The Economic Gains from Mining vis a vis Effects on the Environment, Agriculture and Marine Life

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Yuchengco Center
The Economic Gains from Mining vis a vis External Effects on the Environment, Agriculture and Marine Life.



The Economic Gains from Mining vis a vis Effects on the Environment, Agriculture and Marine Life.Dr. Roberto B. Raymundo
The Economic Gains from Mining vis a vis Effects on the Environment, Agriculture and Marine Life.





Dr. Roberto B. Raymundo












© Copyright 2017

Published by the Yuchengco Center
Prepared by Christiene Jennil G. Liza

Printed in the Philippines. All rights reserved.
Photos on cover retrieved from:
(Xylem) https://www.xylem.com/en-au/industries-applications/mining-quarrying/
(Africa Progress Panel) http://www.africaprogresspanel.org/managing-oil-gas-and-mining/
(Motherboard) https://motherboard.vice.com/en_us/article/kbz79x/mining-the-bottom-of-the-ocean-is-as-bad-for-the-environment-as-it-sounds
(Earth Works Action) https://www.earthworksaction.org/earthblog/detail/the_dangers_of_deep_sea_mining#.WZOmztKx3cs

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without the permission in writing from the Center.





The views expressed by the authors in this publication do not reflect those of the Trustees and Officers of the Yuchengco Center.

ISBN: 978-621-8018-36-5

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TABLE OF CONTENTS
Abbreviations v
1. Introduction 1 1.1 Mining versus the Environment 2
1.2 The Philippine Mining Act of 1995 4
2. The Economic Benefits from Mining 5
2.1 The Mining Industry 5
2.2 Mining Output and Employment 5
2.3 Taxes and Investments 6
2.4 Commonly cited models of responsible mining 7
2.4.1 Rio Tuba Nickel Mining Corporation 8
2.4.2 Philex Mining Corporation 9
2.4.3 OceanaGold 10
3. Documented cases of environmental damage 11
Recent experiences 11
3.1.1 Marcopper Mining 11
3.1.2 Surigao Province 13
3.1.3 Philex Mining 15
3.1.4 Lafayette Mining Corporation 17
3.1.5 Other environmental accidents 17
18204. Areas of Contention: Mining versus the Environment 18
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4.1 Minerals are primary product exports with minimal processing, low value added and limited job creation effects with minimal processing, low value added and limited job creation effects 4.2 Incidents of environmental damage are a thing of the past because of the new safeguards introduced in the Philippine Mining Act of 1995 and
4.2 Incidents of environmental damage are a thing of the past because of the new safeguards introduced in the Philippine Mining Act of 1995 and Executive Order 79
2528303133343737384.3 The Watershed Argument
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4.4 Free Prior and Informed Consent
4.5 Island Ecosystems versus a Continental Land Mass
4.6 Small scale illegal mining is not being regulated by the national or the local government
4.7 The claim that there are no interesting tourist sites in highly mineralized areas is a highly subjective value judgment
4.8 Mining operations only occupy 0.3 percent of the total land area which will not affect food security
4.9 Open Pit Mining and the use of Siltation Ponds or Mine Tailings Dams
4.10 Impact on indigenous peoples
4.11 The rule of law, protecting property rights and preserving the sanctity of contracts
5. Conclusion 40
6. Final Notes 42
7. References 43



LIST OF ABBREVIATIONS

ANZCHAM
Australia New Zealand Chamber of Commerce
BIR
Bureau of Internal Revenue
CDCP
Construction and Development Corporation of the Philippines
DENR
Department of Environment and Natural Resources
ECC
Environmental Compliance Certificate
FPIC
Free Prior and Informed Consent
GDP
Gross Domestic Product
HPAL
High Pressure Acid Leach
ICC
Indigenous Cultural Communities
IPRA
Indigenous Peoples Rights Act
LGU
Local Government Units
MPSA
Mineral Production Sharing Agreements
MGB
Mines and Geosciences Bureau
NAPOCOR
National Power Corporation
NGO
Non Government Organization
NIPAS
National Integrated Protected Area System
RA
Republic Act
RTNMC
Rio Tuba Nickel Mining Corporation
SMI
Sagittarius Mines Inc.
SDMP
Social Development Mining Program
UK
United Kingdom
USGS
United States Geological Survey




The Economic Gains from Mining vis a vis the Effects on the Environment, Agriculture and Marine Life.

Dr. Roberto B. Raymundo

1 Introduction
In February 2017, the Secretary of the Department of Environment and Natural Resources (DENR) cancelled the Mineral Production Sharing Agreements (MPSAs) of 75 projects. The environmental compliance certificate (ECCs) of the biggest mining project in the Philippines (the Tampakan Copper-Gold Project in South Cotabato), recommended the closure of 23 mining firms as well as the suspension of 10 other companies for violation of environmental laws and regulations. These recommendations were primarily based on an audit conducted by 16 multi-disciplinary teams of 41 metallic mining companies currently operating in the Philippines. The recommendations for closure of mining operations were based largely on the violation of environmental laws that included the siltation of rivers and coastal areas, the destruction of functional watersheds and the illegal cutting of trees. The DENR Secretary reported that all audit teams were in agreement on the nature of the violations committed by the mining firms. However, they had different views on the extent by which the sanctions were to be imposed considering the varying degrees by which the violations were committed.

The mining sector as represented by the Chamber of Mines of the Philippines has vehemently opposed the cancellation of these mining contracts and the recommendations for closure and suspension in view of the DENR's failure to observe due process by not issuing formal notices of closure or suspension to the mining firms involved as well as the absence of transparency by not providing the full and complete audit results which became the basis for the recommendations. The Chamber of Mines asserts that the sanctity of contracts between government and mining investors should be upheld, and that alleged violations of environmental laws and mining regulations and the corresponding application of sanctions or penalties should follow due process and the rule of law.

The Chamber of Mines puts emphasis on the fact that the constitution allows mining, the implementing rules and regulations governing the industry are expressed in the Philippine Mining Act of 1995 (Republic Act 7942, and despite several attempts to challenge the legality of its provisions, was declared to be constitutional in 2005. Even when the provisions of the law were subject to amendments in 2012 under Executive Order 79, it continues to serve as the legal framework for mining operations up to the present.

1.1 Mining versus the Environment
The conflict between mining and environmental protection has become more intense over the past three decades in view of the environmental damage caused by mining firms relative to the economic gains provided by their continuous operations. The massive environmental destruction caused by Marcopper Mining Corporation in Marinduque, in 1993 and 1996, the Lafayette Mining Corporation in Albay in 2005, and Philex Mining Corporation in Benguet in 2012, have increased the awareness of local communities of the dangers of large scale mining operations. These communities located in the downstream areas that are affected by large scale mining operations are generally more concerned about mine tailings waste materials destruction of agricultural land, water resources, irrigation systems and coastal fishing grounds despite the regulations imposed by the Mines and Geosciences Bureau (MGB) and the DENR.

The mining sector has always asserted that they contribute to the economy in several ways particularly through the amount of investments they generate and jobs created directly by these operations. Employment outside of mining is also induced indirectly when mining companies purchase various goods and services from different industry suppliers within the local community, municipality and province. The firms provide livelihood programs for the communities where mining operations are being conducted, finance and set up schools for children of the community as well as for indigenous people, provide health care services and implement social development programs for residents in the community to ensure stable sources of livelihood even after the mining companies have left the area.

All large scale mining firms are required to have a rehabilitation plan that should be implemented after its operations have ceased. The plan should include reforestation of the affected area and in certain cases, the creation of a lake or water reservoir where an open pit mine is located. Taxes are paid by the firms to both national as well as local governments and minerals that are exported, contribute to foreign currency reserves

The industry provides the raw materials for a wide range of manufacturing activities that include the production of cell phones, computers, various types of electronic equipment, industrial equipment, metal cables and wiring and metal based construction materials. Non-metallic mining firms which are into quarrying activities provide materials for the construction industry which include gravel and sand, marble and stone and cement. The Chamber of Mines has continually reiterated that its members' practice responsible mining by contributing investments, output and jobs to the economy, protecting the environment, developing local communities affected by mining operations and paying government its fair share of the revenues generated from mining activities.

Both the mining sector and the environmental protection groups discuss their versions by focusing on specific cases that strengthen their positions on the issue. The Chamber of Mines consistently cites examples of firms that faithfully comply with mining regulations and environmental laws, while environmental protection groups have continued to report on many specific area incidents that show environmental damage in critical forest reserve watershed areas, protected wildlife reserves, the pollution of river systems and the siltation of coastal areas that have led to the demise of coral reefs and the disappearance of marine life.

Since mining operations eventually come to an end, particularly when all mineral deposits have been removed from the area, the economic benefits from mining are confined within the lifespan of the mine which may extend over a 10 to 25 year period. Once mining operations are closed, the residents of the affected community who chose to remain in the area may not be able to go back to agriculture and fishing because the land and the coastal areas have been silted and contaminated with mine tailings waste materials. Reforestation in an area which has been mined out has been done by a few large scale mining companies, but reforestation efforts will not be enough to offset the siltation of river systems, natural reservoirs and coastal areas, and will not address the contamination of underground water and aquifers which already contain dissolved metals and chemicals. Mineral extraction is not a sustainable activity because any mineral deposits removed from the earth cannot be replaced, replenished or returned. Is it possible for the economic benefits from mining to more than offset its environmental impact including its spill-over effects on farm land, water resources and coastal marine life?

1.2 The Philippine Mining Act of 1995
In 1995, President Fidel V. Ramos signed into law, Republic Act (R.A.) no. 7942 or the Philippine Mining Act which formally recognizes the country's ownership of its mineral resources, its protection, and use for national development with special attention given to preserving the environment. Following the regulatory regimes of Canada and Australia, the Act includes various measures to protect the environment and define areas in which mining can and cannot take place (Global Business Reports, 2013).

Under R.A. 7942, the country asserts its ownership over all mineral resources to be discovered and unearthed, protects all mining as well as non-mining areas and identifies the necessary measures that should be taken in order to conserve both land and mineral resources.

