. It isto were essentially wrong, they ultimately not the other way around. We are a part of Part of a National Industrializationand inevitably would have to bring worse and not apart from the natural world. The Programproblems and deeper crises, for truth is one: biology of natural systems simply does not Could things be better if the Statethe truth of science, the truth of economics function subject to our rules, economies, supports and protects Filipinos who haveand the truth of ecology are one many- and decisions. In other words, it is we who agreed to take the risk of entering thesided, non-conflictual truth. exist within and are subject to the natural mining field as part of a national indus- For instance, a certain way of exploit- setting, not the other way around. trialization program? Most probably, yes,ing some mineral resources could bring on the logical hunch that those who liveirreparable, and therefore irreversible, Not therefore against mining per se here are not normally in a suicide mode;damage to the environment. Any damage Only in this moral-philosophical they would not normally want to destroyto the environment in this way can in turn context can we concede that we should the environment in which they live andbring irreparable harm and injury to hu- not be against mining per se. Mining has move and have their health. The dramatic example of the been an important part in the historical It is the State that is mainly respon-Minamata disease in Japan took years and development of civilizations – from first sible for the country’s strategic economicyears to establish, before effects could be (agricultural) to second (industrial) to third development plan. It should thus be ablelinked to original causes beyond reason- (information) wave of social formations. to re-channel government support afterable doubt. In our own country today, after Industries need minerals to support the thorough policy review of what is usefulMarinduque and Rapu-Rapu, the question production and flow of basic goods and and what is not. It will be surprised to seenecessarily pops up: What is the right thing services. Indeed, how fortunate should how much and what can still be re-directedto do? Undoubtedly this is, quite properly, our country have been, given the mineral to priorities furthering the task of buildingan ethical question —whether or not it is resources vital for industrialization! a strong industrial economy by seriouslyrecognized as such. For millennia upon millennia now, the developing in our country an integrated Another fact is the non-renewability evolution and development of the human mining industry: a task and a challengeand non-inexhaustibility of mineral re- species has always been accompanied by no think tank around has as yet taken up.sources. Once they are depleted, there is no some form of mining: from the most primi- Granted there is room for foreignway that they can be replaced or restored. tive demand for flint stone to the current investments—room, why must we beWe know that the essential resources upon demand for rare earth elements, a demand so eager to give away the whole house?which our global progress depends are dictated by the lifestyle of a species that Why not, rather, rigorously screen andnot inherently and exclusively created could, come to think of it, choose to evolve strictly regulate investors? Can’t the Stateby human ingenuity and technology. On or develop otherwise. make sure that foreign participation in thethe contrary, the essential resources upon But the question remains: after the critical stages of minerals extraction andwhich global progress depends are inher- environment is fatally devastated, will processing be in accord with a definedently natural in origin so that resources are there be any mining firm around to take program for environmental care, technol-fundamentally in limited supply. responsibility and undertake what has to ogy transfer and constitutionally correct Putting it another way: our technologi- be done to rehabilitate the wounded land, equity shares?cal systems and we humans exist within to reconstitute the top soil, to re-green It is time we open our eyes to the fact 10 IMPACT • March 2012
  5. 5. ARTICLES FILE PHOTOthat we are often fried in our own grease. 40.10%, Brazil 40.85%, Argentina 46.13%, The Philippines has become such aWhat triggers the activity of fund managers Canada 46.71%, Guyana 48.16%, Austra- give-away country—one wonders why anyand investors from abroad are the licenses lia 50.60% )! In the Philippines, however, one should even respect it as sovereign atand permits and certificates here. The it is exactly 0%, believe it or not. Why not all. The State and the Filipino people haveresource is here. The power to allow the bring it up to 50.00%? been so remiss in their duty as stewards.production of new wealth is here. And I At the present time, the Mining Act is Section 80 of its Mining Act expresslysubmit that Filipino financiers can do as blind on how the State—which has the ex- states that the