THE ROLE OF PRIVATE SECTOR IN EIA, THE RTNMC/CBNC EXPERIENCE Presented by: Jose S. Saret, Senior Vice President (RTNMC) Arturo T. Manto, Chief Environmental Officer (CBNC)

1. The Role Of Private Sector In EIA, The RTNMC/CBNC Experience
Presented By:
Jose S. Saret, Senior Vice President (RTNMC)
Arturo T. Manto, Chief Environmental Officer (CBNC)

3. THE ROLE OF PRIVATE SECTOR IN EIA, THE RTNMC/CBNC EXPERIENCE1
Presented by:
Jose S. Saret, Senior Vice President (RTNMC)
Arturo T. Manto, Chief Environmental Officer (CBNC)
I. INTRODUCTION
Similar to most developing countries, the Philippines has to balance economic advancement
needed to support the basic needs of its increasing population on one hand, and conserving
and protecting its declining natural resources on the other. To achieve this balance,
Government through the Department of Environment and Natural Resources (DENR)
developed and put in place the Environmental Impact Statement (EIS) System.
The Philippines has about a quarter of century of experience in the implementation of its EIS
system, starting in 1977 through the formulation of the Presidential Decree (PD) 1151 or the
Philippine Environmental Policy. This was reinforced by the enactment of PD 1586 -
Philippine EIS System in 1978. The implementation of the EIS system was strengthened
further by the issuance of its implementing rules and regulations (IRR) in 1979. Since then,
the IRR have been amended several times and recently, with the approval of DENR
Administrative Order 2003-30. This new regulation further streamlines the EIS system by:
• Providing a more detailed listing of projects that are within and outside of the scope
of the EIS system based on project types and size;
• Simplifying the requirements for securing an ECC by detailing the requirements of
the different project types; and
• Streamlining further the procedures for ECC application by detailing at which levels
of authority can issue an ECC as well as setting time limits and allowing the
automatic approval of projects, which have exceeded the allowable processing
times.
Other regulations have also been formulated to further support the implementation of the
EIS system especially in providing additional guidelines and standards to gauge
environmental impacts notably, the Republic Act No. 8749 – Clean Air Act of 1999, Republic
Act No. 9275 – Clean Water Act, Republic Act No. 6969 – An Act to Control Toxic
Substances and Hazardous and Nuclear Wastes and Republic Act No. 9003 – Ecological
Solid Waste Management Act.
Presidential Proclamation No. 2146 identified the major categories of Environmentally
Critical Projects (ECP) or those located in Environmentally Critical Areas (ECA) first defined
in PD 1151. Specifically, Section 4 states that “no person, partnership or corporation shall
undertake or operate any in part such declared ECP or project within an ECA without first
securing an ECC”. Major resource extractive industries including major mining projects were
then classified as ECP. Thus, the Rio Tuba Nickel Mining Corporation (RTNMC) is among
the mining companies that have undergone the EIA process when it applied for the
continuous use of its 110 mining claims and conversion to MPSA in 1996 and the
development of the HPP project in 2000.
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Paper written for the Forum on Environmental Impact Assessment in the Philippines: Roads Taken. Lessons
Learned (February 11, 2005 Manila, Philippines) in collaboration with MLND Catalon and MD Manaog.
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4. 1.1 RTNMC/CBNC PROFILE AND HISTORY
The Rio Tuba Nickel Mining Corp. (RTNMC) is a Filipino-Japanese partnership that has
been in operation since 1977. The company is engaged in the mining, production, and
export shipment of beneficiated nickel silicate ore to Japan. The mining operations involve
the extraction of lateritic nickel ore deposits by surface mining method. The RTNMC
minesite and hydrometallurgical process plant (HPP) complex is located in Barangay Rio
Tuba, Municipality of Bataraza, Province of Palawan.
Since the start of the mining operations in 1977, RTNMC has exported saprolite ore to a
Japanese ferronickel producer. Low-grade ore and laterite, which are not used as raw
material for ferronickel production, are separated from saprolite ore. This low-grade ore is
not exported to Japan for refining and commercial use since the export and refining process
is not economically viable. The low-grade ore is stockpiled at the mine area according to
nickel content. At present, the volume of stockpiled low-grade ore amounts to
approximately 20 million dry metric tons (DMT).
