A profound and dispassionate critique of the Minerals Action Plan (MAP) reveals that it is devoid of a definitive historical- developmental context and purpose. The Plan makes no attempt to revisit the raison d’être of the Mines and Geosciences Bureau (MGB). The absence of the two critical components, coupled with the lack of a credible implementing, control and support mechanisms, makes the MAP qualitatively and quantitatively flawed and skewed. If it were to be carried out, it is liable to trigger simultaneous government blunder, social and political unrest, economic plunder, and environmental despoliation. As it stands, the MAP cannot serve as a roadmap for the revitalization of the mineral industry.

D.1 Defects in Plan Components

The MAP does not provide for an overview or even a general profile, of the country’s mineral resources from the techno - economic and/or socio -historical perspectives in order to examine and evaluate the real problems, constraints and challenges of the mining industry and its subsidiary concerns. The plan does not provide for analysis and evaluation of the various industry players and the general performance and impact of their enterprises on local communities, the nation and the physical environment. It does not present the gamut of realistic and quantifiable strategies and options that can be considered by various stakeholders in order to protect the national patrimony and to promote a truly national mineral industry.

Essentially, the plan caters to the direct investments of transnational mining firms belonging to the OECD countries. Stripped of its “motherhood statements”, “NGO speak”, and legal semantics, the investment regime being referred by the MAP is heavily loaded in favor of large-scale foreign mining interests and their local counterparts, with a pittance of “charitable” and token provisions for the marginal sectors.

Domestic and foreign investment can be vital to a country ’s development, but only when they are the right investments, under the right conditions, and with appropriate safeguards to protect the rights of the poor and marginalized. The MAP policy agendum on the critical role of investments has no emphatic statement subscribing to this development imperative.

The MAP is silent on the concomitant need to apply the government’s “strong arm”, instead of a kid-glove approach, against abusive or notoriously undesirable foreign and local mining firms, and to provide ample protection to (and not the repression/despoliation of) locally based vulnerable groups and the environment.

A valid civil-society criticism of a flawed MAP element was not rectified: “It centralizes critical decisions on the siting of commercial mining, not in the hands of local communities but in national and local government bodies [and] undercuts legal procedures for processing community consent.” (LRC-KSK in Christian Aid and PIPLinks Report, Dec. 2004, p.10 )

The foregoing couple of omissions in the MAP has reinforced the common perception that on top of the financial incentives introduced to attract foreign in- vestment, the government has made an implicit com- mitment not to enforce costly social and environmental minimum standards, justifying the costs to people and the environment by focusing on the supposed long- term gains.

D.2 The Plan vis-à-vis Other Development Norms

The government has pinned much hope on mining to dig the country out of debt and poverty. But this strategy as contained in the MAP is flawed. Legislation allowing extended holidays for companies and full repatriation of profits has meant that tax revenue has fallen. (Refer to Part III [Mining Act] and Box 2 [FTAA] items.)

According to IBON (page 67), the capital- intensive character of large-scale mining was clearly described. Just a feasibility study for a large copper mine may cost $25 million or more. Exploratory drilling of a potential mining site costs around Php 10 million. An open pit copper mine costs several hundred million dollars and takes three to five years to construct. Exploration to actual mining takes about eight years. The MAP implementation, control and support mechanisms may not be able to cope with this magnitude of undertaking.

The World Bank-Commissioned EIR

Corruption and poor governance are the two main reasons why mineral exploration so seldom leads to poverty reduction, as the World Bank-commissioned “Extractive Industries Review (EIR)” confirmed in its 2003 report. The pertinent discussion is found in the joint Christian Aid and PipLinks report of December 2004, entitled “Breaking promises, making profits”, page 16.

The EIR, whose pro-active recommendations were diluted or rejected by the Bank’s top management, had identified three main conditions that must exist in a country prior to undertaking extractive projects, including those of mining:

• Transparent pro-poor governance based on the rule of law. This includes the notion that an equitable share of a project’s revenue should go to the local community;
• Respect for human rights, including labor rights, women’s rights and indigenous peoples’ rights to their land and resources; and
• Policy advocacy on social and environmental issues like involuntary resettlement and destructive practices (e.g. the disposal of tailings in rivers). Mining companies’ obligation to gain free prior and informed consent (FPIC) of affected communities would also be enshrined.

