Like a broken record

With Gina Lopez as secretary of environment and natural resources, we can expect the same music being played yet again like a broken record. We have had this anti-mining music played during Aquino’s government.

Sagittarius Mines Inc. (SMI), the Philippine subsidiary of Swiss based Xstrata, was denied their Environmental Compliance Certificate (ECC) even after complying with necessary requirements.

David Pearce, an international expert on resource economics presented a report on the potential game changing impact of the Tampakan Copper-Gold project on the economy. If approved, the project can contribute an average of an additional one percent to the gross domestic product over a period of 20 years.

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The Philippines is a well-endowed country with mineral resources. With its long history and experience in mining, it has demonstrated its very rich potential for copper, gold, nickel, chromite and other metallic minerals through the commercial operation of numerous mines. It is also abundant in non-metallic and industrial minerals such as marble, limestone, clays, feldspar, rock aggregates, dolomite, guano and other quarry resources.

The Philippine minerals industry is currently an industry below $1 billion in annual sales (Figure 1) similar to Malaysia and Papua New Guinea, but lagging behind Indonesia ($3.6 billion), Chile ($13 billion) and Western Australia ($26 billion).

To make them useful to the economy, the rich mineral resources of the Philippines have to be explored and developed into commercial mines. However, there are no local funds available for exploration investments. Historically, the funds used for exploration come substantially from foreign investors through foreign direct investments. The Philippines has to compete with other mineral producing countries to attract this fund. During the period 1995 to 1999, majority of the exploration funds went to Indonesia, Chile and Peru.

With untapped mineral wealth worth more than $840 billion, the Philippines is “one of the world’s most highly mineralized countries,” according to a US Department of State report on the Philippine economy.

Despite its rich gold, copper and chromate deposits, however, “the Philippine mining industry is just a fraction of what it was in the 1970s and 1980s when the country ranked among the 10 leading gold and copper producers worldwide,” the Washington-based agency said.

“Low metal prices, high production costs and lack of investment in infrastructure contributed to the industry’s overall decline,” the State Department said in the report, which the US Embassy in Manila has posted on its website.

It noted that “a December 2004 Supreme Court decision upheld the constitutionality of the 1986 Mining Act, thereby allowing up to 100 percent foreign-owned companies to invest in large-scale exploration, development and utilization of minerals, oil and gas” in the country.

In the same report, the agency said the Philippine economy “proved comparatively well-equipped to weather the recent global financial crisis, partly as a result of the efforts to control the fiscal deficit, bring down debt ratios and adopt internationally accepted banking sector capital adequacy standards.”

 “After slowing to 3.8 percent growth in 2008 and sputtering to 1.1 percent in 2009, real year-on-year GDP growth rebounded to 7.6 percent in 2010, a 34-year high fueled in part by election-related spending, optimism over the peaceful transition to a new government, and an accommodating monetary policy,” the report said.

However, “growth slowed in 2011 and is likely to be in the 3.5 percent to 4 percent range,” it said.

According to the State Department, “the portion of the population living below the national poverty line increased from 24.9 percent to 26.5 percent between 2003 and 2009, equivalent to an additional 3.3 million Filipinos.”

As Manuel V. Pangilinan said “Mining is not the enemy, poverty is.” But I don’t think he was understood. Those who are against mining continue with their obstructions while saying “they are not against mining but it must be responsible. “

For mining to be responsible the onus is as much on government regulatory bodies to implement its rules and regulations. It is about good governance.  If there have been instances in the past of irresponsible mining the government is more to blame for its dereliction of duty. In my opinion, the solution is not into making more laws or new laws when the present laws are not being enforced.

The result of the proposed alternative mining bill called “The Philippine Mineral Resources of 2012” would only mean more trouble. We would have more laws to be violated and more opportunities for graft. Meanwhile as Pangilinan says, the real victims of this lack of will on good governance are the poor.

As some of them have told me, when I visited Tampakan until mining came around they fended for themselves without any help or resource from government. They cannot even plant in these areas because mining areas are hard rock on which nothing grows.  Responsible mining as spelled out in the Revised Mining Law of 1995 (considered as one of the best in the world) are committed to build infrastructure, schools, hospitals all of which they would not have ever had if they relied on government. It has also a proviso for setting up a fund for rehabilitation even before mining takes place.

It does not mean that the industry has no bad eggs, particularly those who raped the environment they were already extracting metals from, like that big-time businessman whose operation was dumping waste indiscriminately into the sea in Agusan and so many local officials who made “small-scale mining” synonymous with “big-time destruction” all over the country. But mining also has its conscientious players, who take care not only of local communities but also of the environment.

Duterte said he wanted to follow the Australian model for responsible mining. Like the US and Canada, Australia has very stringent laws on mining, which those three countries have allowed for many decades and allow to this very day.

The Philippines, according to many international experts, also has very comprehensive and tough laws on mining, which can ensure the proper, safe and environment-friendly operation of local mines if they are implemented properly. What the local mining industry needs, therefore, is a good regulator and implementor of applicable laws, not an anti-mining activist.