Pure lip service for environmental protection by DENR, MGB and CMP Part 1

In the July 28, 2009 issue of the Philippine Daily Inquirer, through an article written by Mr. Nikko Dizon titled “Purist ideas of environmentalists assailed”, Mr. Horacio Ramos of the Mines and Geosciences Bureau central office and the Chamber of Mines of the Philippines assailed “anti-mining” groups. Below is a rebuttal from Save Rapu-Rapu Alliance and Pangataman Bikol.




Lately, Mr. Horacio Ramos of MGB has resorted to labeling in his defense of mining companies that go around in the guise of “responsible mining” and “sustainable development.” Failing to present facts about mining impact on Philippine environment, Mr. Ramos cites motherhoods and calls his critics “purists” as if by casting such word like a magic spell all oppositors would vanish with a wave of his wand. Allow us to respond to him and the Chamber of Mines of the Philippines (CMP) point by point:

1. CMP: “The mining act has very stringent environmental protection measures and they have been complied with.”

We reply: The Mining Act became law in 1995. In 1996, the Marcopper mining disaster happened in Marinduque! The Mining Act of 1995 is favorable to mining companies and reads like it was written by them. If the Mining Act has very stringent provisions, then why are mining areas in such terrible shape? Rapu-Rapu, Aroroy, Larap, Marinduque, Mangkayan, etc are serious indictments of the “stringent” mining act.

2. CMP: “Even in the case of Rapu-Rapu, this was dealt with immediately . . . They have paid for their mistakes. Government and even civil society groups in the area monitor operations closely and do not confirm the disappearance of fish catch. This is hearsay.

We reply: These are the facts, not hearsay, about Rapu-Rapu mining. In Rapu-Rapu, five major fishkills have been noted. The Pollution Adjudication Board made Lafayette pay only for the October 2005 accidents. However, not a cent went to the people of the island. Rod Watt, the Australian manager during those spills was not penalized. He even received P16 million in salaries in 2006. The management team of Carlos Dominguez, taking over from the Australians, never improved the situation for the residents of the island. They earned over P 90 million during their stint. While Lafayette executives earn millions inside their airconditioned offices, the people of Rapu-Rapu are losing everything they need for present and future survival. The following data on their salaries are from the annual reports of Lafayette Mining Limited from 2001 to 2007 (the executives have varying periods of employment):

1. Antill, Mark, Asst. VP Mining; US$ 138,131.00; P 6,906,550.00; 1 year
2. Baker, David Lewis, Mng Dir and Chief Exec Offcr; US$ 1,197,884.00; P 55,433,075.00; 2 years
3. Benuik, VG, Asst. VP Metallurgy; US$ 115,714.00; P 5,785,700.00; 1 year
4. Campos, Marc A., Senior VP Prodn and Comrcl; US$ 179,276.00; P 8,159,970.00; 2 years
5. Culbert, Ian Edward, Executive Director; US$ 180,000.00; P 9,000,000.00; 1 year
6. Eckhof, Klaus Peter, Non-executive Director; US$ 21,600.00; P 1,080,000.00; 1 year
7. Geddes, Peter Jeffrey, Non-executive Director; US$ 30,000.00; P 1,500,000.00; 1 year
8. Gillard, Reginald Norman, Non-executive Chairman; US$ 360,759.00; P 17,731,385.00; 6 years
9. Hickman, Timothy James Bruce, Chief Financl Ofcr and Co Sec; US$ 784,008.00; P 39,200,400.00; 4 yrs
10. Mahony, David Ronayne, Executive Director/Non-ex Dir; US$ 768,837.00; P 38,441,850.00; 4 years
11. Marwood, Bradley WJ, Chief Operating Officer; US$ 177,840.00; P 8,892,000.00; 1 year
12. McIlwain, Andrew Ivor Bruce, Mng Dir and Chief Exec Offcr; US$ 1,950,138.00; P 97,506,900.00; 4 yrs
13. McMullen, Michael James, Technical Director; US$ 160,000.00; P 8,000,000.00; 1 year
14. Mitchell, James Scott, Non-executive Director; US$ 120,700.00; P 6,035,000.00; 3 years
15. Quartermaine, Jeffrey Allan, Chief Financl Ofcr and Co Sec; US$ 580,835.00; P 26,408,410.00; 2 years
16. Robinson, Kevin Peter, Non-executive Director; US$ 113,257.00; P 5,662,850.00; 3 years
17. Stevering, Michel GM, Group Finance Mgr/ Comp Sec; US$ 132,058.00; P 5,942,610.00; 1 year
18. Taylor, Paul Richard, Non-executive Director; US$ 50,582.00; P 2,529,100.00; 1 year
19. Thompson, AB, VP Operations; US$ 233,036.00; P 11,651,800.00; 1 year
20. Walker, Jurg, Non-executive Director; US$ 40,000.00; P 2,000,000.00; 2 years
21. Watt, Roderick, Country Manager – Philippines; US$ 915,172.00; P 45,758,600.00; 5 years
22. Widdup, Robin Anthony, Non-executive Director; US$ 46,250.00; P 2,150,000.00; 2 years
23. Wood, Steven C., Non-executive Director; US$ 12,630.00; P 568,350.00; 1 year

Total salaries = US$ 8,308,707.00 = P 406,344,550.00

We do not covet their money. In the first place, that money rightfully belongs to the people of Rapu-Rapu. We only lament that they have all the benefits while the people of Rapu-Rapu bear all the costs – environmental damage and loss of livelihood.

Civil society groups here from the academe, church, fisherfolks, NGOs, etc oppose the mine - Aquinas University of Legazpi, Ateneo de Naga University, Divine Word College of Legazpi, St. Agnes’ Academy, Social Action Center, Parish of Rapu-Rapu, Diocese of Legazpi, Diocese of Sorsogon, Archdiocese of Caceres, Diocese of Virac, Diocese of Libmanan, Diocese of Masbate, Diocese of Daet), the Governor of Albay, many city and municipal governments in Bicol, Save Rapu-Rapu Alliance, Pangataman Bikol, Sagip-Isla Sagip-Kapwa, Kalikasan People’s Network for the Environment, Greenpeace, Oxfam Australia, Banktrack, Development and Peace of Canada, Center for Ecological Concerns Philippines, Health Alliance for Democracy, Community Medicine Development Foundation, Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas, Peace for Life, Philippine Collegian, Bulatlat, AGHAM, Redemptorist Baclaran, Takaki Citizen Science Foundation of Japan, Friends of the Earth Japan, BAYAN Bikol, KMP Bikol, Ugnayan ng mga Mamamayan Laban sa Pagmimina at Kombersyong Agraryo Camarines Norte, BAYAN Camarines Sur, PAMALAKAYA Masbate, KMU Bikol, ABAKA Catanduanes, KADAMAY Bikol, Camarines Sur People’s Organization, Bikol Express Multimedia, AMLDM, Rural Missionaries of the Philippines, radio stations DZGB and DWBS, etc. All the seven bishops of Bicol oppose the mine as manifested in their letter to the Pope dated December 25, 2008, after all appeals for mine closure fell on deaf ears of local and national authorities.

The fisherman around Albay Gulf (including Rapu-Rapu) and the International Solidarity Mission on May 10-13, 2009 all confirm the rapid decline in fish catch which started in 2005, the same year when Lafayette began operation.

In October 2005, July 2006, and October 2007 fishkills occurred. The Rapu-Rapu Fact-Finding Commission recommended mine closure. Lafayette Mining Limited downplayed the impact of the 2005 and 2006 fishkills and does not accept responsibility for the 2007 fishkill. The CEC, UP College of Engineering and UP NSRI detected heavy metals in sediment, fish and water samples. Lafayette boasts that they are ISO 14001 compliant but the ISO certificate does not address the four reasons for objecting to Rapu-Rapu mining: small size, steep slopes, heavy rainfall, acid mine drainage. The ISO certificate does not address Lafayette’s failure to keep its promise to pay billions in taxes and implement social development projects. The ISO Certification does not address the PEZA exemption of Lafayette from taxes on income earned from production of precious and base metals. We should also note that the ISO Certification does not solve the fishermen’s problem of diminished catch in fishing grounds near the island and their need to go far out into the Pacific Ocean facing gigantic waves using tiny boats just to pursue their livelihood. In 2006, the Rapu-Rapu Fact-Finding Commission submitted its recommendations to the President. Instead of following the recommendations, then DENR Secretary Angelo Reyes gave Lafayette a “second chance” through the test runs. A perusal of the report on the test runs shows that the readings of contaminants were so high and a fishkill happened during the period of the test run, in July 2006. Yet, permission to resume full operation was granted in February 2007. Indeed, what were conducted were not test runs but “tutorial runs.” There was already a prior decision to grant permission for full operation. The “tests” were mere motions to counter the calls for mine closure. Regarding the October 2007 fishkill, an investigation was promised by the Sangguniang Panlalawigan of Albay on December 12, 2007. For more than a year now, no investigation has been done. Is this their definition of “immediately”?

Rapu-Rapu mining is nothing but large-scale environmental damage and economic injustice as the following facts show. In response to a letter from the SARA Spokesperson in 2008, the regional office of the Mines and Geosciences Bureau declared the following information:

Metals extracted:

Gold – 159.80 kg = 5636.68 oz
Silver – 488.84 kg = 17,243.03 oz
Copper conc – 8841.60 dmt
Zinc conc – 17,148.50 dmt

Taxes paid – P 36,118,555.54

The following information is from Lafayette Mining Ltd.:

Commodity price forward position as of 30 June 2006

Average US$ price – forward maturity
Gold: 405.74 / oz (< 1 year)
Silver: 5.87 / oz (< 1 year)
(reference: Interim Report for the period ending 31 December 2006 Page 14)


Commodity price forward position as of 31 December 2006

Copper: 1817.00 / tonne (1-2 years)
Zinc: 946.00 /tonne
(reference: Interim Report for the period ending 31 December 2006 Page 13)

The following are the conservative estimate of average prices of the metals from London Metal Exchange website:

Gold – US$ 550 / oz
Silver – US$ 10 / oz
Copper – US$ 50
00 / dmt
Zinc – US$ 2500 / dmt

Putting these information together, we have the following calculation using conservative hedge prices:

Gold: US$ 2,287,028.29
Silver – US$ 101,216.61
Copper – US$ 16,065,187.20
Zinc – US$ 16,222,481.00

Total = US$ 34,675,913.10

At P40 = US$, the total is P 1,387,036,523.84. The taxes paid are therefore merely 2.604%. Using LME prices:

Gold: US$ 3,100,176.37
Silver – US$ 172,430.34
Copper – US$ 44,208,000.00
Zinc – US$ 42,871,250.00

Total = US$ 87,172,028.40

At P40 = US$, the total is P 3,614,074,268.08

The taxes paid are therefore merely 0.999%. This means that Lafayette paid merely 1% in excise taxes, not to Rapu-Rapu or Albay but to the BIR.

In 2008, Lafayette earned P847 million. On inquiry from the Regional Director of the Mines and Geosciences Bureau Region V, the Save Rapu-Rapu Alliance obtained the amount of zinc and copper extracted from Rapu-Rapu in 2008 by LPI under the management of Koreans and Malaysians:

Zinc – 3583.77 dmt
Copper – 4267.94 dmt

At US$ 1100 (zinc) and US$ 3300 (copper) per dry metric ton and exchange rate of P47 per dollar, the total income was P 185,280,909.00 (zinc) and P 661,957,494.00 (copper) for a total of P 847,238,403.00.

