‘Going Down the Drain’
Foreign investors asked
to withdraw from Arroyo’s flagship mining project
Philippine
environmentalists will bring the controversial Lafayette mining project to
international forums and ask foreign investors to withdraw as the
operation violates environmental standards and local community rights.
BY BULATLAT
Environmental
activists affiliated with the Defend Patrimony! alliance and Kalikasan-Peoples
Network for the Environment (Kalikasan-PNE) Nov. 24 vowed to increase
international pressure on mining investors and financial institutions (FIs)
involved in the controversial Lafayette mining project in Rapu-Rapu, Albay.
They said that the
project clearly violates the social and environmental standards that these
FIs supposedly stand for.
In a press conference
held at the Ibon Foundation office in Quezon City, Defend Patrimony
conveners showed reporters findings by Johan Frijns, coordinator of the
international financing watchdog BankTrack.
BankTrack is a
network of grassroots organizations and individuals tracking the
operations of the private financial sector, such as commercial banks,
investors, insurance companies and pension funds, and its effect on people
and the planet.
The Lafayette project
is financed through a syndicate of banks including ANZ Investment Bank in
Australia, NM Rothschild and Sons of the United Kingdom and the Australian
branch of ABN AMRO Bank NV.
Trixie Concepcion,
Defend Patrimony! spokesperson, said that the alliance will ask the
investors funding Lafayette Mining's operations to withdraw their support.
Pull out
"The FIs propping up
Lafayette's operations should concretely manifest their commitment to
advocating environmental and social sustainability by pulling out their
support for Lafayette, which has clearly violated environmental standards
and local community rights," Concepcion said.
Defend Patrimony is a
multisectoral alliance opposing government’s mining liberalization program
of the government and calling for the closure of Lafayette.
Concepcion said that
it would do ABN Amro and ANZ investment bank good to adhere to the
Collevecchio Declaration, endorsed by over 200 grassroots organizations,
which calls on FIs to embrace six commitments (to Sustainability, to Do No
Harm, to Responsibility, Accountability, Transparency, and Sustainable
Markets and Governance) and take immediate steps to implement them as a
way for FIs to retain their "social license" to operate.
The spokesperson said
that the Arroyo government has been giving Lafayette much leeway over
their operations despite their adverse negative effects on the small
island ecosystem and local populace.
"Three extensions of
the Lafayette's test run are way too much. The DENR is giving Lafayette
too much slack and the general welfare of the local community and
environment in the process," she said.
Losing, destructive, and controversial
Clemente Bautista,
Kalikasan-PNE national coordinator, said that it was no use for investors
to support a losing, destructive, and controversial venture such as
Lafayette's polymetallic project.
"Based on the Annual
Financial Report of Lafayette (released last Sept. 29), the company
recorded a consolidated loss as of June 30, 2006 of Aus$111,034,348 or
17.8 cents per share,” Bautista said. “According to the report this loss
includes an amount of Aus$83,130,033 which is attributable to the
accounting of losses on base and precious metal hedge contracts."
The report also
stated that Lafayette Group's consolidated Balance Sheet as of June 30
this year, disclosed a net working capital deficiency of Aus$89,748,451
and a deficiency of net assets of Aus$172,202,840.
"Lafayette continues
to bleed profusely, is now on the brink of bankruptcy, and has no capital
to finance its own mining operation. It is actually the Philippine
government through the DENR with its lax monitoring and control of
Lafayette's operations that is serving as its guarantor to its investors.
As the Arroyo government inexplicably refuses cancel their mining permit,
investors should take the initiative to pull out," he said.
‘Going down the drain’
Bautista also said
that government’s so-called flagship mining project “is going down the
drain” and its expectation that the Lafayette's Polymetallic Project would
generate millions of pesos of taxes does not hold water.
“Lafayette, in
effect, has been using our precious mineral resources which it still has
to mine as collateral to its foreign financiers through hedge contracts.
As of June 30 this year, it accumulated a debt of US$11,607,143
(Php638,392,865) and obligated to settle additional base metal hedge
contracts that matured last September 29 which is approximately US$13
million or Php650,000,000.00," he said.
Sorsogon Bishop and
Rapu-Rapu Fact-Finding Commission (RRFC) chairperson Arturo Bastes said
that 'he was saddened over the Arroyo government's non-implementation of
the RRFC's conclusions and recommendations."
"We fear that the
situation in Lafayette will worsen and that more mining tragedies and
accidents will happen as President Arroyo pursues the destructive policy
of mining liberalization and program for Charter Change," Bishop Bastes
said.
Those present at the
press conference vowed to bring their calls to their international
network. Bulatlat
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