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Historical Sketch of the Mining Industry A.1 Historical Sketch of the Mining Industry

The role of the mining industry in the development of the Philippine economy has been historically significant. Owing to the highly mineralized setting of the archipelago, traditional placer and lode mining and metallurgy were important subsistence activities of the baranganic natives of the islands since the pre- Hispanic times. Raw gold was a regular trade medium between the "peoples of Ma-I" and exotic Chinese, Japanese, Indian and other Asian traders in the littoral areas, and most of the product probably left the country.

The spirit of Spanish expansionism was at its crest when it reached the Philippines in the second half of the 16th century. Mercantilism as a guiding economic policy impelled Spain to build her wealth from abroad that resulted in the stockpiling of precious metals. The adelantados and their companion frayles sent by the Spanish King to these islands did not find gold in commercial quantities, but in the course of their "pacification campaigns" against the indios (and the latter's obligatory conversion to the Catholic faith), they however continued to explore mining areas.

otwithstanding their three centuries of colonial rule, the Spaniards failed to penetrate the gold-rich due to the Gran Cordillera Central fierce resistance of the Ygorotes. The gold workings and hoard of the yellow metal effectively remained in indigenous hands until the coming of the Americans.

The worthless succession of peninsulares and insulares transplanted by the Crown - unlike the intrepid and ruthless conquistadores of the Spanish New World (viz. Mexico and Peru) - did not have the determination and capability to develop the local mining industry. When Spain lost her empire in the New World during the early 1800s, the Philippines separated by two oceans from the mother country consequently wallowed in economic stagnation and general stupor.

rom the mid-1820s to the mid-1870s, the introduction of liberal economic policies, the opening of Manila to world trade, and the operation of the Suez Canal (that reduced the travel distance between Europe and the Far East), stimulated the colony 's economic growth. In the process, a Filipino middle class originating from the mestizos and scions of the principalia - capped by the ilustrados - had emerged.

And it was by this time (viz. toward the last 50 years of Spanish rule) that Philippine mineral production and trade grew. The Royal Decree of 1837, that was effectively the first Philippine mining law, created the Inspeccion General de Minas under the Governor- General for the purpose of administering all mining activities in the colony. In 1864, the Lepanto Mine - producing copper and gold - was opened.

But the grip of Spanish colonialism had loosened, and whatever economic, political, military and ecclesiastical power it still possessed was obliterated by the outbreak of the Philippine Revolution, the Spanish-American War and the Philippine-American War, respectively. The Treaty of Paris concluded by defeated Spain and the victorious U.S. on December 10, 1898 caused the former to cede her Asian colony (among others) to the latter for a token sum of $20 million. The handover was confirmed by the Spanish- American Treaty sealed at Washington DC on November 7, 1900.

merica at the turn of the 20th century had an expanding industrial system characterized by the predominance of monopoly capitalism and the emergence of the corporation as the dominant type of industrial organization. Its industrial system needed vast sources of raw materials, including energy minerals and base metals, even as its appetite for precious metals did not diminish.

Gold mining in continental America had attained eco- nomic pre-eminence when the U.S. government adopted the policy of monometallism that was pur- sued by most Western nations. And in America's case, this pertained to the use of the gold standard by the federal government to provide stability to her dollar- based monetary system. Armed with sufficient mining geological data, backstopped by an aggressive Min- ing Bureau set up in 1900, and legitimized by the Philippine Bill of 1902 (the country's second mining law), her imperialist mining interests immediately ex- ploited Philippine mineral resources (especially gold), and proceeded with the systematic development of the big mining industry.

Applying superior force and Machiavellian cunning, the North American gringos had vanquished both the insurrectos fighting for the first Philippine Republic and the Cordilleran tribal communities occupying the mineral-rich hinterlands. Among the 70,000 U.S. Army troops unleashed to "pacify' the country between 1898 and 1901 were the veterans of the California and Klondike gold rushes. Upon their discharge from military service, these forty-niners remained in the country to become the vanguard of American big mining interests.

n 1907, Benguet Mine - the first modern gold mine in the country - was established. Subsequently, 17 other adjacent gold mines were opened at the Baguio district. The peak of U.S. colonial rule in the Philippines in the 1930's was considered as the boom years of the Philippine large-scale mining industry, especially in gold mining. In 1936, the country 's third mining law was enacted (Commonwealth Act No. 137) and the Bureau of Mines was also created. By and large, there were 40 operating gold mines producing 30 tons per year up to the outbreak of World War II. In the country's export trade, gold was the third most important commodity, exceeded only by sugar and coconut respectively.

Often, the gold boom in the 1930s was sensationally told as the story of how Baguio was transformed from a vast wilderness into a bustling metropolis. The Baguio district had the largest mineral concentration and most number of prospectors and claimants. But the dark circumstances apropos of the story involved the forcible uprooting of indigenous peoples and other sectors of the rural population by foreign interlopers driven by the auri sacra fames. *

The bulk of displaced members of relatively undisturbed communities engaged in traditional gold mining had to eke out a living through gold-rush mining with a lot of techniques copied from the American forty-niners. Eventually, this ragtag army of gold rushers triggered a parallel "gold boom" within the informal mining sector but whose impact over the local mining industry after 70 years is still very much strong.

But the Japanese invading forces rudely disrupted the Philippine mining boom of the 1930s and early 1940s. World War II wrought tremendous havoc on the mining industry, especially during the invasion and liberation stages.

To carry out the grand imperialist design for a "Greater East Asia Co-Prosperity Sphere", the Japanese war machine commandeered strategic metal ores (e.g. iron, copper, chromite and manganese) to support its war effort and the expanding industries in its homeland, all during the brief but brutal occupation. Many Japanese trading companies that operated in the country during the pre-war years turned out to be fronts of the Japanese war machine, and whose officials and employees were military intelligence officers and spies.

The granting of Philippine "independence" by the United States in 1946 - amid the ruinous post-war era - was immediately followed by the imposition, on a prostrate nation, of the "Parity Rights Amendment" and the "mutually beneficial" Laurel- Langley Agreement on trade and related matters. Ostensibly, the big mining industry was "Filipinized" while being rebuilt. Rehabilitation of strategic gold mines was done in the late 1940s, while copper was explored extensively in the early 1950s. New technologies like open pit mining for large-tonnage, low-grade copper deposits were introduced. The two metals became the pillars of big mining with the establishment of three major mines: Atlas (1955), Sipalay (1957) and Philex (1958). The period 1960-1980 was the "Golden Age" of Philippine big mining, even as the neo-colonial "intimate relations" retained the pre-existing trade patterns and ownership of mining companies by US individuals and corporations. But the imposition of martial law in 1972 by then President Marcos dealt a twin hammer blow to the strongman's oligarchic rivals and to the Philippine status quo. Martial law paved the way for the reign of greed in the mining industry under the pretext of Presidential Decree No. 463 (P.D. 463) issued in 1974 that was in effect the country's fourth mining law. As the Laurel-Langley Agreement and similar colonial relics were about to end in 1974, the Marcos cronies and Marcos himself thrust their grasping hands at the U.S.-controlled big mining in- dustry to grab the mines that sated their whims.

The decade 1980-1990, towards the end of martial law (1982) and the fall of Marcos (1986), was the "Dark Period" of the mining industry. It triggered the painful dying process of large-scale metallic ore mining that was marked by a domino type of shutdown of 14 big and medium-sized metal mines. Low prices for the principal metal products in the midst of a collapsing international market were the immediate causes for the moribund state of export-oriented big mining. As the industry was collapsing, gold panning and small-scale mining made a dramatic comeback. From the mid-1980s through the mid-1990s, the country had borne witness to the meteoric rise of a rag-tag army of 500,000 men, women and children digging and panning for the gold metal.

Once more, the auri sacra fames cast its magic spell. This time, it had transformed Mount Agtuganon/Diwata, popularly known as Mount Diwalwal * from an obscure gold panning site of the Mandaya tribe into a chaotic gold rush town of 150,000 subterra- nean-loving inhabitants. And its gold did not elude the covetous eyes of the Marcos cronies and Marcos himself as they had caused the prompt enactment of P.D.1899 (Small-Scale Mining Law) in 1984. All these had a hand in shaping the more than 50% share of the small-scale gold mining sector in the country's total gold output.

hile the big mining industry was slowly wasting, the Philippine government had been conducting major studies on the country's mineral potentials with the aid of the US, British, Ger- man and Japanese governments as well as that of the United Nations Development Program (UNDP) and the Asian Development Bank (ADB). As a result, the government is over-saturated by voluminous reviews of the country's geology and mineral resources for big mining consumption as well as encyclopedic big mining project studies lying side by side with a moribund big mining industry and a monstrous gold rush phenomenon.

In part, the foregoing formed the basis of the government's policy on liberalizing and restructuring the mining industry ultimately finding concentrated expression in the Philippine Mining Act of 1995 (Republic Act 7942), the country's fifth. The train of big mining-related developments and government actions foreshadowed an impending resurrection of the big mining industry. Apparently, the process is that of an inexorable shift from small-scale and labor- intensive to large-scale and mechanized operations, from a Filipino- to a transnational-dominated mining industry.

As of now, big mining is but a shell of its former self. The Department of Environment and Natural Resources (DENR) admitted that since 2002, there are only eight operating large metal mines. http://www.prrm.org/publications/gmo2/historical.htm

This introductory article was written for Corporate Watch by activists from the Stop Mining Network, a new eco-defence project in the Phillipines aimed at spreading information about the destructive mining projects in the country, building solidarity with communities of resistance and supporting their struggles against this little-known corporate encroachment. The mining industry is one of the biggest industries in the world. In every part of the world where there are minerals - in Canada, the United States, Australia, Asia, Japan and Norway and many parts of Europe - mining companies compete to exploit natural resources for profit. Consequently, this has lead to the horrendous destruction of the Earth's biosphere. Life support systems, such as water forests and wildlife, are destroyed everyday in the interests of these companies and their shareholders. In addition, local people's livelihoods are destroyed in the process. Farmers, fisher folk and indigenous tribes end up being harassed, bribed and displaced. People have even been killed when they attempted to seriously oppose a mining operations in their region. Mining is a vital industry for techno-industrial societies. Throughout the centuries, people from different corners of the globe mined for different kinds of minerals which they used in their daily lives. However, the advent of neo-liberal capitalism has made the mining industry more powerful and tyrannical. In just a few hundred years, the industry has brought tragedy to various countries and regions. It has destroyed the planet's biosphere, including wildlife, affecting farmers, fishermen, indigenous people, and causing the degradation of the last remaining forests, rivers and oceans of the world, which have existed for millions of years. History Mining in the Philippines started in the pre-colonial period. In a number of regions in the archipelago, indigenous communities mined for gold, copper and many other minerals. Natives from all over the Philippines used gold, pearls, agate, and so on, for body ornaments. Gold was also bartered, through the Arab world, with merchants all over Asia and Europe in the pre-Islamic and Islamic periods. It is noted that many merchants from Luzon (Northern Philippines), Brunei and Jolo traveled continually all throughout Mindanao in search of slaves and gold. The first commercial mine in the Philippines was in Benguet, in Central Luzon, established by the Benguet Mining Corporation. The Spanish colonisers took advantage of whatever mineral resources they could get. In fact, gold was the main reason why Spain colonized the Philippines, mainly for their so-called Royal Service. They even made a law, called Inspeccion de Minas, to inspect the existence of minerals in the archipelago. It was the Americans, however, who made strategic steps to exploit the minerals of the Philippines. They did a geological survey, which validated the Philippines as a mineral-rich country, and issued Act 468, a law that basically gave the government the right to reserve mineral lands for its own purposes. They claimed a number of areas as "reserved areas" for future mining, hence the commercialization of the Benguet gold mining. In the year 1914 in the south, Surigao and other parts of the Caraga region were declared as an "iron reserved" area for future mining. By then, the mining industry in the Philippines was on its way to boom and the Commonwealth US government took more hold of it, forming a Mining Bureau to regulate all potential operations in the future. Up till 1921, there was no large scale mining but many were making a living from small-scale gold mining. Between 1933 and 1941, gold was the dominant and most important mineral in the mining industry. Under the tyranny of the Japanese, Filipinos in many regions of the country were coerced into mining for metals to be used for war weapons in Japanese imperialism. This paved the way for further commercialisation, exploitation and degeneration of the Philippines. Large-scale copper mining reached its peak in the 1960s and 1970s. By the late 80s, world demand for copper decreased in favour of gold. However, a number of gold mining companies closed down in that period because of law violations and so gold mining went into decline. With the help of the World Trade Organisation, the International Monetary Fund and the World Bank, the neo-colonized Philippines was again coerced to adjust its economic policies to adhere to neo-liberal policies. By 1994, pro-development politicians, such as Gloria Macapagal Arroyo, lobbied for a Mining Bill which would later become the Republic Act 7942 or the Philippine Mining Act of 1995. This law basically gives power over land, resources and life to corporations; many areas became mining hot spots. By 1996, the Philippine mining industry got back on track, allowing offshore companies to operate fully in the 'reserved areas' - a disaster for a number of places in the Philippines. In March 1996, the Marcopper tunnel in Marinduque collapsed. In rough estimation, 1.6 million cubic meters of mine tailings flowed from the mine pit to the Makulapnit and Boac river, trapping 4,400 people in 20 villages. The government declared the Boac river officially dead. The disaster caused massive siltation in downstream communities and coastal areas. Among the tragedies that happened in 1998 is the Malangas Coal Corporation case in Zamboanga Del Sur, Mindanao, where an explosion occurred in the mine site, killing almost a hundred workers and injuring 35 people. In 2004, another disaster took place in Surigao Del Norte, Mindanao. This time it was caused by one of the largest and longest-standing mining corporations in the Philippines, the Manila Mining Corporation (MMC). Three disastrous incidents occurred, where approximately five million cubic meters of waste materials containing high levels of mercury were released, damaging local people's agricultural lands and temporarily poisoning the adjacent Placer Bay. Today, 20 large-scale mining operations, 10 medium-scale and more than 2,000 non-metallic small-scale mining operations exist in the Philippines. Yet, hundreds of mining applications are pending to prey on what's left of the country's resources. http://www.corporatewatch.org/?lid=3832

The team recognizes the external pressures on the Philippines as a deeply indebted country to generate foreign investment but fears that the emphasis on export-driven mining based on foreign investment may diminish rather than improve the possibility of a balanced, long-term, sustainable development strategy. The problems are exacerbated by the unresolved problems of corruption and the fact that, again contrary to the recommendations of the EIR, many of the proposed new mining sites are in areas of conflict including Mindanao. The Philippines is one of the 17 countries in the world to be categorized as a mega-biodiversity country. It is also a geo-hazard hotspot, prone to typhoons, earthquakes, landslides and volcanoes. Its environmental sustainability is already under serious threat with the UNDP highlighting the urgent need to properly manage the country’s natural resources if MDG 7 is to be achieved1. These factors, together with potential social impacts, should require the Philippine government to exercise extreme caution in authorizing large-scale mining projects.

