Unconscionable Mining Contract

PRESS RELEASE
15 May 2008

Unconscionable Mining Contract

The monetary benefits of mining investments and operations in the Philippines is now being questioned as the provincial government of Nueva Viscaya has taken a bold step to stop OceanaGold mining company from its earth moving operations in Didipio for failing to pay Twenty Five Million Pesos (P25,000,000) in local taxes.

Contrary to what Secretary Atienza of the DENR has been promoting, the promised income from the mining project seems to be a mere pipe dream. That the local government of Nueva Viscaya needs to resort to legal action to collect taxes appears to be a red light signaling the great possibility that the Philippines will not benefit at all from this mining project.

The Legal Rights and Natural Resources Center (LRC-KsK/FoE Phils) has always maintained that the DENR crafted a seriously flawed mining fiscal regime (DAO 07-12). Under this department order, the state’s revenue collection from a Financial or Technical Assistance Agreement (FTAA) is limited to (1) the contractor's corporate income tax, (2) excise tax, (3) special allowance, (4) withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign national and (5) all such other taxes, duties and fees as provided for under existing laws.

The enumerated items merely represent the “inherent” and legal right of the state to collect taxes from businesses, in exercise of its taxation and police power. These are the very same taxes collected in other types of businesses operating in the country, not necessarily involved in the exploitation and destruction of the country’s national wealth.

What has not been explicitly spelled out in the DENR policy is the nation’s share in the profits of mining operations. If the DENR equates the above tax items to represent the governments share, it sadly miscomprehends the meaning of governmental share in the exploitation of the national patrimony.

Our position and understanding is that an FTAA is a corporate undertaking done by the state in partnership with a private mining corporation and a foreign capitalist for that matter. Had it been the state that operated the mining operations, it would benefit from the profits wholesale.
Entering into a business venture, it is simply logical that the state should partake in the profits of that business venture aside from exercising its regulatory functions such as taxation.

The more questionable provision is that government’s share in the FTAA shall commence only after the FTAA contractor has fully recovered its pre-operating expenses, exploration, and development expenditures and other expenditures that may be added as part of. A case is now pending in the Supreme Court to question the unconscionable FTAA contract and its unconstitutionality.

The flawed fiscal regime is further highlighted in the case of Lafayette’s mining project in the Bikol region. The government received less than one percent of the PhP 3.6 billion worth of minerals extracted in 3 years of operation. The company has now stopped its operations.
What makes matters worse is that the natural destruction accompanying mining operations place communities at risk of severe hunger and intensified disasters. The OceanaGold Project has converted the fertile rice lands in Didipio into its mining operations and runs the risk of contaminating water sources in the agricultural provinces of Nueva Vizcaya, Cagayan Valley, Isabela and Central Luzon together with the other two pending large-scale mining projects also in the same province – Royalco Phils. in Barangay Pao and FCF-MTL Metals in Barangay Runrunno.

Nueva Viscaya hosts 3 watershed areas - 2 proclaimed: Dupax Watershed Reservation (Proclamation 720) covering 425 hectares, and the Casecnan River Watershed in Dupax del Norte and Dupax del Sur, (Proclamation 136) covering 85,519 hectares , and 1 unproclaimed: Magat River watershed. These watershed areas serve approximately a total population of 400,000 including neighboring provinces such as Cagayan Valley, Isabela and northern parts of central Luzon. At least two of these watershed areas are in proximity to the mining site.

It is elementary that if these watershed areas are compromised due to contamination of the water, it will greatly affect the agriculture production in the said provinces that will contribute more to the worsening situation of our food production.

OceanaGold’s open pit mining method and tailings dam for mine waste disposal will be susceptible to seepage and collapse that will greatly affect the rivers and waters in the province. Ironically, DENR Secretary Atienza himself identified the province of Nueva Viscaya as part of the typhoon belt area.

The negative impacts of mining projects in the Philippines outweigh its envisioned benefits. You cannot find any single mining operation in the Philippines that has brought progress to local communities, only a devastated environment, and an impoverished community. The people of Marinduque can tell us their experience; Marcopper mining operations has inundated two major rivers in their province. Mayor Hagedorn of Puerto Princesa has taken the position against mining operations for clearly understanding the negative impacts.
With the recent developments, the biased positioning of Secretary Atienza for OceanaGolds operations is a complete disregard of the sentiments of the people in the province and the local communities who have been opposing the project for the adverse impacts directly felt by them. How arrogant can Secretary Atienza be in saying "they can barricade all they want".