Thus, offering mineral resources for full exploitation by foreign companies is not the best way to attract investors. An effective way is to get rid of corruption; the Philippines currently ranks 11th out of 102 countries for corruption. Another way is for the government to have the political will to collect taxes from big corporations in order to have the necessary budget to fund various development projects (After Corpuz, C., in Christian Aid and PIPLinks report)

The Oxfam Report

As sourced by the LRC-KSK and the PRRM-CBIS, the American-British NGO Oxfam in its 2002 report entitled “Digging to Development?” concluded that large-scale mining has had serious environmental and social impacts on poor communities around the world. This contrasted with the continued promotion of mining in developing countries by international financial institutions such as the World Bank (to which our nation is virtually mortgaged).

Oxfam argued that the apparent success rich countries like the USA, Canada and Australia have had with mining should not be used as models for developing countries:

• Mining advocates had seriously exaggerated the role of mining in those three countries’ economic development. In a development context, mining was just a part of a complex pattern of institutional, technological and corporate development that encompassed not only mining but also agriculture, manufacturing, retail trade and services;
• “Reasoning by historical analogy” with developed countries seriously exaggerated the claimed positive economic benefits of mining. For one, the role of a single economic activity (mining) in a particular sector (exports) tended to be overstated in size and importance;
• Economic development had been very complex and extended far beyond commercial market ex- change and financial and business relationships. It included the development of political and so- cial institutions, cultural values, public infrastruc- ture and human capital, as well as the effective protection of the environment. Large investment in a single project (e.g. mine) in a particular sec- tor (e.g. exports), by themselves, rarely had major sustained developmental impacts;
• The USA, Canada and Australia were already high-income advanced economies when they began the industrial development of their mineral resources in the late 19th and early 20th centuries. Mineral development was thus knowledge,technology and business organization intensive. Contemporary developing nations lack these conditions; and
• Decline in transportation costs had dramatically changed the likelihood that mining can be the basis for sustained economic development in developing countries. For one, distance and isolation no longer protected the manufacturing that might otherwise develop around mining projects.

Contextual Approach and Creative Modeling

The foregoing “conditions” and “conclusions” although well meaning, should not be treated as 100% gospel truths. These have to be studied and understood within the context of our concrete conditions as a people and a nation (that is, our baranganic heritage, colonial past and neo-colonial present).

What is essential is that relevant historical lessons should be derived from them, as we should take stock of our own national patrimony, our inherent and imposed constraints, and create our own national model that provides for genuine mineral resource development.

D.3 A 350-Year Exploration and/or Exploitation Stage?

The Philippine mineral industry seems to be perennially stuck at Stage I (viz. the mineral exploration stage). This is because way back in 1967 “only slightly more than 10% of the area of the Philippines was systematically surveyed for minerals” (Wernstedt, F.L. and Spencer, J.E. The Philippine Island World [1967], p. 248).

At present, the Mines and Geosciences Bureau still abides by the same token that about 10% of the country ’s territory has been surveyed for minerals. In other words, approximately 90% of the country ’s onshore expanse is still terra incognita in terms of mineral resources.

This is in a way re-affirmed by the mining agency’s admission that “the country was assessed to be producing only 10 % of its potential mineral resource endowment” (IBON, Globalizing Philippine Mining [2002], p.18).

Based on the derived relationship of 10% mineral survey: 10% mineral production within an empirical period of 35 years (with 2002 as reference year), it follows that the country ’s 100% mineral survey concomitant with the 100% mineral production (or the final stage of mineral depletion) shall be completed within the hypothetical period of 350 years.

Logically, this means that the uncompleted 90% mineral survey and the corresponding mineral production amounting to 90% of the resource balance shall take place within the projected net period of 315 years. The MAP provision for “sustained mineral exploration program” does not tackle frontally, nor shed light on, this strategic concern.

However, it does urge “government to provide more technical support to the industry in terms of conducting more geological/geophysical surveys for mineral exploration to provide more complete and accurate information on mineral resources potential in the country”. (MAP, p. 2, para. 2)

An attendant concern (if not a major problem) to this ”sustained mineral exploration program” is how to account for the various government studies on the mineral resource potentials and the state of the industry conducted during the last 30 years with the aid of various foreign governments and international agencies.

This question keeps coming back again and again because of the basic understanding that these studies have generated already a comprehensive review of the geology and mineral resources of the country, undertaken with substantial government counterpart cost in terms of time, effort and taxpayers’ money. In fact, these have supposedly become the bases of the government’s policy and program of liberalizing and restructuring the mining industry.

With so much studies conducted, when shall the country’s mineral resources ever be developed? And by the same token, when shall a truly national mineral industry take off? After 350 years of exploration under Stage I, when ironically the mineral resources shall have been depleted? What kind of monkey business have we got ourselves into?

