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.)

From Lafayette Mining Limited to Voyager Resources Limited

The “resurrection” of the financially failed Lafayette Mining Limited is almost complete.

The “New” Company will be called “Voyager Resources Limited”, if it is allowed to be formed and installed on the Australian Stock Exchange with an initial capital recapitalization of $1,775,000-00!

The General Meeting will be held at Level 24, St Martins Tower, 44 St Georges Terrace, Perth, WA 6000 on 20 July 2009 commencing at 11am (WST).











BDO Kendalls Corporate Finance (WA) Pty Ltd
Level 8, 256 St Georges Terrace Perth WA 6000
PO Box 7426 Cloisters Square Perth WA 6850
Phone 61 9360 4200
Fax 61 9481 2524
bdo@bdo.com.au
www.bdo.com.au
ABN 27 124 031 045
AFS Licence No. 316158


5 June 2009

The Administrators
Lafayette Mining Limited
c/o Ferrier Hodgson
Level 29
600 Burke Street
Melbourne VIC 3000

Dear Sirs

INDEPENDENT EXPERT'S REPORT – LAFAYETTE MINING LIMITED

1. INTRODUCTION
Lafayette Mining Limited (“Lafayette” or “the Company”) proposes to undergo a capital restructure (“the Proposal”) that includes the following events:

issue of 90 million shares to Trident Capital Pty Ltd and/or its nominees (including Tim Flavell and Matthew Wood or their nominees) at an issue price of $0.005 per share (“Trident”);

acquisition of Voyager Resources Pty Ltd (“Voyager”) for the consideration of 105 million shares;

Lafayette’s current issued capital is consolidated on a 1 for 100 basis;

the issue of up to 190 million shares via a prospectus at an issue price not less than $0.01 per share (“the Prospectus”); and

the potential for Tim Flavell, Nick Lindsay and Matthew Wood (“the Directors”) to subscribe for shares under the Prospectus.

As all the resolutions which effect the above are interdependent we will refer to them collectively as the Proposal in this report.

...

2.3 Opinion

We have considered the terms of the Proposal as outlined in the body of this report and have concluded that the Proposal is fair and reasonable to Shareholders.

In arriving at out opinion we have placed particular reliance on Lafayette’s position being such that if the Proposal is not approved then it is likely that Lafayette will be liquidated.

We believe that the Directors would be justified in recommending that Shareholders vote in favour of the Proposal

2.4 Fairness

In Section 11 we determined that the current value of a Lafayette share compares to the value of a Lafayette share if the Proposal is approved, as detailed hereunder.

Value prior to the Proposal
Ref: 9 Low: - Preferred: - High: -

Value following the Proposal
Ref: 10 Low: 4 cents Preferred: 4.5 cents High: 5 cents

The above pricing indicates that, in the absence of any other relevant information, and a superior offer, the Proposal is fair for Shareholders.

2.5 Reasonableness

We have considered the analysis in Sections 12 and 13 of this report, in terms of both

advantages and disadvantages of the Proposal; and

alternatives, including the position of Shareholders if the Proposal is not approved.

In our opinion, the position of Shareholders if the Proposal is approved is more advantageous than the position if the Proposal is not approved. Accordingly, in the absence of any other relevant information and/or a superior proposal we believe that the

Proposal is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

Advantages:
14.1.1 The Proposal is fair
14.1.2 Early return to trading
14.1.3 Eliminates uncertainty of value
14.1.4 Elimination of debt
14.1.5 Shareholders can participate in capital raising

Disadvantages:
14.2.1 Dilution of Shareholder interest
14.2.2 Loss of control

...

4. OUT LINE OF PROPOSAL

Lafayette has entered into a reconstruction deed (“the Reconstruction Deed”) with Trident. The Reconstruction Deed proposes the following:

Trident or its nominees will acquire 90 million shares in Lafayette in consideration for $450,000.

The issue of up to 190 million shares via a prospectus at an issue price not less than $0.01 per share.

