This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. V, No. 18, June 12-18, 2005
Under Probe: The Lepanto Workers’ Demand
for Just Wages and Benefits
“Tunggal dumawat tayo ti
nayon a sweldo, ibaga da a bassit ti mapaspastrek a ganansiya ken maluglugi da
pay” (Whenever we ask for just wage increases, the company tells us that it
is not earning, that business is not good). Striking mine workers have all the
more reason to demand for a wage increase and an improvement in benefits. The
company, after all, has been raking in billions of pesos in retained earnings.
What they are asking for only accounts for less than five percent of such
earnings.
BY ABIGAIL T. BENGWAYAN BAGUIO CITY - The 1,687
rank-and-file employees of the Lepanto Consolidated Mining Company (LCMCo) are
on their 6th day of strike as this article is being written. The work stoppage
started on the foggy dawn of June 2 in Mankayan, Benguet. To date, underground
operations remain paralyzed. The miners were exploited
and oppressed in all imaginable means by the management, a classic example of
struggle between capital and labor. Hard labor is one of the simple bases of the
demand for wage increases and benefits. It is also a known fact that the
economic crisis has affected the Filipino people — and the poor is hit the
hardest. The workers of LCMCo and their families need not be shown macroeconomic
statistics to prove this. They live it everyday. The workers, led by the
Lepanto Employees Union (LEU), ask how LCMCo can go on expanding its operations
when it cannot respond to the needs of its labor force first. The workers ask
why, in spite of LCMCo’s profits, adjusting their wages to realistic rates seems
unworkable. Profile
of a mining giant More than a century ago,
Spanish occupation in Mankayan prompted copper mining which lasted for some 19
years under the Sociedad Minero-Metallurgica Cantabro-Filipino de Mankayan. But
it was American colonization that paved that well-cemented way for the entry of
mining corporations in Benguet province. Several laws were eventually enacted,
including the Public Land Act of 1903 and the Mining Act of 1995. Business
boomed in the 1930s. By 1936, a group of investors led by Victor Lednicky formed
the LCMCo. The LCMCo started operating
in Mankayan primarily for copper production. It has become the biggest gold
producer in the country after expanding its copper operations in 1995 to include
other minerals. According to research
conducted by the Cordillera chapter of the Kilusang Mayo Uno (KMU, or May First
Movement), LCMCo established major subsidiaries in the names of Far Southeast
Gold Resources, Inc., Diamond Drilling Corporation of the Philippines (DDCP),
Diamond Boart Philippines Inc., Shipside Incorporated and the Lepanto Investment
and Development (LIDC). In a primer titled
“Large-Scale Mountain Top Mining: Its Impact on Land, Water, and Indigenous
Peasant Communities in the Agno and Abra River Basins,” the peasant alliance
Alyansa dagiti Pesante ti Taeng iti Kordilyera (Apit Tako, Alliance of Poor
Peasants in the Cordillera) noted that small-scale mining accounts for 54
percent to 59 percent of all gold remitted to the Bangko Sentral ng Pilipinas (BSP)
annually. Large-scale mineral production accounted for only 41 percent to 46
percent of the annual gold remittance. The same KMU research
stated that LCMCo occupies 4,621 hectares of Mankayan land, specifically the
villages of Paco, Sapid, Poblacion, Colalo, Cabitin, Tabeo, Bulalacao, and Suyoc.
