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Historical Sketch of the Mining Industry A.1 Historical Sketch of the Mining Industry

The role of the mining industry in the development of the Philippine economy has been historically significant. Owing to the highly mineralized setting of the archipelago, traditional placer and lode mining and metallurgy were important subsistence activities of the baranganic natives of the islands since the pre- Hispanic times. Raw gold was a regular trade medium between the "peoples of Ma-I" and exotic Chinese, Japanese, Indian and other Asian traders in the littoral areas, and most of the product probably left the country.

The spirit of Spanish expansionism was at its crest when it reached the Philippines in the second half of the 16th century. Mercantilism as a guiding economic policy impelled Spain to build her wealth from abroad that resulted in the stockpiling of precious metals. The adelantados and their companion frayles sent by the Spanish King to these islands did not find gold in commercial quantities, but in the course of their "pacification campaigns" against the indios (and the latter's obligatory conversion to the Catholic faith), they however continued to explore mining areas.

otwithstanding their three centuries of colonial rule, the Spaniards failed to penetrate the gold-rich due to the Gran Cordillera Central fierce resistance of the Ygorotes. The gold workings and hoard of the yellow metal effectively remained in indigenous hands until the coming of the Americans.

The worthless succession of peninsulares and insulares transplanted by the Crown - unlike the intrepid and ruthless conquistadores of the Spanish New World (viz. Mexico and Peru) - did not have the determination and capability to develop the local mining industry. When Spain lost her empire in the New World during the early 1800s, the Philippines separated by two oceans from the mother country consequently wallowed in economic stagnation and general stupor.

rom the mid-1820s to the mid-1870s, the introduction of liberal economic policies, the opening of Manila to world trade, and the operation of the Suez Canal (that reduced the travel distance between Europe and the Far East), stimulated the colony 's economic growth. In the process, a Filipino middle class originating from the mestizos and scions of the principalia - capped by the ilustrados - had emerged.

And it was by this time (viz. toward the last 50 years of Spanish rule) that Philippine mineral production and trade grew. The Royal Decree of 1837, that was effectively the first Philippine mining law, created the Inspeccion General de Minas under the Governor- General for the purpose of administering all mining activities in the colony. In 1864, the Lepanto Mine - producing copper and gold - was opened.

But the grip of Spanish colonialism had loosened, and whatever economic, political, military and ecclesiastical power it still possessed was obliterated by the outbreak of the Philippine Revolution, the Spanish-American War and the Philippine-American War, respectively. The Treaty of Paris concluded by defeated Spain and the victorious U.S. on December 10, 1898 caused the former to cede her Asian colony (among others) to the latter for a token sum of $20 million. The handover was confirmed by the Spanish- American Treaty sealed at Washington DC on November 7, 1900.

merica at the turn of the 20th century had an expanding industrial system characterized by the predominance of monopoly capitalism and the emergence of the corporation as the dominant type of industrial organization. Its industrial system needed vast sources of raw materials, including energy minerals and base metals, even as its appetite for precious metals did not diminish.

Gold mining in continental America had attained eco- nomic pre-eminence when the U.S. government adopted the policy of monometallism that was pur- sued by most Western nations. And in America's case, this pertained to the use of the gold standard by the federal government to provide stability to her dollar- based monetary system. Armed with sufficient mining geological data, backstopped by an aggressive Min- ing Bureau set up in 1900, and legitimized by the Philippine Bill of 1902 (the country's second mining law), her imperialist mining interests immediately ex- ploited Philippine mineral resources (especially gold), and proceeded with the systematic development of the big mining industry.

Applying superior force and Machiavellian cunning, the North American gringos had vanquished both the insurrectos fighting for the first Philippine Republic and the Cordilleran tribal communities occupying the mineral-rich hinterlands. Among the 70,000 U.S. Army troops unleashed to "pacify' the country between 1898 and 1901 were the veterans of the California and Klondike gold rushes. Upon their discharge from military service, these forty-niners remained in the country to become the vanguard of American big mining interests.

n 1907, Benguet Mine - the first modern gold mine in the country - was established. Subsequently, 17 other adjacent gold mines were opened at the Baguio district. The peak of U.S. colonial rule in the Philippines in the 1930's was considered as the boom years of the Philippine large-scale mining industry, especially in gold mining. In 1936, the country 's third mining law was enacted (Commonwealth Act No. 137) and the Bureau of Mines was also created. By and large, there were 40 operating gold mines producing 30 tons per year up to the outbreak of World War II. In the country's export trade, gold was the third most important commodity, exceeded only by sugar and coconut respectively.

Often, the gold boom in the 1930s was sensationally told as the story of how Baguio was transformed from a vast wilderness into a bustling metropolis. The Baguio district had the largest mineral concentration and most number of prospectors and claimants. But the dark circumstances apropos of the story involved the forcible uprooting of indigenous peoples and other sectors of the rural population by foreign interlopers driven by the auri sacra fames. *

The bulk of displaced members of relatively undisturbed communities engaged in traditional gold mining had to eke out a living through gold-rush mining with a lot of techniques copied from the American forty-niners. Eventually, this ragtag army of gold rushers triggered a parallel "gold boom" within the informal mining sector but whose impact over the local mining industry after 70 years is still very much strong.

But the Japanese invading forces rudely disrupted the Philippine mining boom of the 1930s and early 1940s. World War II wrought tremendous havoc on the mining industry, especially during the invasion and liberation stages.

To carry out the grand imperialist design for a "Greater East Asia Co-Prosperity Sphere", the Japanese war machine commandeered strategic metal ores (e.g. iron, copper, chromite and manganese) to support its war effort and the expanding industries in its homeland, all during the brief but brutal occupation. Many Japanese trading companies that operated in the country during the pre-war years turned out to be fronts of the Japanese war machine, and whose officials and employees were military intelligence officers and spies.

The granting of Philippine "independence" by the United States in 1946 - amid the ruinous post-war era - was immediately followed by the imposition, on a prostrate nation, of the	"Parity Rights Amendment" and the "mutually beneficial" Laurel- Langley Agreement on trade and related matters. Ostensibly, the big mining industry was "Filipinized" while being rebuilt. Rehabilitation of strategic gold mines was done in the late 1940s, while copper was explored extensively in the early 1950s. New technologies like open pit mining for large-tonnage, low-grade copper deposits were introduced. The two metals became the pillars of big mining with the establishment of three major mines: Atlas (1955), Sipalay (1957) and Philex (1958). The period 1960-1980 was the "Golden Age" of Philippine big mining, even as the neo-colonial "intimate relations" retained the pre-existing trade patterns and ownership of mining companies by US individuals and corporations. But the imposition of martial law in 1972 by then President Marcos dealt a twin hammer blow to the strongman's oligarchic rivals and to the Philippine status quo. Martial law paved the way for the reign of greed in the mining industry under the pretext of Presidential Decree No. 463 (P.D. 463) issued in 1974 that was in effect the country's fourth mining law. As the Laurel-Langley Agreement and similar colonial relics were about to end in 1974, the Marcos cronies and Marcos himself thrust their grasping hands at the U.S.-controlled big mining in- dustry to grab the mines that sated their whims.

The decade 1980-1990, towards the end of martial law (1982) and the fall of Marcos (1986), was the "Dark Period" of the mining industry. It triggered the painful dying process of large-scale metallic ore mining that was marked by a domino type of shutdown of 14 big and medium-sized metal mines. Low prices for the principal metal products in the midst of a collapsing international market were the immediate causes for the moribund state of export-oriented big mining. As the industry was collapsing, gold panning and small-scale mining made a dramatic comeback. From the mid-1980s through the mid-1990s, the country had borne witness to the meteoric rise of a rag-tag army of 500,000 men, women and children digging and panning for the gold metal.

Once more, the auri sacra fames cast its magic spell. This time, it had transformed Mount Agtuganon/Diwata, popularly known as Mount Diwalwal * from an obscure gold panning site of the Mandaya tribe into a chaotic gold rush town of 150,000 subterra- nean-loving inhabitants. And its gold did not elude the covetous eyes of the Marcos cronies and Marcos himself as they had caused the prompt enactment of P.D.1899 (Small-Scale Mining Law) in 1984. All these had a hand in shaping the more than 50% share of the small-scale gold mining sector in the country's total gold output.

hile the big mining industry was slowly wasting, the Philippine government had been conducting major studies on the country's mineral potentials with the aid of the US, British, Ger- man and Japanese governments as well as that of the United Nations Development Program (UNDP) and the Asian Development Bank (ADB). As a result, the government is over-saturated by voluminous reviews of the country's geology and mineral resources for big mining consumption as well as encyclopedic big mining project studies lying side by side with a moribund big mining industry and a monstrous gold rush phenomenon.

