MAC: Mines and Communities

Philippines update: struggles in Nueva Vizcaya

Published by MAC on 2008-05-26

No to Oxiana Philippines-RoyalCo mining exploration in Nueva Vizcaya Defend Patrimony position on Oxiana Mining presented to the Philippine Congressional Committee on National Cultural Minorities

20th May 2008

Kasibu, Nueva Vizcaya is a land of lush scenery famous for its sweet citrus fruits which thrive in the fertile soil and the presence of free-flowing river systems. However, the residents are presently facing threats to their environment and livelihood due to ongoing mining explorations of Australian-owned Oxiana, Philippines, Inc. in five barangays of Kasibu: Pa'o, Kakidugen, Paquet, Dine and Katarawan.

The Kasibu townsfolk have thus far registered their opposition to the mining operations, and Defend Patrimony has expressed its full support to them. Defend Patrimony is a national and broad multisectoral network of mining-affected communities, grassroots organizations and alliances united against the globalization of the mining industry, plunder and destruction of natural resources in the country. It is currently composed of 15 anti-mining alliances representing 4 provinces, 9 regions and 2 sectors (Church and legislators) and 28 sectoral organizations, NGOs and individuals

Such a stand is supported by the results of a Fact-Finding Mission conducted by Defend Patrimony last August 29 to September 1, 2007, as well as the recent developments in the field pointing to possible damage to the people's livelihood, impacts on land and water resources and harassment of anti-mining leaders. All in exchange for some taxes-which are subject to many exemptions under the current mining law--and a trickle of local jobs, yield evidence that Nueva Vizcaya stands to lose more than to gain if these explorations progress into large-scale mining operations in the future.

Impacts on land resources

Firstly, mining modifies ground conditions at high rates. Stripping of land and vegetation, water extraction and diversion, and blasting drastically disrupt the landform equilibrium in terms of watershed configuration, slope stability and hydrology. The exploration operations alone, which include extractive processes such as drilling, trenching, and bulk sampling, can already bring about negative environmental impacts, such as land alienation from protection options, trailroad and trenching erosion, habitat disruption, noise pollution, and acid mine drainage.

Secondly, due to the loose nature of the soil, communities are vulnerable to soil erosion and landslides. If mining activities occur, the earth-shaking activities associated especially with open pit mining will further loosen the soil, rendering the nearby communities more susceptible to geological hazards. The many environmental threats seen at the early stage of the mining explorations alone include impacts on land ecosystems, such as the instability of the renowned Alayan Cave system, denudation of forest cover in the Mamparang and Palali mountain ranges, and the loss of endemic biodiversity.

Effects on water resources

Mining will also negatively affect water resources, because of characteristics inherent in its operations. For one, Nueva Vizcaya is now facing Acid Mine Drainage (AMD) problems with the entry of mining since large amounts of sulfide-rich materials are exposed to atmospheric oxygen and rain, and generates acid drainage. In addition, blasting operations increase the permeability of the pit floors and walls, allowing for the immediate downward seepage of acidic fluids to the groundwater.

Furthermore, Oxiana's exploration site in Pao-Kakidugen in Kasibu town, are in the vicinity of a critical watershed area. Mining explorations and operations would also entail the creation of boreholes for drilling equipments to penetrate. These boreholes will introduce perforation of impermeable rocks that protect groundwater from contaminants. Also, chemicals used to aid diamond drill bits and RC systems penetrate hard rocks may contaminate groundwater, thus, depriving people of potable water.

Likewise, companies require major water systems to sustain their operations. With their application to water rights that cover watersheds of communities, residents will experience depletion of water supply needed for irrigation and domestic use. This is due to the drill holes that depressurize independent fracture systems.

Should mining operations be allowed, critical water systems that may be affected include major rivers (Tubo River in Muta Valley, Malabing River in Malabing Valley), and more than 30 creeks in Muta and Malabing Valleys. It must be noted that Tubo and Sulong Rivers lead to Cagayan River, which in turn supplies water to Quirino and other provinces in the Cagayan Valley Region. Wastes water from mining operations include huge amounts of ground ore which will cause siltation in the water bodies.

