Friday, July 19, 2013

Mining 27: Ensuring Responsible Mining from Small and Large Projects

A friend, Arcy Garcia, posted in his facebook wall my recent paper, Mining 26: Presentation at Rotary Club of Taguig Fort Bonifacio, and invited his friends from the Alyansa Tigil Mina (ATM) and Philippine Misereor Partnership, Inc. (PMPI) to comment on it. Only one commented, Mr. Samson Pedragosa, and I’m glad he did, as Samson has some constructive ideas how to further encourage responsible mining, not kill it.

Below are our exchanges from July 16-19, 2013 , with permission from Arcy and Samson that I will use their comments. Thanks Arcy, Samson. This is six pages long including photos, nearly 3,000 words, enjoy.

Arcy Garcia sa mga kasama sa ATM, PMPI at iba pang kasama natin sa paglaban sa iresponsableng pagmimina, pwede ba nating sagutin isa-isa ang artikulong ito? ang may akda ay isa sa mga ginagalang kong tao, kahit pa man malinaw sa kanya na siya ay pro-capitalism at neo-liberalism....

Samson Pedragosa This presentation assumes that mining in this country is done responsibly. I have serious reservations about the sildes on Rio Tuba. Like the writer, I have been too the place, not once but many times. But I agree with the author that no mining is not an option. Choosing where to mine should be done, again responsibly. The author also used the so-called "stone age argument" about cars and laptops, etc. This argument reeks of arrogance and deserve to be responded with the eat-your-ore-till-you-choke reposte that does not add anything positive on the discourse on mining versus conservation ek-ek. Between mining and agriculture, the choice is clear. Finally, not to tax mining and instead settle for spoons and forks, well, you be the judge. And Chile, where in the world is that? It may be just a narrow strip of land but it is part of one of the biggest landmass in this planet (American Continent). The Philippines? We are just a string of islands and islets serving as the first line of defense from the wrath of the Pacific Ocean.

Nonoy Oplas Hi Samson, to your points.
1. This presentation assumes that mining in this country is done responsibly.
--> Wrong. If you imply me suggesting that "all miining done responsibly", I made zero statement about that. Please provide an exact quote where I made a statement to that effect.

2. "stone age argument"... reeks of arrogance and deserve to be responded with the eat-your-ore-till-you-choke reposte
--> the photo is shown there -- "STOP MINING!!!" Those people can modernize with zero mining.

3. Between mining and agriculture, the choice is clear.
--> Commenting without reading. It's there, "Should be no conflict between the two. But labor productivity and income per worker is larger in LSMM..."

4. not to tax mining and instead settle for spoons and forks,
--> The exact sentence is "People benefit from it (mining) even if taxes are zero... cellphones and laptops, cars and airplanes...they all came from mining."

5. Chile, where in the world is that?
--> $40 B mining exports per year could be "nothing" to some people. But here, a $20 B per year OFW remittance is already a big thing. Chile earns twice from that remittances, even if they export not a single citizen anywhere around the world.

--> $67 B in new investments until 2017, on top of existing investments, vs. $12 B investments in PH. Yes, all those numbers and money are nothing, cool.

Nonoy Oplas Meanwhile, please answer these points taken from the presentation, all answerable by Yes or No, then expound why:

1. Do you recognize that "responsible mining" is possible and being done by some large scale mining firms?

2. Deadweight loss can happen if mining taxes are further increased?

3. Declining tax revenue as tax rates are increased can happen, as suggested by the Laffer curve?

4. There are more taxes, fees, mandatory social spending, in large-scale mining than in any other sectors and industries in the Philippines?

5. Do you recognize that LSMM surrender almost half of their net income to the government, exclusive of SDMP, while small scale mining pay zero to the national government?

6. Local tax collection of P22,000 for one whole year from small scale mining in the case of Benguet province is fine?

7. Reducing the number of mining taxes and fees from a dozen plus to just 3-4 is possible, and still contribute 25% of total government revenues, like what the Chile government has experienced?