However, upon signing the Philippine Mining Act into Law, both formal and informal environmental groups, non-governmental organizations, college student organizations, church organizations, indigenous peoples, and communities heavily dependent on fishing and agriculture have continuously and consistently protested its enactment. The above mentioned groups assert that mining has destroyed the environment through deforestation, digging open pit mines and dumping chemically tainted metallic mine tailing waste materials (laterite). Mining firms are responsible for the contamination and siltation of river systems, water reservoirs, irrigation systems and coastal areas leading to the destruction of agricultural land and the disappearance of fish and corals. Mining activities have ruined the ecological balance in forested areas, threatens wildlife biodiversity and destroyed watersheds reducing their capacity to absorb rain water which is channeled into streams and river systems. The natural environment and the communities, dependent on it, are put at risk because of mining operations.

Because of the conflicting interests of mining firms versus environmental groups, indigenous peoples, farmers and fishermen, President Benigno Aquino issued Executive Order no. 79 in July 2012, amending the mining industry regulations under the Philippine Mining Act of 1995, which was consequently approved and implemented beginning in October 2012.

The mining sector claims that it makes a significant contribution to the economy in terms of output production, exports, employment and taxes, including the provision of education, health care services and livelihood for the directly affected communities in the mining area. Environment groups however, argue that the contributions of the mining sector make up relatively small benefits compared to the huge long term costs of environmental degradation, destruction of watersheds, contamination of drinking water, and destruction of agricultural land and coastal fishing grounds. Is it possible to arrive at a balance wherein mining operations can be allowed alongside the continued protection of the environment?

2. The Economic Benefits from Mining

2.1 The Mining Industry
The Philippines is the 5th most mineral rich country in the world for gold, nickel, copper, aluminum and chromite whose estimated worth is approximately $1.4 trillion (Australia New Zealand Chamber of Commerce (ANZCHAM, 2015). It is home to the largest copper and gold deposits in the world per capita relative to its 9 million hectares of mineral potential area. There were 45 large scale metallic mining companies in the Philippines that have extracted an estimated P1.3 trillion worth of minerals over the past 10 years (from 2005 to 2015) (MGB, 2016).

2.2 Mining Output and Employment
The entire mining sector's contribution to Gross Domestic Product (GDP) for 2016 is at 0.6 percent with the gross value added estimated at P84.9 billion at current prices. The highest gross value added for the entire sector over the last five years was recorded at P90.7 billion in 2014, which is roughly 0.7 percent of GDP (MGB, 2017).

For the year 2016, large scale metallic mining produced P101.2 billion worth of gross production value, which is 7.5 percent lower than its output recorded in 2015 at P109.4 billion, and 28.3 percent lower than the P141.1 billion recorded in 2014, which is the largest over the last five years (MGB, 2017).

Exports of metallic minerals and mineral products were at $2.317 billion in 2016 representing 4.1 percent of total exports. The largest export revenue recorded over the past five years was at $4.038 billion in 2014, representing 6.5 percent of total exports. Exports of non-metallic mineral manufactures were valued at $154 million in 2016, accounting for 0.3 percent of total exports (MGB, 2017).

Employment in the mining sector declined from 250,000 workers in 2012 to 235,000 workers in 2014 and 218,000 workers by the end of 2016. Mining workers accounted for 0.5 percent of the total employed persons in the country in 2016 (MGB, 2017). During the last five years, the mining sector at its best contributed 250,000 jobs or 0.7 percent to total employment in the country for the years 2012 and 2013.

2.3 Taxes and Investments
The amount of taxes paid to the Bureau of Internal Revenue (BIR) and the Local Government Units (LGUs) along with the fees, charges and royalties collected by the DENR and the MGB amounted to P29.6 billion for the year 2015. With a gross production value of P179.7 billion in 2015; the ratio of taxes, fees, charges and royalties to the gross production value of the entire mining sector is approximately 16.47 percent. The largest amount of taxes, fees and royalties paid by the mining sector was recorded in 2014 at P32.755 billion which is roughly 15.73 percent of gross production value (MGB, 2017).

For each year of operations, the large scale mining firms are required to pay the following taxes and fees to government 1) 2 percent excise tax on gross revenue; 2) 12 percent value added tax; 3) 30 percent corporate income tax; 4) allocation of 1 percent of gross revenue for indigenous people; 5) allotment of 1.5 percent of gross revenue for funding a Social Development Management Program (SDMP); 6) allocation of 10 percent of exploration expenses to be used for community development; 7) real property taxes paid to the local government; 8) a graduated 1 to 2 percent local business tax based on gross sales; 9) a Mayor's Business Permit based on the local government units' assessment of gross revenues; 10) a 10 percent royalty gross revenue for areas classified as government mineral reserve area; 11) 10 centavos for every ton of mine tailings waste produced; 12) 5 percent on waste materials; and 13) a lump sum amount of P5 million to be allocated for mine rehabilitation efforts (Contreras, 2017)

Investments into the mining sector rose from $921.7 million in 2012 to $1.4997 billion in 2013 reflecting a robust increase of 62.7 percent. However, in 2014, investments declined to $1.193 billion and $924.9 million by the end of 2015. At present, there are 41 metallic mines and 62 non-metallic mines in the country, with 1,473 mining applications that were being processed in 2016 (MGB, 2016).

Out of the 30 million hectares of land in the country, 9 million hectares are considered to have high mineral potential and these represent 30 percent of the total land area. Approximately 702,298 hectares or 2.3 percent are covered by mining permits; 602,162 hectares are subject to 319 Mineral Production Sharing Agreements (MPSAs) and 100,136 hectares under financial and technical assistance agreements (FTAAs) as of February 2017. Active mining is currently being done on 81,000 hectares which represents 0.27 percent of total land area. The MGB had issued 27 mining exploration permits as of February 2017 applicable on 49,337 hectares of land equal to 0.16 percent of total land area. There are also 80 industrial sand and gravel permits covering 959 hectares as as of February 2017. (DENR, MGB, 2017).

2.4 Commonly cited models of responsible mining
Responsible mining as defined by the Mines and Geosciences Bureau (MGB) requires the completion of three primary requisites namely: 1) that mining operations contribute to the development of the economy; 2) that the environment is protected and if disturbed, should be restored back to its original or in a much better state and; 3) that the communities whose livelihood has been affected by mining should be provided with alternatives so that when the mines are decommissioned, residents will have other sources of income to rely on. The Chamber of Mines of the Philippines regularly cites the following firms as models for responsible mining:

2.4.1 Rio Tuba Nickel Mining Corporation
Rio Tuba Nickel Mining Corporation (RTNMC) operates at the Rio Tuba mine site located in Barangay Rio Tuba, municipality of Bataraza at the Southern tip of the province of Palawan. The company exports Saprolite and Limonite ore, and provides limonite ore and non-mining services to the adjacent Coral Bay Hydrometallurgical Processing Plant of the Coral Bay Nickel Corporation. In 1967, mineral deposits were discovered in Rio Tuba, and in 1969, open pit mining operations were started for the purpose of extracting nickel ore.

The Rio Tuba mining area has been subject to rehabilitation over the past several years. Since 2011, the RTNMC has planted over 500,000 trees, in 25 percent of the area it has mined and spent P60 million for its environmental rehabilitation program. The company built housing for indigenous people under the Gawad Kalinga program with a commitment to complete 1,000 homes in the Rio Tuba mining area (Brimo, 2012).

The RTNMC along with the other operating members of the Chamber of Mines have planted roughly 15 million trees long before the implementation of the national greening program and have also spent P370 million under the Social Development Management Program (SDMP) for infrastructure, livelihood, water production and distribution, job and livelihood training, education, and medical care. Funding for the SDMP is based on 1.5 percent of the total operating cost of each mining firm. The operating members of the Chamber of mines have also paid P200 million for royalties for the use of ancestral land claimed by indigenous people.

Large scale mining companies allocated P19.1 billion to implement approved projects under their respective Environmental Protection and Enhancement Programs and have reforested more than 47,000 hectares under the National Greening Program as of December 2015 (MGB, 2016).

2.4.2 Philex Mining Corporation
Philex Mining Corporation which operates the Pacdal mine in Itogon Benguet, the Silangan mine in Surigao del Norte, the Bulawan mine in Negros Occidental and the Sibutad Mine in Zamboanga del Norte has been implementing a reforestation program since 1987. One of its projects involves the planting and nurturing of 8 million different tree species, with a 90 percent survival rate at its mine site in Tuba and Itogon. The program covers a total of 2,750 hectares of land which makes use of the Pacdal mine nursery that produces 250,000 seedlings annually, and will reforest an average area of 100 hectares every year.

Philex Mining Corporation has spent almost P90 million or over 20 percent of its total budget of P437 million for 2017 on environmental enhancement projects that include the management of natural resources and third party monitoring of its mining facilities. Pacdal mine in Benguet was "logged out" before the company took over and since then implemented a program that transformed the barren area into a forest rich with foliage and greenery. The company has planted an estimated 10.18 million trees with 3,922 hectares reforested for both upland and coastal areas since 1967. The reforestation activities in Pacdal have been replicated in Bulawan in Negros Occidental and Sibutad in Zamboanga del Norte which have been converted into a natural sanctuary for wild ducks and a lush mangrove plantation, respectively, after the company decommissioned mining in the above mentioned areas (Toledo, 2017).

The company has also allocated more than P400 million for various projects under its Social Development Management Program (SDMP) over the last five years. This covers funding for health and sanitation, education, livelihood and skills development and supportive public infrastructure (Philex Annual Report, 2016).

2.4.3 OceanaGold
OceanaGold evolved out of the gold production assets of Gold and Resources Developments Limited in 2003 with a diverse portfolio of assets in the South Island of New Zealand. In 2006, OceanaGold acquired the Didipio Gold and Copper Project in Nueva Vizcaya in the Philippines through a merger with Climax Mining. Since it began operations in the country, the company has produced 100,000 ounces of gold and 14,000 tons of copper. It uses both open pit mining and underground mining techniques and expects to extract 1.59 million ounces of gold and 210,000 tons of copper over the lifespan of the project which is expected until the year 2030.

