MAC: Mines and Communities

Philippine mining falters in the face of civil society opposition

Published by MAC on 2011-02-14
Source: Manila Times, Business World, GMANews, Inquirer (2011-02-06)

Recent figures show the mining industry in the Philippines is failing to match its revenue targets. The reasons for this include the fact that an increasing number of local government units are looking to ban mining or impose a moratorium on it. Zamboanga del Norte - the province in which notorious Canadian company, TVI Pacific, operates - is the latest to declare such an interest.

The fiercest arguments around this issue are in South Cotabato, where a ban is supposedly already in place as part of an environmental code passed by the provincial government. However, questions have been raised as to how legal it is (whether it trumps the 1995 Mining Code or vice versa).

If a ban were imposed in the province it would knock out Xstrata's Tampakan project - potentially the biggest mine in the country.

Nonetheless the London- and Toronto-listed company is pushing the enterprise forward regardless. Xstrata was recently backed in this by visiting diplomats from the UK, Switzerland and Australia (where Xstrata's copper unit is based).

The Philippine government's department for Indigenous Peoples (NCIP) is also under fire for taking money from companies that was intended for tribal communities.

Moreover, in the case of OceanaGold's Didipio project in Nueva Viscaya, the NCIP has been acused of ignoring the concerns of local communities - see recent article Philippine Human Rights Commission calls for end to mining deal).

Problems raise bitter complaints against the industry

BY Angelo Samonte, Reporter

Manila Times

6 February 2011

ALYANSA Tigil Mina (ATM), a staunch critic of mining operations in the Philippines, said former President Gloria Arroyo's Medium Term Philippine Development Plan (MTPDP) failed to meet expectations.

The nongovernment organization said Mrs. Arroyo's government aimed to achieve $4- to $6-billon worth of investment in the mining industry. The Department of Environment and Natural Resources increased the target to $15 billion by 2015.

These targets were not met.

ATM said that estimated worth of investment in mining in 2004 to September 2009 was just $2.1 billion or only 35 percent of the total original target investment of $6 billion.

In terms of job creation, the government targeted generating 239,000 direct and indirect employments within the President Benigno Aquino 3rd's six-year term.

However, ATM said a study conducted by Colin Hubo and Stan Pado-jinog of UA&P-CRC in 2009 revealed that only 158,000 jobs were created in mining and quarrying in 2008. This is less than 1/2 percent-about 0.46 percent-of the country's total labor force.

Targets for tax collection were also missed during the period. The government planned to get $5 to $7 billion in excise taxes, fees and royalties from the mining industry from 2004 to 2010. But it only collected P2.6 billion or only about 11 percent of the low-end target, ATM said.

Also, the nongovernment organization said the industry failed miserably in maintaining sustainable development principles. This was true not only during Arroyo's term but also during her predecessors' administrations.

Mining hasn't contributed much to the country's development and, worse, it displaced indigenous people in mining areas of the country.

However, Leo Jasareno, the acting director of the Mines and Geosciences Bureau (MGB), defended the government's performance during Mrs. Arroyo's term. He said his bureau was able to achieve the target of the MTPDP.

"We were able to meet everything, we even exceeded the targets. We meet all the targets in investment, employment, production value, export, GDP [gross domestic product]. We met all of that even the geo-hazard we were able to met that," Jasareno said without presenting data.

Nongovernment organizations such as ATM have their own figures, but Jasareno said those data are incorrect. He advised groups criticizing the government to reexamine their data because it doesn't conform to the developments on the ground.

"First of all please check your figures. Second, we can't move forward because you keep on opposing."

Mining opposition

While the government aggressively promotes mining operation in the Philippines, opposition to mining activities is mounting.

For Judith Pamela Pasimio, the executive director of the Legal and Natural Resources Center Inc., said the Aquino government has reacted too fast in embracing mining as top priority to advance the economy.

The center provides support to indigenous people affected by mining operations. For over 23 years now, the center gives direct legal servicing, does research and policy development and campaigns against mining.