The Philippines has relatively strong laws designed to protect the environment, communities and indigenous peoples. The reality, however, is that where investments are concerned the law is too often viewed as a mere technicality to be overlooked or circumvented. Human rights abuses and misreporting are clearly associated with some current mining activities. It is of concern that those in iv government and international agencies seem to lack the capacity or inclination to challenge and end such misconduct. Philippine Law requires that before any development takes place within the ancestral lands of indigenous people they must give their free, prior, informed consent (FPIC). The team heard, however, that this consent is sometimes obtained through misinformation, misrepresentation, bribery and intimidation. Government agencies, in particular the National Commission on Indigenous Peoples (NCIP), are, according to indigenous people the team talked to, failing to fulfill their mandate to protect indigenous peoples’ rights. Many indigenous peoples view the NCIP as siding with mining companies. They feel the need for an independent body to ensure indigenous peoples are adequately informed about plans to operate and expand mines, and to assist them in representing their views.

The World Bank is implicated in the expansion of mining in the Philippines. Despite historical problems with mining and a legacy of 800 abandoned mines, the Bank was one of the major actors influencing the liberalized Mining Act of 1995. More recently, it has played a crucial role in sponsoring and promoting the adoption of the National Minerals Policy, the Mineral Action Plan and the revitalization of the mining industry. In failing to address the negative impacts of mining plans on the poor and marginal, the Bank is failing in its duty both to assist with the country’s steps to sustainable development and is failing to abide by obligations to its own mandate and obligations under international human rights law. Based on the economic evidence available, the team believes that implementation of the proposed mining plan will bring insufficient benefits to the Filipino people. Once incentives to mining firms have been considered and revenues offset against the associated costs – in particular the environmental costs – the net gain will be far lower than that claimed by the companies and the promoters of mining in government. The country may be left with clean-up costs that run into billions of dollars.

Corruption is a serious problem in the Philippines and it can be expected that plans for extensive mining operations in remote areas requiring licensing, regulation and monitoring will make it worse. 1. Introduction Mining has a very poor record in the Philippines as a result of the massive social and environmental problems it has caused historically. Records kept by the United Nations Environmental Programme (UNEP) reveal the Philippines to be among the worst countries in the world with regard to tailings dam failures2 whereby the surface impoundments containing the toxic waste from the mining process failed with disastrous consequences for local people and the environment.

In spite of this, since 1992, the Government of the Philippines has been pursuing an aggressive policy to revitalize the mining industry, potentially opening 30 per cent of the country’s land area to mining.3 It has promised that mining will be carried out to full international standards and that environmental and social problems will be addressed effectively.

The government has conducted mining road shows4 across the globe. Incentives for foreign firms make their operations effectively tax-free for the first five years. Billions of dollars in investments have been promised and a total of 2,000 mining permit applications are pending.5 However, critics say there is scant evidence of economic benefit to the Philippines at the national level. At the local level evidence of the detrimental economic, environmental and social impact is widespread. The ‘streamlining’ of the mining application process has become synonymous with a relaxing of environmental laws combined with attempts to undermine the legal protections afforded to indigenous peoples. It is feared that proposed constitutional change6 may further weaken protections.

The Philippines, which consists of 7,107 islands, has fragile tropical ecosystems and is an outstanding biodiversity hotspot. It is one of the 17 countries in the world that are the richest in biodiversity. More than 52,177 species have been identified, half of them are found nowhere else in the world. According to the biodiversity conservation priorities of the Department of Environment and Natural Resources (DENR), ‘the Philippines is one of the few countries in the world that is both a mega-diversity country and a biodiversity hotspot.7 It recognizes that there is a ‘small window of opportunity in which it is still possible to save this global hotspot from complete devastation and the unique life forms found within from extinction’. This extraordinary biological diversity is at risk because the forest cover of the Philippines has dropped from 270,000km2 when the Spanish left the country in 1898, to 150,000 km2 at Independence in 1946, to just 8,000 km2 in 2006.8 Mining is targeted for many upland areas where it would further reduce forest cover and leave a toxic heritage for succeeding generations.

Natural hazards are common in the Philippines, with major portions of the country classified …. READ ON FROM PDF SOURCE http://www.communitymining.org/attachments/202_Phillipines%20Mining.pdf

Philippines Mining http://www.photius.com/countries/philippines/geography/philippines_geography_mining.html Sources: The Library of Congress Country Studies; CIA World Factbook << Back to Philippines Geography The 1980s were difficult for mining in the Philippines. In 1990 the mining and quarrying sector contributed 1.5 percent of GNP, approximately half the percentage it had accounted for ten years earlier. Mineral exports were 5.4 percent of merchandise trade in 1988, whereas in 1980 they constituted 17.8 percent. Rising operational costs and a depressed market severely affected the industry. In 1990 mining operations suffered from labor disputes, higher mandated wages, higher interest rates, typhoons, an earthquake, and power shortages.

In the early 1990s, the Philippines had large deposits of copper, chromium, gold, and nickel, plus smaller deposits of cadmium, iron, lead, manganese, mercury, molybdenum, and silver. Industrial minerals included asbestos, gypsum, limestone, marble, phosphate, salt, and sulfur. Mineral fuels included coal and petroleum.

In 1988 the Philippines was the sixth largest producer of chromium in the world and ranked ninth in gold production and tenth in copper production. The country's nickel-mining company, Nonoc Mining and Industrial Corporation, ceased operation in March 1986 because of financial and labor difficulties. The Asset Privatization Trust, a government entity in charge of selling firms acquired by the government through foreclosure proceedings, sold Nonoc in late 1990. The new owners expected to resume operations in the middle of 1991 and produce some 28,700 tons a year, which would again make nickel a major export earner for the Philippines.

Data as of June 1991

NOTE: The information regarding Philippines on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Philippines Mining information contained here. All suggestions for corrections of any errors about Philippines Mining should be addressed to the Library of Congress and the CIA. http://www.photius.com/countries/philippines/geography/philippines_geography_mining.html

PHILIPPINES MINING LAW UPDATE: FEATURES OF THE NEW EO 79

OVERVIEW OF THE MINING INDUSTRY According to the data from the Mines and Geosciences Bureau show that from 1970-2010, the Philippines only produced P878.4 billion out of P73.47 trillion supply of metallic and non-metallic mineral production in terms of value.

The economic impact of the mining industry in the country cannot be ignored. The Chamber of Mines of the Philippines estimated that the country lost around P10.4 billion worth of foreign direct investments in the mining sector last year due to uncertainties over the government’s policy direction on the mining sector as well as the delayed issuance of mining permits.

For the years 1960 to 2008, the gross value added (GVA) in mining and quarrying at prices in 2011 rose annually by 17.31 percent on average. For the same period at constant prices, meanwhile, GVA increased yearly by 5.39 percent on average. 1 The total mineral exports of the Philippines and their percentage share to total exports of the country increased annually on average. 2 Likewise, employment in mining and quarrying increased from 141,000 to 166,000 for the period 2006 to 2009. 3

The mining industry has been a source of conflict for the government, non-governmental organizations (“NGOs”) and the private sector. The positive economic performance of the mining industry has always been countered by the negative effects mining operations have on the environment. But the issues confronting the mining industry is not only limited to its detrimental effects on the environment. While our mining laws seek to address the environmental concerns surrounding the mining industry, enforcement of the law is another.

According to Fraser Institute Annual Survey of Mining Companies 2010-2011, the Philippines ranked 66 out of 79 in the policy attractiveness survey. The policy potential index of the Philippines is poor in terms of infrastructure, timely and efficient administration of legal processes, and transparent and non-corrupt governance.

To address the mining issues on economic, environmental and lack in enforcement, President Benigno Aquino III issued Executive Order No. 79 (“EO 79”).

HISTORY OF MINING LAWS IN THE PHILIPPINES The 1987 Constitution is the supreme law governing the Philippine mining industry. Article XII on National Economy and Patrimony provides:

“Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of waterpower, beneficial use may be the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers, lakes, bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.”

During the 1980s and early 1990s, there was, however, a decline in the state of the mining sector that led to the enactment in 1995 of Republic Act No. 7942, otherwise known as the Philippine Mining Act (“Mining Act”), as a means to boost the industry. This law became a subject of controversy and eventually was challenged before the Supreme Court for being unconstitutional. The Supreme Court in the case of La Bugal-B’Laan Tribal Association Inc. vs. Ramos 4 finally resolved the issue on the legality of the Mining Act including those relating to financial and technical agreements ruling that:

“All mineral resources are owned by the State. Their exploration, development and utilization (EDU) must always be subject to the full control and supervision of the State. More specifically, given the inadequacy of Filipino capital and technology in large-scale EDU activities, the State may secure the help of foreign companies in all relevant matters -- especially financial and technical assistance -- provided that, at all times, the State maintains its right of full control. The foreign assistor or contractor assumes all financial, technical and entrepreneurial risks in the EDU activities; hence, it may be given reasonable management, operational, marketing, audit and other prerogatives to protect its investments and to enable the business to succeed.”

When the Supreme Court upheld the Constitutionality of the Mining Act, this resulted in faster growth in mineral exports, percentage share to total exports, employment in the mining sector and in the total paid-up investments in mining. 5

The Philippine mining sector throughout the years has been regulated by the Department of Environment and Natural Resources (“DENR”) together with its attached agency Mines and Geosciences Bureau (“MGB”). On the other hand, quarrying is within the jurisdiction of local government units in accordance with the Republic Act 7160 otherwise known as the Local Government Code of 1991.

HIGHLIGHTS OF THE MINING ACT The core principle of the Mining Act is its strict adherence to sustainable development. The declared policy of the law is to promote the rational exploration, development, utilization and conservation of mineral resources through combined efforts of government and the private sector in order to enhance national growth in a way that effectively safeguards the environment and protect the rights of affected communities.

Economic aspect According to Section 5 of the Mining Act, the government shall get a ten percent (10%) share in all royalties and revenues to be derived by the government from the development and utilization of the mineral resources within mineral reservations which shall accrue to the MGB to be allotted for special projects and other administrative expenses related to the exploration and development of other mineral reservations.

Under the Local Government Code, local government units (“LGUs”) were given authority to impose taxes on sand, gravel and other quarry resources under Section 138 thereof. In addition, the Mining Act provides that LGUs have a share of forty percent (40%) of the gross collection derived by the National Government from mining taxes, royalties and other such taxes, fees or charges from mining operations in addition to the occupational fees (30% to the Province and 70% to the Municipalities concerned) in consonance with the Local Government Code.

Environmental aspect In ensuring that the government protects the right of the people to a balanced and healthful ecology, the Mining Act has provided limitations on how the mineral resources of the country can be utilized.

It established area limitations, maximum years for mining operations, assignment of mining rights, compliance with rules and regulations promulgated by the DENR concerning the sanitary upkeep of mining operations. Section 69 of the Mining Law also required every contractor to undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit which shall be incorporated in the work program which the contractor or permitted shall submit as an accompanying document to the application for a mineral agreement or permit.

To further ensure the protection of our environment, an environment clearance certificate is required based on an environmental impact assessment pursuant to Section 70 of the Mining Act. Details of environmental protection have been outlined in Chapter XVI of Administrative Order No. 2010-21 or the implementing rules and regulations promulgated of the Mining Act. Under Section 167-A of the Administrative Order, a Certificate of Environmental Management and Community Relations Record (CEMCRR) is required in the approval of Mineral Agreements, FTAA, Quarry or Commercial/Industrial Sand and Gravel Permit and Mineral Processing Permits.

The Mining Act and its Implementing Rules and Regulations also gave premium to environmental protection. Measures were put in place to ensure that mining contractors/operators comply with internationally accepted standards of environment management.

Mining contractors/operators are mandated to allocate approximately ten percent (10%) of the initial capital expenditures of the mining project for environment-related activities. A mandatory annual allocation of three to five percent (3%-5%) of the direct mining and milling costs to implement an Annual Environment Protection and Enhancement Program (“EPEP”).

There is also a mandatory establishment of a Mine Rehabilitation Fund (“MRF”) to be composed of the following:

a Monitoring Trust Fund of Php50,000.00 which is replenishable; and a Rehabilitation Cash Fund of Php 5,000,000.00 or ten percent (10%) of the EPEP cost, whichever is lower. Such funds are to be deposited as a trust account in a government depository bank to be managed by the MRF Committee composed of the MGB Regional Director, DENR Regional Executive Director, representatives from the LGU and an NGO, and the contractor.

Conduct of Environmental Work Program during the exploration stage and an Environmental Protection and Enhancement Program during the development and operations stage is also required under the Mining Act.

As an incentive to mining companies, the Mining Act mandates the institutionalization of an incentive mechanism to mining companies utilizing engineered and well-maintained mine waste and tailings disposal systems with zero-discharge of materials/effluents and/or with wastewater treatments plants.

To ensure compliance with the mining laws, a Multipartite Monitoring Team composed of representatives from the MGB, DENR Regional Office, affected communities, Indigenous Cultural Communities, an environmental NGO, and the Contract/Permit Holder shall undertake the monitoring of mining operations. On the other hand, the Mine Environmental and Protection and Enhancement Office in each mining/contract area will set the level of priorities and marshal the resources needed to implement environmental management system.

The MGB Regional Director shall also have the power to summarily suspend mining/quarrying operations in case of imminent danger to human safety or the environment.

ISSUES FACED BY THE GOVERNMENT With the advent of Climate Change or Global Warming, people have shifted their focus from utilization to preservation. The environmental community has been clamoring for the government to push for stringent environmental protection.

Moreover, according to the 10-year review of the mining industry published by International Institute for Environment and Development, despite the emergence of global rules for best practices in the mining industry, more often than not, there is lack of implementation, independent verification, public reporting, or consequences of non-compliance.

The government is also not getting its “fair share” in the mining industry as espoused by President Benigno Aquino III. Mining contractors of Mineral Production Sharing Agreement and Financial or Technical Assistance Agreements can avail of fiscal and non-fiscal incentives granted under the Omnibus Investment Code of 1987, as amended. In addition to these incentives, the Mining Act also granted incentives for pollution control devises, for income tax carry forward of losses, for income tax accelerated depreciation on fixed assets, and investment guarantees, such as investment repatriation, earning remittance, freedom from expropriation, and requisition of investment, and confidentiality of information.

For FTAA contractors, an additional incentive, in the form of a tax holiday on national taxes is granted from the start of the construction and development period up to the end of the cost recovery period, but not to exceed five years from the start of commercial operation.

These issues led the Aquino administration to review the existing mining laws and policies of the country which resulted in the execution of Executive Order No. 79 aimed at addressing the deficiencies in the current laws and rules and regulations with respect to environmental protection and income derived by the government from the mining industry.

HIGHLIGHTS OF E.O. 79 – NEW MINING REGULATION The thrust of Executive Order 79 is to improve environmental mining standards and increase revenues to promote sustainable economic development and social growth, both at the national and local levels.

Pursuant to these objectives, the order focused on enhancing coordination among stakeholders to ensure strict compliance by mining operators to the existing mining laws and regulations.

A careful look at the Mining Act and Executive Order No. 79 will show the different path the government is now taking with respect to the mining industry.