The company as well as the Cagayan Valley Regional Office of the DENR had forged a memorandum of agreement that launched the national reforestation project. In collaboration with different stakeholders and partners, the goal is to plant 1.5 billion trees covering 1.5 million hectares in a span of six years from 2011 to 2016. The company provides the funding for labor and seedling requirements for the project which includes students who are recipients of scholarships from OceanaGold and will assist on site preparations and seedling production. Since 2013 the company has planted more than 130,000 trees and is undertaking forest protection and other environmental programs in the area which is in line with the goal of sustainable growth and development. The company is also actively involved in a number of community and humanitarian programs with particular efforts in environment and reforestation, clean water provision, infrastructure, livelihood and training programs as well as numerous employment opportunities. The company regularly conducts medical and dental missions in Barangay Didipio and its surrounding communities; has recently upgraded the water systems in the areas near the mine site and continues to provide scholarship programs to deserving students in the barangay.

Although Rio Tuba Mines, Philex Mining and OceanaGold are cited as models of responsible mining, cases of mine tailings waste with chemicals and dissolved metals contaminating land and water resources within their respective areas are still reported with damaging effects on farming and coastal fishing grounds. In view of this, is responsible mining still possible?

Documented cases of environmental damage

Recent experiences

3.1.1 Marcopper Mining
Marcopper Mining is a Canadian corporation that started its copper mining operations in 1969 at the Mt. Tapian Ore Deposit on Marinduque Island in the Philippines. Production from the Tapian pit began in 1969 and extended up to 1991. Placer Dome of Canada owned 40 percent of the mining concession from 1987 to 1997 (USGS, 2000). As of 1985, at least 120 million tons of tailings had been discharged into Calancan Bay (Zandee, 1985). Other estimates indicate that from 1975 up to 1990, roughly 200 to 300 million tons of tailings have also been disposed into the bay (Coumans, 1999).

When the Mt. Tapian reserve was depleted in 1990, Marcopper moved its operations to the San Antonio copper mine, three kilometers north of the Mt. Tapian site. In June 12, 1993, the Magila-gila dam (siltation pond for mine tailings waste), constructed to hold back contaminated silt from the San Antonio pit collapses, spilling toxic water and mine tailings into the Mogpog River flooding residents at the river banks with acidic water (caused by sulfur and cyanide) as well as various dissolved metals killing fish, shrimp and other forms of life which were dependent on the river.

Complaints from local residents led to the Mt. Tapian open cut mine site being converted to receive mine tailings from the San Antonio mine on a temporary basis. Marcopper plugged up the Mt. Tapian pit with a concrete fixture to allow it to act as a disposal lake which was filled up with 23 million metric tons of mining waste. The use of the Tapian Pit as a waste containment system was unconventional. In 1996, another mining disaster in the area occurred caused by the breakdown of a drainage tunnel under a mine tailings waster dam with 3 million tons of waste flowing into the 26 kilometer long Boac river which was later declared dead by the DENR-MGB after its contamination with chemical and dissolved metal waste.

The tailings deposits in the Boac River will be a long term source of acid and metals into the environment. Due to the oxidation of sulfides in the tailings, the generation of acid waters during rainstorms and the evaporation of these acid waters during dry periods have built up substantial deposits of soluble salts within the tailings. These salts store acid and metals in readily soluble solid form until the next rainstorm, when they are likely to dissolve and produce ecologically damaging flush of acid and metals into the Boac River. The cycle of salt formation and dissolution can be repeated each dry and wet period (USGS, 2000).

In 2001, the Canadian firm Placer Dome left Marcopper mines without a resolution of the damage left by its two open pit mines. At present, the people affected by Marcopper's unsound practices are still living around the danger was brought by the disaster. Heavy metals such as Lead, Cadmium and Copper are still present in the waters of Boac and Mogpog Rivers in elevated concentrations, 20 years after Marcopper's mining operations have stopped (MGB, 2017). The San Antonio Pit (with Maguila-guila Dam) and the Tapian pit (Makulapnit Dam) continue to pose a threat to the Mogpog river due to the possibility of these dams breaking because of heavy rainfall or an earthquake (Manicad, 2014).

In October, 2005, the provincial government of Marinduque filed a legal complaint against Placer Dome in a District Court in Nevada for all the environmental damages caused by Marcopper's parent company, Placer Dome for $100 million. In 2006, Placer Dome was purchased by Barrick Gold which offered $20 million for the settlement of the case. Conditions for the settlement required that the provincial government of Marinduque declare that Placer Dome did not operate any mines in the province, and that there was neither environmental damage nor any health risk in the area. These conditions were not acceptable to the Marinduque provincial government and the settlement was rejected (Angeles, 2014). In 2015, the case was dismissed citing that the United States had no jurisdiction over the complaint, and that the case should have been filed in Canada where Placer Dome is located (Mangahas, 2017).

3.1.2 Surigao Province
Surigao province is known as the mining capital of the Philippines with 7 out of the 41 large scale mining operations found in Surigao del Norte and Surigao del Sur. Surigao del Norte's mineral output was P11.9 billion in 2011, P14.7 billion in 2012, P12.5 billion in 2013, and P30.1 billion in 2014, while Surigao del Sur's production was P5.5 billion in 2011, P10.4 billion in 2012, P10.2 billion in 2013 and P15 billion in 2014 (MGB, 2016). Open pit mining is the most commonly used method by the large scale mining firms in Surigao province, wherein a forested area is cleared, the land surface is scraped, and the mineral deposits extracted by digging within a depth of 5 to 20 meters. The depth of excavation depends primarily on the amount of mineral reserves which can be removed. The extracted mineral ore is loaded onto several dump trucks and transported to a port closest to the mining area, then transferred to a cargo ship to be brought to a processing plant in China, Japan or Korea.

Deforestation caused by iron ore extraction led to the siltation of the rivers and coastal waters of Surigao province destroying the fishing livelihood of the local Manobo residents (Manicad, 2011). Rivers and coastal fishing grounds have turned into rust colored bodies of water because of the heavy siltation which came from the mine tailings waste washed down from the mountains caused by heavy rainfall. Under the Philippine Mining Act of 1995, mining operations which lead to severe environmental damage should immediately be closed in order to prevent any further destruction in the surrounding area. In 2012, the Mines and Geosciences Bureau produced a multi-disciplinary report revealing the impact of mining operations in both Surigao del Norte and Surigao del Sur which showed violations of environmental laws that involved heavy siltation of rivers and coastal areas. Provisions of the clean water act were violated as laterite flows from mining operations contaminated rivers and marine coastal areas. The mining firms which were required to "show cause" as to why their operations should not be suspended were: 1) Taganito Mining Corporation; 2) Taganito HPAL Nickel Corporation; 3) Adnama Mining Resources Inc.; 4) Platinum Group Mining Corporation and: 5) CTP Construction and Mining Corp (Olchondra, 2012). The mining companies involved were suspended and ordered to implement corrective measures (Velasquez, 2016).

Taganito HPAL Nickel Corp. and Taganito Mining Corporation stated that they were implementing "several control measures" to address siltation in their areas in Claver, Surigao del Norte. The company asserted that there are no chemical contents in the mine tailings waste run-offs and that these are within DENR standards. The constructed siltation ponds ensure that any rainfall runoff will keep the silt within the siltation ponds (Cabauatan, 2016).

However, rust colored water continues to flow into the Taganito river because of mine tailing waste (containing hexavalent chromium) washed by rain water coming from the Taganito Mining site in Claver Surigao del Norte (Mascarinas, 2012).

The MGB also suspended the mining operations of Shenzou Mining Group Corp. In Claver, Surigao del Norte for causing extensive siltation of coastal areas and building a "settling pond" on the sea which is prohibited. A settling pond is a structure where silt laden water is impounded temporarily to allow silt materials to settle and for water to overflow silt-free (Olchondra, 2012). Despite the suspension more mine tailings had spilled over into the coastal area. Mining firms claim to implement mitigating measures in order to reduce environmental damage but residents stated that operations continue, along with the worsening spill-over of mine tail waste (Gavileno, 2012). In the town of Urbiztondo, Claver Surigao del Norte, river systems, coastline and marine sanctuary gardens have been destroyed by laterite (Catoto, 2014). The Kinalagdagan River in Claver Surigao del Norte, has been subject to heavy siltation caused by laterite flows from the operations of the Platinum Group Mining Corporation (Failon, 2012).

In Surigao del Sur, mine tailings waste has made farm land less fertile. Before mining operations began in the area, approximately 200 sacks of rice could be produced from 2 hectares of farm land without the use of fertilizer. After mining operations began in the uplands, heavy rains and rain water run-off carried the mine tailings (laterite) to the low lying rice fields, reducing the fertility of the soil and as a result, decreased production to 50 sacks, with farmer's earnings declining from P36,000 to P10,000 for the same land area usage (Figaro, 2016).

In Surigao del Sur, mining companies have produced laterite mine tailings which have reached the coastal waters of the province and its mangrove areas. The mangrove areas are important for people's livelihood because these are used by fish for laying eggs, and its destruction would result to a smaller fish population in the coastal areas. Siltation has resulted to fish moving away from the coastal area and into less polluted deeper water (Manicad and Pulido, 2016).

3.1.3 Philex Mining
In August 2012, Philex Pacdal Mines in Benguet spilled 20 million metric tons of mineral tailings which drained into the Balog creek and Agno River systems affecting the water requirements of the San Roque Dam used for agricultural irrigation and power generation (Senate Economic Planning Office, 2013). The Philex Mining incident is the biggest mining disaster in the Philippines surpassing the Marcopper accident (Jasareno, 2014).

The company actually paid P1.034 billion in fines for discharging 20.7 million tons of tailings to the Balog and Agno Rivers, another P188.6 million to the Pollution Adjudication Board for environmental damages caused by the spill and an additional P5 billion for the cleanup of waterways polluted by the spill (Paje, 2014).