Trident will pay for all necessary requirements for the reinstatement of Lafayette to the ASX.

The current directors of Lafayette will resign.

Trident will appoint three new directors.

The Reconstruction Deed is conditional on the following:

The variation of the current Deed of Company Arrangement (“DOCA”) to reflect the resolutions included in the Notice of Meeting.

ASX confirming that the Reconstruction Deed will not prevent Lafayette from retaining its ASX listing and that the ASX will not impose any requirements on the Company under Listing Rule 11.1.3.

The following resolutions being passed at a meeting of Shareholders:

o Lafayette’s current issued capital is consolidated on a 1 for 100 basis.
o Lafayette’s capital is reduced by applying a portion of the accumulated losses of the Company against the share capital of the Company which is considered permanently lost.
o Lafayette issues the 90 million shares to Trident and its nominees and performs the capital raising as noted above.
o The Company changes its name to Voyager Resources Limited.

At completion Lafayette will pay $500,000 to the Administrators. As a result of the payment to the Administrators, the Administrators must provide all relevant documentation to release Lafayette of all charges, security and any other encumbrances over, affecting or relating to the Company and the DOCA will be terminated.

Lafayette will also acquire all the issued shares of Voyager through the issue of 105 million shares in Lafayette.

Lafayette Mining Limited bought out by Trident

LAFAYETTE MINING LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ACN 076 390 451


On 4 December 2007, the securities of Lafayette Mining Limited (Company) were suspended from official quotation at the Company's request.

On 18 December 2007, the Directors of the Company appointed Peter McCluskey and Roderick John Sutton of Ferrier Hodgson, Level 29, 600 Bourke Street, Melbourne, as joint and several Administrators of the Company.

At a meeting of the Company’s creditors on 18 March 2008, the creditors resolved to approve the execution of a Deed of Company Arrangement (DOCA) which was subsequently executed on 9 April 2008.

The Deed Administrators have sold the Company’s shareholding in Lafayette Philippines Incorporated which owned 74% of the Rapu Rapu polymetallic project to the minority holder.

The DOCA contemplated the recapitalisation of the Company with a view to having the securities of the Company reinstated to official quotation.

To this end, on 26 May 2009, the Deed Administrators entered into a Reconstruction Deed with Trident Capital Pty Ltd ACN 100 561 733 (Trident), a party experienced in undertaking corporate reconstructions.

Trident is currently working through the necessary steps to recapitalise the Company and to have the securities of the Company reinstated to official quotation. A Notice of Meeting proposing the required resolutions to give effect to the recapitalisation of the Company will be forwarded to shareholders shortly.

For all inquiries please contact Ian Morton on (03) 9604 5131.

Resignation of the "Old" Lafayette Board

LAFAYETTE MINING LIMITED
SUBJECT TO DEED OF COMPANY ARRANGEMENT) (“THE COMPANY”)
ACN 076 390 451

We announce the resignation of the following officers of the Company. The resignations took place on 12 June 2009.

Director
DAVID LEWIS BAKER
Date of Birth: 07-03-1956
City/town of Birth: SYDNEY
State: NSW

Director
JEFFREY ALLAN QUARTERMAINE
Date of Birth: 27-03-1957
City/town of Birth: TULLY
State: Qld

Director
ROBIN ANTHONY WIDDUP
Date of Birth: 16-06-1952
City/town of Birth: HUDDERSFIELD
Country of Birth: UNITED KINGDOM

Director
CARLOS DOMINGUEZ
Date of Birth: 16-09-1945
City/town of Birth: MANILA
Country of Birth: PHILIPPINES

Director
STEVEN CLARK WOOD
Date of Birth: 31-01-1963
Country of Birth: UNITED STATES

Secretary
MICHEL GRADUS MARIA STEVERING
Date of Birth: 12-07-1973
City/town of Birth: WISCH
Country of Birth: NETHERLANDS


The following persons were appointed officers of the Company on 12 June 2009

Director and Secretary
TIMOTHY JAMES FLAVEL
Date of Birth: 23-01-1970
City/town of Birth: Perth
State: WA
Country of Birth: Australia

Director
MATTHEW GADEN WESTERN WOOD
Date of Birth: 17-03-1969
City/town of Birth: Melbourne
State: Vic
Country of Birth: Australia

Director
NICHOLAS MARK LINDSAY
Date of Birth: 20-11-1958
City/town of Birth: Dunedin
Country of Birth: New Zealand


For all inquiries please contact Ian Morton on (03) 9604 5131.