Then LPI boasted through a local tabloid, Mayon Times, on December 3, 2008 that it “shared the bounty with the people of Rapu-Rapu. On verification, the amount spent was P270,000 or a measly 3% of 1% of their income in 2008, a pittance in exchange for posterity and patrimony!

Rice distributed:

900 families x 10 kg/family x P30/kg = P270,000.00

Ratio: P270,000 / P847,238,403 = 0.00032 = 0.032%

The true intention was not to share the bounty but to twist people’s arm into accepting the continued operation of the mine because on the same signature sheet where the recipients acknowledged receipt of 10 kgs of rice, it is written that the rice distribution was “Sharing of Bounty by the Rapu-Rapu Polymetallic Project for the Continued Operation of the Mine.”

All the promises of social development projects, taxes, and mine rehabilitation fund are logically to be funded from the income of Lafayette from its operation in Rapu-Rapu. It does not need a brilliant mind to realize that the company is frying the island in its own fat. Lafayette is so bold in announcing that they have reserved, for example, P157 million for mine rehabilitation. Three things are very clear: (1) that huge amount is from the natural wealth of the island which is owned, in the first place, by the residents; (2) that amount is so big while the rice that they distributed is such a pittance; (3) if Lafayette did not destroy the island, then there is no need to rehabilitate it. They wound the island, then boast that they applied bandage on it!

The situation in Rapu-Rapu Island is desperate. Hunger, disease and ecological disasters are unabated and continue to worsen day by day. Children on the Pacific side die of diarrhea and vomiting for lack of medical services. Respiratory problems are common. These cases, residents confirm, never happened with the same frequency in the past as after the start of mining operations. Fish is scarce in the waters offshore. Even “tagunason,” an edible marine organism that used to be abundant on the shorelines during low tide, is gone. They cannot bathe in the beaches because they experience skin itch and rashes. The creeks are yellowish-red, an indication of acid mine drainage, and no longer host freshwater fish. The dap-dap trees along the banks are dead. Corrals still stand but are pale and likewise dead. No fish can be seen around them. The residents estimate that 50% of the corrals near Buenavista are dead. This explains the observation that fish catch is down. The blue marlin used to be abundant in April and May and 20 could be caught in years past. This year, only 6 have been caught. For the entire island, fish catch decline is estimated at 80-90% since the mine started to operate. There is severe scarcity of drinking water. “We continue to suffer from the adverse effects of mining operation of Lafayette. Foreign mining companies have grabbed our lands, poisoned our seas and destroyed our environment. Worse, the Arroyo government, instead of helping, has abandoned us and is stubbornly forcing us to accept the destructive operation of Lafayette mining,” said Antonio Casitas, leader of the local organization Sagip-Isla Sagip-Kapwa.

3. CMP: Mining activities which are undertaken in the hinterlands have become catalysts to rural development. It is illegal and unlicensed mining that have caused destruction and we enjoin Mr. Bautista and other environmentalists to help the government catch them.”

We reply: We challenge Mr. Ramos and the CMP to name these “hinterlands” that have been catalyzed to “development.” On our part, we do not know any. The following are facts: Aroroy, Masbate has been a mining town since 1837 yet it is only a 2nd Class municipality. Masbate is the poorest province of Bicol with a poverty incidence level of 62.8% according to the NSCB survey in 2000. Paracale, Camarines Norte has been a mining town since 1939 and yet it is only a 3rd Class municipality. Camarines Norte is the second poorest province of Bicol, with a poverty incidence level of 52.7% according to the NSCB survey in 2000. Both Masbate and Camarines Norte are listed as among the country’s ten (10) poorest provinces per NSCB survey in 2000. Rapu-Rapu, Albay has been mined since the 1930’s but it is only a 4th Class municipality, the poorest in the province. In its 2000 survey, the National Statistical Coordination Board (NSCB) identified the top ten poorest provinces. Most of them are mining provinces. On the other hand, the top ten richest provinces or congressional districts are all non-mining areas. In his testimony before the Rapu-Rapu Fact-Finding Commission on April 6, 2006 Heherson T. Alvarez stated that the mining communities of the Cordilleras, Canada, and Australia “have become miserable patches of poverty after the gold or the mineral ore was extracted.” What they call legal and licensed mining are those quarrying and processing operations owned by big business. Small-scale mining done by lowly entrepreneurs are “illegal and unlicensed” because they have no connections to the powerful political leaders. The destruction in Rapu-Rapu, Aroroy, Larap, Marinduque, Mangkayan, etc was caused by “legal and licensed” miners. We enjoin the government to declare how big business really operates in these devastated areas.

4. Ramos: Perlas had a “different definition of sustainable development . . . He wants a purist environment action versus (an action) with economic activity,” pointing out that this was the mindset of a politician . . . There’s no sustainable development without economic activity. We can’t live in a very pure environment but we die of starvation.

We reply: Labelling Mr. Perlas as purist does not win the argument. Mr. Ramos only reduces it to cheapness. Mr. Ramos also fails to see the environment as an important political issue. Moreover, whatever he means by “pure environment” he alone knows. On the other hand, it is clear to us that the economy cannot prosper if the environment is destroyed. All the inputs of production come from the environment. Distribution and consumption, as the other two basic economic activities, presuppose the preservation of the environment. Otherwise, how will goods be transported to reach the consumer if there is no sustainable source of energy, roads and railways whose design conform to ecological requisites? No one will consume the goods if people are stricken by disease in a polluted environment. Al Gore says it so well in “An Inconvenient Truth.” If we don’t have a planet, gold bars are worthless.

5. Ramos: “The Arroyo administration had to take the middle ground between the purists and those pushing the mining industry from an “economic point of view . . . There’s the extreme left and the extreme right. Government has to take the middle ground... We have obligations to the Filipino people which have to be done in a very responsible way.”

We reply: We do not see the Arroyo administration in the middle ground. Perhaps Mr. Ramos means “muddled ground.” As taxpayers, we see the Arroyo administration on the extreme side of big business. Rapu-Rapu mining, Arroyo’s flagship, is a clear case showing where this administration stands – with Lafayette. Otherwise, the people of the island would not have suffered from increasing hunger and poverty.

6. Ramos: Since the 1996 Marcopper mining disaster, the government and the mining industry had taken steps to prevent a repeat of this catastrophe.

We reply: The Mining Act of 1995 became law a year before the Marcopper disaster in 1996. That law never prevented the tragedy in Marinduque. The Mining Act of 1995 is useless in restoring the original condition of that island province. As of March 2009, “The people of Marinduque continue to suffer the destructive effects of mining in their province even as justice continues to elude them. The Marinduque case demonstrates our government’s failure to protect its citizens from large scale mining companies (that) violate our laws and environmental safety standards with impunity.” (Ronald Gregorio of the Legal Rights and Natural Resources Center in a statement to the Mindanao Examiner) Where is the Mining Act of 1995? Until today, Barrick Gold Corporation which bought Placer Dome cannot be made accountable for its irresponsibility. Indeed, how can a Philippine law be used against a juridical person outside the country? Yet, it is this same law that provided lavish benefits to Placer Dome and other mining companies. If a repeat of Marcopper is to be avoided, we must scrap the Mining Act of 1995 and replace it with a People’s Mining Policy.

7. Ramos: Both the government and mining companies had set in place business models that “balance and integrate economic, social, and environment objectives that aim for sustainable development and not just mining at all cost.”

We reply: This is a motherhood statement that has been observed more in the breach. There are no facts to substantiate this as well as other statements of Mr. Ramos.

8. Ramos: The DENR had also put in place a 24/7 monitoring on all mining activities.

We reply: This is not true. In Rapu-Rapu, the residents learned of the toxic spills long before DENR personnel did. Not even the Multi-partite Monitoring Team took the lead in reporting the spills. Instead, it kept quiet until the damage could no longer be hidden from the public.

9. Ramos: Aside from the environmental compliance certificate, the DENR also required mining companies to rehabilitate mine areas as well as follow a clearly defined final land use.

We reply: This is another motherhood statement. When mining companies are done, they just pack up and leave the clean up to the next mine owner or the government. This is what Lafayette Mining Limited did in Rapu-Rapu. This is what Placer Dome, the mother company of Marcopper Corporation, did in Marinduque. Today, Kores, LGI and MSC would not take responsibility for the mistakes of Lafayette Mining Limited. Barrick Gold Corporation which bought Placer Dome does not accept responsibility for the Marcopper disaster. It has been observed that mining companies would do a “rigodon” in order to escape from their responsibilities.

10. Ramos: The $2.1-billion mining industry has an existing 600,000 direct and indirect employment. By 2013, it is projected that the industry would be worth $13 billion.

We reply: This figure is out of the blue and has no evidence to back it up. In Rapu-Rapu, the mining company under the Koreans and Malaysians distributed rice to 900 families at 10 kgs per family. Their income in 2008 was P847 million. Simple arithmetic shows that at P30 per kg, Lafayette doled out a mere 3% of 1% of their income! They claim to employ 875 workers. The fishermen suffering from loss of livelihood due to the sudden decline in fish catch since 2005 are around 14,000. The company prospects to earn $1.54 billion. The wages and social development projects it promised to give amount to just around ½ of 1% (0.594%). In exchange, the people of Rapu-Rapu will lose 100% of their island. Lafayette invested $40 million. This means that for every dollar put in, Lafayette targets to gain $38.5! The gain of $37.5 comes from the sweat of lowly paid workers and the minerals extracted from our land. The Philippine government and the CMP allows this because of their junior partnership with foreign investors.

11. CMP: The industry was only given impetus by the government in late 2003 and it was only in 2005 when the Supreme Court finally resolved and affirmed the constitutionality of the Mining Act when the industry was resurrected.

We reply: The Mining Act was first declared unconstitutional. We can only surmise how it came to be constitutional later. With the resurrection of the mining industry came the death of agriculture in mining areas. Our food supply was diminished. We do not have to argue about the constitutionality of our diminished food supply!

Pure lip service for environmental protection by DENR, MGB and CMP Part 2

12. CMP: Following several investment promotions road shows, the sector has gained investor confidence, making substantial contributions to the economy

We reply: With only 2% of income to be paid as taxes required under the law, with 8 years of tax holiday, with damaged environment, with diminished fish catch, it is hard to see how the CMP could claim such “substantial contributions to the economy.” They are more credible if they say mining contributed substantially to their incomes.

Mining companies have devious ways to diminish their contributions to the economy. Look at the corporate structure of Lafayette in Rapu-Rapu. Even the DENR is confused.

The (Rapu-Rapu Fact-Finding) Commission reported that there is a confusing corporate set-up, that is, that there are at least two corporate entities (RRMI and RRPI) holding mining-related permits and operating inside the Rapu- Rapu Island.

Upon closer scrutiny of the existing records of these companies, the DENR agrees with this finding. (Please see previous blogs.)

