Mining in the Philippines: Bane or Boon

Keynote Speech of Senator Aquilino Q. Pimentel, Jr. at the Interdisciplinary Conference on Mining sponsored by the Legal Rights and Natural Resources Center-Kasama sa Kalikasan at the CSWCD, UP Diliman

on November 26, 2007 October 27, 2007

Ms. Jo Villanueva

Distinguished Guests

Ladies and Gentlemen:

There are a number items to underscore regarding mining, the subject matter of our conference.

Since, many of our participants here are more knowledgeable about it than I will ever be, may I state – restate would be the better word – our concerns regarding the resurgence of mining activities in the country today.

Mining has been pursued in this country for so long as I can remember. The Spanish conquistadors that Magellan brought to our shores did not to my knowledge get into mining as furiously as the Americans did when they replaced the former as our colonial masters at the turn of the last century. And to this day, mining is still big business in the country.

Let’s look at the latest mining map[1] that shows the location of the more aggressive mining firms in the country today.

What’s wrong

Now what is wrong with mining as it is practiced in the country?

What is wrong with mining as a way of extracting the minerals that are embedded in the bowels of the earth in this part of the globe?

Does not mining give people money to meet the needs of life? Build infrastructure for the nation? Sustain the development of the nation?

Embedded in these questions were the assumed answers that in my youth - and even as a naive young man - were deemed gospel truth.

New insights

The evidence is that mining indeed produces money for the people who work the mines, the owners of the mines, and by way of the so-called 'trickle down’ theory of economics, other people too.

Nonetheless, the best information we get is that far from benefiting the country as a whole, mining has devastated it.

We agree with that conclusion despite the fact that the Bangko Sentral saw the doubling of foreign investments, mostly from mining as of November 13 last.

The governor of the Bangko Sentral was quoted as having said that the country may end the year with around $2 billion in net foreign direct investments, nearly double the central bank's target of $1.1 billion.

He also said that net foreign direct investments in the first 10 months rose 26.2 percent to $1.72 billion. The bulk of these investments is expected to be in the mining sector.

The expected surge of foreign investments, with mining industry leaders projecting inflows of more than $7 billion in the next 10 years would come after foreign investment mining rules were eased in 2005. The Arroyo administration considers foreign investments in the mining  industry as a crucial part of its development program. At a mining conference this year, it was estimated that investments in mining from 2004 to 2020 could reach 730 billion pesos, or $13 billion, with annual taxes estimated at 55 billion pesos.

Surprising SC ruling

The rules were relaxed when in December of 2004, the Supreme Court overturned an earlier decision declaring the Mining Act of 1995 unconstitutional. The net effect of the decision was to broaden the rights of foreigners investing in the mining industry.

Foreigners may now, in effect,  "fully own and operate mining companies".

In reversing itself, the court, voting 10 to 4, with one abstention, also set forth a hitherto unheard of principle. It recognized the president's "full control" of mining operations.

I do not see that principle justified by the provisions of the Constitution or by existing legislation.

It looks like the SC engaged in an unwarranted act of judicial legislation.

State of Calamity

Because of that folly, it is feared that as the NGO group called, Defend Patrimony, said "The world's largest mining firms – many of which are notorious in other parts of the globe - will bring this country into a state of calamity and will unleash an environmental tsunami that would engulf the people…"

Foreign mining giants like BHP Billiton and Anglo-American are eyeing multi-million dollar mining projects “spread across Cordillera and Mindanao.”

Spotty record

It appears that these firms have a spotty record in upholding environmental standards in countries where they operate, For instance, BHP Billiton, reportedly “dumped 80,000 tons of rock mine tailings filled with toxic heavy metals such as copper, zinc, cadmium, and lead directly into the Fly and Ok Tedi rivers in Papua New Guinea. The dumping of toxic mine tailings into the rivers has ruined the livelihoods of hundreds of thousands of farmers, poisoned some 2,000 square kilometers of forests, and contaminated two of Papua New Guinea's largest river systems."

The other giant mining company, Anglo-American, has an apparently notorious record in “open and strip mining” in the more than 100 years of its existence as a mining company.

In 2005, the Canada Commission for Environmental Cooperation named Anglo-American as one of the main toxic lead polluters throughout North America. Its operations killed crops and contaminated water sources in Venezuela, and displaced the population and ruined the local Church in Tabaco in Columbia where the largest coal strip mine in the regions lies.[2]

Local mine tailing spills

Among the more notorious environmental disasters that have caught national attention because they took place in the country were the reported mine tailings spills by Lafayette Mining in Rapu-Rapu, Albay and the Placer Dome tragedy in Marinduque island".

I suggest that there is much wisdom in what Caloocan Bishop Deogracias Iniquez has recently said: there is a need to reassess the cost and the benefits of mining in the Philippines, taking note of the tragedy it brings in the name of economic development, before opening the doors to more mining firms.

