Mining Policy Agenda After the Polls

Cielito C. Goño[1]

Considering the results of the May 2007 elections, the political space for reforms in the mining agenda for the next three years is rather easy to predict. With allies of President Gloria Macapagal-Arroyo dominating both the House of Representatives and Local Government Units (LGUs), it is expected that both the policy milieu and the project execution atmosphere for mining in the Philippines will be extremely friendly toward mining companies.

This suggests that there will be a smaller chance for the success of radical reforms in mining policy (for example, the option to abolish the Mining Act of 1995, or to effectively ban any mining project in protected areas). There is greater likelihood for less drastic, but still crucial, alterations in the rules of the game.

Setting aside questions regarding options for more fundamental changes, this article explores some of the less severe, potential areas of reform in the policy environment governing mining. They are less discussed, but perhaps considering the impact of the May Polls on the political space for a mining policy agenda, they deserve more scrutiny.

The rehabilitation of abandoned mines

Under the rules prior to the Mining Act of 1995, companies were under no obligation to restore or rehabilitate the land and water resources that were affected by their activities. They could walk away without penalty. Past the life of a mine, or when the international market for the mineral being mined becomes unfavourable, a company was completely allowed to simply pack up and leave the place that it was mining.

Over time, the Philippines has become pock marked with hundreds of toxin-leaking former mining areas that were not responsibly shut down with social and environmental rehabilitation measures. Environmentalist groups, including the Kalikasan-People's Network for the Environment and Alliance of Peasants in the Cordillera, claimed in October 2005 that there were 857 abandoned mines in the country (Caluza, 2005).

The Department of Environment and Natural Resources (DENR) maintains that the number of abandoned mines in the Philippines is much smaller. It distinguishes abandoned mines from mines that are inactive, idle and orphaned. Inactive mines are only temporarily closed for a variety of reasons (e.g., technical problems, passing environmental conditions, unfavourable international market, or labour unrest) but have a reasonable likelihood of being re-opened in the future. Orphaned sites are mines for which the responsible company no longer exists or cannot be located, but where there may be other parties that are interested in resuming mining activities. Idle mining assets refer to those that are the responsibility of the Privatization Management Office of Malacañang (formerly the Asset Privatization Office), and cannot be accessed by mining companies because of the special rules and legal contests that involve them. Finally, abandoned mines are those that have been closed without rehabilitation and do not interest any other mining company. They involve businesses and/or landowners that may or may not still exist, and that may or may not have the capacity to restore the areas that they damaged.

It is almost impossible to make an accurate inventory of abandoned mines. Organizations that produce these estimates differ in including or excluding mine tailings dams, exploration pits that were dug to gauge the mineral content and richness of a site and may have resulted in explorations elsewhere, very small and undocumented prospecting projects, and sites that were excavated but were found not to be rich in minerals at all.

With these difficulties and in the light of limited government resources, compared to producing an exhaustive and exact inventory, it is more crucial to identify the worst and most environmentally damaged abandoned mines, and prioritize them for rehabilitation.

In 2001, the DENR commissioned preliminary technical assessments for 22 abandoned mines that it considered as candidates for rehabilitation (Tetra Tech EM Inc., 2001). With the relaxation of mining policies since then, a number of these 22 have been opened up for the use of other companies. Thus, the Department's list was later trimmed to seven.

The Environment and Natural Resources Section of the Medium Term Philippine Development Plan (MTPDP) for 2004 to 2010 has set as a specific goal the assessment of these seven abandoned mines, and the rehabilitation of three.

Engineers at the Mining Environment and Safety Division (MESD) of the Mines and Geosciences Bureau (MGB) explain that a number of these seven mines would probably be opened for extraction by other companies anyway, further reducing the prioritized areas for rehabilitation.

Eventually, the agenda proffered by current DENR Secretary Angelo Reyes Jr. identifies only two as the target abandoned sites for rehabilitation by the Department. These are the mines left by the Philippine Pyrite Corporation in Bagacay, Hinabangan, Eastern Samar (which is under the custody of Malacañang’s Asset Privatization Office), and by Marcopper in Marinduque (DENR, 2006).

Thus, one would find when looking into the government's work plan for abandoned mines, a picture of rehabilitation targets that have steadily slipped over time. From a wider set of hundreds of abandoned mines, focus was given to 22, then to just seven, down to only three for rehabilitation in the MTPDP, and now to the Environment Secretary's agenda of only two. This is no doubt to lower the public's expectations, and also to have a more realistic set of "doables" in the face of limited resources for rehabilitation.

