2000 MINING DIALOGUE IN

BBC Cluster on the Environment and Indigenous Peoples

Environmental Science for Social Change (ESSC) March 2008

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 3 ACRONYMS ...... 5 INTRODUCTION...... 6 Objectives...... 6 Dialogue flow and rules ...... 7 PROVINCIAL PROFILE...... 7 Population ...... 7 Geographic location and topography ...... 8 Rivers and lake...... 8 Forest reserve and protected area...... 8 Mineral deposits...... 8 MINING IN SURIGAO DEL NORTE...... 8 LAND USE PLANNING IN THE PROVINCE ...... 9 Recognizing the rights of the Mamanwa indigenous communities to their territories and resources vis-à-vis local development and land use planning...... 9 A LOOK AT THE MINE REHABILITATION FUND COMMITTEE (MRFC) AND MULTIPARTITE MONITORING TEAM (MMT)...... 10 The Mine Rehabilitation Fund (MRF)...... 11 The Mine Rehabilitation Fund Committee (MRFC) ...... 11 Role of the Multipartite Monitoring Team (MMT) ...... 12 Participation in the MRFC and the MMT ...... 12 Offices and groups represented in the MMT ...... 12 MMT for Taganito Mining Corporation ...... 12 MMT for Manila Mining Corporation ...... 13 The NGO sector in Surigao del Norte and Rural Enterprise Assistance Center (REACH Foundation) ...... 13 The Diocese of Surigao...... 13 MONITORING MANILA MINING CORPORATION’S TAILINGS POND NO. 7 .....14 AN INITIAL ASSESSMENT OF THE PERFORMANCE OF THE MMT ...... 16 Gains in multipartite monitoring ...... 16 Some concerns on the MRFC and MMT...... 16 Challenges towards the strengthening the MMT ...... 17 COMMUNITY DEVELOPMENT PROGRAMS ...... 18 Livelihood projects ...... 18 Some concerns on the livelihood projects...... 19 MINING EXPLORATION AND COMMUNITY CONSULTATION...... 19 ACTION POINTS AND WAYS FORWARD ...... 20 On strengthening the capacity of the MMTs and MRFC ...... 20 On exacting more responsibility and accountability from concerned government offices in mine monitoring...... 20 On ensuring the mining company’s commitment to its environmental and social controls and measures...... 20 On livelihood projects and community development programs ...... 20 On local land use and development planning...... 21 On greater recognition of Mamanwa rights...... 21 REFERENCES ...... 22 APPENDIX 1. ITINERARY FOR THE MINING DIALOGUE IN SURIGAO DEL NORTE ...... 23 APPENDIX 2. SAMPLE MULTIPARTITE MONITORING TEAM REPORT...... 24

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 2 March 2008

EXECUTIVE SUMMARY

The second Bishop-Businessmen’s Conference (BBC) Mining Dialogue in Surigao del Norte on 29 November to 1 December 2000 revolved around the functions and performance of local multi-stakeholder mine monitoring mechanisms and the community development programs (including livelihood projects) implemented by mining companies. Local multipartite monitoring of mining operations and community development projects are among the measures in the 1995 Philippine Mining Act that seek to enhance the social acceptability of mining in relation to issues constantly raised against mining, such as environmental destruction and disasters as well as adverse socio-cultural and economic impacts.

The province of Surigao del Norte in the Region is the first mining area where the Mine Rehabilitation Fund Committee (MRFC) and Multipartite Monitoring Team (MMT) were implemented in the country. These mechanisms institutionalize the participation of local communities, local government units (barangay, municipality and province), non-government organizations, religious sector and other civil society groups in monitoring mining operations. The participation of these on-site stakeholders and their assisting partners in the above local monitoring mechanisms creates opportunities for these stakeholders to level off with a mining company and concerned government agencies (and vice versa) and have a voice in the implementation of a mining project that impact on their lives and the environment.

The capacity and efficacy of the MMT and MRFC in Surigao del Norte to hold mining companies to their environmental management and socioeconomic commitments in the areas that are affected by their operations was put to the test by the year-long dispute over Tailings Pond (TP) 7 of Manila Mining Corporation (MMC) involving the MMT/MRFC, MMC and concerned government line agencies, particularly the Mines and Geosciences Bureau (MGB) and the Environmental Management Bureau (MGB) of the Department of Environment and Natural Resources (DENR). Throughout the year 2000, the MMT/MRFC protested the continued dumping of MMC of mill tailings in TP 7 considering that the company’s permit to operate the tailings pond expired in January 2000 and the impounded tailings was nearly – and eventually was – in breach of the 50-meter height limit. The local communities and their support groups, primarily the Diocese of Surigao, picketed the entrances of Manila Mining Company in protest to the issuance of the regional EMB of a permit to MMC to construct three more meters above the existing dam despite lack of social acceptability. The issue evolved into a legal dispute. The Senate Committee on Environment and Natural Resources conducted a hearing on the issue and recommended among others the decommissioning of the said tailings pond. Despite these recommendations and local protest actions, the mining company simply went on using TP7, while pursuing with the regional MGB and EMB its application for permit to raise the wall of TP7 by three meters. In protest to MMC’s disregard for the MMT/MRFC concerns, MMC’s lack of environmental and social commitment and the lack of decisive and coherent action from the line agencies, the Diocese of Surigao withdrew from the MRFC. By the end of the year, MMC suspended its operations.