In part, the foregoing formed the basis of the government's policy on liberalizing and restructuring the mining industry ultimately finding concentrated expression in the Philippine Mining Act of 1995 (Republic Act 7942), the country's fifth. The train of big mining-related developments and government actions foreshadowed an impending resurrection of the big mining industry. Apparently, the process is that of an inexorable shift from small-scale and labor- intensive to large-scale and mechanized operations, from a Filipino- to a transnational-dominated mining industry.

As of now, big mining is but a shell of its former self. The Department of Environment and Natural Resources (DENR) admitted that since 2002, there are only eight operating large metal mines. http://www.prrm.org/publications/gmo2/historical.htm

This introductory article was written for Corporate Watch by activists from the Stop Mining Network, a new eco-defence project in the Phillipines aimed at spreading information about the destructive mining projects in the country, building solidarity with communities of resistance and supporting their struggles against this little-known corporate encroachment. The mining industry is one of the biggest industries in the world. In every part of the world where there are minerals - in Canada, the United States, Australia, Asia, Japan and Norway and many parts of Europe - mining companies compete to exploit natural resources for profit. Consequently, this has lead to the horrendous destruction of the Earth's biosphere. Life support systems, such as water forests and wildlife, are destroyed everyday in the interests of these companies and their shareholders. In addition, local people's livelihoods are destroyed in the process. Farmers, fisher folk and indigenous tribes end up being harassed, bribed and displaced. People have even been killed when they attempted to seriously oppose a mining operations in their region. Mining is a vital industry for techno-industrial societies. Throughout the centuries, people from different corners of the globe mined for different kinds of minerals which they used in their daily lives. However, the advent of neo-liberal capitalism has made the mining industry more powerful and tyrannical. In just a few hundred years, the industry has brought tragedy to various countries and regions. It has destroyed the planet's biosphere, including wildlife, affecting farmers, fishermen, indigenous people, and causing the degradation of the last remaining forests, rivers and oceans of the world, which have existed for millions of years. History Mining in the Philippines started in the pre-colonial period. In a number of regions in the archipelago, indigenous communities mined for gold, copper and many other minerals. Natives from all over the Philippines used gold, pearls, agate, and so on, for body ornaments. Gold was also bartered, through the Arab world, with merchants all over Asia and Europe in the pre-Islamic and Islamic periods. It is noted that many merchants from Luzon (Northern Philippines), Brunei and Jolo traveled continually all throughout Mindanao in search of slaves and gold. The first commercial mine in the Philippines was in Benguet, in Central Luzon, established by the Benguet Mining Corporation. The Spanish colonisers took advantage of whatever mineral resources they could get. In fact, gold was the main reason why Spain colonized the Philippines, mainly for their so-called Royal Service. They even made a law, called Inspeccion de Minas, to inspect the existence of minerals in the archipelago. It was the Americans, however, who made strategic steps to exploit the minerals of the Philippines. They did a geological survey, which validated the Philippines as a mineral-rich country, and issued Act 468, a law that basically gave the government the right to reserve mineral lands for its own purposes. They claimed a number of areas as "reserved areas" for future mining, hence the commercialization of the Benguet gold mining. In the year 1914 in the south, Surigao and other parts of the Caraga region were declared as an "iron reserved" area for future mining. By then, the mining industry in the Philippines was on its way to boom and the Commonwealth US government took more hold of it, forming a Mining Bureau to regulate all potential operations in the future. Up till 1921, there was no large scale mining but many were making a living from small-scale gold mining. Between 1933 and 1941, gold was the dominant and most important mineral in the mining industry. Under the tyranny of the Japanese, Filipinos in many regions of the country were coerced into mining for metals to be used for war weapons in Japanese imperialism. This paved the way for further commercialisation, exploitation and degeneration of the Philippines. Large-scale copper mining reached its peak in the 1960s and 1970s. By the late 80s, world demand for copper decreased in favour of gold. However, a number of gold mining companies closed down in that period because of law violations and so gold mining went into decline. With the help of the World Trade Organisation, the International Monetary Fund and the World Bank, the neo-colonized Philippines was again coerced to adjust its economic policies to adhere to neo-liberal policies. By 1994, pro-development politicians, such as Gloria Macapagal Arroyo, lobbied for a Mining Bill which would later become the Republic Act 7942 or the Philippine Mining Act of 1995. This law basically gives power over land, resources and life to corporations; many areas became mining hot spots. By 1996, the Philippine mining industry got back on track, allowing offshore companies to operate fully in the 'reserved areas' - a disaster for a number of places in the Philippines. In March 1996, the Marcopper tunnel in Marinduque collapsed. In rough estimation, 1.6 million cubic meters of mine tailings flowed from the mine pit to the Makulapnit and Boac river, trapping 4,400 people in 20 villages. The government declared the Boac river officially dead. The disaster caused massive siltation in downstream communities and coastal areas. Among the tragedies that happened in 1998 is the Malangas Coal Corporation case in Zamboanga Del Sur, Mindanao, where an explosion occurred in the mine site, killing almost a hundred workers and injuring 35 people. In 2004, another disaster took place in Surigao Del Norte, Mindanao. This time it was caused by one of the largest and longest-standing mining corporations in the Philippines, the Manila Mining Corporation (MMC). Three disastrous incidents occurred, where approximately five million cubic meters of waste materials containing high levels of mercury were released, damaging local people's agricultural lands and temporarily poisoning the adjacent Placer Bay. Today, 20 large-scale mining operations, 10 medium-scale and more than 2,000 non-metallic small-scale mining operations exist in the Philippines. Yet, hundreds of mining applications are pending to prey on what's left of the country's resources. http://www.corporatewatch.org/?lid=3832

The team recognizes the external pressures on the Philippines as a deeply indebted country to generate foreign investment but fears that the emphasis on export-driven mining based on foreign investment may diminish rather than improve the possibility of a balanced, long-term, sustainable development strategy. The problems are exacerbated by the unresolved problems of corruption and the fact that, again contrary to the recommendations of the EIR, many of the proposed new mining sites are in areas of conflict including Mindanao. The Philippines is one of the 17 countries in the world to be categorized as a mega-biodiversity country. It is also a geo-hazard hotspot, prone to typhoons, earthquakes, landslides and volcanoes. Its environmental sustainability is already under serious threat with the UNDP highlighting the urgent need to properly manage the country’s natural resources if MDG 7 is to be achieved1. These factors, together with potential social impacts, should require the Philippine government to exercise extreme caution in authorizing large-scale mining projects. The Philippines has relatively strong laws designed to protect the environment, communities and indigenous peoples. The reality, however, is that where investments are concerned the law is too often viewed as a mere technicality to be overlooked or circumvented. Human rights abuses and misreporting are clearly associated with some current mining activities. It is of concern that those in iv government and international agencies seem to lack the capacity or inclination to challenge and end such misconduct. Philippine Law requires that before any development takes place within the ancestral lands of indigenous people they must give their free, prior, informed consent (FPIC). The team heard, however, that this consent is sometimes obtained through misinformation, misrepresentation, bribery and intimidation. Government agencies, in particular the National Commission on Indigenous Peoples (NCIP), are, according to indigenous people the team talked to, failing to fulfill their mandate to protect indigenous peoples’ rights. Many indigenous peoples view the NCIP as siding with mining companies. They feel the need for an independent body to ensure indigenous peoples are adequately informed about plans to operate and expand mines, and to assist them in representing their views. The World Bank is implicated in the expansion of mining in the Philippines. Despite historical problems with mining and a legacy of 800 abandoned mines, the Bank was one of the major actors influencing the liberalized Mining Act of 1995. More recently, it has played a crucial role in sponsoring and promoting the adoption of the National Minerals Policy, the Mineral Action Plan and the revitalization of the mining industry. In failing to address the negative impacts of mining plans on the poor and marginal, the Bank is failing in its duty both to assist with the country’s steps to sustainable development and is failing to abide by obligations to its own mandate and obligations under international human rights law. Based on the economic evidence available, the team believes that implementation of the proposed mining plan will bring insufficient benefits to the Filipino people. Once incentives to mining firms have been considered and revenues offset against the associated costs – in particular the environmental costs – the net gain will be far lower than that claimed by the companies and the promoters of mining in government. The country may be left with clean-up costs that run into billions of dollars. Corruption is a serious problem in the Philippines and it can be expected that plans for extensive mining operations in remote areas requiring licensing, regulation and monitoring will make it worse. 1. Introduction Mining has a very poor record in the Philippines as a result of the massive social and environmental problems it has caused historically. Records kept by the United Nations Environmental Programme (UNEP) reveal the Philippines to be among the worst countries in the world with regard to tailings dam failures2 whereby the surface impoundments containing the toxic waste from the mining process failed with disastrous consequences for local people and the environment. In spite of this, since 1992, the Government of the Philippines has been pursuing an aggressive policy to revitalize the mining industry, potentially opening 30 per cent of the country’s land area to mining.3 It has promised that mining will be carried out to full international standards and that environmental and social problems will be addressed effectively. The government has conducted mining road shows4 across the globe. Incentives for foreign firms make their operations effectively tax-free for the first five years. Billions of dollars in investments have been promised and a total of 2,000 mining permit applications are pending.5 However, critics say there is scant evidence of economic benefit to the Philippines at the national level. At the local level evidence of the detrimental economic, environmental and social impact is widespread. The ‘streamlining’ of the mining application process has become synonymous with a relaxing of environmental laws combined with attempts to undermine the legal protections afforded to indigenous peoples. It is feared that proposed constitutional change6 may further weaken protections. The Philippines, which consists of 7,107 islands, has fragile tropical ecosystems and is an outstanding biodiversity hotspot. It is one of the 17 countries in the world that are the richest in biodiversity. More than 52,177 species have been identified, half of them are found nowhere else in the world. According to the biodiversity conservation priorities of the Department of Environment and Natural Resources (DENR), ‘the Philippines is one of the few countries in the world that is both a mega-diversity country and a biodiversity hotspot.7 It recognizes that there is a ‘small window of opportunity in which it is still possible to save this global hotspot from complete devastation and the unique life forms found within from extinction’. This extraordinary biological diversity is at risk because the forest cover of the Philippines has dropped from 270,000km2 when the Spanish left the country in 1898, to 150,000 km2 at Independence in 1946, to just 8,000 km2 in 2006.8 Mining is targeted for many upland areas where it would further reduce forest cover and leave a toxic heritage for succeeding generations. Natural hazards are common in the Philippines, with major portions of the country classified …. READ ON FROM PDF SOURCE http://www.communitymining.org/attachments/202_Phillipines%20Mining.pdf