One would think, with the President making such a clear directive through the MTPDP, that there would be enough political will that takes the shape of a decent budget allocation for abandoned mines. While the Philippine government has certainly talked the talk, however, it has yet to walk it.

In 2005, former DENR Secretary Michael Defensor was quoted as saying that his Department needed PhP35 million for the rehabilitation of these seven abandoned mines (Felix, 2005). He said that an estimated PhP5 million would be needed to rehabilitate each mine.

It would have been interesting to have former Secretary Defensor explain how in the world he intended to rehabilitate any of these seven mines with a measly PhP5 million. For permanent water quality restoration alone, his impact with that money would have been zero. Aside from that, there is the matter of treating the acidic soil, performing as extensive a reforestation as the area would allow, and extending assistance and remuneration to all communities along the Taft River, for example, whose harvests and fish catch were diminished by pollutants that come from the mine and continue to pollute that river.

Former Sec. Defensor should have made time to do the slightest bit of research on the United States Environmental Protection Agency's (EPA) Superfund interventions on Abandoned Mine Lands (AML). A mere perusal of documents found in its website (EPA, 2007) would have made him step back a bit to reconsider his words. He would have read that, at that time, the latest (2004) estimates of the United States EPA pegged the cost of rehabilitating 156 abandoned mines at US$7 to US$24 billion (EPA, 2004a; EPA, 2004b). That is at the very least just under US$45 million on average, for each mine.

The magnitude of rehabilitation requirements is simply prohibitive for poor countries like the Philippines. This is why many environmentalist and sustainable development advocates question the active promotion of mining investments as a policy for this country. It is easy for them to mistrust this policy, and suspect that the government is sweeping the spectre of costs under the rug, making token budgetary allocations to make it look like it is doing something. Given its weak track record in holding mining companies accountable, this is no time for the Philippine government to get cheap with communities affected by mines, including abandoned ones.

In a forum on mining in October 2005, then MGB Assistant Secretary Jeremias Dolino claimed that the Philippine government "has allotted only PhP50 million for the reforestation and clean up of Bagacay Mines," (Caluza, 2005) insinuating the budget's insufficiency. In the same year, DENR Region 8 Director Leonardo R. Sibbaluca spent PhP1 million to reforest part of the Bagacay site with varieties that were unfit for the still toxic soil in the area. MESD engineers who last visited the site found that none of those planted under the million-peso project has survived.

It is a serious cause for concern that the meagre resources of the DENR for the rehabilitation of abandoned mines might be even more squeezed by problems of internal competence and governance.

Congress has allocated PhP24 million for abandoned mines in its budget hearing late last year (House of Representatives, 2006). In the absence of the local equivalent of the EPA's Superfund facility, however, the Philippine government has no claim of victory against the negative legacy of serious social and environmental problems surrounding abandoned mines for generations of people.

Establish good precedent-setting impact from the first mine closures under the 1995 Mining Act

According to engineers at the MGB, the remaining estimated mine life of Lafayette in Rapu-Rapu is around three years, and that of Philex in Baguio is more or less five years. Their actual mine life might be extended a bit, since favourable international market conditions may push these mining companies to further squeeze the land. At any rate, said engineers at the MGB, these two cases will probably be the first, or among the first, mine closures to occur under the 1995 Mining Act.

The manner in which these companies will run their closure processes could strongly set the precedent for all subsequent implementations of the mine shutdown protocol prescribed by the Mining Act. This means that the Philippine government may have roughly 24 months to vet its hard rock mine closure policy framework, to allow time for adoption by companies that are approaching the end of their mining projects. Beyond that, there might be too little time to expect these industry norm setters to comply with any new policy clarification or requirement that might affect their closure plans.

Review and clarify the effective meaning of "Free, Prior, Informed Consent"

Conflicting notions of "Free, Prior, Informed Consent" (FPIC) is one of the main areas of contention in mining communities. What does it really mean? When can a mining company or LGU claim that communities have given their consent for mining projects? Section 16 of the Mining Act says "No ancestral land shall be opened for mining operations without the prior consent of the indigenous cultural community concerned." In addition, Section 2.g of Executive Order (E.O.) 270-A signed by President Arroyo in 2004 states that "The ecological integrity of areas affected by mining operations, including biodiversity resources and small-island ecosystems, shall be safeguarded in order to protect public welfare, safety and environmental quality. The rights of affected communities, including the rights of indigenous cultural communities, especially the Free and Prior Informed Consent requirement, shall be protected."

