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leadership
to
consider
increasing
investments in the sector. He argued
that, as the 5th most mineralized
country in the world, the Philippines not
only had the potential to establish worldclass mines but also compete globally
and yield profit for Filipinos. Moreover,
he challenged the use of common sense,
asserting that the countrys decision to
cease from mining does nothing to curb
the consumers appetite for its products.
According to him, it would cost more for
the Philippines to import these products,
whether raw or manufactured, as
opposed to producing them here in our
own backyard.
Reasonable as these arguments might
sound, they invite a probe into the
definition of wealth and progress as it
relates to communities where mining
operations have taken place. It also begs
the question: who benefits from the yield
of mining anyway? If mineral wealth in
the Philippines is estimated at $840
billion, how much of those assets are
invested in the communities affected by
mining? Most importantly, is this figure
reflective
of
the
social
and
environmental
costs
wrought
by
diggings and excavations?
Past examples have painted a rather dire
picture of how mining can transform
environments and negatively affect
communities. In 2012, fish kill in Lake
Bito, Leyte, was traced to mine wastes
from Nicua Mining Corporation (NMC),
then operating in MacArthur, Leyte. The
Mines and Geosciences Bureau (MGB),
the government entity under DENR
responsible
for
regulating
mining
activities in the country, later suspended
NMCs operations following the fish kill.
However firm the penalty, the damage
had ultimately been done and when
faced with the sudden mass mortality of
fish due to the contamination of waters,
it is difficult to imagine how the people
living
in
the
environs
of
Lake
Bitoeventually recovered.
Responsible
mining
as
a
policy
framework...is insufficient.
Strengthening Oversight
The mining sector is poorly regulated
and monitored. Mines and Geosciences
Bureau (MGB) Director Leo Jasareno
recently said that half of the 44 metal
mines frequently violate environmental
rules, and some have been slapped with
suspension orders, although he refuses
to identify these companies. This
indicates
ineffective
government
regulation and corruption.
The reality is that despite violations of
environmental rules, companies are
allowed to ship the ore they extract.
They continue to profit from our
minerals. An example is the case of
Shenzou Mining Group Corp. operating
in Claver, Surigao del Norte. The
company used the seashore as a waste
pond. The companys operation was
suspended, but it was still allowed to
ship the P174 million worth of minerals
to China. There is clearly no disincentive
for violating environmental regulations.
The state should have seized the ore in
its favor. After all, we are the beneficial
owners of these resources and the
company violated laws in extracting
these minerals.
...despite violations of environmental
rules, companies are allowed to ship the
ore they extract.
Why does MGB refuse to publicly
disclose the identities of these violators?
Either because it does not want to affirm
what the communities and anti-mining
groups are saying all along that the MGB
has allowed these companies to destroy
the environment, or the regulator has
been captured.
The Mining Act of 1995 provides for
multi-stakeholder
approach
in
monitoring mining operations. The law
requires the formation of mining
monitoring teams (MMT) and Mining
Rehabilitation Fund Committees (MRFC)
to monitor the environmental programs
of large-scale mining companies. The
selection of the members of the
The
MGB
and
the
DENR
can
significantly
improve
access
to
information by publishing disaggregated
data in a timely manner in a form that is
usable for further analysis. Public
disclosure of information will strengthen
the accountability of both the MGB and
the companies.
Impact Assessments
Had disaster risks such as these been
diligently accounted for, mining-affected
communities would not be suffering the
brunt of the double-whammy effects of
both man-made and natural disasters
exacerbated by climate change.
Mining companies should also be
required to incorporate the impact of
their operations on the vulnerabilities of
the area to climate change and include
this in their risk reduction strategies.
The people of Sta. Cruz, Zambales living
near
mining
operations
witnessed
horrendous
flooding
after
tropical
cyclone Koppu hit Luzon in 2015. In
2012, typhoons Ferdie and Gener hit
Benguet. Philex Minings decades-old
tailings dam released the biggest mine
spill in Philippine history that affected
the people living along Balog Creek and
Agno River in northern Philippines. Had
disaster risks such as these been
diligently accounted for, mining-affected
communities would not be suffering the
brunt of the double-whammy effects of
both man-made and natural disasters
exacerbated by climate change.
Extractive
Industries
Transparency
Initiative (EITI)
President Duterte stated that companies
should
be
held
to
international
standards. One international standard
that is currently being implemented by a
multi-stakeholder group is the Extractive
Industries Transparency Initiative (EITI).
It is an international initiative to improve
the governance of the extractive sector
by disclosing important information and
requiring companies and governments to
account the payments of industries to
the government.
negative
social and environmental
impacts of mining to the country.
...mining contributes little to the
economy. Mining is not a huge
employment generator.
Furthermore, mining contributes little to
the economy. Mining is not a huge
employment generator. MGB data show
that the total employment contribution
of mining is only at 234,000 in 2015 or
0.6% of total employment in the country.
To increase the benefit of mining, the
government should collect royalties from
all mining operations and ensure that
the rate of the royalty will guarantee fair
share to the Filipino people as owner of
the resource. The fair share we receive
from the mining industry should also
take into account the social and
environmental costs of extraction.
Incentives awarded to companies should
also be rationalized. In 2013 alone, the
government lost around P3 billion due to
income tax holidays granted to seven
mining companies. The awarding of
these fiscal incentives is not even linked
to the performance of the companies.
The
government
should
formulate
policies that will maximize the economic
benefits of its minerals. Indonesia
banned the export of raw ore and
imposed a stiff tax if raw ore is exported
to encourage companies to process the
minerals in Indonesia and develop its
downstream sector. Bulk of our minerals
is exported as raw ore. We do not have
an established downstream sector. We
can further maximize the value of our
minerals
if
we
link
mining
to
manufacturing
and
require
the
processing of raw ore in the country.
Unfortunately, local governments do not
get their share from mining in a timely
manner.
In addition to the issue of fair share is
the share of local governments from the
extraction of resources in their area.
According
to
the
Code,
local
governments get 40% of the proceeds
from the utilization of national wealth.
Unfortunately, local governments do not
figures
presents
another
obvious
problem: underreporting of production.
From 2000 to 2008, reported mineral
production was between 17% and 45%
lower than actual mineral exports,
according to a 2010 study commissioned
by Action for Economic Reforms. The
lack of oversight behind such a
discrepancy is a major criticism of the
existing
mining
law. Father
Edwin
Gariguez, who won the 2012 Goldman
Prize, a
prestigious
international
environmental award, for his work on
mining, argues that Aquino gives too
much weight to the regulatory power of
government agencies. He says most
agencies dont have the capacity or the
will to enforce the law.
The IMF, which once called for the cheap
privatization of the countrys natural
resources, now recommends that the
Philippines revise its mining tax scheme.
Executives at St. Augustine acknowledge
that the Philippines liberal mining laws
and low taxation are part of what
attracted the company to the region, but
Gillespie argues that stricter regulation
and reasonably higher taxes wouldnt
necessarily turn them off. The payoff is
too huge. If you can get in here and get
established, youll be in pretty good
shape in the long term, says St.
Augustine chief operating officer Tom
Henderson, of the countrys mineral
potential.
The President, who has long promised to
reform the industry, this week filed the
implementing rules for his new executive
order on mining. They do not include
provisions on revenue sharing, protected
habitats or ecotourism zones. Other
stakeholders have taken matters into
their own hands, introducing three
alternative mining bills at the Philippine
Congress
(House
bills 4379, 6342 and 4315), each more
radical than the next in their attempt to
reform the industry. These alternatives
are supported by the Catholic Bishops
Conference, environmental groups and
indigenous rights organizations, who