Philippines Mining http://www.photius.com/countries/philippines/geography/philippines_geography_mining.html Sources: The Library of Congress Country Studies; CIA World Factbook << Back to Philippines Geography The 1980s were difficult for mining in the Philippines. In 1990 the mining and quarrying sector contributed 1.5 percent of GNP, approximately half the percentage it had accounted for ten years earlier. Mineral exports were 5.4 percent of merchandise trade in 1988, whereas in 1980 they constituted 17.8 percent. Rising operational costs and a depressed market severely affected the industry. In 1990 mining operations suffered from labor disputes, higher mandated wages, higher interest rates, typhoons, an earthquake, and power shortages.

In the early 1990s, the Philippines had large deposits of copper, chromium, gold, and nickel, plus smaller deposits of cadmium, iron, lead, manganese, mercury, molybdenum, and silver. Industrial minerals included asbestos, gypsum, limestone, marble, phosphate, salt, and sulfur. Mineral fuels included coal and petroleum.

In 1988 the Philippines was the sixth largest producer of chromium in the world and ranked ninth in gold production and tenth in copper production. The country's nickel-mining company, Nonoc Mining and Industrial Corporation, ceased operation in March 1986 because of financial and labor difficulties. The Asset Privatization Trust, a government entity in charge of selling firms acquired by the government through foreclosure proceedings, sold Nonoc in late 1990. The new owners expected to resume operations in the middle of 1991 and produce some 28,700 tons a year, which would again make nickel a major export earner for the Philippines.

Data as of June 1991

NOTE: The information regarding Philippines on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Philippines Mining information contained here. All suggestions for corrections of any errors about Philippines Mining should be addressed to the Library of Congress and the CIA. http://www.photius.com/countries/philippines/geography/philippines_geography_mining.html

PHILIPPINES MINING LAW UPDATE: FEATURES OF THE NEW EO 79

OVERVIEW OF THE MINING INDUSTRY According to the data from the Mines and Geosciences Bureau show that from 1970-2010, the Philippines only produced P878.4 billion out of P73.47 trillion supply of metallic and non-metallic mineral production in terms of value.

The economic impact of the mining industry in the country cannot be ignored. The Chamber of Mines of the Philippines estimated that the country lost around P10.4 billion worth of foreign direct investments in the mining sector last year due to uncertainties over the government’s policy direction on the mining sector as well as the delayed issuance of mining permits.

For the years 1960 to 2008, the gross value added (GVA) in mining and quarrying at prices in 2011 rose annually by 17.31 percent on average. For the same period at constant prices, meanwhile, GVA increased yearly by 5.39 percent on average. 1 The total mineral exports of the Philippines and their percentage share to total exports of the country increased annually on average. 2 Likewise, employment in mining and quarrying increased from 141,000 to 166,000 for the period 2006 to 2009. 3

The mining industry has been a source of conflict for the government, non-governmental organizations (“NGOs”) and the private sector. The positive economic performance of the mining industry has always been countered by the negative effects mining operations have on the environment. But the issues confronting the mining industry is not only limited to its detrimental effects on the environment. While our mining laws seek to address the environmental concerns surrounding the mining industry, enforcement of the law is another.

According to Fraser Institute Annual Survey of Mining Companies 2010-2011, the Philippines ranked 66 out of 79 in the policy attractiveness survey. The policy potential index of the Philippines is poor in terms of infrastructure, timely and efficient administration of legal processes, and transparent and non-corrupt governance.

To address the mining issues on economic, environmental and lack in enforcement, President Benigno Aquino III issued Executive Order No. 79 (“EO 79”).

HISTORY OF MINING LAWS IN THE PHILIPPINES The 1987 Constitution is the supreme law governing the Philippine mining industry. Article XII on National Economy and Patrimony provides:

“Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of waterpower, beneficial use may be the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers, lakes, bays, and lagoons.

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. In such agreements, the State shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.”

During the 1980s and early 1990s, there was, however, a decline in the state of the mining sector that led to the enactment in 1995 of Republic Act No. 7942, otherwise known as the Philippine Mining Act (“Mining Act”), as a means to boost the industry. This law became a subject of controversy and eventually was challenged before the Supreme Court for being unconstitutional. The Supreme Court in the case of La Bugal-B’Laan Tribal Association Inc. vs. Ramos 4 finally resolved the issue on the legality of the Mining Act including those relating to financial and technical agreements ruling that:

“All mineral resources are owned by the State. Their exploration, development and utilization (EDU) must always be subject to the full control and supervision of the State. More specifically, given the inadequacy of Filipino capital and technology in large-scale EDU activities, the State may secure the help of foreign companies in all relevant matters -- especially financial and technical assistance -- provided that, at all times, the State maintains its right of full control. The foreign assistor or contractor assumes all financial, technical and entrepreneurial risks in the EDU activities; hence, it may be given reasonable management, operational, marketing, audit and other prerogatives to protect its investments and to enable the business to succeed.”

When the Supreme Court upheld the Constitutionality of the Mining Act, this resulted in faster growth in mineral exports, percentage share to total exports, employment in the mining sector and in the total paid-up investments in mining. 5

The Philippine mining sector throughout the years has been regulated by the Department of Environment and Natural Resources (“DENR”) together with its attached agency Mines and Geosciences Bureau (“MGB”). On the other hand, quarrying is within the jurisdiction of local government units in accordance with the Republic Act 7160 otherwise known as the Local Government Code of 1991.

HIGHLIGHTS OF THE MINING ACT The core principle of the Mining Act is its strict adherence to sustainable development. The declared policy of the law is to promote the rational exploration, development, utilization and conservation of mineral resources through combined efforts of government and the private sector in order to enhance national growth in a way that effectively safeguards the environment and protect the rights of affected communities.

Economic aspect According to Section 5 of the Mining Act, the government shall get a ten percent (10%) share in all royalties and revenues to be derived by the government from the development and utilization of the mineral resources within mineral reservations which shall accrue to the MGB to be allotted for special projects and other administrative expenses related to the exploration and development of other mineral reservations.