Lafayette Mining management moves

hmm, interesting...


Business Spectator
12:20 PM, 17 Jun 2009
Source: News Bites

Lafayette Mining Ltd directors David Lewis Baker, Jeffrey Allan Quartermaine, Robin Anthony Widdup, Carlos Dominguez, Steven Clarkwood and company secretary Michel Gradus Maria Stevering resigned on June 12, 2009.

The company appointed Matthew Gaden Western Wood and Nicholas Mark Lindsay as directors and Timothy James Flavel as director and company secretary on June 12.

Mining contract for coal area in Masbate sought

As if DENR's pandering to Lafayette-RRPP mining is not enough, here comes the DOE, with its PECR and pseudo-moral posturing, offering among other Bicol places, Rapu-Rapu as mine site for coal... whew!

To quote from the article: “PECR is a public bidding round aimed at encouraging companies to invest in the country's energy sector... Coal block system that was offered under PECR 2009 was in the municipality of Cataingan. Five other areas in Bicol that were offered under the same PECR were Caramoran, Panganiban and Viga, all in Catanduanes; Gubat in Sorsogon and Rapu-Rapu in Albay.”

Coal mining especially in adjacent Batan Island in the municipality of Rapu-Rapu is nothing new. But for the DOE to expand and further legitimize its hated polluting operation… this government's insensitivity to the environment and affected communities knows no bounds!

...

PIA Masbate
by EA Delgado

Masbate City (24 June) -- Because of its coal deposits, a town in Masbate is one of the sites in the country being sought out for exploration and development by mining companies.

The Department of Energy (DOE) said Cataingan, 80 kilometers from the capital city of Masbate, is among 18 areas in the country which are subjects of 25 contract proposals to explore and develop prospective coal sites.

Energy Undersecretary Ramon Allan Oca said the proposals were submitted under the fourth Philippine Energy Contracting Round (PECR) 2009 for coal.

At least 13 local companies submitted the proposals, Oca said in a statement quoted by the energy department website www.doe.gov.ph.

It was reported that the DOE intended to finish the technical, legal and financial evaluation of the proposal within a month.

"I don't want to take this long to avoid any doubts as to what we're doing," Oca added.

PECR is a public bidding round aimed at encouraging companies to invest in the country's energy sector. These contracting rounds, which showcase the country's potential areas for exploration and development, are expected to spur investments and help cut costly oil imports as well.

Coal block system that was offered under PECR 2009 was in the municipality of Cataingan. Five other areas in Bicol that were offered under the same PECR were Caramoran, Panganiban and Viga, all in Catanduanes; Gubat in Sorsogon and Rapu-Rapu in Albay.

The DOE had earlier assured prospective investors that the government had "undertaken a thorough process of resource evaluation to yield high exploration success that is in line with our shared goal of efficient development and production of the coal area." (PIA Masbate)

Ecological Terrorism in Philippines

Protesters shout slogans opposing the reopening of Lafayette mining during a rally in front of the South Korean Embassy in Manila , June 11. / AP-Yonhap

By Kevin Griffith
The Korea Times

06-15-2008 16:09

A picture appeared on the front page of The Korea Times on June 12 concerning a protest in front of the South Korean Embassy in Manila over a planned reopening of a mining operation on Rapu-Rapu Island , the Philippines.

This article is to inform the Korean public about why people are protesting against Korean chaebol which are trying to reopen the mining operation, and also expose the ongoing humanitarian and ecological crisis on the island.