In 1996, an Environmental Impact Assessment (EIA) was conducted for the renewal of
RTNMC’s 990-ha Nickel Mining Claims and the conversion of the mining lease contract into
a Mineral Production Sharing Agreement (MPSA), as well as for its continued operations.
The Environmental Compliance Certificate (ECC) was granted in late 1997.
Since 1986 however, extensive metallurgical test works for the extraction and recovery of
nickel and cobalt from the low-grade nickel ores were conducted. The tests indicated that
nickel and cobalt could be extracted from the low-grade ores by hydrometallurgical process.
Subsequently, the process was modified and a pre-feasibility study was carried out, which
concluded that a process to produce mixed sulfide from the low-grade ore is the most
attractive and feasible option.
The recent increase in international nickel prices as a result of a tight nickel supply
worldwide has resulted in RTNMC’s venture into nickel ore processing. Thus, the
Hydrometallurgical Processing Plant (HPP) Complex Project was drawn up. The HPP
project is owned and operated by the Coral Bay Nickel Mining Corporation (CBNC), which is
a 90% foreign-owned corporation consisting of Sumitomo Metal Mining, Sojitz, Mitsui and
RTNMC.
The HPP project is intended to enhance resource utilization capability by processing the
existing low-grade nickel ores currently stored in open dumpsites within its property, which
for sometime, was regarded as a waste stream that had to be disposed of in areas that
could have been better utilized rather than as a dumpsite.
To realize this project, an EIA was conducted starting in November of 2000 and concluded
with the issuance of its ECC on July of 2002. Despite the issuance of the ECC, other EIA –
related activities relative to legal concerns were conducted.
1.2 ENVIRONMENTAL, HEALTH AND SAFETY
RTNMC/CBNC espouses the principle of sustainable development. Its operation is hinged
on a pro-people, pro-community and pro-environment orientation and goals. Socio-
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5. economic development, environmental protection, pollution control, safety and health are its
top priority and the yardstick to measure its performance and successes.
For the period 1991-2004, RTNMC had invested almost PhP 135M for environmental
protection. This includes construction and maintenance of soil erosion control measures,
dust suppression, reforestation among others.Our mine rehabilitation and reforestation
efforts over the years have resulted in the reforestation of some 203has. of mined-out areas
and some 132has outside of these.
Of the total cost for construction and development of the HPP project, more than PhP 900M
was used for health, safety and environmental concerns while approximately PhP 230M
annually is allotted for such concerns during the projected 20-year operation of the plant.
The Contingent Liability and Rehabilitation Fund (CLRF) for the HPP project, which has the
same purpose as the Environmental Guarantee Fund (EGF) has been established and
deposited in the Development Bank of the Philippines (DBP). This amounts to PhP5.25M
Consequently, RTNMC has been the recipient of various awards because of its strict
advocacy of these principles. Among our notable awards are:
• Presidential Mineral Industry Environmental Awards – Highest Award (2001-2002)
• PMIEA – Titanium Award (1997-1998)
• PMIEA – Platinum Award (1998-1999)
• PMIEA – Platinum Award (1999-2000)
• Certificate of Recognition (Adopt a Tree-Adopt a Mining Forest Movement – 1992 -
1996)
• Adopt a Tree-Adopt a Mining Forest Movement - 3rd Runner Up (1998-1999)
• Plaque of Recognition Adopt a Tree-Adopt a Mining Forest Movement (1999-2000)
• Safest Surface Mine, 1st Place (1983-1985, 1986-1988, 1992-1996, 1997-2000,
2002-2003, 2004)
• Most Improved Safety Record, 1st Place (1983-1985, 1986-1988, 1997-1998, 1999-
2000)
CBNC has likewise received a Safety Award for its 3 million man-hours without lost time for
accidents during the construction period of the HPP project, which started in July 2002 until
August 2004.
1.4 SOCIO-ECONOMIC CONTRIBUTIONS
The RTNMC operations in Barangay Rio Tuba have brought about significant economic and
social benefits to the community. The company provides employment for residents of the
host barangay and nearby areas. It presently employs 367 regular employees, 160 casual
employees, and 152 contractual employees. The company’s operations has stimulated
local business with annual purchases of the company and its employees amounting to more
than ten million pesos worth of locally produced products from local residents within the
community.
