Philippine mining industry: Boon or bane?

by Caroline J. Howard, ANC

Posted at Dec 09 2011 05:21 AM | Updated as of Dec 10 2011 07:14 AM

MANILA, Philippines - On Thursday, mining industry leaders and anti-mining groups including the Save Palawan Movement faced off as the Senate Committees on Agriculture and Food, and Environment and Natural Resources opened an inquiry to discuss legislation that will affect the mining industry.

Malacañang is in the process of drafting a national policy on mining.

In a position paper submitted to the study group, the Chamber of Mines of the Philippines blamed small-scale mining for its alleged disregard for the safety of communities and the environment.

The chamber said small-scale miners, backed by unscrupulous operators, use explosives and heavy equipment underground.

"A population of 300,000 people generating some P42.8 billion in unreported total gold output from their 'small-scale' mining activities. If properly regulated, this output would have given the national government P857 million in additional taxes," said Atty. Ronald Residoro, vice president for legal policy of the Chamber of Mines of the Philippines.

"We suggest that small-scale mining standards adhere to requirements set for big mining companies," he said. "There should be a strict regulation of small-scale mining and indiscriminate issuance of mining permits by local government units."

Republic Act 7076 and Presidential Decree 1899 currently govern mining activities, giving local governments authority to issue small-scale mining permits.

The group also insists it engaged in responsible mining, investing P1.7 billion in reforestation programs.

Platform for development

Speaking at the Senate inquiry, the Chamber of Mines of the Philippines said mining is a platform for development, and mining companies bring basic services which the government can't provide.

"When Philex goes into Benguet, or Lepanto operates in Mancayan, it brings in a first-class hospital, first-class education, commerce, roads, development into these areas, same thing for DPI in Mindanao, Surigao del Norte."

"The Chamber maintains that mining is not a cure-all. Mining does not claim to solve all of the country's problems. Mining can provide the basic platform for world communities to develop, to help assure sustainable growth within communities, and provide a platform for improved quality of life."

Proposals from stakeholders during the inquiry include the creation of a mineral volume verification system that provides for the exact amount of minerals removed from a territory.

"Hopefully, we can find that middle road and find a way to make proper use of these natural resources, so we take advantages of the natural resources we have been blessed with and at the same time don't ruin the rest of the economy in doing that," Senator Bongbong Marcos said.

Environmental cost

But Christian Monsod of the Save Palawan Movement said mining operations can't be conducted without affecting the environment and the community. While mining focuses on investment flows, he added, it seldom focuses on the environmental cost.

"The country is not getting a fair share of the value of mineral resources and this can be calculated by empirical data," said Monsod, noting large-scale mining does not properly declare its income.

Director Leo Jasareno of the Mines and Geosciences Bureau of the DENR said the operations of City Nickel in Narra, Palawan caused siltation in some farmlands downstream.

He noted that mining operation have been suspended until such time the cause of siltation is addressed by the company.

However, some farmers insist that the company's operations continue.

"Itong pagmimina na ginagawa, maliit man o malaki, ang nagsasakripisyo ho and kalikasan at kaming magsasaka. And City Nickel sige-sige pa rin pong nagooperate, 24 hours huwag lang ho umulan ay may operation ho sila," said rice farmer Ariel dela Cruz.

He said the mining company did not comply with rehabilitating agricultural areas affected by nickel tailings, and small farmers are paying for rehabilitating the fields themselves.

They noted that crop yields have gone down since mining operations began.

"Kailangan i-rehab ang lupa... Kada-cropping, nagrerehab kami dahil hindi namin kaya na mag-rehab ng kabuuan... Nasa 70 kabans per hectare dati ang ani, ngayon nung nag operate and mining pababa ng pababa, ngayon nasa 20 to 30 kabans na lang kami."

"Wala ho talagang responsible mining," he noted.

"Ang mining operation ay malaki talaga ang perwisyo na idinulot. Ang lugar na pinagmiminahan nila ay watershed area. Yung irrigation na pinagawa ng NIA [National Irrigation Administration] para sa mag-supply sa farmers ay apektado na. Ang aming mga ilog ay pinasok na ng laterite at ito ang sanhi ng pagbaba ng aming mga ani," said Danny Cabigen, another farmer from Narra, Palawan.

"Yung aming kailugan ay madumi na at tuloy-tuloy ito sa dagat."

No mining in island ecosystems

Citing evidence of destruction from mining activities, the Save Palawan Movement insists there should be no mining in areas of biodiversity and island ecosystems like Palawan.

The group's "No to mining in Palawan" campaign has mustered more than 3 million supporters.

In a full-page ad published recently, the Chamber of Mines of the Philippines accused the Save Palawan Movement of lying, saying grade school students propped-up the movement's signature campaign.

It added signatures were also secured from people in public places "by spreading wrong information and using scare tactics to make them believe mining will destroy Palawan."

ABS-CBN Foundation Managing Director Gina Lopez, who spearheads the movement, denied this.

"The power of our signature campaign comes from the truth and the way it's done, I actually take offense to that. When we say there are 3.5 million signatures, those are all adults who care," Lopez said.

"We've had mining in this country for many decades and there's nothing to show. We have abandoned mine sites, communities that suffer, children that suffer. What we have is a trail of suffering and devastation... They're devastating our farmlands, our fishery resources. There are farmlands they devastated with laterite. In San Isidro, the Chinese vessel rammed into 979 square meters of coral reef... We have documents and pictures and people these are historical fact."

Lopez also opposed the Chamber of Mines of the Philippines' claim that mining does not and will not affect agriculture, fishing, and eco-tourism in Palawan.

