MAC: Mines and Communities

Philippines: Mining conference met with protests

Published by MAC on 2013-09-15
Source: Statements, Bulatlat, Business World, ABS-CBN (2013-09-12)

The past week has seen the annual miners' conference taking place in Manila, accompanied by high security and the customary annual protests.

Philippines Mining protest

Protest at 2013 Philippine Mining Conference in Manila
Photo: Kalikasan/Bulatlat

Pickets outside the venue called for the immediate withdrawal of all military and paramilitary troops from mining areas and for the passage of the People's Mining Bill, while another outside the Supreme Court supported a court case against provisions in the current 1995 Mining Act.

Inside the conference, the miners continued to push the Government for what they believe is a fairer share of revenue, whilst bemoaning that the industry has been held back by Presidential dithering.

Also inside the conference a special meeting revealed, unsurprisingly, that there are now doubts  whether the Philippines can publish  its report  in time to be compliant with its obligations as a new member of the Extractive Industries Transparency Initiative (EITI).

Finally, there have been yet more legal shenanigans among traditional politicians over control of lucrative mining companies - as with a case involving Platinum Group Metals Corp. (which has been subject to previous complicated legal battles). Given the constant repition of such opaque and venal ownership issues,, what hope is there hope for transparency?

Picket protest at miners' conference call for justice and accountability in mining industry

Kalikasan fears more land grabs, disasters from big mines

Kalikasan PNE press release

10 September 2013

A picket protest led by the Defend Patrimony! Alliance against Mining Liberalization and Plunder (Defend Patrimony) and the Kalikasan People's Network for the Environment (Kalikasan PNE) was held today in front of the Sofitel Philippine Plaza in time for the opening of a mining confab organized by the industry lobby group Chamber of Mines of the Philippines (CoMP), highlighting the worsening global mining crisis, unabated and unaddressed mining-related human rights violations, and mining disasters in the country.

"The gold market ‘bubble' and the slowdown of the China-driven demand for metals that we have predicted years ago have come into fruition and is the current crisis large-scale miners are buzzing about. This is precisely the problem when mining regimes are developing mines with an export and profit-driven production instead of a domestic needs-based one. That is why the promise of jobs and revenue generation by the large-scale mining industry is always on shaky ground - now we are seeing the retrenchment of workers and closure or suspension of mining operations nationwide," the Defend Patrimony said in a statement.

"Foreign and big mining companies, to cope with the ongoing global mining crisis, are now intensifying land grabbing of mineral areas and extraction of mineral wealth, while at the same time lowering production expenses. These actions will result to more environmental destruction, human rights violations, and exploitation of mine workers," said Clemente Bautista, national coordinator of Kalikasan PNE.

Defend Patrimony cited market studies in pointing out that the net profit in the global minerals industry went down by 49 percent in 2012 despite a 6-percent increase in overall production volumes, and the projected capital spending in 2013 went down by 21 percent to USD 110 billion. China continues to dominate the demand side of the market, consuming 40 percent of global metal production, but is now faced with a continuing slowdown in the Chinese economy. In the Philippines, Anglo-Swiss mining firm Glencore Xstrata-SMI recently announced the 85 percent downsizing of its work force, including 300 regular and project employees and 620 contract workers. The Philex Petroleum Corporation owned by big businessman Manny V. Pangilinan also shut down its coal mine in Zamboanga because of high operational costs and negative profits. Oceana Gold Corporation, owner of the Didipio Gold Mining project in Nueva Vizcaya, has totally shut down their gold mining project in New Zealand after losing more than US$70 million and retrenching around 300 mine workers.

The CoMP's conference aimed to discuss developments in domestic policy reforms and the trends in the global minerals market. It specifically aims to tackle the Malacanang proposal of rationalizing the industry's fiscal regime, to which the CoMP has proposed alternative revenue-sharing measures.

"While the Aquino government and the large-scale miners are set to discuss over who gets the lion's share in the trillion-dollar mining industry's revenues, the impacts on the environment and people's rights have been eased out of the discussion. The spate in mining-related killings and other human rights violations and outstanding cases of mining disasters were met with either glossy greenwashing or outright silence," said Bautista.

