MAC/20: Mines and Communities

Placer Dome in trouble in Philippines

Published by MAC on 2001-10-23

Placer Dome in trouble in Philippines

Placer Dome gets flood warning - Collapse of Philippine dam, pit would cause loss of life, report to mining company says

Toronto Globe and Mail October 23 2001

A dam holding back millions of tonnes of toxic waste left behind by the mining operations of a Vancouver company is "virtually certain" to collapse at any time, says a confidential report obtained by The Globe and Mail. The report says that the dam and a nearby pit also containing waste pose an imminent risk "of loss of life" on Marinduque island in the Philippines where mining company Placer Dome Inc. managed a copper mine for more than 25 years.

If the dam and the pit fail, more than 100,000 people living in the vicinity would be swamped with several million tonnes of poisonous acidic waste water. It would be the second time that the dam has been breached and the third serious environmental disaster to occur on the island as a result of Placer Dome's mining activities.

The mine structures are maintained by a company called the Marcopper Mining Corp., which Placer Dome co-owned with the family of the corrupt former Philippine dictator Ferdinand Marcos. The report was prepared for Placer Dome Inc. by Vancouver engineering consultants Klohn Crippen and delivered on June 14. It urges immediate action.

A total of four dams and a waste pit were examined in the report, which concluded that all the structures had identifiable "safety issues" and deficiencies." The two structures presenting most concern were the Maguila-guila Dam, built by Marcopper to retain sediments from upstream waste dumps, and the Tapian Pit, a former Marcopper mine site now used to hold mining waste. On Aug. 23, Klohn Crippen sent a follow-up letter by courier to the Manila office of a Placer Dome subsidiary, Placer Dome Technical Services, and to Marcopper. The letter renewed the report's call for urgent action, stating, "It is our opinion that overtopping [overflowing] and failure of the dam is a virtual certainty in the near term under current conditions.

"Failure of the [Maguila-guila] Dam is expected to result in significant downstream property damage and the potential for loss of life."

It predicted that a tunnel running under the Tapian Pit would collapse, leading to "rapid and uncontrolled release of pit waters." The letter continues, "Depending on [how much water is in the pit] at the time of failure, the release could potentially lead to overtopping of the Bol River Dam located downstream of the pit with additiona off-site consequences of downstream damage and loss of life."

No action has been taken. Placer Dome disputes ownership or responsibility for maintaining the structures, saying it divested in1997. That divestment came after a badly sealed pipe at the bottom of the Tapian Pit burst in 1996, sending more than three million tonnes of waste into the Boac River, contaminating a 26-kilometre stretch.

A year later, Placer Dome transferred its 39.9-per-cent holding to one of its subsidiaries, a company called MR Holdings Ltd., which is based in the Cayman Islands. Placer Dome says all the shares of MR Holdings were then transferred to "a group of Philippines financial investors."

But Placer Dome has not provided officials with any documentary evidence of such a transfer. Court documents filed by MR Holdings in 1998, one year after Placer Dome's former president said the company ceased to have "any ownership interest whatsoever in Marcopper," gave MR Holding's address as being the same as Placer Dome's in Vancouver. And in 1999, a judge hearing a claim against Marcopper assets stated, "all three corporations [Placer Dome, MR Holdings and Marcopper] are actually one and the same person sporting a different collar."

In addition, according to contracts obtained by The Globe and Mail, Placer Dome Technical Services entered into a contract in 1997 to pay the salaries of about 200 Marcopper staff, although that pact is thought to have expired.

A spokeswoman for Placer Dome said yesterday that the company paid for the Klohn Crippen report, but did so voluntarily as a "good corporate citizen." After the 1996 Boac River disaster, John Wilson, then CEO of Placer Dome, wrote a four-page letter of apology to Philippine president Fidel Ramos. In the letter he said, "I am determined to maintain the reputation of Placer Dome as a corporation which has high environmental principles that are globally applied and universally effective and which show a sensitive responsiveness in the needs and expectations of the countries where we are present."

Two weeks ago, on Oct. 9, Placer Dome executives refused to attend a Philippine congressional hearing into their conduct and allegations that they failed to clean up properly the damage caused by previous pollution incidents.

On Oct. 18, the head of Philippine Mine Safety issued an order threatening Placer Dome, Placer Dome Technical Services and Marcopper with criminal prosecution and civil legal action if they fail to secure the Maguila-guila Dam, Tapian Pit and other structures. The eight-page order, addressed to Jay Taylor, president and CEO of Placer Dome, Ian Lewis, president of PDTS, and Teodulo Gabor, president of Marcopper, lists 35 serious faults in need of remedial action.

It holds Placer Dome Inc. and Marcopper "jointly and severally liable" for reneging on their commitments and in violation of five laws. It gives them 15 days to begin cleanup work. Last night, a spokeswoman for Placer Dome Inc. said no one in the company could be located who had seen the mine safety order, although she confirmed there had been recent communication between PDI and the Philippine government regarding the Marcopper mine. She declined to give details.

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