excise tax on mineral prod-good if not a better job if backed up by the clusive duty to explore, develop and utilize ucts shall constitute the "total governmentsovereign state. What we mean is that in the natural resources—would participate in the share in a mineral production-sharingcase of mining, would-be investors come profits of service contracts such as financial agreement," which under the Tax Code ishere not seeking markets or efficient and and technical assistance agreements with only two percent of the market value ofcheap labor so much as finding the natural mining contractors. The law also does not the gross output of the minerals. Sectionassets actually found here. guarantee that the government will receive 84 reiterates essentially the same thing. an equitable share on the mining contrac- From an ethical standpoint, prescindingRecover the Share of National Patri- tors profit. The governments share in the from any changing Supreme Court deci-mony mining deals only includes taxes, duties, sions, the law does not make sense when Here is a concrete proposal to strength- and other fees paid by the contractors. The one looks at the provision on the stateen the financial capacity of the State so that payment of these fees does not immediately ownership of mineral resources, because,it can have the wherewithal to become an benefit the Philippines as the contractors are in effect, the government concedes to theeffective and responsible steward of the given the privilege of first fully recovering foreign corporation practically for freenational patrimony: amend the Mining their pre-operating and property expenses its beneficial ownership over the mineralAct to include the crucial provision of the before paying their financial obligations resources.2 Igovernments pre-tax share of the cash flow to the government, not to mention the ag-generated by a mining project. In most gressive grant of tax holidays to foreign (To be continued next issue)countries around the world where there investors in mining, which does not makeis mining this pre-tax share representing sense at all since, as already mentioned, ______________the national patrimony averages a hefty mining is that kind of investment which 1 vide full report in: (Chile 15.00% , Bolivia 27.06% is neither market-seeking nor efficiency- sia/ph/Global/seasia/report/2006/8/denr-assessment- of-the-rapu-ra.pdf.,Venezuela 32.82% ,Peru 36.52%, United and-cheap-labor-seeking so much as clear 2 See also, Solita Collas-Monsod: 36.61%, Mexico 37.21%, Botswana asset-seeking.‘zero’-share-from-mining-wealth. Volume 46 • Number 3 11
  6. 6. ARTICLES Paradise lost to destructive mining FILE PHOTOBy Fr. Shay Cullen homes must be built in advance to highest tain covered in forest solid against a blue standards for the people of the area where sky stood proudly providing a bounteous mining is allowed, if ever, then only under home to the indigenous people for genera- resident Benigno Aquino plans to the strictest regulations and supervision.P tions. In the 70s, I often traveled there to issue a historical Executive Order Mining sites must be open to media and the villages of the indigenous people on (EO) to regulate the mining industry NGOs for transparency and monitoring my pastoral protect the environment and the rights of compliance with the law. Then one day, with a single stroke ofof the people. A strict order is needed and Employees must be paid the highest pen, a scribbled illegible signature by ahopefully, it will levy at least a 20% tax wages and must be from the locality and distant government official, its fate wason mining profits. Hundreds of thousands not foreigners. Today, Chinese workers are sealed and doomed. Then came the killerof justice loving Filipinos live in hope and brought in to work in some mining opera- chain saws and the bulldozers, the back-expectation that it will be so. tions. Even if we have responsible mining, hoes and the dynamite, the crushers and the Mining in the Philippines has a bad a hefty bond must be paid in advance for trucks. They roared and ranted in a frenzy,reputation for environmental destruction, the restoration of the environment in case attacking the serenity of nature, ripping itbribery, low tax and even extensive "tax of any damage. apart, year after year; digging, scraping,holiday" privileges despite soaring com- We see damage everywhere in the scarring, killing all living creatures andmodity prices. It has provoked reaction and mining industry. When opposed by the reducing to powder all the earth and rocka strong peoples power opposition. (See people protecting the environment, they in the rollers of the mighty crushers.the resistance to these incursions www. harass them with baseless legal com- The huge trucks transported its The investors plaints like in Midsalip, Zamboanga del heart to the waiting ships. Insatiable ap-in mining dont need low tax incentives. Sur where the Columban Missionaries are petites demanded more and more until itThe high commodity prices of minerals criminally