Philippines' mine "protection" may move up a dangerous notch

Published by MAC on 2008-10-21

In the face of perceived threats by mining companies to their security, the government is offering to train and arm local people to protect investments. The proposal is viewed with alarm by NGOs.

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Gov't offers to train private mine guards

Business World - Vol. XXII, No. 59

16th October 2008

THE GOVERNMENT has offered to train and supervise armed guards who will protect mines against attacks by communist guerrillas, Defence Secretary Gilberto C. Teodoro, Jr. yesterday said.

Mining firms, Mr. Teodoro said at the 8th Asia Pacific Mining Conference and Exhibition, would be allowed to hire locals "to be trained by the army and the police". Miners will be allowed to create Civilian Auxiliary Groups (CAGs) for security purposes depending on the threat level, he added.

"A memorandum of agreement may be entered into by the agencies concerned," Mr. Teodoro said.

The Defence chief said the government was also asking Congress to approve an extra P2 billion in the department's P56.5 billion budget for next year to recruit additional soldiers to be deployed at mine sites.

"The security needs of mining companies are very unique due to the areas where their investments are located," he told Reuters, encouraging mine operators to enter into security agreements with local military and police forces.

"We're willing to train the security personnel hired by the mining companies and assign soldiers to supervise them. We're even planning to deploy more troops in the mining areas."

Benjamin Philip G. Romualdez, president of the Chamber of Mines of the Philippines , said some firms would be willing to shoulder the costs of extra security.

"Some companies would prefer not to ... it should be on a case-to-case basis," he added.

Mr. Romualdez said the mining industry, along with the police, military, and local government units, were working on a risk assessment plan.

"The first thing that is being done is the rapid security assessment which will then be the basis of mapping out a menu of security measures," he told BusinessWorld.

The Philippines sits atop an estimated $1 trillion worth of unexplored copper, gold, nickel and zinc reserves. But persistent opposition from influential Catholic bishops and environment groups as well as attacks by communist New People's Army (NPA) rebels have slowed the entry of investments in the untapped mineral fields.

About $300 million flowed into the sector in the first half of the year, against the Philippines ' target of $1 billion for all of 2008.

Since the start of the year, the rebels have attacked about four major mine sites in the country, including Tampakan on the southern island of Mindanao , the largest untapped copper deposit in Southeast Asia .

The Tampakan mine is majority owned by Anglo-Swiss mining giant Xstrata Plc.

The 5,000-member NPA is also active in Compostela Valley , a gold rush area in another part of Mindanao , providing a steady flow of cash to fund four decades of Maoist rebellion that has killed 40,000 people and stunted growth in a resource-rich state.

The army was recruiting, training and equipping at least three army battalions and 10 companies of part-time soldiers next year, Mr. Teodoro said, but the military needed twice the number of troops to hasten the defeat of the rebels by 2010. - Reuters and N. J. C. Morales

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Anti-mining group says no to DND plan to deploy soldiers to minesites

MindaNews

19th October 2008

KORONADAL CITY- Deployment of troops to mining areas as protection against rebel attack "does not augur well for the communities," the chair of the South Cotabato, Sultan Kudarat, Sarangani and Davao del Sur Alliance for Genuine National Development Agenda, warned. Eliezer S. Billanes, chair of the Alliance, said the plan of the Department of National Defense will lead to "displacement of indigenous peoples and more human rights violations."

Defense Secretary Gilberto C. Teodoro, Jr. said at the 8th Asia Pacific Mining Conference last week in Pasay City that the deployment of soldiers to mining communities is part of a security plan being drawn for the mining sector.

Foreign-backed mining companies in the country are facing threats from the New People's Army rebels, who have been known to ask for "revolutionary taxes" from big companies but which authorities labeled as "extortion."

On New Year's Day, the NPA raided the remote base camp of Sagittarius Mines, Inc. in nearby Tampakan, South Cotabato, burning facilities worth at least P12 million.

Backed by Swiss miner Xstrata Copper and Australian firm Indophil Resources NL, the Tampakan copper and gold project is staunchly opposed by environmental groups and the local Catholic Church citing concerns for the environment and human health.

Billanes again urged the proponents to abandon the Tampakan project, which straddles the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur.

A company study showed that the upgraded measured, indicated and inferred resource of the Tampakan project totals 2.2 billion tons at a grade of 0.6% copper and 0.2 grams per ton gold and contains 12.8 million tons of copper and 15.2 million ounces of gold using a 0.3% copper cut-off grade.

Earlier, Bishop Dinualdo D. Gutierrez of the Diocese of Marbel here warned of a "wild, wild West" in the mines development site with the training of civilians as village guards.

"I see violence in the future with many people bearing firearms. The training of civilians (to become members of the Civilian Volunteers' Organization) is not a very good prospect. We are becoming violent," the bishop said.