Reference: DENR Assessment of the Rapu-Rapu Polymetallic Project, 2006; p.23

How are RRMI and RRPI related? They are the two “hands” of Lafayette Philippines, Inc. RRMI digs the ground for ores and “sells” them to RRPI which in turn crushes the ores and extracts the metals by using cyanide and sulfuric acid. In effect, the left hand “sells” to the right hand. LPI owns 100% of RRPI and 64% of RRMI. The remaining 36% of RRMI is owned by a law firm called Fortun Narvasa Salazar Creenola. LPI is owned by three foreign companies: Korea Resources Corporation (Kores), 26%; LG International Corporation (LGI), 44%; and Malaysia Smelting Corporation (MSC), 30%. Neither RRMI or RRPI is owned by Filipinos.
Reference: DENR Assessment of the Rapu-Rapu Polymetallic Project, 2006; p. 27

The tax incentives provided to mining companies further reduce their contribution to the economy. Rapu-Rapu, again, is an example. The total cost of social development and livelihood program of Lafayette was made attractive to the people of Rapu-Rapu and even the entire Bicol Region with promises made through a press release titled “Simbag kan Lafayette Philippines, Inc. (LPI) sa mga Isyus Unong sa Operasyon Kaini sa Banwaan kan Rapu-Rapu” (Response of LPI on Issues About its Operation in the Town of Rapu-Rapu) in the Albayano Examiner in its November 19-25, 1999 issue, among which was the payment of taxes to the local government unit.

In a sudden and treacherous turnaround, Lafayette reneged on its promise to pay taxes. The company applied for exemption from local taxes under the government’s PEZA program. It went through a dubious process as the documents show. (Please see previous blogs.)

Lafayette is not even among the top ten (10) tax paying corporations in the Bicol Region as a letter from the BIR Regional Office V dated February 18, 2008 proves.

When Lafayette Mining Limited studied the feasibility of Rapu-Rapu mining, it obtained information on the total amount of metal in the Ungay and Hixbar deposits as presented on its website:

Copper – 103,885 tons
Zinc – 161,724 tons
Gold – 718,245 oz
Silver – 7,028,797 oz

In its quarterly reports Lafayette quoted the prices of the metals it mines in Rapu-Rapu. In the Lafayette Quarterly Report for the period ending March 31, 2007 page 6 it is stated that:

“During the quarter, the average LME copper price was US$ 5,965 per tonne while the average LME zinc price was US$ 3,458 per tonne. Precious metal prices were US$ 649.41 per ounce for gold and US$ 13.26 per ounce for silver.”

In the Lafayette Annual Report for the Period Ended June 30, 2007 page 5 it is stated that:

“During the quarter, the average LME copper price was US$ 7,636 per tonne while the average LME zinc price was US$ 3,666 per tonne. Precious metal prices were US$ 666.84 per ounce for gold and US$ 13.33 per ounce for silver.”

There is sufficient reason to project that these prices will continue to prevail. Owing to the great demand for metals in China over the next years, it is reasonable to expect that the prices would remain close to the higher values shown in the graphs. (http://www.lionselection.com.au/investors_centre/documents/aus_ar/AR-2006.pdf; January 19, 2008)

Nevertheless let us temper our estimation by choosing relatively lower prices as shown below:

Copper – US$ 6,000 / ton
Zinc – US$ 2,000 / ton
Gold – US$ 700 / oz
Silver – US$ 13 / oz

If we multiply the total deposit by the unit prices, we can compute the total amount that Lafayette prospects to haul:

Copper – US$ 6,000 / ton x 103,885 tons = US$ 623,310,000
Zinc – US$ 2,000 / ton x 161,724 tons = US$ 323,448,000
Gold – US$ 700 / oz x 718,245 oz = US$ 502,771,500
Silver – US$ 13 / oz x 7,028,797 oz = US$ 91,374,361

Total = US$ 1,540,903,861 x PhP 40 / US$ = P 61,636,154,440

With P 61,636,154,440 one can spend P 1M every day and will use up the amount in 169 years – the same period from the Mayon eruption that buried Cagsawa in 1814 . . . to the Aquino assassination in 1983 !

Or one can buy 61,636 boats worth P 1M each. If the width of each boat is 4 meters, then they can be lined up widthwise from Rapu-Rapu Pier 45 kms to Legazpi Port in 5 rows and still have an excess of 5,400 boats!

One may buy cars worth P1M each and line up 61,636 of them sideways from Legazpi 90 kms to Naga and still have an excess of 1,636 cars lined over 2.45 kms.

How much does Lafayette promise to give back to Rapu-Rapu? On May 9, 2007 during a conference of Pollution Control Officers in Casablanca Hotel in Legazpi City Lafayette’s Community Relations Department through Mr. Roy Cervantes, showed their plans for social development and actual employment. A close look reveals that several items had been planned for 2006 but as of May 9, 2007 P4,276,000 remained unaccomplished and only P2,244,688 were reported as accomplished.

It shows that even in Lafayette documents the total worth of alleged accomplished projects is only 34% while the unaccomplished is 66%.

In their Powerpoint presentation dated March 22, 2006, Lafayette promised P 10,246,060 in social development projects for Rapu-Rapu, P1M for Legazpi and P1.5M for Sorsogon. A day later, another presentation was prepared allotting only P 9,246,060 to the town.

Still, even the 34% implied as accomplished are refuted by the residents of Rapu-Rapu. In other words, they themselves say that Lafayette’s SDMP is a sham.

In the forum where these promises were presented, the Save Rapu-Rapu Alliance (SARA) Spokesperson took the floor and informed the presentor that according to the Parish Priest of Rapu-Rapu via text messaging, there was no goat-raising in Tinopan. He replied, “Ah, oo, wala pa kasi parating pa lang!”

Recall that in the press release printed in the Albayano Examiner on November 19-25, 1999 this project had been promised. After eight years, the goats are “parating pa lang.”

It should be reiterated that the data used in these comparisons are all from the Lafayette website (http://www.lafayettemining.com/) and the company’s Community Relations Department. We assume that Lafayette’s rosy promises are true.

On November 10, 2007 the SARA Spokesperson showed to Rapu-Rapu residents the plan presented by Mr. Roy Cervantes on May 9, 2007. To each of the items, they responded with a loud cry “Buwa!”, their word for “Lie!”

On December 12, 2007 Joshua Martinez of DZLG Bombo Radyo Legazpi reported that the local government of Rapu-Rapu had asked Lafayette when the latter would fulfill its promised prjects under the Social Development Management Plan. It appears, therefore, that the mining company has not acted on the plan. It can be argued that the SDMP amounts to NEAR ZERO. Let us compute the total amount of the projects promised since 2000:

2000-05 Social Development Management Plan
Infrastructure - 6,240,463
Livelihood - 128,944
Health and Sanitation - 1,702,000
Education - 705,100
Capability Building - 114,365
Socio-cultural - 40,000
Total - 8,930,872

2007 Social Development Management Plan (Core Budget)
Socio-econ infra - 6,691,740
Education and training - 3,609,000
Health and sanitation - 3,350,000
Food security, employment and livelihood - 2,446,760
Capacity-building - 1,564,500
Socio-cultural assistance - 338,000
Power supply for 3 brgys - 2,400,000
Water supply for 3 brgys - 500,000
Total - 20,900,000

2007 Social Development Management Plan (Supplemental Budget)
Socio-econ infra - 5,000,000
Marine turtle conservation project - 500,000
Legazpi City/Albay community development assistance - 2,069,000
Total - 7,569,000

2000-13 Social Development Management Plan
2000-05 - 8,930,872
2006 - 9,420,688
2007 - 28,469,000

Assume that for the rest of the mine life the yearly SDMP budget would be the same as that for the entire province of Albay for 2007. Assume further that Lafayette will appropriate for 2008 to 2013 the same amount as for 2007. This is being generous to Lafayette and these assumptions are very optimistic. Information from MGB V submitted to the RRFFC cites a much lower SDMP budget for the entire mine life- P31,300,000.00

2008 - 28,469,000
2009 - 28,469,000
2010 - 28,469,000
2011 - 28,469,000
2012 - 28,469,000
2013 - 28,469,000
Total - 217,634,560

In a press release titled “Simbag kan Lafayette Philippines, Inc. (LPI) sa mga Isyus Unong sa Operasyon Kaini sa Banwaan kan Rapu-Rapu” printed in the Albayano Examiner November 19-25, 1999, the following were promised:

SDMP: P 7,000,000
Taxes: P2,800,000
Employment: 350 persons

In the Powerpoint Presentation titled “Ang Proyekto sa Rapu-Rapu” dated October 27, 2001, they promised:

Taxes: P 328,000,000
Employment: 1000 first year; 416 during normal operation
Monitoring and rehabilitation fund: P5,050,000

In the Powerpoint Presentation titled “Social Development Management Plan 2006” they promised P 9,246,060

In the Powerpoint Presentation to Pollution Control Officers on May 9, 2007 in Casablanca Hotel, Legazpi City, they reported that from 2001 to 2005 they spent P 8,930,872 for SDMP; that in 2006 they spent P2,244,688 for SDMP and employed 131 persons. No taxes were reported as paid because by then they had acquired PEZA privileges. In the same Powerpoint presentation they promised P 9,246,060 in 2006 and P 30,969,000 in 2007 for SDMP.

In its 2001 presentation, Lafayette promised 416 jobs. In its 2007 presentation, the company reported only 131 from Rapu-Rapu and 65 from the rest of Albay province (total 196). Mr. Carlos Dominguez would claim “thousands”; that Lafayette is the “number one employer in Bicol.” A letter from DOLE Region V dated March 9, 2009 shows that Lafayette was not even among the top ten employers in Bicol Region where the National Power Corporation with 486 employees is number one, followed by the University of St. Anthony in Iriga with 436. Tenth in rank is Bicol Hair Export Corporation in Legazpi City with 195.

Assuming that the promises would be fulfilled and the budget for 2007 would be continued until 2013, let us compute the amount of benefits for Albay.

Total employees from Albay = 196
Average monthly salary/month = P 8000.00
Total salary exp/month = P 1,568,000.00
Total salary exp/year = P 18,816,000.00
Total salary exp for 8 years = P 150,528,000.00
Total expense for SDMP = P 217,634,560.00
Total exp for SDMP and salaries = P 368,162,560.00

Let us compute the benefit-cost ratio:

Total expense for SDMP = P 368,162,560.00
Total Lafayette income = P 61,636,154,440.00

Expense as fraction of income = P 368,162,560 / P 61,636,154,440

= 0.597 %

Note that this is less than 1%.

The total cost for residents. - Being given a minuscule 0.597% is not all. The worse part is that Rapu-Rapu will lose everything. Gaining ½ of 1% of benefits while losing 100% in costs is hardly our idea of “substantial contributions to the economy.”

13. CMP: “The prospective entry of San Miguel Corp. into the industry as well as First Pacific indicates that the relatively untapped mining sector holds a lot of promise. With 7.1 billion tons of metallic minerals and 51 billion tons of nonmetallic minerals waiting to be unearthed, downstream processing and manufacturing remains an area of immense potential.”

We reply: With the entry of more companies into mining, the risk of environmental degradation is so great because big business can dictate to government functionaries. In Albay, the Sangguniang Panlalawigan declared in October 2008 that the board was helpless because the resumption of Lafayette’s operation was already approved on the national level. There will be “development” only for big business but not for the lowly Filipino!