"The Arroyo government for nine years we fought against it. We would have thought that this new government that ran under the platform of change would stop for a while and review to see the real problems. But he [the President] had a very fast positioning. In his speech during a US visit he mentioned about opening up the mining industry to foreign investors. Tourism. And the core is mining," she said.

The President, according to Pasimio, appears to be ignoring the fact that the mining is extensively opposed by the Catholic Church particularly large-scale mining. Also President Aquino hasn't talked about his natural resources agenda, the indigenous peoples rights and such things, which Pasimio's groups has been waiting for.

"We're looking for tiny steps to veer away from the path that the Arroyo government took before. But we're not seeing anything. So it's very alarming that what we're facing right now is a government that does not seem to learn from the past. Are we hopeful for changes? We're hopeful for the people and hopefully the local government to pursue those kinds of assertion of their rights," she said.

Pasimio said they oppose mining because it only benefits large mining corporations and not the people hosting the operations and the country as a whole.

Aside from the impact on the environment, mining displaces indigenous peoples, creates human rights abuses and forces people to compete for energy and water sources.

And now the present secretary of the Environment department, Secretary Ramon Paje favors the same things favored by the Arroyo government.

LGUs getting more share

The law essentially says the excise tax sharing is 60-40, 60 percent goes to the local government units (LGUs) hosting the mining activity and 40 percent to the national government. These include income tax, business tax, real property tax, etc.

But Jasareno said they think the government is not getting enough from mining operations and there's a need to increase the share of the government.

"In our view, we must get more shares. The problem is the President has a platform not to raise taxes. So the department thought of non-tax revenues. We have a program to increase mineral reservations. The mining areas must be made mineral reservations. If they are made mineral reservations we can collect 5 percent of the gross," he said.

Currently, the leading government earner of non-tax revenues is the National Telecommunications Commission (NTC). In 2009 it collected P3 billion. MGB is at 15th place.

If MGB could convert all the mines to mineral reservation areas in 2011, the bureau could get P7 billion, exceeding NTC's yearly collection. "That's for the additional 5-percent gross and that what's we're pursuing."

Of course industry players opposed this additional cost and Jasareno said they are now in the process of consulting with them. While the MGB believes that there is a need to increase the share of the government there are disagreements on the method of how to increase it.

"We want to increase it by 5 percent. We agree on the principle but we disagree on the method. Like in the case of MPSA, the mining contract, mineral production sharing agreement it only means that there is sharing between the mining company and the government."

The MGB will carry out the plan once the President gives his approval. But it was the President who ordered MGB top consult the industry players.

Rehabilitating abandoned mines

The Alyansa Tigil Mina reports that the worst scenario in post-mining activities in the country is the abandonment of mines by companies once they have extracted all they can.

The government has included the rehabilitation of abandoned mines in the priorities under the MTPDP of 2004 to 2010. The plan targeted assessment of seven inactive mines and started the rehabilitation of at least three mines.

Unfortunately however, the ATM said only one was cleaned and restored by the government.

As of 2008, anti-mining nongovernment organizations maintained that there are around 800 abandoned mines in the country while the MGB insists that there are only seven major mines needing immediate clean up. MGB calls it the "seven dirty" mines.

Abandoned mines leave toxins all over the region. And they become useless for the human beings there.

Countering allegations of incompetence, Jasareno said there is still no major rehabilitation because the industry hasn't reached the intended life span of a mine.

But he admitted that their primary concerns are the old existing abandoned mines. For example the Bagacay Mines in Samar, which is a surface mine. The operator left it after the company went bankrupt. The bad thing is the mine was left spilling acid to a nearby river threatening wide life and the environment.

"What should we do? Go after him put him in jail? But still the bad effect is still there so the government is obliged to address it. So the government is now spending millions to rehabilitate it, because we can do nothing," he said.


