Monthly Archives: November 2011

Killer Dam

Is this something you’re willing to take a risk on?

Is a 5.9-billion dollar project the equivalent of an environmental disaster waiting to happen?

Supporting Arguments to the Stand of “Save the Palawan Movement”

SUPPORTING ARGUMENTS TO THE STAND OF SAVE PALAWAN MOVEMENT

Atty. Christian Monsod

November 22, 2011

(1)  Mining is one of the most contentious activities in our country because most of the minerals are located in the rural and in the mountainous areas where the poorest of the poor are located – farmers and indigenous peoples – and in smaller islands where, in addition, the livelihood of fisherfolk are also endangered by mining tailings spilling into the rivers and shorelines.

(2)  The scientific basis for banning mining in island eco-systems, key biodiversity areas and watershed areas, is a key factor in making this decision.

(3)  With respect to other areas, the government should go back to the policy of tolerance for, and not promotion of, mining for the reasons given in pars. (5) and (6) below.  In evaluating mining projects, the Aquino administration should consider explicitly adopting the Precautionary Principle enunciated by the Supreme Court in promulgating the Writ of Kalikasan , to wit:

Part V. Rule 20, “Sec. 1 When there is a lack of full scientific certainty in establishing a causal link between human activity and environmental effect, the court shall apply the precautionary principle in resolving the case before it.

“The constitutional right of the people to a balanced and healthful ecology shall be given the benefit of the doubt.”

(4)  In any case, there should be a moratorium on mining in these areas until the government (DENR/MGB) has put in place the safeguards which the Philippine Development Plan (Chapter 10) admits are not yet in place, namely:

(a) “currently, there is no standard resource and environment valuation. There is a need to have a cost-benefit analysis and standard parameters that will consider all relevant values (including non-market values)”; (page 310)

(b) “Institutional issues need to be addressed to ensure sustainability of the country’s fragile environment and natural resources…(page 320-322)

– “implementation is confused by overlapping and conflicting policies,

-“government capacity for resource management is wanting,

– “enforcement of environmental laws and policies is inadequate.Relevant environmental laws,  specifically those regulating the utilization of natural resources, i.e. NIPAS, etc. are poorly implemented.”

(5)  How can the government approve mining projects in the face of these institutional shortcomings?

(6)  The mining industry is pressing for approval of mining applications and operations, warning that investments might dry up and the international community is becoming alarmed at the instability of the rules and delays in government approvals.

All the more reason why the above safeguards must first be put in place for reasons of transparency and consistency. The present case-to-case approach opens the door to corruption (big amounts are involved) and to decisions that are vulnerable to future questioning

Moreover, the consequences of wrong decisions are so huge and irreversible that it is better to take a longer view today.  In any case, the demand for minerals will continue into the future and there is no real opportunity cost to deferring decisions on mining.

We might as well put in place the safeguards, as well as plans, that we have been postponing for decades, such as, making an inventory of our natural resources, determine the actual metal needs of the country, requiring mining companies to establish downstream plants (PDP, page 327), etc. to capture more of the values of our minerals for ourselves.

(7) Joining the issues on mining

(a) mining as a driver of development – COMMENT: The role of mining is always described as “potential” because mining has never played a major role in our development, even during the mining boom of the seventies and early eighties. Former Sec. Habito estimates, based on input-output tables, that the backward linkages of mining is .46 or less than half of other industries and the forward linkages is a low .82 (below 1) – not considered enough value adding activity. After 50 years, there is no downstreaming industrialization from mining;

(b) mining and employment – COMMENT:  Extraction mining is known all over the world as a low job-generating activity. In our country, its employment contribution is about 1/3 of 1%.  Habito cites other statistics: Labor share in mining = 13.3% compared to the average share of labor in all activities = 20%;

(c)  mining and revenue generation – COMMENT: D itself says that the country is shortchanged with only 2% excise tax share. Moreover, there appears to be an undercollection of excise taxes of 56%-74% of the already low excise tax; a recent study estimates (preliminary) that government only collected 7.5% of the production value of mining from 1997-2007, given the tax incentives and low share of government. AJ Antonio Carpio in his Dissenting Opinion in the MR in the La Bugay case stated that the State has so far gotten zero of “additional share” in mining. And stands to gain zero in the formula chosen by Tampacan for “sharing” with government because of the onerousness of the formula. The profits from mining have gone to foreign companies and corrupt government officials, just like other countries that have suffered the “resource curse”.