14. CMP: “Mr. Perlas said civil society groups are not against mining per se but are against foreign investors investing venture capital in the industry. We’d like to believe this but what they say and do all point against the development of the mining industry.”

We reply: Foreign investment, as a driver of local progress is a farce. Again, Rapu-Rapu mining, the flagship of the Arroyo administration, is a concrete example. A foreign investor would not bring in one dollar and leave with 50 cents. What is logical and makes business sense is that he brings in one dollar and leaves with two or more. The increase in his money comes from the labor of our people and our natural resources, which ought to be reserved for Filipinos. With foreign investors enjoying tax reduction and holidays, the government coffers do not benefit much. Officials allow this to happen because they benefit as junior partners of foreign investors. They do not mind if foreigners get so much. They do not mind if millions of their own people partake of the very little that remains. What they do mind is the share they receive.

15. CMP: “They want government to recognize local resolutions on mining bans and moratorium against mining even if these are contrary to national laws and policies. We will salute them if they can stop illegal logging, illegal fishing and illegal mining operations.

We reply: The national laws they speak of were written by their friends in the legislature. The illegal logging they speak of are mostly done by friends of big business. The illegal fishing they talk about is a problem even environmentalists contend with. However, the magnitude of the impact of “legal” mining on fishing grounds is so much greater and should be addressed with higher priority. Mr. Ramos and the CMP must not unduly distort the impact of “illegal fishing” compared to that of so called legal big business. Even legal loggers destroy the environment. Legal in this sense means having patrons in the branches and agencies of government who protect them.

16. CMP: “If these environmentalists are keen in monitoring environmental concerns, they should have at least mentioned about the environmental laws that have been passed, proclamations on biodiversity and protected areas and other environmental protection measures. What are needed are facts to show how this administration has balanced economics and environmental concerns.”

We reply: The laws and proclamations are one thing. Implementation is another. The reality in the Philippines is that those in high places can work around the law and proclamations. We have all the “facts to show how this administration has balanced economics and environmental concerns.” These facts are about environmental destruction in Rapu-Rapu, Aroroy, Larap, Marinduque, Mangkayan, etc. and economic injustice to the local residents.

17. CMP: “Constructive criticisms are good when alternatives or options are being offered. Sad to say, in this case, no alternatives were offered.”

We reply: Alternatives have been offered but not within the confines of their idea of mining as the vehicle of economic growth. We have to keenly ascertain whether mining in a specific area will really yield development as viewed by the people (improved chances of access to food, clothing, shelter, livelihood, education, security and recreation). The premise that mining results in development in a place has to be studied. If that basic premise is faulty, then we ought to go somewhere else to mine while other industries such as agriculture, transportation, energy, etc. should be promoted in that area. In Rapu-Rapu, the basic question is not how to mine the island. The basic question is how to develop the place and mining has been proven to be not a feasible option from the point of view of the local residents. The islanders have only one island. The miners have many other places to do their trade.

Sad to say, Mr. Ramos and the CMP only think of development in terms of trickle-down economics much like the crumbs that fall on Lazarus from the table of Dives. While they can partner with foreign investors and are happy with a small share of the wealth from exploitation of our natural resources, millions of our own people have to partake of the tiny bits of their leftover otherwise called “development.”

Here, then, is the pure truth and nothing but the truth about mining in the Philippines. In our opinion, Mr. Ramos and the CMP are describing themselves when they use the word “purist.” They are doing pure lip service to “responsible mining” and “sustainable development.” We can cut the debate short. We challenge all defenders of the Mining Act of 1995, of Rapu-Rapu mining, and all their apologists to take a weekly swim in the mouths of the creeks of Rapu-Rapu where Lafayette discharges its “treated” waste water and to eat fish if they can catch one in the area. If they can do it in a month without fear of contamination or actual health effects, then we will rest our case. If they cannot do that then they ought to stop the labeling, stop mouthing pure motherhoods altogether, close certain mines specially Rapu-Rapu, pay for the damages, clean up and take off.


July 29, 2009

Facts about the October 26-29, 2007 fishkill

Lafayette Philippines Inc. which operates the Rapu-Rapu Polymetallic Project grudgingly admits responsibility for the October 11 and 31, 2005 spills. However, it denies the others. The July 20, 2006 spill is recorded in the Technical Working Group report on the test runs from July to December 2006. To this day it is unrepentant and continues to deny its culpability for the fishkill noted on October 26 to 29, 2007. On its website, LPI arrogantly defies reason and proudly denies that it is responsible. Once and for all, the Save Rapu-Rapu Alliance sets the record straight and informs everyone on the facts of that tragedy, the fifth in our count.

1. They claim: The company could not be responsible for the fishkill because the tailings pond still had 11 meters from the water level to the top of the dam and the company was not operating at that time.

We reply: The 11-meter allowance is not a convincing defense because the dam should be inspected for possible cracks where poison could seep through. The document that attests to the possibility of cracks on the dam is the Technical Working Group Report on the "test" runs of July-December, 2006. Pages 8 and 9 state:

To ensure that transparency is maintained in the test run implementation, the following obereved the test run:

- The Philippine Institute of Civil engineers (PICE) Camarines Sur Chapter headed by Engr. Macario Apin II

Among the observations were:

Outside plant facilities like tailings pond / dam, catchment basin, etc. must be inspected and observed daily for any anomalies like cracks and seepages.

The operation or non-operation of the mine is irrelevant. What is relevant is the fact that poison is impounded in the site at the mercy of heavy rains. Moreover, the normal management of cyanide (as presented by Ms. Carmelita Borbe Pacis through a powerpoint presentation dated March 22, 2006) consisted of detoxification at the tailings pond, flow of detoxified liquid to the settling and polishing ponds, and final discharge to the sea. Investigation of the incident should therefore include the detoxification process and the settling and polishing ponds.

We should also consider the finding of Dr. Carlito Barril that Lafayette used acid-forming rocks in the construction of its dam. The Mines and Geosciences Bureau Presentation to the Rapu-Rapu Fact-Finding Commission acknoledges on Slide 71 the use of waste rocks as dam and road construction materials. Dr. Barril puts his expert's credentials behind the assertion that sich waste rocks could produce acid when rained upon.

Furthermore, the photographs taken from the seawater off Poblacion show a brownish coloration. This indicates the presence of silt. In the island of Rapu-Rapu, the major source of silt whenever there is heavy rainfall is the open pit and adjacent areas inside the mine site. The flow of silt indicates the flow of liquid that comes from the mine site. This liquid should have been investigated for the presence of toxic chemicals as well.

The Technical Working Group Report on the test runs confirms on Page 27 that seepage apparently come from the toe of the dam!

Daily samples are taken to determine pH, temperature, and conductivity. Metals and DO (dissolved oxygen)are also being undertaken (sic) on a weekly basis. The evaluation of the results indicates the presence of cadmium and lead in elevated levels from in (sic) Pagcolbon and Maypajo creeks. These metals apparently come from the adit and the seepage from the toe of the dam.


2. They claim: The level of cyanide in the dead fish was only 0.001 while the tolerable level is 0.002 (statement of DENR Regional Director in an interview on November 1, 2007 over Channel 11 in Manila.)

We reply: The DENR Regional Director declared this result merely three (3) days after their reported sampling on October 29, 2007. Our sources say that it takes at least 15 days to analyze a dead fish sample because the process requires incubation. How can a result, therefore, be obtained by the DENR in 3 days?

Moreover, the DENR reported only the results of marine water sampling. What is the result of their freshwater sampling? The analysis of water samples taken from the settling ponds, polishing ponds, wetland, and creeks should have been made with transparency and also reported. To this day the DENR and BFAR have not disseminated copies of their reports. They fear that their "report" when scrutinized will be found severely deficient.


3. They claim: The dead fish were observed only in Poblacion, some 7 kilometers from the mine site. So, Lafayette cannot be responsible for the fishkill.

We reply: The fishkill was reported from Pagcolbon where Lafayette is operating all the way to the Rapu-Rapu Port. Dead fish were seen off the shores of Sta. Barbara, Carugcog, and Malobago. Even the residents of Binosawan, Linao and Tinopan (Pacific side) reported the presence of dead fish off their shores.

It should be recalled that in the Ibon Foundation case study conducted on February 14-19 and released on April 23, 2007 it is reported that fish catch in Malobago declined as much as 93%. Since Pagcolbon and Malobago are adjacent barangays, it can be concluded that the remaining fish in the waters of these barangays are so few such that even if so much poison is poured into them, there will be less fish that will die. Once the poison is carried by the current to other areas where there are more fish, then can we observe also more dead fish.

On October 26 and 27, a typhoon was hovering over northern Luzon. This induced winds from the southwest. High tide flows from the east. The resultant of the southwest wind and the high tide from the east would be a current to the northwest owing to the same orientation of Rapu-Rapu Island. This current can carry to the waters off Poblacion whatever poison obtains in the Pagcolbon area. In reverse, upon the onset of low tide the direction of the current is from the west. This will carry the poison to the Pacific side of the southern tip of Rapu-Rapu. When the high tide returns, the current will take the poison back to the port area and the northern part of the Pacific side of the island. This is the scientific explanation for the presence of dead fish in several barangays (villages).

After the spills of October 2005, the arsenic and copper contamination reached Sorsogon, 12 kilometers from the mine site, as revealed in the study conducted by the UP NSRI in January 2006. In the oil spill off the shores of Guimaras, the contamination reached 200 kilometers. Therefore, seven kilometers is not enough distance to prevent contamination from reaching Poblacion.


4. They claim: The fishkill could have been caused by compressor fishing.

We reply: The method of fishing using a compressor does not necessarily entail the use of any poison. The compressor is the same equipment used to inflate rubber tires and balls. It is used by divers to supply themselves with air as they explore underwater for fish. To catch fish using a compressor, a diver uses an arrow. If ever a chemical is used, the amount is just low because he just wants to disable the fish and using a big amount would kill even the diver. Once a diver using a compressor has disabled the fish, he gathers and does not leave them to scatter over a wide area. Hence, the use of a compressor cannot lead to the death of so many fish or their scattering over a wide area.

Compressor fishing with spear is confirmed even by Lafayette in Slide 12 of its Powerpoint presentation titled "Project Baseline Data."

We do not condone compressor fishing that uses cyanide but neither do we inordinately blame ordinary people for the misdeeds of big business as we do not ascribe the Holocaust to common street thugs.


5. They claim: The fish died because of strong current (BFAR).

We reply: On September 27 and November 30, 2006, when Milenyo (185 km/hr) and Reming (270 km/hr) respectively passed through Albay, the sea waves were more turbulent but no fishkill was observed. The BFAR conclusion is contradictory to its advise to Rapu-Rapu residents through TV Patrol Bicol on November 7, 2007 that the latter should not yet eat fish. If the fishkill was due to strong current and not chemical contamination, then the fish would still be edible after a few hours. Why did BFAR advise the people not to eat fish?


