EXTRACTIVE INDUSTRY AND THE

CHURCH IN THE PHILIPPINES

FR. EDWIN A. GARIGUEZ

Executive Secretary, National Secretariat for Social Action –Justice and Peace (NASSA-JP) of the Catholic Bishops’ Conference

of the Philippines (CBCP)

Quantity of Mineral Resources per unit area

3rd in the world for gold

4th in the world for copper

5th in the world for nickel

6th in the world for chromite

REVITALIZING

MINING AS A

GOVERNMENT

POLICY . . .

Promotion of mining

as an engine for

economic growth

and in the alleviation

of poverty in the

countryside!

The Mining Act and Mining Policy FrameworkThe 1995 Mining Act was passed primarily to attract foreign investments while getting around the constitutional provision of Filipino corporate ownership in resource extraction.

The law was passed as a key economic measure of the Ramos administration, a way of saying the Philippines was “open for business” – a policy congruent with the liberalization mantra of the IFIs and IDAs.

Act grants different types of mining rights:

• Exploration permits for corporations and individuals

• Mineral production Sharing Agreements (MPSA)

• Financial Technical Assistance Agreements (FTAA)

The act allows 100% ownership participation in through, FTAAs

Philippine Mining Act is acclaimed as “among the most favourable to be found anywhere”

The PHILIPPINE MINING ACT OF 1995 was crafted to attract

foreign investors. The country’s right to sovereignty is relaxed

in order to provide palatable incentives to transnational

mining investors :

100% foreign ownership of mining projects,

concession area of up to 81,000 hectares on shore and 324,000 hectares off shore,

100% repatriation of profit,

5 years tax holiday later extended to eight, and deferred payment are allowed until all cost are recovered,

enjoyment of easement rights, and other auxiliary rights in mining concession,

mining lease for 25 years, extendable to another 25 years, losses can be carried forward against income tax, among others.

Existing/ Approved

Exploration Permit 64

Mineral Production

Sharing Agreement

313

Financial or Technical

Assistance Agreement

4

Mineral Processing Permit 50

Industrial Sand and Gravel

Permit

213

Mining Lease Contract 77

TOTAL 721

Data as of March 2010

Minute Economic Contributions of Mining to Philippine Economy

Mining gross production value in 2007 was valued at

Php 101.5 billion pesos

Government tax collection (in 2007) was at

Php 10.4 billion pesos

National Gov’t. (Agencies) collected Php 8.35 billion pesos

BIR collected Php 942 million pesos

DENR/MGB collected Php 774 million pesos

LGUs collected Php 357.9 million pesos

Contribution of mining sector to 2007 GDP was merely

1.4% (consistent in 3 decades)

Crunching the Numbers

Claimed investments was only 35%

Job creation was only at 158,000 in 2008

Actual tax collection was only at 11%

Actual Paid-up investments (SEC) was only

at less than 10%!

GDP contribution is only 1%

Agriculture GDP contribution is at 16.5%

With all the hype about mining

serving as an engine of economic

development:

The local mining industry’s contribution to the

Philippine economy since the time the Mining Act

of 1995 was implemented has barely reached 2

percent of gross domestic product (GDP).

In contrast, agriculture, a sector that is often

negatively impacted by mining activities,

contributes a solid 16-17 percent of GDP!

(From study conducted by the University of the Philippines and

Ateneo de Manila)

LRC-KsK, irlg 2005

Philippines is still net importer of metals

US$ 689.4 million worth of iron and steel

US$ 97.74 million worth of copper

US$ 131.26 million worth of other metal

manufactures

(2000 figures)

Why the “resistance”?

The present mining policy does not, however, recognize

the reality that the Philippine archipelago, with small

islands having forests and surrounding marine

ecosystems, are more sensitive to mining impacts.

There are areas where the resulting ecological loss

resulting from mining operations will be too considerable

to be justified by the benefits.