D.4 Revisiting MGB’s Raison D’Etre

In the process of doing the MAP critique, the raison d’être of the Mines and Geosciences Bureau (MGB) needs to be revisited. This is due to the fact that the mining agency is the pivot of the MAP in terms of plan formulation, implementation, control and gen- eral support. Further, the mining agency’s historically significant role in the development of the local mining industry needs to be taken into account. The es- sential consideration on both counts is the agency’s professional and bureaucratic integrity that boils down to its propensity to succumb to poor governance and corruption.

The Mining Act (RA 7942) had transformed the MGB from a staff to a line bureau (under Sec.100). And as a pre-requisite to this transformation, the same law (under Sec.9) had fortified the agency’s authority that includes among others:

• Its having the direct charge in the administration and disposition of mineral lands and mineral resources; and
• Its Director having the recommendatory power (with respect to the DENR Secretary) to grant mineral agreements to qualified persons, and the power to monitor the compliance by the contractor of the terms and conditions of the mineral agreements.

The acid test that shall the make or break the MGB (not to mention the DENR) could occur within the first two years of MAP implementation. Its track record, sourced from Isles of Gold: A History of Mining in the Philippines by S.P. Lopez (1992), as commissioned by the Philippine Chamber of Mines, can aid in coming up with a prognosis.

During the Spanish colonial period, the mining agency was known as the Inspeccion General de Minas created in 1837 and placed under the authority of the Governor-General in order to administer all mining activities in the colony. Then, the Inspeccion issued explicit rules of mine ownership and manpower re- quirements, particularly on special mining concessions (pertenencias), aside from conducting geological studies and surveys.

The functions of the old Inspeccion were taken over by the Mining Bureau, formerly the Directorate of Civil Administration that was organized by the U.S. Military Governor in 1900. This body was instrumental in putting in place explicit provisions of the U.S.-made mining law (Philippine Bill of 1902). It facilitated the successful entry of American capital, technology and men in the mining industry between 1902 and 1935 inasmuch as that mining law made no distinction between American citizens and Philippine colonial subjects.

Came 1936, the Philippine National Assembly passed a supervening mining law (Commonwealth Act No. 137) which stipulated that only Philippine citizens shall be given rights over the disposition and development of natural resources. In the same year, the Commonwealth Government under President Manuel Quezon established a new Bureau of Mines based on the need for a government office to take charge of the administration and disposition of mines, minerals and mineral lands as well as the promotion of the industry. This was undertaken in the context of the boom in the gold industry in the 1930s that brought about the emergence of hundreds of new mining companies and near anarchy in the stock market.

In 1942, when the Japanese war machine gathered the motley of collaborators to man the central administrative organization and to prop up a puppet republic, the mining agency found itself becoming a cog in the civilian wheel of that war machine. Symbolic of the havoc that visited the mining industry during World War II was the destruction of the Bureau of Mines Building in Manila. Used by the Japanese as a fort, the building was burned and smashed in the last days of the fighting in Manila. The Director of the Mines Bureau was killed during the closing days of the war.

The post-war period witnessed the painfully slow revival of the mining industry being overshadowed by an escalating economic crisis that reached a high point when peasant unrest turned into a full-scale rebellion. Hastily, the U.S. government arranged for a program of military and economic assistance. An Economic Survey Mission (headed by the U.S. banker Daniel Bell) in 1950 took a close look at the mining industry and reported that the mineral resources of the country were varied and extensive and warranted an aggressive exploration and development program.

To maximize the potential of the mining industry, the Bell Mission recommended, and no doubt the Bureau acceded to, the following:

• Lifting of the limitation on employment of foreign engineers and technicians in order to encourage more foreign venture capital to come in;
• Support of the Bureau of Mines’ five-year program by providing U.S. technical assistance and setting up a school of mineral industries and sciences at the University of the Philippines;
• Development of strategic minerals targeted at the U.S. market; and
• Better price incentives for the gold producers.

To sum up, it’s déjà vu in reverse!

D.5 MAP: Return To Sender or Return to Maker?

If government shall insist on having the Minerals Action Plan (MAP) as a roadmap for the omnibus revitalization of the mineral industry for the Filipino People and Nation then by all means, the plan needs to be reformulated and reinforced by striking a better balance of policy concerns, strategies, action agenda, targets and activities. No doubt, the MAP must be returned to the sender.

But what if, government shall insist on having the MAP serve as a roadmap for the exclusive revitalization of a mere Philippine-hosted, large-scale transnational- dominated mining industry? Can the Filipino People and Nation stand up, and return the MAP to the maker?