8. Just 2% of total land area with mining contracts/permits is big already?

9. Raising mining tax revenue more than 4x from $400 M in 2011 to $1.8 B in 2018 even without raising the tax rate is a bad thing?

10. "The things that we need, if they cannot be grown, they must be mined" is a correct statement?

Thank you.

Samson Pedragosa 1. Yes. Responsible mining is possible. In fact, I advocate that it should be done here.
2. Yes. But the Philippines is way far from that. We still have to optimize the tax take from mining.
Yes. Of course, But again, we are still very far from that point in the curve.

Small-scale mining is as destructive as large-scale mining, but I have doubts in the surrender of almost half of the net income of the LSM companies. in 2007, I worked with the COMP in mining advocacy, and they are also in fact willing to look into this so they will know how much taxes are really paid and where they go. We also tried to invite the EITI and a third party, to help us monitor.

As I said, SSM is as destructive as LSM and must be regulated as well.
We need to get the good players to do this. But what we have right now are the "juniors" who like to do the dirty jobs.

2% includes only those with actual operations but if you look at the map, pending applications comprise a mosaic of the whole country. This to me is not responsible. We really have to establish no-go zones. The tax rate really needs looking into. We need to get but we deserve. And mining should be made an integral part of the whole national development agenda.

Of course, the things we could not grow, we need to mine. But again, it should be done responsibly. And with responsible mining, I do not mean merely doing CSR, building some classrooms there, some roads here, etc.. No, responsible mining should be by the people, for the people and of the people. It should be done in a manner where there is least destruction, and where the benefits far outweigh the costs, both short-term and long-term. Finally, responsible mining should be done by responsible miners which we have very few of. It should be regulated by a strong government not prone to regulatory capture, but this is something we still have to work out.

Thank you, I hope I made myself clear here. P.S. Responsible mining should respect rights.

Nonoy Oplas The number has been provided already, COMP said LSMM paid P11.9 B out of P27.6 B net revenue in 2010, not 2007, or 43% tax and fees payment. So it's already there, it answers your "how much taxes are really paid." Where they go, Legislators, other politicians and bureaucrats in government can provide the answer where they spent the money.

Arcy Garcia  sa aking palagay, ang ating posisyon sa anti-mina ay mas tama. ngunit tiyak akong mas tatalas ang ating argumento kung makikinig sa iba , lalo na sa kabilang panig...tuluy tuloy na usapan- ...basta ang policy- ang unang umamba (ibig sabihin, gumamit ng phisycal na lakas, i.e., manigaw, umastang manununtok, bumagsak sa ad hominem argument, etc.) ay talo sa usapan....ngunit habang nag-uusap at nagkakatwiranan- dulo, makakatulong ito sa bawat isa, at sa bawat panig... bilib ako sa sagutan nyo...kailangan natin yan sa demokrasya....

Samson Pedragosa Salamat, Arcy. Pero yun naman talaga ang tawag sa ganung argumento na inumpisahan mismo ng mga minero - "stone-age argument" na anila yung mga ayaw sa mina ay dapat magsimula nang lumakad pabalik sa stone age at huwag gumamit ng kung anuman na galing sa pagmimina. Ako mismo ay hindi kontra sa pagmimina, kanya lang dapat sa wastong pamamaraan at dapat patas ang hatian sa kita.

Arcy Garcia ibig sabihin- ang common natin sa kanila ay- oks ang pagmimina. kailangan nating mga tao at komunidad- ang isyu lang ay: anong uri ng pagmimina- at ang ating posisyon ay: responsableng pagmimina- kaya kailangan nating patunayan na ang kasalukuyang pagmimina ng mga mining firms na ito, na siyang may hawak ng mining industry ay hindi mga responsable...yan ang ating kailangang patunayan at ipakita sa kanila.....

