mining frenzy in the philippines
lodel magbanua, irc-ksk/friends of the
earth phillipines
“The disposition, exploration,
development, exploitation, or utilization
of any of the natural
resources of
the
Philippines
shall be
limited to citizens of the
Philippines
, or to
corporations or
associations at
least sixty percent of the capital which is
owned by such citizens.”
“The President may enter into
agreements with foreign-owned corporations
involving either
technical or
financial assistance for large-scale
exploration, development, and utilization
of
minerals, petroleum, and other
mineral oils according to the general terms
and conditions provided
by law,
based on real contributions to the economic
growth and general welfare of the
country.”
Following the global recession in the
1980s, countries in Southeast Asia turned
to foreign investment to boost their
economies. In 1990, an IMF-World Bank staff
report described the Philippines as still
having relatively restrictive laws and
regulations governing foreign investment in
key sectors. To attract more foreign
investment, the Bank recommended that the
government expand foreign participation in
various industries, including mining.
Similarly, in 1994 the Asian Development
Bank's mineral sector study proposed the
abolition of the 40% limitation on foreign
equity in mining corporations. It also
recommended that mining companies be given
tax holidays, full repatriation of profits,
and other incentives.
On 30 March 1995 , the Philippine Mining
Act was enacted. This new law allowed fully
foreign-owned corporations to explore,
develop, utilize and exploit mineral
resources. They could now apply for
exploration permits, mineral processing
permits and financial or technical
assistance agreements (FTAAs) and could
operate mining projects directly. They were
also given a wide range of financial
incentives, and incentives in relation to
the employment of foreign nationals
influx of mining companies
|
Four months after the enactment of
the new law, 21 foreign mining firms
(and one local one) had applied for
FTAAs covering six million hectares -
20% of the total land area of the
Philippines . Two 100%
Australian-owned mining companies
were soon awarded FTAAs: the Western
Mining Corporation Philippines (WMCP)
and the Climax Arimco Mining
Corporation (CAMC).
The entry of these foreign mining
companies had negative impacts on
local indigenous peoples and
communities. In Southern Mindanao ,
the WMCP organized “tribal councils”
of their own making to fabricate the
Free and Prior Informed Consent
(FPIC) of affected indigenous
communities required under the
Indigenous Peoples Rights Act. The
company employed deception,
harassment, co-optation and coercion
to obtain the consent of the B'laan
indigenous group. Militarization also
intensified with the entry of WMCP in
the area. These tactics inevitably
created resentment, divisions and
conflict within these
communities.
In 1997, the B'laan communities,
together with support groups and
individuals, filed a petition in the
Supreme Court in an effort to stop
the incursion of foreign mining
companies into their ancestral
domains. The petitioners argued that
the 1987 Philippine Constitution,
which removed previous references to
foreign corporations being involved
in “service contracts”,
|
actually prohibited such corporations
from operating and managing an entire
mining project. Thus, the 1995 Philippine
Mining Act, which resurrected the “service
contract” arrangement, was void and
unconstitutional. Ultimately, the Supreme
Court upheld the petition in January
2004.
However, on December 1st, the highest
court in the country reversed its ruling.
Moved by fears of an economic backlash, the
Court “reconciled” the Constitutional
provision with the supposed imperative to
liberalize mining.
dealing with the resource curse
Communities and environmental advocates
continue to criticize the liberalization of
the mining industry and the reliance on
increased resource extraction as a
shortsighted strategy for revitalizing the
national economy. They cite the
overwhelming evidence linking dependence on
extractive industries to environmental
degradation, underdevelopment, the
increasing gap between rich and poor within
society, and the disempowerment of peoples.
The 2005 UN Human Development Report has
aptly called this link the “resource
curse”. From the viewpoint of communities
directly affected by large-scale mining
projects, liberalization will not stem the
crisis of the Philippine economy and
environment, but will worsen it.