6. They claim: The fish died of pollution from farm chemicals.

We reply: There is no significant runoff from parts of the island with thick vegetation. On the contrary, there is severe denudation in the mining area and runoff is evidenced by the presence of silt emanating from the mouths of creeks there. At the time of the fishkill, the farmers of Rapu-Rapu were harvesting and not planting so no farm chemicals were being used. Moreover, the farmers of Rapu-Rapu do not use any appreciable amount of fertilizers and pesticides, being largely poor and incapable of affording the price of these inputs. On the mainland, where chemical fertilizers and pesticides are used there is no report of any fishkill in rivers or shores. Fish in Yawa River, for example, still survive even with the obvious pollution indicated by a black contaminant and foams developing in the then existing Spillway.


7. They claim: The fish died of drowning.

We reply: People laugh aloud when they hear this Lafayette claim. In fairness, fish can drown if there is insufficient oxygen in water. Insufficiency of oxygen can be attributed to:

a. overcrowding of fish in a limited space
b. warming of temperature of the water
c. pollution

Overcrowding in a limited space cannot happen in Albay Gulf because fishermen report a precipitous decline in fish catch, indicating a decline in fish population. Moreover, the Albay Gulf is so wide. If Albay Gulf is too small for them, then there is the Pacific Ocean, the widest body of water in the world.

Warming of seawater could not have occurred because the fishkill happened during rainy days when temperature was lower than that of previous days.

The only explanation for insufficiency of oxygen is pollution. Around Rapu-Rapu, what is the most identifiable source of pollution? The open pit and access roads are major sources of silt. The sea current flows from the seawater off the area of the mine site to the Poblacion. The brownish color of the seawater in Poblacion indicates the presence of silt. Silt itself can kill fish by way of clogging their gills according to Dr. Emelina Regis of Ateneo de Naga University's Institute for Environmental Conservation and Research. If silt can reach the Poblacion, so can any chemical if it is emitted at the mine site.


8. They claim: Government agencies have cleared the company of any culpability for the fishkill.

We reply: Government agencies have refused to link Lafayette to the fishkill so they have not investigated the company. How can a government agency clear a suspect which has not even been investigated? The explanations cited by the government agencies have been rebutted. The DENR and BFAR have not publicized the documents containing their reports. These agencies together with Lafayette have not been cleared by the citizens of the doubt generated when they claimed that the fish died first of strong current, then of compressor fishing, and lastly of drowning. The people hearing about the results react with disbelief and ridicule.


9. They claim: A fishkill also happened in Catanduanes.

We reply: That the Rapu-Rapu fishkill cannot be attributed to Lafayette because a fishkill also happened in Catanduanes is a non sequitur. Different fishkills have different causes. The cause of fishkill in Catanduanes, assuming the report is true should be investigated. The fishkill in Rapu-Rapu has alleged causes that should be investigated also. Compressor fishing, water turbulence, farm chemicals and drowning have been refuted but pollution from Lafayette remains to be deeply investigated. It can even be argued that the October 2007 spill was so pervasive it reached the distant shores of Catanduanes aided by sea current. This has basis on the fact that there is a south-to-north current direction in our part of the Pacific Ocean as illustrated in "An Inconvenient Truth."


10. They claim: The death of the fish observed on October 26 to 29, 2007 cannot be considered as fishkill.

We reply: In 2005, the DENR and Lafayette acknowledged having collected about two kilograms of dead fish (in spite of the reports by residents that two sacks wer gathered in Binosawan alone). They called the event a fishkill. This time, about two sacks of dead fish were acknowledged as having been collected (DENR report to Kinatawan Celso Aytona who in turn reported ito the Provincial Board on November 7, 2007). If two kilograms indicated for them a fishkill in 2005, then why not two sacks in 2007?


11. They claim: In 2005, a hoax was perpetrated by anti-mining groups leading to a fish scare in Sorsogon.

We reply: The fishkill in 2005 was not a hoax. Documents submitted by Lafayette to the DENR and subpoenaed by the Rapu-Rapu Fact-Finding Commission are evidences that the mining company admitted their culpability for the 2005 fishkills. The fish scare in Sorsogon should not be blamed on anti-mining groups but on Lafayette itself because the decision not to buy fish is a result of the cyanide spills caused by the mining company. The anti-mining groups did not have to tell people not to buy fish. The people themselves decided so.


12. They claim: The anti-Lafayette groups are destroying the livelihood of fishermen in Rapu-Rapu.

We reply: The livelihood of the fishermen is being destroyed by those who spill poison into the sea where Rapu-Rapu fishermen depend for a living. Anti-Lafayette groups do not have an open pit from where silt flows to the sea when it rains heavily. Anti-Lafayette groups do not use cyanide solution which is mixed with ore to extract gold. Anti-Lafayette groups do not unleash heavy metals from the rocks of Rapu-Rapu and let them flow through creeks to the sea.

The fishermen of Rapu-Rapu do not blame anti-Lafayette groups but Lafayette itself for the fishkills that have happened. The fishermen of Rapu-Rapu welcome with open arms anti-Lafayette groups who visit them while shouting when a boat arrives at the port that they do not want Lafayette personnel on their island. They say, “Bawal an taga-Lafayette digdi! An taga-Lafayette iuulog mi sa dagat.” ("Lafayette personnel are banned here. We will push them into the sea!)

The psychological effect of the fishkill on the residents of Rapu-Rapu comes after their own experience of being hospitalized subsequent to eating fish caught in the seawater off the shores of the island. The Sangguniang Bayan of Rapu-Rapu’s declaration of a state of calamity is proof that the fishkill, not the anti-Lafayette groups, damaged the livelihood of the fishermen.


13. They threaten: Those responsible for the hoax that is the October 2007 fishkill will be prosecuted.

We reply: We are ready to face Lafayette in court. The fishkill on October 26 to 29, 2007 is not a hoax. It is true. Even BFAR told the residents of Rapu-Rapu not to eat fish from their area. (TV Patrol Bicol November 7, 2007) This is proof that there is contamination among the fish. People who tell the truth should not be prosecuted but protected by the law.


14. Fact: On October 31. 2007 the Lady Jacqueline, a fastcraft used by Lafayette when it still had the services of Leighton, was docked at the farthest end of the Legazpi pier. On closer look, the boat held a big yellow machine. Asked about it, the security guard replied that it was a pump that was to be unloaded for repairs on the mainland. Beside the yellow machine were two boxes one measuring about 2m x 3m x 1m was open and contained some plastic sheets and green rubber mat. The other, measuring about 2 ft x 2 ft x 4 ft. was sealed with plastic sheets protruding from the edges. A photograph of the boat, the pump and the boxes are available for inspection. On November 11, 2007 the same fastcraft was docked closer to public view near the port entrance this time without the yellow machine and boxes.

This would have been a significant object of investigation. However, those in authority never conducted a thorough study of the October 2007 fishkill despite all claims of interest to do it. The DENR and BFAR merely announced alleged results of their inquiries but no official documents were released for public scrutiny. The Albay Provincial Board formed an investigation committee, according to radio news, too late in October 2008. No names were mentioned as to the members. A year and ten months later, the investigation is still an empty promise.

We are interested in the investigation of that “yellow machine” because it was a pump to be repaired. On October 11, 2005 the spill was caused by a faulty pump. On October 26-29, 2007, there was a fishkill and a damaged pump again. Were responsible authorities afraid to unravel their connection?

As we have been challenging them, if all these arguments do not convince the pro-Lafayette side, then we challenge them: every weekend they should dive in the beach near the mouth of creeks where their waste water is discharged, gargle the water and eat fish caught there. If they can do this, then we in SARA will rest our case. If they cannot, then they should stop all claims about their mine being safe and clean, close it, clean it, pay for the damages, pack up and leave the island.

SARA refutes RRMI allegations Part 4

Confusing corporate structure and foreign ownership of RRMI and RRPI

The corporate structure of the polymetallic project is confusing even to the DENR.

The (Rapu-Rapu Fact-Finding) Commission reported that there is a confusing corporate set-up, that is, that there are at least two corporate entities (RRMI and RRPI) holding mining-related permits and operating inside the Rapu- Rapu Island.

Upon closer scrutiny of the existing records of these companies, the DENR agrees with this finding. Under present circumstances, the concept of piercing the veil of corporate fiction is justified considering that the Supreme Court held that there are three (3) instances when piercing is allowed:

1. When the corporate entity is used to commit a fraud or to do a wrong (fraud causes);
2. When the corporate entity is merely a farce since the corporation is merely the alter ego, business conduit or instrumentality of a person or another entity (alter ego cases); and
3. When piercing the corporate fiction is necessary to achieve justice and equity

Additionally, the documents regarding F & N Property Holdings, Inc. reflected that there are only four (4) incorporators of this company. Clearly, this is a violation of a very basic requirement of The Corporation Code which under Section 10, Title 11 thereof, requires not less than five (5) incorporators to form a company.

Furthermore, records submitted by the Project to the DENR would show that these companies involved in the Rapu-Rapu Project are structured in a manner that is so complicated, hence the need to pierce the corporate fiction.

Reference: DENR Assessment of the Rapu-Rapu Polymetallic Project; p. 23


How are RRMI and RRPI related?

They are the two “hands” of Lafayette Philippines, Inc. RRMI digs the ground for ores and “sells” them to RRPI which in turn crushes the ores and extracts the metals by using cyanide and sulfuric acid. In effect, the left hand “sells” to the right hand. LPI owns 100% of RRPI and 64% of RRMI. The remaining 36% of RRMI is owned by a law firm called Fortun Narvasa Salazar Creenola. LPI is owned by three foreign companies: Korea Resources Corporation (Kores), 26%; LG International Corporation (LGI), 44%; and Malaysia Smelting Corporation (MSC), 30%.

Simplified, the structure shows that RRPI is 100% foreign-owned and RRMI is 36% owned by Fortun, Narvasa and Salazar law firm.

The DENR assessment also states:

Foregoing, another indication of seeming farcity and fraud that the DENR had observed is the use of common corporate addresses, office building and facilities of these companies. RRPI and LPI use a common business address as indicated in the General Information Sheet they submitted to the Securities and Exchange Commission (SEC), at 178 Salcedo St., Legaspi Village, Makati. Upon verification, RRMI is also holding office in the same address, while RRMI, RRHI and F & N Holding, Inc., use the common business address at 23/F Multinational Bancorporation Centre, 6805 Ayala Ave., Makati, which is actually the Law Office of Fortun, Narvasa and Salazar.

The DENR therefore has endorsed the issue of the corporate structures of the five companies to the National Economic Development Authority (NEDA), the SEC and the Bureau of Internal Revenue (BIR) for proper investigation and if warranted, the filing of appropriate charges.

Reference: DENR Assessment of the Rapu-Rapu Polymetallic Project, 2006; p. 27


Poverty has reached calamitous proportions

On May 10-13, 2009, an International Solidarity Mission went to Rapu-Rapu to have an ocular inspection. The group was composed of NGO’s in Bicol, Manila and Japan. The situation in Rapu-Rapu Island is desperate, according to the ISM. Hunger, disease and ecological disasters are unabated and continue to worsen day by day. It demands the attention of local and national authorities.

Filipino and Japanese participants went to the island and walked through the mining area but were escorted by armed company guards who restricted them to footpaths away from the facilities. In its previous pronouncements, Lafayette Philippines, Inc. vouched for transparency of its operations with claims that interested parties are welcome to visit the site. However, as experienced by other before, unscheduled visits are banned. The company, indeed, would want enough time to clean up the areas before any visitor can see the pollution.