Mining investments miss target in 2010 -- MGB chief

Business World

6 February 2011

INVESTMENTS in the local mining sector fell about $244 million short of the government's target last year due to delays in various projects, the Mines and Geosciences Bureau (MGB) said late last week.

"We missed our target due to Didipio, Pujada, Nonoc, Intex, and partly from (sic) Siana and Taganito ... projects," MGB Director Leo L. Jasareno told reporters via text late Friday.

Specifically, some $955.85 million worth of investments came in, against a $1.2-billion target for the year.

The target last year was itself a reduction from the $1.429-billion target set in 2009. That target was also missed.

Realized mining investments last year, however, were still a 36% increase from $704.43 million in 2009.

Mr. Jasareno said that the biggest investments last year consisted of:

In a separate telephone interview yesterday, Mr. Jasareno said that since some of the projects planned for 2010 were deferred to this year, the bureau is reviewing this year's target.

"[The projects were] pushed...to 2011, so the target for 2011 is currently under review because it may increase," Mr. Jasareno said.

MGB had projected the value of mining investments to reach $3.417 billion this year.

The projects that were deferred were Australian miner OceanaGold Corp.'s Didipio project in Nueva Vizcaya, Asiaticus Management Corp.'s Pujada nickel project in Davao Oriental, Philnico Industrial Corp.'s Nonoc nickel project in Surigao del Norte and Norway-based Intex Resources ASA's nickel project in Mindoro, Mr. Jasareno said.

The target was also not reached partly because investments in the Siana gold and Taganito HPAL projects were less than planned. Mr. Jasareno noted that the Taganito investment was supposed to total some P1 billion last year, but could not recall the plan for the Siana project.

MGB projects mining investments to reach $3.855 billion next year but to drop to $1.995 billion in 2013. Last Jan. 5, the Environment department said mining investments are expected to total $17.35 billion from 2001-2016.

In a telephone interview yesterday, Nelia C. Halcon, executive vice-president of the Chamber of Mines of the Philippines, said that the industry is optimistic, but at the same time cautious, that the investment targets can be reached.

"We remain optimistic that investments can reach the targets set by the MGB...however, industry [players] are also alarmed by both national and local policies that may discourage investments," Ms. Halcon said.

Ms. Halcon said she was referring to the Environment department's decision last month to stop accepting new applications for permits as it reviews existing projects to weed out inactive ones, as well as the negative policy stances adopted by South Cotabato and Romblon.

Last Jan. 10, the province of Romblon ordered an indefinite moratorium on the exploration, excavation and utilization of metallic minerals.

Earlier, on June 29, 2010, an environment code containing a ban on open pit mining was signed into law by the province of South Cotabato.

"The recent moves by government may affect investments in mining...but for [the industry's] part, we will continue to work, to pursue projects in the pipeline," Ms. Halcon said.
"The demand [for metals] is there and the prices of metals are high," she noted. --

Kathleen A. Martin


House committee to probe mining royalties

By Floro Taguinod

GMANews.TV

1 February 2011

LAGAWE, Ifugao - The House of Representatives committee on National Cultural Communities (NCC) is set to investigate some officers of the National Commission on Indigenous Peoples (NCIP) over their alleged involvement in a fund reparations anomaly.

The NCIP could be involved in irregularities concerning over P 71 million in royalties due to the Mamanwa tribe in Surigao Del Norte, said Ifugao Rep. Teddy Baguilat, chair of the NCC committee.

The amount represents the share of the Mamanwas living in areas that generate revenues from the nickel operations of Taganito Mining Corporation (TMC) in Claver town.

In a marathon hearing hosted by Gov. Sol Matugas at the Surigao Provincial Capitol, questions were raised by some congressmen on where the money actually went as the Mamanwas alleged that some unscrupulous officers of the NCIP regional office had pocketed part of the royalty payments using deception and coercion.