charged together with the people was almost all gone. Then nature reacted.worldwide assure big profits. There should for defending the environment against the The mighty Mt. Pinatubo belched forth itsbe no mining allowed where there will be mining company. It is a travesty of justice angry torrent of protest and ended it all.serious environmental and community just like the damage done by mining to the Today, the mountain and valley is aban-damage. environment. doned and dead, a gaping gigantic wound Without strong taxation on the mining As I look out my window across in its side, a white shroud of volcanic ashindustry, the government and the people Subic bay towards Matain, I can see the covers its ugliness. Below in the valley,will get practically nothing from the vast remains of the long conveyer belt and a poisoned lake of toxic chemicals haswealth of the nations minerals. In Austra- the abandoned wharf. There, the ships killed all life.lia, the profits of mining corporations are bound for Japan berthed year after year Here can be seen the evidence thatrecently taxed to 35%. Now that is what and greedily swallowed the millions of the promises of mining companies andwe need in the Philippines. tons of black chromate with its mixture their corporate and government backers If ever mining is allowed, the miner- of precious sparkling gold flakes. are but falsehoods and lies. Here is seenals must be processed in the Philippines, The once great storage warehouses the evidence of empty promises that wenot shipped abroad as raw materials. now stand empty, silent witnesses to the hear today from the Chamber of Mines andProcessing gives added value and bigger plunder of nature and the destruction of the their members and backers. This is whattax revenue and more jobs for Filipi- mighty mountain in Pili, San Marcelino, President Aquino will surely regulate andnos. Communities, schools, hospitals and Zambales. There, the once majestic moun- it must be strong and for the people. I 12 IMPACT • March 2012
  7. 7. COVERS TO RY16 IMPACT • March 2012
  8. 8. COVER S TO RY Should Mining be allowed inthe Philippines?By Christian S. Monsod did not include these because the min- by every administration—that rising ing industry may have a point on the waters raise all boats—that sustainedT practicality and long-term feasibility economic growth driven by investments he mineral wealth of our country, of these conditions—hence the need for will eliminate poverty. But conclusive as the mining industry reminds more consultations. empirical data tell us that sustained high us, is “staggering” – about $840 I submit that mining is a social growth is not possible unless we alsobillion. Its potential to contribute to justice issue. And we cannot discuss it address the problem of inequality. Andour country’s development cannot be except in the context of our country’s that means not only income reform—discounted. While mining has never been dismal performance in addressing mass quality education, universal health carea driver of our development, not even poverty and the gross inequalities of and livelihood—but also asset reform,during the mining boom of the seventies, income, wealth and political power which is primarily about land and naturalwe are here to find out if there is a way that persist more than 25 years after resources and a substantive redistribu-to realize that potential. the glowing promise of EDSA of a just tion of their benefits and costs. As you The real question before us today society. know, the four asset reform programsis: Should mining be allowed in the We are all familiar with the data. are agrarian reform, urban land reformPhilippines? Over 24 million Filipinos are poor, and housing, ancestral domain and I believe that we should be open i.e. “poor” meaning per capita income of that proposition provided four mini- less than P46/day and about 9.4 million That is why it is unfortunate thatmum conditions are met: (1) the envi- of them are “food poor”, i.e. those who two major stakeholders on the issueronmental, social and economic costs live on P32/day, not even enough to meet of mining were not invited to speakare accounted for in evaluating mining the minimum 2,000 calories a day. Over today—the National Commission onprojects; (2) the country gets a full and 28 years, our real per capita income rose Indigenous Peoples and the Departmentfair share of the value of the extracted only 20% while per capita incomes of of Agricultureresources, (3) and this is addressed to the our neighbors increased—like Malaysiagovernment, the institutional capabilities (400%), Thailand (500%) and China Environmental, Social and Economicof the government to evaluate and regu- (1100%)—in the process eradicating Costs and Benefitslate mining activities are put in place; and absolute poverty. Mining activities are usually located(4) again addressed to the government, Even more compelling—the in- in rural and mountainous areas and cansince mining uses up non-renewable equality of income has not changed