Refocus mining industry to domestic priorities

AT GROUND LEVEL By Satur C. Ocampo

Controversy has greeted Department of Environment and Natural Resources Secretary Gina Lopez’s successive orders – cancelling the contracts/permits of 23 mining firms in operation (out of 41), suspending five others for six months, and cancelling the contracts on 75 projects that have not yet begun. She issued the orders after a month-long audit of the mining firms’ operations by technical experts of the DENR, other related government agencies, and environmental organizations.

The mining firms’ organization has quickly protested (and manifested its opposition to Lopez’s confirmation as DENR secretary by the Commission on Appointments).  Appeals to President Duterte to reverse the orders are anticipated and legal challenges are expected to be filed in court, invoking alleged violations of due process and the “sanctity of contracts.”

Secretary Lopez’s singular and uncompromising position is that the mining operations have violated environmental laws, which her office is mandated to enforce. Similarly, she avers that the 75 cancelled operations are all located in watersheds, thus threatening further widespread environmental despoliation. Backing her stand are not only the ocular findings of the mining audit but the long record of environmental degradation: Over the decades, mining operations have caused the denudation of mountains, and the pollution and siltation of rivers, streams, shorelines, and agricultural lands in Luzon, Visayas, and Mindanao.

In brief, Lopez told the mining firms: “You will kill watersheds, you will kill life.” She pointed out that all open-pit mining operations (scraping off, digging out mountain tops to extract metallic minerals) are being carried out in watersheds. “That should never be allowed,” she emphasized.

It’s a good thing that the issue of defining the policy priority is now being posed for resolution. Is it the government’s intent to protect the environment in the immediate and long-term perspective, or to foster the industry-claimed economic benefits of large-scale mining operations (by both Filipino and foreign-owned corporations under the Mining Act of 1995)? 

But this is not a zero-sum proposition. It doesn’t have to be reduced to either killing the environment or killing the mining industry.

This issue will test President Duterte’s political will to stand for, as he has often made clear, the interest and welfare of the Filipino people as the defining goal of his government. He has declared his firm support for Lopez’ bold initiatives. But he has also given assurance to the affected mining firms that they will be afforded due process: the opportunity to scrutinize the audit findings and to dispute or oppose, and seek legal remedies if they can identify findings that lack factual or legal basis.

Beyond resolving that issue, we need to thoroughly review the status and direction of the mining industry, which is currently geared towards exploiting our rich mineral resources to supply the demands for raw materials of foreign markets. Such a review must focus on strictly regulating the industry, guaranteeing environmental protection, acquiring the consent of and justly compensating the people in adversely affected communities, and ensuring the domestic processing of our mineral resources towards helping build the elements of an industrialized national economy.

Let’s first take a look at the current situation, based on published data.

  • Our mineral deposits are roughly estimated at US$840 billion (P41.9 trillion). In the world, our country is ranked third highest in deposits of  gold, fourth in copper, fifth in nickel, and sixth in chromite. Of the 30-million-hectare total land area, about 9 million hectares have high mineral potentials. Per the Chamber of Mines of the Philippines (COMP), only 180,000 hectares (two percent) have been covered by mining contracts/permits. (Take note: over the decades, large-scale, long-running environmental devastations have already occurred in parts of those 180,000 hectares.)
  • Mining input to GDP (gross domestic product): Government statistics as of December 15, 2016 show that mining operations’ gross value added to the GDP between 2012 and 2016 was not even one percent (only 0.65 percent). In exports, mining (both metallic and non-metallic) accounted for just five percent.
  • On employment, the mining industry had 216,000 workers as of September 30, 2015, or only 0.6 percent of total employment.  The COMP, however, claims that the industry affects the lives of 1.2 million people, including those families engaged in economic activities relying on mining operations.

Not much to crow about, as economist Solita Collas-Monsod wryly wrote recently.

Weighing in on the issue, former president of the Senate and the University of the Philippines Edgardo Angara wrote in a commentary that “properly harnessed, developed and processed” even just a fraction of our mineral deposits could “spur immense countryside growth not just in mining, but in ancilliary industries as well.” But, he warned, “leaving the industry unregulated and its fiscal regime grossly lopsided mining could just end up becoming a bane, rather than a boon, for the country.” He was referring to the huge profits raked in by mining firms, with a pittance going to the government and the affected communities who get one percent of gross sales in royalty payments.

In 2012, Angara headed a Congressional Commission on Science & Technology and Engineering that pushed for the creation of tripartite partnerships among mining firms, universities, and government agencies in research and development and technology transfer, or “innovation clusters for responsible mining.” Implementing the plan, he explained, could have helped create a deep talent pool of high-value jobs in science and technology for mining “while ensuring that the industry is not only environmentally sustainable but socially acceptable as well.”  Alas, he lamented, that hasn’t happened.

Closely related proposals on how to develop and utilize regulated mining in support of national industrialization in tandem with agrarian reform and rural development were put on the table last month in the GRP-NDF peace negotiations, abruptly cancelled by President Duterte. The proposals include a ban on mining in “environmentally critical areas” besides watersheds, such as prime agricultural lands and areas designated for food production; as well as the provision of technical support to small-scale miners towards integrating them in a nationalized mining industry.

Once the peace talks resume – more likely than not they will – there should be interesting discussions on these and other issues related to social and economic reforms.

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Email: satur.ocampo@gmail.com

 

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