SPECIAL REPORT

Gov't Takeover To Bring In More Mining Giants to Diwalwal

Conclusion of a 3-part special series which began in last week’s issue of Bulatlat.com  

Sidebar: Gov't Scheme Allots 75% of Diwalwal to Big, Foreign TNCs

The takeover of the Diwalwal gold mines by the environment department, its secretary, Heherson Alvarez, says will benefit thousands of beleaguered small miners. But there are fears that Alvarez’s offer is a trap all laid out for the small miners who will be gobbled up by giant mining TNCs. 

BY CARLOS H. CONDE AND DAISY C. GONZALES
Bulatlat.com

MOUNT DIWATA, Compostela Valley Province - Franco Tito, the pistol-packing barangay chairman of Diwalwal, is the first to admit that, by entrusting their fate in the hands of government, thousands of miners and their families in Diwalwal are actually gambling their future. "We know that. But either we try this alternative or peace and stability will never come to Diwalwal," Tito says.  

Earlier, Tito spoke with his constituents in Diwalwal, explaining to them the scheme that DENR Secretary Heherson Alvarez wants implemented. "This could be our chance to finally be recognized, for us to finally own Diwalwal," Tito told the miners. "But if this fails," he added, "we will continue the fight." The crowd cheered. 

"To be honest with you," Tito added, "all we have right now is the word of Secretary Alvarez, who promised to help us. We've dealt with the government for so long that many of you might not be as optimistic as I am today. But he has given his word and I respect him. All we have is his word." 

Under Administrative Order 2002-18, Alvarez outlined the plan for the government takeover: the government takes over Diwalwal, troops are sent in, the mining is stopped, a technical working group is created to implement a so-called mine management plan, declare 8,100 hectares as a mineral reservation area, issue service contracts to the small miners, the mining resumes, build a common mine tailings pond, relocate the miners and their mineral processing plants, with the Bangko Sentral ng Pilipinas buying all that gold. 

According to Alvarez, the bottomline of the plan is to enable the small miners to have more share of the riches of Diwalwal. After a three-month mining stoppage in which the DENR will "rationalize" the mining in the area, Alvarez said those who "dig like rats in the tunnels" should have more share from Diwalwal's gold. The ideal sharing, he said, would be 60% in favor of the miners and 40% to the financier. 

Apprehensions

The seemingly decisive entry of the DENR has been applauded by the small miners. But there are those who are apprehensive about the outcome of all this. The whole government plan in Diwalwal is, after all, anchored on the law that created the problem there in the first place: Republic Act 7942 or the Mining Act of 1995.  As the Mount Diwata Coalition itself acknowledged in a letter to President Arroyo in March, "the existence of RA 7942 guaranteed the entry of (Southeast Mindanao Gold Mining Corp.) in Mount Diwata and served as their instrument to suppress our rightful claim to the gold-rush area." 

Indeed, the Alvarez plan will be "under the regime of RA 7942," the same law that allowed the entry of Southeast, which is being accused of forcing the small miners out of Diwalwal through violent means, a charge that it has consistently denied. 

Engr. Catalino Corpuz, a convenor of MineWatch Asia Pacific and the campaign officer of the Tebtebba Foundation that advocates anti-mining campaigns in the country, says that under the law, there is no impediment for big and multinational mining companies to enter Diwalwal. "RA 7942 heavily favors the big miners," he told this reporter in a long-distance phone interview from Baguio City, where he is based. 

Constancio Paye, the team leader of the technical working group Alvarez formed to plan the operation of the 729-hectare gold-rush site, had conceded that, because of the Mining Act, both foreign and domestic investors could come in. 

Canadians 

Already, the Canadians have expressed interest in investing in Diwalwal. Marcopper, the company that transferred its exploration rights over Diwalwal to Southeast for a token one peso, is partly owned by Placer Dome, one of Canada's biggest mining companies.  

The Chamber of Mines of the Philippines has also pledged "assistance" to Alvarez in the "rehabilitation" of Diwalwal. The chamber also offered the "services" of its technical staff from such mining companies as Philex Mining, Lepanto, and Benguet Corp. This staff will design the tailings dam in Diwalwal. The chamber also offered "technical support in terms of consultancy services on mining and mineral processing operations." 