Talking to residents of Carugcog, Tinopan, Buenavista, Viga and other villages, the ISM participants, according to Dr. Geneve Rivera of Health Alliance for Democracy, learned that children die of diarrhea and vomiting for lack of medical services. Respiratory problems are common. These cases, they confirm, never happened with the same frequency in the past as after the start of mining operations. Fish is scarce in the waters offshore. Even “tagunason,” an edible marine organism that used to be abundant on the shorelines during low tide, is gone. They cannot bathe in the beaches because they experience skin itch and rashes.

The creeks are yellowish-red, an indication of acid mine drainage, and no longer host freshwater fish. The dap-dap trees along the banks are dead. Corrals still stand but are pale and likewise dead, according to Mr. Clemente Baustista of Kalikasan People’s Network for the Environment. No fish can be seen around them. The residents estimate that 50% of the corrals near Buenavista are dead. This explains the observation that fish catch is down from 20 kilograms per outing to almost zero. The blue marlin used to be abundant in April and May and 20 could be caught in years past. This year, only 6 have been caught. For the entire island, fish catch decline is estimated at 80-90% since the mine started to operate, according to PAMALAKAYA national chair Mr. Fernando Hicap.

There is severe scarcity of drinking water. In fact, as early as September 12, 2007, in a letter to the mining company, Municipal Council Secretary Allan L. Asuncion complained about the total absence of drinking water in Pagcolbon, one of the direct-impact villages. No reply was reported.

There is no end in sight for the suffering of the people of Rapu-Rapu. In Mananao, exploration is complete and full-scale operations may start anytime. That village is on the northeast end of the island while the current mining operations are in the south and southeast.“We continue to suffer from the adverse effects of mining operation of Lafayette. Foreign mining companies have grabbed our lands, poisoned our seas and destroyed our environment. Worse, the Arroyo government, instead of helping, has abandoned us and is stubbornly forcing us to accept the destructive operation of Lafayette mining,” said Antonio Casitas, leader of the local organization Sagip-Isla Sagip-Kapwa.

The residents are calling for the immediate closure of the mine. They believe that the local government units have the power to do so but refuse. They also urge authorities to investigate the marine degradation in the area and provide food and financial assistance to the poor communities of the island. “Once and for all, the Arroyo government should listen to the people and immediately stop large-scale mining in our beloved island,” said Mr. Casitas.

One of the Japanese participants, Ms. Shoko Murakami of Takaki Citizen Science Foundation, vowed to disseminate the information they obtained in international fora.The International Solidarity Mission was joined by Kalikasan, People’s Network for the Environment, Center for Ecological Concerns Philippines, Health Alliance for Democracy, Community Medicine Development Foundation, Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas, Peace for Life, Philippine Collegian, Bulatlat, AGHAM, Redemptorist Baclaran, Takaki Citizen Science Foundation, Friends of the Earth Japan, BAYAN Bikol, KMP Bikol, Ugnayan ng mga Mamamayan Laban sa Pagmimina at Kombersyong Agraryo Camarines Norte, BAYAN Camarines Sur, PAMALAKAYA Masbate, KMU Bikol, ABAKA Catanduanes, KADAMAY Bikol, Camarines Sur People’s Organization, Bikol Express Multimedia, AMLDM, Rural Missionaries of the Philippines, and Sagip-Isla Sagip-Kapwa.

Like the early conquistadors who promised so much to our ancestors, these foreigners are promising many benefits from their operations. As Andres Bonifacio wrote in his “Ang Dapat Mabatid ng Mga Tagalog”, our people only reaped enslavement and oppression:

Dumating ang mga Kastila at dumulog na nakipagkaibigan. Sa mabuti nilang hikayat na diumano, tayo’y aakayin sa lalong kagalingan at lalong imumulat ang ating kaisipan, ang nasabing nagsisipamahala ay nangyaring nalamuyot sa tamis ng kanilang dila sa paghibo.

Gayon man sila’y ipinailalim sa talagang kaugaliang pinagkayarian sa pamamagitan ng isang panunumpa na kumuha ng kaunting dugo sa kani-kanilang mga ugat, at yao’y inihalo’t ininom nila kapwa tanda ng tunay at lubos na pagtatapat na di magtataksil sa pinagkayarian.

Ito’y siyang tinatawag na “Pacto de Sangre” ng haring Sikatuna at ni Legaspi na pinakakatawanan ng hari sa Espana.

Buhat nang ito’y mangyari ay bumubilang na ngayon sa tatlong daang taon mahigit na ang lahi ni Legaspi ay ating binubuhay sa lubos na kasaganaan, ating pinagtatamasa at binubusog, kahit abutin natin ang kasalatan at kadayukdukan.

As in colonial times, foreigners are unbridled in their exploitation of our natural resources, leaving Filipinos destitute and robbed of their chance to rise from poverty. There are Filipinos who assist foreigners in the exploitation and oppression of their countrymen. During the Japanese Occupation they were called “Makapili” and “collaborators."

Radio Veritas Legazpi organized a debate on April 29,2009 between the SARA Spokesperson Virgilio S. Perdigon, Jr. and Ms. Cecille Calleja, VP for Community Relations of Lafayette. Ms. Calleja accepted the invitation. One day before the schedule, Mr. Corpus sent a letter to the organizers that they could not come to the debate with no reason cited. Said Mr. Corpus in his letter to Ms. Meg Alcantara dated April 27, 2009:

We very much want to see a continuing communication process that will give an accurate and in-depth understanding of the mining industry. Unfortunately we will not be able to participate in the program. Rest assured, however, that we remain interested in opportunities that will promote genuine dialogue and effectively share factual information particularly about Rapu-Rapu polymetallic project since its resumption of operation last October 2008.

Rogelio E. Corpus
President, RRMI


In a letter to Ms. Alcantara dated April 29, 2009, Mr. Perdigon wrote:

The scheduled program was one of their "opportunities that will promote genuine dialogue and effectively share factual information particularly about Rapu-Rapu polymetallic project since its resumption of operation last October 2008." Yet they were a NO SHOW. So much about their remaining interest. They did not even accord you the courtesy of citing any reason for their last-minute back-out after initially accepting your invitation. Next time they say anything, virtually anything, we do not have to believe. This development only confirms our observation that they have neither the heart nor the mind to defend what they claim to believe in.

Virgilio S. Perdigon, Jr.
Spokesperson


In summary, SARA has shown the evidence, facts and bases. The preceding information reveals it is Mr. Corpus who utters statements that are “baseless, speculative and in no way supported by facts or evidence.” If he does not accept that, then we challenge him, Ms. Cecille Calleja, Ms. Carmelita Pacis, Mr. Christopher Flores or any of their colleagues and apologists to take a weekly dip in the mouths of the creeks where Lafayette discharges its allegedly “treated” waste water and eat any fish caught in the area. If they can do that, then all else is moot and academic. Only then can Mr. Corpus use such words as “baseless, speculative and in no way supported by facts or evidence.” If they cannot do that, then they should shut up, close the mine, clean the area, pay for the damages, pack up and leave Rapu-Rapu.


Save Rapu-Rapu Alliance

SARA refutes RRMI allegations Part 3

The Rice Distribution

In response to a letter from the SARA Spokesperson, the regional office of the Mines and Geosciences Bureau declared the following information:

Metal extracted:

Gold - 159.80 kg
Silver - 488.84 kg
Copper concentrates - 8841.60 dmt
Zinc concentrates - 17,148.50 dmt

Taxes paid: P36,118,555.54

Note: 159.80 kg = 5,636.68 oz; 488.84 kg = 17,243.03 oz

The hedge prices of these metals are available from Lafayette Mining Ltd. The market prices are posted in the London Metal Exchange website. Putting these information together, we have the following calculations:

Gold
Extracted : 5,636.68 oz
Hedge pr : 405.74 / oz
Total sales : $ 2,287,028.29

Silver
Extracted : 17,243.03 oz
Hedge pr : $ 5.87 / oz
Total sales : $ 101,216.61 10

Copper
Extracted : 8,841.60 dmt
Hedge pr : $1817.00 / dmt
Total sales : $ 16,065,187.20

Zinc
Extracted : 17,148.50 dmt
Hedge pr : $ 946.00 / dmt
Total sales : $ 16,222,481.00

Grand total in dollars: $34,675,913.10
Exchange rate= P 40.00/$
Grand total in pesos : P 1,387,036,523.84

Taxes P 36,118,555.54

Taxes as % of sales 2.604%

Hedge prices, however, are very conservative and do not reflect the actual market values. If we use average market prices, we have the following calculations:

Gold
Extracted : 5,636.68 oz
Hedge pr : $ 550 / oz
Total sales : $ 3,100,176.37

Silver
Extracted : 17,243.03 oz
Hedge pr : $ 10 / oz
Total sales : $ 172,430.34

Copper
Extracted : 8,841.60 dmt
Hedge pr : $ 5000 / dmt
Total sales : $ 44,208,000.00

Zinc
Extracted : 17,148.50 dmt
Hedge pr : $ 2500 / dmt
Total sales : $ 42,871,250.00
Grand total : $ 87,172,028.40
P 3,614,074,268.08

Taxes : P 36,118,555.54

Taxes as % of sales 0.999%

This means that Lafayette paid merely 1% in excise taxes, not to Rapu-Rapu or Albay but to the BIR.

In 2008, Lafayette earned P847 million. Then it boasted through a local tabloid, Mayon Times, on December 3, 2008 that Lafayette shared the bounty with the people of Rapu-Rapu. On verification, the amount spent was P270,000 or a measly 3% of 1% 0f their income in 2008! Yet, the company had the gall to boast that it shared the bounty. Moreover, the true intention was not to share the bounty but to twist people’s arm into accepting the continued operation of the mine because on the same signature sheet where the recipients acknowledged receipt of 10 kgs of rice, it is written that the rice distribution was “Sharing of Bounty by the Rapu-Rapu Polymetallic Project for the Continued Operation of the Mine.”

Income from metals:

Zinc
Extracted :3583.77 dmt
Ave mrkt pr : $1100 / dmt
Total sales : $ 3,942,147.00
Exch rate : P47 / $
Total sales : P 185,280,909.00

Copper
Extracted : 4267.94 dmt
Ave mrkt pr : $ 3300 / dmt
Total sales : $14,084,202.00
Exch rate : P47 / $
Total sales : P 661,957,494.00
Grand total sales: P 847,238,403.00

There is no report on gold and silver. According to Mr. Christopher Flores, the Australian Lafayette Mining Limited had carted all they could before leaving.


Rice distributed among the residents:

900 families x 10 kg/family x P30/kg = P270,000.00

Ratio: P270,000 / P847,238,403 = 0.00032 = 0.032%

The amount of rice they distributed was a measly 3% of 1% of their 2008 income. In exchange, Lafayette solicited the signatures of the recipients as proof that the latter were in favor of the continued mining operations in Rapu-Rapu, a pittance in exchange for posterity and patrimony! In the Mayon Times issued on December 3, 2008, the news article was titled: Rapu-Rapu mining firm shares 'bounty' with barangays.

