“Let’s not kill mining. Instead, we should rationalize it.”

ON PHILIPPINE MINING

BY JESUS DUREZA

The mining industry today is at a crossroad. Both for small scale and large scale mining. Anytime this month, President Aquino will announce his administration’s “new” mining policies. My sources told me the office of Executive Secretary Jojo Ochoa will put on the presidential desk soon for the President’s signature the executive order. A task force commissioned to study mining has sent in its recommendations.

There are “leaks” going the rounds of what those papers contain. Some are accurate, others are mere speculations. Some mining industry players fear that a radical shift in the government’s mining policy will not only drive away foreign investments but will kill existing projects already on stream. When this happens, the whole economy inevitably, together with the people, will get the ultimate backlash. The Chamber of Mines of the Philippines, headed by Phillip Romualdez has a policy paper for consideration on behalf of the mining industry. Not to be outdone, anti-mining advocates, notably Ms. Gina Lopez of ABS CBN Foundation, including the Catholic church, intensify their pressure tactics, to somehow sway official decisions. It’s fair game for all.

(Lawyer Jesus G. Dureza was government peace panel chair in the negotiations with the MILF under the Arroyo administration from 2001 to 2003 and was later named Presidential Adviser on the Peace Process (2005 to 2008). He heads Advocacy MindaNOW Foundation, Inc. and is now publisher of the Davao City-based Mindanao Times. This piece is from his syndicated column, Advocacy MindaNOW).

What President Aquino will announce soon will definitely have strategic implications on a long term. It will have far reaching effects – positively or negatively, depending on what will come out and which side of the fence you are in.

NO TO “STOP MINING” – In my case, I am for sustainable and responsible mining. I do not agree with the “stop mining” or “no to mining” campaign of anti-mining advocates, although I respect their views. I am for the rationalization of the mining industry to make it a potent driver of the economy; to improve the lives of those in remote and far flung areas, mostly our indigenous peoples or lumads. They never had this opportunity ever.

To me, stopping mining is nothing but a sure-fire formula of depriving the poor and the forgotten , an opportunity to make a breakthrough from poverty. I refuse to accept the proposition that we leave alone the rich minerals lying there beneath their feet “for the future generation.” By golly, why worry more about the future when we cannot even take care yet of the present.

The anti-mining campaigners can easily whip up emotions. To agitate support, they present doomsday scenarios. Appearing to be taking the high moral ground, they ride on tragedies, like floods and calamities, as their convenient propaganda vehicles. They resort to scare tactics. And they squeeze dry those incidents “to the max.” Well and good. Their campaigns should pressure the mining industry, government and all players to do better. But to kill the industry is something else. Because they also kill the dreams of the poor.

Yes, indeed, there are culprits and bad guys in the mining industry who deserve the bashing. But there are guys too who do good . For example, we should not lump up the sins of the small scale miners with those of large-scale corporate miners who have been doing a good job. The latter have the ways and means of addressing the dangers anti-mining sectors predict may happen. Big, developed countries like the US, Canada, Australia built their economies starting with mining. Their mining footprints did not devastate these countries. Look at where they are today. Many of these reputed mining companies come from these capitals and have imbibed the best practices of the industry where they come from.

WHERE IS NATIONAL GOVT? – We have enough good laws to address many of these valid concerns. The implementation however falls short. Our own national government must take the lead to promote mining but at the same time seeing to it that the industry does good than harm Unfortunately, this is not so today. Government, when the crunch comes, even abdicates its own authority.

A case in point. It showed reluctance in exercising its authority to crack the whip on local government units exceeding their authorities. It did not decisively act to help the multi-billion dollar SMI Tampakan project, a project the government says it is supporting, when the South Cotabato province passed an ordinance disallowing it. While DENR Secretary Ramon Paje repeatedly announced support for the SMI’s plans to operate an open pit mine, he denied SMI’s ECC (Environment Compliance Certificate) because it is into open pit mining. What contradiction! In Zamboanga del Norte province, TVIRD, a mining firm affiliated with a Canadian mother company which has been responsibly operating for about 9 years and well accepted by its host communities but still with a few years of remaining mine life had to go to court alone to battle a similar ordinance. It has surfaced lately in the court hearings that the province is exploiting environment issues when its real motive is to shakedown TVIRD into giving more to the province. Up to now, the national government, supposedly the owner of the minerals and the entity that contracted the mining company to extract minerals, is just sitting helplessly by the wayside. No wonder many investors, mostly foreign, are now starting to look somewhere else to go. Pity because we are now hoarse in crying for foreign investments to come. In this case, we foolishly squander it by driving them away.

WHERE’S MINING INDUSTRY? Tragically, the sector directly affected, the mining industry itself, has been nonchalant about dealing with anti-mining issues and propaganda. It merrily goes about its profitable business with not much regard to winning the hearts and minds not only of its stakeholders but the bigger audience as well. In the face of a growing anti-mining sentiment, the industry allows this avalanche of disinformation to sway public sentiments without helping much to clarify and explain. Their reactions, if not too late, are laid back. They are not rising up to the occasion. I begin to suspect that perhaps some of those in the mining industry, especially the foreigners, get cold feet because they just prefer to lie low and avoid being “political”. They may lose by default!