Changes introduced by EO 79 on the environment aspect In addition to the areas closed to mining applications as provided under Section 19 of the Mining Act has been expanded by EO 79 to include the following:

Protected areas categorized and established under the National Integrated Protected Areas System (“NIPAS”) under Republic Act No. 7586; Prime agricultural lands, in addition to lands covered by Republic Act No. 6657, including plantations and areas devoted to valuable crops, and strategic agriculture and fisheries development zones and fish refuge and sanctuaries declared as such by the Secretary of the Department of Agriculture; Tourism development areas, as identified in the National Tourism Development Plan; and Other critical areas, island ecosystems, and impact areas of mining as determined by current and existing mapping technologies, that the DENR may hereafter identify pursuant to existing laws, rules, and regulations and the terms and conditions of the grant thereof. Implementation of ensuring environmental compliance is now not solely the responsibility of the National Government. Enforcement will now be done in coordination with LGUs. The LGUs shall, however, confine themselves only to the imposition of reasonable limitations on mining activities conducted within their respective territorial jurisdictions that are consistent with national laws and regulations.

Existing mining operations will now be placed under review by a multi-stakeholder team led by the DENR. Likewise, the use of mercury in small-scale mining is strictly prohibited and small-scale mining shall be confined only to declared People’s Small-Scale Mining Areas or Minahang Bayan.

Changes introduced by EO 79 on the economic aspect A new feature has been introduced by EO 79 when it comes to granting new mineral agreements is the necessity of a public bidding. Under the Mining Act, the rule is a first come first serve policy. Whoever reserves first and is qualified to undertake the mining operation can be granted the permit, subject to limitations imposed by the laws and rules and regulations. EO 79 has completely changed the way mining agreements will now be granted by undergoing a public bidding.

As provided in Section 6 of EO 79:

“Section 6 The grant of mining rights and mining tenements with known and verified mineral resources and reserves, including those owned by the Government and all expired tenements, shall be undertaken through competitive public bidding. While all other mining rights and tenements applications shall be processed and approved through existing procedures.”

A moratorium has also been placed on the grant of new mineral agreements until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect. Likewise, existing mining contracts and agreements will also be reviewed by the DENR for possible renegotiation of terms and conditions, which, shall in all cases be mutually acceptable to the government and the mining contractor.

In addition, Section 7 of EO 79 provides that:

“All valuable metals in abandoned ores and mine wastes and/or mill tailings generated by previous and now defunct mining operations belong to the State and shall be developed and utilized through competitive public bidding. Likewise, upon expiration of the pertinent mining contracts, the said metals shall belong to the State and will be developed and utilized through public bidding.”

Changes introduced by EO 79 on the enforcement aspect A new council called the Mining Industry Coordinating Council (“MICC”) has also been created under Section 9 of the said executive order. The MICC’s powers and functions can be categorized into two purposes: coordination with stakeholders and enforcement of mining laws.

The following are the powers and functions of the MICC as to coordination:

Ensure continuing dialogue and coordination among all stakeholders in the industry Conduct and facilitate the necessary capacity and institutional building programs for all concerned government agencies and instrumentalities; Conduct an assessment and review of all mining-related laws, rules and regulations, issuances, and agreements with the view to formulating recommendations to enhance coordination between the National Government and LGUs to ensure implementation of mining laws and regulations, and to properly regulate small-scale mining participants and ensure that they are accountable to the same environmental and social obligations as large-scale mining companies; Serve as the Oversight Committee over the operations of Provincial/City Mining Regulatory Boards (P/CMRBs); The following are the powers and functions of the MICC as to enforcement:

As may be directed by the President, constitute and create a Task Force Against Illegal Mining and seek the assistance of all law enforcement agencies, such as, but not limited, to the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) to ensure strict compliance with relevant laws, rules and regulations; Request the assistance of any government agency or instrumentality, including government-owned and controlled corporations and local government units (LGUs), in the implementation of this Order Other powers and functions:

Submit a work plan to implement the EO and implement other reforms related to the mining industry; Conduct an assessment and review of all mining-related laws, rules and regulations, issuances, and agreements with the view to formulating recommendations to improve the allocation of revenues and risk between the government and the mining sector; Submit periodic reports to the President on the status of the implementation of this Order; and, Perform such other functions and acts as may be necessary, proper or incidental to the attainment of its mandates and objectives, or as may be directed by the President. As a means of improving regulation in the processing of mining application, Section 13 of EO 79 sought the creation of an inter-agency one-stop shop for all mining related applications and processes. The DENR will issue authority to verify mineral deposits only for areas open to mining as defined in Section 9 of EO 79.

Securing free and informed prior consent of the concerned indigenous peoples and compliance with the social acceptability requirement of the communities affected before a Mineral Production Sharing Agreement, Financial and Technical Assistance Agreement, Joint Venture Agreement or Co-Production Agreement can be approved has also been mandated by EO 79.

               The changes introduced by EO 79 basically focused on three areas: economic, environmental, and enforcement. Aiming for a more equitable distribution of opportunities, income, and wealth while protecting the right of the Filipino people to a balanced and healthful ecology are the core principles of EO 79. These goals will only be achieved through stricter enforcement of our mining laws and policies with the help of all the stakeholders in the mining industry.