The more widely used interpretation is that prior consent is required only from indigenous peoples who are residents of ancestral domains, as stipulated by both The Indigenous Peoples' Rights Act of 1997 and the Mining Act of 1995. However, there are questions regarding why the Mining Act would require that consent be secured only from indigenous peoples, when any local population would also face environmental, social and economic risks from mining. They interpret "the rights of affected communities" mentioned in EOs 270 and 270-A to include the right of any community to information, the right to clean air, soil and water, the right to protect land and water from which farmers and fisherfolk source their livelihood, all of which are tantamount to the right to say no to mining.

There are civil society groups and local people's organizations that understand free, prior, informed consent to mean that communities have the right to veto any proposed mining project that affect their environment, livelihood, health and ancestral domain. In this view, FPIC is the prerogative of communities and the sole discretion of barrio folk.

Companies of course do not accept this interpretation. Mining companies may share information and fund projects for the benefit of communities that are affected by what they do, but to render the flow of mining operations dependent on the consent of local villagers could convey instability and discourage investors. To them, the whole idea of FPIC does not necessarily make good business sense. They tend to regard it as the product of give and-take between communities and mining companies, a negotiated outcome. For example, residents of Homonhon Island recount that Heritage Resources and Mining Company has asked in exchange for its donation of electric generators (there is no electric power supply in the island), that they not sign any petition opposing mining in their island. Thus, the company can present as proof of community consent the set of residents' signatures that were gathered for electrification project benefits. .

In addition, there are those who believe that FPIC is required only to begin a mining project, while others contend that periodic consent must be 'secured from communities for every alteration a mining company makes on lands and waters.

Further complicating the issue of true community consent is the role that mining interests played in shaping the outcome of the May 2007 polls. Because the electoral campaign funding of many local officials included sizeable contributions from mining companies, it will become more difficult to ensure that the subsequent permits that they grant to mining companies are not political payback. One way of mitigating this risk is to clarify what free, prior, informed consent entails in the case of indigenous communities, and what will prove the social acceptability of mining in any affected village in general.

Conclusion

The mining policy agenda in the political landscape after the May 2007 polls include many more opportunities to benefit and protect mining communities. What this article outlines are but three that require the intervention of national policy makers.

Key interventions are also possible at the local level, particularly where pro-mining candidates somehow lost the elections to less compromised contenders. Eastern Samar comes to mind, with independent Congressman Doloy Coquilla having defeated the entrenched Libanan clan.

Mindoro is another special case where the chances for irresponsible mining are tempered, as local environmentalists in civil society groups and in the local government have very ably marshalled their influence and found an ally in their province-mate, Vice President Noli de Castro.

There are national policy reforms and local political configurations that can be plied to offset a national policy environment that is heavily supportive of mining companies.

Thus, there are both national policy reforms and local political configurations that can be plied to offset a national policy environment that is heavily supportive of mining companies.

References

Caluza, Desiree. October 5, 2005. Gov't to pay for rehab cost of abandoned mine sites. In Philippine Daily Inquirer. Makati City, Philippines.

Felix, Rocel C. February 18, 2005. DENR to clean up abandoned mines. In The Philippine Star.

Available at http://202.44.15.50/ tis/News/ 4/ 44001544. htm.

Republic of the Philippines, House of Representatives. October 11, 2006. Budget Hearing. 2006 Plenary Interpellation for the Department of Environment and Natural Resources.

Tetra Tech EM Inc. 2001. Executive Summary. Semi-detailed Assessment of 21 Abandoned/Inactive Mine Sites in the Philippines (final). Submitted to Republic of the Philippines Department of Environment and Natural Resources Mines & Geosciences Bureau.

United States Environment Protection Agency. 2004a. Nationwide Identification of Hardrock Mining Sites. Report #2004-P-00005. Office of the Inspector General.

United States Environment Protection Agency. 2004b. Abandoned Mine Lands Team Reference Notebook.

DENR. 2006. Secretary Angelo Reyes' 12 Point Agenda.

Available at: http://www.denr.gov.ph/article/view/3840/ .

United States Environmental Protection Agency. 2007. Abandoned Mine Lands.

Available at: http://www.epa.gov/superfund/ programs/ aml/

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[1] Intersect, Volume 22, N° 2, April-June 2007, pp. 26-30