In the acknowledgment sheets for the rice Lafayette distributed, the heading states: Biyayang Hiras kan Rapu-Rapu Polymetallic Project sa Pagpadagos kan Pagdalagan nin Minahan (Sharing of Bounty by the Rapu-Rapu Polymetallic Project for the Continued Operation of the Mine). The next line states: An Saimong pirma minapatunay na naresibe mo an bagas. (Your signature attests that you received rice.)

Frying Rapu-Rapu in Its Own Fat

All the promises of social development projects, taxes, and mine rehabilitation fund are logically to be funded from the income of Lafayette from its operation in Rapu-Rapu. It does not need a brilliant mind to realize that the company is frying the island in its own fat. In the local language, piggigisa kan Lafayette an Rapu-Rapu sa sadiri kaining mantika. Mr. Corpus is so bold in announcing that they have reserved, for example, P157 million for mine rehabilitation. Three things are very clear:

(1) that huge amount is from the natural wealth of the island which is owned, in the first place, by the residents;
(2) that amount is so big while the rice that they distributed is such a pittance;
(3) if Lafayette did not destroy the island, then there is no need to rehabilitate it; they wound the island, then boast that they applied bandage on it!

(Please see continuation.)

SARA refutes RRMI allegations Part 2

Other issues not addressed by Corpus

There many other issues not addressed by Mr. Corpus. Among these are the following:
1. Unfulfilled SDMP promises; the “lollipop affair" indeed was characteristic of Lafayette mentality towards the people of Rapu-Rapu
2. Employment of members of a government-paid paramilitary unit, Civilian Armed Forces for Geographical Units, (CAFGU) as company guards
3. Continued employment of personnel directly involved in the 2005, 2006 and 2007 toxic spills
4. Implausible explanations for the toxic spills and fishkills
5. Assumption of management by a minor shareholder, Kores and LGI, after the former owner, LML, ran away from its responsibilities; unwillingness of Kores and LGI to assume responsibility for the mistakes of LML; the management change is only a ploy to deflect penalties
6. Token employment of locals with very low salaries and preference for non-residents with higher salaries
7. The island’s small size
8. The steep slopes of its hills thus any poisonous spill will immediately contaminate the creeks and the seas;
9. Heavy rainfall in our area (8-12 inches monthly average from July to December) which will easily fill up any tailings pond
10. Lafayette’s use of the open pit method
11. Turnaround on the promise to pay taxes

The Open Pit

Any open pit exacerbates global warming for the following reasons:

Trees and other forms of vegetation (which produce a net supply of oxygen) are removed. The silt from the mine site is carried by rainwater to the sea and kills the plankton which produces 50 to 70% of the earth’s oxygen supply by consuming carbon dioxide.

The following quotation from EMB V Regional Director Gilbert Gonzales is insightful:

Mining industries are a major source of greenhouse gases which pollute the environment, as Gilbert Gonzales, regional director of the Environment Management Bureau (EMB) of the Department of Environment and Natural Resources in Bicol explained. “Mining operations are major emitters of greenhouse gases to the environment because of the chemicals they’re using,” Gonzales said.

Reference: Mining emits greenhouse gasesBy Rhaydz B. Barcia, Correspondent, Manila TimesMonday, October 22, 2007

http://www.manilatimes.net/national/2007/oct/22/yehey/prov/20071022pro1.htmlApril 21, 2008


The Turnaround on the Promise to Pay Tax

The total cost of social development and livelihood program of Lafayette was made attractive to the people of Rapu-Rapu and even the entire Bicol Region with promises made through a press release titled “Simbag kan Lafayette Philippines, Inc. (LPI) sa mga Isyus Unong sa Operasyon Kaini sa Banwaan kan Rapu-Rapu” in the Albayano Examiner in its November 19-25, 1999 issue, among which was the payment of taxes to the local government unit.

In a sudden and treacherous turnaround, Lafayette reneged on its promise. The company applied for exemption from local taxes under the government’s PEZA program. It went through a dubious process as the documents show. In December 2003 Lafayette applied for tax exemption under the Philippine government’s PEZA program. On May 4, 2004, the application was approved by the President of the Philippines through Proclamation No. 625.

A certain Resolution 150-2003 purportedly passed by the Rapu-Rapu Sangguniang Bayan (municipal council) on November 19, 2003 was flaunted by Lafayette as evidence that the former had consented to the declaration of the mine site as a Special Economic Zone. The document was fake and its source is unknown up to this time.

In a letter Mr. Allan Asuncion, Secretary of the Sangguiang Bayan, pointed out that a closer look at the document reveals the following:

1. The signature of Councilor Batas is rubberstamped as indicated by the doubling of strokes.
2. The signature of the Mr. Asuncion is also fake as it is different from those appearing in other documents he truly signed.
3. The date of adoption of the resolution is ONE MONTH LATER than its date of approval.
4. The resolution does not have a letter of transmittal from the Sanggunian Secretary.
5. The resolution is printed not on the official stationery of the Sanggunian.
6. The resolution is not dry sealed.

According to Proclamation No. 625, Lafayette will pay:

the government share of two percent (2%) of “the actual market value of the gross output thereof at the time of removal, in the case of those locally extracted or produced” under the Mineral Production Sharing Agreement (Memorandum from Atty. Marwil N. Llasos of the Office of the President to the Rapu-Rapu Fact-Finding Commission dated May 2, 2006)

the tax of one percent (1%) of gross income to be remitted first to the national government before it is distributed to the local government unit (Section 24 of R.A. No. 7916)the tax of one percent (1%) “for the establishment of a development fund to be utilized for the development of municipalities outside and contiguous to each ECOZONE” (Section 24 of R.A. No. 7916)

Ordinary citizens of the Philippines are taxed based on GROSS INCOME. For some taxpayers, the amount of income tax is about two months of their annual earnings. The remaining ten (10) months of income is subjected to EVAT of 12%. As a result, an ordinary taxpayer pays an equivalent of three (3) months of his annual income. In effect, the 13th month pay is merely for taxpaying purposes. All considered, the tax paid is 3/13 or 23.08% of GROSS INCOME while Lafayette pays 7% of NET INCOME (5% under RA 7916, 2% under the MPSA). Of the 7%, only 2% purportedly goes to the local government unit. However, this 2% is further reduced through the labyrinthine operation of our taxation system.

Non-mining corporations pay as much as 32% of NET INCOME as required under the National Internal Revenue Code. The lowest tax rate on other corporations is 15% as stated in Chapter V Section 27 paragraph 4 of the Code.

But there is more . . .Lafayette will never have to pay any income tax because under the Implementing Rules and Regulations of the Special Economic Zone Act (RA 7916) they have six (6) years of tax holiday extendable to eight (8) years.

RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT NO. 7916, OTHERWISE KNOWN AS “THE SPECIAL ECONOMIC ZONE ACT OF 1995”Rule XV Section 6A. Income Tax Holiday

1. Period of Availment - New ECOZONE Export or Free Trade Enterprises shall be fully exempt from income taxes levied by the National Government for the period as follows:

a. New Registered Pioneer Firms - Six (6) years from commercial operations.
b. New Registered Non-Pioneer Firms - four (4) years from commercial operations.
c. Expanding Firms - Three (3) years from commercial operation of the expansion.

6. Additional Period of Availment - For ECOZONE Export or Free Trade enterprises, the income tax holiday incentive may be extended for an extra year in each of the following cases but in no case to exceed a total period of eight (8) years for pioneer registered enterprises:

a. If the ratio of the total imported and domestic capital equipment to the number of workers for the project does not exceed US$10,000.00 to one worker, or as prescribed by the Board;
b. If the average cost of indigenous raw materials used in the manufacture of the registered product is at least fifty percent (50%) of the total cost of raw materials for the preceding years prior to the extension unless the Board prescribes a higher percentage;
c. If the net foreign exchange savings or earnings amount to at least US$500,000.00 average annually during the first three (3) years of operations to be determined by the Board at the end of such three-year period:

Provided, That the foregoing foreign exchange savings criterion shall apply, as a general rule, to ECOZONE Export or Free Trade Enterprises whose products are totally imported into the country at the time of registration and duly indicated as imports substation in firm’s approved project proposal.

For the purpose of availment of this incentive, the ECOZONE Export or Free Trade Enterprise shall apply in writing to PEZA for the additional period and shall submit proof of compliance with the criteria above-mentioned.

7. Determination of Pioneer / Non-Pioneer Statusa. Investment Priorities Plan - As a general policy, the basis for determining whether an area of economic activity may be considered pioneer or non-pioneer shall be the Investment Priorities Plan prepared yearly by the Board of Investments. In the absence thereof, the applicable criteria shall be formulated by PEZA.

In a press release, Lafayette announced the extension of the mine life from six (6) to eight (8) years. No wonder Lafayette has programmed its operations for a mine life of (guess what) EIGHT YEARS !

In the light of all these information, what is Lafayette saying?

LAFAYETTE VOWS TO PAY MORE IF TAX LAWS AMENDED

Lafayette's Rapu-Rapu Polymetallic project has been paying its taxes religiously and is ready to pay more if Congress amends the law to raise taxes on mining companies.

This statement deviates from the core of the accusation against Lafayette re tax payment. THE COMPANY PROMISED TO THE PEOPLE OF ALBAY IN 1999 AND 2001 TO PAY BILLIONS OF PESOS IN TAXES BUT IN 2004 IT APPLIED FOR TAX EXEMPTION UNDER THE SPECIAL ECONOMIC ZONE ACT. The issue is not the law but the sincerity of the company. Lafayette may be legal in its much reduced tax payments but it is immoral in making the Albayanos expect billions of pesos and then use the law to break the promise. It is also immoral in using a perjured document to apply for exemption.

Lafayette is not even among the top ten (10) tax paying corporations in the Bicol Region as a letter from the BIR Regional Office V dated February 18, 2008 proves.

We asked BIR Legazpi office for the list of the top ten taxpaying corporations in 2008 but this time the regional director replied that issuing such a document is against the law on divulgence of trade secrets!?

(Please see continuation.)

SARA refutes RRMI allegations Part 1

According to a news item that appeared in the Business Monitor on June 9, 2009, “Rapu-Rapu Minerals refutes allegations vs mining operations.” In what follows, the Save Rapu-Rapu Alliance (SARA) presents the bases, facts and evidences that will demolish the allegation of RRMI President, Mr. Roger Corpus, that the statements of oppositors to Rapu-Rapu mining are mere allegations and “speculative.”

Mr. Roger Corpus: Allegations against the project are baseless, speculative and in no way supported by facts or evidence.

SARA:

Mr. Corpus speaks about Rapu-Rapu Minerals, Inc., the company responsible for the blasting and quarrying of ores. It operates the open pit. Open pits are contributors to climate change as Al Gore cites in “An Inconvenient Truth.” RRMI cannot wash its hands of the responsibility for the siltation of creeks and the surrounding seawater. Silt clogs the gills of fish and kills them. Silt also kills corrals, the habitat of fish. When corrals die, the fish dependent on them are deprived of food and shelter.

Mr. Corpus cannot speak for Rapu-Rapu Processing, Inc., the company responsible for the use of chemicals used to treat the ores so that the metals can be extracted. He does not defend the processing company against the charges of spills. In fact, the Pollution Adjudication Board (PAB) slapped RRPI with more than P10 million in fines for violation of the Clean Water Act. The report of the Technical Working Group formed after the October 2005 toxic spills shows exceedingly high values of heavy metals yet the company was allowed to resume operations.