In August 27, 2014, the MGB lifted the suspension on the gold and copper mine stating that the impacts of the spill "have been substantially addressed to warrant the resumption of the normal operation of Philex". The tunnel of Tailings Storage Facility No. 3 that leaked, has been sealed and the excess water containing mining sediments is now being discharged in an open spillway replacing the penstock system that failed and caused the spill (Jasareno, 2014).

However, despite the cleanup efforts, the waterways remain contaminated. Contents of the spilled mine tailings waste include copper, lead cadmium, chromium, mercury, arsenic, zinc and cobalt which killed fish in the Agno river and silted the San Roque reservoir (Failon, 2012). The turbulence of millions of tons of mine tailings has reportedly devastated the downstream communities near the Philex mine site. The Balog River used to have clean water but is now polluted due to the Philex mine tailings discharge (Salamat, 2012 and Luis, 2012).

The Philex Pacdal Mine has so far only cleaned up one million metric tons or just five percent of the total amount of toxic mine tailings it spilled from its outdated dam facilities (Jasareno, 2014). Philex had refused to pay the P6.42 billion demanded by the National Power Corporation (NAPOCOR) for rehabilitation of the affected San Roque Dam (Bautista, 2013). In a Philex disclosure report to the Philippine Stock Exchange in May, the company cited that in a May 10, 2013 notification, NAPOCOR is billing Philex the amount of P6.42 billion for pollution that has damaged the San Roque watershed and for 13.5 million cubic meters of mine wastes that currently occupy significant space in the San Roque Dam reservoir that reduced the volume of water to be used for power generation (Caluza, 2013).

The mining company blames heavy rains, for the incident, an act of nature which they could not control. The mine tailings dam was built in 1992 and has a life span of 18 years to 20 years.
3.1.4 Lafayette Mining Corporation
In October 2005 , Lafayette Mining Corporation's Rapu Rapu mines in Albay was responsible for cynanide spills and acid mine drainage and toxic heavy metal pollution resulting in massive fish kills along the fishing grounds of Rapu Rapu island and the adjacent municipalities on the eastern coast of Sorsogon (Regis, 2012). The Australian owned Lafayette Corporation started mining gold , silver, copper and zinc on Rapu Rapu island in 2005, but did not implement environmental safeguards, resulting in spills of cyanide and other contaminants from the mine into the sea and around the island. The spills caused massive fish kills after heavy rains in October 2005. Cyanide and acid mine drainage resulted in very high levels of heavy metals which included cadmium, copper and zinc in dissolved forms at many hundreds of times typical of background levels for these metals in river water (Goodland and Wicks, 2008)

Other environmental accidents
In July 2012, the Nicua Mining Corporation operating in MacArthur Leyte, released mine wastes resulting to a large fish kill in the rich fishing grounds of Lake Bito Leyte (Caguioa, 2013).

In November 2012, slit spilled from the Toronto mine of Citinickel Mines and Development Corporation in Narra, Palawan, with waste from mining operations flowing into a river and irrigation canals affecting farms and a fish pond. The Mines and Geosciences Bureau imposed fines of over P500,000 on the firm for the mine spills attributed to negligent operations. The firm was also required to clean up and rehabilitate the affected waterways (Mines and Communities, 2013).

Aside from the breakdown of mining waste disposal systems, the failure of firms to undertake mine rehabilitation and maintenance procedures for their abandoned mines also lead to problems such as acid mine drainage, heavy metal contamination of surface water, laterite and other mine tailings sedimentation, and pit void which create both environmental and health hazards for residents in the immediate vicinity. This leads to the dislocation of communities, risks to health and livelihood, massive environmental damage and the loss of mineral resources to a small group of large scale mining companies.

In addition to the various cases of environmental damage, mining operations evicted indigenous peoples from mining sites, these imposes an imminent danger to indigenous culture, destroyed mangroves, coral reefs, agriculture and biodiversity. The record of mining companies with regard to environmental protection, disasters and post-mining clean-up in the Philippines is widely acknowledged to be very poor (Doyle, et al., 2007).

4.0 Areas of Contention: Mining versus the Environment

Minerals are primary product exports with minimal processing, low value added and limited job creation effects
Mining firms argue that the comfort and convenience provided by cell phones, lap top computers, cars, housing and household appliances will not be possible without the mining industry. The average cell phone for example, contains roughly 24 milligrams of gold, 50 milligrams of silver, and 3,800 milligrams of cobalt and 9 milligrams of palladium. More than 200 million cell phones have been imported over the past several years (Pangilinan, 2012).

However, it is important to note that the manufactured goods such as cell phones, cars, household appliances, metal based construction materials and industrial equipment are all either imported or rely heavily on imported processed and semi-processed mineral products. The processing of mineral ore is primarily done in highly industrialized countries, and this is the reason why most mineral ore extracted from the Philippines are directly exported to Japan, China, South Korea, Canada, the United States and Australia. The Philippines is severely limited in its capacity to process mineral ore, given that there was only 1 copper smelting plant which last operated in 2014, and only 2 gold and 2 nickel processing plants as of 2016. The extremely limited capacity to process mineral ore in the country is responsible for the low value added in mineral output, its lower prices and the mining sector's weaker job creation potential.

A representative of Nickel Asia Corporation argued that processing minerals may be an ideal situation because it creates more value added as well as employment. Its economic viability depends on the attractiveness of world prices for processed minerals, the high cost of equipment needed for processing and the volume of mineral ore produced that will allow economies of scale in production so that the processing stage will lead to lower average costs and more profitable operations. The reality in the market is that prices of some processed minerals are not always high enough to encourage local mining firms to invest and operate processing plants (Baylon, 2017). This encourages mining firms to export more mineral ore and less of the processed minerals.

Mining in the Philippines does not support industrialization in the country but further sustains industrialization in highly developed countries. The United States, Japan, Canada, Australia and South Korea for example, use the Philippines as a cheap source of mineral ore. The country does not have the capacity to process its own mineral ore to be used for the domestic production of cars, mass transport systems, appliances, electronic and industrial equipment because it still needs to import the minerals in its processed or semi-processed form. The linkages of the mining sector are limited especially when it comes to supplying processed minerals to higher value added manufacturing industries (Bella Guzman, 2015).

The Chamber of Mines of the Philippines has consistently claimed that the sector contributes significantly to the creation of jobs both directly through mining operations and indirectly by: 1) purchasing supplies from other industries; 2) through the expenditures of its employees in the local communities and; 3) its social development and management programs that create livelihood for the residents in the mining area (Halcon, 2017). Direct employment generated by the sector is over 230,000 from 2012 to 2015, and there are roughly 1.2 million other jobs which were created that can indirectly be attributed to the existence of mining operations in the entire country (Halcon, 2017).

The Department of Labor and Employment reported 218,000 jobs in the mining sector for 2016, and over 230,000 employed persons from 2012 to 2015. However, there have been no studies or reports that confirm or establish the creation of 1.2 million jobs indirectly by the mining sector. In fact, the ability of the mining sector to increase its demand for goods and services coming from the other sectors of the economy is low as shown by the weak backward linkages which it generates (IO Accounts of the Philippines, 2006). Since the mining sector does not purchase as much goods and services from other sectors (as compared to manufacturing, construction, transportation, storage and communication), its ability to create jobs indirectly will be relatively weak.

In addition, the represented employment benefits created by large scale mining are selective and represent a very small proportion of the labor force. Geologists and mining engineers employed by large scale mining firms have salaries two or three times higher than their counterparts at the Mines and Geosciences Bureau, but these professionals only make up a small percentage of the entire workforce within the firm, since most of them function as supervisors, consultants or administrators at the mine site (Jasareno, 2012). The members of the workforce performing the hard labor which involves digging and excavation are hired on a contractual basis with lesser pay.

At present, the mining sector's share of employment to total employment is 0.5 percent. During the last five years, the sector's largest contribution to total employment was 0.7 percent in 2012 and 2013 (MGB, 2017).

The mining sector contributes less than 1 percent to GDP, less than 1 percent to total employment, and less than 5 percent to total exports which are significantly smaller compared to the contributions of the agricultural sector to employment and food production. However, it is currently being allowed to destroy forest resources, agricultural land, fresh water resources (rivers and aquifers), coastal fishing grounds and marine life which will lead to permanent damage, or at the very least, require a very expensive long term clean up and rehabilitation plan.
Incidents of environmental damage are a thing of the past because of the new safeguards introduced in the Philippine Mining Act of 1995 and Executive order 79

In a Philippine Mining Conference held in 2012 , a representative and a consultant for the mining sector stated that mining accidents and environmental damage are thing of the past, and should not be a cause of concern in the future because of the stricter rules imposed by the Philippine Mining Act of 1995 which includes provisions that will protect the environment. Such rules include the prohibition of mining in protected critical forest reserves, watershed, wildlife and coastal marine areas, as well as prime agricultural land. As long as the law is implemented properly, mining accidents and environmental damage can be avoided (Brimo, 2012 and Wallace, 2012).

The claim appears to be valid considering the strict provisions of the Philippine Mining Act. However, the real situation in protected forest reserves and watershed areas is completely different.

Although the Philippine Mining Act prohibits mining in identified key protected areas, mining firms still continue to operate in those which have been identified as protected under the National Integrated Protected Area System (NIPAS) Act of 1992.

A clear example of this violation, involves the mining firms which were subject to closure orders by the DENR in February 2017. Due to their destruction of functional watersheds and illegal tree cutting the firms that were recommended for closure were namely: 1) BenguetCorp Nickel Mines Inc.; 2) Eramen Minerals Inc.; 3) Zambales Diversified Metals Corp. and; 4) LNL Archipelago Minerals Inc., all located in Zambales province. Also recommended for closure were: 6) Mt. Sinai Mining Exploration and Development Corp.; 7) Emir Minerals Corp. and; 8) Techron Mineral Resources Inc. located in Homonhon island mainly for siltation of coastal waters and the destruction of functional watersheds.

