The government’s formula for the efficient exploita- tion of the country’s mineral resources is to liberalize the local mining industry. To optimize extraction, the industry must be open to new and improved tech- nologies that usually require tremendous capitaliza- tion. To acquire capital, the Philippine economy must be attractive enough for foreign investors. To earn from the whole liberalization process, the industry must be able to capture the elusive world market. The pro- ponents of liberalization believe that the implemen- tation of these options will help to propel the country toward industrialization.

D.1 Flaws in the Process

But this skewed approach of the present government ignores the fact that the Philippine mining industry is in deep crisis precisely because it has been structured to fulfill the foreign market and is dependent on foreign capital. Taking a quick look into our immediate past, it is regrettable that previous governments had failed to build for the country a strong and independent politico-economic base that can promote and protect its indigenous mining industry.

In the case of transnational mining companies fearing an over-extended crisis in the industry, this sort of drastic and decisive action liberalization is a must. They have adopted strategies to reduce pro- duction cost and to ensure that their mining opera- tions are sustained in order to survive the competition in the industry. To maintain their leadership in the gold, copper and other sub-sectors of the industry, these companies have extended their borders beyond their home countries, competing in the acquisition of min- eral lands overseas – to broaden their mineral as- sets, reserves and actual areas of production.

With the entry of transnational mining firms facilitated by the government, the intended end-scenario of the mining industry’s liberalization would be a resurrected Philippine-hosted mining operation that is large-scale, highly mechanized and foreign-dominated. Efficient exploitation of the country’s mineral resources with financial and technical assistance coming from the transnational companies becomes the pre-requisite for a revitalized big mining industry, or even just its semblance.

D.2 Biased Legislation and Preferential Treatment

In pursuance of the mining liberalization agenda, the Congress passed during the 1990’s several pieces of inter-related legislation that are pregnant with biased provisions for transnational mining interests:

• People’s Small-Scale Mining Act of 1991 (Republic Act 7076);
• National Integrated Protected Areas System Act of 1992 (Republic Act 7586);
• Philippine Mining Act of 1995 (Republic Act 7942); and
• Indigenous Peoples Rights Act of 1997 (Republic Act 8371).

To fast-track the mining liberalization process, the government had belabored to address the key concerns which transnational mining companies identified as barriers to the revitalization of the big mining industry:

Investment incentives – Since mining is a high- risk venture and huge capital has to be poured in, complete operational control is necessary; Inconsistent land and land-use policies – Perceived as threats to the continuity in mining operation; Access to mineral lands - The bulk of these are mountain areas where indigenous peoples and small-scale miners are present; Peace and security problem - Insurgency is strong in the hinterlands; and Bureaucratic and similar problems at the national and local government levels.

Despite the rush of applications to mine, the expecta- tion that the Mining Act would attract industry leaders and cutting-edge technology was not realized. The National Minerals Policy (NMP) emerged in 2003 to rectify the government’s poor performance.

The NMP had sought to reposition mining as “sustainable development” by emphasizing the supposed best practice of the major companies and their con- cern for social equity and environmental protection. Even as the NMP asserted that there had been a “paradigm shift from traditional mining to a new regime of a pro-people, pro-environment miner- als industry ”, civil society groups roundly criticized its failure to address the environmental and social impacts of mining. (After Christian Aid and PIPLinks)

D.3 Recent Top-Level Moves

On January 16, 2004, Executive Order No. 270 outlining the national policy agenda on revitalizing mining in the Philippines was issued by the President, in line with the policy-shift from tolerance to promotion of mining in recognition of the economic con tributions from the sector. It signaled to all and sundry that it’s full speed ahead for the mining liberalization train.

For reasons known only at the highest circle, the Supreme Court on January 27, 2004 declared the Mining Act (RA 7942) unconstitutional by a vote of 8-5 and one abstention. It nullified all provisions of the Mining Act concerning financial and technical assistance agreements that allow foreign firms to own up to 100 % of mining projects and other permits that can be granted to foreign investors. The high court ruling was issued after environmentalist groups have filed a petition questioning the constitutionality of RA 7942 on claims that the law would displace indigenous communities and destroy the country’s natural resources.

And came September 2004, the Speaker of the House presented to the President an ambitious wealth creation package that focuses on reviving the mining industry. Like Pandora’s box, the package sought to rebuild the industry by allowing foreigners to lord it over the country’s huge mineral wealth estimated at $800 billion to $1 trillion. It included the mobilization of international and local investors to develop gold mines at Mt. Diwalwal and the exploration and development of oil and gas wells like Malampaya oil and natural gas fields in offshore Palawan. (TODAY, September 24, 2004 Issue, page 12)

Not to be left behind, a Senate special committee identified last October 2004 the revival of the mining industry as one of the four focal points of wealth and job generation bills to be given priority by the chamber. The special committee said that mineral wealth is the country ’s greatest comparative advantage in the global economy, its value similarly estimated at $800 billion to $1 trillion. (The Manila Times, October 19, 2004 Issue, page