Corpus: Rapu-Rapu Polymetallic is continuously strengthening measures to safeguard the people of Rapu-Rapu Island and their environment.“The project can only be successful if we protect local residents and the environment for the long term.”

SARA:

The proof of the pudding is in the eating. Under the Koreans and Malaysians, Lafayette Philippines, Inc., which owns RRMI and RRPI, bears responsibility for the lapses of the Australian Lafayette Mining Limited. The rapid decline in fish catch commencing in 2005 is evidence of the culpability of the mining companies which started their quarrying and processing operations also in 2005. Korea Resources Corporation and LG International Corporation were minority shareholders during the watch of the Australians. Therefore, they also bear responsibility for the toxic spills in 2005, 2006 and 2007. Mr. Corpus has been with Lafayette since 2002. He is also responsible for the lapses.

Nowadays, it is said that there will no longer be any fishkill with the Koreans and Malaysians in charge. That is so because there are no more fish to kill. Continuously, everyday, silt, heavy metals and acid flow through the creeks to the sea. No control measure under the new management has stopped the pollution.

Corpus: If the project were to have any adverse impact on people’s health, the 875 personnel at the mine and processing plant would be affected first before nearby residents, but there has been no such health impact from the Rapu-Rapu operations.

SARA:

This argument of Mr. Corpus is very similar to that of Atty. Julito Sarmiento in 2006 that if Lafayette poisoned the sea, then his relatives in Legazpi would also be "matitigbak" (killed). As events unfolded in 2007 people who ate fish arund Rapu-Rapu got sick while the relatives of Atty. Sarmiento would not dare eat fish from the same area!

There are over 14,000 fishermen who have lost their incomes because of the pollution of the sea around Rapu-Rapu. The alleged 875 workers are well oriented on the exact location of danger. They are protected by helmets, garments and other devices. On the other hand, the people of Rapu-Rapu are bare against the contaminants that pass through their areas of work and residence. Workers of Lafayette do not earn their living by fishing in the sea around the island. The fishermen of Rapu-rapu are the ones exposed to the contaminants that have scattered in the former fishing grounds.

Corpus: The mine’s tailings storage facility (TSF) has been strengthened and developed further to a capacity of 1.4 million cubic meters, of which 540,000 cubic meters are currently available.

SARA:

The pertinent ECC requirement is stated in condition number 23:

The tailings dam with an impounding capacity of five million (5,000,000) metric tons of tailings produced over the mine operations must be constructed strictly in accordance with its design criteria and largely from waste rocks excavated from the open pit. It must be provided with sufficient freeboard and spillway capacity to ensure that it can withstand the maximum probable storm event. Its outer slope must be stabilized and protected against progressive erosion.

Five million metric tons over the mine life of 8 years (2005-13) would mean that by 2009, Lafayette ought to have developed a TSF for 2.5 million metric tons. The figure cited by Mr. Corpus of 1.4 million is in cubic meters. Mr. Corpus has to reconcile his figure with the ECC condition.

Regardless of the dam capacity, the diagram submitted by Lafayette to the Rapu-Rapu Fact-Finding Commission in 2006 shows that waste water is “treated” then discharged to the sea. Any claim of high capacity of a TSF is immaterial if the waste water discharged is not actually clean like what happened in 2005, 2006 and 2007 when major fishkills happened. The photographs shown on this website give the reader a good look into the quality of water that flows from Lafayette’s detoxification system. The mining company says anyone may visit the mine site and see for himself. The catch is that such a visit has to be pre-arranged. No surprise visit is allowed. Why? Obviously, the mining company wants sufficient time to clean up the area before any visitor arrives. This was the experience of the team of Dr. Emelina Regis of INECAR in November 2007. They were held up in the office for an hour and when they were summoned to be guided to the target spot, Dr. Regis saw white marks on the soles of the worker's boots indicating that he stepped on acidic substance. Moreover, any ocular inspection by an outsider is to be guided within restricted areas. A visitor cannot go anywhere he pleases.

Corpus: The TSF embankment is designed with technical specifications to properly contain tailings, including an impermeable clay section to prevent penetration by stored tailings and tailings water.

SARA:

Dr. Carlito Barril, retired professor from UP Los Baños, attests that Lafayette committed a major mistake when it used potentially acid forming (PAF) rocks as dam material. Dr. Barril emphasizes that this mistake alone is enough reason to close the mine! Such blunder by Lafayette is terrible because the dam, instead of preventing poison from going to the surroundings, by itself when rained upon produces acid which flows to the surroundings. The analogy is that of a person required to wear clothes because it is cold. Yet, the apparel given to him is wet.

Corpus: The tailings are kept underwater to render them inactive. While best practice calls for a cover of two meters of water, the TSF now has a depth of 10 meters of water covering the tailings.

SARA:

According to the Chemistry Department of Aquinas University of Legazpi, mine tailings when immersed in water will still produce a toxic solution. Such toxic solution cannot be covered with water if the intention is to prevent the evaporation or spillage of toxic solutes. Even common sense would tell a layman that a glass of water in which a solid poison is immersed and toxic solute is dissolved cannot be contained by pouring more water into the same glass. The poisonous solution will just mix with the added water, the solid poison will just emit more poisonous solute and the whole glass will still contain poison.

Corpus: In the event of any overflows during heavy rains, the spillway from the TSF has been lined with concrete to prevent soil erosion that may cause turbidity in the run-off. The spillway is linked to the environmental ponds to ensure the company’s compliance with standards set by the Department of Environment and Natural Resources for water quality, which is constantly monitored.

SARA:

The danger during heavy rains primarily comes from the overflow of poisonous liquid from the tailings storage facility (TSF). This liquid alone will destroy the creeks and the sea. In like manner, poison made to flow through gold-plated tube will still destroy whatever organism comes in contact with the liquid.

The evidence that silt still flows to the sea (despite the claim by Corpus that “the spillway from the TSF has been lined with concrete to prevent soil erosion that may cause turbidity in the run-off”) is the brown-yellow-red-orange color of runoff water in creeks and near their mouths.

Without the mine, runoff water will minimally cause silt to flow because of vegetation cover. With the mine, increasingly large areas become bare and exposed to rain so that more silt and acid are released to the sea. The claim of constant monitoring is baseless because this is not verifiable considering that no third-party inspector or visitor will stay on the site 24 hours a day and 7 days a week. Nobody can verify this claim of Mr. Corpus.

Corpus: Environmental monitoring is integral to its operations, including continuous monitoring of water quality covering an extensive area within and outside the project site.

SARA:

This is a motherhood statement that can never be verified because they do not allow unannounced visits. As previously mentioned, nobody external to the mining companies will ever stay on the island to check such claim 24/7.

Corpus: The project’s approved Environmental Protection and Enhancement Program specifies a total of 26 water-quality monitoring stations. On its own initiative and as the project develops, Rapu-Rapu Polymetallic has established additional monitoring stations to cover a much bigger area, so there are now 37 stations.

SARA:

Regardless of the number of water monitoring stations, the sudden drop in fish catch starting in 2005 is evidence of severe pollution. When the toxic spills of 2005 were being investigated Lafayette already claimed the same number of monitoring stations. Yet, the 2006 and 2007 fishkills happened. This time, Mr. Corpus still cites the same number of monitoring stations. It is said that there will no longer be any fishkill because there are no more fish to kill, with contaminants flowing daily through the creeks and to the sea.

Corpus: Since July, 2008, the new shareholders of the company have deposited P50 million in an escrow fund for its Final Mine Rehabilitation and Decommissioning Plan (FMRDP). Corpus said the advance deposit is the first ever to be made by any mining operation in the country before approval of its FMRDP. When the plan is approved, regular deposits into the fund will continue on a stipulated schedule. The fund will cover the costs of rehabilitating the site and decommissioning the mine at the end of extraction operations.

SARA:

The mine rehabilitation fund will not make up for lost income of the people as it is intended for clean up. It will take a long time after mining is stopped and cleanup begins for the sea to recover. Continued operation of the mine only delays the recovery of the island and its surrounding sea. Lafayette boasts of P50 million deposited in the bank for mine rehabilitation but according to Mr. Christopher Flores, the mediator between the Koreans and some “Filipino authorities,” the new owners are not willing to increase the benefits they provide to the people of Rapu-Rapu; that is, 3% of 1% is all they are willing to share!

Corpus: Safeguarding the people and the environment is a priority which we are actively pursuing.

SARA:

This is another typical Lafayette motherhood which is “baseless, speculative and in no way supported by facts or evidence.”

Corpus: The project has successfully passed the surveillance audits for its ISO 14001 certifications for environmental management systems. The ISO 14001 certifications signify that the environmental management systems of Rapu-Rapu adhere to globally recognized standards, and that the project is environmentally compliant.

SARA:

Again, the proof of the pudding is in the eating. The zero fish catch in the sea (where fishermen used to obtain 50 bañeras before mining started) strongly belies any claim of compliance and only puts the ISO certification in question. The ISO certification can never justify the large income of Lafayette against the meager benefits and heavy costs reaped by the people of Rapu-Rapu. We have rebutted this allusion to ISO. We have said:

The Save Rapu-Rapu Alliance refutes the relevance of this certification to the fundamental reasons why mining in the island cannot be responsible and the three factors that make current mining operations in the island a threat to sustainable development.

The ISO Certification does not address the island’s small size which makes the management of tailings possible only through hollow promises. The tailings ponds are still only a few meters from the sea and any accident will readily spill poison into fishing grounds.

The ISO Certification does not address the heavy rainfall in our locality which would lead to the scattering of heavy metals and cyanide and the death of marine life and destruction of the fishing industry.

The ISO Certification does not address the steep slopes of the hills which will engender the speedy flow of poisonous chemicals to rivers, farms and ultimately the sea.

The ISO Certification does not address the presence of sulfide rocks which are being exposed to air and water thus forming acid that will also kill plants and animals on land and in the sea.

The ISO Certification does not address the use of cyanide which by experience has been shown to be prone to spills that cause fishkills, kill the plankton that consume carbon dioxide or evaporate to form carbon and nitrogen compounds that directly contribute to global warming. The ISO Certification does not absolve Lafayette from the confirmed fishkills on October 11 and 31, 2005; July 20, 2006; and October 24-29, 2007.

The ISO Certification does not address the use of the open pit technology which removes the topsoil and renders the land unarable for decades and reduce the population of plants that also consume carbon dioxide.

The ISO Certification does not address the PEZA exemption of Lafayette from taxes on income earned from production of precious and base metals.

We should also note that the ISO Certification does not solve the fishermen’s problem of diminished catch in fishing grounds near the island and their need to go far out into the Pacific Ocean facing gigantic waves using tiny boats just to pursue their livelihood.

We should also note that the ISO Certification does not cure the diseases related to heavy metal contamination suffered by residents of Rapu-Rapu and coastal towns of Sorsogon.

The ISO Certification is only for the needs of Lafayette. It is never for us.

Remembering all these is enough to make anyone realize that the ISO certification obtained allegedly by Lafayette is nothing but another attempt at what the company does best: to hide the truth about its evil design for Rapu-Rapu.

(Please see continuation.)