Sustainable development will not be achieved if the

country’s backbone of biodiversity resources is severely

compromised. While the mineral supply may be

considerable, the archipelago as a whole may not be able

to “sustain” its widespread extraction.

(de Alban, et al. 2005)

In July 2006, the Right Honorable Clare Short MP, former UK Minister of International Development, led a Fact Finding Mission on Mining to the Philippines, the report of which, “Mining in the Philippines: Concerns and Conflicts” was published in 2007. This report noted that:

“Mining in the Philippines is being developed at a

speed…scale…and in a manner likely to cause massive

long-term environmental damage and social problems.

Current mining plans will undermine the Government’s

own strategy for sustainable development by destroying

or severely damaging critical eco-systems, including

watersheds, rivers, marine eco-systems and important

agricultural production areas.”

“Mining in the Philippines: Concerns and Conflicts” by Doyle, C., Wicks, C.

and Nally, F. 2007. Society of St. Columban, Solihull, UK: 62 p.

Slide 19

The Tapian Pit, Marcopper mine on Marinduque Island

in the Philippines in 1989

Photograph by Catherine Coumans/MiningWatch Canada

Boac River Disaster of 1996 -

Marinduque

Slide 21

The Mogpog River, Marinduque Island. The red/orange colour

and Oxfam’s scientific studies indicate acid mine drainage

and contamination by heavy metals

Photograph by David Sproule/Oxfam Australia

Slide 22

Illness spans generations: Wilson Manuba and his father

Pedro – both Calancan Bay fishermen are suffering from

severe arsenic poisoning

Photograph by Ingrid Macdonald/Oxfam Australia

Cordillera

Abra River

LAFAYETTE MINING, RAPU-RAPU, ALBAY

THE SHOW CASE OF

“RESPONSIBLE MINING”

IN THE PHILIPPINES

February 2, 2006

November 9, 2005

OCTOBER 2007

POISONED RIVER, SIOCON. 2006

APEX MINE2008

British MP "enormously shocked" by mining operations

in Philippines http://philippinesfactfinding.blogspot.com/

Clare Short said: “I have never seen

anything so systematically destructive

as the mining programme in the

Philippines. The environmental effects

are catastrophic as are the effects on

people’s livelihoods.”

Our experiences of environmental tragedies and

incidents with the mining transnational

corporations belie all assurances of sustainable and

responsible mining that the government is

claiming. Increasing number of mining affected

communities, Christians and non-Christians alike,

are subjected to human rights violations and

economic deprivations. We see no relief in sight.

Catholic Bishops Conference of the Philippines

January 29, 2006

The promised economic benefits of mining by

these transnational corporations are outweighed

by the dislocation of communities especially

among our indigenous brothers and sisters, the

risks to health and livelihood and massive

environ­mental damage.

Mining areas remain among the poorest areas in

the country . . . The cultural fabric of indigenous

peoples is also being destroyed by the entry of

mining corporations.

Catholic Bishops Conference of the Philippines

January 29, 2006

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.

Catholic Bishops Conference of the Philippines

January 29, 2006

Development, when it is pursued primarily for

financial benefits without real consideration to

human and ecosystems well being is a distorted

version of development.

The inherent defect is that development is viewed

as the delivery of the much needed investment

which is often achieved at the expense of social

and ecological factors.

In the context of mining industry, by using this

distorted framework, the local community and

the indigenous peoples are the ones who are most

affected by this lopsided development priority.

Towards a Definition of “Responsible Mining”

The term “sustainable mining” is an oxymoron; by definition minerals (e.g., oil, coal, metals) are not renewable. They can be exhausted at slower rates and can and should be recycled to the fullest extent possible, but this cannot be called sustainable.

“Responsible Mining” avoids the following: (a) Densely populated areas (no forcible displacement of humans); (b) Zones of social conflict; Ancestral domains & Indigenous Peoples. (c) Conservation units & biodiversity areas e.g., National Parks, watersheds, wetlands. (d) High rainfall; typhoon prone belts; cyclone areas; Active seismic faults, tectonic areas, earthquake prone areas; Steep slopes, especially where protective forest has been destroyed, above food- and fish-producing areas; erosion-prone and landslip areas.