The efforts and gains of the mining sector in Surigao del Norte in establishing multi- sectoral monitoring at the local level and making this work was undermined by the ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 3 March 2008

irresponsible attitude of MMC and the lack of decisive and cohesive action on the part of concerned government line agencies. Mistrust and cynicism prevailed among the members of the mine monitoring groups causing an impasse in the monitoring efforts and rendering the provisions inutile.

There were learnings shared by the local stakeholders from their experiences in undertaking mine monitoring functions. The gains that could be derived from the MRFC and the MMT may be summed up in the opportunity for local empowerment and participation in decision-making through more access to and sharing of information, partnership building among stakeholders and the laying out of viable options in seeking timely resolution to issues. With commitment from the stakeholders, these legally mandated monitoring structures can be capacitated to become a comprehensive social process where multiple stakeholders can engage issues within the legal framework but, at the same time, can be creative and flexible to explore and adopt realistic and appropriate alternative options. The success of local monitoring mechanisms depends heavily on the commitment of all the stakeholders. The ball is in the hands of the mining company to prove their commitment to environmental and social measures and controls and the government agencies to implement the law. From the start, there is a need to clarify and agree on the rules of engagement, to outline all possible courses of action to take, the legal procedures, agencies and other stakeholders involved for possible issues and to give teeth to the local monitoring mechanism when faced with major issues.

The mining companies in Surigao del Norte started implementing livelihood projects in the area. Most of these projects respond to the beneficiaries’ immediate needs, but whether these would contribute to the long term socio-economic development of the communities remains a question. Corporate social responsibility should go beyond short-lived livelihood projects. What is called for is a more strategic planning of livelihood projects with the long-term community development in view.

Community development projects introduced by companies during the exploration stage were viewed by some participants as a strategy to cajole local communities into giving their consent should the mining company apply for a mining permit, in the event that the mineral exploration activity yields promising results. Representatives of mining companies in the area expressed misgivings over the current strategy in implementing development projects because of the tendency to develop dependency among community members. It was argued that facilitating a development process that would lead to community self-reliance and self-help is a better approach.

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ACRONYMS

CADC Certificate of Ancestral Domain Claim

CRO Community Relations Officer

ECC Environmental Compliance Certificate

EIA Environmental Impact Assessment

EMB Environmental Management Bureau

EPEP Environmental Protection and Enhancement Program

FPIC Free, Prior and Informed Consent

IP Indigenous Peoples

MGB Mines and Geosciences Bureau

MMC Manila Mining Company

MMT Multipartite Monitoring Team

MRFC Mine Rehabilitation Fund Committee

NCIP National Commission on Indigenous Peoples

NGO Non-government Organization

REACH Rural Enterprise Assistance Center

TMC Taganito Mining Corporation

TP Tailings Pond

TWG-SB Technical Working Group-Speakers’ Bureau

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INTRODUCTION

The mining dialogue in Surigao del Norte on 31 November to1 December 2000 is the second in the Bishop Businessmen’s Conference (BBC) Mining Dialogues, which aimed to facilitate dialogues and mine site learning visits whereby a diverse group of stakeholders could have on-site contexts to discuss mining issues, identify gaps and limitations, as well as propose possible ways for moving forward.

During the first mining dialogue in province on 24 to 26 May 2000, it was discussed that the monitoring mechanism that is mandated in the Philippine Mining Act – the Mine Rehabilitation Fund Committee (MRFC) and the Multipartite Monitoring Team (MMT) – may provide a venue to address mining-related environmental and social concerns. As the monitoring arm of the MRFC, the role of the MMT is to monitor the environmental and socio-cultural impact of ongoing mining projects and to report their findings to the MRFC. The MRFC then comes up with decisions based on the inputs by the MMT. Part of the monitoring effort is to strategize how best to achieve effective results for emerging concerns, including exploring and exhausting all possible options on critical issues, following up on necessary action from concerned agencies and keeping the monitoring effort move forward regardless of the outcome of their recommendations.