http://www.zglaw.com/mining-law-update-aug-2012.php

Page 1 1 The trail of a mining law: ‘resource nationalism’ in the Philippines* *Paper read at the conference on Mining and Mining Policy in the Pacific: History, Challengesand Perspectives, 21-25 November 2011. Noumea, New Caledonia.Minerva Chaloping-March, PhD Research Fellow, 'After Mining' Public Sector Linkage ProjectPhilippines-Australia Studies Centre, Institute for Human SecurityLa Trobe University, Bundoora 3086 VIC, Australia m.chaloping-march@latrobe.edu.au or minerva.chaloping-march@cantab.net Abstract:The paper looks into the socio-political and historical landscape of the Philippines that defined theimpetus for a mining policy and has shaped the evolution of what is now the Philippine Mining Act of1995. It discusses the law’s colonial foundations under the Spanish and American regimes that shaped thetiming and tempo of minerals exploitation in the Philippines that were perfected by subsequentadministrations. The paper traces the decades-long thorny path of the Mining Act of 1995 towards thePhilippine State’s purported goal of enhancing national growth by promoting the rational exploration,development, and utilization of mineral resources. Currently, the process of administering and disposing mineral resources is encumbered by resolute anti-mining advocacy that rely considerably on nationalist rhetoric and ideas about state sovereignty and control. In addition, opposition to mining builds onreligious-cultural perspectives. The role of the Catholic Church, together with various non-governmentorganizations, could not be discounted in infusing ideas of citizen’s duty of stewardship over the country’smineral resources and moral responsibility to protect the environment. The paper, using fieldwork dataand archival materials, aims to contribute to understanding the strenuous pathway that a mining policytrudges and the socio-political and cultural factors that confront its objective of becoming effectively andefficiently implemented. IntroductionThis paper examines the historical pathway through which an enacted mining policy has passed.In particular, it looks into key socio-political factors that have shaped the process ofimplementing the Philippine Mining Act of 1995, the law that governs the conservation,management and development of mineral resources in the Philippines. The timeline of eventsunderlines key issues stemming from the nexus of political, economic, cultural and ideologicaldynamics of claiming rights to land and mineral resources, as well as raising concerns aboutenvironmental degradation associated with mining operations. The interlocution of manystakeholders brings up images of ‘nationalism’ and ‘sovereignty’, two broad terms which areclosely tied to expressions of self-determination and aspirations to partake in the fruits of naturalresource development. Thus, this paper is about understanding ‘resource nationalism’ in thePhilippines in light of key events that have configured the ebb and flow of realizing the goals ofthe mining law.In current literature, discussions on ‘resource nationalism’ concern the moves of countries ‘totake (or seek to take) direct and increasing control of economic activity in natural resourcesectors’ (Ward, 2009, p. 5). In particular, resource-rich countries transfer political and economiccontrol of their energy and mining sectors from foreign and private interests to domestic and Page 2 2state-controlled companies (Bremmer & Johnston, 2009, p. 2). The rationale of a state inenlarging its control is to secure its ability to exact a greater share of resource rents. During the1970s, resource nationalism was a demonstration of backlash by developing countries againstformer colonial masters. At present, resource nationalism is ‘better understood in the context ofglobal concern for resource security, climate change, sustainable development and povertyreduction’ as all these are intertwined (Ward, 2009, p.5).The paper explores the images of ‘resource nationalism’ with a focus on a much smaller andmore immediate scale – the level of communities and local governments vis-à-vis mainly thePhilippine State that aims to reinvigorate the minerals industry by attracting foreign investments,given the country’s vast potential and actual mineral reserves. Hence, the situation is one whereconstituent citizens challenge the absolute control of the Philippine State over land and naturalresources and their utilization and development. This aspect of resource nationalism involvingthe claims of subnational constituencies is scarcely examined. It is towards this inadequacy thatthis paper attempts to make a contribution.Local governments seek to protect mineral lands within their area of jurisdiction. Communitiessupport local governments to ensure they benefit from resources such as minerals within theirvicinity and at the same time protect the surrounding environment that support forests andagriculture. In certain provinces within the archipelago, local government officials andconstituent citizens share the need to secure a fair share of the proceeds from the development ofthe natural resources located within their area. Mining as an economic activity in the Philippineshas continued to be a hotbed for controversies involving industrialists, environmentalists andconservation groups, indigenous peoples, local governments, communities, and religious groups.There are two primary reasons for the continuing controversies: a) a genuine concern of citizensfor the long-term social and environmental consequences, including the cultural and economicwellbeing of communities especially after mining has long ceased, and b) a lingering mistrust oflocal citizens in the ability and sincerity of the national government and the minerals industry toaddress the concerns of communities who are adversely affected by mining operations.The paper consists of three sections. The first is a review of key colonial laws that served asfoundations for policies by subsequent administrations in defining tenurial rights to land and thepace of exploiting mineral resources in the Philippines. The second section discusses governmentefforts to revive the minerals industry that had been on decline since the 1970s, except for 1985-1986 until the 1990s. Reviving the industry is regarded by the government as hinging on thesuccessful implementation of the Mining Act of 1995. The third section looks into recent events– since the time the Act was passed – that highlight intertwining issues which exemplify thenature of claims and expectations concerning entitlements to land and mineral resources. Thepaper uses fieldwork data and archival materials collected mainly in September 2004 to May2005 and complemented with additional interviews in March-April 2010 and August 2011, aswell as additional materials from online sources.Colonial foundations for the current mining lawMining has carved out a place in the early history of the Philippines. The country’s long traditionof mining can be traced to as early as 400 B.C. to 250 B.C., a stage when other metals such asiron and bronze became known in Philippine prehistory (Caballero, 1996). The early Spanish Page 3 3conquerors and pioneers who arrived in the Philippines in the 1500s observed alluvial mining,although relatively sparse, in many areas. During the 16th century, an important directive of theSpanish king to the conquistadors was to identify and consider the colonies’ resources which arepotentially useful to the Crown. Thus, the leaders of exploratory teams in the Philippinesrecorded in detail the products and resources of localities they visited. Their tasks involvedcompiling geologic studies of many mineral-producing districts. They produced a mineral mapof the archipelago incorporating the unsolicited observations of travellers. These works would,many years later, provide the subsequent colonial power in the Philippines – the Americans –vital information on locations of the mineral deposits and the mining areas where they couldconstruct new mines (Lopez, 1992).The Spanish colonial government legislated the institutional regulation of the mining industry.By virtue of conquest, the entire archipelago of the Philippines was assumed to be owned by theSpanish King. This assumption, based on the concept of the Regalian Doctrine, hinges on theprinciple of eminent domain which accords the Crown the right to develop mines on its owninitiative or through private concessions. However, this principle is considered ‘mythical’(Leonen, 2004) because the Regalian Doctrine was not extensively effective during the Spanishregime in that the colonial government was not able to subjugate all areas of the islands.Nonetheless, as rightly stressed by Owen Lynch (1986) the doctrine would later become thebasis upon which subsequent Philippine land laws are founded. The 1935, 1973, and the 1987Philippine Constitutions all include provisions on the State’s ownership of natural resources, andits right to utilise and develop them.Spain handed over the Philippines to the United States under the Treaty of Paris on 21 December1898. As the American occupation began in the Philippines, mining had been a major interest ofthe American economic survey teams. A series of land statutes were enacted that ensured centralgovernment control over all lands. Among the various laws were the following:a) the Land Registration Act No. 496 of 1902 which required the acquisition of a ‘TorrensTitle’;a) the Public Land Act of 1905 which declared all previously unregistered lands as publiclands under the administration of the state; andb) the Mining Law of 1905 which granted Americans the right to acquire public land formining pursuits.These laws provided that mineral deposits in public lands were free and open for exploration,occupation and purchase by citizens of both the United States and the Philippines (Congress ofthe Philippines, 1902). These laws reinforced what had been laid out by the Spanish in whichnew ideas of resource access and use would dispossess certain groups of people, particularlythose in the unhispanized areas, of their lands. Little or no regard has been paid to the peopleinhabiting the land or their unwritten rules on land (see Constantino, 1975).Mining policy under the Marcos administrationUnder the Marcos administration, an easy path for the extraction of the country’s mineralresources had been laid out with specific laws created for such purpose (Malig, 2002). In 1971, Page 4 4the Senate and Congress enacted Republic Act 6364 1, also known as the Gold Subsidy Law toprovide relief to gold producers. Under this law, the Central Bank was required to purchasenewly mined gold from mining companies at a designated price. All gold producers received asubsidy of sixty pesos per ounce of production, plus seventy per cent of the positive differencebetween the cost of production per ounce of gold and the official price (RA 6364, 1971).In 1974, Marcos issued Presidential Decree 463 (PD 463), also known as the MineralDevelopment Act of 1974, to provide for an efficient administration and disposition of minerallands and promote and encourage their development and exploitation. Under the law, miningcompanies were exempt from paying customs duties and all taxes for machineries, equipment,tools for production, and plants imported for the use of new mines and old mines. In addition, allmining claims, improvements and mineral products derived from these claims were not liable forthe payment of all taxes (PD 463, 1974, Chapter X Section 53). While PD 463 is labeled as thecountry’s first mining law to provide for ways ‘to deal with environmental and social aspects ofmining operations’ (Cabalda, Banaag, Tidalgo, & Garces, 2002), it also granted miningcompanies timber, water and easement rights on mining claims they own, occupy or lease (PD463, 1974, Chapter XI Sections 56 - 59). Even as the law stipulated penalties for pollution frommine wastes and mill tailings, the maximum fine of PhP5,000 or six-year imprisonment or both(Chapter XIV Section 81) saw no actual imposition on polluting mines.In 1977, Marcos issued two decrees that should have supplemented PD 463. First, PD 1198 2 provided that mining corporations ‘shall, to the fullest extent possible, restore, rehabilitate, andreturn the lands, rivers, and natural environment subject thereof or affected thereby to theiroriginal conditions as of before such operations or activities’ (PD 1198, 1977, Section 1,emphasis supplied). Second, PD 1251 3 imposed fines of PhP0.05 and PhP0.10 per metric ton ofmine waste and mill tailings respectively. The pollution of major waterways is lucid evidencethat these laws had not, over the decades, actually been enforced. PD 463 actually amendedCommonwealth Act 137 (CA 137) 4 , the mining law under the American administration, whichstipulated the 60-40 ownership ratio where foreign investors can own 40 percent as maximum ofthe company while Filipino citizens can own the remaining 60 percent.Mining policy under subsequent administrationsOn July 1987, President Corazon Aquino issued Executive Order 2795. This law fully authorisedthe Secretary of the DENR (Department of Environment and Natural Resources) to negotiate and 1 An Act to Provide for Assistance to the Gold Mining Industry2 Requiring All Individuals, Partnerships or Corporations Engaged in the Exploration, Development andExploitation of Natural Resources or in the Construction of Infrastructure Projects to Restore or Rehabilitate AreasSubject Thereof or Affected Thereby to their Original Condition3 Imposing A Fee on Operating Mining Companies to be Known as "Mine Wastes and Tailings Fee" to Compensatefor Damages to Private Landowners and for Other Purposes4 This law is also known as the Mining Act of 1936. It was patterned after the United States’ Federal Mining Act of1872 and incorporated most of the features of the Philippine Bill of 1902. 5 Authorizing the Secretary of Environment and Natural Resources to Negotiate and Conclude Joint Venture, Co- Production, or Production-Sharing Agreements for the Exploration, Development and Utilization of MineralResources, and Prescribing the Guidelines for Such Agreements and Those Agreements Involving Technical or Page 5 5conclude leasehold agreements with existing and expected proposals from interested parties,including foreign-owned corporations. The aim was to encourage investment in the miningindustry’ (Executive Order 279, 1987). This authority was formerly a prerogative reserved onlyfor the President of the Philippines. The new power of the DENR Secretary effectively hastenedthe entry of many foreign mining firms.Aquino’s successor in 1992, Fidel V. Ramos, further opened the doors to foreign investors for allindustries: deregulating, liberalizing and privatizing almost all government owned corporations.The Philippines was one of many developing countries to adopt neo-liberal economic policies toattract more mining investments. In 1993, President Ramos commissioned a multi-sectoral taskforce to assess the needs of the minerals sector and make proposals towards reviving the stagnantand ailing industry. A major concern which the minerals industry in the Philippines had faced foryears was the delay in the passage of a new mining law. For many years, executive andadministrative orders providing guidelines for specific activities concerns governed the mineralsindustry. A particular clamour by key officials of the Mines and Geosciences Bureau (MGB) 6 and the Chamber of Mines of the Philippines (COMP) was the need to remedy the constitutionalrule restricting foreign investors to a ceiling of 40 percent ownership in mining ventures.Under President Ramos, the Philippine Congress issued in 1994 Republic Act 7729, otherwiseknown as the Excise Tax Act 7 . This law reduced the excise tax rates on metallic and non-metallicminerals. Subsequently in March 1995, Republic Act 7942, known as the Philippine Mining Actof 1995, was approved. As entreated by the minerals industry, the Act allows up to 100 percentownership of mining operations by foreign companies. Such avenue given to foreigners to fullyown and control mining operations in the Philippines is the most contentious issue pertinent todeveloping the country’s minerals resources. The Mining Act also grants mining companies tooperate for a maximum of 50 years and can occupy an area of 81,000 hectares where thecompany enjoys timber rights, water rights and easement rights. The incentives granted toforeign mining companies include tax holidays and 100 percent repatriation of their capital andprofit.The passage of the Mining Act of 1995 proved that it was the signal which foreign investorswere waiting for. Barely a few months after the law’s enactment, more than 50 applications forFTAAs were already filed at the MGB (Cinco, 1995). In 1996, 20 of the world’s largest miningcompanies established offices in the country and filed applications for various mining tenementsleading to the approval of several exploration projects (Cabalda, Banaag, & Garces, 2002;Domingo, 2003). Financial Assistance by Foreign-Owned Corporations for Large-Scale Exploration, Development, and Utilization ofMinerals. 6 The MGB is the primary government agency in charge of administering the exploitation of the country’s mineral resources. It is one of the bureaus of the DENR. 7 An Act Reducing the Excise Tax Rates on Metallic and Non-Metallic Minerals and Quarry Resources, Amending for the Purpose Section 151(A) of the National Internal Revenue Code, As Amended. Page 6 6Ebb-and Flow of the Mining Act of 1995In the most ironic twist of events, the positive momentum generated by the passage of theMining Act of 1995 had dissipated during the years immediately following the law’s enactment.This was due to a combination of economic, political, and socio-cultural factors which warrantsome discussion.The Marcopper mine disasterThe Marcopper disaster ironically happened just as the Philippine government was trying torevive the industry and campaigning about the Mining Act as the vehicle to implement‘sustainable mining’. On 24 March 1996, a major tailings spillage occurred at the Marcoppermine in Marinduque Island. For many years, Marcopper Mining Corporation had been using amined-out open pit as a tailings containment pond. Connected to this pond is an old drainagetunnel that collapsed. As a result, an estimated 1.5 to 3 million cubic meters of mine tailingsfound their way into the Makulapnit River, Boac River, and eventually the ocean at the Westsideof the island (Plumlee, Morton, Boyle, Medlin, & Centeno, 2000). The immediate effects werecatastrophic: agricultural fields were flooded and fishing which was a major livelihood for morethan 20,000 families in 42 communities stopped due to the flow of mine tailings burying thechannels and the valley floor (SEPO, 2005).Inquests on the accident established that the mines’ pollution problems had been occurring formany years. Previous penalties were imposed on the company for its marine disposal of over 200million metric tons of tailings in Calancan Bay resulting in marine pollution and siltation ofabout 0.84 kms 2 during the period 1975 to 1986 (Ramos, Cabalda, & Banaag, 2000). However,permanent closure was never enforced.Although the tailings spillage was committed specifically by one company, public denunciationwas launched at the entire minerals industry. The incident reinforced the public doubts cast at theminerals industry’s claims of environmental management especially in managing mine wastesand tailings (Ramos, et al., 2000). The disaster drew calls from mainly the country’s Catholicclergy, church-based organisations, civic-oriented groups, conservation and environmentactivists for opposition to mining in general and even the outright scrapping of the Mining Act of1995 in particular.A legal impassePartly as a response to the Marcopper tailings disaster, and alarmed by the influx of foreignmining companies to the country, a group of nongovernment organizations (NGOs) filed on 10January 1997 a petition at the Philippine Supreme Court questioning the constitutionality of theMining Act and its implementing rules and regulations. The group of NGOs was led by the LegalRights Center-Kasama sa Kalikasan (LRC-KsK). Known as the La Bugal-B’laan Case, thepetition called for the Supreme Court to nullify the Philippine Mining Act of 1995 and the FTAAentered into in 1995 by and between the Philippine Government and Tampakan Mineral Page 7 7Resources Corporation, Inc., owned by the Australian Western Mining Corporation (WMC) 8 .Although WMC is the only formal private respondent in the case, the entire minerals industryhad actually been handed the legal challenge.The key issue of the appeal pertains to the unconstitutionality of the FTAA provision of theMining Act because, as claimed by the petitioners, such provision allows 100 percent foreignownership in large-scale exploration, development, utilization and exploitation of mineralresources in the Philippines by filing FTAAs. Such practice, the petitioners argued, breaches theconstitutional provision that the natural resources of the Philippines are a national heritage whichforeign companies, through FTAAS, should not exploit.Enactment of a law to protect indigenous peoples rightsWhile the Mining Act was caught in a legal standoff, a law that concerns protecting indigenousresource rights was enacted: Republic Act 8371, otherwise known as the Indigenous PeoplesRights Act (IPRA). Its final passage 9 on 29 October 1997 was the result of a decade of lobbying,deliberations and consultations by concerned NGOs, peoples’ organizations and indigenouspeoples’ representatives with the support of public interest lawyers who are themselvesenvironmental activists. The IPRA is a realisation of the State policy on rights of indigenouspeoples and cultural communities as declared in Section 22, Article II of the PhilippineConstitution, i.e., “The State recognizes and promotes the rights of indigenous culturalcommunities within the framework of national unity and development.”The IPRA created the National Commission on Indigenous Peoples (NCIP) as ‘the primarygovernment agency for the formulation of and implementation of policies, plans and programs topromote and protect the rights and well-being of indigenous cultural communities/indigenouspeoples (ICCs/IPs) and their ancestral domains as well as their rights thereto’ (RA 8371, 1997).Hailed by Atty. Evelyn Dunuan, the first NCIP head as ‘the first of its kind in the whole world’(Dunuan, 2003), the IPRA gives explicit recognition to and protection of the rights of ICCs/IPs‘to their ancestral domains to ensure their economic, social and cultural well-being’. Theancestral domain of ICCs/IPs not only covers the physical land they occupy but the totality ofresources and environment including mineral and natural resources underneath. The IPRAprovides for priority rights to ICCs/IPs in the extraction, development or exploitation of anynatural resources within their ancestral domain (see NCIP Administrative Order No.3, 2002).Soon after its enactment and what appeared to be a countermove to the La Bugal-B’laan case,two lawyers, i.e., Isagani Cruz (a retired Supreme Court Justice) and Atty. Cesar Europachallenged at the Supreme Court the constitutionality of the IPRA. As petitioners, their issuespertain mainly to the ownership of minerals, property rights, priority rights and self-delineationby the ICCs/IPs. They also questioned the powers and jurisdictions of the NCIP and theapplicability of customary law to the settlement of disputes involving ancestral domains andancestral lands as violating due process of law. 8 In 2004, Western Mining Corporation (Australia) sold the project to the joint venture of Sagittarius Mining, Indophil Resources, Xstrata Holdings and J.P. Morgan. 9 The law’s passage had a considerably lengthy history in which one change built incrementally upon another. Circumstances leading to the enactment of the law can be traced to as early as 1974. Page 8 8With the legal challenge posed to the IPRA, the government withheld the release of the NCIP’sbudget in September 1998. Thus, the agency was prevented from performing its functions.Concerned sectors were asking why the government did not also suspend the implementation ofthe Mining Act, which was similarly facing a constitutionality challenge before the SupremeCourt. On 6 December 2000, the Supreme Court dismissed the challenge to the constitutionalityof the IPRA (see Supreme Court of the Philippines, 2000). Subsequently, the petitioners filed amotion for reconsideration. However on 21 September 2001, the Supreme Court arrived at aresolution and declared that the IPRA is constitutional.Verdict on the constitutionality challenge to the Mining ActFrom the time the La Bugal-B’laan case was filed in 1997, the Supreme Court had not issued adecision on the constitutionality issue against the Mining Act. In January 2004, after seven yearsof deliberations, the Supreme Court ruled in favour of the petitioners, thereby nullifying theMining Act’s FTAA provisions that allowed the execution of service contracts with foreign firmsfor exploration and mining ventures. The Supreme Court also declared null and void the FTAAentered into by and between the Philippine Government and WMC.The MGB enjoined by the private respondents and the minerals industry represented by theCOMP immediately appealed the High Tribunal’s decision. They argued, among others, that thePhilippine Constitution allowed foreign contractors to have reasonable management over miningprojects and the Mining Act ensured a fair and equitable sharing of the proceeds of miningprojects between the contractor and the state. The appellants also asserted that annulling theFTAA provisions would deprive the country billions of dollars of potential investments fromoutside. The President of the COMP stressed that the Philippines has already lost at least $20billion-worth of export revenues because the Mining Act was not fully implemented since itspassage in 1995 (Clancy, 2005). The COMP worked closely with the Office of the SolicitorGeneral and then filed a motion for reconsideration to the Supreme Court to plead for an oralhearing of the case in order to explain better the implications of the decision. Thus, an exhaustiveconstitutional review and the oral hearing in the Supreme Court were held in July 2004.On 1 December 2004, the Supreme Court reversed its January decision. It affirmed the legalityof the FTAA. The High Court’s response pointed out that ‘whatever priority or preference maybe given to mining vis-à-vis other economic or non-economic activities is a question of policy(not of constitutionality)’. In addition, such policy is something which the other two branches ofgovernment, the President and Congress, must address. Accordingly, the Supreme court ‘decidedfor the greater good of the greatest number’ and upheld the constitutionality of the Mining Act of1995 (Supreme Court of the Philippines, 2004). The High Court ruled that the mining laws thatwere questioned earlier – the implementing rules and regulations (IRR) crafted by DENR, andthe FTAA with WMC-Philippines which was executed in 1995 – do not breach the constitution.In the earlier decision handed in January 2004, the High Court had noted that the provision ofRepublic Act 7942 allowing foreign-owned corporations to operate and manage mining activitiesin the country violated the Charter on the grounds that it was in the nature of a ‘service contract’(see Panganiban, 2005). The LRC-KsK submitted a motion for reconsideration of the Court’sruling. However, on 1 February 2005, the Supreme Court denied the motion, thus upholding withfinality the constitutionality of the Mining Act of 1995. Page 9 9Expectedly, the government and the minerals industry were euphoric with the High Tribunal’spronouncement as this would pave the smoother path for implementing the Mining Act. Both thegovernment and the minerals industry carried out a series of campaign activities to invite foreignmining investments to the Philippines. Both the MGB and the COMP had presented thePhilippines as an investor-friendly country with a mining law that assures fiscal incentives suchas tax holidays as well as non-fiscal incentives which include employment of foreign nationals,simplified customs information procedures and institutional assistance for faster businessregistration procedures. The marketing and campaign activities had displayed the closepartnership between the government and the COMP, particularly in presenting the firm pro-mining stance of President Gloria Macapagal-Arroyo.Prior to the High Tribunal’s December 2004 ruling in favour of the Mining Act, PresidentMacapagal-Arroyo already declared her policy shift “from tolerance to promotion” of mining in2003. In January 2004, the President subsequently issued Executive Order No. 270, also knownas the National Policy Agenda on Revitalizing Mining in the Philippines. She also directed theDENR to complete a Minerals Action Plan (MAP) to guide the development of the local miningindustry which included identifying the government’s priority mining projects. PresidentArroyo’s directives aimed to facilitate the processing time of mining applications.A test for the Mining Act’s effectiveness and the government’s policing capabilityThroughout most of 2005, the government and the minerals industry were at the height ofpromoting, at home and abroad, mining investments in the Philippines. The sustainedinformation campaign on the government’s priority mining projects was generating remarkablyencouraging pledges and memoranda of understanding (MOUs) from investors. While this washappening, another major tailings spillage occurred in the country. This time, the disasterinvolved an Australian mine operation which belongs to the 24 priority mining projects: theRapu-rapu Pollymetallic Project. The company’s first production in July 2005 was a significantmilestone for the country’s minerals industry because the RRP was the first to have opened andfinally moved into production in the country within three decades (MGB, 2005). The project isconsidered by the government as critical to attracting more global investments into mining in thecountry (DENR, 2006; RFFC, 2006).Barely three months after RRP’s first gold production, mine tailings spilled from the company’sore processing mill into nearby creeks, leading into the sea. Based on the Rapu-rapu Fact FindingCommission (RRFC) Report and the DENR Assessment Report, there were two incidents ofspillage, i.e., on 11t h and 31 st October 2005. The cause of both incidents was grave mistakes ‘onthe part of Lafayette management and operating personnel’, which the company admitted.Similarly, both incidents of mine tailings spills ‘released extremely high levels of cyanide intothe nearby creeks and caused damage to the marine life’. The DENR admitted its culpability ‘innot being able to monitor’ in advance of any incident and acknowledged its being ‘dysfunctional’as it failed to check on the company’s ‘crucial non-compliance’ to rules and regulations (DENR2006.). The Rapu-rapu calamity clearly showed the critical weaknesses of the DENR as aregulatory agency. As admitted by DENR in its assessment report, the first spillage could havebeen corrected to avoid the second spillage (DENR 2006). The Rapu-rapu spillage incidentsprovided more credence to the predictions and general rhetoric of anti-mining advocates. Page 10 10Local government moratoriums against miningWhile the national government has been marketing the Philippines to attract foreign investmentsin mining, a number of local governments have aimed to impede the implementation of theMining Act. In 1999, the Capiz provincial government declared a 15-year moratorium on alllarge-scale mining. The Oriental Mindoro provincial government declared a 25-year moratoriumon mining since 2000, particularly opposing the plan of the Canadian Crew MineralsDevelopment Corporation to undertake open-pit mining in the province. Currently, the mostcontroversial opposition to mining by local governments, supported by constituent populations,are found in Palawan (see MISN, 2010), Romblon, and South Cotabato (Minda News, 2010, 11June, 2011, 18 February). Lower-level local governments such as municipalities have also issuedrelated ordinances in an attempt to restrict if not disallow the entry of exploration and miningprojects.Organised and sustained opposition to mining by local government, backed up by concernedcitizens, has recently demonstrated that indomitable mining companies do eventually getdissuaded to withdraw. This is demonstrated in the case of Ivanhoe-Philippines, a subsidiary ofCanadian Ivanhoe Mines Ltd. The company decided to abandon its plans to explore copper-goldprospects in the province of Romblon citing local politicians’ opposition as a reason (see PDI,GMA News Online, 2011, 13 January; 2011, 13 October).Advocacy to deter mining projectsThe ultimate recipients of the adverse effects, both direct and indirect, of mining are the poornatural resource-dependent communities that rely on fishing and agriculture, two commonlivelihoods in rural areas of the Philippines. Also, indigenous peoples in upland areas and remotelocations face ruinous effects on their way-of-life and cultural practices given their dependenceon land and access to various resources such as water, forests and animals. With the number ofmining projects speedily entering many parts of the Philippines, these vulnerable populationswant their apprehensions heard and subsequently addressed appropriately. They turn for help toavailable advocates who would support and represent their cause. In specific municipalities orprovinces, the champions may include local government officials. Others are civic organisations.At the national level, some help is often found in the Roman Catholic Church. The religioussector of mining oppositionists includes Catholic clergymen, particularly the politicallyinfluential Catholic Bishops Conference of the Philippines (CBCP) that raises a moral issue inregard to mining: the land must not be ‘defiled’, the environment protected and thedisadvantaged sectors particularly the indigenous peoples must not be displaced.The CBCP has been vocal in its criticism of mining. As early as 1998, it issued an officialstatement demanding the repeal of the Mining Act (CBCP, 2006; CBCP, 1998). In 2006, theCBCP called the Arroyo government to cancel ‘all concessions and deny all applications’ (TheManila Times, 2006). In addition to the collective declaration by the CBCP, individual bishopshave been crusading against opening mining to foreigners, criticizing mining companies, andblaming the industry for deaths in natural disasters (see Catholic News, 2006; Catholic News,2007). Most recently, the bishops declared anew their commitment to the environment. In aparticular case, they have stressed their rejection of mining projects in Palawan to avoiddespoiling the province’s subterranean river (CBCP Online Radio, 2011, 17 November). Page 11 11The clergymen are supported by the advocacy activities carried out by nationalist groups thattend to be ideological in orientation and whose rhetoric appeals to citizens and communitiesdesperate for support. Their discourse includes claims to stop the entry of transnational miningcompanies into the Philippines as foreign mining companies are ‘imperialist plunderers’. Manynationalist organisations are either directly allied with or sympathetic to BAYAN (BagongAlyansa Makabayan)10, a leftist supra-organisation that coordinates mass movements. BAYANtakes a political position during elections and represents peasants, industrial workers, women,jeepney drivers, teachers, indigenous peoples, and others. BAYAN organisations are overtlyrevolutionary and seek involvement in any constituency of resistance that they can identify.ConclusionThe ebb and flow of the Philippines’ Mining Act of 1995 demonstrate that the passage of amining law is simply the beginning of another process of negotiating claims and counterclaimsof many stakeholders. The Philippine State has expended enormous resources – policy,administrative structure, and extensive promotional activities – to revive the minerals industrythat stagnated for years. However, serious consequences of the failure in both previous andcurrent state policies and enforcement eventually emerged, as they are bound to emerge, to drawattention to fundamental problems that require resolution. These were exemplified by theMarcopper disaster and subsequently the Rapu-rapu tailings spillages. Having an existing mininglaw is one thing, implementing it effectively is another matter.The Filipinos’ religious and political culture brings important dimensions to how policy onmineral exploitation is formulated and implemented. The role of NGOs and the Church could notbe more important in maintaining the needed voice in the way a mining law directs mineraldevelopment. The Catholic Church infuses ideas of ethics and morality as the government talksof the Mining Act of 1995 as bringing hopes for economic growth by drawing in the muchneeded foreign capital through investments from overseas. However, the responses of concernedcitizens to the mining law confirm the nationalist discourse that questions the capability ofmining, particularly through foreign investments, as a vehicle for sustained development. Inaddition, there lingers a continuing general lack of trust among many Filipinos that miningcompanies will be dutiful to sincerely fulfil the law. There is general scepticism among ordinarycitizens about the government’s capability and political will to carry out its policing functions.Vulnerable citizens find the mining oppositionists as valuable channels for their demands andaspirations for better changes. The strong position of NGOs and clergymen serves to counter thegenerally perceived durable and intimate alliance between government and business interests.‘Resource nationalism’ builds on citizens’ profound awareness and commitment that protectionof their lands and the environment as well as the way mineral resources are disposed lieprimarily on themselves. Having had real experiences of mining-related disasters, localgovernments and citizens find the environmental safeguards promised by the Mining Act of 1995as being too far-fetched from real. The effective implementation of a mining law hinges on theestablished trust of citizens on the national government. http://webcache.googleusercontent.com/search?q=cache:aUvrV2AtJCkJ:nouvelle-caledonie.ird.fr/layout/set/popup/layout/set/print/content/download/41888/318831/version/1/file/Chaloping-March.pdf+&cd=8&hl=en&ct=clnk&gl=us