Earlier in April, Korean corporations ― LG International and Korean Resources Corp. (Kores) ― gained majority control of an Australian firm Lafayette Philippines Inc. (LPI).

LPI has been operating a highly controversial Polymetallic Mining Project on the once pristine island of Rapu-Rapu in the Republic of the Philippines .

LG and Kores have taken control of the operation; therefore, the details of this affair are now the business of the Korean people.

Rapu-Rapu is no longer pristine because the environmentally damaging practices of mining have incurred severe ecological damage to Rapu-Rapu's ecosystem. In the process of mining, LG and Kores use toxic chemicals to retrieve the minerals.

In November 2005, LPI was found liable for many damaging cyanide and mine tailings spills which resulted in massive fish kills, environmental destruction, community displacements, human rights violations and livelihood loss to the local people.

While I was there, I saw the fish kills with my own eyes. I even saw a dead whale shark there in 2003. I served as an American Peace Corps volunteer and lived on Rapu-Rapu Island from 2002-04.

I lived and worked hand-in-hand with the 20,000-plus Rapu-Rapuhon and personally know the hardships the local people have faced.

The local people were given false promises from LPI that their lives would be improved by allowing a mine to remove the valuable gold, copper, silver & zinc deposits.

The exorbitant mining profits resulting from the mining operation have gone to LPI and the Philippine government; meanwhile, the fisher folk are losing their livelihood and the local population is losing their most important source of protein, fish.

When I visited the island during Christmas festivities last December 2007, the Rapu-Rapuhon could not eat fish caught from the sea because the risk of illness was too great. People lived in fear of their food, and the fishermen couldn't sell their fish on the mainland.

The local Catholic Church has a sign on the steeple that says, `` Lafayette thinks this is a hoax. Rapu-Rapu is suffering for real.'' Children can be seen naked on the streets, dogs with mange run wild and the local high school's computer lab remains damaged from a super typhoon; meanwhile, LPI profits by exploiting Rapu-Rapu Island 's minerals.

Kalikasan, the people's network for the environment, said that the Mines and Geosciences Bureau (MGB) ordered LPI to pay 134 million peso (3.1 billion won) to rehabilitate the damages caused due to the mining. However, I have been unable to find any report confirming this payment has ever been made.

Kalikasan reports, `` Lafayette 's income during its operation was estimated at 3.487 billion peso (80.94 billion won).'' This is just another case of a mining operation being more concerned about profits and shareholders than environmental and social responsibility.

A press release from Kalikasan's Web site quotes their national coordinator Clemente Bautista as saying, ``There is no reason to continue the Lafayette mining project. Its three-year operation in Rapu-Rapu Island has brought enormous environmental destruction, community displacements, human rights violations and livelihood loss to the local people.''

An LG press archive states that once Rapu-Rapu operations stabilize, the Korean firm and Lafayette will be embarking on other mining projects in the Philippines.

Are we to believe that the catastrophic impact of mining on Rapu-Rapu Island is going to change now that Korea 's LG is in control? Bikolanos have been protesting LPI's mining operation for over six years now; I'm afraid that operations will not stabilize.

There has been a long history of exploitation of the Rapu-Rapu people, which dates back to Japanese occupation during World War II. The Imperial Japanese had a base on the island because it provided a valuable lookout point for the Albay Gulf.

The locals told me that the Japanese would rape local women and sometimes shoot them and their families. They employed forced labour during the occupation to plunder the minerals from the island.

Now, LPI is profiting from the purchase and exploitation of land on the island; meanwhile, the local population once again suffers.

Who should be responsible for the ecological and humanitarian catastrophe brought on by LPI's mining operation?

The Australian investors apparently feel comfortable selling their stake, taking their profits, and washing their hands of the whole affair.

Now, LG and Kores are the major shareholders; therefore, they are responsible. They have made a big mistake and underestimate the veracity and the fortitude of the Filipino people.