Corpuz says these are signs that the big mining firms "have long-term goals for Diwalwal." He says the issue of Diwalwal "is not the rehabilitation of the area but the right of the small miners, which they have been asserting. Unfortunately, the big mining firms see Diwalwal as commercially viable and it is their long-range interest to take over the area," Corpuz says. 

The Mining Act, he says, "is very deceptive because while on the surface it recognizes the rights of small miners, it is actually a legal way of temporarily recognizing them but later on, through some machinations, they will be evicted. There have been cases like that." 

He says the DENR will justify the entry of big mining firms in Diwalwal by invoking "national interest." The DENR's Mines and Geosciences Bureau, Corpuz adds, has identified 10 "world-class gold deposits" in the Philippines and "they want it declared as something akin to export-processing zones." Corpuz says he won't be surprised if Diwalwal is one of the 10 and would become, as a result, of national interest. 

According to the MGB, some P2.95 billion Diwalwal gold were sold to the BSP buying station in Davao in 2000; that's 35% of the country's gold produced by small-scale miners. From 1985 to 1998, some P36 billion worth of gold was bought by the BSP from Diwalwal. 

Corpuz says the government's gambit in Diwalwal is to pacify the situation there in the short term and, later on, allow big miners in. "When you think about it, the small miners have walked into a trap," Corpuz says. 

Moreover, Corpuz, one of the most notable anti-mining advocates in the country, says he doesn't know of any instance anywhere in the Philippines where a government takeover of a mining area benefited the small miners. "There is no such success story," he says. 

He urges the Diwalwal miners to view their situation in a larger context. He says the government has a National Minerals Policy, which was prepared by the DENR's MGB. The mining industry is said to be pressuring President Arroyo to issue a memorandum order endorsing the policy, which, according to the participants of the Philippine Conference on Mining held in Baguio last May, is geared toward the exploitation of the 10 "world-class" ore deposits in the Philippines  by "hastening the resolution of many of our conflicting laws" on mining, ultimately to favor big mining companies. One such conflict is the challenge posed to the Mining Act by anti-mining advocates, chief among them indigenous peoples. 

Investment attraction 

The policy also pushes for the so-called "responsible mining under globalization" - a thrust that the mining industry is earnestly lobbying. In November last year, Artemio Disini, president of the Chamber of Mines of the Philippines, said "we have to keep waving the flag to attract investors." He said the mining industry needs foreign investment to "either reopen or explore new mines." 

The MGB, which boasts of such words as "sustainable development in mining" in its website, says that the Mining Act is "a primary tool to revitalize the mining industry," which can only be done, as far as Disini and other miners are concerned, if big and foreign mining firms invest in the Philippines. Horacio Ramos, the MGB's director, said in a letter published in the bureau's website that in order for Filipinos to enjoy the fruits of mining, "the government has taken the policy to expedite the grant of mining tenements, especially exploration permits..." 

To critics like Corpuz, all this can only mean one thing: what the DENR has is a recipe for disaster. "There can be no 'sustainable development through responsible mining' for so long as the country's economic policy is an export-oriented and import-dependent one," Corpuz wrote in a paper at the mining conference. He was referring to the extractive nature of Philippine mining, which, under the Mining Act, allows foreign firms to wholly own mining rights, enjoy tax holidays, and expatriate their capital and their earnings, almost leaving nothing to the communities they oftentimes ravage. In the case of the disaster in Boac, Marinduque, Marcopper and Placer Dome have yet to fully compensate the residents there and haven't even fully acknowledged their culpability. 

In a phone interview, Corpuz says the government should nationalize the mining industry. In the case of Diwalwal, he says, "we can use our gold as capital to strengthen our capacity for international trade. As such, we have to adopt a moratorium on gold mining until such time that we have a capacity to mine it at a very low production cost." 

The point is, Corpuz says, "we were said to be the No. 1 producer of gold in the world once upon a time and we are still among the biggest, but our country has never gotten rich out of it precisely because the government favors big and foreign firms while the local communities, the direct beneficiaries, suffer." Bulatlat.com

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