nouvelle-caledonie.ird.fr/layout/set/popup/.../Chaloping-March.pdf‎

Bibliography

Isles of gold: a history of mining in the Philippines

Front Cover Salvador P. Lopez, Chamber of Mines of the Philippines Oxford University Press, 1992 - Technology & Engineering - 468 pages http://books.google.com/books/about/Isles_of_gold.html?id=27pPAQAAIAAJ

Breaking Promises, Making Profits: Mining in the Philippines

A Christian Aid and Piplinks report, December 2004

Over the past eight years the authors have visited and listened to mine-affected communities, company representatives, government officials and groups from many different parts of the Philippines. They have visited communities in Siocon, Bayog, Sibutad, San Miguel, Midsalip, Pagadian, Leon Postigo, Sindangan and Iligan in Western Mindanao; Mainit, Tubod, Placer and Claver in Northeast Mindanao; and Toledo, Cebu, Palawan, Victoria, Pinamalayan Naujan and Calapan in Mindoro Oriental. They have also visited Aurora Province and the Cordillera Region, including the communities of Itogon, Mankayan, Cervantes, Tadian, Quirino, Bontoc and Sagada, among many other areas.

"We have seen the devastating effects of some of the mining operations: the spillages of mine tailings in Boac, Marinduque, in Sipalay and Hinobaan, in Negros Occidental, in Itogon, Benguet, and mudflows in Sibutad, Zamboanga del Norte. The adverse social impact on the affected communities, especially on our indigenous brothers and sisters, far outweigh the gains promised by large-scale mining corporations. Our people living in the mountains and along the affected shorelines can no longer avail of the bounty of nature." [1] Statement of Catholic Bishops of the Philippines, 1998

ON 24 MARCH 1996 a cement plug in the base of a tailings pit burst at the Marcopper mine on Marinduque Island in central Philippines. Poisonous waste began to pour into the nearby Boac River.[2] The leak took months to stop, by which time an estimated four million tonnes of grey, porridge-thick tailings had filled the river bed and caused widespread flooding and damage to property and rice fields. Five villages had to be evacuated and an estimated 20,000 villagers living along the river and its estuary were affected, according to a UN report.[3] Today the river mouth and bed are still filled with waste and the metals in the silt are generating acids. The local economy and ecology have been devastated. [4]

But the 1996 disaster was by no means the only one to afflict the people of Marinduque. The Marcopper mine had been polluting the environment continuously since it was opened in 1969. Over a period of about 20 years up to 1991, it dumped around 200 million tonnes of mine waste into the nearby coastal fishing grounds of Calancan Bay,[5] extending a 500-metre-wide causeway five kilometres into the sea, and devastating the livelihoods of local fishing communities. Analysis by the United States Geological Survey, the Philippines Department of Health and Oxfam Australia's Mining Ombudsman has shown very high levels of lead and other metals in children's blood and the local environment. Some children have died of metal poisoning.[6]

A Canadian multinational mining company, Placer Dome, was the largest single investor in the Marcopper mine with a 39.99 per cent holding (the most a foreign company is allowed to own). Although it has strenuously denied accountability for Marcopper's activities and the disaster in 1996, Placer has spent millions of dollars since cleaning up the Boac River. A Philippine government report shows that after seven years of contamination the river is slowly returning to normal [7] and Placer says it is content it has behaved responsibly by paying for some of the clean up: "We hope the current owner is going to do the right thing... We have fulfilled our responsibility," said a spokesperson.

The company also claims that it was only a "minority shareholder with very little ability to influence and certainly not control" operations.[8] Placer Dome was, however, the only company with mining expertise involved in the Marcopper project. Staff who left Placer to run the Marcopper mine, and subsequently returned to Placer, were not described as 'secondments' but employees of Marcopper Mining.

But the company accepts no responsibility for the devastation caused in Calancan Bay and other areas polluted since 1969. As well as saying that it was not the operating company, it argues that the mine was operating legally. "Submarine tailings disposal was the accepted and approved way to go in that part of the world at that time," said a spokesperson.[9]

Asked whether Placer Dome had investigated reports of the damage, Keith Ferguson, vice-president for safety and sustainability, told Christian Aid, "I haven't seen any studies or any evidence or anything." There are many reports in the public domain describing the horrific state of Calancan Bay today. In the same interview, Christian Aid was advised that, "There are many parts of the world where these kind of things have occurred."

The headline-grabbing disaster in 1996 alerted people all over the Philippines to the disastrous environmental impact that has so frequently been the legacy of large-scale mining in the Philippines.

Marcopper remains the worst, but by no means the only, environmental disaster in Philippine mining history. It happened just one year after a new law, the 1995 Mining Code - intended to boost investment in the industry - was passed. All the disaster boosted, however, was the widespread community opposition to mining that still remains today. The industry appears to have lost its social licence to operate.[10]

In researching this report over the past eight years, the authors have visited communities affected by mining from Luzon to Mindanao, and from Cebu to Palawan.

What they found was that while companies express their commitment to high environmental standards and good relations with their host communities, the communities themselves tell of the repeated violation of environmental standards and their human rights by companies and their employees. Given the negative experiences of the past, locals fear for the future: they express openly their lack of confidence that either mining companies or the government will do enough to protect them from mining's worst effects.

This report asks whether mining as currently practised benefits ordinary Filipinos, and looks at what changes are needed to address their concerns.

Foreign and domestic investment in mining has been encouraged by successive administrations, with the backing of influential international organisations such as the World Bank. But the Philippine government is following policies that are hurting some of its poorest citizens. Going beyond simple economic measures, this report looks more broadly at the environmental and social costs and benefits of mining.

Two case studies explore these issues in greater depth. Lepanto Consolidated Mining, a Philippine company, owns a copper and gold mine in Mankayan that has operated since 1936, making it the oldest working mine in Asia. The report examines its environmental legacy: its waste has polluted and clogged a major river, the Abra, causing environmental damage across four provinces. It is accused of causing subsidence in the local area. The report looks at the response of communities, long familiar with mining, to proposals for its continuation and expansion.

The second case study looks at a Canadian company, TVI Pacific, which is attempting to mine gold in Canatuan, Siocon, on the southern Philippine island of Mindanao. It looks at whether the rights of the indigenous Subanon[11] to make decisions about its land have been sacrificed for the sake of foreign capital. Local people who rely on clean and plentiful water for agriculture and fishing fear economic ruin because of pollution from the mine. The area has become heavily militarised as TVI seeks to protect its investment.

National governments, including that of the Philippines, continue to introduce legislation favouring big companies, to the detriment of ordinary people. This report calls for a more sustainable form of development instead, in line with the wishes of local communities. It also criticises influential lenders, such as the World Bank, which promote policy reforms designed to expand the mining industry. The Extractive Industries Review (EIR), commissioned by the World Bank to assess its record in the sector and published in late 2003, agrees that mining projects, including many funded by the Bank, have too often entrenched rather than reduced poverty. The Bank has rejected its main recommendations.

Because the benefits to the national economy remain so unclear, with negative effects appearing to be at least as likely as positive ones, it is vital to focus on the local impact of mining. Here the picture is clear - people who live near mines in the Philippines are overwhelmingly being made worse off, because of environmental degradation, economic stagnation and human rights concerns. Only a small minority are benefiting from the few jobs available, and the occasional company-sponsored community programme.

If there is a role for mining in the Philippines, it must be within a context of human rights and truly sustainable development.

But if we are to change a system in which the long-term costs are borne by the environment, and the poorest, a strong framework of rights and precautionary law is urgently needed. The EIR argues that, at a minimum, clear conditions have to be in place prior to investment if that investment is going to benefit poor people. Domestic legislation to improve the accountability of companies based in prominent mining centres like the UK, Canada and Australia is critical.

Mining companies, financiers and international institutions must be compelled to comply with existing international law and emerging international and national standards. The rights of indigenous peoples to determine what development should take place on their lands, including the right to reject unacceptable development, must be respected in practice as in law.

Moreover, the numerous allegations of human rights violations associated with mining development should be investigated. Communities affected by a mining company should have a right of redress. They should be able to bring their grievances to an international or nationally-based regulatory body and pursue their case in the domestic courts of the countries where mining companies are based. KASAMA Vol. 18 No. 4 / October-November-December 2004 / Solidarity Philippines Australia Network http://cpcabrisbane.org/Kasama/2004/V18n4/BreakingPromises.htm

Gold Mining industry Blog Gold Mining News, equipment, tools and techniques. Gold mining industry reviews

Tuesday, November 16, 2010

Philippine Gold Mining Industry - A Rich History The Philippine gold mining industry plays an important role in the global gold production, generating 37,800 kg of the precious metal in 2003. Almost all of the 73 island provinces contain lode and placer deposits. However, the districts that have historically produced the highest amounts of gold are Baguio, Paracale, Masbaate, Surigao and Masara. Much of the gold generated in the Philippine gold mining industry is extracted through various small mining operations. Currently, the largest producer is the Lepanto Consolidated Mining Company. Other mining companies in the Philippines include TVI Pacific, Philsaga Mining Corporation, Lafayette Mining LTD and Apex Mining Company. In July of 2010, the Apex Mining Company made headlines when it found a new deposit of high grade gold in a southern mine.

