International financing and development aid institutions have been instrumental not only in providing outside financing for mining projects but also in steering Philippine national policies towards mining. Institutions such as the World Bank have figured prominently in promoting mining liberalization as a national policy and lobbying for the enactment of the current Mining Law. This liberalization is part of the structural adjustment programs began by the World Bank and the International Monetary Fund (IMF) in 1980.

International financing and development aid institutions have been instrumental not only in providing outside financing for mining projects but also in steering Philippine national policies towards mining. Institutions such as the World Bank have figured prominently in promoting mining liberalization as a national policy and lobbying for the enactment of the current Mining Law. This liberalization is part of the structural adjustment programs began by the World Bank and the International Monetary Fund (IMF) in 1980.
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Aid institutions provided funding for mineral resource investigations that would later on be cited as a basis for revitalizing the mining industry. During the lull in mining activities in the early 1980s, the Philippine government conducted mineral potential studies in the country with help from the United Nations Development Program (UNDP), the Asian Development Bank (ADB) as well as US, British, German and Japanese governmental aid.

Dealing with the Aquino and Ramos administrations, development aid institutions explicitly moved for the liberalization of existing country controls in the mining industry as well as other economic sectors, such as the oil industry. In the Economic Integration program in 1992 of the World Bank was a loan tied to a recommendation for the Philippine government to attract more foreign investors and to expand the coverage of foreign participation in various industries,including mining.

The ADB directly influenced the liberalization of the mining sector and in a 1993/94 study put forward an explicit recommendation for immediate action to enact a new mining code with far more open and generous terms for investors than the past mining laws.

These studies and recommen-dations eventually shaped the government’s thrust on liberalizing and restructuring the mining industry which culminated on March 6, 1995, when former President Fidel V. Ramos signed the Mining Act of 1995 (Republic Act 7942) into law following instruction and support from the World Bank, UNDP, and Asian Development Bank.

RA 7942 was passed in tandem with other laws aiming to effect the policies of liberalization, deregulation, and privatization, including RA 8179 (Amendment to the 1991 Foreign Investment Act) and RA 8180 (Downstream Oil Deregulation Act), as well as accession to the General Agreement on Tariffs and Trades-World Trade Organization (GATT-WTO).

Eventually, development support to the Philippines extended beyond the forging of Mining Act of 1995 to promotion of mining investments, increased security aid to areas of mining projects as well as technical support to the Philippine government’s capacity to facilitate and monitor mining operations.

Speaking at a National Mining Conference in December 2003, then World Bank Country Director Robert Van Pulley exhorted Philippine government officials, mining industry members, and civil society groups to pursue mining as a means to “increase economic growth and expand the public revenue base needed to achieve sustainable development and to reduce poverty”.

Van Pulley also disclosed that the World Bank, along with funding support from the Australian, Canadian, Japanese and U.S. governments, has assisted in the promotion of mining in the Philippines by facilitating resource speakers, conferences, and mine study tours.

President Arroyo quickly responded to this call by the World Bank barely a month later by enacting supplementary policies to RA 7942, such as Executive Order 270 (National Policy Agenda on Revitalizing Mining in the Philippines) on 14 January 2004, which categorically declared “mineral development” as one of the Arroyo administration’s main economic programs, and directed the Environment Department to craft a National Mineral Action Plan (NMAP). These pro-mining liberalization measures reached a climax in December 2004 when the Supreme Court reversed its earlier decision that stated that certain provisions of RA 7942 were unconstitutional.

More foreign mining firms have grabbed the opportunity to enter the Philippines since then. As of October 2006, the Philippine government has approved a variety of mining permits covering 514,948.76, or more than half a million hectares of Philippine lands nationwide under RA 7942.

The DENR approved 28 exploration permits (EPs) covering a total of 89,828.76 hectares, 229 Mineral Production Sharing Agreements (MPSAs) covering a total of 373,201 hectares and 2 Financial and Technical Assistance Agreements (FTAAs) covering 51,919 hectares of land nationwide.

An additional 2,000 applications for mining permits remain pending for approval to date, including 43 FTAA applications covering around 2.16 million hectares or some 8% of Philippine territorial land.

The Arroyo administration has also openly declared support for 24 Priority Mining Projects encompassing a total of 176,000 hectares, mostly in the Cordillera Region, Southern Mindanao Region and Caraga Region. Largest among these are the Tampakan Copper Project (31,600 has.) in South Cotabato, Amacan Copper Project (27,058 has) in Compostela Valley, Nonoc Nickel Project (25,000 has) in Surigao del Norte, Didipio Copper Project (21,465 has.) in Nueva Vizcaya, and Pujada Nickel Project (11,799 has) in Davao Oriental.

• The ADB’s invisible hand stretches until the present. Their recommendation in a 1993/94 study includes Intermediate Term Recommendations which lists the following for consideration of the government to enable it to revive the Philippine mineral industry:
• government’s limited role and policy formulation on the mineral sector;
• negotiations of the MPSAs and FTAAs;
• environmental concerns;
• the decentralization of national government functions vis-à-vis that of the local government;
• the promotion of the mineral sector;
• changes in the fiscal regime; and,
• the strengthening of the Mines and Geosciences Bureau.

Official Development Aid and Mining Investments: The case of Australia

Direct official development aid by Australia can be correlated to the influx of Australian mining investors in the Philippines. This fact was not lost to the National Economic and Development Agency team who visited Canberra in 2005 to discuss Australian ODA who said that “the constitutionality of the Philippine Mining Act will surely have a positive effect on the bilateral trade relations between the Philippines and Australia.”