The recommended closure is well within the mandate of the DENR, considering that the Philippine Mining Act prohibits the operation of mines in protected critical watershed areas. However, the DENR order has been challenged by the mining firms citing approval of their mining permits, environmental clearance certificates and consent from the local communities. Mining companies argue that they have secured the rights to mine the area based on a contractual agreement approved by the national government and that these contracts are legally binding should be honored and enforced.

Despite attempts by the DENR to implement prohibitions under the law, mining firms continued to operate in the watershed area which will result in more illegal tree cutting, the siltation and contamination of river systems and the destruction of the environment.

Open pit mining will always be a threat to the environment considering that this technique requires cutting trees to clear an area, scrapping the surface to remove the top soil and consequently digging and excavating the mineral ore to a depth of 15 to 20 meters creating a huge hole in the ground. Open pit mining is responsible for forest denudation, soil erosion and river siltation. The pit may be filled up with main tailings, or a separate mine tailings dam or siltation pit can be constructed. However, this structure will be a permanent threat to local downstream communities in the event that the dam breaks or collapses because of heavy rains or an earthquake. An outcome similar to the Marcopper incident of 1993 and 1996 and the Philex spill in 2012 is likely to occur that will destroy agricultural land and water resources in the downstream areas. The lessons from the Marcopper and the Philex incident cannot simply be dismissed because all mine tailings waste dams can break either because of heavy rains or an earthquake. From 1990 up to 2009, 39 mine tailings dams or waste containment facilities worldwide, have failed despite guarantees by engineers that they are safe (Azam, 2010)

Mining rehabilitation requires planting new trees, with resources coming from the rehabilitation fund set up prior to the start of mining operations. Replanting has not always been successful because of the removal of the nutrients from the soil caused by open pit mining. The downstream river pollution and sedimentation as well as coral reef destruction are not corrected by reforestation, and will require a separate set of cleanup programs.

A fact finding commission led by the former UK Minister for International Development, Claire Short, provided the following assessment on the impact of mining in the Philippines:

Mining in the Philippines has left over 800 abandoned mines littered throughout the countryside, caused massive environmental damage and has been linked to serious human rights abuses. More than 800 extra judicial killings have been reported since 2001 believed to be directly linked to protests against mining. Mining companies have failed to comply with national law and international standards. Indigenous people have been shifted off their lands to make way for mining, consultation rights have been undermined and ignored, rivers were polluted, mangrove forests were destroyed, corals along coastal waters were damaged and agricultural land was ruined. The Philippines is in danger of losing much of its biodiversity and damaging the lives of unique indigenous cultures. Mining has been systematically destructive in the Philippines, and the environmental effects are as catastrophic as the effects on people's livelihoods (Short, 2007).

The non-governmental organization known as "Alyansa Tigil Mina, confirmed the findings of UK Minister Claire Short. Approximately 800 abandoned mine sites have not been cleaned up and seven major abandoned mines will require billions of dollars for clean up and rehabilitation, with damages that can never be fully reversed (Legacy of Disasters, 2011 Alyansa Tigil Mina). These include: 1) Bagacay Mines-Philippine Pyrite Corporation, Barangay Hinabangan Western Samar (1956-1992); 2) Tagburos Mines- Palawan Quick Silver Mines, Tagburos, Puerto Princesa City, Palawan (1953-1976); 3) Basay Mines-Basay Mining Corporation, Brgy. Malinao, Basay Negros Oriental (1978-1994); 4) Mogpog Mines-Consolidated Mines Inc., Mogpog Marinduque (1977-1979); 5) Benguet Mines-Black Mountain Mines, Tuba, Benguet; 6) Benguet Exploration-Thanksgiving Mine Inc., Tuba Benguet and; 7) Atok Mines-Western Minolco, Atok Benguet (1974-1982) (Alyansa Tigil Mina Report, 2011).

Other examples of mining firms that have ruined the environment were: 8) the Sibuyan Nickel Properties Development Corporation with mining operations in Romblon and maintains a mine tailings waste pond which contains mercury that feeds into the Dulacan River in Sibuyan Island; 9) the Marinduque open pit mines of Marcopper Corporation that spilled enormous volumes of mine tailings waste materials in the Boac river as well as emptying its mining waste from earlier operations into the Calancan Bay, that resulted in dead corals, the disappearance of fish and fishermen's livelihood and the occurrence of skin infections (arsenica keratosis ) on people exposed to water contaminated by mine waste; 10) the massive fish kills in Rapu-Rapu island caused by large volumes of mine tail waste spilling into the coastal bay caused by La Fayette Mining Corporation; 11) the Abra River Cordillera mine drainage from the Lepanto Carbon and Pulp Mill that travels through underground tunnels and into the tributaries of the Abra River; 12) the Minoco Mining Corporation which exploited Lake Lubo in Kibungan Benguet for more than 11 years and left it without implementing a rehabilitation program and allowing the continued erosion of the soil, along with permanent water pollution plaguing the area; 13) the Victoria Gold Mines in Benguet that contaminated rice fields beside rivers and streams carrying mining waste with large amounts of mercury; 14) the collapse of the sulphide dam of Canatuan Gold Mines in Siocon, Zamboanga del Norte under heavy rains; 15) the mine tailings dam of Toronto Ventures Inc., located at the top of Mount Canatuan, Siocon Zamboanga del Norte, that had collapsed and contaminated lowland rice fields and causing various types of skin illnesses on the residents of Siocon and; 16) continued expansion of mining activities by Rio Tuba Nickel Mining Corporation which has defaced Mt. Bulanjao in Palawan over a 42 year period resulting to soil erosion and rain water run-off that carries mine tailings waste (laterite) contaminating rice farmland at the foot of the mountain (Manicad, 2016, Short, 2007 and Alyansa Tigil Mina Report, 2011)

The dust generated by hauling trucks bringing nickel from the mines to the processing centers also cause respiratory diseases among residents in the local community. The Bulanjao range which is still covered with old growth and second growth forests is being subjected to rapid denudation caused by continued mining operations; 17) the Bagacay Mines in Hinabangan Samar, which was abandoned, contains large volumes of mine tailings waste which will require P300 million to clean up with the mining company not providing any remuneration or benefits to the host communities during its operations; 18) the Palawan Quick Silver Mines which was abandoned but was responsible for contaminating the river systems in Puerto Princesa with mercury; 19) the CDCP Basay Mines in Basay, Negros Occidental which had completely abandoned the hospital, schools and airstrip which it built after decommissioning its mines; 20) the Benguet Corporation Sta. Cruz Nickel Project in Zambales that had its mine tailings waste carried by rain water run offs, contaminating rice farmland in Sta. Cruz, resulting to reduced land fertility. Prior to mining operations and laterite contamination, farmers on the average could produce 100 cavans of rice per hectare. After laterite contamination, production is down to 60 cavans per hectare (Manicad, 2016, Short, 2007, Alyansa Tigil Mina Report, 2011, Failon, 2012).

Local residents have lost their fishing livelihood due to mine tailings waste that has spread out into the coastal waters, destroying corals and marine life and; 21) the Platinum Group Metals Corporation in Claver Surigao del Norte which had polluted the Kinalagdagan river with laterite and rendered it useless. The river had previously provided water for drinking, washing and cleaning but is now dead, because of the contamination of dissolved metals and chemicals (Manicad, 2016, Short, 2007, Alyansa Tigil Mina Report, 2011, Failon, 2012). In 2012, approximately 33 large scale mines were subject to 97 complaints filed in court, most of which dealt with various incidences of environmental damage (Manicad, 2016).

Environmental damages experienced in the past should not be forgotten, and must serve as a lesson for local communities and local governments, in spite of the new provisions to protect the environment in the Philippine Mining Act. Mining corporations will always attempt to find ways to transfer the social and environmental cost of their operations to some other individuals or groups, particularly if they are not held accountable and if local communities are not vigilant. There are simply too many examples of environmental damages caused by mining companies and that this should be enough reason to prevent the issuance of new exploration permits particularly for protected critical forest reserves and watershed areas.

4.3 The Watershed Argument
Mining in critical forest reserves and watershed areas is prohibited under Section 19 of the Philippine Mining Act. The other areas closed for mining are protected wildlife areas, prime agricultural lands, coastal areas, off-shore areas, forest reservations, civil reservations, tourism development areas, island ecosystems, critical habitats, fishery zones and marine sanctuaries. Protecting a watershed is an argument put forward by environmental protection groups because of its role in the collection and absorption of rain water and its distribution in streams, rivers, lakes, aquifers, ground water

However, Arcilla (2012), argued that this becomes the reason for anti-mining advocates to have an overall ban on mining since the entire country can be considered a watershed. On the other hand, Contreras (2017) asserts that not all watersheds are critical because of the absence of forest cover. A forest reserve is necessary in order to absorb or impound rain water and divert it into tributaries and river systems.

The arguments given by both Arcilla and Contreras are not entirely true, considering that in the Philippines, there are only 9 declared protected watershed areas and areas for endangered wildlife. These areas are: 1) the Balbalan-Balbalasang National Parkin Cordillera ; 2) Mount Irid Angelo and Binuang in Rizal, Bulacan and Quezon; 3) Zambales Mountains in the Zambales Tarlac areas; 4) Polilo group of islands in Quezon; 5) Mt. Iglit-Baco National Park in Mindoro; 6) Mt. Nug-as Lantoy in Cebu;7) Mt. Nacolod in Southern Leyte; 8) Mt. Hilong-hilong in Agusan Surigao; and 9) Bongao Peak in the Tawi-Tawi islands (Short, 2007). This shows that the watershed areas have been defined, identified and limited to the above mentioned locations.