Senior Superintendent Robert R. Kiunisala, South Cotabato police director, has confirmed that they are training people to become CVO members in barangays Tablu, Danlag and Pulabato in Tampakan. These villages are within the mines development site.

"What the police have done was to lecture them on law enforcement subjects, simple community defense, peace and order and basic laws," he said.

CVOs are supposedly the unarmed version of the Citizens Armed Forces Geographical Unit (Cafgus) but in many areas, they are also armed.

But Bishop Gutierrez said that since CVOs are usually armed, violence is not far-fetched.

"Agaw-armas (firearm snatching) may become prevalent in the area. Knowing the NPA, they also want as many firearms as possible. Armed clashes cannot be avoided," the bishop said.

The training of civilian volunteer watchmen was on top of the new security arrangement put in place by Sagittarius last month, when it hired the services of Catena Security, Inc., an affiliate of England-based Group 4 Securicor, one of the world's leading security firms.

Sagittarius has said its private security force consists of at least 100 men. (MindaNews)

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Rebels, volatile policy threat to mining industry

By Edwin G. Espejo

Sun Star

17th October 2008

DAVAO CITY -- Defence Secretary Gilberto Teodoro Jr. called on mining companies to link with government for its integrated security plan, as the insurgency problem remains a major threat to the industry's development.

Several mining giants are also reportedly wary on pouring in more investments in the Philippines because of potential risks involved that include volatile government policy on mineral development.

"There must be synergy among all of us," Teodoro said, who is the keynote speaker of the 8th Asia Pacific Mining Conference.

He proposed that mining companies formalize such linkage by signing with government either individually or as a group memorandum of agreement on implementing the plan.

Authorities are looking into the matter as security threats continue plaguing the country's mineral development projects, dampening investor interest in the Philippines which aims to attract a USD10-billion investments into the mining industry by 2012.

They identified as stumbling blocks to the country's mineral development the various groups which use as front for extortion indigenous peoples with ancestral claims over mining areas.

Other threats to the industry's security are Communist Party of the Philippines-New People's Army (CPP-NPA) and other rebels capable of attacking mining sites, Teodoro noted.

Teodoro said the communist rebel movement is "extorting" money from mining firms to finance its armed rebellion.

He called on mining companies to avoid giving in to extortionists' demands.

"Don't pay - every PhP20 paid can potentially buy a bullet that can kill," he said.

Assuring investors and mining companies in attendance during the conference, Teodoro said the government will deal hard against the CPP-NPA.

He said the defence department is already drawing up a coordinated and integrated security plan for the mining sector.

This will include, he added, deployment of government troops where mining activities are ongoing.

Teodoro also said the Armed Forces of the Philippines (AFP) is considering an "investment defence plan" to contain security threats facing foreign investors in the country.

He likewise disclosed that the AFP is coordinating with the Philippine National Police to draft security protocols in the light of ongoing security threats.

"We will not bend to any armed rebel groups," Teodoro told reporters after he delivered his speech.

He said the AFP will organize and supervise the creation of more Citizen Armed Forces Geographical Units (Cafgus) in areas where the communist rebels are very active.

He however insisted that these Cafgu forces will serve as a security force in their community and not for a particular mining firm.

Aside from the CPP-NPA, Teodoro said the Abu Sayyaf Group with ties to the Jemaah Islamiya and the splinter groups from Moro Islamic Liberation Front (MILF) are also posing security concerns in areas where there are mining activities, particularly in south-western Mindanao .

"Some groups view the mining sector as a potential revenue source and attacked operations of companies that refused to pay money demanded," he said.

"Mining is an economic growth driver and is among priority sectors under the 2004-2010 Medium-Term Philippine Development Plan (MTPDP)," he said.

But the country's volatile policy on mineral development was viewed by many investors as something to be wary about.

Phil Carney, who spoke on strategic risk and management planning during the same conference, said although there has been a shift in policy direction in the Arroyo government towards mining -- one from "tolerant to active promotion" -- big mining firms want "100 per cent assurance that their investment here are protected."

He said the 60-40 rule on local and foreign ownership in mining firms are holding back foreign investors from pouring in more capital to fast track the exploration and development of existing and potential mining projects.

In December 2006, the Supreme Court however upheld the constitutionality of the Philippine Mining Act of 1995, which allow big-ticket mining firms to own 100 per cent of local mining companies under the financial technical assistance agreement (FTAA).

FTAAs are granted to mining firms with claims in areas in excess of 8,000 hectares.

Mineral development projects below 8,000 hectares are granted mineral production sharing agreements (MPSA).

So far, only two firms have been granted FTAAs.

The Arroyo government has been pushing for the revitalization of the mining industry and has vowed to make the Philippines a "mining country" in 2011. (Sun.Star Davao/Sunnex)