"Case in point, Philex's Padcal mine has up to now cleaned up 1,000,000 metric tons or only five percent of the total amount of toxic mine tailings that spilled from their outdated dam facilities last year. Philex has in fact refused point-blank to pay the P6.42-billion demanded by the National Power Corporation for the rehabilitation of the affected San Roque Dam. It can only be concluded that big mines are unwilling to pay environmental and social costs they entailed to protect their profits in these times of crisis," Bautista noted.

Defend Patrimony cited data from the Task Force-Justice for Environmental Defenders (TF-JED) indicated that mining-related murders make up 76.47 percent of the total recorded killings of environmental advocates under the Aquino government. The latest was the murder of B'laan chieftain and staunch opponent to Xstrata-SMI Anting Freay and his son, Victor, last August 23 at the hands of paramilitary troops under the Armed Forces of the Philippines' Task Force KITACO. His wife, Kiit Freay, survived the attack. Bryan Epa , an anti-mining activist in Nueva Vizcaya, was also the latest victim of enforced disappearance when he was illegally arrested by the local Philippine National Police last August 21 and has not been seen ever since.

"Glencore Xstrata-SMI has only recently admitted to funding paramilitary groups operating in their mining concession areas, which are the primary culprits in the various incidences of human rights violations in mining-affected areas in Mindanao and across the Philippines. These are the trends that the Aquino government and the Chamber of Mines should be addressing, but again the controversies are met with blanket denial or silence," Defend Patrimony lamented.

The picketing groups called for the immediate pullout and demobilization of all military and paramilitary troops from mining areas and the immediate filing of criminal charges against military, paramilitary, police and security forces with track records of killings and human rights violations. Finally, they called for the passage of the People's Mining Bill, a progressive policy on large-scale mining that seeks to reorient the industry towards domestic economic development, genuine environmental safety and a needs-based extraction.

Reference: Mr. Clemente Bautista, national coordinator - Kalikasan PNE - 0922 844 9787


Mining giants to pass on impact of mining crisis to people?

By Marya Salamat

Bulatlat.com

12 September 2013

These large foreign-controlled mining firms, in hopes of surviving the mining crisis, would intensify land grabbing of mineral-rich areas and extraction of mineral wealth. At the same time, it would cut production expenses. - Kalikasan PNE

MANILA - Members of the police force and some security guards blocked parts of a public road at the CCP Complex on Sept. 11 to bar protesters from marching in front of the luxurious Sofitel, site of the three-day mining conference and exhibition organized by the Chamber of Mines of the Philippines (COMP). The mining association of large mining companies operating in the Philippines gathers this year "high caliber speakers in the world of mining, financiers, investors, developers, legal and consultancy firms."

The confab is set to discuss "key issues and questions facing the Philippines' mining industry." But absent in the program are concerns aired by groups that were barred a few blocks from the confab's venue. The roadblock forced a traffic rerouting in that part of the CCP Complex, irking some commuters and requiring hotel employees to show identification cards first to the police before being allowed to pass.

For the protesters, the blocking of a public road just so the mining bigwigs can start discussing their investment prospects without disruption is just another example of the mining firms' objectionable practices.

The Defend Patrimony! Alliance against Mining Liberalization and Plunder (Defend Patrimony) and the Kalikasan People's Network for the Environment (Kalikasan PNE) condemned the human rights violations happening in mining communities when they held a picket near the Sofitel Philippine Plaza in time for the opening of the said mining confab.

"While the Aquino government and the large-scale miners are set to discuss who gets the lion's share in the trillion-dollar mining industry's revenues, the impacts on the environment and people's rights have been eased out of the discussion. The spate in mining-related killings and other human rights violations and outstanding cases of mining disasters were met with either glossy greenwashing or outright silence," said Clemente Bautista, national coordinator of Kalikasan PNE.

If these large mining companies were allowed to continue operation, the mining-affected communities will likely suffer even worse in the coming months, warned the progressive environmentalists. They said that the large miners would attempt to ride out the ongoing global mining crisis with profits intact or even higher. They foresee that the miners would pass on the impact of the mining crisis to their host communities.