The Philippines has rich and diverse natural resources.

However, these resources are being rapidly depleted

due a variety of mutually reinforcing negative factors:

high population pressure with the majority of the poor

deriving their income from natural ecosystems;

advancing industrialization,

conflicts of interest between long term environmental

concerns and short term profit motives in particular

regarding logging and mining . . .

The European Commission, 2005

http://www.delphl.ec.europa.eu/docs/cep%20Philippines.pdf: European

Commission, 2005. Philippines country environmental profile. Makati City,

Delegation of the European Commission to the Philippines. 75 p.

Community State, Banks, and

Mining Companies

Resource for

subsistence

and livelihood

Production for life

Resource for production

and consumption. Driven by

global markets

Production for Commodity

Goodland & Wicks, Philippines: Mining or Food?,

MINING

Mining stands at the centre of the divide

Between the Rich and the Poor.

Fro

m t

he

So

uth

..to

th

e N

ort

hFrom the

North…

To the

South

Glorious promises

Contracts & Agreements

1900

1999

Less than 6% of original forests remains Source: Environmental Science for Social Change, 1999

Philippines

Mining consistency with Development Goals?

• The World Bank highlights that its „successful development will depend very much on improving environmental and social practices which caused substantial problems in the past‟.

• The lack of adherence to international best practices is blatant in the Philippines and appears to be worsening

Mining

Indicator Environment Indicator Poverty Indicator Fishery

Year

Income

from

Mining (in

million)

Forest

Degradation

(in million)

Land

Degradation

(in million)

Palay

Farming

Cost (in

million)

Coconut

Farming

Cost (in

million)

Unemployment

Rate

Magnitude

of Poor

Families

Fishery

Value

1994 2,434.14 46.64 143.67 6.05 2.57 6.8 259,638

1995 2,397.00 43.35 156.97 6.50 2.89 6.9 281,816

1996 2,432.48 100.94 161.98 7.00 2.78 5.75 305,924

1997 2,468.48 88.42 163.86 7.06 3.11 6.1 332,131

1998 2,505.01 115.39 182.64 7.52 3.10 7.9 360,623 1,267.52

1999 2,542.08 133.59 177.63 7.98 3.08 7.85 391,605 1,507.18

2000 2,588.76 151.79 163.86 8.10 3.12 7.9 411,963 1,746.83

2001 2,900.37 169.99 182.64 8.29 3.10 8.25 443,613 1,950.11

2002 3,667.41 188.19 177.31 9.14 4.77 7.75 477,778 2,255.24

2003 4,290.63 206.39 181.54 9.70 5.23 7.25 537,035 2,483.98

2004 4,386.51 224.59 192.47 10.06 6.98 7.3 581,871 2,712.72

2005 4,794.00 242.79 196.93 9.89 7.05 4.5 626,707 2,941.46

2006 4,506.36 260.99 201.40 9.52 6.20 4.6 671,543 3,170.20

Consolidated Table on Cost Externalization in Philippine Mining

(Gonzales, 2008, “Econometric Treatment of Cost Externalization in Philippine Mining”)

In a study entitled ”Philippine Asset

Reform Report Card”, results show that :

Extractive activities are present in more than one-third (39.8%) of the 1.85 million hectares ancestral domains covered by the study, with logging and mining as the most prevalent extractive industries.

It also revealed that a majority (72.1%) of the extractive activities are in operation without the consent of the tribes (i.e. without securing FPICs).

The aggressive pursuit of mining investments has also spawned

numerous human rights abuses, especially against individuals

and communities opposed to mining. The abuse has included,

both physical and psychological harassment.

A number of anti-mining advocates have also been killed. The

purpose of this is clear, to cultivate a climate of fear and stifle

opposition.