Possible damages to livelihood

Nueva Vizcaya is known as the Citrus Capital of the Philippines for the varieties of citrus and orange fruits propagated using traditional farming methods. More than 200 tons of citrus fruits are harvested and sold in the upland towns of Kasibu, Kayapa, and Ambaguio from July to January each year. Rice farming is also one of the major livelihoods in the area. The municipality of Kasibu is also a major producer of rice in the province.

But due to the impacts on the geophysical environment, the company's operations threaten to affect the ecosystem and the people's welfare and livelihood, especially in the field of citrus fruit production. For example, water bodies supplying the rice and citrus farms may possibly be contaminated if acidic drainage water or mine wastes produced during the mining process leaches into the water table and un-mined rocks, or drains from tailings dams and waste rock heaps to rivers and creeks.

Calls and Demands

Amid these findings, Defend Patrimony calls for the immediate pullout of Oxiana Philippines from its mining operations in Kasibu, on the grounds that the mining activities strike at the heart of Nueva Vizcaya's critical ecosystems and will result in the economic, social, and physical displacement of the people. This includes members of Ibaloi, Ifugao, Kalanguya, Bugkalot, Kankaney and Bontoc tribes, who have also resisted the encroachment of Oxiana into their ancestral domain.

Such a move of the company would be a show of respect to the court ruling last October 2008 which orders the dismissal of the legal case filed Oxiana to the twenty four indigenous leaders opposing their mining exploration.

In addition, it strongly denounces the glaring lack of consent from majority of the communities to be affected by mining which are reinforced by the loopholes under the current mining law, where foreign mining companies or their subsidiaries can be given exploration permits without even requiring consent from local government units or the majority of affected peoples.

Defend Patrimony calls for the protection of Nueva Vizcaya's more economically-beneficial and booming agriculture sector and freshwater reserves instead of leaving the door open for plunderous foreign and large-scale mining activities.

National Coordinator
Kalikasan-People's Network for the Environment (Kalikasan-PNE)
No.26 Matulungin St. Bgy, Central, Quezon City, Philippines 1100
Tel. No. +63-2-9248756 Fax No. +63-2-9209099

IP group up in arms v. exploration project

By Jane Cadalig, Sun Star Baguio

18th May 2008

AN INDIGENOUS peoples group in Bakun, Benguet on Saturday asked the National Commission on Indigenous Peoples (NCIP) not to endorse a mining exploration project in the town, saying the company failed to obtain the consent of the affected communities.

While admitting that dialogues have been conducted to seek the people's consent, the Gambang Indigenous Peoples and Community Organization (Gipco) said Royalco Philippines, a mining firm seeking to conduct exploration in the village, failed to get the support of the people to the undertaking.

Gipco said the required majority vote of all the affected residents were not met when a referendum was done, a process which seeks to get the pulse of the people on the project.

Said majority vote was imposed by the community, which will define if a project should be endorsed or not. This, they said, is a component of the decision-making process.

In their petition, the indigenous peoples said the majority vote was not attained when a referendum was held December last year.

But despite the failure, they alleged that a memorandum of agreement (MOA) was signed between the elders and the company.

Results of the referendum showed that only 745 voters or 25.69 percent of the total 2,899 voters participated.

"This clearly indicates that there was non-compliance with the decision-making process and the agreement during the meeting," the group said.

"Despite the fact that the referendum is a failure, a MOA was executed between some elders and Royalco Philippines. The MOA signing took place in Bangao, Buguias, a place outside the municipality of Bakun," they said.

Even prior to the community consultations, the group alleged that the company already initiated series of meetings with the affected areas, claiming that these consultations were authorized by the NCIP.

"They distributed money to some residents who attended the meetings," the group said.

Philippines warns groups blocking Australian gold mining project


21st May 2008

MANILA (AFP) - A Philippines official on Wednesday warned anti-mining groups blocking a major gold-copper project in the country's north that they were committing an illegal act.

Led by the governor of Nueva Viscaya province, opponents have erected a barricade on a road leading to the remote Didipio project of Australian miner Oceana Gold, Environment and Natural Resources Secretary Joselito Atienza said.

The Melbourne-based company is currently building facilities for mining the 320 million US dollar project, in the Caraballo mountain range near the town of Kasibu, about 200 kilometres (124 miles) north of Manila.

Production is scheduled for 2010.

