MANILA, Philippines (UPDATE) – On the heels of an international mining and environmental conference in Davao, environmentalists noted that the Davao del Sur mining declaration would seek a moratorium on mining operations until steps are taken to tighten conditions in the mining sector.

“The International Mining and Environmental Conference in Davao just ended last night. Basically, it proposed a moratorium on mining until all these conditions are tightened up,” said environmental scientist Dr. Robert Goodland on ANC’s “Dateline Philippines” on Saturday.

Goodland specializes in the impact of extractive industries on the environment, poverty and human rights, particularly in conflict zones.

“Make the Environment Department (DENR) into an environmental enforcement agency and let other departments deal with mining licenses, make everybody respect the laws that exist,” added conservation and development consultant Clive Montgomery Wicks.

Vulnerable to disasters

Given the country’s vulnerability to natural calamity, Goodland and Wicks said the Philippines is no place for large-scale mining. They said there is no such thing as responsible mining in the Philippines, more so amid the high risk of seismic activity.

“Wherever you’ve got steep slopes, high rainfall, risk of cyclones, that is not the place to put mining,” Goodland explained.

“If you add up all the things Dr. Goodland has said, plus seismic activity, then you create a massive dangerous situation,” added Wicks.

They noted that an area’s vulnerability to natural disasters could worsen with the presence of mines.

They cite the case of the Tampakan mine in South Cotabato, considered one of the world’s most dangerous, more so given its proximity to an active volcano.

“The Mount Matutum volcano, a registered active volcano is within 10 kilometers of where they want to put the mine, and you cannot mine within 10 kilometers of an active volcano. It’s ridiculous, irresponsible, and they want to put 2.7 billion tons of toxic rock with high potential for acid drainage, a high acid content on top of the mountain,” said Wicks.

“They’re going to build a hole 800 meters deep in an area where there are dormant volcanoes, faultlines. That’s going to fill up with toxic water, very dangerous. They’re going to build two dams, 2.1 kilometers long, 280 kilometers high. That’s going to have millions of tons of waste and toxic water behind it.”

In its ESIA report on the Tampakan Copper-Gold Mine Project, mining company SMI said: “… the TSF has been given an ‘Extreme’ consequence classification, during operation and closure, due to the high potential for loss of life and high environmental damage if failure occurs.”

“If that breaks… the engineers accepted, it could be dangerous. If you’re going to mine on top of a mountain or a volcano, next to a volcano and you’ve got faultlines running underneath, and given storms like what we’ve just seen (tropical storm Sendong), and you’ve got a 2.1 kilometer dam, which is 280 kilometers high. I asked them: how many people will be killed if your dam collapses and it goes down the river? They told me that’s an unethical question. I still say to SMI-Xstrata: answer the question,” Wicks said.

The dam is set to be built in the water catchment area just above the irrigation dam which provides water for the whole of Coronadal Valley and for the whole of Davao Del Sur, Sultan Kudarat and Saranggani.

Tampakan mine

Wicks and Goodland are both part of the Tampakan Forum, which was set up to deal with the threat of open mining by SMI-Xstrata in Tampakan, South Cotabato.

Goodland and Wicks said large-scale mining, not small-scale operations, are to blame for the environmental destruction.

“Let’s make a distinction between small scale mines which are done usually by the very poor because it’s a very difficult job, very dirty, arduous, they wouldn’t do it without any other alternative, so they do earn a living from that. But on the one hand, it’s not as damaging as these large scale mines like Tampakan.

“The Chamber of Mines of the Philippines always blames these small-scale miners…the small scale miners did not create this disaster, not bring down the mountains, did not destroy the island of Rapu-Rapu. You know you should leave these small islands alone.  You cannot mine them, you’ll ruin them and you’ll ruin your ability to have ecotourism,” Wicks said.

The issue of mining may need revisiting in light of Palawan’s declaration among the 7 New Wonders of Nature.

They noted that the mining debate has also taken added urgency, amid the spate of deaths involving environmental and human rights activists.

Wicks said 11 people working with the groups they work with have been killed in the last four years.

Fr. Fausto Tentorio was killed by a gunman in Mindanao last October 2011.  Wicks said he believed Tentorio was murdered because he protested against the mining activities.

Wicks pointed out that security in mines cannot stand the perennial test of security risks from militant groups. He said the World Bank recommended that no mining be done in conflict zones.

“Not only is this going to destroy the environment, it’s going to create massive poverty… more violence,” Wicks noted.

Mining or agriculture?

Given the clear and present danger mining activities pose to crops and communities, Goodland and Wicks said the Philippines must choose between mining and agriculture.

They co-authored the book “Philippines: Mining or Food”.

Goodland, who is a former senior enviromental adviser to the World Bank Group in Washington DC, added that investments into agriculture, such as aid donations from the World Bank would go to waste, if mining disrupted a farming area’s eco-system.

“There should be a balance between the two, but at the moment we’re nowhere near the balance. The Philippines used to export rice.  A couple of years ago when the price of rice spiked, the Philippines became the biggest importer of rice in the whole world. Now, is that sustainable? No it’s not. Philippine rice farmers are among the best in the whole world. You can either have mining or food.  Which does the Philippines want? Which is more sustainable? 15 years of mining or perpetuity of rice production?”

