'Gov't giving away 90% of Mt. Diwalwal gold in ZTE mining deal'


Posted at Sep 13 2008 12:04 PM | Updated as of Sep 15 2008 02:38 AM

President Arroyo's administration will be giving away 90 percent of the country's gold reserve in Mt. Diwalwal, Compostela Valley if the government's mining deal with China's ZTE Corp. pushes through, lawyer Harry Roque revealed Saturday.

Roque said he uncovered the government's agreement with ZTE Corp. through the minutes of a meeting between government officials, led by Trade Secretary Peter Favila, with officials of the Chinese company.

He said the meeting took place at the Shangri-La Hotel in Makati City on July 27, 2006, months after Favila signed with ZTE the controversial memorandum of understanding (MOU) on the $1-billion mining deal.

Based on the minutes of the meeting, Roque said the government agreed to give the Chinese company 90 percent of gold that will be cultivated from Mt. Diwalwal, which leaves the Philippines 10 percent of the precious metal's reserve in the mining town.

He said the agreement is already contained in a legal document. "This summarizes what was agreed upon by the Philippines and the ZTE Corp in implementation of the MOU."

Roque said one of the Chinese people present in the meeting was Fan Yan, the same ZTE Corp. official mentioned in the Senate's investigation on the botched $329-million national broadband network (NBN) deal.

He said he will name the other government officials and details of the agreement next week.

'Tongpats' source

Roque suspects the mining deal entered into by the government with ZTE Corp. would be the source of "kickbacks" for other high-ranking government officials involved in the botched NBN-ZTE agreement, who have not received their share of the deal.

“This explains where the tongpats (kickbacks) will be taken from. The $150 million kickback is too small. How will you get the money that would be used for the broadband operation? This is the answer,” the lawyer told radio dzMM.

One proof that giving away kickbacks is involved in the mining deal, Roque read a part of the MOU that says the Philippine government would handle the “local nuances.”

“The government of the Republic of the Philippines shall make available technical advises on the local nuances in the development and implementation of the investment,” Roque said, reading a provision of the MOU. “What do local nuances mean? That’s tongpats.”

Roque had said that the mining deal,  if it pushes through, would become the mother of all illegal transactions entered into by the government, because of the amount involved in the agreement.

He said that based on a P200-million study conducted by the Philippine Mining Development Corp., the gold reserve in Mt. Diwalwal is worth at least $1 billion.

He said $1 billion is enough to satisfy all erring government officials who want a share from the projects awarded to the ZTE Corp.

Confidential clause

Roque said the MOU is a five-page document with a provision that says the agreement should be kept from the public.

“Unless otherwise required by law, regardless of regulations or an order of a court or any appropriate government agency, a party hereto shall not reveal the contents of this agreement, or issue any press release or make any other public announcement pertaining to the project contemplated herein without the written approval of the parties,” the lawyer said.

He said the provision clearly proves that something is fishy about the deal, adding that all negotiations entered into by the government should be made public as transparency in all government transactions is required by law.


Roque also belied claims by Press Secretary Jesus Dureza that the MOU is not an enforceable document.

The press secretary told radio dzMM that the MOU is not like a memorandum of agreement. He said the MOU is just a document for an “intention to invest.”

Roque, however, said that other than the title, there were no words in the document that says there is only an intention to invest.

He said the word “agreement” is written all over the document. “Aside from the title, there were no instances that mention the document is an MOU.”

Roque added that there is a provision in the document that says the government and ZTE Corp. “agree to perform all such acts and to execute and deliver such other documents… maybe necessary in order to give effect to the intent underlying the agreement or fully implement or consummate the transactions contemplated hereby…”

One of the required documents that has been executed by the government with ZTE Corp. is the 90-10 “sharing agreement” of Favila and Chinese officials, he said.

“I challenge Secretary Favila to make public other agreements entered into by the government with ZTE Corp. regarding this MOU,” he said.

Roque said the government hid the agreement by using the word MOU in anticipation of the people’s possible negative reaction to the mining deal.

Arroyo directly involved

The lawyer said Mrs. Arroyo is directly involved in the alleged illegal deal.

He said Mrs. Arroyo gave Favila a special authorization to “negotiate, conclude and sign for and in behalf of the Republic of the Philippines the MOU between the Philippine government and the ZTE International Investment Limited.”

Roque said he will bring his latest exposé before the proper court only after the public has been completely informed about the allegedly anomalous mining deal.

He added that he is also waiting to get hold of other documents needed to file complaints before the court.

Dureza, meanwhile, declined to comment on the revelations of the lawyer.

“Let it be threshed out [in the proper court]. We will wait for his answer to the constitutional challenge,” he said.

The press secretary had challenged Roque to bring the mining deal issue before the courts instead of babbling his revelations before the media.