The formation of mine monitoring groups and guarantee reserves for rehabilitation and community development purposes are among the progressive provisions of the Philippine Mining Act in addressing concerns on environmental protection, social acceptability and community development. Notwithstanding these provisions, however, a lot of sectors remain unconvinced that these would serve as enough guarantee against mining-related environmental, socio-cultural, and economic issues. One perspective holds that the law is primarily a means to advance mining interests in the country, and that the inclusion of environmental protection and social acceptability provisions is no more than an attempt to clothe it with a good appearance. There is little faith in the way the government is carrying out its monitoring and regulatory functions. There is also a high level of mistrust and cynicism in the strict compliance of mining firms to the provisions of the law. Mining is not seen as a potential contributor to the local economy in light of the legacy of mining disasters in and in other parts of the that exemplify the arguments against mining.

The second BBC Mining Dialogue looked into the experiences of various groups in the mining district of Surigao del Norte, which somehow reached a milestone with the creation of Multipartite Monitoring Teams and the regional Mining Rehabilitation Fund Committee, in participating in this monitoring process. Having the provisions in place is a starting point. Policy, however, does not make actual practice. The dialogue looked into how multi-sectoral monitoring is implemented and whether this is working or not in Surigao del Norte.

Objectives

The objectives of the Mining Dialogue in Surigao del Norte are as follows:

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1. to locate mining in the local development agenda and to understand how mining has been contributing to the socio-economic development of Surigao del Norte; 2. to know how the mine monitoring mechanisms – the MRFC and MMT – are operating in the province and to make an initial assessment of their operation (what works and what does not work); 3. to understand the perceptions and experiences of the different groups such as the church, NGOs, LGUs, government agencies and mining companies in the MMT and MRFC; and, 4. to find out how community livelihood projects implemented by mining companies feed into the objectives of preparing a more sustainable economy for the communities.

Dialogue flow and rules

During the two-day dialogue, representatives of organizations that sit in the MRFC and MMT shared on specific aspects of mine monitoring and community development projects as these are carried out in Surigao del Norte. The Provincial Governor, Francisco Matugas, briefed the group on the province’s Provincial Land Use Plan, locating mining in the economic agenda of the province. Monsignor Iral of the Diocese of Surigao talked about the establishment and process of the MRFC and MMT and the local church’s participation in the monitoring process. A representative of the regional Technical Working Group-Speakers’ Bureau (TWG-SB) presented the community livelihood programs of mining companies in the host and affected communities. The only NGO that is involved in mining discussions in the province, the REACH Foundation, shared on the role of NGOs in mining discussions in Surigao del Norte. An open forum followed each discussion for clarifications and further sharing. Finally, a wrap-up session summarized the learnings from the above discussions.

Like other BBC Mining Dialogues, the dialogue process in Surigao del Norte was governed by explicit rules that were agreed upon at the start of the activity (Appendix___). The rules enjoined each participant to LISTEN and to be open to the views of others. As a rule, the participants could clarify points to seek further understanding, but not to put a person on the spot. Rebutting or opposing a point or statement made was not allowed since the process sought a dialogue, not a debate. A related rule encouraged the participants to keep an open mind and to set aside their biases. Each participant was given a chance to speak his/her mind. Given the range of topics that could be covered in discussions on mining, the participants were also reminded to keep their focus on the specific topics being tackled at a given time or session and to wait for appropriate time to raise new topics. In the course of the dialogue, the attention of some participants was called when they were going against these rules.

PROVINCIAL PROFILE

Population

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Surigao del Norte registered a total population of 442,203 persons in 1995. Majority of the residents are Surigaonon. The provincial population also includes indigenous peoples belonging to the Mamanwa and Manobo cultural groups.

Geographic location and topography

Surigao del Norte lies on the northeast portion of Mindanao. It is bounded on the north by Gulf, on the east by the Pacific Ocean, on the west by the Surigao Strait, and on the south by and .

Plains stretching along the coast that rise to rugged, mountainous terrain inland characterize the topography of the province’s mainland. The highest elevation in the mainland is 1,170 meters above sea level at the peak of Mount Legazpi.

The province comprises 20 municipalities1 and its capital, . It has a total land area of 2,740 square kilometers, which includes more than a hundred islands.

Rivers and lake

Lake Mainit, which is 17,000 hectares wide, is an important water resource in the province. It is eyed as a potential site for hydro or geothermal power generation. Half of the lake is within the administrative jurisdiction of the province of Agusan del Norte.

Mainland Surigao del Norte is traversed by six major rivers that provide domestic and agricultural water supply: the Baoy, Magpayang and Mayag Rivers feed into Lake Mainit; Payapag and Campo Rivers empty into the Bacuag Bay; and the Anao-an and Surigao Rivers.

Forest reserve and protected area

The Surigao Watershed Forest Reserve covers a total area of 967 hectares. The Island of Siargao is included in the National Integrated Protected Areas Programme (NIPAP) of the DENR and, as such, should not be open to mining activities.

Mineral deposits

Surigao del Norte has abundant metallic and nonmetallic deposits. The metallic minerals include large reserves of nickel-cobalt, chromite, gold, lead-zinc and copper. Non-metallic minerals include limestone, shale, coal, sand and gravel.