To uncover irregularities

Baguilat, himself an indigenous person and a former governor of Ifugao said that his committee intends to uncover alleged irregularities in the conduct of the free and informed prior consent (FPIC) and the management of the royalty fund which was supposed to benefit the Mamanwa but "instead led to more misery and dissension among the usually peaceful indigenous peoples."

Under the Mining Act, mining companies have to secure the FPIC of indigenous peoples in mining sites before getting a license to mine the area while the communities issuing an FPIC are entitled to 1 percent of mining revenues or royalties for the development of infrastructure and better social services for affected communities.

"We have to find out where the money went because it rightfully belongs to the Mamanwa in the area, who have to be the first to benefit from their sacrifice in allowing the mining operations to start in the first place," Baguilat explained. The issue should be resolved immediately to prevent unrest and violence that may arise in the area, he added.

In the hearing at the provincial capitol, Akbayan party-list Rep. Arlene Bag-ao also reportedly chided the NCIP for allegedly getting part of the funds - that should have gone to the Mamanwa tribe - for the administrative costs of its regional office.

Oblivious to indigenous people's plight

NCIP was created to promote and protect the well being of indigenous peoples with respect to their beliefs, customs, institutions, and ancestral domains but it has been accused in the past for supposedly kowtowing to the interests of some mining companies and turning a deaf ear against the plight of affected communities.

In Nueva Vizcaya, the Ifugaos in Kasibu's Didipio village had accused NCIP of muddling issues concerning the prior consent for Australian miner OceanaGold Philippines Inc.

GMANews.TV asked OceanaGold's vice president for communications Chito Gozar to comment on the issue by email, but has not received a response as of this posting. We also tried to get in touch with Ruben Bastero, the NCIP's regional director for Cagayan Valley but wasn't able to get though as of this posting.

In an interview with GMANews.TV, Tolentino Inlab, chair of environment group Didipio Earth Savers Movement, claimed that during the initial phases of OceanaGold's entry into the province the NCIP in Region II had told the Ifugaos that they did not have the right to meddle with issue of prior consent as they were migrants from nearby Ifugao province.

"Nevertheless, we are still indigenous people and we have been residents of Didipio for many, many years now," Tolentino reasoned.

The NCIP was even a signatory to documents required by the Department of Environment and Natural Resources for the OceanaGold's environmental compliance certificate - one of the pre-requisites that allow a company to start its mining operations, Inlab.

In a recent resolution borne out of its investigation into alleged human rights violations against the Ifugaos, the Commission on Human Rights required several line agencies including the NCIP to submit reports regarding concrete actions that were taken to respect, protect, and fulfill the rights of the affected community in Didipio. - VS, GMANews.TV


Zambo Norte ordinance vs open-pit mining lauded

Philippine Daily Inquirer

25 January 2011

MANILA, Philippines-The Legal Rights and Natural Resources Center-Kasama sa Kalikasan (LRC-KsK) Cagayan de Oro commended the legislators of Zamboanga Del Norte in "sprucing up provisions of a proposed ordinance protecting and conserving the integrity" their land and water resources by banning open-pit and open-cut mining.

When enacted, it will be the second local government unit to do so; South Cotabato being the first to ban open-pit mining in their province.

As reported in Philippine Daily Inquirer (January 24 issue), the proposed legislation was "principally authored by Board Member Edgar Baguio and co-authored by all 12 of his colleagues."

"The proposal is premised on situations such as the "drying up of rivers and creeks, and the thinning of water resources [that] ... is becoming a phenomenon" in Zamboanga Del Norte and could have long-term negative impact on its agriculture-based economy," the reports reads.

The proposed legislation, its proponents argue, is covered under the local governments mandate to "protect the environment, protect its flora and fauna and secure its inhabitants from the harmful effects of man-made disasters."

"This is a very welcome development as we witness that more and more local government units are sprucing up their local environment codes based on the protectionist provisions of our constitution. We are more than willing to support local legislative bodies who are exercising their right to say no to environmentally destructive projects and industries," said Ma. Zherwinah B. Mosqueda, LRC-KsK Cagayan de Oro team leader in a news release.