Despite the prohibition set forth by the Philippine Mining Act, there is a clear lack of enforcement, because two thirds of the biodiversity and protected areas are already being occupied by the mining firms and half of the indigenous lands and forests are already affected by mining (Garganera, 2016). For example, Mt. Hilong-hilong in Surigao del Sur contains a primary forest and was declared a protected watershed and a key biodiversity forest reserve area. However a mining company by the name of Marcventures Mining Corporation operates in the area. The company has the largest project area for gold and copper in Cantilan Surigao del Sur and acquired its Mineral Sharing and Production Agreement (MPSA) on July 1, 1993. Marcventures Mining Corporation acquired a permit from the MGB-DENR a few months prior to the declaration of the area as a critical watershed (Garganera, 2016). The company has removed a large part of the forest cover in the area and puts at risk, the downstream communities source of water and wild life resources.

Mt. Hilong-hilong in Surigao is home to 120 species of birds, of which 59 can only be found in the Philippines. In 2009, 40,000 hectares of the area was proclaimed as critical protected forest reserve and watershed area, which supplies water to Carascal, Cantilan at Madrid Surigao del Sur and other towns in Agusan del Norte (Pulido, 2016). The National Water Resources Board already declared the area as a primary source of water for irrigation and the local government of Cantillan, Surigao del Sur continues to deny the granting of a mining permit to Marcventures Mining Corporation (Pulido, 2016).The local government of Cantillan had issued 2 resolutions denying the application of the company to operate a mine in the area. Resolution 2007-32 expressing "no to mining" by the Sanguniang Bayan of Cantilan, and Resolution no. 01-2001 reaffirming the "no to mining" position of the Sangguniang Bayan of Cantilan (Pulido, 2016). Since they did not have a business permit issued by the local government, the company should not have been given a mine feasibility permit (Garganera, 2016). However, the Carascal and Cantilan watershed areas continue to have mining operations being conducted by Marcventures Mining Corporation, firmly standing on its legal contractual rights signified by its mining permits obtained from the national government.

All mining contracts, agreement and permits issued prior to July 6, 2012 (E.O. 79), shall remain valid, binding and enforceable, even if the operations are in prohibited areas, and this is the major reason why companies like Marcventures Mining Corporation continue to operate in a critical forest reserve and watershed area. This is also the main reason for resistance and protest by cause oriented groups which shows one of the major inadequacies of the mining law.

Another mining firm operating in Surigao del Sur namely: Carascal Nickel Mining Corporation has been the source of mine tailings waste (laterite) that continues to spread across the coastline and mangrove area of Carascal town. Prior to the contamination of the coastal area, residents could easily catch fish within a short distance from the shoreline. At present, fishermen need to travel farther beyond the silted coastline, use more fuel for their motorized boats, and move towards clear water in order to catch fish (Manicad, 2016).

The value of minerals produced in Surigao del Norte had increased from P11.9 billion in 2011 to P30.1 billion in 2014, A similar trend is observed with mineral production in Surigao del Sur which had increased from P5.5 billion in 2011 to P15 billion in 2014 (MGB, 2015). As of June 2016, approximately P108 billion worth of minerals were produced in 2015, with only P13 billion worth of taxes being collected. During the last 30 years, the contribution of mining output to gross domestic product has never exceeded 2 percent, and for the last five years has been at less than 1 percent (Garganera, 2016). Mining operations have continued to deforest protected watershed areas, poison water in river systems, led to siltation in reservoirs and dams, contaminate coastal areas and destroyed marine life. It has created health problems for downstream residents and threatens food and fish production and yet contributes substantially less to output and employment as compared to agriculture and manufacturing.

This is a point of contention because unlike agriculture, manufacturing and services where output production does not involve the extraction of a non-renewable resource, mining is purely extractive and once all the minerals are removed from the earth, it cannot be replenished. Once the mine site is abandoned it will be unable to sustain life because of all the toxic waste materials contained in a dam or siltation pond stored in perpetuity. Because minerals cannot be renewed, replaced or replenished, a larger share should be distributed to the affected community because of the permanent loss of the natural resources With its record of poor enforcement, the Mining Act does not serve the interest and benefits of the Filipino, particularly if the environment is permanently damaged (Garganera, 2016).

4.4 Free Prior and Informed Consent
A permit to operate a mine requires: 1) a comprehensive mining plan; 2) an environmental compliance certificate and; 3) free prior and informed consent (FPIC) from all residents. The Indigenous Peoples Rights Act (IPRA, 1997) and the Philippine Mining Act guarantee indiginous peoples the right to free, prior and informed consent (FPIC) over decisions affecting them and developments on their lands. The right to FPIC extends to natural resource extraction projects. FPIC is defined as:

The consensus of all members of the ICCs/IPs [Indigenous Cultural Communities/Indigenous Peoples] to be determined in accordance with their respective customary laws and practices, free from any external manipulation, interference or coercion, and obtained after fully disclosing the intent and scope of the activity, in a language and process understandable to the community (IPRA, 1997).

Free prior informed and consent (FPIC) is not necessarily followed, with mining firms dividing communities and even family relatives into pro-mining and anti-mining groups. Free prior and informed consent is obtained from pro-mining groups within the community, deliberately avoiding the anti-mining groups. For example, the Manobo tribes in Kandilar, Surigao del Sur have never given their consent for mining operations by Marcventure Mining Corporation and notice was only given to them in 1997 when exploration activities officially started. In 2007, officials from the mining company met with the tribes and presented their approved mineral production sharing agreement (MPSA) with the permit to start extraction with the consent of Datu Digangan Cesar Bat-ao Chieftain Cabangahan of the Manobo Tribe. This had occurred despite opposition from the other tribes.

Another example is the Subanon people with its ancestral domain and scared mountain in Mt. Canatuan located close to the town of Siocon in Zamboanga del Norte, Mindanao. Mt. Canatuan is referred to as the rice granary of Zamboanga del Norte, is a critical water catchment zone and a biodiversity hotspot (Short, 2007). The Subanon people have always protested against mining in Mt. Canatuan since 1989, but in spite of the protests, a mining permit (MPSA) was still awarded by the MGB-DENR to a company named RV Bosque and Benguet Corporation. The permit was sold to a Canadian mining company called TVI Resource Development Philippines which strongly asserts that there is no legal requirement to obtain free prior and informed consent from the indigenous people because the permit predates the Indigenous People's Rights Act (Short, 2007).

Mining companies strongly assert their claims with legal permits and with impunity without complying with the required free prior and informed consent. Sacred burial and hunting grounds were to be initially surveyed but instead bulldozed with operations under full swing. Free prior and informed consent was not followed along with the non-compliance of local government resolutions that disapproved mining operations.

Mining projects can only be allowed if permission or consent is granted by the national government, the local government and the community directly affected by prospective mining operations (Jasareno, 2012). Any opposition by either the local government or the community should prevent the operations of mining firms in the locality.

4.5 Island Ecosystems versus a Continental Land Mass
Mining in Canada and Australia do not pose problems as severe as those found in the Philippines because of their geographical features. Both Canada and Australia are large continental land masses with mining grounds located far from the coastal areas which do not threaten marine life. Mining in these countries along with oil extraction in the Middle East for example, do not pose much of an environmental problem because of the continental land mass of these countries that do not allow mine tailings to spill into rivers, lakes and coastal waters (Garganera, 2012) .

The Philippines is an archipelago, with islands surrounded by coastal water, linked to rivers, lakes, forest and mountains in close proximity to fertile agricultural land and with the coastal areas serving as fishing grounds for local communities. Mineral rich forest covered mountainous areas function as watersheds which collects rain water and distributes this into river systems, lakes and coastal areas. Rain water run-off from mountains is naturally regulated by forest cover before water flows into streams and rivers.

Rivers provide water for irrigation while clean coastal waters provide a habitat for fish and mangroves which serve as a repository and hatchery for fish eggs. Forest cover helps regulates temperature, absorbs rain water and is home to bio-diverse wild life. Agricultural farms and coastal fishing areas are threatened by mining operations when deforestation is undertaken to facilitate open pit mining which always leads to soil erosion and siltation, further worsened by mine tailing waste spill-offs. Denudation caused by illegal logging, and slash and burn agriculture and illegal mining has resulted to a drastic reduction in the natural forest cover of the entire country which is currently at 6 percent of its original forest cover during the early 1900's (Environmental Science for Social Change, 1999).

Sedimentation of rivers reduces its depth and leads to flooding. Sediments clog irrigation systems depriving farm land of water. Coastal waters filled with mineral waste sediments destroy corals and marine life. Mine tailing waste which may contain either all or a combination of dissolved metals and chemicals such as mercury, lead, cadmium, zinc, copper, cyanide, sulphur, nickel and chromite will destroy agricultural land and render it useless for farming and will poison the water in the river systems making it toxic for irrigation, washing, cooking and drinking. Farmers will not be able to grow crops and raise livestock when both land and water have been contaminated by mine tailings waste material. Agricultural land which has not been severely damaged by mine tailing waste can only produce crops with the use of fertilizer, and despite its usage, only yields one fourth of the original harvest, with earnings from crop production falling to one third of its original level prior to the land contamination. (Manicad, 2016).

Baylon (2017) argued that because the entire Philippines is made up of island ecosystems, this argument is used to justify a mining ban in the entire country. This point of contention was raised for the purpose of characterizing the former DENR Secretary (Regina Paz Lopez) as an anti-mining advocate whose intention is to completely ban mining operations in the Philippines. The country is an archipelago with many island ecosystems, but there are areas where mining operations have been allowed to operate, particularly if the companies are compliant with regulations and do not violate environmental laws.

Small scale illegal mining is not being regulated by the national or the local government
Large scale mining firms have argued that government continues to heavily regulate their operations, impose taxes and strict requirements for mine rehabilitation and social development for communities, but do not address the problems created by illegal small scale mining who do not pay taxes, use more dangerous methods (mercury for gold mining), employing children, and do not follow any mining operation safety standards including mining waste containment and disposal. Due to these dangerous practices, the environment is destroyed and yet prohibition and enforcementof regulations are severely inadequate showing the ineffectiveness of the MGB, the DENR, and the local governments in preventing illegal small scale mining.

