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By Andrea Lim

Progressive environmental groups condemned the security forces of a mining corporation in Nueva Vizcaya for harassing students and professors from the University of the Philippines (UP) trekking to a mining-affected community in Sitio Bit-ang in Barangay Runruno.

According to Leon Dulce, spokesperson for the Task Force-Justice for Environmental Defenders (TF-JED) and Kalikasan People’s Network for the Environment (Kalikasan-PNE) campaign coordinator, forests advocates from UP were on a tree-planting activity in Barangay Runruno when they were harassed by heavily armed security personnel of FCF Minerals Corporation and local policemen.

The party, composed of three professors and 12 students who
are also members of a university-based environmental organization, including a reported from the university’s publication Philippine Collegian, was held up by 13 security guards in civilian clothes for more than six hours, preventing them from conducting their tree-planting activity last May 31.

The group had already secured earlier permission to visit the community.

“Since when did efforts to plant trees and ultimately reforest an important watershed area affected by mining development activities become a prohibited action?” Dulce said.

UP Prof. Joanne Manzano, member of the regional advocacy group Taripnong Cagayan Valley and a participant in the tree-planting activity, said that a certain PO1 Primo Valdez told the group that ‘reforesting Sitio Bit-ang is not allowed.’

Threat to indigenous people
The mining firm plans to demolish structures in Sitio Bit-ang as part of their mining operations. Meanwhile, community members continue to carry out protests against the big mining project, from setting up barricades to sending out letters of protests to authorities to conducting dialogues with local government officials.
A fact-finding mission in Brgy. Runruno last year states that FCF Minerals claimed they had ‘mineral rights’ on the land below the properties of the peasants and indigenous people in the area who only had ‘surface rights’ and thus can be displaced by the mining company.

“We fear that what happened to us will also be done to indigenous peoples in Nueva Vizcaya. If they can intimidate professors and students from the University of the Philippines, they can surely do it with the residents of the communities,” Prof. Manzano added.

Threat to balanced economy
Prof. Manzano says that the FCF Minerals’ Financial and Technical Assistance Agreement (FTAA) permits mining firms to cut down trees, utilize and even pollute water sources, and expel indigenous people from their homes, taking away their livelihood for the large foreign mining firm’s profits.

A total of 515,520 hectares of watershed reserves have been proclaimed in Nueva Vizcaya. The province was declared by NEDA as a ‘watershed haven’, supporting seven multi-million infrastructure projects for irrigation and hydroelectric power generation purposes, including the Magat and Casecnan Hydroelectric Power Dams.

Noni Abao, a member of the university-based group Minggan-UP Diliman that sponsored the tree-planting activity, also says that the mining operations threaten the biodiversity of the Sierra Madre mountain range.

The province is home to forest reserves and protected areas, including parts of the Palali-Mamparang Mountain Range, which is a section of the Sierra Madre Mountains in Kasibu and Quezon towns that is one of the eight biodiversity hotspots in the country.
“By preventing the work of environmental advocates, violating the rights of indigenous peoples and anti-mining activists, and perpetrating environmental destruction, FCF Minerals is clearly one of the biggest threats to our rights to land, life, and a healthful and balanced ecology in Nueva Vizcaya.” Dulce said.

“These human rights violations should be immediately investigated by the Commission on Human Rights and the provincial government, and FCF Minerals’ permit should be cancelled if proven guilty,” Dulce concluded.


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Artwork by Sonny Boy Surnit

The consequences of large-scale mining
By Andrea Lim

After the cancellation of a mining franchise due to environmental damage in a local community in Española, Palawan, mining companies have to think twice about the way they implement mining operation procedures.

Two rivers have been put at the risk of being “biologically dead” due to Citinickel Mining and Development Corporation’s nickel mining project.

An environmental and scientist group conducted an Environmental Investigative Mission (EIM) in surrounding areas of the Pulot nickel-mining project on November 2012, and reports revealed mortalities of shellfish, fish, aquatic and coastal plants and other organisms.

The fact-finding mission was in done in response to complaints of local residents that the rivers in the area seemed to cry “crimson tears” every rainfall, noted especially during the heavy rains brought about by the Habagat storms.

According to Finesa Cosico, lead scientist of the EIM, crying crimson tears mean “oxygen depletion and the eventual biological death of the rivers.”

Kalikasan-People’s Network for the Environment (Kalikasan PNE) national coordinator Clemente Bautista said that interviews with locals revealed that the productivity of affected fisheries and agricultural lands experienced a radical decline since the start of Citinickel’s mining operations.

There have also been cases of respiratory and skin diseases, among others, that can be attributed to the mining’s effects.

Price to Pay

Citinickel Mines and Development Corp. confirmed that there was an incident of overflowed water with silt, and paid a Php375,000 penalty fine to the government.

It also claims to have stopped their mining operations and immediately cleaned up and rehabilitated the river and some adjacent farm lots that were affected by the overflow.

On the other hand, the damage has already been done and despite this incident, mining companies, with the majority being foreign-owned, continue to operate in the country.

Large-scale mining operations also continue to show how indifferent the Aquino administration is to the demands of the people and the protection of the environment. It has no problem in giving in to the interests of multinational mining corporations.

Recent Developments

Last June 13, Citinickel Mines and Development Corp. have been suspended indefinitely from operating its nickel mine in Española.