The company’s presence has encouraged the establishment of various commercial
establishments particularly, pharmacies, gasoline stations, rice mills, an ice plant,
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6. mechanical welding shops and hardware stores locally. This has given residents access to
much needed commodities, which was not present before the RTNMC operations.
Between 1991-2003, RTNMC had invested over PhP 50M for community development
alone. The company has provided valuable community services such as the establishment
of a hospital with pharmacy, schools, gymnasium and other recreational facilities, markets, a
Catholic church, a mosque for the Muslim community, communal latrines, among others. It
has contributed to the development of transportation and basic accessibility within the area
through the construction and maintenance of about 51 kms. of farm to market roads within
the community and neighboring barangays.
With the establishment of the HPP complex, additional employment opportunities were
generated. The project is also expected to contribute further to the local economy due
increased commercial activities.
In addition, the HPP project enhanced the existing social development programs. For this,
RTNMC/CBNC have committed more than PhP 90M for their five-year program, which will
directly benefit ten (10) barangays including IPs.
The HPP Project was one of the largest investments in the country in 2002 with a project
cost of more than US$180M. The expected income generated from its operation would
accrue to the local, provincial and national levels thus, it is expected to fulfill strategic
economic goals for the country.
II. EIS SYSTEM AND RTNMC/CBNC EIA EXPERIENCE
2.1 ROLE OF THE PROPONENT
In the past, project proponents/developers were more inclined to be observers in the EIA
process, just waiting in the background for the issuance of their ECCs. In December 1996,
the DENR Administrative Order 96-37 was approved, which adopted and institutionalized
the participatory and community-based EIA approach. This regulation called for the active
participation of the proponents and other stakeholders in the EIA activities.
The participatory and community-based EIA approach allows the the stakeholders to be
informed on the details and the possible effects of the project so that they can determine
what components in the environment the EIA should look into and what appropriate
mitigation measures can be adopted. The project proponent is, in itself, an important
stakeholder since its operations may adversely affect not only the host communities, but
also even its workers that may affect the viability of the project.
The project proponent is an active participant in the EIA process. First and foremost, they
shoulder the financial responsibility for the conduct and review of the EIA. Second, the
proponent must also be able to articulate intelligently the plans and coordinate credibly with
various sectors including the DENR. Third, there are administrative and coordinating works,
which is the responsibility of the project proponent in an EIA. It should be emphasized that
this should be done by the proponent themselves since putting the responsibilities to other
parties, e.g. the environmental consultants, would contradict the third party assessment role
of the latter. Thus, the role or the deliverables of the project proponent in the EIA activities
are:
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7. • To provide all the proposed data requests of both the consultants, the DENR and
host community residents/ stakeholders;
• To facilitate and attend to the logistical requirements of any consultation requested;
• To be available to respond and negotiate on issues concerning the details of the
proposed project during any meeting/ consultation called relative to the project;
• There are certain documents that the proponent should provide which are included in
the final EIS e.g. Locational/Zoning Clearance, Water use permits, proofs of socials
acceptability, etc.
• Prior to and during the conduct of the EIA the project proponent should have and
should continue to establish contact with stakeholders, initiate consultations with
them and seek their approval of the project (a best case scenario). The reason for
this is that the EIA will determine the level of awareness of the stakeholders about
the project, the level of consultations conducted by the proponent with the
stakeholders and the level of project support. A key element in the issuance of the
ECC is the social acceptability of the project;
• Initiate the establishment of the Environmental Monitoring Fund and/or
Environmental Guarantee Fund as may be stipulated in the ECC;
• Ensure that appropriate post-assessment monitoring and reporting are carried out as
required and submit the reports to the EMB.
Aside from this, the proponent must work to ensure that the project enjoys social
acceptability. For the project to become socially acceptable it must be:
• Needed by the country and the host community;
• The permits issued are legal and binding;
• There was a clear, transparent and comprehensive process of consultation among
various stakeholders;
• The project is culturally acceptable;
• The project has acceptable level of negative social impact that can be mitigated and
which does not tragically divide the community;
• The project has an acceptable level of negative environmental impact that can be
mitigated that environmental risks are acceptable;
• The proposed project presents benefits that will accrue to the country and to the host
community in which the development is sustainable and not a boom bust type of
activity.