affect farmlands, rivers and shorelines,natural capital, the money from mining since EDSA. The top 1% of the families where the poorest of the poor are locatedare specifically used to create new capital numbering 185,000 has an income equal namely, the farmers, indigenous peoplessuch as more developed human resources to the income of the bottom 30% of the and municipal fishermen.and infrastructure, particularly in the families numbering 5,500,000. The fact is that mining cannot berural areas. In this regard, I refer you to I just wanted to make the point that conducted without affecting the land,the paper of Prof. Ronald Mendoza of history has not been very kind to our poor. water, and air surrounding the site, asthe AIM Policy Center and his proposal And we know this must change. well as the various natural resourcesfor a “middle ground” that involves the The increasing inequality of in- found in them. Mining involves theestablishment of an “inclusive growth” come, wealth and political power is, of extraction of minerals, but may alsotrust fund. course, happening worldwide. In our involve the use or destruction of non- With respect to downstream plants particular case, the root of the problem mineral resources, such as freshwater,and the total banning of ore exports, I is the development paradigm followed timber, and wildlife. This may also FILE PHOTO Volume 46 • Number 3 17
  9. 9. COVERS TO RYresult in health problems, displacement in 2007, the Climate Change National • Total government taxes, fees andof people, social divisiveness, even the Consultations of 2009 and the Summit on royalties 1997-2010 = P64.2 B = 7.6%need to provide PNP and AFP protection Poverty, Inequality and Social Reform con- ofto mining companies. Then there are the ducted last October to December 2011. • Total production value of miningdisasters that can happen from the cutting Why Climate Change? Because the companies 1997-2010 = P842 Bof trees, from siltation and erosion, and ac- new normal arising from climate change • On industrialization: Per formercidents from mining structures. All these requires a watershed approach to mitiga- NEDA Sec. Cielito Habito: Based ontranslate into public costs. tion, adaptation and disaster management national I-O tables: Backward linkages That is why mining is often cited as and watersheds are where the forests and of mining = .46 (less than half of otheran example of what Paul Krugman calls minerals are mostly located. In these industries); Forward Linkages is a low .82.activities that privatize benefits and social- conferences, one of the deepest concerns These mean that mining is not consideredize costs. This is the social justice issue of the poor are the environmental, social enough of a value-adding activity.on mining. and economic costs of mining. • On poverty alleviation: Mining has As for the argument that minerals are The Benefits and Costs of Min- the highest poverty incidence of any sec-meant to serve humanity and are the raw ing – What we want to know are the real tor in the country 48.7%. The only sectormaterials for the modern conveniences contributions of mining to GDP, exports, where poverty incidence increased betweenwe use everyday, the point is that, in employment, government revenues, in- 1988-2009. High poverty incidence in manycases where mining is allowed, the min- vestments, industrialization, poverty al- mining areas i.e. CARAGA (47.5%), Zam-erals should be priced at full cost, includ- leviation, etc. boanga Peninsula (42.75%), Bicol regioning environmental, social and economic Here are some statistics: (44.92%), the national average being 26%.costs. Otherwise, our poor who mainly • Ave. contribution to GDP 2000-2009 At the municipality of Bataraza in Palawanbear these costs would be subsidizing the = .91%, 2010 = 1.30% where Rio Tuba has been operating for 30consumerism of the rich, both domestic • Ave. share to total employment years, the poverty incidence (53%) is doubleand foreign. 2000-2009 = 0.376%, 2010 = 0.5% = the national rate. The mining industry is We cannot find the answers to the 197,000 correct in pointing out that the statistics doplight of the poor unless we listen to the • Ave. contribution of metallic mining not establish causality. But the data at leastpoor. In this regard, you might want to to total exports - 2000-2009 = 2.96% , shows an association between mining andread three public documents—the National 2010 = 3.7% poverty that raises questions on the claimRural Congress II of the Catholic Bishops • Ave. share of mining investments to that mining improves the quality of life inConference of the Philippines (CBCP) total investments = 2.5% its communities. FILE PHOTO 18 IMPACT • March 2012