Nonoy Oplas Kung ang goal ng maraming activist groups ay "responsible mining", then it is being done by some -- not all -- large scale mining companies. And it is definitely NOT done by SSM. If that is the case, it is expected that many activist groups should demonize SSM more than LSMM. And as shown by data from Chile, LSMM can be (a) a major contributor to tax collections, 25% of total govt tax revenues, and many sectors will benefit from such big funding, even if (b) taxes on LSMM are few and small, unlike the current PH policy of many taxes and fees, and (c) a major job creator, major source of exports revenues, not sending people abroad.

The numbers and photos are already there. If some people will say that those numbers are wrong, then they should produce the "right" numbers and show the source/s of those correct numbers.

Samson Pedragosa Yan mismo Arcy, ang sinabi ko sa mga kaibigan natin sa COMP, ATM at PMPI. Kailangan natin na mgakasundo saan ba talaga pwede at paano. Sinabihan ko ang mga taga PMPI at ATM, hindi pwede ang hindi. Ang sabi ko naman sa mga taga COMP hindi pwedeng abusuhin ninyo ang kalikasan at mga komunidad, at pag umalma ang komunidad e tatakbo kayo sa militar at gagamit ng dahas. Hindi rin pwede na daanin na lang sa mga konswelo di bobo na CSR. Sa iyo naman Noy, mismo sinabi ko sa PMPI at ATM na dapat bantayan din ang SSM dahil masyado rin itong mapanira.

Nonoy Oplas Then that is a more productive discourse and action. Expose those who are doing irresponsible mining, both small and large-scale, and penalize them for their environmental destruction. Philex has been penalized even though the culprit was heavy flooding and not willful or deliberate negligence. I have not heard stories of SSM being penalized. In the AFRIM report (commissioned by Bantay Kita) on SSM in Benguet, it said that of the 69 SSM operators in the province, only 8 were registered and only 5 were paying local taxes, they paid P22,000 total for whole year 2010. That is large-scale violation of local laws by SSM, at least in the province of Benguet.

So when activist groups go to the SC to declare 2 provisions of the Mining Act as "unconstitutional" and declare a stop to some LSMM operations, they are relegating if not avoiding the bigger issue of forcing ALL mining enterprises, small and big, to practice responsible mining -- they (a) pay taxes to local and national govt, (b) institute structures to control mine tailings, (c) provide SDMP and various community devt projects for the impact villages, (d) rehabilitate the mined out areas and reforest, and so on.

Arcy Garcia kaya ang isa sa mga dapat nating i-highlight sa mga mining firms, at mga advocates nila ay: sa first stage pa lang ng mining , soc prep, ang dami na nilang human rights violations na hindi na dapat magpatuloy....ang mga lumalaban sa pagmimina sa kanilang lugar, (dahil sa kultura nila ang bundok), ay hindi nila ginagalang--at sa ilang kaso, ay pinapatay...ang mga kaso ng 2 lider ng PKSM sa Compostela Valley, at sa Tampakan (mga EJK) ay dapat mahinto..

Nonoy Oplas Then these are criminal cases that require criminal prosecution. Whether people are killed after a drinking spree or over a bad joke or over land squatting dispute or over mining land, killing is killing, regardless of the circumstances and killers should be penalized as a crime against person, if not a crime against humanity, and not be diverted to other issues like mining taxes or over foreigners' FTAA contract.

Arcy Garcia may problema ako sa c Noy. Ang LGU dapat ang may development program sa area. as long as nagbabayad ng buwis ang mining firm, at pumasok nang may malinaw na agreement sa mga tao roon- oks na sa akin yun. at nagbabayad ng tamang sahod sa mga manggagawa roon. ang ayoko ay sila ang nagpapatayo ng eskwelahan- mga SCR na ginagamit lang pampapogi...habang kung titignan, sila lang ang kumita...tulad ni Sam, ayoko ng CSR...
sa mga nabanggit kong cases, mahigpit ang ugnayan ng mining sa patayan..

