Fact-checking the mining closure debate

(Image by Kalikasan PNE)
(Image by Kalikasan PNE)


The way the big mining lobbyists paint the recent crackdown of Department of Environment and Natural Resources Secretary Gina Lopez on big mines, it would seem our country is on the verge of collapse.

Billions of pesos in local government revenue disappear overnight, running down basic public services to a halt. More than 60,000 mine workers suddenly find themselves jobless, and more than a million people directly and indirectly benefiting from mining are now facing the prospect of hunger and hardship in the coming days.

Unsuspecting taxpayers will shoulder even more billions of pesos in legal costs over the next decade, as disgruntled mining companies file case after case against the DENR’s sudden closure and suspension of mines and cancellation of mining agreements that allegedly violated their right to due process and for not following the mining law’s process on conflict settlement.

So we fact-checked these raised issues. Here’s what we found:

Economic losses

The mining industry’s contribution to the country’s gross domestic product is negligible at an average of just 0.7 percent from 2011 to 2015. In contrast, economic sectors that suffer from irresponsible big mines contributed more in the same period, with agriculture at 11.5 percent and tourism at 7.3 percent.

The Surigao Chamber of Commerce and Industry argued that while mining contributes little on the national scale, it significantly contributes to host regions, such as its 28.5-percent direct and 32.5-percent indirect regional GDP contribution to CARAGA region. Economic think tank IBON Foundation noted, however, that mining-generated local revenue did not translate to poverty reduction in these regions, such as CARAGA remaining the second poorest in the country with a 39.1 percent poverty incidence.

So who gained from the extraction of our country’s mineral resources? Latest data from the Mines and Geosciences Bureau shows that from 1997 to 2015, we extracted minerals worth P1.7 trillion but directly exported over P1.6 trillion or 93.4 percent of the mineral production value generated. From this, we collected only P199.3 billion in taxes, fees and royalties or just 11.8 percent. Even subtracting production costs from the total value, the revenue collected would be just 21 percent of the gross value-add created from 1998 to 2015.

(Image by Kalikasan PNE)
(Image by Kalikasan PNE)

We can thus surmise that public interest would suffer minimally from the closure’s economic losses. What we should instead be worrying about is that we are losing to foreign companies 8-9 pesos for every 10 pesos worth of minerals extracted.

Employment losses

Mining’s contribution to the national employment rate only averages at 0.6 percent from 2011 to 2015, in contrast to agriculture with an average of 31.1 percent in the same period. There are currently 236,000 people employed by the industry, but this is not yet disaggregated between big mines and registered small-scale mines.

The nature of work in big mines is already predominantly precarious, as a 2012 International Solidarity Mission on Mining revealed that contractualization, low wages, and other workers’ rights violations are rampant in mining areas they visited in Benguet province and the CARAGA region. In Benguet, particularly, 800 out of the 1,400 workers in Lepanto Mining Consolidated Corp., incidentally one of the suspended big mines, are contractual while the rest are ‘illegals’ who only get P200 to P250 a day.

Regardless, the worker layoffs are a legitimate concern that must and can be addressed. An inter-agency that includes the Department of Social Welfare and Development and the Department of Labor and Employment is already looking into providing economic relief to the workers. The employers are responsible as well to ensure the provision of benefits and compensation to workers while the operations remain suspended or closed.

Legal challenges

Sec. Lopez asserted that due process was afforded to mines, as they were given the opportunity to respond to the findings and recommendations of the audit teams. The multi-partite and inter-agency Mining Industry Coordinating Council is already investigating this.

But there is just and scientific basis for the crackdown. From 2012 to 2015, scientific investigations conducted by our network on big mining projects in the provinces Nueva Vizcaya, Zambales, and Palawan confirmed the massive environmental and socio-economic impacts of these mines. The DENR’s audit findings thus establish a pattern of impunity as violations persisted years after the big mines were found guilty.

Since 2001, we have also monitored cases of harassment, trumped-up charges, militarization, and other rights violations against anti-mining activists and communities in areas where 20 of the closed and suspended mines are located. There are cases of killings involving critics and opponents of at least six of these companies.

Unfortunately, there are loopholes and impediments in the Mining Act. Grounds for a mining agreement’s cancellation, revocation and termination are limited only to administrative violations. Only ‘proclaimed’ watersheds will be protected from mining operations. The Mining Act also lays down an arduous process for conflict settlement that involves a panel of arbitrators and a mines adjudication board.

There is international precedence, however, for a national government’s assertion to cancel mining agreements. The national government of El Salvador recently won against a USD250-million damages suit filed by Australian-Canadian mining corporation OceanaGold (which owns another suspended big mine in Nueva Vizcaya) over the cancellation of their mining agreement based on El Salvador’s argument that the mining project should be cancelled for failing to secure crucial environmental permits and land rights, among other bases.

Grain of truth

Going by the facts, it turns out that there is some grain of truth in the doomsday prophecies of the mining lobby.

Yes, there are economic losses—in the trillions of pesos that will continue to be shipped overseas if we don’t stop the plunder.

Yes, jobs will be lost—just not in the scale of unmanageable crisis proportions we are being made to believe.

Yes, our mining law has specifications that Sec. Lopez might not have followed to the dot—we’ll let the lawyers deliberate on this—but it only goes to show how more than two decades of the Mining Act was able to perpetuate such callous injustices.#

Leon Dulce is the campaign coordinator of the Kalikasan People’s Network for the Environment, a national environmental campaign center established in 1997.

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  1. support the closure of destructive and large scale mining.

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