The local legislators cited "past disasters involving the mine site of Philex Gold Philippines in Sibutad town, and the environmental damage wrought by the ongoing operation of TVI Resources Development Inc. (TVIRD) of its Canatuan mines in Siocon town."

"They pointed out the "massive destruction of wide land surface" and "total denudation of the forest cover of a wide area" caused by the said open-pit mining operations," the report continues.

Currently, some 137 applications to operate or explore minerals in the region have been filed that covers 703,598 hectares-almost half of the region's land area.

"We encourage other local legislative bodies to follow suit. It is well in their mandate to protect their constituents from the ravages of extractive industry-influenced disasters and calamities. They have the constitutional right to say no to mining," Mosqueda said.


Environmentalists call for wider ban on mining

Catholic News Asia

28 January 2011

Philippine environmental groups are urging local governments across the country to follow the lead of the southern province of South Cotabato and enact laws banning open-pit mining.

Daniel Castillo, a representative of the Church-based Committee on Mining Issues, said a localized mining ban is a viable countermeasure against a central government mining code of practice which anti-mining activists say favors companies investing in mineral extraction projects.

An environmentalist organization in Cagayan de Oro earlier praised lawmakers in Zamboanga Del Norte province for considering an ordinance banning open-pit mining.

"We are more than willing to support local legislative bodies who are exercising their right to say no to environmentally destructive projects and industries," said activist Zherwinah B. Mosqueda.

Currently, some 137 applications have been filed to mine or explore for minerals in the southern Philippines' Zamboanga Peninsula region.

The total area that would be affected if they are all granted would be 703,598 hectares or almost half the region's land mass.

"We encourage other local governments to follow suit. It is well in their mandate to protect their constituents from the ravages of extractive industry-influenced disasters and calamities," Mosqueda said.

A Mindanao business leader, meanwhile, has joined a Canadian mining firm in urging Zamboanga del Norte legislators to consider the effect a ban on open-pit and open-cut land surface mining would have on the local economy.

Edwin Capili of the Philippine Chamber of Commerce and Industry warned that Zamboanga del Norte could miss out on the social and economic benefits that can be gained from mining.

Capili tried to allay fears of massive destruction to land and water resources by claiming that responsible mining practices are sensitive to the requirements of sustainable development.


Tampakan mine opponents challenge government stance

Business World

25 January 2011

KORONADAL -- Church leaders supporting South Cotabato's environment code are challenging pro-open pit mining groups to take their arguments to court.

Fr. Romeo Q. Catedral, director of the social action arm of the Diocese of Marbel, said only the court can decide if indeed Section 22 of the code, which bans open-pit mining in the province is "ultra vires," or beyond the power of the local government, as open-pit supporters have argued.

The banning of open-pit will endanger the massive Tampakan copper-gold project of Sagittarius Mines, Inc. The project has the potential to be the largest mine in the country and the fifth-largest copper mine in the world should it start operations in 2016.

Fr. Catedral, during a hearing on Monday, said "the Sangguniang Panlalawigan should not give in to pressures tossed by open-pit supporters and just let the company find the venue to answer the question of ultra vires."

The joint hearing of Environmental Protection and Justice, Legal Matters, Rules and Revision of Ordinances committees of the provincial board was conducted to hear the arguments of environmental groups supporting the code and in retaining the provision that bans the open-pit method.

Jose M. Madanguit, vice-chairman of the two committees, said the board has listened to all arguments. "[We], especially the previous members of the council, which had two lawyer-members, have already made our unanimous stand that it is not ultra vires through the passage of the code."

Mr. Madanguit also clarified to BusinessWorld that there are no pressures at the moment from any group but that the board merely entertained the petitions under a democratic process. He had noted that after the first public hearing held last week, members of the council were not convinced by pro-open pit groups' arguments.