  10. 10. Should Mining Be Allowed in the Philippines? FILE PHOTOInvestment and Export Proceeds than the collectibles from LSM ranging includes SSM which requires virtually no The mining industry’s absolute figures from 4%-36%. capital investment and capital-intensiveon gross investment inflows and export It is unfortunate, that the small-scale LSM, like Tampacan, that will generateproceeds are impressive, but they are only mining sector was not invited to speak at 10,000 temporary jobs and 2,000 perma-one-half the picture. this conference so it can defend itself and nent jobs with a $5.9 billion investment Mining companies are allowed to justify its role in the development of the (about P120 million per permanent job).recover and repatriate all pre-operating mining industry. After all, the production The mineral extractive industry is consid-and development costs up to 4-5 years value of SSM from 1997-2010 was the ered worldwide as a low job generatingafter start of operations. Thus, the inflows same as that of LSM at about P300 bil- activity.and outflows on investment may even out lion. These data put in question the ex-during that period. pansive claim by the Chamber that the On export proceeds, mining opera- Employment projected LSM $15 billion investmentstions usually front load production during The mining industry claims that 1 will generate 70,000 direct jobs that willthe first five years, arguably to exploit direct job in mining creates 5 more jobs result in 350,000 other jobs, leading tomarket opportunities, but this also happens in the rest of the economy—a multiple 2,050,000 jobs by 2018 with 10.25 millionto coincide with their tax holidays. Profit of 5. NEDA denies that it has any such Filipinos as “direct beneficiaries of min-remittances can, thus, be considerable. data. However, a study by Madeleine B. ing”. A recalculation would look more like Dumaua based on the 2000 Input-Output = 576,000 Filipino beneficiaries.Government Revenues tables of the economy shows that: The DENR says that there is a dis- The Share of Government in Miningcrepancy between potential excise taxes A peso change in the final demand for Revenuesfrom mining and actual collections (P7.8 the mining/quarrying The Chamber is objecting to thebillion from 2000-2009). The LSM sector generates P1.70 pesos worth of additional proposed royalty of 5% on miningclaims that their payments in 2008-2009 output for the economy; revenues on the ground that it wouldequaled the collectible amount and that the drive investors to other countries withuncollected excise taxes are attributable On employment, every one million more favorable financial regimes. Thesolely to small-scale miners and quarrying. of additional investment in industry in Nov. 2011 appealed to theThat may be true. But it is interesting that mining/quarrying generates additional government not to increase the royaltiesif one takes a longer view, from 1997- employment of 2.2, not 5. because the “current fiscal regime….2007, there is no such correlation. Actual may be the only thing that’s keeping thecollections for 6 of the 11 years are lower The average multiplier of 2.2 jobs industry afloat.” Volume 46 • Number 3 19
  11. 11. COVERS TO RY At the same time, the stock market is are entitled to register with the Board of not given any value, our government paysat new highs and the newspapers banner Investments for a five–year income tax the contractors to extract them through fis-unprecedented mining profits in some holiday cal incentives. What do we get in return?companies. (7) exemption of pollution control (a) Very little by way of taxes, fees RA 7942, Sec. 80: devices from real property and other and royalties, and practically none at all “The total government share in a taxes; during the tax holiday period;mineral production sharing agreement (8) income-tax carry forward of (b) Very little by way of job genera-shall be the (2%) excise tax on mineral net-operating losses incurred in the first tion;products as provided in Republic Act No. 10 years, which may be deducted from (c) Probably little net foreign ex-7729, amending Section 151(a) of the taxable income over a five-year period; change inflows;National Internal Revenue Code, (9) accelerated depreciation of as- (d) Very little contribution to GDP;as amended.” sets—at twice the normal rate (e) Very little industrialization link- An excise tax is a tax on the use or (10) option to deduct the cost of all ages;consumption of certain products, or a tax exploration and development expenditures (f) Questionable poverty alleviationon an activity. In the case of mining, no from taxable income over a four-year pe- resultsvalue is given to our minerals. riod from commencement of commercial Of course, there is always the poten- Some comparisons by the MGB of the operations; tial. But there may be another side to thefiscal regimes of selected countries (China, In the case of FTAA (financial and relatively low benefits from mining—thereIndia, Indonesia, Mongolia, Myanmar, technical assistance agreements) is not much to lose should the governmentPapua New Guinea, Peru, Chile) show that (11) they are allowed to recover all refuse to give in to the demands of miningthe fiscal regime in the Philippines is quite their tax and operating expenses before that would compromise the environment.competitive with, if not more favorable