MINING IN SURIGAO DEL NORTE

In the 1930s, the entire province of Surigao del Norte was declared a Mineral Reserve under Presidential Proclamation No. 390 pursuant to the Mineral Reservation Act. However, around 5,063 hectares in Dinagat Island was segregated from the reservation as production areas through Proclamation No. 295. At present, around

1 The 20 municipalities are Alegria, Bacuag, Burgos, Claver, Dapa, Del Carmen, General Luna, Gigaquit, Mainit, Malimono, Pilar, Placer, San Francisco (Anao-Aon), San Isidro, Santa Monica (Sapao), Sison, Socorro, Tagana- an and Tubod. ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 8 March 2008

20,000 hectares on the mainland is still covered under this mineral reserve proclamation.

The mining companies currently undertaking exploration or production projects in the province include Taganito Mining Corporation’s nickel laterite mine in Claver; Manila Mining Company’s gold-copper mine in Placer; and Pacific Cement Company’s limestone quarry and processing plant in Sison. Exploration for gold deposits is being undertaken by a number of companies, including the joint venture of Anglo-American and Philex Corporation. The Hinatuan Mining Corporation and Cagdianao Mining Corporation are also mining the mineral-rich Dinagat Island and surrounding islands for nickel. In addition, both legal and illegal small-scale mining is carried out in the province.

LAND USE PLANNING IN THE PROVINCE

The Provincial Land Use Plan of Surigao del Norte, which is a second-class municipality, outlines a three-pronged economic development strategy anchored on the utilization of the province’s vast natural resources. The provincial plan does not regard mining, agri-fishery and tourism incompatible development strategies but can be pursued simultaneously.

Aware of the rich mineral deposits in the area, the provincial government puts high priority on mining. The plan recognizes that the mining industry in Surigao del Norte is not yet developed to its full potential. It can be further maximized to contribute to the province’s economic growth and improvement of the people’s quality of life.

Agri-fishery development targets to optimize the utilization of vast agricultural lands, marine fishing grounds and inland fisheries in the province. This is to ensure sustained supply of food and raw materials to meet the demands of the province’s increasing population.

Eco-tourism is another strategy for generating employment. It intends to promote the tourism potentials of Siargao Island, Surigao City and the municipality of General Luna.

The Provincial Physical Framework Plan/Comprehensive Provincial Land Use Plan projects an annual average employment growth rate of 2.42% in 1990-2002. The highest annual growth is predicted in the trade sector at 5.25%, followed by the mining and quarrying sector at 5% and the construction sector at 4.10%. These figures reflect the importance placed on the minerals sector for the province’s economic growth.

Recognizing the rights of the Mamanwa indigenous communities to their territories and resources vis-à-vis local development and land use planning

A comment was made on the apparent lack of recognition of the Mamanwa indigenous communities in Surigao del Norte in the provincial physical framework plan.

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The Mamanwa belongs to the cultural group of the Manobos who are spread over the northwest portion of Mindanao. Maps provided by the MGB-Caraga Region identified five areas occupied by this cultural group in the municipalities below. The five areas have a total land area of 13,573.36 hectares, or 4.96% of the total land area of the province.

1. San Francisco – 1,695 hectares 2. Sison – 471 hectares 3. Mainit – 1,000 hectares 4. Bacuag, Gigaquit, Alegria – 2,804 hectares 5. Gigaquit – 7,603 hectares

In June 1998, the DENR issued Certificate of Ancestral Domain Claim (CADC)-13- 156 covering a total area of 12,104 hectares to the Manobo indigenous cultural community in Cagwait, Surigao del Norte. It is unclear whether this CADC covered any of the above identified ancestral domains.

Notwithstanding the ancestral domain areas identified by the MGB, indigenous peoples have a right to identify and delineate the areas they claim as their ancestral domains or ancestral lands (self-delineation). Indigenous peoples have rights to their ancestral domains and lands and natural resources and should therefore be consulted on any mining plans on their lands, whether the government formally recognizes their claims through a CADC or Certificate of Ancestral Domain Title (CADT) at this point or not. Respect for indigenous peoples’ rights is provided for in both the Philippine Mining Act and the IPRA.

The recognition of ancestral domain claims through the CADC or CADT entails the formulation of a plan for the management and development of the ancestral domain and the resources therein to be prepared by the indigenous community, with assistance from the NCIP, LGUs, NGOs or other assisting groups. Ancestral domain planning is an opportunity for the indigenous communities to articulate their aspirations for themselves and for their future, including their socio-economic development, cultural integrity and the management of their resources.

Land use and local development planning process must allow the interfacing of formal systems and indigenous communities’ resources management practices and institutions, taking into consideration the cultural communities plans and their traditional approaches in resource management. There needs to be recognition of ancestral domains/lands and indigenous peoples’ natural resources management practices in the local land use and development plans so that government agencies, the local governments and external investors (such as mining companies) that intend to enter these areas are guided accordingly. Ancestral domains should be clearly identified as such so that interested mining companies are aware of the land classification from the start.