The spill happened in Citinickel’s Pulot mine on June 5 when the miner’s siltation control facilities were breached and caused massive discoloration and build up of sediments in the Pasi and Pulot Rivers, the bureau said in a June 10 suspension order.

On-site reports reaching the bureau showed the breach in the silt pond has not been repaired and traces of laterite sediments were still present in the rivers, MGB director Leo Jasareno said.

The mining company is a subsidiary of Oriental Peninsula Resources Group, whose shares are traded on the Philippine Stock Exchange.

No need to raise taxes from mining

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Chamber of Mines suggests options to increase government take from mining projects

Government data indicate that nearly half of the country’s gold output is produced by small-scale mining operations, most of which operate illegally.

Small-scale miners’ excise and income tax payments are negligible and in fact, non-existent for illegal miners, yet the value of the gold, nickel, and iron ore they extract – minerals owned by the Filipino people–run in the billions every year.

“If government wants a bigger take from mining, there are many other options it can explore before increasing the tax on mining,” says the Chamber of Mines of the Philippines in a statement sent to Opinyon.

It can encourage local investment and development linkages to supply and interconnect with mining projects. It can revive idle or abandoned mines to generate new employment and revenues.

Case study: The Tampakan Project in South Cotabato
In a 2011 study of the Tampakan Project, Dr David Pearce of the Center for International Economics (CIE), found that the project will generate, not just direct benefits for the Philippine economy, but substantial indirect benefits as well:
* Around US$800 million (Php35 billion) directly spent on Philippine goods and services during the construction phase, and an additional US$892 (Php40 billion) on Philippine goods and services over the mine’s 20-year operation.
* The project will make an estimated total contribution of US$5.1 billion (Php220 trillion) in taxes and duties over the life of the project.

Infra Benefits
* The total contribution of the project to household income could be up to Php600 million annually in the four host provinces, and the impacted and outlying municipalities.
* Around USD477 million in total, or USD19 million each year, will be allocated to the host barangays.
* Approximately USD344 million in total, or USD14 million, will be allocated to provincial and other local government units in the four host provinces through investment in roads, health care, schools and other essential government infrastructure and services.
* Host communities will receive royalty payments of USD338.5 million over the life of the project. On a per capita basis, these payments are significant and will make a major contribution to sustainable economic welfare of these communities.
“Simply increasing the tax on mining projects will have an enormously negative effect. With very few projects far down the pipeline, an increased tax on new projects will not immediately result in a bigger take for government.

In Limbo
Since the issuance of Executive Order No. 79 in July 2012, a moratorium on new mining projects has been put in place by the Department of Environment and Natural Resources (DENR), while the Mining industry Coordinating Council (MICC) looks into how it can increase government’s share in mining projects.
Nearly two years later, the mining industry is still in limbo. With mining investments down 40 percent from projections for 2012, the MICC insists it is just out to ensure government gets its fair share from mining.
The challenge has been how government determines what is “fair”–and how to get there. Thus despite the issuance of EO 79 over a year and a half ago, the MICC still has no revenue sharing bill ready for Congress.
However, the MICC seems set to impose a 10-percent tax on gross revenues or a 50-percent share of the adjusted net mining revenues (ANMR)—figures which industry players and analysts find to be too high and which will make the country unattractive as an investment destination.
In a letter to President Aquino last March 2014, the Joint Foreign Chambers (JFC) expressed concern over the proposed revenue scheme and said that “such a fiscal regime will have an extremely negative impact on future investment in the minerals sector.”

The JFC said that “mining investments generate jobs, and multiply those jobs into other jobs. They build infrastructure. They inject money into communities. In short, they create inclusive growth – which is so much needed in these economic times of the country’s development.”

Increased linkages will yield more revenues for government. Given the chilling effect increased taxes will have on investments, the Chamber of Mines suggests that the key to increasing the mining industry’s contribution to the economy lies in increased mining investments and in enhancing the local backward and forward linkages in the sector—essentially maximizing mining’s multiplier effect,
especially in the areas where mines operate.

With proper linkages programs created by the government coupled with transparency in tax collections and disbursements, the Philippine mining industry can go a long way in helping deal with poverty and be an example of inclusive growth,” said Jesse Ang of the International Finance Corp. (IFC), adding that mining “can be a strong catalyst” for the country if managed properly.

“With a proper linkages program, with proper transparency–you know here the (tax) payments are going–to make sure that money goes to the communities,” Ang said.

The IFC official also said mining as an industry can help government drive infrastructure projects to greater levels so the Philippines could move up to the next stage of economic growth beyond that driven by consumption.

By encouraging local source and supply linkages, the mining industry’s most valuable contribution to the country’s growth could come from its ability to generate further benefits to the domestic economy through productive linkages with other sectors.

Spillover Effects
If interconnected with the mining project, local suppliers of goods and services needed by the mine
and its employees will grow as the mine operation progresses–encouraging inclusive growth and yielding even more tax revenue for government.

For backward and forward linkages to have the desired impact, it is not enough that government impose local content and value-addition conditions on mining contractors, and provide incentives for investors to structure projects.

Government needs to come up with complementary strategies to create the business environment and public sector institutions that encourage growth and deepen the integration of mineral projects into national and regional economies.

Government must also make mineral processing a viable investment, developing upstream capital goods and service industries. It must create and improve needed infrastructure, particularly power and transport.
Policymakers need to maximize the beneficial spillover effects of infrastructure triggered by mining by planning around resource corridors.

Policies should also encourage the collateral or integral use of the minerals produced by other economic sectors.