Here is another irony. On the ground, while some mining companies enjoy the support and goodwill of the host communities, people who are not the locals are the loudest in raising their hackles against these operations. How sad because the “outsiders” are the more noisy and the more vociferous ones. And the public wrongly thinks they espouse the preponderant view. Some politicians do not know any better. They jump into the bandwagon to appear publicly as environmentalists, or conservationists without much of serious study. It’s the easiest way out. (But having been a politician myself before , “that is par for the course” , to use an old cliché.)

INITIAL FEEDBACKS – I am saddened to know that unlike in the past, mining today appears to be no longer considered one of the principal drivers of the economy. Some members of the Aquino cabinet were even reported as scoffing at the low contribution of mining to the national economy. They profess ignorance of the big positive impact a mining company brings to a remote host municipality and its environs. If they look only at the amount of excise tax being paid, (2%) then they can say it’s pitifully low, that even if they close down mining in the country, it will not matter much because it is an insignificant factor in the economic profile. Sorry, but those facts do not give a complete picture. They fail to reckon the totality of mining’s contribution. It’s not only taxes. We must factor in the government’s share as agreed in the Mineral Production Sharing Agreement (MPSA), the salaries and wages paid to the thousands employed, the income taxes paid, the roads and infrastructure built and maintained for the host communities, the required social and development projects (schools, scholarships, livelihood programs, etc); the royalty funds turned over to the host indigenous peoples (lumads); the security-related expenses,(which mining companies have to bear by necessity, given that government cannot physically protect everyone), the extent of business and economic activities it generates specially in the locality, the required rehabilitation fund and the volume of money infused into the local economy on the various operational activities. And so on and so forth.

I’m sure I missed some points but the mining industry must put these numbers together accurately and clearly. And fast! If you total it, it’s definitely not peanuts to scoff at. The industry should have done this arithmetic a long time ago. I am surprised. Even the business sector is tentative in what action to take when the whole business community, not only the mining industry is at a crossroad. Wake up boys and girls!

WINDFALL –If the government makes the right moves, the reported measly contribution so far of the mining industry to the Gross Domestic Product (GDP) can rise dramatically and perk up the economy. It can serve as a windfall – the button just waiting to be pushed. For instance, the US$5.9 billion direct investment of Saguittarius Mining Inc. in its proposed Tampakan project can perk up Mindanao’s GDP several notches higher. Instead of government making light of mining’s impact, it should instead view it as an opportunity and a readily available tool, just waiting to be tapped, to spurt the regional and national economy . It’s badly needed, especially nowadays, when the economic trend is on a downward trajectory.

PROPOSALS –There are proposals for a review of the tax holidays to mining. Or an increase of the 2% excise tax to 5%. There’s this proposal that will factor in the so-called total economic value formula, whatever that means. Then there’s the complaint of local government units about the low and slow flow of benefits from mining companies that they host. Well and good. Whatever they are, it’s always desirable for government and the people to have a bigger piece of the action. But the bottom line is to retain investors’ interest and not drive them away.

SMALL SCALE –Rationalizing the small scale mining industry is also a must. Small scale mining should not (and CANNOT) be totally stopped but must be brought within the ambit of law and regulations. As we have seen, mostly, they are the harbingers of many problems, environmental or otherwise. (I cannot understand why anti-mining voices are focused at big scale mining and not at the real culprits.) Despite past efforts, government failed to follow through on this. The whip must be cracked to totally stop the environmental harm and damage. So sorry to say: during our time, efforts were exerted but did not fully succeed.

WAY FORWARD –My unsolicited advice is for the national government, as owners of all minerals to consolidate control over these resources, rationalize the system so that government, the communities and all stakeholders get their due and equitable share, punish and weed out the bad guys and allow to operate only responsible and compliant mining companies which have good track records and capable of using world-class best practices and technology in the business. And use mining as one of the principal drivers of improving – not destroying or harming— the well being of our people. Killing the industry is not the answer, folks! It’s like killing the hen that lays the golden egg just because it shits everywhere when all you have to do is clean it up!

In the midst of these uncertainties, only President Aquino can finally put clarity to all these with the awaited policies to be announced soon. Also, he must put to rest the “floating” status of DENR Secretary Ramon Paje. Competent and well meaning, he is neither here nor there because his non-confirmation in the Commission on Appointments is still a “sword of Damocles” hanging over his head. The President must also put to rest the growing, but perhaps speculative, fears of alleged policy-capture by some “anti-mining” elements who now walk the corridors of power. The mining industry is so vital that we cannot just relegate it to the dustbin. Or leave its fate in the hands of those who want to kill it.

Will President Aquino do the right thing? Let’s watch and see.

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