Another group showing interest in Lafayette?

Some comments to the press release entitled "Second group shows interest in acquiring Lafayette Mining" (full text below).

1. Another investor group is looking at acquiring majority control of Lafayette Mining Ltd., i.e., buy its existing debts and hedges at a discount. Must be a very big discount.

For advocates of transparency and the environment, this news (truth or otherwise), published last 7 December 2007 on Manila Bulletin, is one more reason not to be lulled to complacency and premature rejoicing. Change of ownership or majority ownership does not augur well to efforts at assigning accountability for corporate malpractice. Remember, remember the Marcopper disaster.

2. Now this one is a straight LIE. “The project directly employs approximately 1,000 people, most of whom are from the island itself.”

Data presented by Mr. Roy Cervantes, a Lafayette employee from its Community Relations Department, in a conference of Pollution Control Officers on 9 May 2007 in Legazpi City, revealed that Lafayette directly employs a total of (ta-daan!) 131 Rapu-Rapu locals among their personnel. 131 is less than 0.5% of the town’s total population. Cervantes’ figures of Lafayette’s workforce in 2007 is only a little more than a quarter of 1000. “1,000 people, most of whom are from the island”, you say?

3. This one is a DECEPTION. “It also conducts various activities designed to improve life on the impoverished island for residents. These valuable community activities range from raising the quality of education to providing livelihood projects and basic necessities such as roads, water and electricity.”

From the same data presented by Lafayette’s Mr. Cervantes, the company has spent for its Social Development Program in Rapu-Rapu the following amount: P8.9 million for 2000-2005 (an average of P1.5 million each year), P6.5 million for 2006 and 18 million for 2007. Take note that they have raised their allocation only after the 2005 fish kills.

A closer look at Lafayette’s social development projects will reveal, not only that most of these are palliative in nature, but also that their beneficiaries are limited mainly to residents of barangays Pagcolbon, Binosawan and Malobago where the mine site is located. Apparently, they are designed to gain the loyalty of, at least, a segment of Rapu-Rapu’s population and to project the company’s supposed socially-responsible image. Nice plan, but, as they say, the devil is in the details. Whether there is significant economic improvement in the lives of most of these programs’ beneficiaries is another matter altogether.

In a recent people’s forum in Rapu-Rapu, Dean Virgilio Perdigon Jr., of Aquinas University’s Polytechnic Institute, presented Lafayette’s proclaimed social development projects. To each of them, the people gathered there resoundingly cried out “buwa!”, the local word for “lie”.

The road, water and electricity projects are also situated (you guessed it!) in the barangays where the mine operates and its workers reside. These projects are there primarily because Lafayette needs them for its operations.

There are even reports of occasional harassments committed against researchers and even Rapu-Rapu residents just to pass through this road. How would you feel if you were a Rapu-Rapu resident and you would be required either by Lafayette’s “blue guards” or by Lafayette-subsidized barangay security personnel to write your name on a logbook, stating the time and purpose of visit, every time you pass through this road? Still think Rapu-Rapu residents should be grateful to Lafayette for providing them roads, water and electricity? Think again.

4. Of course, the article has to end with the constant yet WEAK ALIBI that Lafayette couldn’t be in any way connected to the alleged fish kill because it happened only in Brgy. Poblacion, located 10 kilometers away from the mine site.

First, the fish kill did happen. Second, the fish kill sighting was not limited in Poblacion only but in other barangays as well. Third, here is an excerpt from the independent study conducted by Ateneo de Naga University’s Institute for Environmental Conservation and Research (INECAR):

“It was impossible for the source of the poison that killed the fishes to originate from the town proper because of the heavy rains and wind direction (on) October 26-27, 2007. If this (were) the case, the dead fishes (would) have floated farther west of the island. Thus, the poison could have only come from the eastern section of the island.” The mine site is located in that section of the island.

Still think Lafayette is all for truth and transparency? Think again.

Second group shows interest in acquiring Lafayette Mining
http://www.mb.com.ph/issues/2007/12/07/BSNS20071207110800.html

Another investor group is looking at acquiring majority control of Lafayette Mining Ltd (LML) following a stall in the negotiations with the previously announced Cornerstone Investor.

David Baker, managing director of LML, said he had been informed by the Southeast Asian Strategic Asset Fund (SEASAF) about talks with a number of other investors, although the Cornerstone Investor has “not yet closed the door.”

LML is the Australian-based mother company of the Lafayette Group in the Philippines which has a polymetallic project in Rapu Rapu, Albay.

SEASAF arranged a $15 million investment in LML convertible notes and has been keeping in touch with a number of potential investors for a major restructure of Lafayette and the Rapu Rapu project.

SEASAF in essence wants Lafayette and the project to be debt free and hence financially stronger. It has proposed to the potential investors to buy the existing project debts and hedges at a negotiated discount.

“If those proposals proceed, the funds that we would in the future have to allocate to servicing loans could be made available to the Philippine project instead and to the Rapu Rapu community and its residents,” said Baker.

The project directly employs approximately 1,000 people, most of whom are from the island itself. It also conducts various activities designed to improve life on the impoverished island for residents. These valuable community activities range from raising the quality of education to providing livelihood projects and basic necessities such as roads, water and electricity.

Despite these efforts, militant anti-mining groups and some Church personalities have been asking for the closure of the project and had even accused it of causing an alleged fishkill that was more than 10 kilometers away.