(d)  mining and poverty alleviation – COMMENT: Figures derived from FIES 1988-2009). Mining has the highest poverty incidence (48.7%) of any sector in the country. It is the only sector where poverty incidence increased between 1988-2009. As for the argument that national figures do not tell the whole story: among the highest poverty levels among regions are where many mining companies operate, i.e. CARAGA (47.5%), Zamboanga Peninsula (42.75%), Bicol region (44.92%) . At the municipality level, (small area poverty estimates 2003), Bataraza in Palawan where Rio Tuba has been operating for 30 years has a poverty incidence double (53%) the national rate (26%).

(e)  mining as God’s bounty to serve humanity – COMMENT: Minerals can serve other purposes than being dug up and exported. Science says that they are needed to anchor forests (especially in island ecosystems). Since we are the number one disaster area from typhoons, the value of mineral rocks to our forests and biodiversity is just as high. As for the argument that minerals are the raw materials for modern conveniences, the point is that, in cases where mining is allowed, the minerals should be priced at full cost, including environmental and social costs. Otherwise, our poor, who bear these costs are effectively subsidizing the rich in their consumerism.

(6) In the face of contrary empirical evidence, past Presidents bought into the rhetoric of mining and made it public policy:

“Long term, high profit mining translates into (1) higher revenues for government, (2) more decent jobs for the population, (3) more raw materials to feed the engines of  downstream and allied industries, and (4) improved chances of human resource and  countryside development by creating self- reliant communities away from urban centers. 

            (Pres. Fidel Ramos, as quoted in the SC decision on La Bugay case )

(1) responsible  exploration, development and utilization,(2) to enhance economic growth, (3) in a manner that adheres to the principles  of sustainable development (4) with due regard for justice and equity,  sensitivity to the culture of the Filipino people and respect for Philippine sovereignty.” (Pres. Gloria Arroyo, as quoted in the SC decision in the La Bugay case)

The new mining policy of the Aquino Administration can surely do better than these.

Reporter’s Notebook: Pilipinas For Sale?

The land really bleeds.

httpv://www.youtube.com/watch?v=ZBaz3rKdLP0

Consolidated Mineral Resources Bill of 2011


Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

 

HOUSE BILL No. ____

Introduced by 

 

 

AN ACT TO REGULATE THE RATIONAL EXPLORATION, DEVELOPMENT AND UTILIZATION OF MINERAL RESOURCES, AND TO ENSURE THE EQUITABLE SHARING OF BENEFITS FOR THE STATE, INDIGENOUS PEOPLES AND LOCAL COMMUNITIES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

CHAPTER I. DECLARATION OF POLICIES

 

Section 1. Short Title. This Act shall be known as the “Philippine Mineral Resources Act of 2011”.

Section 2. Declaration of Policy. It is hereby declared the policy of the State to:

a)    Maintain peace and order, protect life, liberty and property and promote the general welfare;

b)   Advance the medium- and long-term needs of the Philippines;

c)    Encourage the  advancement of the industry’s technology with emphasis on existing indigenous knowledge, research and development;

d)   Protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature;

e)    Value the dignity of every human person and guarantees full respect for human rights;

f)     Promote social justice in all phases of national development;

g)    Recognize and promote the rights of indigenous cultural communities within the framework of national unity and development and protect the right to self-determination of the indigenous and Moro peoples;

h)   Protect and promote the right to health of the people and instill health consciousness among them;

i)     Pursue an independent foreign policy. In its relations with other states the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-determination;

j)     Develop a self-reliant and independent national economy effectively controlled by Filipinos;

k)    Ensure the autonomy of local governments;

l)     Give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good;

m)  Encourage non-governmental, community-based, or sectoral organizations that promote the welfare of the nation; and

n)   Adopt and accept the generally accepted principles as embodied in the International Covenant on Civil and Political Rights, International Covenant on Economic, Social, Cultural Rights, UN Declaration on the Rights of Indigenous Peoples, UN Convention on Biodiversity and other international accords on human rights, labor rights, the rights of women and children, and the protection and preservation of the environment, of which the State is a party.

