MAC: Mines and Communities

Dialogued to Death

Published by MAC on 2001-05-01


Dialogued to Death

Rio Tinto in the Philippines: shortcomings and lessons.

Summary

This is a summary of the experience of communities and supportive NGOs dealing with Rio Tinto (the world's largest mining company) in their recent attempted entry into the Philippines. It is an account based on evidence presented to the Permanent Peoples Tribunal at Warwick University in March 2000 and a subsequent presentation at IDS Sussex by Geoff Nettleton of PIPLinks. The information presented is backed throughout by sources. However as this was prepared for an oral presentation the footnotes are not included in this text. Anyone seeking detailed clarification should contact tongtong@gn.apc.org

The paper focuses on 3 main areas

1.Failure to gather, recognise or respect local wishes

2.Attempts to misrepresent local opinion

3.Questionable efforts to influence local opinion to serve company ends.

(These are of course not the only issues of concern relating to the activities of Rio Tinto in the Philippines but together they represent a consideration of the cluster of concerns surrounding public acceptability and attempts to satisfy the legal requirements in the Philippines for mining companies to gain Free Prior and Informed Consent from Indigenous communities before operating on indigenous lands).

Background on mining in the Philippines.

The Philippines is rich in minerals especially Gold, copper, chromite, nickel, silver and others. It has long had a developed mining industry. As gold is one of the major minerals and as this outcrops in many mountainous regions throughout the country there is also a long established small-scale mining sector. Most places where gold occurs in high-grade concentrations have existing small-scale mining operations. This small-scale mining sector employs hundreds of thousands of people and at times in recent years has accounted for up to 50% of total Philippine production. Among the small scale producers are many indigenous peoples and rural poor peoples.

In the late 1980s the World Bank, which has substantial influence over Philippine government policy (the Philippines is among the countries with the highest international debts) pressed for liberalisation of the laws surrounding mining to attract foreign investment into an important but declining sector of the Philippine economy. The UNDP financed the placement of "experts" into the Bureau of Mines within the Department of Environment and Natural Resources to conduct a programme of attraction. Other internationally financed support for liberalisation followed (from the Asian Development Bank and others) through studies and consultations with mining companies. In 1993 the Philippine Government organised a workshop at the Asian Mining Congress with the express purpose of inviting companies to come along and help the Philippines draft its new mining legislation.

In March 1995 the Philippines enacted its new Mining Code. One of itís main proponents was current President Gloria Arroyo. In line with international trends this was a liberalising package remove many restrictions on foreign investment and offering incentives for foreign entry into what previously had been defined as a strategic industry. The package included in its Foreign Technical Assistance Agreements (a device designed to circumvent the Philippine constitution and give special incentives to large foreign investors) 100% foreign ownership, removal of central bank control over sale of gold on the international market, full repatriation of profits, rights to multiple applications of large tracts (81,000 hectares) of land for exploration and development, reduced (halved) excise duties, free movement of equipment in and out, tax free periods on start up, easement rights to remove obstacles to mining including communities and others.

Many companies made claims under the new Code. A veritable gold rush ensued making claims over more than 1/3 the land area of the whole country. (Some reports identify exploration claims over more than half the land area- eg Ibon). Rio Tinto, using the name Tropical Exploration Philippines Inc (TEPI,) was one of the largest applicants. Its claims were concentrated in 2 areas. It applied for 6 100,000 hectare blocks in Zamboanga and 3 100,000 blocks in the Bicol region of southern Luzon.

Indigenous Peoples and the mine rush

The Philippines has more than 10 million indigenous peoples living in the mountainous hinterlands and in the south. For the first time in 1987, when the Philippine Constitution was revised after the fall of Marcos, indigenous peoplesí rights to their ancestral lands were recognised by the State. Sadly Congress dragged its feet on enabling legislation (finally passed in 1997). However by the 1992 the DENR was already applying an administrative order (DAO.02) which allowed indigenous peoples to make claim to their ancestral lands. This was neither widely known by indigenous groups nor universally accepted. Some of the stronger and more militant groups rejected the implication that their rights to land lay with the Philippine State to dispense when their own structures predate that State.

However the changing political climate: - the large role played by indigenous groups in opposing and exposing Marcos, their militancy coupled with changes in the international climate, including the advance of indigenous rights within the UN, has influenced politics in the Philippines. The 1995 Mining Code contained some provisions specifically relating to mining on ancestral lands. As most of the applications were within ancestral lands these provisions have major implications. The legislation required that companies secure prior informed consent from indigenous groups for any project on their land.

Rio Tinto in the Cordillera

Rio Tinto first entered the Philippines by buying into the Far South East project of Lepanto Consolidated; a Philippines based mining company that has its largest operations in the Cordillera Mountains of the North. Rio Tinto acquired 15% of Lepanto. In 2000 Rio Tinto reported they had dropped all association with Lepanto. Lepanto is notorious in the Cordillera for its failures in dealing with indigenous rights issues, environmental and health problems caused by its operations and its poor relations with workers. However it is a prominent company in the Philippines and active in the Chamber of Mines. The issues associated with this investment though important are not covered in this account. However it is of grave concern to the people of Zamboanga that in 2001 after the supposed withdrawal of Rio Tinto Lepanto has lodged applications on many of the areas earlier explored by their "former" partner.

Rio Tinto and the Subanen of Zamboanga

There are many twists and turns to the involvement of Rio Tinto in the Zamboanga Provinces of Mindanao. This account focuses on three areas of concern regarding the practice of Rio Tinto in this case.

1.Failure to gather, recognise or respect local wishes

2.Attempts to misrepresent local opinion

3.Questionable efforts to influence local opinion to serve company ends.

In this Rio Tinto is not, it seems, untypical of the arrogant and abusive practices of other mining companies in the Philippines. Mining companies generally seem to believe that their size and influence can of itself wear down and overcome all opposition.

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