they begin to pay either the basic or the Timely alternative development strategiesthan, those of other countries. additional shares of government, such may, in fact, result in a net gain. Moreover LSM are given generous as:tax incentives, to wit: (12) “(a) contractor’s income tax; Institutional Capacity of Government (1) income tax holidays of 5 years (b) customs duties and fees on imported to Evaluate and Regulate Mining(including excise taxes); capital equipment; (c) value-added tax on One cannot blame the mining industry (2) deduction of 50 percent of labor imported goods and services; (d) withhold- for always trying to get the best deal for itsexpenditure from taxable income, ing tax from interest payments on foreign shareholders. But it is the responsibility of (3) tax and duty exemptions on loans; (e) withholding tax on dividends government to protect the interests of theimported capital equipment and spare to foreign stockholders; (f) documentary, stamp taxes; (g) capital gains tax; (h) However, the government admits in (4) exemptions from wharfage fees, excise tax on minerals; (i) royalties for the Philippine Development Plan 2011-and additional incentives for enterprises mineral reservations and to indigenous 2016, that it does not have the capabilitythat locate in less developed areas. peoples , if applicable; (j) local business to make that kind of assessment: (5) the privilege to deduct 100 per- tax; (k) real property tax; (l) community (a) Page 310 of the PDP: “…cur-cent of expenditures on infrastructure tax; (m) occupation fees; (n) registration rently, there is no standard resourcefrom taxable income, over a period of 10 and permit fees; and (o) all other national and environment valuation. There is ayears and local taxes, royalties and fees as of need to have a cost-benefit analysis and (6) during the exploration period effective date of the FTAA.” standard parameters that will consider allare not liable for income taxes. When (13) To summarize the issue on the relevant values (including non-marketthey begin commercial operations, they revenue sharing: Not only are our minerals values)”; 20 IMPACT • March 2012
  12. 12. Should Mining Be Allowed in the Philippines? (b) “government capacity for re- This is a good time to adopt these This safeguard is needed. The presentsource management is wanting”; analytical tools since the Philippines is mining system is simply no longer work- (c) “enforcement of environmental one of 6-10 countries where WAVES is able because it is onerous to the countrylaws and policies is inadequate.....Rel- being piloted by the World Bank. Why and is open to corruption and to decisionsevant environmental laws, specifically the Chamber of Mines seems to object to that are vulnerable to future questionings,those regulating the utilization of natural their explicit application to mining proj- and we need a little more time to putresources, i.e. NIPAS, etc. are poorly ects in the new policies is frankly hard to things right.implemented.” understand. In closing, may I say that the mining We need these tools. For example, industry is correct that our fragmented The question begs to be asked – how there is an apparent oversight in the views on mining heightens the uncertaintycan the government approve any mining Mining Law or its IRR—because the of mining investors, although this mayapplication or allow any mining opera- so-called final rehabilitation fund for have the reverse effect on other inves-tion in the absence of these institutional phased out mines applies only to the tors, as in tourism. The mining industrysafeguards? capital costs of rehabilitation—like land should thus welcome the initiative of the The proposal is to adopt TEV (To- restoration and reforestation. There is no government to put in place a new set oftal Economic Valuation) and WAVES perpetual accountability or trust funds rules that can promote solidarity with(Wealth Accounting and Valuation of for the maintenance of structures like consultations. If the rules turn out to beEcosystem Services) which is an in- tailings dams or the disasters that could too tough on mining, at least the decisiontegration of TEV and natural capital happen years later from dam breakages. to invest will have less uncertainties andaccounting. WAVES is an initiative of These risks should be borne by the min- its parameters will be clear. On the otherthe World Bank which is supportive of ing companies and not by our taxpayers, hand, the government and other stake-“responsible mining”. It complements which seems to be the case today. This holders should be fully aware of theirthe Extractive Industry Transparency is not responsible mining. If my under- consequences on mining investments andInitiative (EITI)—a priority advocacy standing of the rules is wrong, I will be the need for a fair and proper disengage-of the Chamber of Mines. happy to be corrected. ment process, if necessary, as well as the The exercise is not “catatonic” be- Until the new policies are fully in urgency of implementing