It is a fact that the MGB and the DENR do not have enough personnel to enforce its prohibition of illegal small scale mining given that there are roughly 300,000 small scale miners as groups and or as individuals in the country, with roughly 80 percent conducting illegal operations (no mining permits) (Jasareno, 2012). These illegal miners use toxic mercury, have no containment facility of mining waste materials, and resort to throwing mining waste materials into river systems or coastal areas. (Jasareno, 2012). Illegal mining cannot be stopped as long as poverty remains severe in the countryside. If large scale mining is to be banned, small scale illegal mining will continue and will use more environmentally hazardous methods. Mt. Diwalwal in Mindanao is frequently explored by illegal small scale mining groups which are using unsafe methods for extracting gold, silver and copper ore. It is estimated that seventy percent of all the gold extracted in the country come from small scale illegal mining operations (Jasareno, 2012).

Small scale illegal mining activities do not follow best practices in terms of environmental protection and mine waste disposal. However, large scale mines have a much larger environmental impact because of the use of open pit mining which is the cheapest method that can be used for extracting minerals on a large scale basis, and involves physically defacing or scrapping the surface of a mountain where minerals can be found. This method can only be undertaken upon clearing a forested area and or the removal of any form of vegetation on the surface area where mineral ore can be found.

Accidents encountered during small scale illegal mining operations are not reported in order to avoid detection by government. The large number of illegal operations, along with the limited manpower at the Mines and Geosciences Bureau have allowed small scale illegal miners to continue operations without being regulated and penalized for violations of environmental laws. Illegal mining operations by foreigners are also rampant with Chinese and Korean nationals functioning as either miners or middlemen/ traders, extracting gold, silver, iron, nickel and copper mostly in Nueva Viscaya, Zambales and Zamboanga (Contreras, 2017). Most foreigners use Filipino nationals to pose as owners of the mining firm and serve as front men for either Chinese or Korean investors (Contreras, 2017).

Small scale mining operations use child labor, destroy the environment, do not have rehabilitation plans and do not pay taxes, Large scale mining firms which are regulated, taxed and required to have rehabilitation and social development programs, can ruin the environment on a much greater scale. Using open pit mining methods, and perpetually existing mine tailings and siltation dams, large scale companies can inflict greater damage on the environment equal to those of 100,000 small scale mines. Examples of these are the experiences from the Marcopper mine tailing spill of 1993 and 1996, the Rapu Rapu mining cyanide spill and fish kill of 2005 and the Philex mining waste spill of 2012. (Lopez, 2012).

Large scale mining firms do not hire children, but there are large companies that hire contractual workers at low wages with no benefits. Rio Tuba mines in Bataraza Palawan for example, was subject to a legal complaint filed by workers at the Department of Labor because of low wages and the absence of benefits (Mayo-Anda and Mana-Galido, 2006). Hiring contractual workers, depressed wages and violation of workers rights are rampant among mining operations in the Cordilleras and Caraga Regions (International Solidarity Mission on Mining, 2012). Mining companies do not only extract the natural resources of the country, but also gravely exploit Filipino laborers with very low wages and rampant contractualization (International Solidarity Mission on Mining, 2012).

The claim that there are no interesting tourist sites in
highly mineralized areas is a highly subjective value judgment

Pangilinan(2012) presents a very superficial argument justifying large scale mining by claiming that highly mineralized areas do not offer any interesting sites for tourist to see and should therefore be allocated for mining operations. This is a highly subjective value judgment because of the fact that there are tourists who prefer spending their vacation in modern hotels, theaters, malls and restaurants, but there is also a market for environmental tourism where both locals and foreigners are more interested in seeing forest reserves, different forms of plan life, diverse animal wild life, rivers, lakes and streams as well as beaches and coastal fishing areas. Most of the highly mineralized areas are well forested and the denudation caused by logging, mining and slash and burn agriculture have been responsible for soil erosion, the loss of biodiversity and the reduced ability to absorb rain water.

Most of the mining companies recommended for closure were operating in functional watersheds which initially had adequate forest cover, diverse wildlife and clean sources of water. Once the mining operations started, trees were cut down; soil erosion led to the siltation of rivers and coastal areas, water sources were contaminated; and large open pits were being dug up alongside the construction of siltation and mine tailings waste dams.

Brimo (2012) stated that highly mineralized areas cannot be used for agriculture because of the low fertility of the top soil and must instead be subject to mineral extraction. However, most of the highly mineralized areas have forest cover which is necessary for a functional watershed so that rain water can be absorbed and impounded onto streams, rivers and lakes. The mining companies recommended for closure were operating in functional watersheds with adequate forest cover. Cropping and livestock activities may be undertaken in the low lying areas , but their water source depends primarily on the forest cover of the mountains which absorb the rain water and divert it into tributaries and river systems. A mineralized area may not be suited for cropping, but it supports forest growth which enhances the watershed and increases biodiversity.

Mining operations only occupy 0.3 percent of the total land area which will not affect food security

Brimo (2012) explained that food security will not be affected by mining operations because only 0.3 percent of the total land area in the Philippines has been allocated for mining. Even if the number of large scale mines is doubled, the sector will only occupy 0.4 percent of the total land area in the country, which should not affect food security.

This claim is not true particularly if the 0.3 percent of the total land area allocated for mining is closely linked to farmland, inland water resources and a coastal area. Large scale mining in both Surigao del Norte and Surigao del Sur may occupy a relatively small percentage of the total land area in the Philippines, but has already affected food and fish production in both provinces. Mine tailings waste has contaminated agricultural land and reduced yield per hectare to a third of its original level. In extreme cases, mine tailings waste have made agricultural land useless without the capacity to grow any type of crops. Fish have disappeared in the coastal area because of mine tailings waste contaminating corals and mangroves.

The Tampakan Copper-Gold deposit is one of the largest undeveloped copper-gold deposits in the world. Once developed, it has the potential to be a key driver of national and regional growth as well as socio economic development for its host communities. Sagittarius Mines Inc. (SMI) along with the Australian mining firm Xstrat, is developing the Tampakan project for its shareholders by virtue of a Financial and Technical Assistance Agreement (FTAA) issued by the Philippine government in 1995 (Sagittarius Mines Inc., 2017). It is expected to invest approximately $5.9 billion into the project covering a land area of 10,000 hectares (Wallace, 2012).

The Tampakan Copper Gold Project Environmental Impact Assessment Report of SMI-Xstrata actually shows that the mining site located in South Cotabato, 50 km north of General Santos City and is in a critical watershed area providing water for six rivers and two provinces. The area has 40 percent forest cover and contains ancestral lands which will require free prior and informed consent (FPIC) from the local community before any mining activities can be approved. A local indigenous group called the Bilaans" have not been informed about the long term impact of mining activities on farming. The groups opposing the Tampakan project were not invited to public dialogues, and were prevented from participating in public meetings. Participants to these meetings were asked to sign in for free lunch, with the list of signatures being used later on as an official and formal indication of their willingness to allow the mining firm to implement the project in the area. Xstrata is going to divert 900 liters of water per second for its operations depriving agricultural land and local communities of 78 million liters of water per day. The watershed area in Tampakan is actually listed as a "no go" zone based on Executive Order 79 (Lopez, 2012).

The company's plan to create an open pit mining was not allowed as part of a regulatory measure imposed by the local government of South Cotabato. It will destroy the Cartisan Allah River Watershed (742,858 hectares), the Padada River Watershed (120,213 hectares), and the Marbel River Watershed (122,659 hectares). There are 14 earthquake fault lines found within the area of the Tampakan mining site (Lopez, 2012)

The Tampakan project is a mine concession with an area of 10,000 hectares and makes up a relatively small .0001 percent of the total land area in the Philippines. However, the project will have a tremendous impact on agricultural land and the irrigation systems of the surrounding area if and when its mine tailings dam collapses either because of an earthquake or a strong typhoon. The project's dam has the capacity to store 1.35 billion metric tons of mine tailings greater than those of Marcopper and Philex mines, and once this dam breaks, the enormous spillage will destroy agricultural land, irrigation systems and render the water useless for consumption. Agricultural land will be permanently damaged. The mine tailings dam is located near the top of a mountain and is expected to stay there in perpetuity. The Australian firm Xstrata admits that open pit mining is the most dangerous method that can be used, but it is used nonetheless because it is cheap, allows the fast extraction of minerals and is easy to undertake, but is the most destructive as well. Acid build-up in mine tailings dams are consequently washed off by rain which contaminates the underground water sources or the aquifer. Aquifers cannot be rehabilitated and reforestation cannot negate river siltation and sedimentation of coastal areas. Even if the mining area only occupies a small percentage of the total land area in the country, as long as it is located in a watershed and surrounded by farmland or a coastal area, it will affect food production particularly because of mine tailings waste carried by rain water run-offs or worse a break in its mine tailings dam that is caused by an earthquake or heavy rains. As discussed in the previous sections of this paper, approximately 39 mine tailings dams or waste containment facilities worldwide, have failed since 1990, despite guarantees by engineers that they are safe (Azam, 2010).


Open Pit Mining and the use of Siltation Ponds or Mine Tailings Dams
Open pit mining which requires cutting trees in a mineral rich area, scrapping the surface to remove the top soil and undertaking deep excavations in order to extract the mineral deposits has the most destructive impact on the environment. However, this is also the most commonly used method for large scale mining because it is cheap, and efficient in terms of mineral ore extraction. The construction of a siltation pond or a mine tailings waste dam where water mixed with mud, dissolved metals and chemicals are deposited and stored in perpetuity sits atop a mountain that constantly threatens downstream communities with a potential mine tailings waste spill waiting to occur. Similar to the Philex and Marcopper incidents, heavy rain fall caused by a typhoon or an earthquake can damage a mine tailings waste dam and release millions of metric tons of waste that will destroy agricultural land and water resources and will be a health risk to the downstream communities.