A LOOK AT THE MINE REHABILITATION FUND COMMITTEE (MRFC) AND MULTIPARTITE MONITORING TEAM (MMT)

The formation of the MRFC and MMT are in line with the aim of the government to develop the mining industry to contribute to wealth creation and to the improvement ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 10 March 2008

in people’s quality of life in a way that is pro-people and pro-environment. In general, the monitoring functions of these bodies seek to ensure that a mining company meets its commitments to adequately address community development and environmental responsibility.

The regional MGB-CARAGA facilitated the establishment of the MRFC and the MMTs to encourage the communities to be active collaborators and not merely passive participants or beneficiaries of development. The regional MGB-DENR set up the Technical Working Group–Speakers’ Bureau that took the lead in establishing the MRFCs and the MMTs. It planned and implemented its Information, Communication, Education–Community Development (ICE-CD) approach.

The Mine Rehabilitation Fund (MRF)

Section 71 of the Philippine Mining Act of 1995 requires each operating mine to establish a Mine Rehabilitation Fund (MRF). The fund is to be used “for the physical and social rehabilitation of areas and communities affected by mining activities and for research on the social, technical and preventative aspects of rehabilitation”.2

The MRF serves as a “reasonable environmental deposit” to ensure that funds are available for a mine to comply with its commitments under the Environment Protection and Enhancement Program (EPEP). The EPEP3 presents in detail appropriate control and rehabilitation strategies and activities that a company will put in place for controlling and managing to acceptable levels the impacts of its operation on the environment (land and water resources and air quality); on the physical infrastructure (buildings and roads); cultural sites and heritage; and on the community’s well-being (noise levels). It also contains proposals on post-mining land use for tailings dams, and waste dumps. The EPEP is a mandatory requirement that each mine prepares and submits to the DENR in applying for an Environmental Compliance Certificate (ECC).

The MRF is divided into the Monitoring Trust Fund (MTF) and the Rehabilitation Cash Fund (RCF). The MTF is used to cover the expenses incurred by the Multipartite Monitoring Team of an operating mine. The RCF is to be used for the progressive and sustainable rehabilitation of all areas affected by mining activities.

The Mine Rehabilitation Fund Committee (MRFC)

The MRFC is to be created in every region where there is an active mining operation. It is composed of the regional MGB director as chair; regional executive director (RED)–DENR as co-chair; and representatives from the LGUs, local NGOs and people’s organizations (POs), the church and the mining company as members. The tasks and responsibilities of the MRFC include the following:

a. make a preliminary assessment of the EPEPs of mining companies and determine whether these contain adequate control and rehabilitation measures, with the help of experts, if necessary;

2 Philippine Mining Act of 1995, Sec. 71 3 Based on the EPEP, a company formulates an Annual EPEP (AEPEP) that specifies the company’s environmental protection plan and targets of the company in a year. ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 11 March 2008

b. evaluate reports of the MMTs, the MRFC’s monitoring arm in each operating mine, and make recommendations accordingly; c. ensure that the mining company strictly implements its approved EPEPs/AEPEPs; d. manage and monitor the MRF of each operating mine in its jurisdiction; e. addressing issues that emerge in the progressive mine rehabilitation programs that will be implemented; and, f. hire credible experts to conduct independent studies and researches on the environmental, engineering and socio-cultural impacts of the projects that will inform its decisions.

Role of the Multipartite Monitoring Team (MMT)

The MMT is the monitoring and recommending arm of the MRFC. An MMT is established for each operating mine as a mechanism for checking whether mining activities are in compliance with conditions specified in the Environmental Compliance Certificate for that particular mine. An MMT is composed of representatives from the MGB-DENR, local government units, the indigenous communities (if there are in the area), the church and NGOs in the area.

With the TWG-SB, the MMT for each mine conducts monthly monitoring and quarterly documentary and actual ocular evaluations in its respective mining area. Reports on the results of these activities are forwarded to the MRFC for deliberation and formulation of recommendations (see Appendix 2 for a sample of a MMT Report).

From the perspective of local communities, the MMT is a mechanism that encourages vigilance and broader participation of local stakeholders in monitoring a mining operation. It is a venue whereby local governments, communities and assisting groups are able to gain access to information about the mining operation that can help them understand the mining project implementation in more detail and its impact on their lives. These monitoring groups should be allowed to frame their own process to ensure that the benefits of mining will be sustained even after the mining companies will cease operations.

Participation in the MRFC and the MMT

An MMT was formed in seven of the 10 active mining companies in Surigao del Norte. These companies are Cagdianao Mining Corporation, KROMINCO, Manila Mining Corporation, Hinatuan Mining Corporation, PACEMCO, Taganito Mining Corporation and PHILNICO Processing Corporation.