Mining is seen as not feasible in lateritic areas in Southern Palawan which holds the local rice granary.

"The area of Brookes Point where they want to spend P1 billion to extract mineral, is an agri-community. The National Irrigation Authority (NIA) has given many loans so they can do irrigation so how can the Chamber of Mines say the area is not feasible for agriculture?"

"I have literally gone to islands, 3/4ths of which have been mined, and they have asked me for help and I can't even help. They admitted to me it's ugly. How can you say it doesn't affect tourism? Tourism and mining are antithetical. You can’t have tourism in an area which has been mined."

In its ad, the Chamber of Mines of the Philippines said the Save Palawan Movement misrepresented the facts, when it referred to poverty incidence in the mining sector going up by more than half from 1988 to 2009. It said the increase accounted for the migration of unskilled workers to the sector.

Numbers don't lie

However, Lopez said the numbers don't lie. "I'm not misleading the public, I'm using the same figures and they have skewed up the interpretation to poke holes into the figures that are the truth."

"The fact that people have migrated there, they have migrated into construction, manufacturing, the incidence of poverty improves but in mining, it has gotten 74% worse in 20 years, and it's the only sector with that kind of record. There has to be something wrong," Lopez said. "How can the mining sector claim to be able to eradicate poverty in the country when they can't even eradicate poverty in their own sector?"

The movement cited figures from a study on the dimensions of poverty in the Philippines by Professor Arsenio Balisacan, dean of the University of the Philippines School of Economics.

Balisacan, who has been examining the nature, causes and consequences of poverty for the past 15 years, said poverty across all sectors of the economy has tended to decline, with the exception of mining. However, he admitted that evidence of any supposed link between mining activities and surges in poverty is purely anecdotal.

"Poverty across sectors is trending downwards, though at a slow rate. You see progress over time in the last 15 years. That is not the case for mining, where both in incidence of poverty and the absolute number of people in the sector increased. However, that does not suggest that mining per se is the cause of the problem, it might have contributed to the problem but there are other factors."

"If you want to address the bigger picture what really drives poverty in mining, we have to also look at many other factors including migration... For so long as you have so much unemployment, so much poverty, especially in low-paying jobs in agriculture and other areas, mining development is likely to attract migration of unskilled workers, usually the poor and their families, from these areas."

Mining: boon or bane

Amid the raging mining debate, Balisacan said mining can be a boon or a bane, depending on the quality of institutions and policies put in place.

Before declaring if the area is good for mining, Balisacan said it is vital that governments have a clear policy and governance framework on mining, providing the parameters of engagement, especially safeguards, protocols, and rules of the game.

A proper resource valuation framework on mineral resources has to be adopted to ensure that all the costs and the benefits, including direct and indirect, on-site and off-site, of mineral extraction are adequately accounted for.

The governance of the mining sector should be informed of this framework. Mining should not be undertaken in areas where the costs to society outweigh the benefits.

But without a well-defined policy framework, he warned, mining may only spell danger for communities.

"We are openly inviting investors without specifically saying what the rules of the game are. For example, would you allow open-pit mining in ecologically-sensitive areas? The policy framework and governance structure [should come] first, clearly defining what the standards and protocols are, so investors are properly guided and choose technologies for mineral extraction consistent with those standards. Would you allow open-pit mining in ecologically sensitive areas?" Balisacan said.

"Those have to be well-defined. If they're not well-defined, institutions not developed to address problems like pollution and migration, then you will get this conflict between incomes and the sustainability of the environment.

"The policy framework should define those safeguards so when you go to an ecologically-sensitive area, then eco-tourism may be the better alternative, but in areas where the economic gains are tremendous, the social cost can be contained, then why not? Make sure you price it properly so there's something left to the country which can be used for education and rebuilding out the environment. That's how you can balance the interest.

"There's no such thing as one-size-fits-all. There are areas where mining may be warranted, but also areas where the better use of resources would be eco-tourism.

"There are costs and there are benefits... the net should promote the common good, the economy is advanced, poverty is reduced, inequality is not aggravated."

Win-win solution

"There is a win-win solution. It's realizing there are potential problems, at the same time there are potential gains, economic and social gains from using properly mineral resources and transforming them into activities, goods, even human capital so that poverty is reduced and inequity is not," Balisacan said.

"Any extraction of resource must promote the common good so public welfare can be advanced. You have to make sure that the social costs are not more than the social benefits you extract from mining."

Balisacan noted that officials may need to study Palawan's own experience with drawing natural gas, how local institutions and governance applied existing policies, and whether the resource drawn has benefitted communities.

Balisacan noted mining has contributed significantly in countries like Australia and Malaysia.

"In many countries around the world where mining is an important economic activity, mining tends to be adverse to local conditions to local communities, the poor in those areas, if the policy in mining is not well defined, local institutions are not equipped to address the adverse consequences of mining. But not in areas where there are enough safeguards and the institutional environment is clear, predictable, well-defined and says what's allowed and what's not.

"Surely there's a common ground, an appropriate policy framework government has to settle. [If] that framework defines what's allowed, what the responsibilities of the responsible parties are, then we should have no conflicts and the common good will be promoted."

Balisacan said the challenge lies in local governments organizing themselves to closely monitor mining practices, to make sure they are done with the least cost and the greatest benefit to communities.

"In island ecosystems, the very fact of mining there is irresponsible. Palawan is our last old growth forest, it's our UNESCO biosphere reserve, it holds one of the Seven Wonders of Nature. Why will we allow it to be cut up for selfish interests. Why don't we preserve it," said Lopez.

"If we preserve Palawan, it's not only our country that stands to benefit, it's the world."