For further questions and inquiries please contact us at +63 2 926-4409, +63 2 434-4079, +63 917-548-1674 (Ronald/Campaigns/Paralegal) or visit us at 87B Madasalin St., Teachers Village, Diliman, Quezon City.

We are Hiring

Legal Rigths and Natural Resources Center, Inc. a reputable Non-Governmental Organization is seeking qualified candidates for the following positions:

Legal Coordinator (Ref: LC-NO)
Communications and Networking Officer (Ref: CNO-NO)
Lawyer who will be based in Cagayan de Oro City (Ref:RC-CdO)
Paralegal who will be based in Davao City (Ref: LPL-DvO)

We are seeking individuals with experience of working in the area of indigenous peoples, human rights and/or development and with keen understanding of the social and environmental impacts of development projects, and legal and policy environment in the Philippines. Experience in networking and coordination, policy research, and advocacy work and also of working with grassroots communities will be an advantage.

You will have a commitment to working in partnership with our stakeholders in various contexts.

The posts will require travel to communities in Luzon and Mindanao.
Applicants are requested to send their CV with an application letter to lrcksk@lrcksk.org.

For more information or details, you may send your inquiries to the same address.

DIDIPIO GOLD-COPPER PROJECT: FAR FROM A DONE DEAL

URGENT ALERT
26 March 2008

DIDIPIO GOLD-COPPER PROJECT: FAR FROM A DONE DEAL
(Demolition of houses in Didipio continues)

Blood spilled on Black Saturday

Residents now fear for their lives as one community member (Emilio Pumihic) was shot and hospitalised when he tried together with other neighbours to prevent a team of demolition crew from demolishing the house of Samuel Bidang who was then taking a nap inside. Accounts from witnesses said that Pumihic was restrained by two security personnel of OceanaGold and was then shot from behind by another security guard (Whitney Dongiahon). (related article available at-http://newsinfo.inquirer.net/inquirerheadlines/regions/view/20080324-126059/Shooting-mars-Lent-in-mining-village).

Emilio Pumihic is a descendant of Juan Pumihic, the first Barangay Captain of Didipio and also one of the first families to settle in Didipio.

In another act to intimidate anti-mining officials and residents, OceanaGold and its cohorts in Didipio harassed Councilor Eduardo Ananayo at 10 o’clock in the evening also on Black Saturday. After attending a meeting in Sitio Dinauyan he was accosted by SPO4 Noel Valdez and brought to the Community Relations Office of OceanaGold without any valid reason t do so, SPO4 Valdez is a member of the Provincial Philippine National Police assigned in Didipio supposedly to keep peace and order in the community. Councilor Ananayo in his affidavit stated that he was slapped on the face by SPO4 Valdez when he introduced himself as one of the baranggay officials in Didipio.

These unfortunate events happened on Black Saturday (where Catholics all over the world observes a week of lent to reflect on the sacrifices and crucifixion of Jesus Christ). The people of Didipio last 17 March sought Bishop Villena’s intervention to ask OceanaGold not to resume demolition activities during the holy week in respect for the people in Didipio who wanted to reflect, pray and celebrate Jesus Christ’s salvation of mankind. The people of Didipio relayed this message through Sr. Eden Orlino, SPC of the Diocesan Social Action Commission who then responded to bring this request to the Bishop.

Sr. Eden’s appeal to the mining company thru Arnel Arrojo, Site Development manager of OceanaGold was not seriously considered since what happened on Black Saturday even Mr. Arrojo gave his word to Sr. Eden that they will accept the request of the people of Didipio to observe a peaceful holy week without any demolition activity. Much worse, 200 more demolition crew arrived on the same day and a shooting incident.

Bishop of Bayombong condemns OceanaGold

Bishop Ramon Villena of the Diocese of Bayombong declared OceanaGold’s acts in demolishing the houses of Indigenous Peoples in Didipio and the shooting of Emilio Pumihic as ‘atrocious’ and ‘monstrous’. He also add that it was made even worse by the mining company’s attempt to cover up for its human rights violations. (related article available at http://newsinfo.inquirer.net/breakingnews/regions/view/20080325-126399/Stop-Vizcaya-mining-bishop-asks-GMA).