Offices and groups represented in the MMT

MMT for Taganito Mining Corporation

Chair Caraga MGB Regional Director Co-chair Caraga Regional Executive Director-DENR Members: TMC Resident Mine Manager Surigao del Norte Provincial Governor ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 12 March 2008

Claver Municipal Mayor Taganito Barangay Captain Church Representative REACH Foundation Representative (NGO)

MMT for Manila Mining Corporation

Chair Caraga MGB Regional Director Co-chair Caraga RED-DENR Members MMC Vice President Surigao del Norte Provincial Governor Placer Municipal Mayor Magsaysay Barangay Captain Bugas-bugas Barangay Captain Suyoc Barangay Captain Church Representative REACH Foundation Representative (NGO)

The NGO sector in Surigao del Norte and Rural Enterprise Assistance Center (REACH Foundation)

The 1995 NGO and PO directory in Surigao del Norte lists only 15 organizations, but several of these are no longer active. Most of the NGOs are into health care and enterprise development. The few organizations that deal with environmental concerns are focused on coastal resource management and the protected area of Siargao Island.

Only one NGO, the REACH Foundation, is active in discussions on mining in the province. REACH Foundation works mainly in the adjacent provinces of Surigao del Norte and Agusan del Norte. Its projects include microfinance, community organizing, sustainable agriculture and biodiversity protection. It is also assisting IP groups in their livelihood projects. The REACH Foundation is the only NGO in the Caraga Region that sits in the MRFC and MMTs.

The Diocese of Surigao

The lack of the involvement of the NGO sector is compensated in part by the active representation of the community via the Catholic Church. The communities look to the bishop and priests for advice, support and representation of their concerns and for information. The Provincial Monsignor is an active member of the MMTs and MRFC. The bishop is also a co-signee of the memorandum of agreement on the Contingent Liability and Rehabilitation Fund4 (CLFC) of Philippine Nickel Mining Corporation (PHILNICO).

As an active member in the MRFC and MMT, the Diocese of Surigao acknowledges these mechanisms as a means for promoting environmental sustainability although these are not the only venues where mining-related advocacies could be taken up.

4 The CLRF is the collective term for the social and environmental guarantee fund mechanisms, such as the Mine Rehabilitation Fund and the Mine Waste and Tailings Fees. The purpose of the establishment of the CLRF is to ensure availability of funds for adequate damage compensation and progressive rehabilitation for destructive effects of a mining operation or activity. ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 13 March 2008

The diocese representative noted the following advantages of the monitoring process:

1. Mining companies become more transparent. By laying out the facts, companies also risk being criticized. 2. LGUs are encouraged to be more vigilant. The information that is brought forward during discussions and data gathered from monitoring activities provide a basis for LGUs to assess and anticipate the potential risks and to plan and act as necessary. 3. Local participation is taken seriously. Involving communities in compliance monitoring can be considered as a departure from the outlook that considers communities as mere beneficiaries. 4. During meetings and monitoring activities, the non-mining members learn about the technical aspects of mining. The knowledge they acquire help them carry out their monitoring tasks.

The diocese has a critical engagement with mining in the province. It supports the call of the Catholic Bishops Conference of the Philippines (CBCP) and the participants of the Mindanao Mining Summit on 9–12 March 1998 for the scrapping of the Philippine Mining Act of 1995. Its participation in monitoring mining operations and in managing guarantee fund mechanisms mandated by the Mining Act is not inconsistent with the CBCP position, but is a form of strategic engagement with mining that gives voice to local communities’ interests and that ensures environmental protection. The Diocese recognizes that, with or without the Mining Act of 1995, Surigao del Norte is a mining district, and it is in this context that the church defined its critical role vis-à-vis mining.

The Diocese is uncompromising when a company is amiss in its operation. However, the church representative withdrew from the MMT of Manila Mining in protest over the obstinate refusal of Manila Mining to accept and comply with the recommendation of the MMT and MRFC for the decommissioning of Tailings Pond No 7 that reached its maximum allowable height.

MONITORING MANILA MINING CORPORATION’S TAILINGS POND NO. 7

Tailings ponds are a means of pollution control wherein the waste and crushed rock generated from the mining and milling operations are deposited. As a pollution control measure, tailings ponds are under the regulation of the Environmental Management Bureau (EMB) and require regular monitoring.

The controversy over Tailings Pond 7 (TP7) of Manila Mining Corp. (MMC) throughout the year 2000 put to the test the efficacy of the multipartite monitoring initiatives in Surigao del Norte, the commitment of a mining company to its environmental and social obligations and controls and willingness to take on board local multipartite monitoring findings and recommendations, as well as the capacity of the DENR regional and national offices and its line agencies to implement the law – especially, for violations committed by mining companies – and to act on concerns raised by the MRFC and local stakeholders. TP 7 failed before – in 1999 – and

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discharged about 140,000 cubic meters of mill tailings that inundated 40 hectares of rice land, nipa, and mangrove areas and also affected 16 families.