Miners fear for their profits, communities fear for their lives, livelihood

What the Chamber of Mines members refer to as "Philippine mining industry," and what the Defend Patrimony refers to as the export-oriented extraction of minerals in the country, is currently facing problems of weakening global demand. China continues to dominate the demand side of the market, consuming 40 percent of global metal production, but as the Defend Patrimony noted, China is now faced with a continuing slowdown in its economy.

On the second day of the mining confab, based on their volunteers' social media posts, speakers reportedly said: "Metal prices are down; drilling activity continues to decline; new resources estimate continue to decline; mergers and acquisitions are down significantly; capital raisings are declining , cash fund has decreased," among other problems.

"The gold market ‘bubble' and the slowdown of the China-driven demand for metals that we have predicted years ago have come into fruition," the Defend Patrimony said in a statement. The group said this is precisely the problem when mining regimes develop mines with an export and profit-driven production instead of a domestic needs-based one.

"Are we in the beginning or end of a bull run?" was one of the mining companies' optimistic ways of tackling the situation. Subsequent topics revealed that despite the threats on mining profits posed by an increasingly bearish market, the mostly large-scale miners with the chamber are still looking for ways to prolong the bull run. From their discussions and previous statements, these ways include thwarting the moves to change or replace the Philippine Mining Act, or tweak the sharing of revenues from mining.

Defend Patrimony and Kalikasan PNE warned that these mining companies, in their effort to cope with the mining crisis, would further cause sufferings to Filipinos and the environment .

As a result of this global mining crisis, "the promise of jobs and revenue generation by large-scale mining industry is always on shaky ground," Defend Patrimony said. They cited as examples the cases of Anglo-Swiss mining firm Glencore Xstrata-SMI which recently announced the 85 percent downsizing of its work force, affecting 300 regular and project employees and 620 contract workers. The Philex Petroleum Corporation owned by big businessman Manny V. Pangilinan also shut down its coal mine in Zamboanga because of high operational costs and negative profits. Oceana Gold Corporation, owner of the Didipio Gold Mining project in Nueva Vizcaya, has totally shut down their gold mining project in New Zealand after losing more than US$70 million and retrenching around 300 mine workers.

Philippines as battleground

Mining companies with the chamber, all large, have been battling moves of communities and people's organizations against their operations. They have been lobbying for government support and incentives, and they are actively campaigning against the mining ban as well as legislative moves to replace the Philippine Mining Act of 1995, a law the chamber describes as "world class and at par" with other similar legislations in other countries.

The Chamber of Mines has been warning against proposed legislations replacing the Mining Act, and against petitions in Supreme Court questioning portions of the mining law. They call this "threat to mining industry" as "resource nationalism." They also sounded leery of talks that would hike the percent share of Philippine government in mining revenues.

On the second day of the mining conference, their call to "move forward" revolves around urging the government to make mining policies and fiscal regime "competitive."

Justin Hillier, executive vice president of Sagittarius Mines Inc, partner of Xstrata that has been found to be funding paramilitary groups operating in their mining areas, angled for a "competitive" fiscal regime. He echoed an IMF study that claimed the "FTAA is a tough regime for investors," and that it is "not competitive."

Speaking at their conference on Sept. 11, Hiller reportedly cited the "very high mineral potential" in the Philippines, but it "ranks way behind mining countries in terms of policies."

The chamber wants the Aquino government to "adopt more attractive environment for investors" in mining. Horacio C. Ramos, former DENR Secretary and MGB Director and one of the panelists in the conference, reportedly said the "government must move fast to stabilize the virtual stand still of the mining industry."

Based on the conference topics and previous statements, the desired additional perks include "rationalizing small-scale mining in the Philippines;" "harmonizing national and local laws" (experience shows that this reads as subverting local resolutions vs large-scale mining); limiting no-go zones for mining; and giving mining companies more incentives to invest on mining here.

"Mining companies like the idea that mining areas will be declared as mineral economic zones, we like that," Chamber of Mines spokesperson Jimbo Gulle reportedly said during a press conference on the first day of their confab. The idea of a mineral zone seems similar to the derided no-union, no-strike, incentive-rich, export-oriented special economic zones, except it seems it would take into account the "peculiarities" of mining industry.