Oceana Gold chief executive Steve Orr on the company's website describes Didipio as "one of the highest grade gold-copper porphyries in the world today," and said construction activities were on track.

Atienza said he had given the government's green light for Oceana Gold to proceed with the project despite efforts by Nueva Vizcaya governor Luisa Cuaresma to stop it.

Atienza said Cuaresma and other provincial officials and villagers are barricading the project after the company declined to pay local taxes and quarrying fees.

"It (Didipio project) cannot be delayed by an illegal order issued by the governor," Atienza said.

He said the national government has notified the interior department that the Nueva Vizcaya government was not owed a quarry tax and back taxes because "there should have been no such tax at all."

While local governments can impose taxes on quarries, "Oceana Gold is not in the quarrying business. They are now putting up their processing plant and have in fact bidded out this project to several bidders who will do the construction and development of the plant site," Atienza said.

The Philippines mining act excludes earth-moving, road building, and the construction phase of the development of a plant site from those activities that require local government permits, he added.

"The issue here is one of rule of law and we must uphold the law if we are to encourage investors, local or foreign for that matter, with consistent interpretation of the intent of the law.

"You cannot deviate from the intention of law one way or another depending on the thinking of a local official," Atienza said.

"If you stop it at this moment, in time everybody loses: the province of Nueva Vizcaya loses, the country will lose, the investor will lose," he added.

Atienza said the government expects the project to yield at least 30 billion pesos (701 million dollars) in national taxes during its 15-year operation, on top of local revenues and several thousand jobs.

OceanaGold - Unconscionable Mining Contract

LRC Luzon Press Release

15th May 2008

The monetary benefits of mining investments and operations in the Philippines is now being questioned as the provincial government of Nueva Viscaya has taken a bold step to stop OceanaGold mining company from its earth moving operations in Didipio for failing to pay Twenty Five Million Pesos (P25,000,000) in local taxes. Contrary to what Secretary Atienza of the DENR has been promoting, the promised income from the mining project seems to be a mere pipe dream. That the local government of Nueva Viscaya needs to resort to legal action to collect taxes appears to be a red light signalling the great possibility that the Philippines will not benefit at all from this mining project.

The Legal Rights and Natural Resources Centre (LRC-KsK/FoE Phils) has always maintained that the DENR crafted a seriously flawed mining fiscal regime (DAO 07-12). Under this department order, the state's revenue collection from a Financial or Technical Assistance Agreement (FTAA) is limited to (1) the contractor's corporate income tax, (2) excise tax, (3) special allowance, (4) withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign national and (5) all such other taxes, duties and fees as provided for under existing laws.

The enumerated items merely represent the "inherent" and legal right of the state to collect taxes from businesses, in exercise of its taxation and police power. These are the very same taxes collected in other types of businesses operating in the country, not necessarily involved in the exploitation and destruction of the country's national wealth. What has not been explicitly spelled out in the DENR policy is the nation's share in the profits of mining operations. If the DENR equates the above tax items to represent the governments share, it sadly mis-comprehends the meaning of governmental share in the exploitation of the national patrimony. Our position and understanding is that an FTAA is a corporate undertaking done by the state in partnership with a private mining corporation and a foreign capitalist for that matter.

Had it been the state that operated the mining operations, it would benefit from the profits wholesale. Entering into a business venture, it is simply logical that the state should partake in the profits of that business venture aside from exercising its regulatory functions such as taxation. The more questionable provision is that government's share in the FTAA shall commence only after the FTAA contractor has fully recovered its pre-operating expenses, exploration, and development expenditures and other expenditures that may be added as part of. A case is now pending in the Supreme Court to question the unconscionable FTAA contract and its unconstitutionality. The flawed fiscal regime is further highlighted in the case of Lafayette 's mining project in the Bikol region. The government received less than one percent of the PhP 3.6 billion worth of minerals extracted in 3 years of operation. The company has now stopped its operations.

