Rationalizing mining policies

EDITORIAL

Current policy on mining has not brought promised benefits to the Filipino people while implementation of the mining law has been fraught with lack of transparency and numerous examples of poor governance.

This according to nongovernment and environment organizations which claimed the FPIC (free, prior, informed consent) process has, too often, served to misinform indigenous communities on the effects of mining projects.

Instead of improved livelihoods and progress, according to the groups, mining has brought displacement and economic injustice to the so-called ‘host’ communities. Watersheds and forests have been encroached upon, endangering the health and welfare of both upland and surrounding downstream communities.

Bantay Kita, an environmental group says compared to devastation caused by mining projects in their jurisdictions, local government revenue gains are too miniscule to be felt. “The industry is plagued with under-declaration, tax avoidance and tax evasion. From 2000-2009, the under-collection of excise taxes was 65.5%. Among the many defects of the Mining Act of 1995, is that it contains provisions that do not allow the national government to get a fair share of mining revenues.”

Employing its more than generous gains, the mining industry, according to Bantay Kita, has embarked on lobbying and media campaigns to mislead the political leadership and the public with statements and advertisements on the benefits of mining. “It has even articulated a veiled threat that any obstacles to mining, such as environmental restrictions, will harm economic development,” the group said in a statement. “Contrary to all this industry hype, local governments and communities have not felt the benefits but the adverse effects of mining.

Their experience has led them to take action to protest against the encroachment of actually irresponsible mining projects and protect themselves from their devastating consequences. According to the MGB, 7 out of 16 mining projects in the advanced exploration and feasibility financing stages and 25 out of 28 projects in the development and expansion stages are facing opposition from local populations and their officials.”

Over 20 LGUs have reportedly issued moratoriums and environmental regulations to prevent mining firms from causing further damage to the environment, to livelihoods and to lives in their jurisdictions.

In the last decade, from 2000 to 2009, Bantay Kita said mining and quarrying together accounted for no more than 0.91% of Philippine GDP. In the same period, the industry’s contribution to total employment was a mere 0.376 %. Unnecessary incentives have also contributed to making the revenue effort of the mining industry to be slightly more than half of the revenue effort of the country.

Mining has contributed significantly to exports, it admitted. “But, without the development of downstream industries, that is a double-edged sword. As it spreads, it will cause a resource curse situation and hamper future development of the economy. Even if exports give rise to growth, this growth is clearly unsustainable. It will cause dependence on exports that deplete non-renewable resources.”

Not a few national government officials have also become concerned with the problems created by the current policy for the mining industry. Some are looking for means to raise revenues, others are considering mechanisms to improve governance of the industry. Executive Secretary Paquito Ochoa recently announced that the government intends to adopt the Extractive Industries Transparency initiative. However, these are piecemeal measures mainly addressed to improving revenues for the national government. To date, no comprehensive policy review has been conducted.

Such a review is not even an express priority and therefore no viable vision for a viable and sustainable mining program has been articulated. Without such a vision, new mining projects such as those recently procured by the President in China, will benefit only those companies, not the country, not the Filipino people and not the Philippine government (national as well as local).

Congress has taken due notice of the problems caused by current mining policy. Several alternative mining bills that adequately address these concerns have been filed in the House of Representatives. But, these have not been prioritized in the legislative agenda of the Executive branch of government. On the other hand, moves to amend the economic provisions of the Constitution may further degrade the Philippine position vis-à-vis mining.

Crafting and institutionalization of reforms should be done before further expansion of the mining industry, according to environment groups. President Benigno C. Aquino III could look into this issue which is of great concern particularly among indigenous groups.

The President could institute an in-depth review of mining laws, with special attention to the incentives granted to the industry, its practices vis-à-vis rights of local populations and indigenous peoples and its long term effects on the environment.