Read more »

A Briefer on the Minerals Management Bill

A BRIEFER ON THE MINERALS MANAGEMENT BILL
[House Bill No. 3763-Phil. Mineral resources Act of 2010]

 MANUEL P. QUIBOD
(UCEAC Member)

 The country’s natural resources form a great part of the nation’s wealth. Consequently, all activities which have the propensity to impair the quality of our natural resources should be subjected to scrutiny before being allowed to continue. One of the industries which have a massive societal and environmental impacts is the mining industry. Mining is essentially an extractive industry which results in the depletion of nonrenewable resources.[1]

The Philippines is said to be one of the most mineralized countries in the world. According to the Chamber of Mines of the Philippines (COMP), the Philippines has a potential mining wealth estimated to reach US$840 Billion Dollars or P47 Trillion Pesos. It is 10 times the country’s annual gross domestic product (GDP). The Philippines ranks 3rd in total gold deposits, 4th in copper, 5thin  nickel and 6th in chromite.[2]

Minerals are essential resources that are part of our national patrimony. While necessary for national development and important to the economy, the extraction of mineral resources must be done judiciously because mineral areas are part and parcel of ecosystems that includes forests, watershed, riverine systems, coastal habitats and communities of people—all of which are intrinsically linked with biodiversity, the environment, food security, livelihoods and survival. Specially now in the era of undeniable climate change, it is our responsibility to make sure that minerals governance do not sabotage efforts to mitigate the impact of climate change as well as our capability to move towards low carbon global economy. Since minerals are essentially non-renewable resources, we have an inter-generational responsibility towards its conservation and preservation— mineral extraction should only be done as a last resort out of the utmost necessity and with the least impact on communities and the environment.[3]

The law that currently regulates and governs the mining industry is RA 7942, otherwise known as the Philippine Mining Act of 1995. It was signed into law by President Fidel V. Ramos in March 3, 1995. Under the law, the government has the power to grant three (3) types of mining rights: (1) exploration permit[4], (2) mineral agreements thru (a) mineral production sharing agreement (MPSA), (b) co-production agreement, and (c) joint-venture agreement[5]; and (3) financial or technical assistance agreement (FTAA)[6].

On March 30, 1995, less than a month from the passage of the law, President Ramos entered into an FTAA with Western Mining Corp. Phils. (WMCP), Inc. (a fully foreign-owned corporation) which covered 99,387 hectares of land in Mindanao (covering the areas of Davao del Sur, South Cotabato and North Cotabato in Central Mindanao). In 1997 the constitutionality and validity of the RA 7942, its IRR and the FTAA between the government and WMCP were challenged before the Supreme Court which case became known as “La Bugal-B’laan Tribal Association, et. al   vs. Sec. Victor O. Ramos, et. al.[7]

In January 27, 2004 the Supreme Court declared the Mining Act of 1995 unconstitutional including the FTAAs. On motion for reconsideration filed by the aggrieve parties, including the government, the Supreme Court in December 1, 2004 reversed its decision and upheld the constitutionality of RA 7942[8]. In February 1, 2005, the High Court issued its final ruling upholding its constitutionality[9].

In December 2004 Senator Sergio R. Osmena III filed Senate Bill 295 for the repeal of the Philippine Mining Act of 2005 due to the large scale damage and disaster that mining will inflict[10].

The Catholic Bishops Conference of the Phils. (CBCP) also called for the repeal of the Mining Act of 1995. The said law destroys life. The right to life of people is inseparable from their right to sources of food and livelihood. Allowing the interests of big mining corporations to prevail over people’s right to these sources amounts to violating their right to life. Furthermore, mining threatens people’s health and environmental safety through the wanton dumping of waste and tailings in rivers and seas[11]. The repeal of the law has been also called by other legislators in Congress and by civil society.