LPI must pay the fines and reparations demanded by the Philippines and stop the mining operation on Rapu-Rapu Island indefinitely. People matter, even if those running the operation consider these people to be nothing more than ``peasants,'' The people of Rapu-Rapu Island want their livelihood, food source, and island returned.

If you're interested in learning more about this crisis, watch Greenpeace's ``Undermining Paradise'' at http://kr.youtube.com/watch?v=EnVg3nywXNQ.

Kevin Griffith is currently working as an English teacher trainer at the Gyeonggi-do Institute for Foreign Language Education (www.gifle.go.kr) near Pyeongtaek, Gyeonggi Province . He worked as an English teacher trainer with the U.S. Peace Corps in the Philippines from 2002-04. He can be reached at intrepidkev@yahoo.com

Philippines: Mining enriches few, impoverishes many

NewsNotes, May-June 2009

Maryknoll Office for Global Concerns

A new study says the decline and loss of Philippine forests, fisheries and now mineral resources has seriously decreased food production. In their study Philippines: Mining or Food, Robert Goodland and Clive Wicks say the Philippines, once a major rice exporter, is now the world’s largest rice importer. They demonstrate the overlap of mining locations with indigenous ancestral domains, watersheds and areas of environmental importance – all critical for Philippine agriculture and food security. The complete report and a summary can be found here.

Goodland and Wicks say deforestation from the 1950s to the 1980s affected rainfall and the water supply, leading to a decline in rice production. Much of the country’s fisheries were subsequently lost due to poor management practices. The loss of forests and fisheries denied the poor – comprising perhaps half the population – two avenues to a sustainable livelihood.

“Despite these warnings,” the authors say, “the large-scale mining that is now proposed for the Philippines threatens to wreak further havoc … There is strong evidence from areas in which mining has already taken place ... that the extraction process damages rice production, often permanently.”

While the government presents mining as a means of lifting the country out of poverty, the study indicates mining creates relatively fewer jobs than agriculture, fisheries or tourism – about 0.4 percent of total employment – and says mines normally have a lifespan of just 10-20 years. The study notes that “(i)n most cases, the ore is exported unprocessed, just as unprocessed logs were exported during the massive deforestation of a few decades ago.”

Goodland and Wicks wrote their report based on a February 2008 visit to mines on the islands of Mindoro and Mindanao . Goodland discussed the report April 7 at a presentation in Washington , D.C.

He said 26 Philippine families benefit the most from mining. As the report states, “Mining profits accrue primarily to mining corporations, most of which are based outside the country; some go to the government, but little trickles down to poor Filipinos. Thus profits are privatized by companies while the costs are externalized to communities.”

A representative of the Philippine Embassy said the country’s Mineral Action Plan of 2004 sets high standards for the mining industry and includes strict provisions to protect the environment and indigenous people’s rights.

However, Goodland said the problem is a lack of enforcement. As the study says, “While the Philippines may appear to have some of the best laws in the world to protect the environment, human rights and Indigenous Peoples, their application is unacceptably poor. Many countries without such good legislation have far better practical protection for their people and environment.”

The study cites a number of negative factors that can affect the outcome of mining operations. “Mining … is especially precarious in areas of high rainfall (more than three meters per year); seismically active areas; steep slopes downstream of deforestation; and densely populated areas,” it says. “These conditions are common in the Philippines .”

The study also reports frequent conflict between the Philippine armed forces and members of local communities protesting mining. “This leads to further human rights abuses and undermines the constitutional position of the military as protector of the rights of Filipino citizens rather than multinational interests,” the study says.

Goodland and Wicks address recommendations to the government, mining companies, people affected by mining and others. Their primary recommendation is that the Philippine government declare a moratorium on new mining development. They also recommend a review of existing mining projects “to determine if they impact on food producing capacity, afford adequate protection to the environment and respect existing legal provisions and rights, including the requirement to obtain Indigenous Peoples’ Free and Prior Informed Consent.”