These large foreign-controlled mining firms, in hopes of surviving the mining crisis, would intensify land grabbing of mineral-rich areas and extraction of mineral wealth. At the same time, it would cut production expenses, Bautista of Kalikasan PNE said. These actions, he warned, will result to "more environmental destruction, human rights violations, and exploitation of mine workers." (http://bulatlat.com)


SC urged to rule in favor of petitions vs Mining Act

by Ina Reformina

ABS-CBN News

12 September 2013

MANILA, Philippines - A group of anti-mining advocates staged a picket at the Supreme Court on Thursday morning, as part of their commemoration of the "Anti-Mining Solidarity Movement."

Under umbrella organization Alyansa Tigil Muna (ATM), the protesters called on the high court to rule in favor of consolidated petitions that seek to have two provisions of the Philippine Mining Act of 1995 stricken down as unconstitutional.

The provisions being assailed are Sections 80 and 81, pertaining to government's share in mineral production sharing agreements, and other mineral agreements.

"As the people are mobilizing against pork barrel, another form of plunder has been happening in our country for many years: the plunder of our mineral resources," the group said, in a statement.

The group lamented that government is getting "almost zero to nil" from mining operations.

The group also called on government to hold mining firms liable for "mining tragedies" such as the Marcopper incident in Marinduque.

ATM is currently pushing for a moratorium on mining, and the enactment of the Alternative Minerals Management Bill to ensure that our mineral resources "benefit Filipinos, without compromising the environment and the rights of affected communities."


Miners to offer revenue scheme

Business World Online

4 September 2013

A MINING industry group will push for its own revenue-sharing measure, which could give the government a 5-10% take from firms' earnings.

"We will put forward a bill in Congress... close to what we have now -- the 2% [excise tax] plus the 5% [royalty imposed on firms operating in mineral reservations], plus all the taxes we pay currently," said Jimbo B. Gulle, Chamber of Mines of the Philippines (CoMP) communications manager, at the sidelines of a briefing for next week's Mining Philippines 2013.

"The government has said they will not take anything lower than 5%. So somewhere between 5 to 10% of the gross may be the magic number," Mr. Gulle said, adding that the mining industry in general is "amenable" to an increase in the government's share of revenues.

The final mechanism, however, must be "reasonable, equitable, and competitive."

"We all want to contribute to national development and all that so we are always communicating with the MICC (Mining Industry Coordinating Council) on what is or what can be an equitable sharing scheme," Mr. Gulle said.

The MICC is a Malacañang-created body tasked to draft a bill rationalizing the fiscal regime for the mining industry, part of the reforms mandated under Executive Order (EO) 79 that was issued last year. EO 79 extended a moratorium on the issuance of new mining permits until a new revenue-sharing scheme is passed by Congress.

The MICC has put forward several proposals, including taking either a percentage of a firm's gross margin or gross revenues, a single rate of 10% taken from a firm's gross sales that lumps together all taxes paid by industry players, and a 50-50 revenue sharing scheme. -- Bettina Faye V. Roc


'We Warned Govt' - Mining investments to drop 'dramatically', owing to govt policies - lobby group

By Euan Paolo C. Anonuevo

InterAksyon.com

10 September 2013

MANILA - The Philippine government will miss its target investments from the local mining sector by 2016 as revenue-sharing issues push potential industry players to watch and wait on the sidelines, the sector's lobby group said on Tuesday.

During an industry forum, Benjamin Philip G. Romualdez, Chamber of Mines of the Philippines (COMP) president, said that the country will not be able to meet the $16-billion mining investments target from 2004 to 2016 in light of the Aquino administration's review of the industry's tax regime.

"Mining investments that were supposed to happen during this administration will not happen. Let me tell you now that investments in the next three years will certainly, dramatically go down. We warned government of that in 2012, and sadly it is happening," he said.

At present, $12-billion worth of investments in the sector are on hold as investors await for the policies that may be adopted by the government.