What is wrong with mining and with the Mining Act of 1995? From the study made by the LRC-KSK[12], among others, it finds the following,

  1. Mining is a questionable development model. RA 7942 liberalized the mining industry to foreign investments allowing foreign mining players access and control to our mineral areas. But in exchange of the extraction and depletion made, it is problematic to look upon these mining companies as agents of change. Mining companies exist to make profits not to help communities.
  2. Mining imposes many costs. Mining intensively uses land and environmental resources often leading to significant and enduring environmental degradation. Economic benefits are not enough to meet the environmental costs. RA 7942 has no answer to the pollution in the mining industry as well as to serious mining accidents and has not provide solution to the devastating effects of mining  on the health of the environment and communities.
  3. Mining has never shown to drive national economic development. Despite the claim that our country has an estimated P47 Trillion Pesos of mineral wealth, the fiscal incentives regime under RA 7942 is a big lie. In July 2007 then DENR Secretary the late Angelo Reyes in a news report said that “the probability of the government getting an additional and fair share of its minerals from the mining companies is ‘somewhere from zero to nil’. Under the profit based sharing which most mining companies would opt, the additional government share will come if the profitability ratio of net income over gross income is higher than 40%. According to Sec. Reyes, there is no mining company in the history of the industry achieves that 40% income. Under the profit sharing formula the government will receive ‘somewhere from zero to nil’, not even a pittance, ni singkosin wala.[13]

Under Sec. 80 to 82 of RA 7942, the government share in the MPSA shall be the excise tax on mineral products and its share in other mineral agreements shall be negotiated plus the taxes; and for the FTAA, the government share shall consist also of taxes[14]. In other words, the government share will come from taxes.

In December 2010 members of the House of Representatives: Kaka Bag-ao, Walden Bello, Teddy Baguilat, Jr., Rufus Rodriguez, Maximo Rodriguez, Carlos Padilla and Roilo Golez submitted House Bill No. 3763 which has been called the “Minerals Management Bill”. This was brought about by the numerous criticisms on RA 7942 which puts into question the integrity of our natural resources and national patrimony.

HB 3763 or the Minerals Management Bill will replace the present Mining Act of 1995 (RA 7942). The bill seeks for the conservation of our mineral resources, which are non-renewable, intended for the benefit not only of the present generation but also of the future by adopting a sustainable, needs based minerals management geared towards effective utilization of our mineral resources to achieve economic development.

Among others this house bill addresses the following concerns:[15]

-Conservation of our mineral resources. The classification of public lands as mineral reservations shall hereby cease. All such lands shall be closed to mining. The President’s power to declare mineral reservations shall likewise cease. All existing mining permits, licenses and agreements are deemed cancelled. There shall be a moratorium on all mining activities.

Re-mining and recycling of mineral resources shall be prioritized as well as the rehabilitation of the abandoned mines.

Providing maximum areas for mineral agreements that a person can hold shall not exceed 500 hecs. and with a term not beyond 15 years including the period for rehabilitation and remediation of the mining area.

Priority use for water for domestic, municipal and agri purposes. Water used in mining shall be recycled

-For the Benefit of the Filipino People. Mineral resources development, utilization and processing shall be reserved for Filipino citizens and for Filipino corporations.

Access to justice provision on peoples and communities affected by mining

-Minerals Utilization Framework. The MGB is transformed into a scientific research institution under the DOST to conduct and develop research of mineral resources and mining technologies and training of local communities, LGUs and IPs.

-Creation of the MMC The Multi-Sectoral Mineral Council is established to determine allowable area for mining. The Council shall determine whether the land where mineral resources are found shall be opened to mining. The Bill lists the areas which the Council is prohibited to open for mining, i.e. water sheds, climate disaster-prone areas, traditional swidden farms, hunting grounds, and prime agri lands, key biodiversity areas, etc.

-Ownership of IPs. Mineral resources within ancestral domains/lands are collectively property of the IPs/ICCs. No mining shall be conducted unless there is free prior and informed consent (FPIC).