AusAID previously funded  feasibility studies related to aeromagnetic surveys of the Philippines to identify potential mineral deposits as well as programs in reduction in red-tape in land administration. Presently, it is funneling aid to security programs and peace-building efforts in Mindanao where four of the largest mining projects are located.

Australian-Philippines war games are also being held under the guise of an RP-Australia defense pact, which includes military support.  The deployment of Australian troops will be concentrated in the southern Philippines region where mining investments especially from Australian firms are on the rise. This includes BHP Billiton - the world’s largest mining firm - in Pujada Peninsula in Davao Oriental and Claver in Surigao del Norte, Medusa Mining in Eastern Mindanao, Red 5 in Siana in Surigao del Norte, Indophil in South Cotabato, Climax-Arimco in Surigao del Norte.

More and more Philippine “priority” mining projects owned by Australian mining firms are getting into trouble for causing environmental damage, human rights violations and community unrest for the past few years, yet the Arroyo administration’s silence seems to have been bought by Australian aid and investments.

The following Australian firms have figured in recent mining related disasters and rights violations:

Lafayette Mining Limited- which owns 74% of the Rapu-Rapu Polymetallic Project in Albay that began operations in April 2005. Six months later, on October 11 and 31 2005, two mine tailings spills occurred that resulted in fish kills. Despite this, Lafayette was allowed by the DENR to continue full commercial operations. Community residents in Albay continue to oppose the project.

BHP Billiton - the world’s largest mining firm is developing four nickel exploration sites in the Philippines, including a potential $1.8 billion project in the mineral-rich southern island of Mindanao. BHP Billiton recently entered into an agreement with the Sibuyan Nickel Property Development Corp. (SNPDC) in Romblon, which has yet to clear its acocuntability in the fatal shooting of anti-mining advocate Arman Marin last October 3.

Royalco Resources Ltd. - the foreign partner of Oxiana Philippines in its mining project in Kasibu, Nueva Vizcaya. Last July, seven indigenous people’s tribes in Kasibu have banded together in a barricade to block the entry of Oxiana’s exploration equipment into their communities.

Australian and New Zealand firms are estimated to account for an estimated one-fourth of the investments in the Philippine mining sector

Lessons from mining liberalization: Marinduque

The liberalization of the mining industry since the Mining Act of 1995 has brought little improvement to the lives of the Filipino people, and death, destruction and displacement to communities affected by the increased mining operations.

The country’s record of mining accidents is evidence of this. Most infamous is the Marcopper disaster of 1996, on Marinduque Island, when a mine tailings spill of more than four million metric tons of waste caused widespread flooding and damage to farm lands and property. Villages were evacuated and an estimated 20,000 people along the Boac River were affected. The river was subsequently declared biologically dead.

The Marinduque Mining Project, managed and controlled by Placer Dome (then Placer Development Limited), was given a USD 40 million loan from the ADB in 1992 promising daily 30,000 tons of output from the mine. The spill contaminated the Boac, Mogpog and Makulapnit river systems with an estimated over 3 million cubic meters of tailings that drained into the Calancan Bay bringing with it high levels of heavy metals that are environmentally toxic to fish stocks and marine flora.

What can be done?

The Filipino people believe that mining has a fundamental role in national industrialization and that it can be responsibly utilized for the people’s welfare: to meet the needs of hospitals and schools, homes and industries. Mining has its rightful place in a society where governance and science and technology is for the people, and not for corporate interests. Mining can be made sustainable if pursued at a much balanced scale in contrast to the present practices of all-out mineral extraction for export, unchecked waste generation, and plunder.

However, the current policies and programs brought about by mining liberalization, pushed and strengthened by international financing institutions and official development aid, practically sell the country’s remaining mineral reserves, lands and waterways to foreigners. These are pursued at the expense of grave ecological destruction, threats to the people’s health and livelihood, and dubious economic gains. When local communities oppose these foreign mining projects, the state uses its own military forces— whose firearms and training are “enhanced” by foreign aid—to intimidate, threaten, or even kill.

Furthermore, many of these mining giants that are now encouraged by the government to invest in the Philippines-such as BHP Billiton and Anglo-American-are notorious in other countries for their role in grave environmental disasters, spotty human rights records, and anti-labor histories.

BHP Billiton, the world’s largest mining company which is eyeing a multi-million dollar nickel project in Pujada, Davao Oriental, faces a $4 billion class suit by the people of Papua New Guinea. For two decades, it dumped 80,000 tons of mine tailings filled with toxic heavy metals such as lead directly into the Fly and Ok Tedi rivers, ruining the livelihoods of the people, poisoning forests, and contaminating river systems. Anglo-American, the fourth largest mining company in the world, paid its South African laborers the world’s lowest wages and was named as one of the main toxic lead polluters in North America. Now, it has numerous mining operations in the Cordillera and Mindanao, some of which have been even classified by the government as “priority projects”.

This should not and must not  happen in the Philippines. Development agenda and programs should truly mirror the people’s basic aspirations and address their real needs and problems and the communities around Rapu-Rapu, Kasibu and Sibuyan has shown that concerted action will be their answer against development aggression that ruin the environment, physically and economically displace people and communities, harm and kill people.

Lisa Ito  is connected with Kalikasan (People’s Network for the Environment), while Dr. Giovanni Tapang is chairperson of Agham (Center for People’s Development and Governance).

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