Human Rights Context

Civil & Political Rights & Extra Judicial Killings

“[Killings] eliminated civil society leaders, including human rights defenders… &…narrowed the country’s political discourse”

E x tra J u d ic a l K illin g s a n d E n fo rc e d D is a p p e a ra n c e s

0

2 0 0

4 0 0

6 0 0

8 0 0

1 0 0 0

1 2 0 0

2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

K illin g s a n d D is a p p e a re n c e s

E xtra Ju d ic ia l K illin g s

E n fo rc e d D is a p p e a re n c e s

• Estimates of

over 900 Extra-

Judicial killings

& 185 Enforced

Disappearances

since 2001

• James Balao

Sept 08

• 2007 Visit of UN

Special

Rapporteur on

Extra-Judicial

Killings:

Mining as currently practiced in the Philippines

poses extremely high social, environmental and

financial risks.

It is therefore essential that rigorous due

diligence regarding potential human rights and

environmental impact of projects is conducted.

Some Relevant Quotes from

Catholic Social Teachings

vis-à-vis

Problems in Extractive Industry

If the environmental crises facing the world today were

simply a matter of information, knowledge, and skills,

then we would be heading out of these dangers.

For more than 30 years the world’s major institutions,

scientists, and governments, and some of the largest

nongovernmental organizations (NGOs), have compiled

and analyzed details of how we are abusing the planet . . .

Yet the crises are still with us. The simple fact is that

knowledge on its own is not enough . . .

Ultimately, the environmental crisis is a crisis of the mind

. . . We see, do, and are what we think, and what we think

is shaped by our cultures, faiths, and beliefs . . .

- World Bank Study (Palmer and Finlay 2003)

“The more deeply I search for the roots of the global environmental crisis, the more I am convinced that it is an outer manifestation of an inner crisis that is, for lack of better word,

spiritual.As a politician, I know full well the special hazards of using “spiritual” to describe a problem like this one . . . But what other word describes the collection of values and assumptions that determine our basic understanding of how we fit into the universe? “

Al Gore, Former US Vice President

As Christians committed to our vision to promote life, justice and equity in an ecologically sustainable and people-oriented communities, we believe that environment should never be sacrificed - that

“an economy respectful of the environment will not have the maximization of profit as its only objective, because environmental protection cannot be assured solely on the basis of financial calculations of cost and benefits. The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces.”

John Paul II, Encyclical Letter Centesimus Annus, 40

“It is the task of the State to provide for the defense and preservation of the common goods such as the natural and human environments, which cannot be safeguarded simply by market forces” (CA 40).

Humanity today must move toward a lifestyle that the limits of Creation can sustain and “must be conscious of its duties and obligations toward future generations” (CA 37).

1. A COMMON HERITAGE IS A

COMMON TASK

2. RESPECT FOR THE INTEGRITY OF

CREATION IS A RELIGIOUS DUTY

“At the root of the senseless destruction

of the natural environment lies an

anthropological error…Man thinks that

he can make arbitrary use of the earth,

subjecting it without restraint of his will,

as though it did not have its own

requisites and a prior God-given purpose,

which man indeed develop but must not

betray” (CA 37).

Peace with God the Creator, Peace with all Creation1 January 1990

(first papal document devoted

exclusively to environment and

development issues)

“Christians in particular

realise that their duty

towards nature and

Creator are an essential

part of their faith.”

The problem we have is admittedly, not that there are

not enough resources, but that unjust social inequity

restricts the enjoyment of goods to a privileged few

who squanders the limited resources, while masses of

people are living in conditions of misery, de­prived of

the fruit of the earth.

This situation is condemnable because “God intended

the earth with everything contained in it for the use

of all human beings and peoples . . . the right of

hav­ing a share of earthly goods sufficient for oneself

and one's family belongs to everyone.”