What makes matters worse is that the natural destruction accompanying mining operations place communities at risk of severe hunger and intensified disasters. The OceanaGold Project has converted the fertile rice lands in Didipio into its mining operations and runs the risk of contaminating water sources in the agricultural provinces of Nueva Vizcaya, Cagayan Valley, Isabela and Central Luzon together with the other two pending large-scale mining projects also in the same province - Royalco Phils. in Barangay Pao and FCF-MTL Metals in Barangay Runrunno. Nueva Viscaya hosts 3 watershed areas - 2 proclaimed: Dupax Watershed Reservation (Proclamation 720) covering 425 hectares, and the Casecnan River Watershed in Dupax del Norte and Dupax del Sur, (Proclamation 136) covering 85,519 hectares, and 1 un-proclaimed: Magat River watershed. These watershed areas serve approximately a total population of 400,000 including neighbouring provinces such as Cagayan Valley, Isabela and northern parts of central Luzon .

At least two of these watershed areas are in proximity to the mining site. It is elementary that if these watershed areas are compromised due to contamination of the water, it will greatly affect the agriculture production in the said provinces that will contribute more to the worsening situation of our food production. OceanaGold's open pit mining method and tailings dam for mine waste disposal will be susceptible to seepage and collapse that will greatly affect the rivers and waters in the province. Ironically, DENR Secretary Atienza himself identified the province of Nueva Viscaya as part of the typhoon belt area. The negative impacts of mining projects in the Philippines outweigh its envisioned benefits.

You cannot find any single mining operation in the Philippines that has brought progress to local communities, only a devastated environment, and an impoverished community. The people of Marinduque can tell us their experience; Marcopper mining operations has inundated two major rivers in their province. Mayor Hagedorm of Puerto Princesa has taken the position against mining operations for clearly understanding the negative impacts.

For further questions and inquiries please contact us at +63 2 926-4409, +63 2 434-4079, +63 917-548-1674 (Ronald/Campaigns/Paralegal) or visit us at 87B Madasalin St., Teachers Village, Diliman, Quezon City .

Tensions up as Aussie firm halts entry of Vizcaya personnel to mine site

By Charlie Lagasca, Philippine Star

14th May 2008

KASIBU, Nueva Vizcaya --- Tension is mounting in a mineral-rich village here after security guards of an Australian firm undertaking the nationally-sanctioned Didipio Gold-Copper Project blocked all entry points to its project site, preventing the entry of non-company and government-owned vehicles, including personnel. This, as provincial capitol guards came to ensure the enforcement of the provincial government-issued cease and desist order to Oceana Gold Philippines to stop its "illegal" quarry activities in the area, which has been the subject of an impasse between the province and the foreign company, which continued to ignore the former's order for it to secure a quarry permit.

Anti-mining posters and streamers which had all but disappeared in the past years had again started to come out as the residents found comfort in the provincial government's moves to take on the mining firm. "I am following lawful orders of the provincial government.

We are here to ensure that the cease and desist order of the governor is properly implemented. But if they're going to bar us from fulfilling our duty, that's another matter. We have to carry out the order at all costs," said Francisco Tolentino, the provincial government's environment and natural resources officer. On Monday, tension was stirred here as Tolentino's vehicle was blocked by boulders suddenly poured along the way by a truck employed by Oceana Gold while Tolentino's convoy was on its way to its monitoring site in Barangay Didipio here.

Furious, Tolentino and his men, backed by police escorts, disembarked from their vehicles and barged through the hastily-set up checkpoint of Oceana Gold and hiked to the monitoring site where he and his men ensured that no quarrying activity would take place in violation of the provincial government's order. "Nobody can stop us from implementing the provincial government's order. If they block us, we will respond at all cost. We must remember that this is still part and parcel of Nueva Vizcaya, although they may have a mining permit to operate here," he said.

Oceana Gold company guards said they were only following orders from management.

Moreover, a number of capitol guards were also dispatched to the area amid reports that even provincial government vehicles were prevented from entering the firm's project site. Vice Gov. Jose Gambito, for his part, clarified that the deployment of police in the area was to ensure that peace and order would be maintained. "We have to emphasize that the police are not taking sides with anybody. They are here only to ensure that no untoward incident would happen," he said. Gov. Cuaresma, other provincial officials and employees trekked back to Didipio in the wee hours of the morning yesterday to beef up their barricade amid reports of Oceana Gold's insistence of pursuing with its quarrying activity, reportedly on orders of Department of Environment and Natural Resources Secretary Lito Atienza.

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