2.2 THE RTNMC/CBNC EIA EXPERIENCE
RTNMC/CBNC have fulfilled our role as project proponents. What therefore sets apart our
EIA experience from similar projects?
The RTNMC Mine Site and CBNC HPP complex is located in the Province of Palawan,
considered a frontier area owing to its abundant natural resources and the presence of
unique floral and faunal species. Studies have shown that plant and animals species found
in the province are not found in other areas of the Philippines. Aside from this, the studies
have revealed that species diversity and endemicity is high.
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8. Because of this unique characteristic, efforts have been made to ensure that this is
protected. It is in this premise that the Republic Act 7611 or the Strategic Environmental
Plan (SEP) of Palawan was approved in 1992. The SEP seeks to ensure that the unique
environment and natural resources of the province are protected, preserved and developed
in a sustainable manner involving the participation of the different sectors of the society
including the indigenous peoples (IPs). The implementation of the SEP was formalized
through the creation of the Palawan Council for Sustainable Development (PCSD).
Under the mandate of the PCSD, the proposed developments are evaluated whether they
conform to the SEP through the Environmental Critical Areas Network (ECAN). The ECAN is
a graded system of protection and control of the various areas in the province comprising
the terrestrial and marine components and tribal ancestral lands. These areas are classified
as areas for strict protection (core zones); areas for restricted, controlled or traditional use
areas (buffer zones) and multiple use areas.
In order to implement the SEP, the ECAN zones have to be delineated through mapping
and inventory. This is just however, the start of the process. Section 22 of PCSD Resolution
No. 94-44 lays down the procedures for the preparation and declaration of the ECAN zoning
plan. The procedure include:
1. Organization of a planning team in each municipality or city composed by the
Planning and Development Coordinator, Municipal Environment Officer, CENRO,
District Manager of the PCSD, and representatives from the private community;
2. Preparation by said planning team of the draft ECAN Zoning plan;
3. Presentation of the draft plan for public hearing in the locality;
4. Endorsement by the Sangguniang Bayan/Panglunsod and the Sangguniang
Panlalawigan to the Council Staff;
5. Endorsement by the Council Staff to the PCSD; and
6. Final approval of the plan by the PCSD.
In spite of the ratification of the SEP in June of 1992 and the adoption of the ECAN
guidelines in May 1992, the ECAN Zoning has just started the mapping and inventory stage.
The delay in the implementation of SEP (absence of approved zoning) wielded pressure to
our company causing delay in the permitting process, unnecessary financial expenditures
and further delay in the implementation of our project. This is due to the absence an
approved guideline, which could have addressed the issues related to our project in black
and white. In particular, the need for the Free and Prior Informed Consent (FPIC) from the
IPs, location of our facilities, continued mining operations, among others.
As stated previously, an Environmental Impact Assessment (EIA) was conducted for the
renewal of RTNMC’s 990-ha Nickel Mining Claims, and the conversion of the mining lease
contract into a Mineral Production Sharing Agreement (MPSA). The EIA activities
commenced in August of 1996 following the provisions of DAO 96-37. In particular, the
scoping process and extensive consultation activities were included in the EIA that was
carried out.
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9. Similarly, the EIA in 2000 for the HPP Complex followed the same process. While both EIAs
had to undergo consultations, review and evaluation with the PCSD prior to the issuance of
a (PCSD) Clearance, the HPP Complex EIA had undergone more and extensive
consultations including three scoping sessions, focus group discussion (FGDs) with NGOs,
Information, Education and Communication activities starting in 2001, validation meetings
and technical conference with PCSD, site walkthrough with PCSD and NGOs, project
presentation at the Palawan Provincial Board and a public hearing.
The EIS document was submitted to the PCSD in July 2001. After the above-listed
activities, the PCSD Clearance was issued for the HPP Project last 29 November 2001.