Ramoncito Gozar, vice-president for communications and external affairs of OceanaGold on the other hand downplayed the shooting incident and tried to discredit and put the blame on the victim by saying that Emilio Pumihic was drunk at the time and tried to engage the security forces of OceanaGold. Police officials in Didipio, however, find Gozar’s version of the incident as “incredible”.

Breakdown of Law and Order

The Baranggay Council of Didipio with the present development and incidents now happening in the community is virtually non-existent or incapacitated to protect its constituents in the face of serious human rights violations being perpetrated by OceanaGold. The council has made several appeals to the mining company to settle first with the owners of houses and farmlands before they conduct demolitions activities but it seems this appeal fell on OceanaGold’s calloused and deaf ears.

OceanaGold showed its blatant disrespect to the public authority in Didipio for what they did to Councilor Edwardo Ananayo.

Arrogant mining company

OceanaGold’s order to its contractors to “demolish now, negotiate later” expresses utter disregard for due process of law and is highly insensitive to the well-being of the Indigenous Peoples community living in Didipio, even proudly invoking their so-called rights under the Mining Act of 1995.

We reiterate our call on all justice organisations, human rights and indigenous peoples advocates to extend support and solidarity to the Indigenous Peoples in Didipio. WE ASK YOU TO:

1. Be part of the Fact Finding Mission on 1-4 April 2008 in Didipio, to be spearheaded by LRC-KsK, Philrights, TFDP, Amnesty International, Alyansa Tigil Mina and to be joined by other foreign participants from Piplinks. You may contact LRC-KsK - +632 926 4409, TFDP National Office +632 437 8054, Alyansa Tigil Mina - +632 426 6740, Philrights - +632 433 1714;

2. Help the people of Didipio to defend themselves against the onslaught of OceanaGold and demand for the prosecution of the security guard who shot Emilio Pumihic;

3. Extend financial assistance for the legal defence fund, as the mining company will surely resort to take advantage of its huge resources to take the resisting community to the tedious and very expensive legal cases in courts, as what other mining affected communities are experiencing now and even before;

4. Increase awareness and disseminate information of the real situation in Didipio especially with OceanaGold investors and shareholders.
5. We call on all justice and human rights advocates and organizations to join hands with us in solidarity with the Indigenous Peoples of Didipio in Nueva Viscaya, Philippines. Let us call to IMMEDIATELY INVESTIGATE and ACT on the shooting of Emilio Pumihic and STOP THE VIOLENCE in DIDIPIO! Let us call on OceanaGold mining company to RESPECT Indigenous and Peoples RIGHTS and to abide, observe and practice good business etiquettes and standards. Write URGENT LETTER of CONCERN to the following:


1. H. E. Gloria Macapagal-Arroyo
President of the Republic of the Philippines
Malacanang Palace,
JP Laurel St., San Miguel
Manila Philippines
Tel: +632.564.1451 to 80
Fax:+632.742.1642/929.3968
Cell: +63.919.898.4622 / +63.917.839.8462
Email: corres@op.gov.ph / opnet@ops.gov.ph

2. Hon. Purificacion V. Quisumbing
Chairperson, Philippine Commission on Human Rights
SAAC Blg., UP Complex
Commonwealth Avenue
Diliman, Quezon City,Philippines
Tel: 928.5655/926.6188
Fax: +632.929.0102
Email: drpvq@yahoo.com

3. Sec. Jose L. Atienza Jr
Department of Environment and Natural Resources (DENR)
Central Office, Visayas Avenue
Diliman, 1100, Quezon City, Philippines
Tel: 928.06.91 to 93 loc. 2003, 2008
Email: osec@dem.gov.ph


4. OcenaGold Corporation
a. Australia
Stephen Orr – Chief Executive Officer
Corporate Office
Level 5, 250 Collins Street, Melbourne, Australia
Tel: +61.3.9656.5300
Fax: +61.3.9656.5333

b. Australia
James E. Askew-Chairman
Corporate Office
Level 5, 250 Collins Street, Melbourne, Australia
Tel: +61.3.9656.5300
Fax: +61.3.9656.5333

c. Philippines
Jose P. Leviste
2nd Floor, CJV Building
108 Aguirre Street, Legaspi Village
1229 Makati City, Philippines
Tel: +6.32.8926643
Fax: +6.32.892.8399