alternatives tocause “significant advances have been place, the government should strictly mining.made in defining and conceptualizing apply the precautionary principle to In times like this, it is good to re-protected areas valuation.” There are at pending issues. The principle is public member the words of Albert Camus whenleast 60 instances, at least 3 in the Philip- policy under RA 9729 (Climate Change he received the Nobel Peace Prize—wepines, where TEV has been done. There Act of 2009), and was enunciated by should put ourselves at the service not ofare enough research work and examples to the Supreme Court in issuing the Writ those who make history but of those whoarrive at a less than perfect, but nonetheless of Kalikasan: suffer it. Iusable, formula. Part V. Rule 20, “Sec. 1 When WAVES is a comprehensive wealth there is a lack of full scientific certainty (Atty. Christian Monsod is co-chair ofmanagement approach to long-term sus- in establishing a causal link between hu- the Climate Change Congress of thetainable development that includes all man activity and environmental effect, Philippines (CCCP) and co-convenor ofassets—manufactured capital, natural capi- the court shall apply the precautionary the Sulong CARPER. He gave this talk attal, human and social capital. The method- principle in resolving the case before it. a conference on Mining’s Impact on theological framework is the UN’s System of The constitutional right of the people to Philippine Economy and Ecology at theEnvironmental and Economic Accounting a balanced and healthful ecology shall Hotel Intercontinental in Makati City,(SEEA) developed over the past 20 years. be given the benefit of the doubt.” March 2, 2012.) FILE PHOTO Volume 46 • Number 3 21
  13. 13. STATEMENTS A Call to Moral Integrity, Transparency and Accountability in Governance ast February 9, 2012 the Supreme The Impeachment Process is a politi-L why can it not be opened now? Instead, Court issued a Temporary Restrain- Chief Justice Corona remains steadfast and cal process to protect the integrity, transpar- ing Order (TRO) on the Senate act- adamant in his relentless drive to declare ency and accountability of a democraticing as an Impeachment Court, preventing the Impeachment Trial as unconstitutional government. Essentially, this impeachmentthe Senate Court to secure the foreign and a violation of his human rights. And to trial will decide on the integrity, transpar-currency accounts owned by Chief Jus- challenge and question the Senate Court ency and accountability of Supreme Courttice Renato C. Corona, citing RA 6426, and the entire impeachment process, Chief Chief Justice Corona.section 8. Justice Corona continually seeks refuge We therefore implore Chief Justice This issuance of the Temporary Re- in the Supreme Court for protection and Renato Corona to listen to the stirrings ofstraining Order by the Supreme Court is in- solace. This is against decency and “delica- truth, justice and respect the Senate Courtdeed disappointing since the Impeachment deza” because he is asking this of Justices and the impeachment proceedings.Trial is an invaluable political process to who are under him. We also urge the Senate Judges torestore, renew and strengthen the integrity, The Association of Major Religious remain steadfast in their duty and to as-transparency and accountability of the Judi- Superiors of Women in the Philippines sert their sovereignty in the pursuit of theciary and Philippine governance. It is even (AMRSWP), a gathering of 275 women TRUTH.more disappointing that 13 Senators voted religious congregations in the Philip- Each and every Filipino citizen isto obey it because this means acknowledg- pines strongly believes the impeachment asked to act with integrity, to maintaining the jurisdiction of the Supreme Court proceedings will strengthen the founda- a sense of decency and honesty, and toover them but it is clear in the Constitution tions of democratic governance in the be held accountable for actions whichthat the Senate Court is supreme in mat- Philippines. have grave ramifications on the commonters regarding impeachment. And the only The impeachment trial against Su- good.question they should have asked themselves preme Court Chief Justice Renato Co- We ask no less of a Supreme Courtbefore voting was: “Will the TRO serve to rona is not a battle against two warring Chief Justice Renato the TRUTH or will it hinder it?” government bodies, the Judiciary and theThe answer is obvious. Executive. Nor is the Impeachment Trial Association of Major Religious Su- Chief Justice Corona says that he will a personal contest between two powerful periors of Women in the Philippinesopen his foreign account in due time. Our politicians – Chief Justice Renato Corona (AMRSWP)question is, if he is not hiding anything, and President Benigno Aquino III. February 17, 2012 Sibuyan Declaration Defending MIMAROPA Islands, Securing the Future from Mineral Extraction onverging our effortsC to defend our island ecosystems from ridgeto reef to