Philippine Gold Mining Industry

The history of the Philippine gold mining industry dates back hundreds of years. When the Spanish conquistadors first arrived to the islands, they found the natives wearing gold ornaments from head to toe. According to records, Philippine natives had a vast knowledge of gold and the children were even able to determine the purity of gold alloys. The natives also had a complex vocabulary for gold and were skilled in various techniques of working with this precious metal.

In 1905, 89 active mines applied for claims in the Philippines, and that number increased dramatically to 544 in 1906. Through the early 1940s, the Philippine gold mining industry was continuing to experience a large and impressive growth. It was during this time that the first mining companies were established in the islands. In 1995 the Philippine government passed a law that allowed foreigners to own and operate mines in the islands. This law still exists and is controversial because many Filipinos believe that only they should own and operate mines. However, it is expected that this law will allow billions of dollars to be invested in the country and help to stimulate the economy.

The Philippine gold mining industry is also well known for the legend of Yamashita's gold. This refers to the treasures stolen in Asia by the Japanese military during World War II. Legend states that the gold was hidden underground in the Philippines. Although this legend is disputed by most experts, many people have been lured to the area in search of the hidden treasure. To this day, tourists and adventure enthusiasts visit the Philippine islands in search of Yamashita's gold. http://lijag.blogspot.com/2010/11/philippine-gold-mining-industry-rich.html

The North Davao Mining Corporation (NDMC) mineral property is located in the province of Davao del Norte, in the southeastern part of the island of Mindanao, the main southern island of the Philippine Archipelago. The area has a long history of gold and copper mining. Since the 1940’s, various companies have carried out operations in the vicinity. NDMC itself had two major mining operations in the area, namely, the Amacan Copper and Hijo Gold Projects.

But following the EDSA revolution in 1985, NDMC was sequestered by the Presidential Commission on Good Government (PCGG) because of alleged Marcos-sponsored behest loans. The mining company’s account was then transferred to the Assets Privatization Trust (APT). The Amacan Mine was operated by the APT until 1992, but was eventually closed because of low metal prices, adverse economic conditions and internal management problems.

The NDMC property has been under the receivership of the government through its Privatization and Management Office (PMO) until it was transferred to the Philippine Mining Development Corporation (PMDC) on April 7, 2006 for proper disposal through public bidding. To facilitate the promotion of the property as an investment target, PMDC executed a Memorandum of Agreement with the Mines and Geosciences Bureau (MGB) for the purpose of conducting an assessment of the copper/gold potential of the property.

The NDMC asset consists of two partially-mined deposits, Hijo and Amacan, together with several other gold and copper-gold prospects. A total of seven (7) porphyry copper prospects and sixteen (16) meso-epithermal gold prospects were identified within the area of 20,237 hectares, easily making it one of the single most mineralized areas in the country.

HIJO GOLD MINE I. LOCATION AND ACCESSIBILITY

The NDMC Mineral Property lies in the southwestern flanks of the Diwata Mountain Range of Eastern Mindanao. It is approximately 975 aerial kilometers southeast of Manila and 60 aerial kilometers northeast of Davao City. It lies within geographic coordinates 7°16’00” to 7°29’30” N and 125°58’00” to 126°06’30” E.

The area under the Financial and Technical Assistance Agreement (FTAA) application spans the municipalities of Mabini, Maco, Nabunturan, San Mariano (formerly Maragusan) and Mawab in Compostela Valley Province, Mindanao Island, Philippines. It is accessible via a three-hour drive through the northbound concreted RP-Japan Fiendship Highway from Davao City to Mawab Junction (73 km) and then through an all-weather dirt road to the mine site (37 km). Daily flights from Manila to Davao are available and normally take 1.5 hours. There are also two seaports near the NDMC mine site—the Madaum Pier of Hijo Plantations, Inc. in Tagum City (67 km) and the Panabo Pier (83 km) of Tagum Development Corporation.

II. HISTORY OF EXPLORATION AND MINING

A. HIJO GOLD MINE

The original claims in the Hijo area were staked out in 1934, covering what was then known as the Davao Gold Mine (DGM). Samar Mining Company, Inc. (SAMICO) began running gold ore from the site in 1939 at 150 tonnes per day. About 57,000 tones averaging 12 g Au/t were mined by open pit and underground methods until the outbreak of World War II. Mining operations resumed in 1960 but were stopped because of high production costs.

In October 1979, SAMICO transferred its operating rights to NDMC. NDMC, under a profit sharing agreement with Apex Mining Company, delivered the ore to the Apex Mill at the Masara mine site for processing. NDMC developed and mined592,293 DMT at an average grade of 5.46 g Au/t from May 1980 to June 1985. The mine eventually closed due to depletion of readily open-pittable reserves.

A total of 131,091 ounces of gold was extracted intermittently from the mine from pre-war years up to 1985.

B. AMACAN COPPER PROJECT

The claims in the Amacan porphyry Cu-Au orebody were staked out by SAMICO in 1963 and were explored by reconnaissance to detailed geological mapping and geochemical sampling in 1964. The Amacan Copper Mine was in operation from August 1982 to May 1992. A total of 50,241,716 tons averaging 0.39% Cu and 0.30 g Au/t have already been mined out. The remaining drill-indicated reserve is 65 million MT at 0.34% Cu and 0.412 g Au/t at 0.22% Cu cut-off. The mine closed due to accumulating debts, low copper price, decreasing copper grades, deteriorating equipment and increasing operational costs.

C. PANORAON PORPHYRY CU-AU DEPOSIT

The Panoraon property was an active mine site in the late 1960’s until 1971. The mine was operated by INCO Mining, through an operating agreement with SAMICO, at a cut-off grade of 0.5% Cu. Mined ore was delivered to Apex Masara mine mill. In 1972, a large landslide covered a sizeable portion of the pit, burying a bulldozer in the process. This eventually led to the closure of the mine. INCO Mining was reported to have mined 200,000 tonnes of ore at 0.8% Cu and 7 g Au/t. NDMC took interest in the deposit in 1982 due to its reported high copper and gold grades. A NDMC report mentioned that the diamond drill holes bottomed into ore, indicating that the porphyry copper mineralization may still be open at depth.

III. GEOLOGY AND MINERALIZATION

The NDMC property is located within what has been traditionally called the Masara Mineral District. The Area is underlain by an ophiolitic basement and volcano-sedimentary sequence consisting, from oldest to youngest, of:

Pre-tertiary Basement complex consisting of amphibolitic schist and serpentinized ultramafics Pre-tertiary volcanics and sediments (Masara Formation) Paleogene sediments (Hijo Formation) Miocene limestone (Tagbaros Limestone) Pliocene to Pleistocene volcanic flows, pyroclastics and sediments, and Quaternary alluvium The Masara Formation served as the main host rock for the porphyry copper-gold and meso-epithermal gold mineralization in the Masara sub-district. The Hijo Formation act as host rock to the sediment-hosted replacement gold mineralization such as in the Hijo-Barrio-Palali deposit and the vein and sediment replacement prospects of Gacob, Anitapan, Shanghai and Lost Horizon.

The mineral prospects in the area are distributed along a north-south trending zone that is approximately 20 km long and 9 km wide. Twenty-three (23) prospects of mineralization were identified mainly from past literature and current sites of informal artisanal mining. Considering the accessibility, geography and distribution of the mineral prospects, the NDMC area may be divided into a Northeast Block and a Southwest Block, their boundary being the Masara fault zone. Porphyry copper mineralization is only present in the Northeast Block while quartz-sulfide-gold vein and sediment replacement gold deposits occur in both blocks.

IV. THE NORTHEAST BLOCK PROSPECTS

A. AMACAN GROUP. Surrounding what was once an active mine at the east-central portion of the NDMC property is this group of porphyry copper prospects. Among these, only the Piaminyan and Tarago prospects have been explored by limited drilling, disclosing the presence of porphyry copper mineralization of similar grades as that in Amacan orebody.

B. LAKE LEONARD GROUP. This includes the Lumanggang gold prospect wherein 1.8 M oz of gold resource could be present.

C. TAGBAROS GROUP. This contains three porphyry copper prospects and the Goldsborough gold prospect, which is a possible open-pittable resource.

D. RCO GOLD PROSPECT. This sediment replacement gold prospect has mineralization similar to that of the Hijo deposit mined by the NDMC in the 1980’s.

V. THE SOUTHWEST BLOCK PROSPECTS

A. SAGAY-SAGAY GROUP. Although much of the samples collected from this group of prospects yielded no significant gold values, past high-grading activities and open-cut mining by Apex in the Kanarubi segment indicate that there are pockets and/or segments that contain sufficient gold to warrant mining. The Monte de Oro gold rush, which erupted in the area in 2004, is also an indication.

B. MARAOT GROUP. This group includes the Royal Flush and the Lost Horizon prospects which were previously mined by INCO and NDMC. Together with the Magwandos prospect, these deposits may still justify a medium-scale operation.

C. DASURAN GROUP. High-grading operations were once active in the Lawaan area. Similarly, the Dasuran prospect is one high-grading area that has been active since at least a decade ago.

D. HIJO GROUP. The Hijo, Barrio and Pallali sediment replacement gold deposits are reported to still contain 1.713 million tons at 3.48 g Au/t. http://pmdc.com.ph/projects-ndmc.htm

East Mindanao Mining History

Figure 1: East Mindanao Regional Mineralisation. East Mindanao Regional Geology

This richly mineralised region with a long mining history measures approximately 400 kilometres in length and the Company now controls about 20% of the strike length.

The Company’s tenements are centrally located along the richly endowed Diwata Ranges which form the East Mindanao Ridge (Figure 1). The regional geology comprises an Early Tertiary ophiolitic basement overlain by andesitic lavas and pyroclastic beds, sandstone, shale, conglomerate and limestone. The volcano-sedimentary sequence is intruded by Late Tertiary dacite and quartz diorite plutons.

The dominant structural feature is the Philippine Rift Fault, a major regional structure that extends for 1,200 kilometres in a north-northwesterly direction over the length of the Philippines from southern Mindanao to northern Luzon. The Diwata Ranges straddle the Philippine Rift Fault which provides the main source of Tertiary volcanism and mineralisation.

Mineralisation associated with the Philippine Rift Fault and Subduction System occurs as copper-gold porphyries, epithermal gold veins, and skarn and disseminated deposits associated with calcareous sediments. Locally, gold mineralisation is controlled by strike-slip faults parallel to the Philippine Rift Fault or splay structures off the Rift Fault and dilationary structures which develop orthogonally to the main structures as a result of strike slip movements on structures parallel to the Philippine Rift Fault.

The Company’s tenements are centrally located between the well known and exploited gold and copper districts of North Davao in the south and Surigao in the north. The Diwalwal Gold Mine located some 60 kilometres south of the Co-O Mine is reported to have contained seven million ounces of gold and represents a target type of epithermal vein mineralisation while the Boyongan Deposit in the Surigao District and the King King Deposit in the North Davao District represent porphyry copper-gold target types.

The Co-O Mine and the Tambis areas have been interpreted to be within truncated calderas which are identifiable from volcanic features known to be favourable for gold and base metal mineralisation.

Regional Mineralisation – Background

The East Mindanao Ridge has been a major mining region since before World War II. Previous mining has essentially been divided into two areas, the Surigao District in the north and the North Davao District in the south as shown on Figure 1.

Pre-WWII operations were mainly confined to the Surigao District with production from high grade veins at the Mindanao Motherlode (or Mabuhay) Mine, Tapian and Mapaso Mines, from veins at the Siana underground mine commencing in 1938, and from veins at the Placer Mine commencing in 1936. In later years Siana became an open pit mine and numerous open pit mines were established in the Placer Mine area where porphyry copper-gold bodies were found adjacent to and below the high grade vein systems.

The most notable recent discovery in the Surigao District is the large Boyongan porphyry copper-gold deposit which is undergoing further work.

In the North Davao District, the Maco (previously Masara) copper-gold deposits were discovered in 1938 and subsequently mined. The Amacan porphyry copper deposits were mined in the 1980s, and the large Kingking porphyry copper deposit was discovered as well as smaller porphyry copper deposits such as Mapula. Epithermal veins such as Hijo were mined as part of the Amacan operation, and approximately 20 years ago the large Diwalwal epithermal vein system was discovered with high grade mineralisation extending to approximately 600m from surface. http://www.medusamining.com.au/philippines/east-mindanao-mining-history/

External links

• http://www.philippinemetals.com/i/pdf/PMC-presentation.pdf OTHER SOURCES:

                                                                                      PFII/2007/WS.3/7

Original: English

 	    UNITED NATIONS                                     NATIONS UNIES

DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS Division for Social Policy and Development

Co-organizers Secretariat of the Permanent Forum on Indigenous Issues Government of Khabarovsk Krai and the Russian Association of Indigenous Peoples of the North (RAIPON)

INTERNATIONAL EXPERT GROUP MEETING ON INDIGENOUS PEOPLES AND PROTECTION OF THE ENVIRONMENT

KHABAROVSK, RUSSIAN FEDERATION

AUGUST 27.-29, 2007

Case Study on the Impacts of Mining and Dams on the Environment and Indigenous Peoples in Benguet, Cordillera, Philippines

Paper by

CORDILLERA PEOPLES ALLIANCE

I. Background

Land and People of Benguet

The Cordillera region in Northern Luzon, Philippines, is homeland to more than 1 million indigenous peoples belonging to at least 8 distinct ethnic groups collectively known as Igorots. Two of these ethnic groups, the Ibaloy and the Kankanaey, are found in the province of Benguet, which occupies 265,538 hectares of the Cordillera region’s total land area of 1.8 million hectares. The Ibaloy people live in the southeastern portion, occupying 8 of the province’s 13 towns. The Kankanaey, meanwhile dominate the northeast areas of Benguet.

Benguet’s fertile land along the rivers and gold ore in the mountains saw the emergence of distinct villages engaged in various economic activities. Gold mining communities rose in the gold-rich areas in Itogon, while gold-trading villages were established along strategic mountain passes and trails. Rice-growing villages emerged in the river valleys. Swidden farming combined with gold panning in the streams and rivers.

Land ownership among the Ibaloy and Kankanaey is traditionally recognized by prior occupation, investment of labor and permanent improvements on the land, specifically irrigation systems and retaining stonewalls of the ricefields. The community shares access rights to the forests, rivers, and creeks, and the fruits of these lands and waters are open to those who gathered them.

Entry of mining, construction of dams Mining has a long history in the Philippines. Small scale mining has been practiced by Philippine peoples for at least ten centuries, and large scale mining by foreign as well as Filipino firms for about a century. Little is known, though, about mining prior to the coming of the Spanish colonialists in the 16th century.

