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!
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