In January 2000, MMC’s permit to operate TP7 at 50-meter height expired. When the MMT conducted the quarterly monitoring of the MMC operations in March 2000, it found out that the dam height was close to reaching the allowable height of 50 meters and computed the remaining life of TP7 at 40 days. Based on this finding, the MMT, through the MRFC, made recommendations to MGB-Caraga for appropriate action against MMC for its continued use of TP7 in spite of an expired permit and for MMC to stop using TP7 on reaching the 50-meter limit. MMC abstained from the said resolution and continued to dump its mill tailings in TP 7 throughout March-April 2000, despite MGB-Caraga’s advice for the company to stop the use of said tailings pond issued in March and EMB’s similar recommendation issued in April. In defense, MMC challenged the reference used by MMT in measuring the disputed tailings level. MMC also applied for the construction of additional three meters on TP7. MMC claimed that it temporarily stopped discharging tailings into TP 7 on 4 May pending the conduct of public consultations for its application for permit to construct additional three meters on TP7 dam, but, in less than a week, its mill plant resumed operations and mill tailings were discharged on the southern part of TP7. Public consultations held by the EMB on 27 April and 5 May on the planned raising of TP7’s wall was met with strong opposition. In April, the municipal council of Placer passed a resolution against the raising of the said tailings pond’s existing height, and the residents of Placer also signed a petition to the DENR opposing the same.

Despite these, EMB-Caraga granted MMC on 29 May the permit to construct the additional three meters above the TP7 dam on several conditions, including obtaining a building/structure permit from the LGU. In protest to the MMC’s continued use of TP7 and the regional EMB’s issuance of the above permit, the local communities and other stakeholders led by the Diocese of Surigao picketed the gates of MMC from 12 June to 22 July. They demanded that MMC should stop its use of TP 7, that the DENR would not issue another permit exceeding the 53-meter dam height and that MMC must find another site for impounding its tailings. MGB-Caraga tried to mediate between the protesting groups and the mining company to no avail. MMC refused to meet with the opposing group unless they ended the picketing.

The dispute evolved into a legal dispute when the Diocese and the local residents filed a criminal and administrative case against the DENR-MGB Director in June 2000 for failing to issue a cease-and-desist order against MMC. The issue over TP7 was also tackled at the Senate Committee on the Environment chaired by Senator Robert Jaworski. The committee’s report dated 18 October recommended, among others, Manila Mining Corp.’s decommissioning of TP7 and to comply with its commitment to put up TP 8.

Notwithstanding the above recommendation and the lack of social acceptability of the raising of the TP7 height by three meters, MGB affirmed the structural soundness of TP7 in November 2000 that would allow MMC to push through with its plan. The MGB’s and other experts’ certification that the wall was technically and structurally sound for three more meters failed to assuage the local residents’ fear of a repeat of the 1999 dam failure. Disappointed with this decision and the complete disregard of ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 15 March 2008

the MMC of environmental and safety measures, the Diocese of Surigao resigned completely from the MRFC and MMT.

AN INITIAL ASSESSMENT OF THE PERFORMANCE OF THE MMT

Gains in multipartite monitoring

The initial period in the implementation of the multipartite monitoring was marked by active participation and strong commitment among the members of the MRFC and MMT to make these multi-sectoral monitoring groups work. The participants identified the following gains in the MRFC and the MMT:

1. The monitoring mechanisms introduced by the Mining Act are crucial improvements on previous arrangements in terms of environmental monitoring and local participation in the monitoring process. 2. Transparency on the part of the company and government agencies is vital in building a multi-stakeholder partnership. This in turn helps establish the credibility of the MRFC and the MMT. 3. The direct involvement of local representatives in the monitoring process allows the communities to have access to information and take part in decision-making. The information and knowledge they gain in meetings and actual monitoring activities help build their capacity to deal with mining issues and risks. There is more vigilance on the part of the local governments and civil society groups of the impact of mining on the local community and environment. 4. The MMTs and MRFC are also a venue for discussing community development proposals including livelihood projects.

Some concerns on the MRFC and MMT

While the potential of the MRFC and the MMT as effective strategies for environmental monitoring and for stakeholders’ engagement was recognized, there were gaps and limitations that need to be addressed. Some recommendations were raised on the following aspects of the monitoring process:

1. Community representation. Not all communities affected by a particular mining operation are represented in the MRFC and MMT. In most cases, the barangay chairman is the only one representing the community. Limited representation gives little leeway for a participatory social process in which diverse local voices on issues and concerns are heard. It was suggested that the membership of the MRFC and MMT be expanded so that every community is included and a broader sharing of information and feedback with the local communities is made possible.

2. NGO and LGU voting. Under the present structure, NGOs and LGUs constitute only one vote. However, the NGOs and LGUs have separate mandates and interests, and therefore should have separate votes.