Corporate mining in Benguet started during the Spanish colonial period when Spanish businessmen secured a mining concession from the Igorots in Mancayan and launched the operations of the Sociedad Minero-Metalurgica Cantabro-Filipina de Mancayan in 1856. This mine eventually closed down. When the Americans arrived in the 1900s, they entered into contracts with local families to file legal claims to mineral-bearing land. These claims were later used by American prospectors to create the mining companies that would dominate the mining industry in Benguet. These were Benguet Corporation, Atok Big Wedge, Itogon-Suyoc Mines and Lepanto Consolidated.

In the 1950s, the Agno River in Benguet was tapped as a source of hydropower. The first dam to be built along the Agno River was the Ambuklao Dam, followed by the Binga Dam. Twelve (12) other run-of-river mini-hydros, all privately operated, were also built in other parts of Benguet.

In the 1980s, widespread people’s resistance forced the Marcos government and the World Bank to give up its plans for major dam projects in the region. However, the Ramos government took advantage of the energy crisis in the 1990s and initiated with Japanese funding, the construction of the San Roque Multipurpose Project. The San Roque dam is the third dam to be built along the Agno River, located in the boundary between Benguet and Pangasinan province of Central Luzon.

II. Mining Operations, Dams and Impacts on the Indigenous Peoples of Benguet

Mines and Dams Present in Benguet The province of Benguet has hosted 14 mining companies since corporate mining started in 1903. Some of these mines have closed down while others have continued. Presently operating in Benguet are two large mines using high technology for large-scale mineral extraction. These are the Lepanto Consolidated Mining Company (operating for 70 years) and the Philex Mining Corporation (operating since 1955). Benguet Corporation, the oldest mining company in the country, abandoned its operations in 1997 after mining for almost a century. The abandoned open pit mine site, underground tunnels, waste dump sites, mill, diversion tunnels and tailings dams in Itogon still remain today. The company now has ongoing contract mining arrangements with small scale miners. Itogon-Suyoc mines closed down in 1997, but is now negotiating with foreign investors to reopen its mines. In addition, new mining explorations and applications are now coming into other parts of Benguet with renewed efforts by the government to invite foreign investments. These applications of various kinds, numbering 138, are found in all 13 municipalities of the province covering 147,618.9 hectares or 55.7% of the province’s total land area. This figure is aside from the area already covered by past and existing mines. Thus we have a situation where most of the total land area of Benguet is covered by past, ongoing and future mining operations.

Accompanying mining operations is the construction of tailings dams needed to contain the mine wastes. These tailings dams were built across the river beds in various parts of Benguet. However, most tailings dams are not leak proof and have not been strong enough to withstand torrential currents during the typhoon season, and the major earthquake that rocked Northern Luzon in 1990. Through the years, tailings dams in Benguet have proved incapable of containing the volume of tailings that came from the mills. Time and again, these tailings have breached their dams. Benguet Corporation constructed 5 tailings dams. Lepanto has 5 tailings dams, 2 of which collapsed. Philex has 3 tailings dams, 2 of which collapsed in 1992 and 1994. In 2001, tailings breached another Philex dam. Itogon-Suyoc has 1 tailings dam that collapsed in 1994. Thus we have a situation where burst, broken, weak and leaking tailings dams dot the major river systems of the province – the Abra River, Agno River, Antamok River and Bued River.

Another concern is the series of three mega hydroelectric dams built along the Agno River - the Ambuklao, Binga and San Roque dams – that block the river flow to generate electricity. The power generated by these dams has gone to supply the power needs of the mining companies as well as the overall power demand of the Luzon Grid. However, Ambuklao and Binga dams are dying and no longer fully operational, crippled by the voluminous silt that has accumulated in the reservoirs, upstream and beyond. The San Roque dam, which has the generating capacity of 345 megawatts, is now generating only 18 megawatts.

Impacts of Mines and Dams The combination of mines and dams in Benguet has had devastating impacts on the environment and on the Kankanaey and Ibaloy people in the province. These impacts have not only caused serious environmental destruction and suffering for the affected communities, but have also violated the collective rights of the indigenous peoples. As proven by the experience of the Benguet indigenous peoples, large-scale corporate mining and dams destroy, pollute, disrupt agricultural economies, and displace indigenous peoples.

1. Land destruction, subsidence and water loss Corporate mining in Benguet is done by surface mining as well as underground tunneling and block caving. Also significant are other surface excavations by the mining companies for the installation of facilities, such as portals for deep mining, lumber yards, ore trains, mills, tailings ponds, power houses, mine administration offices, and employee housing.

Open pit mining is the most destructive as it requires removing whole mountains and excavation of deep pits. Generally, open pits need to be very big – sometimes more than 2.5 kilometres long. In order to dig these giant holes, huge amounts of earth need to be moved, forests cleared, drainage systems diverted, and large amounts of dust let loose. According to the Benguet Corporation, “Any open-pit mining operation, by the very nature of its method, would necessarily strip away the top soil and vegetation of the land.” Sure enough, open-pit mining in Itogon by Benguet Corporation has removed whole mountains and entire villages from the land surface. After exhausting the gold ore, the open pit in Itogon is now abandoned as the company has shifted to other economic ventures like water privatization.

Not known to many, Philex also practices open pit mining in Camp 3, Tuba, Benguet, presently affecting 98 hectares of land. The affected area is continuously expanding as the open pit mine operations of Philex continue. The land damage has displaced homes and communities and caused the people to lose their lands.

Meanwhile, underground block-caving operations by Philex and Lepanto have induced surface subsidence and ground collapse. In Mankayan, where Lepanto is operating, the land surface in populated areas is sinking, causing damage to buildings, farms and property. In July 1999, Pablo Gomez, a villager in Mankayan, was killed when he was suddenly swept away in a landslide along with the Colalo Primary School building. 71 million cubic feet of earth gave way beneath him, covering and destroying 14 hectares of farming land.

Aside from land subsidence, the water tables have also subsided as deep mining tunnels and drainage tunnels disrupt groundwater paths. Tunneling often leads to a long-term lowering of the water table. In 1937, a disaster hit Gumatdang, Itogon’s oldest rice-producing village. Atok-Big Wedge drove in two gigantic tunnels on opposite sides of the village, immediately draining the water from its most abundant irrigation sources. In 1962, Benguet Corporation drove in another drainage tunnel that stretched between its Kelly mine in Gumatdang and its mines in Antamok. Instead of just draining water from the mines, the tunnel drained the water from a major irrigation source, drying up ricefields. Ventilation shafts have also drawn water away from surface streams, irrigation canals, and pondfields. In addition, the felling of timber to shore up underground tunnels has denuded surrounding watersheds, aggravating water loss.

Not only does mining cause water subsidence, it also deprives farming communities of much-needed water. The industry requires large volumes of water for mining, milling and waste disposal. Mining companies have privatized numerous natural water sources in Itogon and Mankayan for the purpose. Now, the people in many mining-affected communities have to buy water for drinking and domestic use from outside sources through water delivery trucks, or by lining up for hours in the few remaining water sources to fill up a gallon of water.

2. Pollution of Water and Soil Open-pit and underground bulk mining by Philex in Tuba and Lepanto in Mankayan generate ore and tailings at a rate of up to 2,500 metric tons per mine per day. Toxic mine tailings are usually impounded in tailings dams. However, when pressure in the tailings dams builds up, especially during times of heavy rainfall, the mining companies drain their tailings dams of water or face the risk of having the dams burst or collapse. In either case, the tailings eventually find their way out, polluting the water and silting up the rivers and adjacent lands.

People of Mankayan remember the Abra River before the mine. It was deep and narrow, just 5 meters wide, full of fish and surrounded by verdant rice paddies. Now there is a wide gorge of barren land on either side of the polluted river. Fruit trees and animals have died from the poisoned water and rice crops are stunted.

When Lepanto started operations in 1936, the company dumped mine tailings and waste straight into the river. It was only in the 1960’s that the first tailings dam was built. The dam was abandoned after less than 10 years and the land became unsuitable for agriculture. Tailings dam 2 was constructed in the 1970s. Its collapse caused the contamination of nearby ricefields. Tailings Dam 3 and a diversion tunnel gave way in 1986 during a strong typhoon. Another spillway collapsed after a typhoon in 1993. The spilled tailings encroached on riverbanks and destroyed ricefields downstream. They also caused the riverbed to rise and the polluted water to backflow into other tributaries of the Abra River.

An Environmental Investigative Mission (EIM) in September 2002 indictaed that heavy metal content (lead, cadmium and copper) was elevated in the soil and waters downstream from the Lepanto mine. Water samples from the Abra River were found to have low level pH (acidic) capable of solubilizing heavy metals. One resident who used gravel taken from the Mankayan River for construction of his house reported that the steel bar reinforcements were corroded after a few months. The same EIM report revealed dissolved oxygen readings at the CIP Mill Outlet and at Tailings Dam 5A to be below 2 mg/L. Aquatic life cannot survive in conditions where dissolved oxygen is below 2 mg/L. Sulfuric acid is also believed to be the cause of the “rotten eggs” smell that residents report when mine tailings are released into the Mankayan River during heavy rainfall. Another concern is the high amount of Total Suspended Solids (TSS) and Total Dissolved Solids (TDS) found at various points of the Mankayan River downstream from Tailings Dam 5A.

Abandoned mine sites like Benguet Corporation and Itogon-Suyoc Mines in Itogon have long-term damaging impacts on rivers and their surrounding fields because of the build up of acidic mine water. Acid mine drainage comes from both surface and underground mine workings, waste rock, tailings piles and tailings ponds. Pollution of this kind can continue long after a mine is closed or abandoned, and the water that leaches into the ecosystem is frequently acidic, killing rivers and posing health risks to local communities.

3. Siltation

Siltation of rivers is a serious problem in Benguet resulting from mining operations and dam construction. The Ambuklao and Binga dams are stark examples of the detrimental impacts of siltation and megadams on rivers. The steadily rising level of silt in the dam reservoirs and along the Agno River upstream of the dams is covering a wider and wider area around the dams and continues to destroy more and more rice fields. In the case of the Ambuklao dam, the communities of Bangao and Balacbac were located far above the predicted water level of the dam and 17 kilometers away from the predicted edge of the reservoir. These two communities are now inundated because of the rising water level and accumulation of silt upstream along the Agno River. Government authorities dismiss the increasing siltation as a natural phenomenon. However, the Ibaloy people know that the dams are the real culprit. The farmlands and communities were never affected by silt before the dams were built despite storms and earthquakes. The dams blocked the free flow of water and silt down to the lowlands. Silt deposits built up in the dam reservoir and blocked oncoming silt that receded backwards upstream, swamping and inundating all farmlands and communities within reach.

In the case of the Philex, a tailings dam collapsed in 1992, releasing some 80 million tons of tailings and causing heavy siltation in the irrigation system downstream. The company paid Php5 million to the affected farmers. Again, during a typhoon in 2001, another tailings dam of Philex collapsed. Ricefields in San Manuel and Binalonan, Pangasinan, were buried in toxic silt a meter deep. This time, Philex refused to admit responsibility for the disaster putting the blame on nature.

In the case of Lepanto, the downstream impact of tailings disposal is that along a 25-kilometer stretch of the Abra River, some 465 hectares of riceland have been washed out. Further, Lepanto’s claim that Tailings Dam 5A is actually helping to contain siltation is deceiving. The high level of TDS and TSS from the CIP Mill Outlet up to Tailings Dam 5A indicates that the silt originates from company operations and is not due to natural siltation.

4. Serious health problems due to water, soil and air pollution Contamination of water, soil and air contributes to increased toxic build-up in people’s bodies. Asthma and other respiratory problems often affect local communities as well as mine workers. When people’s health deteriorates, their ability to work and earn money is reduced even further. The old and the young are particularly vulnerable.

In 1985, a copper ore dryer was installed by Lepanto. The copper dryer affected the 3 barangays of Paco, Colalo and Cabiten in Mankayan. Local residents complained of abnormal withering of crops, sickness and death of domestic animals and high incidence of respiratory ailments. The company was forced to close down the dryer in the face of people’s opposition.

The most common symptoms felt by residents of Mankayan who have inhaled chemical fumes emanating from the mine are: headache, dizziness, cough, chest pain, nasal and eye irritation. Other symptoms reported are itching of the skin, rashes and diarrhea.

Some residents report that wounds take longer to heal when exposed to the water of the Abra River. Because of past adverse reactions, people avoid contact with the river water. They do not allow children to bathe in the river. Nor do they let their animals drink from it. Incidence of cancer is a cause for further study as it is among the top 3 causes of mortality in some affected communities.

Women are primarily responsible for maintaining the health of the family and the community. As such, women have to carry the burden of ill health arising from environmental destruction and pollution due to mining operations. At the height of the open pit mine and mill in Itogon, some pregnant women suffered miscarriage, while others experienced diseases of the skin, respiratory tract and blood when exposed to toxic fumes emanating from the mill. The drying up of natural water sources in another contributory factor in the poor health and sanitation in the community.

5. Loss of Flora, Fauna, Biodiversity, and food insecurity The drainage area of the Abra River is home to about 1689 species of plants belonging to 144 families, including 177 species of orchids in 47 genera. More than half (51.2%) of the plants found within the area are classified as endemics with 60.7% of all the orchids classified as such. Benguet has the highest plant species diversity within the river basin area compared to other provinces.

The EIM conducted in September 2002 noted gross differences between the waterways located directly below the Lepanto mining operations and tributaries originating from sources elsewhere. When the company started a fishpond in March 2001, all the fingerlings died after only 4 days.

Aquatic organisms like udang (shrimp) and igat (eel) are reportedly becoming rare. Residents observed fish disease and deformities, aside from a drop in the fish catch. Fishkills occur every rainy season, attributed to the release of water from the tailings dams by the company. The loss in aquatic life is a major change in the life support system of the communities who rely on the river for daily food.

Not only are livelihood sources affected, but so is the general biodiversity damaged, causing breakdowns in the food web. Once-common birds and tree species have disappeared. Among the bird species reported now to be rarely seen are: pagaw, tuklaw and kannaway. Trees such as the kamantires and burbala were also identified to be no longer in significant quantities.

6. Dislocation of Indigenous People from Ancestral Land and Traditional Livelihoods Large-scale corporate mining and dams have dislocated the indigenous Kankanaey and Ibaloy people from their ancestral lands and traditional livelihoods. Dams have caused the loss of ancestral lands to inundation and siltation. Descendants of families displaced by dams have been reduced to illegal occupants in the dam’s watershed areas or settlers in land owned by others. Mining patents granted by the government to mining companies have denied indigenous communities of their rights to ownership and control over their ancestral lands and resources.

In terms of livelihood, mining concessions have taken over lands used by indigenous peoples for their traditional livelihoods - ricefields, vegetable gardens, swiddens, hunting and grazing livestock. Rice fields along riverbanks have been damaged by siltation. Garden cultivators have lost their crops to surface subsidence. Traditional small scale miners have lost their pocket mines and gold panning sites to the big mines and dams. Some communities have lost entire mountainsides, burial sites and hunting grounds to ground collapse and deep open pits. Traditional fishing is no longer possible in polluted rivers, replaced by commercial fishponds in dam reservoirs.