Defying evidence

Still, Environment and Natural Resources Secretary Angelo Reyes revealed in June of this year that he has approved 12 mining permits that will bring in, at least, P224.7 million in investments for the country in the next two years.

Reyes told global mining leaders during the 7th Asia-Pacific Mining Conference and Exhibition at the Shangri-La Hotel in Makati City, that of the 12 permits, seven are mineral production sharing agreements (MPSA) and five are exploration permits (EP).

The new mining operations will take place in Luzon, namely in La Union, Cagayan, Ilocos Sur, and Laoag City; in the Visayas in Palawan and Bohol and in Mindanao in Bukidnon, Surigao del Norte and Surigao del Sur.

           Reyes justifies the entry of these mining firms into the country in the expectation that some P196.35 million in investments would come from the initial exploration activities of six MPSAs, and P28.44 million from the initial exploration funds of the five EPs.

The favored mineral targets of the new mining  operation appear to be gold, copper, nickel, zinc and chromite.

Contradicting Reyes

The optimistic position of Reyes that measures the country benefits only in monetary terms is flatly contradicted by the report of a fact finding team from the United Kingdom led by Member of Parliament Clare Short and a Columban priest, Frank Nally. The team did a two-month observation of the status of mining operations in the country.

After consulting with a lot of people in many mining areas all over the land, the team issued a report. The team's conclusions were far from flattering to the mining industry and included the following:

1.     Mining operations invariably evicted indigenous peoples from mining sites;

2.     Mining poses an imminent danger to indigenous culture;

3.     Mining polluted the rivers at their sites;

4.     Mining destroyed mangroves;

5.     Mining damaged corral reefs;

6.     Mining ruined agriculture, and

7.     Mining damaged the nation's biodiversity.

In a word, the damage caused by the manner in which mining operations are done in the country cannot be compensated by the money mining brings to our people.

Recommendations

Lest we be accused of merely echoing what we see is bad in the mining industry, let us add immediately that there are certain recommendations made by the UK team some of which the government can adopt to alleviate the problems caused by the mining industry. Among these recommendations are the following:

(1)       Mining firms shall be made to adhere to our laws and to the best practices and standards of international mining.

It looks like foreign mining firms behave responsibly when operating in their home grounds but irresponsibly in developing countries like ours.

(2)       Unless they do so, no permits will be issued to applicant mining firms and for existing mining operations, their permits will be cancelled if they do not show compliance within a reasonable time frame;

(3)       The Department of Environment and Natural Resources should be split into two: Department of Environment and the Department of Natural Resources.

It is incompatible for any entity to be both regulator and dispenser of rights at the same time.

(4)           Cause the amendment of the 1995 Mining Act or repeal it and substitute it with a more environmental friendly legislation.

(5)           Inform the people of the actual revenue – provable by facts and figures – derived from the mining industry.

It is so easy to mouth self-serving paeans to the bounty that the industry brings to the people. But it is difficult to believe it when you continue to see thousands of our people working in the mining pits or residing nearby still visibly mired in poverty.

(6)           Ensure that human rights – especially of the indigenous peoples - be respected in the mining sites.

A Jesuit friend of mine, Fr. Ernesto Javier, complained months ago that he and his brother wanted to go a piece of agricultural land their family owned that was located near the site of a mining operation in a province in the Visayas. They had to undergo the humiliation of being stopped and made to alight from their vehicle at a check point manned by armed men who wanted to know where they were going and why.

If they did that to a Jesuit priest and to his brother who were doing a perfectly legal and legitimate act, we can just imagine the liberties the armed mercenaries of the mining industry would take when they accost the poor unlettered "lumads" who may want to know what the miners are doing in their ancestral domain.

(7)           Require mining operators to post bond to cover the potential damage that their operations could cause to environment and the residents of the affected areas.

It is not fair that mining firms get what metals they want from our land, devastate it as they wish, and depart without even saying 'Thank you' or 'By your leave.'

(8)           Require mining firms to submit to genuine consultations with indigenous peoples before they are allowed to operate in the areas occupied by the latter.

(9)           Disallow the use of military personnel to enable mining operators to force their way into the mining sites despite legitimate opposition, and

(10)         Create a fast responding center in every mining province, city or municipality where complaints against abuses of the industry may be received, discussed and solved at the earliest opportunity.

In this regard, the local government units concerned may do so by themselves without the permission of the central government.  For more effectiveness, however, it is suggested that the central government should respect the right of the local officials on this matter as this is certainly one of the powers they may exercise under Local Government Code.

What we can do

To sum up, it may be too much to expect that we can summarily close down mining operations in the country.

Briefly, what we can do is to insist that mining firms doing business here follow international mining practices and standards that (1) observe pertinent domestic legislation; (2) uphold the requirements of domestic ecological balance and sound environmental concerns; and (3) bind themselves to respect human rights and the cultural traditions and customs of the lumads of the land.