Mining industry needs sustainable framework, lawyer says

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BAGUIO CITY (20April2013) – The country’s mineral wealth has not been used significantly to benefit the Filipino people, and in fact, “mining has the highest poverty incidence of any sector in the country,” a lawyer said.

Atty. Christian Monsod, co-convenor of the Climate Change Congress of the Philippines said he and the mining industry are in agreement that investments need a framework that is fair, transparent and stable.

“Clearly, the present framework does not work – after more than 50 years of mining, there is no significant industrialization based on our mineral wealth and there is an imbalance in the distribution of the costs and benefits, to the great disadvantage of the Filipino people,” Monsod added.

In his arguments before the Supreme Court on the constitutionality of two sections of the Mining Act of 1995, Monsod explained he and the other petitioners did not come to argue that mining should be banned, “not only because that position finds to traction in the Constitution that allows it but also because the value of our mineral wealth is huge at $ 840 billion or about P 40 trillion.”

He added that “although mining has never been a driver of our development, not even during the mining boom of the seventies, we cannot discount its potential and must try to find ways to realize that potential.”

Monsod said the Mineral Production Sharing Agreement and the Financial or Technical Assistance Agreement have not been in favor of the Philippine government and its people.

He said a number of countries have began to reconsider existing laws as UNCTAD’s World Investment Report of 2012 underscored the need for a “new generation of policies” according to its findings that investment agreements, specifically on extractive industries, “have been found wanting in two major aspects.” He went on to describe these as the failure to take into account requirements to make sustainable development and inclusive growth a reality. He said governments are at a disadvantage due to an imbalance in the benefits and costs shouldered by the government and investors.

Monsod said the Philippine Development Plan 2011-2016 described inclusive growth as “growth that creates jobs, draws majority into the economic and social mainstream and continuously reduces mass poverty.”

He underscored the inequitable distribution of environmental, social and economic costs because mining is carried out in rural and mountainous areas affecting farmlands, rivers and shorelines where the poorest of the poor are engaged in livelihood activities.

He cited reports which revealed taxes, fees and royalties collected from mining was 7.3% relative to the total value of mineral production from 1997-2011 though the average was up to 10.5% from 2005-2011. There’s a need to create an additional of four million jobs until 2016 to alleviate poverty through tourism, business process outsourcing, agribusiness and manufacturing. While it requires P 200,000 to create a single job, mining is an industry where investment to job ratio is high as “exemplified by its biggest proposed investment in Tampacan, Mindanao the investment-job-to is P120,000,000 per job.

He added the average contribution to GDP from 2000 to 2010 was pegged at 0.945% with an average share to total employment was 0.387%.

“Mining has the highest poverty incidence (48.7%) of any sector of the country and it is the only sector where poverty incidence increased between 1988–2009,” he further said.

He particularly cited the case of Bataraza in Palawan where Rio Tuba is located for the past 30 years with a poverty incidence double of the national rate (53% vs. 26%)

“These date do not establish causality but they do show an association between mining and poverty that at least raises questions on the claim of mining that is substantially improves life in their communities,” Monsod said.

Monsod called on the Court to look into explicit provisions on what to do with the revenues from mining. (MA/CBCPNews)

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