Apart from complying with technical requirements, the EIA that was conducted was
participatory and transparent. This has resulted in RTNMC’s generating a documented
close to 80% support rating in the perception survey, endorsements from the following local
government offices, non-governmental organizations, host community residents, and
people’s organizations, tribal councils, among others. :
Consequently, RTNMC/CBNC submitted the EIS document to the DENR-EMB for initial
screening on December 2001. The EIA Review Committee between February and May
2002 conducted at least four technical conferences. During the course of the consultations
and validation meetings, RTNMC/CBNC had invested in the conduct of further studies to
validate the concerns that were raised during these meetings. Some of these studies were
later included as part of the requirements of the ECC issued for the HPP Project. Among the
studies conducted were:
• Archaeological Impact Assessment of the proposed Gotok Limestone Quarry;
• Environmental Health Impact Assessment of the RTNMC Mining Operations;
• Survey and Assessment of Caves and other Sinkholes at the Gotok Limestone Area
and Vicinities;
• Flora and Fauna Biodiversity Survey of Caves and Vicinities in Gotok Limestone
Area;
• Groundwater Resource Potential of the Gotok Limestone Area;
• Groundwater Characterization in the Vicinity of the Proposed HPP Site of RTNMC;
• Soil Erosion Modelling of the RTNMC Mine Site;
• Assessment of the Marine Ecosystem of the Ameril Island;
• Coral Bay Wet Season Simplified Suspended Sediment Transport Modeling
The DENR-EMB/EIA Unit conducted a separate public hearing and site inspection in March
2002. Following favorable endorsement by the EMB Director, the ECC was issued/signed by
the DENR Secretary in July 2002.
Thereafter, the Environmental Legal Assistance Center, Inc. (ELAC) wrote the Secretary of
DENR seeking recall of the ECC on grounds, which had been previously raised (and
responded to by RTNMC/CBNC on a point-per-point basis). The Palawan NGO Network,
Inc. (PNNI) and ELAC filed a Petition for Certiorari at a Manila Court of Appeals in
December 2002. The Court of Appeals dismissed the case for lack of merit on September
2003. After a motion for reconsideration was denied, the PNNI/ELAC elevated the case to
the Supreme Court. Their petition was first denied on February 2004 and finally, the
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10. Supreme Court decided to deny with finality the petition and uphold DENR’s decision to
issue the ECC to our HPP project. It took 555 days for this case to be resolved.
The RTNMC/CBNC EIA is unique in the sense that it had to have clearance from the PCSD
before the DENR-EMB could review and evaluate the EIS. In essence, it has undergone
two separate reviews, which translated to a longer review process.
Moreover, the major role that NGOs played in the EIA activities confirms that the presence
of active and educated NGOs is valuable since it is one way of ensuring that development
addresses environmental and social issues. Their active participation pushes the
environmental movement to the limits. At the extreme, it puts project proponents like
RTNMC/CBNC in a vulnerable position in that interest groups can become very influential to
the extent that decision-making processes involved in permitting are delayed or decisions
are altogether questioned.
For instance, the PCSD was influenced to the extent that it considered cancellation of the
Clearance it issued for the HPP project. Almost two years after it was issued, the PCSD
contemplated to cancel the Clearance it issued for the HPP project as requested by the
PNNI. This request was based on old issues previously brought up by the group and which
were comprehensively answered by RTNMC/CBNC. The PNNI request resulted in
additional inspections by a Technical Working Group formed by the PCSD. In August 2004,
the PCSD finally decided to uphold the Clearance it issued to the HPP project.
Similarly, the DENR, through Special Order 2003-251 formed a Multisectoral Committee to
conduct an investigation into issues raised regarding the ECC granted for the HPP project.
Thus, the participatory and transparent conduct of the EIA exercise required the DENR to
exhaust more effort to re-evaluate the project until such time that all issues related to social
acceptability have been resolved. This, notwithstanding that an ECC had been granted for
the project and that the issues are passé having been discussed and responded to/clarified
in several fora.
The presence of IPs in the area led the others to demand for a Free and Prior-Informed
Consent (FPIC) as a requirement for the issuance of the ECC. An FPIC however is required
for the MPSA and the Mineral Processing Permit (MPP). However, no ancestral domain
claims have been field and approved for the project areas.
This issue was used by the different interest groups to support their opposition to the
project. Consequently, this has resulted in the delay of processing the companys’
application for a MPSA and MPP.
III. LESSONS LEARNED
3.1 SUCCESS IN THE RTNMC/CBNC EIA PROCESS
It can be said that as a whole, the RTNMC/CBNC EIA has been successful despite the
extended route that it has undergone. It has been a useful tool in achieving balance of
interests between development and environment, sustainability, and accruing benefits not
only for RTNMC/CBNC but also for interest groups and the environment, in general.