Under the Local Government Code, local government units (“LGUs”) were given authority to impose taxes on sand, gravel and other quarry resources under Section 138 thereof. In addition, the Mining Act provides that LGUs have a share of forty percent (40%) of the gross collection derived by the National Government from mining taxes, royalties and other such taxes, fees or charges from mining operations in addition to the occupational fees (30% to the Province and 70% to the Municipalities concerned) in consonance with the Local Government Code.

Environmental aspect In ensuring that the government protects the right of the people to a balanced and healthful ecology, the Mining Act has provided limitations on how the mineral resources of the country can be utilized.

It established area limitations, maximum years for mining operations, assignment of mining rights, compliance with rules and regulations promulgated by the DENR concerning the sanitary upkeep of mining operations. Section 69 of the Mining Law also required every contractor to undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit which shall be incorporated in the work program which the contractor or permitted shall submit as an accompanying document to the application for a mineral agreement or permit.

To further ensure the protection of our environment, an environment clearance certificate is required based on an environmental impact assessment pursuant to Section 70 of the Mining Act. Details of environmental protection have been outlined in Chapter XVI of Administrative Order No. 2010-21 or the implementing rules and regulations promulgated of the Mining Act. Under Section 167-A of the Administrative Order, a Certificate of Environmental Management and Community Relations Record (CEMCRR) is required in the approval of Mineral Agreements, FTAA, Quarry or Commercial/Industrial Sand and Gravel Permit and Mineral Processing Permits.

The Mining Act and its Implementing Rules and Regulations also gave premium to environmental protection. Measures were put in place to ensure that mining contractors/operators comply with internationally accepted standards of environment management.

Mining contractors/operators are mandated to allocate approximately ten percent (10%) of the initial capital expenditures of the mining project for environment-related activities. A mandatory annual allocation of three to five percent (3%-5%) of the direct mining and milling costs to implement an Annual Environment Protection and Enhancement Program (“EPEP”).

There is also a mandatory establishment of a Mine Rehabilitation Fund (“MRF”) to be composed of the following:

a Monitoring Trust Fund of Php50,000.00 which is replenishable; and a Rehabilitation Cash Fund of Php 5,000,000.00 or ten percent (10%) of the EPEP cost, whichever is lower. Such funds are to be deposited as a trust account in a government depository bank to be managed by the MRF Committee composed of the MGB Regional Director, DENR Regional Executive Director, representatives from the LGU and an NGO, and the contractor.

Conduct of Environmental Work Program during the exploration stage and an Environmental Protection and Enhancement Program during the development and operations stage is also required under the Mining Act.

As an incentive to mining companies, the Mining Act mandates the institutionalization of an incentive mechanism to mining companies utilizing engineered and well-maintained mine waste and tailings disposal systems with zero-discharge of materials/effluents and/or with wastewater treatments plants.

To ensure compliance with the mining laws, a Multipartite Monitoring Team composed of representatives from the MGB, DENR Regional Office, affected communities, Indigenous Cultural Communities, an environmental NGO, and the Contract/Permit Holder shall undertake the monitoring of mining operations. On the other hand, the Mine Environmental and Protection and Enhancement Office in each mining/contract area will set the level of priorities and marshal the resources needed to implement environmental management system.

The MGB Regional Director shall also have the power to summarily suspend mining/quarrying operations in case of imminent danger to human safety or the environment.

ISSUES FACED BY THE GOVERNMENT With the advent of Climate Change or Global Warming, people have shifted their focus from utilization to preservation. The environmental community has been clamoring for the government to push for stringent environmental protection.

Moreover, according to the 10-year review of the mining industry published by International Institute for Environment and Development, despite the emergence of global rules for best practices in the mining industry, more often than not, there is lack of implementation, independent verification, public reporting, or consequences of non-compliance.

The government is also not getting its “fair share” in the mining industry as espoused by President Benigno Aquino III. Mining contractors of Mineral Production Sharing Agreement and Financial or Technical Assistance Agreements can avail of fiscal and non-fiscal incentives granted under the Omnibus Investment Code of 1987, as amended. In addition to these incentives, the Mining Act also granted incentives for pollution control devises, for income tax carry forward of losses, for income tax accelerated depreciation on fixed assets, and investment guarantees, such as investment repatriation, earning remittance, freedom from expropriation, and requisition of investment, and confidentiality of information.

For FTAA contractors, an additional incentive, in the form of a tax holiday on national taxes is granted from the start of the construction and development period up to the end of the cost recovery period, but not to exceed five years from the start of commercial operation.

These issues led the Aquino administration to review the existing mining laws and policies of the country which resulted in the execution of Executive Order No. 79 aimed at addressing the deficiencies in the current laws and rules and regulations with respect to environmental protection and income derived by the government from the mining industry.

HIGHLIGHTS OF E.O. 79 – NEW MINING REGULATION The thrust of Executive Order 79 is to improve environmental mining standards and increase revenues to promote sustainable economic development and social growth, both at the national and local levels.

Pursuant to these objectives, the order focused on enhancing coordination among stakeholders to ensure strict compliance by mining operators to the existing mining laws and regulations.

A careful look at the Mining Act and Executive Order No. 79 will show the different path the government is now taking with respect to the mining industry.

Changes introduced by EO 79 on the environment aspect In addition to the areas closed to mining applications as provided under Section 19 of the Mining Act has been expanded by EO 79 to include the following:

Protected areas categorized and established under the National Integrated Protected Areas System (“NIPAS”) under Republic Act No. 7586; Prime agricultural lands, in addition to lands covered by Republic Act No. 6657, including plantations and areas devoted to valuable crops, and strategic agriculture and fisheries development zones and fish refuge and sanctuaries declared as such by the Secretary of the Department of Agriculture; Tourism development areas, as identified in the National Tourism Development Plan; and Other critical areas, island ecosystems, and impact areas of mining as determined by current and existing mapping technologies, that the DENR may hereafter identify pursuant to existing laws, rules, and regulations and the terms and conditions of the grant thereof. Implementation of ensuring environmental compliance is now not solely the responsibility of the National Government. Enforcement will now be done in coordination with LGUs. The LGUs shall, however, confine themselves only to the imposition of reasonable limitations on mining activities conducted within their respective territorial jurisdictions that are consistent with national laws and regulations.

Existing mining operations will now be placed under review by a multi-stakeholder team led by the DENR. Likewise, the use of mercury in small-scale mining is strictly prohibited and small-scale mining shall be confined only to declared People’s Small-Scale Mining Areas or Minahang Bayan.

Changes introduced by EO 79 on the economic aspect A new feature has been introduced by EO 79 when it comes to granting new mineral agreements is the necessity of a public bidding. Under the Mining Act, the rule is a first come first serve policy. Whoever reserves first and is qualified to undertake the mining operation can be granted the permit, subject to limitations imposed by the laws and rules and regulations. EO 79 has completely changed the way mining agreements will now be granted by undergoing a public bidding.

As provided in Section 6 of EO 79:

“Section 6 The grant of mining rights and mining tenements with known and verified mineral resources and reserves, including those owned by the Government and all expired tenements, shall be undertaken through competitive public bidding. While all other mining rights and tenements applications shall be processed and approved through existing procedures.”

A moratorium has also been placed on the grant of new mineral agreements until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect. Likewise, existing mining contracts and agreements will also be reviewed by the DENR for possible renegotiation of terms and conditions, which, shall in all cases be mutually acceptable to the government and the mining contractor.

In addition, Section 7 of EO 79 provides that:

“All valuable metals in abandoned ores and mine wastes and/or mill tailings generated by previous and now defunct mining operations belong to the State and shall be developed and utilized through competitive public bidding. Likewise, upon expiration of the pertinent mining contracts, the said metals shall belong to the State and will be developed and utilized through public bidding.”

Changes introduced by EO 79 on the enforcement aspect A new council called the Mining Industry Coordinating Council (“MICC”) has also been created under Section 9 of the said executive order. The MICC’s powers and functions can be categorized into two purposes: coordination with stakeholders and enforcement of mining laws.