Romualdez, who heads Benguet Corp, said that investors are concerned about the proposed 10-percent gross or 50-percent net excise tax on mining in place of the 2-percent excise tax collected from big companies.

Various groups earlier questioned what they deemed to be disproportionate tax imposed on large-scale miners.

The current rate, the COMP official said, is already "fair and equitable" since, aside from paying excise taxes, mining firms also pay 12 different taxes to the government. These expenses are on top of the mining firms' investments, personnel risk and efforts to secure over 150 permits, Romualdez said.

"The truth is our government receives over half of the total value of a mining project based on the internationally accepted AETR or the Average Effective Tax Rate," he said.

AETR is the formula used to determine the government's share throughout the entire lifecycle of a mining project, from the time the contractor starts to invest funds in the project to the very end of the mine life.

Romualdez said that for profitable projects, the Philippine government's average effective revenue take already amounts to nearly 60 percent of the project's pre-tax cash flows-significantly higher than that of the large mining countries of South Africa, the US, Chile, Australia, and Peru.

Instead of just focusing on big mining, Romualdez said the government should also look into the operations of small-scale miners, whose operations are driving away big-ticket projects, "which contribute far more to inclusive growth than what has been reported in media."

In the same forum, Senator Franklin M. Drilon said that Congress consider the industry's proposal as it formulates a new tax regime for the sector.

"We are a listening Senate. We will do our best to determine what tax regime will work best," he said.

The lawmaker has outlined the proposed measures to regulate the industry, which only takes up 0.7 percent of gross domestic product (GDP). These include the review of tax incentives, cancellation of stagnant contracts, and the grant of mining rights to those who employ best practices, complete remediation programs and secure all the necessary permits, among others.


Mining data needed under transparency standard

By Bettina Faye V. Roc, Reporter

Business World Online

10 September 2013

THE AVAILABILITY of pertinent mining industry data will challenge the government's preparation for its full implementation of an international revenue transparency standard.

"The main challenge has to do with the availability of data. We're not sure if our data satisfies EITI (Extractive Industries Transparency Initiative) standards," Alessandra V. Ordenes, national coordinator for the Philippine EITI (PH-EITI), said in a focus group discussion yesterday, at the sidelines of the ongoing Mining Philippines 2013 Conference and Exhibition at Sofitel Philippine Plaza Manila.

EITI, launched by former British Prime Minister Tony Blair in 2002 at the World Summit for Sustainable Development, promotes a global standard in reporting revenue and payments to the government from extractive industries such as mining and extraction of oil and gas.

A country that commits to EITI will require firms in these industries to report all taxes, fees and royalties paid to the government while the government will disclose the amounts it receives.

Section 17 of Administrative Order 2012-07, issued by the Environment department in September 2012, requires the government to commit participation in the EITI. The AO also sets out the rules and regulations implementing Executive Order 79, issued in July 2012, spelling out the Aquino government's mining policy.

The country was approved as an EITI candidate in May, so the Philippines must start disclosing payments from its extractives sector and meet all the requirements in the EITI standards within two and a half years to become EITI-compliant.

In accordance with the EITI rules, the country is also required to publish its first EITI report within one year and six months of becoming a candidate and to submit a final validation report within two years and six months of becoming a candidate.

Failure to meet either of these deadlines will result in delisting.

Ms. Ordenes said that the PH-EITI is already gearing up to meet the initiative's requirements.

"We're already conducting scoping studies to determine which companies, or which payments and fees, must be included in our first report as an EITI candidate," she said.

"Our concern is, in particular, on the degree of disaggregation of the existing data we have from the government and the industries involved," Ms. Ordenes said.

As part of the PH-EITI's preparations, it will likewise conduct capacity-building activities for mining firms for financial tracking, revenue management, and expenditure reporting, she added, alongside regular meetings with stakeholders.

"We hope that by December 2014 or by 2015, we can conduct the drafting and publication of our EITI report, for validation by July 2016," Ms. Ordenes said.

"The EITI will have potential benefits for the industry, especially in ensuring responsible mining and transparency in the industry's operations," she said.

If deemed EITI-compliant, the Philippines will join 20 other countries that have put in place a system for disclosing income from extractive activities.