The Catholic Church in the Philippines will likely use the report to bolster similar arguments. Iloilo Archbishop Angel Lagdameo, president of the Catholic Bishops’ Conference of the Philippines , criticized mining companies late last year that had “systematically engaged in the rape of Mother Earth and left a legacy of impoverished communities and environmental [despoliation].” The archbishop said the Church wanted a moratorium on mining until “the government and the mining companies learn to uphold the right of the indigenous peoples, compensate the affected communities for past damages, and ensure responsible mining practices.”

Rapu-Rapu Minerals refutes allegations vs mining operations

Yet another misrepresentation of truth - and attempt to downplay damaging data - from Lafayette-RRMI-RRPP. We will post a lengthier response. For now the following points will have to do:

1. "allegations against the project are baseless, speculative and in no way supported by facts or evidence."

-- The International Solidarity Mission will release a full report of its findings. When they do, let's see if company reps can still say they are speculative. Let their methods and findings be tested by fair and objective scientific evaluation. Unlike what the company and DENR did with the findings of the test run. The company failed the test run. The presence of mineral contaminants in the waters were found to be way off the charts. There was even a fish kill mentioned (in passing) in the official report. Yet the DENR chose only the "expert opinion" minimally favorable to them. And that was all the DENR needed to grant approval to the resumption of Lafayette's mining operations. It was not a test run at all, it was a "tutorial run". In the meantime, why don't the company respond scientifically to the findings of Dr. Emelina Regis in her book "Impacts of Mining in an Island Ecosystem: The Case of Rapu-Rapu Island, Philippines" (Ateneo de Naga University: 2008).

2. “The project can only be successful if we protect local residents and the environment for the long term,” he said.

-- The project does not enjoy the support of the local community. The people themselves complain of health problems, loss of potable water, dwindling fish catch, social division, corruption, human rights violations, etc. And Lafayette-RRMI-RRPP has the gall to tell the people the company is protecting them. Let company officials speak about these claims in a public forum in Rapu-Rapu and let's see how the community will react to them.

Increased militarization in affected communities near the mine site

3. “Safeguarding the people and the environment is a priority which we are actively pursuing,” Corpus said.

-- Double-talk. People and the environment, them too. But profit mostly. Double-talk.

4. 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.

-- And the island's residents should just be grateful for the company's great generosity. Let's forget about the overly-minimal tax they're paying and the overly-generous tax exemptions they're enjoying, while they wantonly blast the bowels and mountainsides of the island to extract its minerals. And for whose benefit? Certainly not for the majority of the people of Rapu-Rapu, or the province of the Albay. A few local employees and corrupt politicians may have some share in the benefits, but definitely not the majority of the people.

5. "The project has successfully passed the surveillance audits for its ISO 14001 certifications for environmental management systems"

-- Ah, the ISO certification... Can this ISO certification restore the losses in fish catch, give justice to the human rights violations, the health problems, the pollution in water supply, and the displacement of the people? Were these issues even considered before the certification was even granted? Your ISO certification may be good for your company's image, but what good does it do to the lives of the residents of Rapu-Rapu? I tell you what it actually does to the people: it further disenfranchises the suffering voices of the affected communities.

These are pictures from an ISO 14001 certified company:

Business Mirror

Regions

Written by Jonathan Mayuga / Correspondent

Tuesday, 09 June 2009

RAPU-RAPU Minerals Inc. belied allegations that its Rapu-Rapu Polymetallic Project in Albay is threatening the health and livelihood of island residents.

Roger Corpus, Rapu-Rapu Minerals president, said in a statement that allegations against the project are baseless, speculative and in no way supported by facts or evidence.

According to 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,” he said.

Specifically, Corpus said that 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.

Corpus cited the following recent measures to protect Rapu-Rapu residents and the environment:

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.

Corpus said 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.

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.

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.

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

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.

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.

“Safeguarding the people and the environment is a priority which we are actively pursuing,” Corpus said.

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, he added.