The following are the powers and functions of the MICC as to coordination:

Ensure continuing dialogue and coordination among all stakeholders in the industry Conduct and facilitate the necessary capacity and institutional building programs for all concerned government agencies and instrumentalities; Conduct an assessment and review of all mining-related laws, rules and regulations, issuances, and agreements with the view to formulating recommendations to enhance coordination between the National Government and LGUs to ensure implementation of mining laws and regulations, and to properly regulate small-scale mining participants and ensure that they are accountable to the same environmental and social obligations as large-scale mining companies; Serve as the Oversight Committee over the operations of Provincial/City Mining Regulatory Boards (P/CMRBs); The following are the powers and functions of the MICC as to enforcement:

As may be directed by the President, constitute and create a Task Force Against Illegal Mining and seek the assistance of all law enforcement agencies, such as, but not limited, to the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) to ensure strict compliance with relevant laws, rules and regulations; Request the assistance of any government agency or instrumentality, including government-owned and controlled corporations and local government units (LGUs), in the implementation of this Order Other powers and functions:

Submit a work plan to implement the EO and implement other reforms related to the mining industry; Conduct an assessment and review of all mining-related laws, rules and regulations, issuances, and agreements with the view to formulating recommendations to improve the allocation of revenues and risk between the government and the mining sector; Submit periodic reports to the President on the status of the implementation of this Order; and, Perform such other functions and acts as may be necessary, proper or incidental to the attainment of its mandates and objectives, or as may be directed by the President. As a means of improving regulation in the processing of mining application, Section 13 of EO 79 sought the creation of an inter-agency one-stop shop for all mining related applications and processes. The DENR will issue authority to verify mineral deposits only for areas open to mining as defined in Section 9 of EO 79.

Securing free and informed prior consent of the concerned indigenous peoples and compliance with the social acceptability requirement of the communities affected before a Mineral Production Sharing Agreement, Financial and Technical Assistance Agreement, Joint Venture Agreement or Co-Production Agreement can be approved has also been mandated by EO 79.

The changes introduced by EO 79 basically focused on three areas: economic, environmental, and enforcement. Aiming for a more equitable distribution of opportunities, income, and wealth while protecting the right of the Filipino people to a balanced and healthful ecology are the core principles of EO 79. These goals will only be achieved through stricter enforcement of our mining laws and policies with the help of all the stakeholders in the mining industry. http://www.zglaw.com/mining-law-update-aug-2012.php