4.10 Impact on indigenous peoples
The Philippine Mining Act mandates mining companies to spend a minimum of 1.5 percent of their annual operating budget for social development projects, while indigenous peoples get a minimum of 1 percent of the annual gross revenue as their share of royalties. This may be done by the mining firms but it is highly unlikely for the indigenous communities to actually verify the mining firm's true annual gross revenues, when accounting records are subject to manipulation by the company's accountants in order to reduce tax liabilities. In addition, capacity building in the use of funds for the livelihood and development of indigenous peoples is necessary to prevent leaders of indigenous communities from taking personal ownership of these funds. Past experience has shown that this can become a source of conflict among members of indigenous people (Contreras, 2017).

Education, scholarship, livelihood and jobs can be provided by the mining firms in the short term however, this will pale in comparison to the environmental damage in the long run if a mine tailings dam breaks and massive amounts of waste are spilled into farm land and water resources. Mining operations in the past have also displaced indigenous people, by occupying their ancestral domain which is the mineral rich area. Militarization further induces displacement as local residents are subject to harassment by armed security personnel manning check points and blocking access to their ancestral domain (Short, 2007).

The rule of law, protecting property rights and preserving the sanctity of contracts
The release of the DENR-MGB mining audit results in February 2017, provided a list of mining companies that were recommended for either suspension or closure depending on the extent and magnitude of the violations committed under various environmental laws and the provisions of the Philippine Mining Act.

The mining firms that were subject to closure orders were BenguetCorp Nickel Mines Inc., Eramen Minerals Inc., Zambalaes Diversified Metals Corp. and LNL Archipelago Minerals Inc., all in Zambales province, mainly because of the siltation of rivers, destruction of functional watershed and illegal tree cutting.

Also closed were Mt. Sinai Mining Exploration and Development Corp., Emir Minerals Corp. and Techlron Mineral Resources Inc., in Homonhon mainly for siltation of coastal waters and destruction of functional watershed; and AAMPHIL Natural Resources Exploration, Kromico Inc., SinoSteel Philippines H.Y. Mining Corp., Oriental Synergy Mining Corp., Wellex Mining Corp., Libjo Mining Corp., Oriental Vision Mining Phils. Corp., in the Dinagat Islands mainly for siltation of coastal waters.

ADNAMA Mining Resources Corp., Claver Mineral Development Corp., Platinum Group Metals Corp., CTP Construction and Mining Corp., Carrascal Nickel Corp., Marcventures Mining and Development Corp., and Hinatuan Mining Corp. in Surigao del Norte were also closed for siltation of coastal waters and mining in functional watersheds.

The five mining companies suspended were Berong Nickel Corp.(for siltation of coastal waters), OceanaGold Phils (for mining operations impact on agricultural land), Lepanto Consolidated Mining Corp. (for mine tailings spill and abandoned tail ponds), Citinickel Mines and Development Corporation (for siltation of farm lands) and Strong Built Mining Development Corporation (for mine tailings spill).

The Chamber of Mines of the Philippines expressed its opposition to the audit results as well as the recommendations for suspension and closure of the above mentioned mining firms. The companies have asserted that a copy of the full audit results was not provided and that there was no formal/ legal notice given to the firms explicitly discussing the nature of their violations. Representatives of the mining firms stated that the DENR Secretary displayed unprofessional conduct in holding a press conference and announcing the list of firms recommended for suspension and closure without giving a prior formal notice to the mining companies concerned. Regulation by government should be conducted formally and not through press conferences because it undermines the integrity of the process (Leviste, 2016). Audits conducted by the MGB-DENR are accepted as part of the regulatory process but mining firms question the inclusion of a non-governmental organization (NGO) namely the Alyansa Tigil Mina in the audit team. The Alyansa Tigil Mina by its very name has the mandate to stop mining and this puts into question the supposed objective mindset that the audit team should adopt. (Leviste, 2016).

Since the firms that were recommended for suspension or closure believed that due process was not observed and that formal legal notices were not given to explain the specific nature and extent of the violations, it will be necessary for the Chief Executive to reconsider the recommendations of the DENR Secretary. The cancellation of the Mineral Production Sharing Agreements does not rest on the DENR Secretary alone, but must be decided upon collectively by the government as a whole considering the adverse impact it may have on the country. There is a need to uphold the sanctity of contracts, follow due process and observe the fundamental rule of law so that justice and fairness will apply to all the parties concerned (Halcon, 2017).

Mining cannot be banned because the constitution allows it. The Philippine Mining Act through its implementing rules and regulations allows mining operations to be done anywhere in the country as long as it is outside the prohibited areas defined by the law and covered by Mineral Production Sharing Agreements (MPSAs). Cancellations of MPSAs may be appealed to the chief executive, or at worse brought to court subject to the filing of a legal complaint against government which had granted the MPSAs in the first place (Bravo, 2017).

In view of this, it is not only the sanctity of contracts which should be upheld but the property rights of the residents in the communities that will be affected by mining operations. Property rights of residents should also be protected through their local representatives and through their local government officials, particularly if mining operations will pose a threat to livelihood, health and the loss of natural resources. Mining projects can only be allowed if permission or consent is granted by the national government, the local government and the community directly affected by prospective mining operations. Any opposition by either the local government or the community should prevent the operations of mining firms in the locality (Jasareno, 2012).

5. Conclusion
Mining cannot be stopped as long as poverty exists. If mining is to be allowed, it should be regulated in order to ensure protection of the environment, promote the interest of affected communities alongside maximizing the economic gains. The environmental, social and economic cost of extracting non-renewable minerals should be fully paid by the mining firms and the country should get a fair share of the value of the extracted minerals which should be used for improving the institutional capability of government to evaluate and regulate mining activities and expanding human capital and infrastructure.

Pro-mining advocates recommend lower tax rates in order to attract more investments into the sector. However, considering that mining companies generate a substantial amount of negative externalities or negative spill-over effects such as environmental degradation attributed to deforestation and the disposal of mine tailings waste, the imposition of higher taxes should done in order for these firms to shoulder the true cost of their operations, particularly when they ruin the environment, extract all the non-renewable mineral resources, contaminate farmland, water and marine resources and destroy the livelihood of downstream communities. They damage wildlife, fill the air with dust containing minerals, create health risks, displace people, induce social divisiveness, implement militarization which are all public costs. Mining should be heavily regulated to cover these costs as well as to make firms accountable for their contractual agreements with government that allow auxiliary rights to timber, water easement and the use of explosives. If higher taxes discourage new investments in mining, then such an outcome would only provide an indication of firms not willing to shoulder the true cost of mining in the country. Mining firms do well to internalize benefits (profits) but fail to completely externalize social costs (negative spill-over effects passed on to other parties who have nothing to do with mining). Extracted minerals should be priced to cover all costs including the economic, social and environmental cost.

The greater priority is to increase productive capacity and create more jobs in manufacturing, as well as raise productivity in the agricultural sector. Japan imports all of its metallic mineral requirements for manufacturing and does not need to rely on a domestic mining sector to support industrialization. Singapore and Hong Kong have strengthened their manufacturing industries without having to depend on a domestic mining sector. Mining is not a priority if the environmental and social damages it generates is greater than the economic gains from operations. Because of its permanent destructive impact on the environment, and with the inability of the MGB and the DENR to effectively regulate mining operations, environmental destruction will get worse despite provisions in the Philippine Mining Act which is made to appear as a law, adequate enough to protect the environment from irresponsible mining.

The DENR and the MGB are subject to corruption and regulatory capture. The DENRs continued issuance of environmental compliance certificates and the MGB granting of mining permits in protected critical forest reserves and watershed areas can only mean that regulators have accepted financial considerations in exchange for ignoring the environmental provisions in the law. Members of the legislative and executive branches of government who have substantial business interests in the mining companies operating in the provinces of Mindanao directly influence the appointment of officials at the MGB and the DENR which lead to regulatory capture or the ability of special interest groups to control actions that the regulator is expected to undertake. This leads to the MGB and the DENR simply ignoring blatant violations of environmental laws by mining companies. In the event that violations are exposed through the media, regulators impose relatively light penalties such as short suspensions and fines. Closures, longer suspensions and heavier fines are only imposed when the violations are severe and could not be hidden from the public. The World Bank Extractive Industry Review (EIR), which covers a wide range of academic studies and UN Reports have been critical of this approach, identifying mining companies as the main beneficiaries of regulatory concessions in the extractive industry, while the long term burden of environmental and social costs remain with the developing countries and some of their poorest communities.

6. Final Notes
Over the past 30 years the greatest contribution of mining to gross domestic product (GDP) has been 2 percent, and over the last five years, mining output was at a minimum of 0.7 to a maximum of 0.9 percent of GDP. Despite the small contributions, past experience shows that they have done more in terms of destroying forests, watersheds, coastal waters, mangrove areas, farm land, fishing areas, and contaminated water which could have been used for supporting life and livelihood. The issuance of mining permits should be rational, selective and limited, and the ban on protected critical watersheds and wildlife preserves must be enforced. The MGB should not have issued mining permits in watershed areas during the previous administration if watershed areas are prohibited. Agriculture and fisheries contribute more to GDP as compared to mining, with no extraction of non-renewable resources and with their respective production activities contributing to food security. Agriculture and fisheries are both less damaging to the environment as compared to mining.

The Philippine Mining act was passed as part of the series of trade and investment liberalization policies recommended under the grant of technical assistance by the World Bank to ensure that mineral resources are made available for export and raw materials made available in the global market. Most of the local large scale mining firms have a foreign investor as a partner, or a shareholder which operates a much larger mining company in the foreign country of origin that purchases the mineral ore extracted from the Philippines. This is one of the reasons why a majority of the large scale mining firms export mineral ore, rather than processing the minerals in order to create greater value added. Mineral extraction and production in the mining industry should support the growth of local manufacturing industries and should not remain as a mere supplier of mineral ore to developed countries.



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ABOUT THE AUTHOR















Dr. Roberto B. Raymundo is Associate Professor at the School of Economics of De La Salle University Manila. He has been teaching and doing research for the past 25 years. He teaches courses in microeconomics, macroeconomics, money and banking, and public finance and has done research in the areas of central banking, international macroeconomics, economic integration, currency wars and exchange rate systems.