‘No efficient system’

Wicks admitted that there is no efficient system in approving mining licenses and making sure requirements are met.

“It’s an absolute mess. It’s being done in the DENR but the DENR is also responsible for selling licenses; it is supposed to be protecting the environment,” he said. “Who makes the decision on when you give a mining license? Is it a second-level official of the DENR or the Presidential committee? Aid agencies like the World Band invested a lot of money in irrigation schemes. If miners come in here and mess up this (system), all the money is wasted.”

reposted from: http://www.abs-cbnnews.com

By: Solita Collas-Monsod
Philippine Daily Inquirer

9:35 pm | Friday, October 21st, 2011

“All …minerals … and other natural resources are owned by the State….”  That is part of Section 2, Article XII of the 1987 Constitution, and is a reiteration of the so-called regalian doctrine (“all mineral wealth was the prerogative of the crown or the feudatory lord”) which is reportedly followed by mining countries in the world except the United States.

The Philippines claims to be the fifth most mineralized country in the world, and to hear Gary Teves tell it (quoting DTI/BOI), our reserves of gold, copper, nickel and chromite are second, fourth, fifth and sixth largest in the world, not to mention silver, coal, gypsum, sulfur, clay.

What is the value of these mineral resources?  In 2004, then Neda Director General Romulo Neri cited the amount of P47 trillion to the Supreme Court (as quoted in Justice Antonio Carpio’s dissenting opinion in the La Bugal case, where the high court reversed an earlier decision and upheld the constitutionality of the Philippine Mining Law, RA 7942 and its implementing rules and regulations) as the “potential mining wealth” of the Philippines.

Since the state owns these mineral resources, how much should its share be of the profits (revenues minus costs) from their exploitation?  At least 50 percent, wouldn’t you say? Or 60 percent, if the government goes into some form of joint venture with a foreign corporation. In any case, something that represents a “fair share” of the profits.

Certainly not a zero share. But that is exactly what the government’s share is of the income from the mineral resources it owns. Zilch. Nada. This, Justice Carpio pointed out in his dissenting opinion.

Only consider.  There are some 30 large commercial mining operations in the country today, all apparently operating under so-called Mineral Production Sharing Agreements (MPSAs) entered into with the government.

Section 80 of the Philippine Mining Law, titled “Government Share in Mineral Production Sharing Agreement,” provides the following:  “The total government share in a mineral production sharing agreement shall be the excise tax on mineral products as provided in Republic Act No. 7729, amending Section 151 (a) of the National Internal Revenue Code, as amended.”

And how much is the excise tax on mineral products? Two percent on metallic and non-metallic minerals.

But isn’t 2 percent greater than zero?  Excuse me.  As Carpio explains, “The excise tax is imposed not only on mineral products, but also on alcohol, tobacco and automobiles produced by companies that do not exploit natural resources owned by the State.  The excise tax is not payment for the exploitation of the State’s natural resources, but payment for the “privilege of engaging in business.” Clearly, under Section 80 of RA 7942, the State does not receive as owner of the mineral resources any income from the exploitation of its mineral resources (emphasis his).

Thunders Carpio: “Natural resources are non-renewable and exhaustible assets of the State.  Certainly, no government in its right mind should give away for free its natural resources to private business enterprises, local or foreign, amidst widespread poverty among its people.”  And further on, “Under the 1987 Constitution, the State must receive its fair share as owner of the mineral resources, separate from taxes, fees and duties paid by taxpayers.  The legislature may waive taxes, fees and duties, but it cannot waive the State’s share in mining operations.”(emphasis his)

So how come the majority opinion didn’t see it his way?  A non-lawyer’s (but one who understands English) take:  it looked to me like a weaseling operation—the reason was that the MPSA wasn’t the issue at bar, but rather the FTAA, which is also provided for in RA 7942.

FTAA stands for Financial or Technical Assistance Agreement, where private companies act as contractors of the State (and in the particular case, a foreign private company, although it has since sold 60 percent of its shares to a Filipino company).   Presumably, the difference between the MPSA and the FTAA is that in the latter, it is the State that is directly exploiting the natural resource, but using the contractor and paying it a share of the income from the exploitation of the resource.

Well, does the government get its fair share under the FTAA?  Here is where Carpio goes to town.  He points out that the State doesn’t begin to get its share until after the contractor has fully recovered its pre-op, exploration and development expenditures—for which there is no time limit (!).  And then, the State’s share consists solely of taxes, fees and duties. Zero share of profits again, this time, says Carpio, because the conditions in the implementing rules and regulations (DAO 56-99) are impossible to fulfill (this in the dissenting opinion to the motion for reconsideration on the case).

What conditions?  Well  government will get an additional “share”  (to the taxes, etc), only if the contractor’s net income after tax amounts to more than 40 percent of gross output, for two successive years.  Carpio, using data from the six largest Philippine mining companies, shows that the highest net income after tax/gross output ratio was only 25 percent, with the average ratio being 16 percent over a nine-year period.

Carpio then cites data from the mother company of the FTAA contractor (average ratio of 10 percent), as well as the world’s largest mining companies (largest average ratio was 13 percent).  Clearly the 40-percent “trigger” will never be reached.

So who benefits?  Not the government. While the people are left to deal with a devastated land.