Page 1 1 The trail of a mining law: ‘resource nationalism’ in the Philippines* *Paper read at the conference on Mining and Mining Policy in the Pacific: History, Challengesand Perspectives, 21-25 November 2011. Noumea, New Caledonia.Minerva Chaloping-March, PhD Research Fellow, 'After Mining' Public Sector Linkage ProjectPhilippines-Australia Studies Centre, Institute for Human SecurityLa Trobe University, Bundoora 3086 VIC, Australia m.chaloping-march@latrobe.edu.au or minerva.chaloping-march@cantab.net Abstract:The paper looks into the socio-political and historical landscape of the Philippines that defined theimpetus for a mining policy and has shaped the evolution of what is now the Philippine Mining Act of1995. It discusses the law’s colonial foundations under the Spanish and American regimes that shaped thetiming and tempo of minerals exploitation in the Philippines that were perfected by subsequentadministrations. The paper traces the decades-long thorny path of the Mining Act of 1995 towards thePhilippine State’s purported goal of enhancing national growth by promoting the rational exploration,development, and utilization of mineral resources. Currently, the process of administering and disposing mineral resources is encumbered by resolute anti-mining advocacy that rely considerably on nationalist rhetoric and ideas about state sovereignty and control. In addition, opposition to mining builds onreligious-cultural perspectives. The role of the Catholic Church, together with various non-governmentorganizations, could not be discounted in infusing ideas of citizen’s duty of stewardship over the country’smineral resources and moral responsibility to protect the environment. The paper, using fieldwork dataand archival materials, aims to contribute to understanding the strenuous pathway that a mining policytrudges and the socio-political and cultural factors that confront its objective of becoming effectively andefficiently implemented. IntroductionThis paper examines the historical pathway through which an enacted mining policy has passed.In particular, it looks into key socio-political factors that have shaped the process ofimplementing the Philippine Mining Act of 1995, the law that governs the conservation,management and development of mineral resources in the Philippines. The timeline of eventsunderlines key issues stemming from the nexus of political, economic, cultural and ideologicaldynamics of claiming rights to land and mineral resources, as well as raising concerns aboutenvironmental degradation associated with mining operations. The interlocution of manystakeholders brings up images of ‘nationalism’ and ‘sovereignty’, two broad terms which areclosely tied to expressions of self-determination and aspirations to partake in the fruits of naturalresource development. Thus, this paper is about understanding ‘resource nationalism’ in thePhilippines in light of key events that have configured the ebb and flow of realizing the goals ofthe mining law.In current literature, discussions on ‘resource nationalism’ concern the moves of countries ‘totake (or seek to take) direct and increasing control of economic activity in natural resourcesectors’ (Ward, 2009, p. 5). In particular, resource-rich countries transfer political and economiccontrol of their energy and mining sectors from foreign and private interests to domestic and Page 2 2state-controlled companies (Bremmer & Johnston, 2009, p. 2). The rationale of a state inenlarging its control is to secure its ability to exact a greater share of resource rents. During the1970s, resource nationalism was a demonstration of backlash by developing countries againstformer colonial masters. At present, resource nationalism is ‘better understood in the context ofglobal concern for resource security, climate change, sustainable development and povertyreduction’ as all these are intertwined (Ward, 2009, p.5).The paper explores the images of ‘resource nationalism’ with a focus on a much smaller andmore immediate scale – the level of communities and local governments vis-à-vis mainly thePhilippine State that aims to reinvigorate the minerals industry by attracting foreign investments,given the country’s vast potential and actual mineral reserves. Hence, the situation is one whereconstituent citizens challenge the absolute control of the Philippine State over land and naturalresources and their utilization and development. This aspect of resource nationalism involvingthe claims of subnational constituencies is scarcely examined. It is towards this inadequacy thatthis paper attempts to make a contribution.Local governments seek to protect mineral lands within their area of jurisdiction. Communitiessupport local governments to ensure they benefit from resources such as minerals within theirvicinity and at the same time protect the surrounding environment that support forests andagriculture. In certain provinces within the archipelago, local government officials andconstituent citizens share the need to secure a fair share of the proceeds from the development ofthe natural resources located within their area. Mining as an economic activity in the Philippineshas continued to be a hotbed for controversies involving industrialists, environmentalists andconservation groups, indigenous peoples, local governments, communities, and religious groups.There are two primary reasons for the continuing controversies: a) a genuine concern of citizensfor the long-term social and environmental consequences, including the cultural and economicwellbeing of communities especially after mining has long ceased, and b) a lingering mistrust oflocal citizens in the ability and sincerity of the national government and the minerals industry toaddress the concerns of communities who are adversely affected by mining operations.The paper consists of three sections. The first is a review of key colonial laws that served asfoundations for policies by subsequent administrations in defining tenurial rights to land and thepace of exploiting mineral resources in the Philippines. The second section discusses governmentefforts to revive the minerals industry that had been on decline since the 1970s, except for 1985-1986 until the 1990s. Reviving the industry is regarded by the government as hinging on thesuccessful implementation of the Mining Act of 1995. The third section looks into recent events– since the time the Act was passed – that highlight intertwining issues which exemplify thenature of claims and expectations concerning entitlements to land and mineral resources. Thepaper uses fieldwork data and archival materials collected mainly in September 2004 to May2005 and complemented with additional interviews in March-April 2010 and August 2011, aswell as additional materials from online sources.Colonial foundations for the current mining lawMining has carved out a place in the early history of the Philippines. The country’s long traditionof mining can be traced to as early as 400 B.C. to 250 B.C., a stage when other metals such asiron and bronze became known in Philippine prehistory (Caballero, 1996). The early Spanish Page 3 3conquerors and pioneers who arrived in the Philippines in the 1500s observed alluvial mining,although relatively sparse, in many areas. During the 16th century, an important directive of theSpanish king to the conquistadors was to identify and consider the colonies’ resources which arepotentially useful to the Crown. Thus, the leaders of exploratory teams in the Philippinesrecorded in detail the products and resources of localities they visited. Their tasks involvedcompiling geologic studies of many mineral-producing districts. They produced a mineral mapof the archipelago incorporating the unsolicited observations of travellers. These works would,many years later, provide the subsequent colonial power in the Philippines – the Americans –vital information on locations of the mineral deposits and the mining areas where they couldconstruct new mines (Lopez, 1992).The Spanish colonial government legislated the institutional regulation of the mining industry.By virtue of conquest, the entire archipelago of the Philippines was assumed to be owned by theSpanish King. This assumption, based on the concept of the Regalian Doctrine, hinges on theprinciple of eminent domain which accords the Crown the right to develop mines on its owninitiative or through private concessions. However, this principle is considered ‘mythical’(Leonen, 2004) because the Regalian Doctrine was not extensively effective during the Spanishregime in that the colonial government was not able to subjugate all areas of the islands.Nonetheless, as rightly stressed by Owen Lynch (1986) the doctrine would later become thebasis upon which subsequent Philippine land laws are founded. The 1935, 1973, and the 1987Philippine Constitutions all include provisions on the State’s ownership of natural resources, andits right to utilise and develop them.Spain handed over the Philippines to the United States under the Treaty of Paris on 21 December1898. As the American occupation began in the Philippines, mining had been a major interest ofthe American economic survey teams. A series of land statutes were enacted that ensured centralgovernment control over all lands. Among the various laws were the following:a) the Land Registration Act No. 496 of 1902 which required the acquisition of a ‘TorrensTitle’;a) the Public Land Act of 1905 which declared all previously unregistered lands as publiclands under the administration of the state; andb) the Mining Law of 1905 which granted Americans the right to acquire public land formining pursuits.These laws provided that mineral deposits in public lands were free and open for exploration,occupation and purchase by citizens of both the United States and the Philippines (Congress ofthe Philippines, 1902). These laws reinforced what had been laid out by the Spanish in whichnew ideas of resource access and use would dispossess certain groups of people, particularlythose in the unhispanized areas, of their lands. Little or no regard has been paid to the peopleinhabiting the land or their unwritten rules on land (see Constantino, 1975).Mining policy under the Marcos administrationUnder the Marcos administration, an easy path for the extraction of the country’s mineralresources had been laid out with specific laws created for such purpose (Malig, 2002). In 1971, Page 4 4the Senate and Congress enacted Republic Act 6364 1, also known as the Gold Subsidy Law toprovide relief to gold producers. Under this law, the Central Bank was required to purchasenewly mined gold from mining companies at a designated price. All gold producers received asubsidy of sixty pesos per ounce of production, plus seventy per cent of the positive differencebetween the cost of production per ounce of gold and the official price (RA 6364, 1971).In 1974, Marcos issued Presidential Decree 463 (PD 463), also known as the MineralDevelopment Act of 1974, to provide for an efficient administration and disposition of minerallands and promote and encourage their development and exploitation. Under the law, miningcompanies were exempt from paying customs duties and all taxes for machineries, equipment,tools for production, and plants imported for the use of new mines and old mines. In addition, allmining claims, improvements and mineral products derived from these claims were not liable forthe payment of all taxes (PD 463, 1974, Chapter X Section 53). While PD 463 is labeled as thecountry’s first mining law to provide for ways ‘to deal with environmental and social aspects ofmining operations’ (Cabalda, Banaag, Tidalgo, & Garces, 2002), it also granted miningcompanies timber, water and easement rights on mining claims they own, occupy or lease (PD463, 1974, Chapter XI Sections 56 - 59). Even as the law stipulated penalties for pollution frommine wastes and mill tailings, the maximum fine of PhP5,000 or six-year imprisonment or both(Chapter XIV Section 81) saw no actual imposition on polluting mines.In 1977, Marcos issued two decrees that should have supplemented PD 463. First, PD 1198 2 provided that mining corporations ‘shall, to the fullest extent possible, restore, rehabilitate, andreturn the lands, rivers, and natural environment subject thereof or affected thereby to theiroriginal conditions as of before such operations or activities’ (PD 1198, 1977, Section 1,emphasis supplied). Second, PD 1251 3 imposed fines of PhP0.05 and PhP0.10 per metric ton ofmine waste and mill tailings respectively. The pollution of major waterways is lucid evidencethat these laws had not, over the decades, actually been enforced. PD 463 actually amendedCommonwealth Act 137 (CA 137) 4, the mining law under the American administration, whichstipulated the 60-40 ownership ratio where foreign investors can own 40 percent as maximum ofthe company while Filipino citizens can own the remaining 60 percent.Mining policy under subsequent administrationsOn July 1987, President Corazon Aquino issued Executive Order 2795. This law fully authorisedthe Secretary of the DENR (Department of Environment and Natural Resources) to negotiate and 1 An Act to Provide for Assistance to the Gold Mining Industry2 Requiring All Individuals, Partnerships or Corporations Engaged in the Exploration, Development andExploitation of Natural Resources or in the Construction of Infrastructure Projects to Restore or Rehabilitate AreasSubject Thereof or Affected Thereby to their Original Condition3 Imposing A Fee on Operating Mining Companies to be Known as "Mine Wastes and Tailings Fee" to Compensatefor Damages to Private Landowners and for Other Purposes4 This law is also known as the Mining Act of 1936. It was patterned after the United States’ Federal Mining Act of1872 and incorporated most of the features of the Philippine Bill of 1902. 