"This will increase the integrity of information and provide a level playing field for industry players," Ms. Ordenes noted.


Ex-gov accuses NBI agents of trespassing and theft

By Jerome Aning

Philippine Daily Inquirer

7 September 2013

MANILA, Philippines - A former Agusan del Sur politician who is now a mining company executive asked the Department of Justice on Friday to prosecute two National Bureau of Investigation agents for resorting to illegal means to obtain evidence for a case filed by another mining company.

Lawyer Ceferino Paredes Jr., a former Agusan del Sur governor and congressman in the 1990s who is now a director and senior legal adviser of Platinum Group Metals Corp., claimed that NBI special investigators Gregory Yu and Edgar Paul Panlaqui committed trespassing and qualified theft in their investigation of the complaint of Case Mining and Development Corp.

PGMC currently operates the mineral claims of CMDC in Cagdianao, Claver, Surigao del Norte following an agreement signed in 1992. However, the two companies had a dispute over royalty payments which Paredes said was at the root of the case.

"The filing of these charges is nothing short of malicious prosecution, loosely orchestrated by complainants to harass [us] in order to force the collection of what complainants claim to be the proper amount of royalty payments from PGMC, [an] issue [that] is supposed to be threshed out in an arbitration proceeding pursuant to the agreement between the PGMC and the CMDC," Paredes said in his nine-page counter-affidivafit.

Paredes claimed that Yu and Panlaqui, in their effort to obtain evidence, trespassed the firm's mining site in Cagdiano in Claver and took pictures and videos without permission. The two agents also somehow got hold of confidential maps from the PGMC.

Paredes accused the two agents of conspiring with CMDC in filing the cases of violations of the Philippine Mining Act and Philippine Water Act against him and other PGMC officials.

"The taking of such pictures and video inside PGMC's premises without PGMC's consent is akin to unreasonable search, and therefore such pictures and footage are fruits of a poisonous tree and are inadmissible in evidence. The maps are are likewise inadmissible as they were also fruits of a poisonous tree," Paredes said.

He also pointed out that the case against him and other PGMC executives were being investigated at a time when President Aquino himself has expressed doubts about the integrity of some people in the NBI.

Yu and Panlaqui "have used their powers, skills and ability to brazenly commit illegal acts against PGMC to aid and conspire with CMDC. I cannot help but join the President's doubts and suspicion over the lack of integrity of some of the agents and officers of NBI, especially the likes of NBI agents Yu and Panlaqui," Paredes said.

The DOJ case was initiated through a letter dated May 23 signed by NBI deputy director Ruel Lasala on behalf of complainants Argel Joseph Cabatbat, representing the CMDC, and the NBI-Environment and Wildlife Protection Investigation Division.

Cabatbat sought the NBI's assistance last March in investigating alleged illegal mining operations and possible violations of environmental laws by the PGMC.

Paredes described the accusations as "baseless" and "obviously frivolous, if not ridiculous." The other PGMC officials, in their counteraffidavits, said the company had complied with regulations and obtained the proper permits.

Paredes also called on the DOJ not to waste its time by involving itself in what is "essentially a private dispute" between the two mining firms.

He said the publicity over the case had destroyed his family's reputation and taken a toll on his health as he was still recovering from a stroke and had to travel to Manila several times just to deal with the suit.

The PGMC executives were accused, among others, of failing to obtain ore transport permits, register its mineral trading activities, obtain an environmental clearance certificate, rehabilitate mined out areas, remit proper taxes and government share, as well as of illegally cutting trees and polluting bodies of water through mining discharges.

Aside from Paredes, other respondents in the case were PGMC president Lin Ou Wen; vice president Joseph Sy; vice chair Rafael Atayde; directors Lin Zheng, Lin Qing Ping and Lin Hui; and incorporators Dante Bravo, Cymbelly Delos Santos and Mindy Guevarra.

The Cagdianao mining sites operated by PGMC and other companies were attacked by the communist New People's Army in October 2011. The rebels burned and destroyed 18 trucks and mining equipment worth more than P2 billion and took the firearms and communication gadgets of security and office personnel.

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