An additional impact is the violation of the collective rights of the indigenous Kankanaey and Ibaloy people of their collective rights to self-determination and cultural integrity as they are displaced from the land and community that is the basis of their continued existence and identity.

III. People’s Alternatives People’s alternatives to corporate mining and dams and indigenous systems of sustainable resource utilization and management can be found in indigenous communities in the Cordillera.

The Ibaloy and Kankanaey people of Benguet continue to practice traditional small-scale mining till today. Traditional methods of pocket-mining and gold panning are crude but environment-friendly and have been passed down through generations since the 16th century. Small-scale mining is a community affair and access to resources is defined by customary laws, characterized by equitable sharing, cooperation and community solidarity. Men, women, children and the elderly each have a role to play in the extraction and processing of the ore. They extract only enough gold to meet their basic necessities and receive their share of the gold based on an equitable sharing system. However, as communities are deprived of their land and resources, these traditional small-scale mining methods and positive values are now under threat of vanishing.

An alternative source of energy are microhydro dams as opposed to megadams. The experience of the micro-hydro project (MHP) of the Chapyusen Mangum-uma Organization (CMO) in the Cordillera proves the viability of a community-based and community-owned power system to provide energy for lighting, rice milling, sugar pressing, blacksmithing and carpentry. The MHP has built up the people’s capacity to develop their own local resources while ensuring affordable access of poor households to electricity. It also became an opportunity for the people to improve their organization by participating in all phases of project implementation. The observance of ubfo or the traditional system of labor exchange in community mobilization has had a positive outcome by restoring traditional cooperative practices and the free utilization and exchange of individual skills towards a common objective.

IV. Recommendations

The experience of the Kankanaey and Ibaloy people brings to a fore the need for changes in the development paradigm and policies affecting indigenous peoples. The following recommendations, arising from various reports and fact-finding missions, are forwarded for consideration by the United Nations, by international financial institutions, mining and dam companies and national governments:

1. The international community should develop minimum standards for the protection of the environment and human rights that are binding on all countries and companies, based on the highest existing standards, and with effective monitoring and sanctions imposed on the offending parties, be it the national government, funding institutions, or the companies.

2. There exists the Akwe:Kon voluntary guidelines, developed under the Convention of Biological Diversity, for the conduct of cultural, environmental and social impact assessments regarding developments proposed to take place on, or which are likely to impact on sacred sites and on lands and waters traditionally occupied or used by indigenous and local communities. These guidelines should be made binding rather than voluntary and could be adopted as a minimum standard by international financial institutions and national governments when implementing development projects affecting indigenous peoples.

3. Countries that are home to transnational companies should enact legislation that will require those companies to operate using the same standards wherever they operate in the world. Home countries whose nationals and corporate entities inflict damage in developing countries, particularly on indigenous peoples, should impose some form of penalty on the offending parties.

4. An international system should be created to allow complaints to be filed by affected indigenous communities against companies, governments and financial institutions whose development programs and interventions violate the rights of ownership and control by indigenous peoples over their ancestral land, territories and resources and cause serious destruction of the environment.

5. In the case of Benguet where the indigenous people have already suffered and will continue to suffer enormous damage to their lands and environment due to the long-term impacts of mining and dams, proper and immediate compensation and reparation should be provided to all affected people to include adequate monetary compensation, sustainable livelihood, alternative land, employment and other sources of regular income. A program for the restoration and rehabilitation of lands and waters destroyed by mines and dams should also be implemented.

6. Past experience has shown that no monetary compensation nor livelihood project could replace or surpass the destroyed ancestral land and traditional livelihoods of affected indigenous peoples. The solution to restoring the living quality and to stop the permanent destruction of the environment is to stop destructive large-scale corporate mining and decommission unviable tailings dams and megadams. Alternatives such as chemical-free traditional small scale mining methods and community-based microhydros need to be promoted and supported.

7. National legislation and policy on the liberalization of mining and the energy industry need to be reviewed and revised as these have proven detrimental to indigenous peoples in different parts of the country. A new mining policy should support the Filipino people’s efforts towards nationalist industrialization and ensure the creation of jobs, food security, a stable economy, mitigation of environmental degradation, and environmental rehabilitation.

• www.un.org/esa/socdev/unpfii/documents/workshop_IPPE_cpp.doc‎

BOOK

http://www.fess-global.org/workingpapers/lessons_from_rp.pdf ww.fess-global.org/workingpapers/lessons_from_rp.pdf‎

EXT LINK http://pcij.org/tag/mining/

http://www.pecc.org/resources/doc_download/1307-the-philippines-experience-can-mining-benefit-economic-growth-and-local-people

http://www.iss.nl/fileadmin/ASSETS/iss/Student_profiles/PhD/PhD_foto_s_pdf_s/Sustainable_Mining_in_the_Philippines.pdf

http://sierramining.com.au/?id=311

Source: http://gbreports.com/admin/reports/Philippines_Mining_2013.pdf

http://www.unep.org/hazardoussubstances/Portals/9/Mercury/Documents/ASGM/Presentations_Forum/Day%202/Health_and_Environmental_Impact.pdf

The primary industries in the Philippines include agriculture, wood products, electronics assembly, garment and footwear manufacturing, mining and fishing. The Philippines also has an active tourism industry, and receives remittances from some 4-5 million overseas Filipino workers. http://asianhistory.about.com/od/philippines/p/philippinesprof.htm

Transforming Extractive Industries in the Philippines: Locating Spaces for People’s Participation in Mining Policies

Blogs and Think Pieces Discuss this Viewpoint Go to... 31 May 2012

Author(s): Marie Joyce Godio Transforming Extractive Industries in the Philippines: Locating Spaces for People’s Participation in Mining PoliciesThis is part of a series of think pieces reflecting on the importance of bringing the social dimension back into discussions about green economy and sustainable development.

Many in the Philippines consider mining an important industry that generates employment, taxes and foreign exchange earnings. But such economic potential is not translating into the well-being of local communities. More often than not, resource extraction is associated with social conflict and environmental degradation. The 1995 Philippine Mining Code requires environmental monitoring and includes provisions for public consultation. According to the author, however, these processes are often mired in corruption; a lack of transparency and consultation means that the communities most affected are deprived of their right to determine how best to use their resources and the freedom to define their own development.

Marie Joyce Godio is reading for an MA in Asian Studies with a focus on the Southeast Asian region at the Asian Center, University of the Philippines Diliman, Quezon City, Philippines.

Setting the scene

Extractive mining is one of the major industries in the Philippines, a country with an estimated $1 trillion in mineral wealth. Mining is seen as an important industry that generates employment, taxes and foreign exchange earnings, and contributes to local socioeconomic development.

However, mining involves processes such as drilling and excavation that are intrusive and disruptive of the environment. For example, the Lepanto Consolidated Mining Company in Benguet Province—just one of many mining sites in the Philippines—has polluted the Mankayan-Abra river system and deforested surrounding watersheds for more than half a century. The collapse of Lepanto’s tailing dams in the 1960s and 1990s damaged rice fields surrounding the area and, in 1986, led to siltation of the Abra River. The most recent incident was in July 1999 when an elementary school was buried, a number of families displaced and a Lepanto employee killed.

Today, concerns about environmental degradation caused by the extraction of non-renewable resources have prompted a need for more sustainable alternatives. Unless a substitute to mining and non-renewable resources—which have become necessities—emerges, the only solution is to minimize the environmental and social impacts of mining, and of extractive industries in general.

One of the most important ways to make this possible is through good mining policies, which incorporate effective public involvement through consultation/dialogue/hearing. Mining policies should provide space for public involvement where all stakeholders—mining companies, national and local government, civil society (organizations and individuals), and especially the communities living in proposed mining areas whose lives are immediately affected by extractive activities—can discuss and deliberate the decisions involving the mine processes. These public consultations should be spaces where everyone’s concerns, ideas and opinions are heard and considered at all stages, including planning, implementation and assessment. Equal participation also includes ensuring transparency and enabling all stakeholders to make informed decisions.

As the first step in the natural resource production chain, extractive industries can be said to contribute to development and people’s well-being through the generation of material wealth and resources. But experiences of people in the Philippines with mining suggest that as long as mining communities are deprived of their rights to determine how best to use their resources and the freedom to define their own development, a better life is unlikely (Begonia and Leonen 1996). People should have opportunities to sustain an adequate standard of living in an extractive area even after mining operations have ceased. This was not possible, for example, in the case of the operation of Benguet Corporation1 in Antamok Mines where people were forced to leave land that was rendered dry and barren.2

Local knowledge and participation

Participation is a core requirement for achieving development that is sustainable both socioculturally and environmentally: it opens spaces for deliberation, discussion, sharing and learning from all participants’ ideas, experience and knowledge. Learning and understanding local knowledge, for example, can be very valuable. In the Philippines, local mining communities often comprise indigenous groups that have their own understanding of the environment and way of managing natural resources, born from decades/centuries of interacting with it. Denying local communities the right to participate in decisions about resource use can hinder or reverse development (Sajor and Resurrection 1999). By contrast, local knowledge and participation “can lead to better informed decisions [of managing resources] and may result in reduced environmental degradation” (Bravante et al. 2009:6).

Integrating local knowledge can make mining more sustainable. Small-scale miners in the Cordillera region of the northern Philippines, for example, use a low-environmental-impact method called ga-id. Ga-id is a local term referring to the crushing of ores using two big blocks of stone. The ores are continuously crushed until they are pulverized before the gold particles are separated through panning. Unlike industrialized mining, ga-id does not use harmful chemicals such as cyanide when separating the gold particles. Although ga-id is no longer practiced these days as it is a very tedious and time-consuming method, the likelihood of improving it, while maintaining its low-impact, is not impossible.

Sociopolitical conflicts can also often be avoided when people are able to anticipate the effects, especially the negative effects, of a particular "development" initiative. As Bravante, Holden and Ingelson argue, "[a]fter stakeholders have had the opportunity to express their opinions they may be more inclined to accept the final outcome decided by the regulators, as they have had the opportunity to express their views" (2009:6). In the long run, local people’s participation in decision making will thus prove to be beneficial not only to the environment but also to the mining industry.

Despite the demonstrated advantages of including local people in natural resource management in general, there remains a need to incorporate spaces for broad-based civil society participation in specific laws and policies related to mining. While there are legal ways where communities can have their voices heard, such as claiming their "freedom of information, speech and participation of civil society organisations at all levels of decision-making", these are general constitutional rights (Begonia and Leonen 1996:19). The extent to which mining policy specifically incorporates civil society participation varies, as the following discussion of the Philippine Mining Act of 1995 (Republic Act 7942) illustrates.

Identifying spaces for participation

Mining has long existed in the Philippines and reached its peak in the 1960s and 1970s when President Ferdinand Marcos identified it as a key industry to economic progress which, in turn, was expected to improve people’s well-being. The national mining industry dwindled in the 1980s due to falling investment, which affected the Philippine economy and paved the way for the creation and passing of the Philippine Mining Code, RA 7942 (Undangon ang Mina, 10 September 2011).

RA 7942 "legitimizes the entry of large foreign mining companies and control of the country’s mining industry. Large foreign mining companies are allowed to mine a maximum area of 81,000 hectares for a period of 25-50 years in exchange for a minimum investment of $50 million into the country’s mining industry" (quoted by Begonia and Leonen from Corpuz 1996:i-ii). RA 7942 is therefore strongly market-driven and profit-oriented (Lopez 1992), and has been framed as such by the Philippine government. It is largely supportive of mining corporations, but seems to disregard the potential negative effects on the environment and people living in mining areas.

The implementation of RA 7942 requires the Environmental Management Bureau to administer an Environmental Impact Assessment (EIA), which includes provisions to carry out public consultations where civil society can raise concerns and even oppose a proposed mining project. The result of these public consultations should subsequently be reflected in the environmental impact statement (EIS)—which is needed to secure an Environmental Compliance Certificate—before a mining company can obtain permission to operate. However, the public consultation component of the EIA is not required when a mining company is only securing an exploration permit (Begonia and Leonen 1996). Apart from the EIA, there is no other mention of civil society participation under RA 7942.

RA 7942 is problematic not only for its minimal requirements for participation but also for the potential for corruption of the process. Unequal power relations among stakeholders have resulted in fraudulent EIA and EIS, with a lack of monitoring and transparency of the stages of mining further compounding the corruption. For example, there have been experiences where free, prior and informed consent (required in areas declared as ancestral lands of indigenous peoples) have been obtained "through misinformation, misrepresentation, bribery and intimidation" (Doyle et al. 2007:8). As of 2003 there have been serious environmental and health concerns in areas where 16 tailing dams have failed and 800 abandoned mine sites have been left without a proper mining closure process (Doyle et al. 2007). There have been 11 mining-related killings since 2001. These cases of human rights violations and extrajudicial killings are said to be heightened by the deployment of government-supported paramilitaries (Mines and Communities 2011). Set up to protect the mining companies’ safety, these paramilitaries are found in mining areas where environmental and anti-mining activists are present. Calls to the government to withdraw these paramilitaries have not been addressed.

Conclusion

Large-scale mining in the Philippines has been marred by human rights violations, grabbing of indigenous land, corruption and environmental destruction (Doyle et al. 2006). Many of these negative human, social, environmental and developmental impacts might have been avoided if there were more formal spaces for civil society participation, given that consultation is, to some extent, incorporated in mining laws and policies. Limiting the space for civil society engagement leads to underdevelopment. If people are involved in decision-making processes and are aware of the outcomes of a particular initiative such as mining, social conflicts can be eased (Bravante et al. 2009). Policy makers must incorporate spaces for civil society participation—where people can freely express their views and judgments, and share their knowledge and ingenuity—if genuine development and human progress are to be achieved. http://www.unrisd.org/news/godio

Philippines: A flood of mining problems Published by MAC on 2012-08-13 Source: GMANews.tv, Inquirer, statement, Rappler, Sun Star (2012-08-06) Whenever there are attempts to reform the mining laws in the Philippines - and that's frequently - some form of mining disaster seems to follow (For news on mining reforms see: Philippines: The President finally publishes, but arguments continue...). In this case Philex Mining has been ordered to suspend its Benguet operations after its tailings dam discharged mine wastes into a river following torrential rains.

As a result of the President's Executive Order on mining, Xstrata plc has lobbied to overturn the rejection of the Environmental Compliance Certificate for its Tampakan mine - where another person had been murdered as violence continues to shroud the project.

The government is reviewing the guidelines for obtaining the Free, Prior and Informed Consent (FPIC) of indigenous peoples to mining ventures. The last internal review on the guidelines, in May 2012, was welcomed by indigenous communities. Now they fear that the mining industry will get its way in revising the procedures downwards.

A telling example of the problems created by lax implementation of FPIC can be seen in Mankayan, where a picket against Lepanto Consolidated & Goldfields has held out despite efforts to break it up. The community claims that its legitimate rejection of the company has been ignored.

Finally, Canada's TVI has hit back at claims, filed in a court action, that it orchestrated violence against its opponents (see:Philippines: Mining murders continue, no justice in sight). Using a report it commissioned, the company claims that email evidence was faked as a part of a conspiracy against it.

Philex suspends operations at Benguet mine after tunnel gets flooded http://www.minesandcommunities.org/article.php?a=11849