5 Authorizing the Secretary of Environment and Natural Resources to Negotiate and Conclude Joint Venture, Co- Production, or Production-Sharing Agreements for the Exploration, Development and Utilization of MineralResources, and Prescribing the Guidelines for Such Agreements and Those Agreements Involving Technical or Page 5 5conclude leasehold agreements with existing and expected proposals from interested parties,including foreign-owned corporations. The aim was to encourage investment in the miningindustry’ (Executive Order 279, 1987). This authority was formerly a prerogative reserved onlyfor the President of the Philippines. The new power of the DENR Secretary effectively hastenedthe entry of many foreign mining firms.Aquino’s successor in 1992, Fidel V. Ramos, further opened the doors to foreign investors for allindustries: deregulating, liberalizing and privatizing almost all government owned corporations.The Philippines was one of many developing countries to adopt neo-liberal economic policies toattract more mining investments. In 1993, President Ramos commissioned a multi-sectoral taskforce to assess the needs of the minerals sector and make proposals towards reviving the stagnantand ailing industry. A major concern which the minerals industry in the Philippines had faced foryears was the delay in the passage of a new mining law. For many years, executive andadministrative orders providing guidelines for specific activities concerns governed the mineralsindustry. A particular clamour by key officials of the Mines and Geosciences Bureau (MGB) 6 and the Chamber of Mines of the Philippines (COMP) was the need to remedy the constitutionalrule restricting foreign investors to a ceiling of 40 percent ownership in mining ventures.Under President Ramos, the Philippine Congress issued in 1994 Republic Act 7729, otherwiseknown as the Excise Tax Act 7. This law reduced the excise tax rates on metallic and non-metallicminerals. Subsequently in March 1995, Republic Act 7942, known as the Philippine Mining Actof 1995, was approved. As entreated by the minerals industry, the Act allows up to 100 percentownership of mining operations by foreign companies. Such avenue given to foreigners to fullyown and control mining operations in the Philippines is the most contentious issue pertinent todeveloping the country’s minerals resources. The Mining Act also grants mining companies tooperate for a maximum of 50 years and can occupy an area of 81,000 hectares where thecompany enjoys timber rights, water rights and easement rights. The incentives granted toforeign mining companies include tax holidays and 100 percent repatriation of their capital andprofit.The passage of the Mining Act of 1995 proved that it was the signal which foreign investorswere waiting for. Barely a few months after the law’s enactment, more than 50 applications forFTAAs were already filed at the MGB (Cinco, 1995). In 1996, 20 of the world’s largest miningcompanies established offices in the country and filed applications for various mining tenementsleading to the approval of several exploration projects (Cabalda, Banaag, & Garces, 2002;Domingo, 2003). Financial Assistance by Foreign-Owned Corporations for Large-Scale Exploration, Development, and Utilization ofMinerals. 6 The MGB is the primary government agency in charge of administering the exploitation of the country’s mineral resources. It is one of the bureaus of the DENR. 7 An Act Reducing the Excise Tax Rates on Metallic and Non-Metallic Minerals and Quarry Resources, Amending for the Purpose Section 151(A) of the National Internal Revenue Code, As Amended. Page 6 6Ebb-and Flow of the Mining Act of 1995In the most ironic twist of events, the positive momentum generated by the passage of theMining Act of 1995 had dissipated during the years immediately following the law’s enactment.This was due to a combination of economic, political, and socio-cultural factors which warrantsome discussion.The Marcopper mine disasterThe Marcopper disaster ironically happened just as the Philippine government was trying torevive the industry and campaigning about the Mining Act as the vehicle to implement‘sustainable mining’. On 24 March 1996, a major tailings spillage occurred at the Marcoppermine in Marinduque Island. For many years, Marcopper Mining Corporation had been using amined-out open pit as a tailings containment pond. Connected to this pond is an old drainagetunnel that collapsed. As a result, an estimated 1.5 to 3 million cubic meters of mine tailingsfound their way into the Makulapnit River, Boac River, and eventually the ocean at the Westsideof the island (Plumlee, Morton, Boyle, Medlin, & Centeno, 2000). The immediate effects werecatastrophic: agricultural fields were flooded and fishing which was a major livelihood for morethan 20,000 families in 42 communities stopped due to the flow of mine tailings burying thechannels and the valley floor (SEPO, 2005).Inquests on the accident established that the mines’ pollution problems had been occurring formany years. Previous penalties were imposed on the company for its marine disposal of over 200million metric tons of tailings in Calancan Bay resulting in marine pollution and siltation ofabout 0.84 kms 2 during the period 1975 to 1986 (Ramos, Cabalda, & Banaag, 2000). However,permanent closure was never enforced.Although the tailings spillage was committed specifically by one company, public denunciationwas launched at the entire minerals industry. The incident reinforced the public doubts cast at theminerals industry’s claims of environmental management especially in managing mine wastesand tailings (Ramos, et al., 2000). The disaster drew calls from mainly the country’s Catholicclergy, church-based organisations, civic-oriented groups, conservation and environmentactivists for opposition to mining in general and even the outright scrapping of the Mining Act of1995 in particular.A legal impassePartly as a response to the Marcopper tailings disaster, and alarmed by the influx of foreignmining companies to the country, a group of nongovernment organizations (NGOs) filed on 10January 1997 a petition at the Philippine Supreme Court questioning the constitutionality of theMining Act and its implementing rules and regulations. The group of NGOs was led by the LegalRights Center-Kasama sa Kalikasan (LRC-KsK). Known as the La Bugal-B’laan Case, thepetition called for the Supreme Court to nullify the Philippine Mining Act of 1995 and the FTAAentered into in 1995 by and between the Philippine Government and Tampakan Mineral Page 7 7Resources Corporation, Inc., owned by the Australian Western Mining Corporation (WMC) 8 .Although WMC is the only formal private respondent in the case, the entire minerals industryhad actually been handed the legal challenge.The key issue of the appeal pertains to the unconstitutionality of the FTAA provision of theMining Act because, as claimed by the petitioners, such provision allows 100 percent foreignownership in large-scale exploration, development, utilization and exploitation of mineralresources in the Philippines by filing FTAAs. Such practice, the petitioners argued, breaches theconstitutional provision that the natural resources of the Philippines are a national heritage whichforeign companies, through FTAAS, should not exploit.Enactment of a law to protect indigenous peoples rightsWhile the Mining Act was caught in a legal standoff, a law that concerns protecting indigenousresource rights was enacted: Republic Act 8371, otherwise known as the Indigenous PeoplesRights Act (IPRA). Its final passage 9 on 29 October 1997 was the result of a decade of lobbying,deliberations and consultations by concerned NGOs, peoples’ organizations and indigenouspeoples’ representatives with the support of public interest lawyers who are themselvesenvironmental activists. The IPRA is a realisation of the State policy on rights of indigenouspeoples and cultural communities as declared in Section 22, Article II of the PhilippineConstitution, i.e., “The State recognizes and promotes the rights of indigenous culturalcommunities within the framework of national unity and development.”The IPRA created the National Commission on Indigenous Peoples (NCIP) as ‘the primarygovernment agency for the formulation of and implementation of policies, plans and programs topromote and protect the rights and well-being of indigenous cultural communities/indigenouspeoples (ICCs/IPs) and their ancestral domains as well as their rights thereto’ (RA 8371, 1997).Hailed by Atty. Evelyn Dunuan, the first NCIP head as ‘the first of its kind in the whole world’(Dunuan, 2003), the IPRA gives explicit recognition to and protection of the rights of ICCs/IPs‘to their ancestral domains to ensure their economic, social and cultural well-being’. Theancestral domain of ICCs/IPs not only covers the physical land they occupy but the totality ofresources and environment including mineral and natural resources underneath. The IPRAprovides for priority rights to ICCs/IPs in the extraction, development or exploitation of anynatural resources within their ancestral domain (see NCIP Administrative Order No.3, 2002).Soon after its enactment and what appeared to be a countermove to the La Bugal-B’laan case,two lawyers, i.e., Isagani Cruz (a retired Supreme Court Justice) and Atty. Cesar Europachallenged at the Supreme Court the constitutionality of the IPRA. As petitioners, their issuespertain mainly to the ownership of minerals, property rights, priority rights and self-delineationby the ICCs/IPs. They also questioned the powers and jurisdictions of the NCIP and theapplicability of customary law to the settlement of disputes involving ancestral domains andancestral lands as violating due process of law. 8 In 2004, Western Mining Corporation (Australia) sold the project to the joint venture of Sagittarius Mining, Indophil Resources, Xstrata Holdings and J.P. Morgan. 9 The law’s passage had a considerably lengthy history in which one change built incrementally upon another. Circumstances leading to the enactment of the law can be traced to as early as 1974. Page 8 8With the legal challenge posed to the IPRA, the government withheld the release of the NCIP’sbudget in September 1998. Thus, the agency was prevented from performing its functions.Concerned sectors were asking why the government did not also suspend the implementation ofthe Mining Act, which was similarly facing a constitutionality challenge before the SupremeCourt. On 6 December 2000, the Supreme Court dismissed the challenge to the constitutionalityof the IPRA (see Supreme Court of the Philippines, 2000). Subsequently, the petitioners filed amotion for reconsideration. However on 21 September 2001, the Supreme Court arrived at aresolution and declared that the IPRA is constitutional.Verdict on the constitutionality challenge to the Mining ActFrom the time the La Bugal-B’laan case was filed in 1997, the Supreme Court had not issued adecision on the constitutionality issue against the Mining Act. In January 2004, after seven yearsof deliberations, the Supreme Court ruled in favour of the petitioners, thereby nullifying theMining Act’s FTAA provisions that allowed the execution of service contracts with foreign firmsfor exploration and mining ventures. The Supreme Court also declared null and void the FTAAentered into by and between the Philippine Government and WMC.The MGB enjoined by the private respondents and the minerals industry represented by theCOMP immediately appealed the High Tribunal’s decision. They argued, among others, that thePhilippine Constitution allowed foreign contractors to have reasonable management over miningprojects and the Mining Act ensured a fair and equitable sharing of the proceeds of miningprojects between the contractor and the state. The appellants also asserted that annulling theFTAA provisions would deprive the country billions of dollars of potential investments fromoutside. The