Arroyo Risking Social Upheaval for Mining
Policy
President Macapagal-Arroyo
may be dreaming of peddling the idea of sustainable mining as a savior of
the fiscal crisis. She is basically courting disaster by opening up almost
all mining sites and making people pay for whatever bad would come out of
it.
By John Paul E.
Andaquig
IBON Features Vol XI No. 1
Posted by Bulatlat
President Gloria
Macapagal-Arroyo’s admission of the country’s fiscal crisis last year
proved beneficial for the business sector after all, particularly for
mining companies.
The government’s fiscal woes were enough reason to sway the Supreme Court
toward eliminating probably the last obstacle to the full liberalization
of the country’s mining sector.
Last Dec. 1, the country’s justices decided that the 1995 Philippine
Mining Act is constitutional--completely reversing its Jan. 27 ruling that
said foreign-led mining is tantamount to foreign ownership and control of
the country’s resources.
The Mining Act, or Republic Act 7942, has been described by people’s
organizations, NGOs and environmentalists as a legal instrument that
essentially sells the country’s sovereignty in managing its resources. The
Mining Act allows government to enter into Financial or Technical
Assistance Agreements (FTAAs) with mining companies in the extraction of
mineral resources abundant in the country.
“Economic development” through mining investments was the goal of R.A.
7942. For the World Bank, which pushed for the passage of the law, this
means the Philippines should live up to its reputation as the 5th most
mineralized country in the world. For the government, the message was
clear: export your natural resources through foreign companies to be able
to pay your debts.
Mining Act author
As a senator in 1995,
Gloria Macapagal-Arroyo authored the Mining Act and by the time she became
President, turned out to be the heaviest borrower among Philippine
presidents. Her administration eventually faced a crisis characterized by
ballooning debts, widening budget deficits and falling tax collection.
Desperate for investments, she set her sights on the one sector she has
promoted for years-- the mining export industry.
Proving that she can walk the talk after saying her government is shifting
its mining policy from “tolerance” to “actual promotion” in late 2003, she
unveiled the Minerals Action Plan (MAP) last year, which was basically a
policy document taken entirely from the Mining Act, but only added a few
provisions on “social and environmental protection” to make it appear that
large-scale mining can be “responsible and sustainable.
Anti-corporate mining groups thumbed down the government’s mining policy,
and clamored for the junking of the mining law. They challenged the
constitutionality of the law with regards to national patrimony way back
in 1997-- a petition filed by B’laan tribal groups under the La Bugal
Tribal Association.
This petition however is now junked by the SC, apparently convinced of the
mining industry’s arguments of “economic benefits for the majority”. While
the decision is taken as a go-signal by the government and mining leaders,
communities and people’s groups vowed that they would not take it sitting
down.
Good news?
Arroyo didn’t hide
her elation with the court ruling, describing it as a “stroke of good
news.” She was particularly referring to how mining can contribute to
ongoing government efforts to douse the country’s fiscal crisis by relying
on the bankrupt solution of more debts and more reliance on exports and
investments.
Speaking of investments, trade officials are presently harping about the
country’s rich mineral potential at a road show in China to attract
cooperative ventures with Chinese mineral firms. By early next month, the
government is expecting to draw the attention of major global mining
corporations in its mining summit ahead of the World Mining Conference in
Africa.
And government expectations are high. Trade and Industry Secretary Cesar
Purisima said they hope to attract $6.5 billion in mining investments for
the next six years and export some $3.1 billion worth of minerals
annually.
In an old trick to further gain public approval, the government added that
new and expanded mining projects would generate $490 million in tax
revenues and employ 34,800 workers, aside from providing more than 200,000
indirect jobs.
Arroyo, in an interview by a major daily, said that the country’s mineral
worth over $840 billion was more than enough to erase the government’s
budget deficit and other fiscal woes for the years to come.
Such claim effectively shows the government’s ignorance or outright denial
of past experiences with mining companies, in which mine-affected
communities have suffered displacement from their homes and livelihood,
destruction of their water systems and resources areas and human rights
violations. NGOs have estimated roughly millions of pesos in social and
environmental costs, though figures would not really measure actual
people’s experiences at the hands of mining companies.
Not to mention the billions of pesos lost in potential tax revenues as a
result of incentives given to mining firms under the Mining Act, Arroyo
may be dreaming of peddling the idea of sustainable mining as a savior of
the fiscal crisis. She is basically courting disaster by opening up almost
all mining sites and making people pay for whatever bad would come out of
it.
Faulty argument
In its Jan. 27, 2004
ruling, the SC had decided that the Mining Act is unconstitutional for it
allows foreign control of the country’s natural resources through FTAAs,
which are no different from service contracts.
In overturning this decision later, the SC said, “the Constitution should
be read in broad life-giving strokes.” Simply put, the justices are
agreeing with the government’s argument of the importance of investments
and the mining industry’s argument that the SC should not intervene on
“urgent” economic matters.
But these arguments are not only faulty but are made to deceive public
opinion into accepting large-scale mining.
The MAP for instance allows various leeways for mining corporations to
evade social responsibility altogether and to simply secure their
investments.
The country is not even assured of increased tax revenues since the
government can only collect taxes from companies only after the company
has earned its capital, which can take at least seven years-- enough time
for mining firms to underdeclare their profits or simply pull out and
claim “unstable investment climate” or other reasons.
Moreover, how can the government earn from mining when it is hell-bent on
increasing incentives for mining companies? About 23 big-ticket mining
projects, including those of companies such as Lepanto and Philex Mining,
firms with bad environmental records, are included in the government’s
Investment Priority Projects (IPPs).
These additional incentives include 6-year tax holidays, 3-year tax
holidays for expansion projects, 10-year exemption from export taxes and
other fees, and exemption from corporate income tax, and all other ways in
which the government may squeeze something out of the mining firms’ fat
profits.
Simply put, the government’s mining policy allows mining firms to fully
repatriate their earnings, including any excess capital, in its first
decade of operation and even beyond.
Also worrisome is the control it will give to foreign banks through loans
appropriated for mining companies. A provision in the MAP gives foreign
banks rights to re-classify mining lands whenever a mining company
defaults on its loan payment.
Opening more dangers
In essence, NGOs and
people’s organizations are pressing that the SC decision opens the
floodgates to more disasters since the government’s “revitalized” mining
policy expands, if not advances, the perks and incentives already provided
to mining companies under the Mining Act.
The Mining Act itself allows foreign control of resources through such
access to rights over use of water resources, the right to classify mining
lands, and the right to displace communities in the right-of-way of
exploration projects.
This has been concretely experienced by many mine-affected communities and
indigenous groups around the country, such as the Subanon people who have
been calling Arroyo’s attention over recent spate of militarization in
their areas as a result of mineral operations by Canadian company Toronto
Ventures, Inc.
Communities are also expressing their concern that the MAP’s “one-stop
shop” process of rushing the application of permits by mining companies
would result in less capabilities for government regulatory agencies such
as the DENR to monitor mining firms that are entering the country in terms
of environmental and social responsibility records.
These concerns however were not registered during consultations by the
DENR to mining stakeholders in 2003 when the government railroaded the
National Minerals Policy (NMP), the precursor of the MAP.
As the crisis continues to grip the economy and the lives of Filipinos,
Arroyo cannot simply risk more social upheaval by insisting on
foreign-dictated policies such as the Mining Act and its present arm of
implementation, the MAP.
Above all, the issue of national patrimony in the extraction and use of
natural resources can only be addressed if people themselves are the ones
directing its development and benefiting from it. IBON Features /
Posted by Bulatlat
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