In January 2005, it applied for an Application for Production Sharing Agreement
(APSA) in Maintin, Bontoc, Mt. Province covering 3,924.67 hectares, and another
APSA in Mankayan covering some 1,057 hectares. It also has an approved and
registered Mineral Production Sharing Agreement (MPSA) for copper mining also in
Mankayan. According to the Department
of Environment and Natural Resources (DENR), LCMCo filed in January 2005 for an
Application for Financial Technical Assistance (AFTA) covering 77,549 hectares
in Benguet; 81,000 hectares in Ifugao, Nueva Vizcaya and Benguet; and another
81,000 hectares in Ilocos Sur and Abra. For its foreign partners,
KMU reported that the company clinched deals with big foreign investors from the
US, Japan and Australia, specifically with NM Rothschild & Sons-Australia,
Dredsner Bank for their Gold Hedging, Financing and Loans, Chemical Bank,
International Metal Company, ASAP Company (USA), Nippon Mining (Japan), Conzinc
Rio Tinto (Australia) and Ivanhoe Mines Ltd. The
capital that gold built The company posted retained
earnings amounting to P2.72 billion, P2.57 billion and P2.59 billion ($49.21
million, $46.63 million and $46.86 million, based on an exchange rate of P55.20
per U.S. dollar) for the years 2002, 2003 and 2004 respectively, according to a
recent KMU fact sheet on the ongoing strike at Lepanto. The economic slump may not
seem to affect to the sale of gold. Independent research think-tank IBON
Foundation explained that gold, as a commodity, reacts inversely to the crisis.
During global economic recession, the demand for gold increases, and similarly
in instances of wars and currency turmoil. IBON clarifies that gold is the
traditional store of value such that investors buy gold when prospects of other
assets are at risk. From its Teresa Ore Body
expansion, Lepanto targets to produce P83.02 billion ($1.50 billion) from its
estimated gold reserve of 110,418 kilograms (kg). This mine site has a 15-year
lifespan. These figures were derived from converting the estimated gold reserve
(110,418 kg) to grams (110,418,000 g) and dividing it by 31.157 g, which is the
value of 1 troy ounce. The quotient was multiplied by the $428.50, the price of
gold in the international market as of June 7, 2005. (The computations were
lifted from an article posted at the Cordillera Peoples Alliance website at
http://cpaphils.org/campaigns/cpa-teresa_4c04.htm, except for the recent price
of gold in the world market.) The Victoria Gold Project
meanwhile started in 1997, where Lepanto produced 3,432.47 kilograms of gold and
earned P1.47 billion ($26.63 million) for that year alone. The Save the Abra
River Movement (STARM) in its 2003 primer on the effects of corporate mining on
the Abra River System stated that from 1998 to 2002, the company earned P9.55
billion ($173.04 million). Clearly, the money does
come in. In the June 5 issue of
Northern Dispatch, we presented the figures the union would acquire if its
proposal – i.e., to increase daily wages by P29, P29 and P33 for the first,
second and third year of the collective bargaining agreement’s (CBA) effectivity
– were approved, which is P93.69 million ($1.70 million) for three years. This
amount is only 4.7 percent of the company’s retained earnings in 2004.
The company issued a
statement last May 24 titled Updates on the CBA negotiation which claimed that
the total proposed package (wages and non-cash benefits) of P133 million ($2.41
million) is greater than the previous package, which is P103 million ($1.87
million). But with the rising cost of living, it would only be proper for a
corporation like LCMCo to increase the wages of its workers. Using the same
formula, P133 million ($2.41 million) is only 3.95% of the 2004 retained
earnings. A worker’s daily pay is
P340 ($6.16). In monetary terms, the benefits per worker amount to P260 ($4.71),
which is why company reports the daily wage at P610 ($11.05) per worker. Then
again, the benefits refer to boots, eyeglasses, allowances and the like which
are not given daily but monthly or yearly. The National Statistical
Coordinating Board (NSCB) and the National Economic and Development Authority (NEDA)
reported that in the Cordillera region, a family of six needs P573 ($10.38) to
survive daily. IBON stressed that the
buying power of the peso continues to slide, such that its real value is down to
P0.53 ($0.01). And this is due mainly to the increasing prices of goods and
services. Buying power or purchasing
power is the amount of goods and services a person can buy with P1 ($0.02) using
a base year as point of comparison. This means that P1 ($0.02) can now only buy
P0.53 ($0.01) worth of goods and services. The workers’ basis for
their proposed wage hike is therefore valid. It is also just and legitimate.
This truth cannot be denied. Nordis/Bulatlat © 2004 Bulatlat
■
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ANALYSIS
Northern Dispatch
Posted by Bulatlat