sustainably address promote eco-cultural, historical tourism and sustainable initia- tives, and • Help ENSURE foodthe needs of the present gen- self-sufficiency and recognizeeration and secure the future the interdependence of islandof the next, provinces. WE, as concerned mining- In the genuine spirit ofaffected communities from Oc- Sustainable Development, In-cidental Mindoro, Oriental Min- tergenerational Responsibilitydoro, Marinduque, Romblon and Precautionary Principle,and Palawan, united to protect we therefore CALL for a re-our lands and seas, shall gional • STRENGTHEN our re- • MINING MORATO-gional cooperation for environ- RIUM and make Agriculturemental justice and protect the and Tourism as core focus forepicenter of marine biodiver- development;sity of the country • CANCELLATION of Rodne Galicha | • BROADEN support to all mining applications andcommunities to confront the REVOCATION of all existingimpacts of climate change and mining licenses and permits.hazards, • RECOGNITION of our • ENGAGE government at local government’s autonomyall levels and communities to Sibuyan, page 25 Volume 46 • Number 3 23
  14. 14. STATEMENTS Pastoral Letter ALAY KAPWA 2012 2012 (i.e., February 26, March 4, 11, 18,M y dear brothers and sisters in Christ, 25 and April 1). The funds gathered for “Stewardship is disciple- Alay Kapwa during these six Sundays willship,” this is the theme for Alay Kapwa be used as emergency funds for crisis and2012. Alay Kapwa means offering (alay) to calamities both from natural and humanour neighbor (kapwa). Alay Kapwa is the causes all over the country, as was doneLenten evangelization-action program to for the victims of Sendong recently.raise social consciousness about the plight I also encourage all parishes to sponsorof the poor and the marginalized in imita- booths for our social services and devel- of Jesus who offered Himself for us opment ministry, so we may inspire morepoor sinners. It is also the time of the year possible donors for our Caritas programsdesignated to raise funds for social services for the poor.and programs of the Church for the poor. “We should ask: what can I do in order As we successfully did last year here in that others may be saved and that for them the victory over our sufferings through thethe Archdiocese of Manila and our suffra- star of hope may rise? Then I will have done transformative power of charity and thegan dioceses, we will again be supporting my utmost for my own personal salvation as maternal care and prayers of Mary.and implementing Alay Kapwa not only well” (Spe salvi, 48). And, as the First Letter May God bless you always!during Palm Sunday but throughout the of John (3:18) tell us, “Let us not love with40 days of Lent. We will take up a special words or tongue but with actions.” + LUIS ANTONIO G. TAGLE, DDsecond collection for Alay Kapwa for six On our road to Easter, our Lord Jesus Archbishop of ManilaSundays, from February 26 to April 1, Christ’s ultimate triumph, let us also claim Chairman, Caritas ManilaSibuyan, page 23to disallow mining in their re- As a regional convergence,spective territories and utmost the Cooperation of Small Is-RESPECT for our indigenous lands (CSI – MIMAROPA),peoples’genuine Free, Prior and we shall stand up learning theInformed Consent processes. lessons of the past to act on For a healthful and bal- the challenges of the presentanced ecology, for our island- and face confidently the futurepeople’s general welfare; to to make our islands the bestprogress within the carrying places to live in without chaoscapacity of Nature in the grand harmony of Mother • We DEMAND that the Nature.Mining Act of 1995 (Republic Signed this 19th of Feb-Act 7942) be SCRAPPED and ruary, 2012, in the island ofurgently ENACT the alterna- Sibuyan, where the world’s dens-tive minerals management bills est forest flourishes, the Philip-pending in the House of Repre- pine’s cleanest inland body ofsentatives and Senate Bill No. water flows and the majestic Mt.3126 "A Bill to Regulate the Guiting-guiting dwells.Rational Exploration, Develop-ment and Utilization of Mineral KAAGAPAY PO-NGO Network Inc. (KAAGAPAY): OccidentalResources, and to Ensure the Mindoro; Alyansa Laban sa MinaEquitable Sharing of Benefits (ALAMIN): Oriental Mindoro: Marin-for the State, Indigenous Peo- duque Council for Environmentalples and Local Communities, Concerns (MACEC): Marinduque; Alliance of Students Against Min-and for Other Purposes."; and ing (ASAM): Romblon; Romblon • We URGE President Ecumenical Forum Against MiningBenigno Simeon C. Aquino (REFAM): Romblon; SibuyanonsIII to declare Key Biodiver- Against Mining (SAM): Romblon; Sibuyan Island Sentinels Leaguesity Areas, Island Ecosystems, for Environment Inc. (SibuyanCritical Watershed Areas, Geo- ISLE): Romblon; Ancestral LandHazard Areas, Natural Forests, / Domain Watch (ALDAW): Pala-Eco-Tourism Zones and Ag- wan; Environmental Legal Assis- tance Center (ELAC): Palawan;ricultural Lands as MINING Palawan NGO Network Inc. (PNNI):NO-GO ZONES. Palawan Volume 46 • Number 3 25