(Gaudium et Spes, No. 69; see also, THE ECOLOGICAL CRISIS,

No. 8, Message of His Holiness Pope John Paul II for the celebration

of the WORLD DAY OF PEACE, January 1, 1990)

2. JUSTICE & UNIVERSAL

DESTINATION OF GOODS

Serious ecological problems demand

that planning for development must

take into account “the limits of

available resources and of the need to

respect the integrity and cycles of

nature” instead of “sacrificing them to

certain demagogic ideas” about the

economy (SRS 26).

3. REFORM OF THE ECONOMIC

SYSTEM IS OF MORAL URGENCY

The Catholic Bishops”

Conference of the Philippines

(CBCP)

and its Agenda for Extractive

Industry Reform

We question the neo-liberal pitch that there is no other

path to development except through further economic

liberalization, especially in the mining industry.

The CBCP calls for changing the way we manage and

develop our natural resources . . . We are calling for the

abrogation of the Mining Act of 1995 that do not

adequately protect the interest of our people and the

country’s natural resources.

Catholic Bishops Conference of the Philippines, Letter to

President Benigno Aquino III, 12 July 2010

The people and NGOs are not able to scrutinize the

applications and contracts because these are kept from

the public.

We are expecting this new government to turn away from

the policy of secrecy that characterized the previous

administration. The best instruments we could use in

safeguarding the interests of our nation are transparency

and sincerity . . . The promotion of participatory

governance guarantees check and balance on

government decisions and policies.

Catholic Bishops Conference of the Philippines, Letter to President

Benigno Aquino III, 12 July 2010

Thank you!

At the root of the senseless destruction of

our environment is the anthropological

distortion which claims that human beings

are the absolute masters of the earth.

This justifies the reckless exploitation of resources in

the name of progress and development. Thus,

“instead of carrying out his role as a cooperator with

God in the work of creation, man sets himself up in

place of God and thus ends up provoking a rebellion

on the part of nature, which is more tyrannized than

governed by him.”

(CENTESIMUS ANNUS, No. 37, Encyclical Letter of Pope John Paul II; see

also, EVANGELIUM VITAE, No. 42, Encyclical Letter of Pope John Paul II,

March 25, 1995)

World Bank should fully implement its

guidelines and safeguard procedures which, if

applied, would under current conditions

preclude investment in most, if not all,

Philippine mining projects.

This would include the proposed IFC equity

investment of up to Can$5 million project in a

Canadian Mining Junior, Mindoro Resources

Ltd. (MRL), which is planning operations

throughout the Philippines.

The Philippines is not currently a location for safe or

responsible mining investment. The social, climatic,

geographical and geological conditions in the country

provide for challenging conditions to mine, to say the

least.

Frequent and repeated tailings dam collapses and breaches,

which have adversely affected the health and livelihoods of

many people.

Opposition and resistance to mining are therefore

increasing, resulting in some projects being stopped and

companies bankrupted.

Most mining companies that seek to operate in the

Philippines find themselves embroiled in or accused of

responsibility for human rights abuses.

All companies face environmental protection tests that, to

date, most companies have failed.

"It is unacceptable that citizens with abundant

incomes and resources should transfer a considerable

part of this income abroad purely for their advantage, without care for the manifest wrong that they inflict on their country by doing so."

(Populorum Progressio)

The reasons given for IFC’s new interest in

mining are startling. IFC is reported as

claiming that mining opens opportunities

for the poor to improve their economic

status, a statement that contradicts

practically all recent experiences of mining

worldwide.

Aspirations of poverty reduction from

mining are also contrary to the findings of

the IFC itself (Weber-Fahr 2002) and the

2004 World Bank Group’s Extractives

Industry Review (EIR 2004).

The command to "fill and conquer" the earth,

however is not a license to exploit the natural

world according to human whim or fancy. It is the

late Pope John Paul II himself who provides a

precise interpretation for the text:

" . . The dominion granted to man by the Creator is not an absolute power, nor can one speak of a freedom to 'use and abuse; or to dispose of things as one pleases. . . when it comes to the natural world, we are subject not only to biological laws, but also to moral ones, which cannot be violated with impunity"

(Sollicitudo Rei Socialis No. 34).