President of the COMP stressed that the Philippines has already lost at least $20billion-worth of export revenues because the Mining Act was not fully implemented since itspassage in 1995 (Clancy, 2005). The COMP worked closely with the Office of the SolicitorGeneral and then filed a motion for reconsideration to the Supreme Court to plead for an oralhearing of the case in order to explain better the implications of the decision. Thus, an exhaustiveconstitutional review and the oral hearing in the Supreme Court were held in July 2004.On 1 December 2004, the Supreme Court reversed its January decision. It affirmed the legalityof the FTAA. The High Court’s response pointed out that ‘whatever priority or preference maybe given to mining vis-à-vis other economic or non-economic activities is a question of policy(not of constitutionality)’. In addition, such policy is something which the other two branches ofgovernment, the President and Congress, must address. Accordingly, the Supreme court ‘decidedfor the greater good of the greatest number’ and upheld the constitutionality of the Mining Act of1995 (Supreme Court of the Philippines, 2004). The High Court ruled that the mining laws thatwere questioned earlier – the implementing rules and regulations (IRR) crafted by DENR, andthe FTAA with WMC-Philippines which was executed in 1995 – do not breach the constitution.In the earlier decision handed in January 2004, the High Court had noted that the provision ofRepublic Act 7942 allowing foreign-owned corporations to operate and manage mining activitiesin the country violated the Charter on the grounds that it was in the nature of a ‘service contract’(see Panganiban, 2005). The LRC-KsK submitted a motion for reconsideration of the Court’sruling. However, on 1 February 2005, the Supreme Court denied the motion, thus upholding withfinality the constitutionality of the Mining Act of 1995. Page 9 9Expectedly, the government and the minerals industry were euphoric with the High Tribunal’spronouncement as this would pave the smoother path for implementing the Mining Act. Both thegovernment and the minerals industry carried out a series of campaign activities to invite foreignmining investments to the Philippines. Both the MGB and the COMP had presented thePhilippines as an investor-friendly country with a mining law that assures fiscal incentives suchas tax holidays as well as non-fiscal incentives which include employment of foreign nationals,simplified customs information procedures and institutional assistance for faster businessregistration procedures. The marketing and campaign activities had displayed the closepartnership between the government and the COMP, particularly in presenting the firm pro-mining stance of President Gloria Macapagal-Arroyo.Prior to the High Tribunal’s December 2004 ruling in favour of the Mining Act, PresidentMacapagal-Arroyo already declared her policy shift “from tolerance to promotion” of mining in2003. In January 2004, the President subsequently issued Executive Order No. 270, also knownas the National Policy Agenda on Revitalizing Mining in the Philippines. She also directed theDENR to complete a Minerals Action Plan (MAP) to guide the development of the local miningindustry which included identifying the government’s priority mining projects. PresidentArroyo’s directives aimed to facilitate the processing time of mining applications.A test for the Mining Act’s effectiveness and the government’s policing capabilityThroughout most of 2005, the government and the minerals industry were at the height ofpromoting, at home and abroad, mining investments in the Philippines. The sustainedinformation campaign on the government’s priority mining projects was generating remarkablyencouraging pledges and memoranda of understanding (MOUs) from investors. While this washappening, another major tailings spillage occurred in the country. This time, the disasterinvolved an Australian mine operation which belongs to the 24 priority mining projects: theRapu-rapu Pollymetallic Project. The company’s first production in July 2005 was a significantmilestone for the country’s minerals industry because the RRP was the first to have opened andfinally moved into production in the country within three decades (MGB, 2005). The project isconsidered by the government as critical to attracting more global investments into mining in thecountry (DENR, 2006; RFFC, 2006).Barely three months after RRP’s first gold production, mine tailings spilled from the company’sore processing mill into nearby creeks, leading into the sea. Based on the Rapu-rapu Fact FindingCommission (RRFC) Report and the DENR Assessment Report, there were two incidents ofspillage, i.e., on 11t h and 31 st October 2005. The cause of both incidents was grave mistakes ‘onthe part of Lafayette management and operating personnel’, which the company admitted.Similarly, both incidents of mine tailings spills ‘released extremely high levels of cyanide intothe nearby creeks and caused damage to the marine life’. The DENR admitted its culpability ‘innot being able to monitor’ in advance of any incident and acknowledged its being ‘dysfunctional’as it failed to check on the company’s ‘crucial non-compliance’ to rules and regulations (DENR2006.). The Rapu-rapu calamity clearly showed the critical weaknesses of the DENR as aregulatory agency. As admitted by DENR in its assessment report, the first spillage could havebeen corrected to avoid the second spillage (DENR 2006). The Rapu-rapu spillage incidentsprovided more credence to the predictions and general rhetoric of anti-mining advocates. Page 10 10Local government moratoriums against miningWhile the national government has been marketing the Philippines to attract foreign investmentsin mining, a number of local governments have aimed to impede the implementation of theMining Act. In 1999, the Capiz provincial government declared a 15-year moratorium on alllarge-scale mining. The Oriental Mindoro provincial government declared a 25-year moratoriumon mining since 2000, particularly opposing the plan of the Canadian Crew MineralsDevelopment Corporation to undertake open-pit mining in the province. Currently, the mostcontroversial opposition to mining by local governments, supported by constituent populations,are found in Palawan (see MISN, 2010), Romblon, and South Cotabato (Minda News, 2010, 11June, 2011, 18 February). Lower-level local governments such as municipalities have also issuedrelated ordinances in an attempt to restrict if not disallow the entry of exploration and miningprojects.Organised and sustained opposition to mining by local government, backed up by concernedcitizens, has recently demonstrated that indomitable mining companies do eventually getdissuaded to withdraw. This is demonstrated in the case of Ivanhoe-Philippines, a subsidiary ofCanadian Ivanhoe Mines Ltd. The company decided to abandon its plans to explore copper-goldprospects in the province of Romblon citing local politicians’ opposition as a reason (see PDI,GMA News Online, 2011, 13 January; 2011, 13 October).Advocacy to deter mining projectsThe ultimate recipients of the adverse effects, both direct and indirect, of mining are the poornatural resource-dependent communities that rely on fishing and agriculture, two commonlivelihoods in rural areas of the Philippines. Also, indigenous peoples in upland areas and remotelocations face ruinous effects on their way-of-life and cultural practices given their dependenceon land and access to various resources such as water, forests and animals. With the number ofmining projects speedily entering many parts of the Philippines, these vulnerable populationswant their apprehensions heard and subsequently addressed appropriately. They turn for help toavailable advocates who would support and represent their cause. In specific municipalities orprovinces, the champions may include local government officials. Others are civic organisations.At the national level, some help is often found in the Roman Catholic Church. The religioussector of mining oppositionists includes Catholic clergymen, particularly the politicallyinfluential Catholic Bishops Conference of the Philippines (CBCP) that raises a moral issue inregard to mining: the land must not be ‘defiled’, the environment protected and thedisadvantaged sectors particularly the indigenous peoples must not be displaced.The CBCP has been vocal in its criticism of mining. As early as 1998, it issued an officialstatement demanding the repeal of the Mining Act (CBCP, 2006; CBCP, 1998). In 2006, theCBCP called the Arroyo government to cancel ‘all concessions and deny all applications’ (TheManila Times, 2006). In addition to the collective declaration by the CBCP, individual bishopshave been crusading against opening mining to foreigners, criticizing mining companies, andblaming the industry for deaths in natural disasters (see Catholic News, 2006; Catholic News,2007). Most recently, the bishops declared anew their commitment to the environment. In aparticular case, they have stressed their rejection of mining projects in Palawan to avoiddespoiling the province’s subterranean river (CBCP Online Radio, 2011, 17 November). Page 11 11The clergymen are supported by the advocacy activities carried out by nationalist groups thattend to be ideological in orientation and whose rhetoric appeals to citizens and communitiesdesperate for support. Their discourse includes claims to stop the entry of transnational miningcompanies into the Philippines as foreign mining companies are ‘imperialist plunderers’. Manynationalist organisations are either directly allied with or sympathetic to BAYAN (BagongAlyansa Makabayan)10, a leftist supra-organisation that coordinates mass movements. BAYANtakes a political position during elections and represents peasants, industrial workers, women,jeepney drivers, teachers, indigenous peoples, and others. BAYAN organisations are overtlyrevolutionary and seek involvement in any constituency of resistance that they can identify.ConclusionThe ebb and flow of the Philippines’ Mining Act of 1995 demonstrate that the passage of amining law is simply the beginning of another process of negotiating claims and counterclaimsof many stakeholders. The Philippine State has expended enormous resources – policy,administrative structure, and extensive promotional activities – to revive the minerals industrythat stagnated for years. However, serious consequences of the failure in both previous andcurrent state policies and enforcement eventually emerged, as they are bound to emerge, to drawattention to fundamental problems that require resolution. These were exemplified by theMarcopper disaster and subsequently the Rapu-rapu tailings spillages. Having an existing mininglaw is one thing, implementing it effectively is another matter.The Filipinos’ religious and political culture brings important dimensions to how policy onmineral exploitation is formulated and implemented. The role of NGOs and the Church could notbe more important in maintaining the needed voice in the way a mining law directs mineraldevelopment. The Catholic Church infuses ideas of ethics and morality as the government talksof the Mining Act of 1995 as bringing hopes for economic growth by drawing in the muchneeded foreign capital through investments from overseas. However, the responses of concernedcitizens to the mining law confirm the nationalist discourse that questions the capability ofmining, particularly through foreign investments, as a vehicle for sustained development. Inaddition, there lingers a continuing general lack of trust among many Filipinos that miningcompanies will be dutiful to sincerely fulfil the law. There is general scepticism among ordinarycitizens about the government’s capability and political will to carry out its policing functions.Vulnerable citizens find the mining oppositionists as valuable channels for their demands andaspirations for better changes. The strong position of NGOs and clergymen serves to counter thegenerally perceived durable and intimate alliance between government and business interests.‘Resource nationalism’ builds on citizens’ profound awareness and commitment that protectionof their lands and the environment as well as the way mineral resources are disposed lieprimarily on themselves. Having had real experiences of mining-related disasters, localgovernments and citizens find the environmental safeguards promised by the Mining Act of 1995as being too far-fetched from real. The effective implementation of a mining law hinges on theestablished trust of citizens on the national government. http://webcache.googleusercontent.com/search?q=cache:aUvrV2AtJCkJ:nouvelle-caledonie.ird.fr/layout/set/popup/layout/set/print/content/download/41888/318831/version/1/file/Chaloping-March.pdf+&cd=8&hl=en&ct=clnk&gl=us

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