-Establishment of No Go Zones. There will areas closed to mining. Open-pit mining is prohibited. Use of mercury in small scale mining is prohibited. Adoption of precautionary principle, when threats of harm to health or environment arises even not fully scientifically established. Adoption of polluter pays principle. Dumping of waste or tailings is prohibited. Acid mine drainage prohibited.

 

-Equitable Sharing. Aside from fees and taxes, the government shall have at least 10% share from the gross revenues. LGUs shall also have a share from net revenues. IPs/ICCs shall a share of 10% of gross revenues on mineral operations within ancestral domains/lands.

 

Why is this bill important to us especially to the people of Mindanao? A substantial portion of this P47Trillion mineral wealth is found in Mindanao where “80% of the country’s deposits of copper, nickel and gold are found here in Mindanao”[16]. Our “1987 Constitution mandates the State to exploit our mineral resources through direct undertaking, joint venture, or co-production arrangements.  The purpose is to for the State, as owner of the mineral resources, to receive its fair share in the profits from the exploitation of our mineral resources.  Sadly, for the last 20 years the State has not received a single centavo from the profits of mining companies.”[17]

 

Perhaps you would “remember in the 1950s and 1960s seeing almost daily huge trucks filled with logs negotiating the then narrow highways of Davao. People did not mind the indiscriminate logging because our forests then seemed inexhaustible. Our nation’s population at that time was only 20 million. Now we regret bitterly how we squandered our finite forest resources and how indiscriminate logging has destroyed our environment. And with all that logging, did the people of Mindanao receive their fair share in the profits from the exploitation of this precious natural resource?  How much did the State earn from all that logging?  Only a pittance consisting of minimal forest fees and charges.”[18]

 

Thus, this afternoon’s activity is to undertake a discussion of this house bill to help us make a strategic position and draw out possible recommendations on how the bill can best address our peculiar needs in this island of Mindanao. We shall look at the bill whether it is able to address what the Mining Act of 1995 has failed.

Daghang salamat ug Ma-ayong Hapon Kaninyung tanan.

 

See the Consolidated Minerals Resources Bill as of October 2011

 


[1] Explanatory Note from HB 3763-Minerals Management Bill, Hon. K Bag-ao & Hon. W. Bello, Akbayan Partylist

[2] Philippine Mining Wealth Seen at $840B, by Riza T. Olchondra, Phil. Daily Inquirer, Oct. 22, 2011, Business section, p. B2-1.

[3] http:/lrcksk.org/main/campaigns/minerals-management-bill/

[4] Sections 20-25, RA 7942

[5] Sections 26-32, RA 7942

[6] Sections  33-41, RA 7942

[7] La Bugal v. Ramos, G.R. No. 1278821, Jan. 27, 2004, Supreme Court of the Phils.

[8] La Bugal v. Ramos, G. R. No. 1278821, Dec. 1, 2004

[9] La Bugal v. Ramos, G. R. No. 1278821, Feb. 1, 2005

[10] Business World Online, December 30, 2004

[11] CBCP Statement on Mining Issues and Concerns, January 29, 2006

[12] Legal Rights and Natural Resources Center-Kasama sa Kalikasan/ Friends of the Earth – Phils.

[13] Closing the Gaps Between Law and Justice, Justice Antonio T. Carpio, Keynote Speech during the Regional Convention of Mindanao Lawyers-IBP, Nov. 21, 2007.

[14] Sections 81-82, RA 7942

[15] http:/lrcksk.org/main/campaigns/minerals-management-bill/; and

Phil. Mining Act of 1995 vs. Alternative Mining Bill, Dr. Emelina G. Regis, Director, INECAR, Ateneo de Naga University

[16] Mining Mindanao, March 6, 2007, Digging Minds. adzx.wordpress.com

[17] Closing the Gaps Between Law and Justice, Justice Antonio T. Carpio, Keynote Speech during the Regional Convention of Mindanao Lawyers-IBP, Nov. 21, 2007.

[18] Ibid.