Minerals

FIRST PERSON By Alex Magno
Publication Date: [Thursday, September 28, 2006]

http://www.philstar.com/philstar/show_content.asp?article=277335

The Philippines, it has often been said, is a rich country pretending to be poor.

The fact is, we are a rich country seemingly incapable of getting its act together. A slippery political arena, a permeable policy-making process, a murky Constitution littered with 19th century protectionist advocacies, and, for a time, a Supreme Court that liberally intervened in business issues all contributed to stunting our development potential. For many years now, the Philippines stood at the tail-end of Asia’s development race, receiving only a small fraction of direct investment flows in the region.

We might not be endowed with large rivers and enough land to make us an agricultural power. On the contrary, we face land and water shortages given rapid population growth. But that is compensated for by the fact that we have among the richest mineral deposits in the world.

A few decades ago, the Philippines stood among the world’s top ten mineral producers. We have among the largest known deposits of gold, nickel, chromium, copper and manganese. These mineral deposits are situated in some of the poorest provinces in the country – especially those provinces on the Pacific side of the archipelago, including the Bicol region, Samar and Leyte islands and eastern Mindanao.

A full redevelopment of our mining industry will bring prosperity to areas where prosperity is most scarce.

For too long a time, our minerals industry was stunted by the absence of a clear national policy. A mining law was indeed passed, but it was trapped at the Supreme Court for a decade over some issue about foreign investments in the mining sector.

After the Court finally cleared all judicial obstacles to the law, a deluge of international interest in our mining sector swept in. It was pleasant to imagine that the national economy could blossom quickly, like some oil producing country, driven by revenues from mining.

But the anti-mining fundamentalists, along with those who opposed foreign investments as a fanatical faith, would not rest. They grabbed every minor spill and every little accident as an occasion to rail against mining.

Politicians, of course, are quick to latch on to every environmental issue thinking this to be both safe and politically profitable to plumb. Sen. Pia Cayetano, for instance, made some strange noises about reviewing the Mining Act shortly after the Supreme Court finally removed all judicial obstacles to it. Those noises caused several hundred million dollars in investments to be put on hold.

Our Mining Act is among the best in the world. It is superior to the UK law in ensuring environmental protection. It is better than the US law in protecting indigenous people. It is stronger than the Canadian law in promoting corporate social responsibility. It is more effective than the Australian law in granting mining permits.

If we are able to ensure policy predictability for our mining sector, this part of our economy will provide a strong plank for economic take-off, along side our blooming tourism sector, our business processing outsourcing industries, our electronic manufacturing sector and our alternative energy base. These are the key fronts of economic opportunity that will lessen our dependence on remittances from exported labor by creating hundreds of thousands of employment opportunities where these are needed more.

The key person in opening up the great potentials of our minerals sector is DENR Secretary Angelo Reyes. It is his task now to facilitate investments in mining by clarifying the policy framework and assuring potential investors of a reliable policy horizon. This is indispensable, considering that investment in the minerals sector are of a long-term nature and involve large outlays.

In a word, Angelo Reyes ought to see his job more as an economic manager than just merely an environmental policeman.

Given new technologies and processes, mining should not be in conflict with concerns over environmental protection. It is simply a matter of getting the best players into our minerals future.

A few months ago, Reyes attended a meeting of major mining corporations in Africa and managed to convince the mining multinationals to come over and see our minerals sector up close. They did come the other week and were thoroughly briefed about our policies and were brought out to see our mining areas. Most of those who came were suitably impressed.

In his speech during that conference, Reyes did lay out a pretty clear policy, saying that the Philippines "fully adheres to the principle of sustainable development and steers our industry towards responsible operations using only the best practices in mining, mineral processing and environmental management."

That policy framework is clearly laid out in the Mining Act. It is reassuring that the main regulator of this industry, the DENR, is laying down clear rules of the game. That should reassure not only investors but all those anxious over the potential environmental implications of substandard mining operations.

We should understand, however, that the worst environmental damage will be caused, not by the modern mining corporations, but by poorly capitalized, under-equipped and small scale operators. Just look at the mess at Diwalwal, overrun by small-time mining concerns, and compare that with the Tampakan copper exploration project. The latter has produced an environmental catastrophe while the latter provides a global model for responsible minerals exploitation closely woven with the lives of the surrounding communities.

More than strictly enforcing laws protecting environmental integrity, the DENR should screen investments to ensure that only those ready to employ best practices are allowed to mine. An ounce of prevention is better than a pound of post-disaster regulation.

The mining concerns are now more sensitive to the demands of industrial excellence in a society that so jealously guards the integrity of its environment. By choosing the players well, we can build a stronger public consensus behind rebuilding our minerals industry.

With that consensus, we should be ready to open up what could be a very strong facet of our economic growth. Doing that is extremely urgent if we are to sustain the economic dynamism we have begun to demonstrate.