Nonoy Oplas Pero nasa batas, Mining Act, ang (c) SDMP. Re schools, ibang klase Ars. I saw the private school in Rio Tuba, it is administered by La Salle, it is private yet free to children of employees of the company, even to some selected children of non-employees. They have modern apple computers, the students are technologically prepared if they pursue college education in big schools in Metro Manila. Ganon din sa private hospital, owned by Rio Tuba, private and yet free to employees and possibly, some non-employees as there is no government hospital there. The barrio is more developed -- wide, cemented roads, street lights, well-maintained drainage, compared to Bataraza town proper. Mas maunlad pa ang barrio kesa sa munisipio.

About the killing, just implement the rule of law. The police should do their work well. Get the perpetrators, produce the evidence and persecute them.

Samson Pedragosa I remember, in one meeting of the COMP which I attended in AIM, the white guy from Rio Tuba stood up and said "In Rio Tuba, when we started building some school rooms there and some roads here, the people in the community realized that mining is not such a bad Idea after all." I replied to him "Yes indeed, communities are reasonable, deal with them properly and they will cooperate with you, respect them and they will respect you. It is better to spend more money for the direct benefits of the community than pay hefty sums to your COMREL people". Speaking of SSM, unfortunately, both the ATM and the PMPI still have to make a clear position on it (but I cannot speak for them, although I do meet with them). But they both realize that SSM is as destructive as LSM. The difficulty with SSM, as I explained to them, is that SSM is part of the culture of many indigenous peoples in this country, and we have to respect that. As I observed, in both ATM and PMPI, there are what I refer to as the "Puritans" and the "Pragmatists." The former wants to stop all mining, the latter advocate responsible mining. I guess this is the dilemma haunting both organizations, they need to find internal balance. I even suggested that ATM needs to change it name in order to be more reflective of their position advocating an alternative minerals management policy.

Nonoy Oplas Thanks Samson. We are moving to a productive discussion. Yes, the term "Tigil Mina" is literal, stop mining -- small scale or large scale, metallic or non-metallic. Tingin ko halos konti lang talaga talo sa large-scale, accountable, fullly registered and transprent mining. They get the soil and rocks, the land area remains there, still owned by the state and/or Filipino private enterprise. But the tax revenues to national and local govts, the schools, hospitals, paved roads, street lights, livelihood projects, skills training, indirect jobs and entrepreneurship, public markets, etc that serve the needs of employees and officers of the mining company, etc.

If I were the local government head of a mining area, I won't ask them to cover the mined out pit with soil then plant trees. I would rather see a lake, or a dam. It will catch the flash flood during heavy rains, it will have water sports facilities like Caliraya lake, or CamSur Water sports, it will have resorts and hotels. Lots of new jobs will be created, and the LGU did not spend a single centavo digging that pit.

Arcy Garcia sarap ng palitan ninyo....sana tuluy-tuloy natin ito...salamat sa inyo..

Nonoy Oplas Hi Samson, I want to pursue the idea of some of those mined out open pits, especially the deep ones (say 20 meters or deeper) be not resurrected as forest area but as dams and lakes, ala Caliraya Lake, a man-made lake. Lots of sustainable jobs are created by that huge lake -- tourism and hotels, water sports, fishing, vacation houses, hydro-electric power, etc.

Because if this is possible/feasible, then an amendment to the Mining Act can be introduced to allow those LSMM to partner with tourism/hotel companies to develop those deep open pits. Government will keep receiving taxes and royalties, the locals will have new, more jobs. What do you think, thanks.

Awaiting for Samson’s reply. Meanwhile, imagine a possibility of former rocky hills or uplands, not suitable for high value crops as soil quality is poor, are mined, the deep open pit has later become a lake and/or dam, and creating a new set of industry and jobs for the people while government keeps earning taxes and  fees, even if it has done nothing except protect peace and order and have stable policies that protect private property and long term investments.

No comments: