Mining amid armed conflict: nonferrous metals mining in the Philippines WILLIAM N. HOLDEN Department of Geography/Program of Environmental Science, University of Calgary, Calgary, Alberta, Canada T2N-1N4 (e-mail: [email protected]) R. DANIEL JACOBSON Department of Geography, University of Calgary, Calgary, Alberta, Canada T2N-1N4 (e-mail: [email protected]) In recent years the government of the Philippines has L’activit´e mini`ere au milieu d’un conflit arm´e: attempted to accelerate the growth of the nation’s l’extraction de m´etaux non-ferreux aux Philippines economy by encouraging the extraction of its mineral Dans les derni`eres ann´ees, le gouvernement des resources by multinational corporations. The Philippines a pris des mesures afin d’acc´el´erer la Philippines is also a nation beset by armed violence croissance de son ´economie nationale en incitant des carried out by anti-state groups. This article soci´et´es multinationales a` exploiter ses ressources discusses how the presence, and activities, of these mini`eres. Les Philippines sont un pays rong´e par la groups generate problems for a mining-based violence commis par des groupes arm´es development paradigm. The article examines: the anti-gouvernementaux. Cet article explique comment literature on the topic of natural resource abundance la pr´esence et les activit´es de ces groupes posent des and conflict, how there have been attacks upon mines probl`emes pour le paradigme du d´eveloppement ax´e by armed groups, how mining companies have served sur l’exploitation mini`ere. L’article ´etudie la as a target of extortion, how grievances related to litt´erature sur l’abondance des ressources naturelles mining can act as a source of conflict, how mining et des conflits, comment des attaques contre les could disrupt the peace process with the Moro Islamic mines sont commises par les groupes arm´es, Liberation Front and how mines are accompanied by comment des actes d’extorsion sont men´es sur des a militarization of the area in their vicinity. compagnies mini`eres, comment les griefs relatifs a` Ultimately, violence is a manifestation of poverty and l’activit´e mini`ere peuvent d´eg´en´erer en conflit, social exclusion inherent in Philippine society. Mining comment l’activit´e mini`ere peut nuire au processus de may not diminish, and indeed may increase, this paix avec le Front de lib´eration islamique Moro, et poverty and social exclusion. Unless poverty and comment les lieux situ´es pr`es des mines se social exclusion is alleviated the violence will continue militarisent. En derni`ere analyse, la violence est une and alternative efforts to develop the Philippine manifestation de la pauvret´e et l’exclusion sociale qui economy will be precluded. sont inh´erents a` la soci´et´e philippine. L’activit´e mini`ere ne r´eduirait pas cette pauvret´e et exclusion sociale, mais tendrait au contraire a` les exacerber. A` The Canadian Geographer / Le G´eographe canadien 51, no 4 (2007) 475–500 C / Canadian Association of Geographers / L’Association canadienne des g´eographes 476 William N. Holden and R. Daniel Jacobson moins que la pauvret´e et l’exclusion sociale ne soient soulag´ees, la violence continuera et il sera impossible de mettre en œuvre des mesures alternatives au d´eveloppement de l’´economie des Philippines. Introduction eral phenomenon (Stake 1995). In this particular study, mining in the Philippines (the particular This article examines the phenomena of large- phenomenon) is studied as a vehicle to evaluate 1 scale corporate mining that occurs amid armed the problems inherent in having mining compa- conflict by examining nonferrous metals mining nies locate in areas of armed conflict in the de- in the Philippines, a country where armed insur- veloping world (the general phenomenon). This gent groups are engaged in violence against the methodology is specifically designed to comply Philippine state. Mining activity imposes substan- with the view of Peluso and Watts (2001, 5) that tial impacts upon social environments, as well violence is ‘a site specific phenomenon rooted as biophysical environments. The juxtaposition of in local histories and social relations’. The spe- mining with armed conflict significantly compli- cific characteristics of mining amid conflict in cates mining’s social impacts. the Philippines are examined to exemplify a more In recent years, the multinational corporations general manifestation of mining amid conflict in (MNCs) that comprise the nonferrous metals min- the developing world. ing industry have shown a locational preference for the developing world (Hayter et al. 2003). This investment has occurred as a result of ‘push fac- Extractive Activities in Conflict Areas: tors’out of the developed world, such as con- The General Phenomenon under Study cerns regarding mining’s environmental impact or decreasing access to high quality ore deposits According to the ‘resource curse thesis’coun- (Muradian et al. 2003) and from ‘pull factors’into tries rich in mineral resources tend to experience the developing world, such as liberalized mining poor economic performance (Auty 1994; Sachs codes that were specifically geared towards at- and Warner 2001). Several observations are rel- tracting foreign direct investment (FDI) by min- evant in this regard. First, there is the concept ing companies (Bridge 2004). Concomitant with of the ‘Dutch Disease2’, wherein an influx of for- this relocation, many mining companies have en- eign exchange attracted into a country as a re- tered into politically unstable areas of the world sult of mineral exports causes an exchange rate where armed groups engage in acts of anti-state appreciation that renders other locally produced violence (Mining, Minerals, and Sustainable Devel- products uncompetitive in foreign markets (Auty opment 2002). 1994; De Soysa 2000; Sachs and Warner 2001; This article draws upon fieldwork interviews Le Billon 2005). Second, there is the tendency of conducted in 2004, 2005 and 2006. An instru- mineral prices to experience volatility over time. mental case study methodology is employed that Mineral prices may rise, and they may fall sud- allows for a detailed knowledge of a single case; denly; this volatility becomes a substantial dis- it is a strategy for conducting research involving ruption to budgetary planning in those countries a particular phenomenon (Robson 1993). Instru- dependent upon their export (Renner 2002; Le mental case studies are used to understand some- Billon 2005). Third, mineral extraction may cre- thing other than just the case itself; they are a ate an ‘enclave economy’with isolated pockets of method of focusing on a particular phenomenon in order to acquire knowledge about a more gen- 2 The term is referred to as the ‘Dutch Disease’as a result of the experience suffered by the Netherlands during the 1970s. 1 The focus of this article is on large-scale mining by corpora- As the Dutch began exporting North Sea oil, the Dutch Gilder tions. Small scale, or ‘artisanal’mining carried out by individu- appreciated in response to the inflow of foreign exchange and als or families using labor-intensive methods and rudimentary this appreciation rendered other Dutch export products un- technology is beyond the ambit of this article. competitive in foreign markets. The Canadian Geographer / Le G´eographe canadien 51, no 4 (2007) Mining amid armed conflict 477 wealth having few linkages to the rest of the na- violence occasioned by the extortion of the min- tional economy (Ross 1999; Renner 2002). ing companies makes it more difficult for firms In addition, a new dimension to the resource engaged in other types of economic activity and curse thesis has emerged recently that posits that the economic structure of the country becomes countries rich in mineral resources have an en- distorted and over reliant upon mining. hanced vulnerability to armed conflict (De Soysa The issue of payments by extractive compa- 2000; Le Billon 2001, 2005; Auty 2004; Nevins nies in conflict zones has been addressed by 2004; Ross 2004a). Although some writers, such a 2001 initiative sponsored by the American, as Homer-Dixon (1999), postulate a view that British, Dutch and Norwegian governments (as a scarcity of resources creates conflict, a con- well as a group of mining and oil companies) trasting view has developed which says that an called the ‘Voluntary Principles on Security and abundance of resources is much more likely to Human Rights’(Global Witness 2005). This initia- generate conflict (Collier 2000; De Soysa 2000; tive is somewhat limited in its effectiveness be- Hartmann 2001; Peluso and Watts 2001; Le Bil- cause it only creates voluntary guidelines, which lon 2004). The reasons underlying this latter view are not binding on the companies (Global Witness relate to: greed, or the looting mechanism; the 2005). It is doubtful as to whether this volun- grievance mechanism; the lengthening of conflicts; tary initiative will have any effect in reducing the the militarization of areas and the relationships scope extractive industries pose for an aggrava- between corruption and conflict. tion of a conflict by locating in a conflict zone. In With respect to the looting mechanism, the lo- the words of Global Witness (2005, 33), ‘it seems cations of mining projects are dictated by ‘id- that a company can endorse the Voluntary Prin- iosyncratic natural endowments’(Collier 2000, ciples, and draw the reputational benefits, with- 93). It can take several years, and hundreds of out providing any information to the public about millions of dollars, for a mining company to find, any payments that it makes to armed parties to develop, and begin to mine a major mineral de- a conflict’. posit (Soussan 1988). Once a mining project is With respect to the grievance mechanism, min- developed it cannot be relocated and a mining ing is an activity with a substantial potential company has a substantial incentive to pay funds for environmental harm (Muradian et al.