He added the provincial board will conduct an open forum with a "neutral" resource person to present the open-pit method, who could be Mines and Geosciences Bureau XII chief Constancio A. Paye, Jr. But Mr. Paye argued during last week's public hearing that "open-pit is only a mining method, thus it is allowed by national law."

Bishop Dinualdo D. Gutierez of the Diocese of Marbel led the church group during the hearing with a statement enumerating biblical, legal and constitutional provisions as "solid basis" for the Church's stance.

He noted from the rationale of the Supreme Court's Rules of Procedure for Environmental Cases that "the development construct of environmental rights under the constitution is framed in such a way that these rights are shaped as state policies."

Church groups have claimed that they are not against development but for one that is "sustainable, environment-friendly, equitable," and mindful of "intergenerational justice."

The controversial code was signed into law in June last year by then governor and now second district congresswoman Daisy P. Fuentes after six years of deliberation and two provincial administrations.

After it was signed, President Benigno S. C. Aquino III called for a compromise with the provincial government now headed by Governor Arthur Y. Pingoy, to do away with the stumbling block to the potentially biggest mining operation in the country.

Mr. Pingoy maintained the position of the previous administration to implement the code even after a series of meetings with officials from the Department of Environment and Natural Resources. He even criticized a memorandum sent by Interior and Local Government Secretary Jesse M. Robredo calling for the immediate suspension of the implementation of the code pending board review.

Mr. Robredo's memorandum argued that while local governments have the power to enact laws in their areas of jurisdiction, they cannot bypass national laws. The national law referred to in the memorandum is Republic Act No. 7942, or the Philippine Mining Act.

John B. Arnaldo, Sagittarius Mines' corporate communications manager, said the company has always applied its "best practice, respects the views and concerns of the stakeholders, and appreciates and abides by the process applied by the Sangguniang Panlalawigan, and will continue to monitor the development on the concern."

Mark Williams, Sagittarius Mines' general manager, said in a statement posted on the company's Web site that a continuing dialogue with all stakeholders is the key to solving the dispute.

"We share [the Tampakan project supporters'] belief that a project of this magnitude undertaken by a company that is committed to the highest standards of sustainable development offers unprecedented opportunities for the region," he said. -- Louie O. Pacardo


Swiss, Austrian, NZ diplomats visit Tampakan project

Philippine Daily Mirror

5 February 2011

Embassy officials from Switzerland, Australia, and New Zealand were in South Cotabato recently to observe the progress of the proposed copper-gold project In Tampakan town, touted as the biggest single foreign investment in the country to date.

"Our small town is now prominent in the world map because of the proposed copper-gold project," said Tampakan mayor Leonardo Escobillo while receiving Switzerland's ambassador to the Philippines Ivo Sieber, Australian General Consul Hugh Wilson, and New Zealand Deputy Head of Mission to the Philippines Andrew White, during a visit to Tampakan this week.

"It is a huge honor for a small town like ours to be visited by foreign diplomats," Escobillo said. Tampakan is a 2nd class municipality with a population of at least 34,000.

"The project, while still on its exploration stage, has brought employment and business opportunities for our town," Escobillo said.

South Cotabato Provincial Assessor Eduardo Siason on the other hand confirmed that for a small town like Tampakan it has displayed "tremendous economic growth for the last five years."

"In terms of an increase in assessed real property value Tampakan is now number two among the municipalities in the province," Siason said.

"Imagine how Tampakan will overtake everyone once the copper-gold project starts," Siason said.

"Last year, the real assessed value in Tampakan increased by 5.99%, the second highest in terms of increase percentage among all municipalities," Siason said.

"We are definitely looking forward to the mine's operation in 2016," Escobillo said.

The mayor also expressed his commitment to responsible mining and said he will ensure that the project institutes measures to protect the environment, specifically the water resources in the project area.

"Our town has the biggest copper gold deposit in Asia and we look forward to using this deposit to bring progress here," Mayor Escobillo said.

"Tampakan is now known all over the world and the project has not even started yet," he observed.

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