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11. In the RTNMC/CBNC EIA, communication lines were opened to the extent that conflicting
parties have agreed to communicate and dialogue despite their differences. The
comprehensive discussions/dialogues between the company and different groups involved
resulted in increased information flow to the different stakeholders. This likewise resulted in
a high level of awareness among various stakeholders, which assures the eventual
realization of a balance of interests between development and environment.
It should be pointed out that RTNMC/CBNC has been maintaining viable operations even
before the EIA system has been implemented in the country. As such, the fact that we had
to undergo the EIA process has been a learning experience for the company. We have, for
instance, realized the importance of becoming even more proactive – this has led to
modification of the organizational form by which the company addresses environmental and
social issues and to reconsider some technical aspects of our project. Through the EIA, the
company considered environmental and technical issues that might have significant impacts
on the environment. Specific changes in our original plans for blasting (limestone) and
causeway design and alignment were thus implemented upon consideration of the EIA
findings. The former ensures that limestone quarrying will not destroy nearby caves in the
area. In ensuring that the project is planned and designed in environmentally sound ways,
the EIA made a contribution to sustainable development.
Although the EIA exercise has been a costly and time-consuming exercise for
RTNMC/CBNC, we have learned albeit in a “painful” manner. The amount of scrutiny the
project had undergone including that outside the EIA process per se, has made the
company consider and select the design, location and development of (project) components
that provide ways of reducing environmental consequences during the implementation stage
and work on the recommendations to enhance the project’s positive impacts. As a result of
the successful EIA, the companies have expanded existing programs for social
development, which recognize the needs of both indigenous and non-indigenous peoples in
the host community and nearby areas. The comprehensive Social Development and
Management Plan (SDMP) of RTNMC/CBNC attempts to, among others, take action on the
plight of indigenous peoples (IPs) in the area. Likewise, well-defined environmental impact
mitigating measures and a monitoring program have been put in place according to the
companies’ approved Environmental Protection and Enhancement Program (EPEP). Both
the SDMP and EPEP were among the conditionalities in the project ECC.
The post-ECC concerns of our company, notably, the case filed by the PNNI/ELAC and the
Senate inquiry on the mining activities of RTNMC, corollary to this have brought out
important social, political, legal and environmental issues in open. This experience likewise
educated our foreign investors, in particular and the business sector, in general on
Philippine environmental / social issues, which we believe have far-reaching implications vis-
à-vis doing business in the country. What is significant however is that the Supreme Court’s
decision to uphold the legality of the ECC issued by the DENR demonstrates that the judicial
branch of Government respects the decision of the DENR.
3.2 RECOMMENDATIONS
In light of our EIA experience, we have gained some valuable lessons.
Foremost, it is crucial to be true to our commitments as project proponents for our project to
succeed. The genuineness we emanate as project owners goes along way in terms of the
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12. support and trust of communities within our impact areas, who are the most sensitive
stakeholders of our project.
Second, transparency in our transactions ensured that we have exerted all legal means to
achieve our goals. This minimized questions regarding the legitimacy of our business.
Third, our EIA experience taught us that the conduct of information, education and
communication (IEC) activities guarantee a faster flow and accurate dissemination of
information thus, we have learned the importance of exerting more effort in securing the line
of communications between our company and the stakeholders.
Lastly, the use of third party consultants has enabled us access to impartial and technically
sound project assessment and recommendations. Because of this, we were able to institute
appropriate modifications to improve our project design.
Together with these lessons, we also realize that there are certain areas for improvement
vis-à-vis the EIA process. We recognize the important role of NGOs’ steadfast dedication to
protect the environment. Relative to our experience, we encourage that NGOs get better
technical advice to give more merit to their work.
Based on our experience, we feel the need for the DENR-EMB to select EIA
reviewers/resource persons based not only on their qualifications, but also on their capacity
to be impartial in carrying out their functions. We believe this is crucial to the EIA process
since it affects the integrity of their recommendations.
We want to stress that the issuance of our ECC, the resolution of the post-ECC issues and
the subsequent development of our project does not mean that the exercise is concluded.
Monitoring, which is an essential requirement of our ECC will be implemented throughout
the lifetime of the project. For monitoring to be effective, a community-based approach is
needed wherein members of the monitoring team are well informed about the project and
adequately trained for the task.
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