3. Authority of representatives in decision-making. It should be agreed from the start that whoever is sent to MRFC meetings as the representative of a ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 16 March 2008

company or an organization must be authorized to decide for and in behalf of the company or organization.

4. Participation of indigenous peoples and the NCIP. The NCIP is the government agency that is mandated to implement the IPRA and address concerns of indigenous peoples. Some Mamanwa Manobo communities are affected by the mining projects. The LGUs do not necessarily represent the interests of the indigenous communities. Hence, the indigenous communities and the NCIP should be part of the MMT and the MRFC.

5. Governance and political will. This pertains to the authority and the accountability of the MGB/EMB/DENR for their actions on recommendations that the MRFC and other interest groups forward to their offices. They have to make explicit the process that they follow and the bases for their decisions, to endorse or overturn these recommendations. It seeks to clarify the question in who makes a final decision on specific issues raised and the extent to which these agencies are willing to take on board and uphold the recommendations of the MRFC.

6. Monitoring compliance with environmental conditions. There is inadequate monitoring compliance based on specific commitments made by the company under the ECC. The data contained in the ECC is limited because it only deals with potential environmental threats and possible mitigating measures that can be put in place to lessen adverse impact. Some expressed the view that data obtained from the Natural Resource Accounting and Environmental Audit are more significant in terms of the far-reaching and comprehensive studies on potential economic losses caused by disturbance of the natural resource base.

7. Mining company’s compliance with its environmental and social commitments and its corporate social responsibility. Much depends on how seriously the mining companies take the local monitoring process and their level of commitment to collaborate with local stakeholders and to comply with their ECC, integrating the local mine monitoring process in their mining operations and not simply in compliance with the law.

Challenges towards the strengthening the MMT

In addition, the following questions were put forward for a more comprehensive assessment and strengthening of the MRFC and MMT:

• Aside from the specific roles assigned to every member-organization of the MRFC and the MMT, what specific commitments are expected of them in terms of sticking with the team through problematical situations, but without necessarily compromising their position, and moving the discussions forward?

• In relation to the above, what mechanisms are employed to ensure that the MRFC and the MMT stay on top of the situation whatever the consequences of the recommendations that they put forward? What strategies do the groups employ to maintain the focus and commitment of the members to the

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 17 March 2008

objectives of the MRFC and the MMT when controversial situations arise, or while legal issues are being pursued?

• What guidelines are laid out to ensure the objectivity and independence of the MRFC and the MMT process?

• How adequate is the representation and participation of stakeholders in the MRFC and the MMT? Are they effective such that issues and concerns are thoroughly discussed and effectively addressed?

COMMUNITY DEVELOPMENT PROGRAMS

A mining company is mandated to allocate funds equal to one percent of the annual direct mining and milling costs for the development of the affected communities, promotion of the general welfare of the residents and development of science and technology. In addition, a company is required to pay royalties5 to the concerned indigenous communities that gave their FPIC allowing the company to mine in their ancestral domain. The amount for royalty should not be less than one percent of the gross output.

The community development programs of mining companies in the province include the introduction of livelihood projects, contributions in the delivery of basic services (such as health and education) and construction of some physical infrastructure.

Livelihood projects

The different mining companies in Surigao del Norte commenced their community livelihood projects. The TWG-SB, the Community Relations Officers (CROs) of the mining companies and the REACH Foundation coordinate with each other in the implementation of mining companies’ livelihood projects. They facilitate consultations on needs assessment, identification of livelihood projects and formation of core groups.

Taganito Mining Corporation (TMC) implemented livelihood programs identified by the barangays and indigenous communities surrounding the mine during previous consultations. These livelihood programs include hog and carabao raising and home- based income generating projects such as pop-rice and chicaron making. The CRO presents to the company the project proposed by the communities. The company then provides the necessary supplies, materials and the livestock. The other component of TMC’s community development program is health improvement.

Just before the mining dialogue, Manila Mining Corporation held the signing of the agreement among the beneficiaries from its neighboring barangays, the company and MGB-Caraga on the implementation of its livelihood projects, specifically chicken and swine raising.

5 Philippine Mining Act, Sec. 17 ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 18 March 2008

Some concerns on the livelihood projects

A common question raised by the participants was on whether the livelihood projects would be sustainable enough to outlive a mine’s life and make a significant contribution to the recipient-communities’ long-term development. Some beneficiaries related that the projects being implemented only serve to augment their family income. For example, a woman beneficiary of a hog-fattening project mentioned that she has to source out the money to buy animal feed from the salary of her husband who works in Taganito Mine. This makes an added expenditure on the household budget, eating up a fraction of the salary of her husband from TMC that is barely enough for the family’s immediate needs.

The projects proposed and implemented for community livelihood require more prudent planning to develop self-reliance among the community members and at the same time ensure productivity and sustainability of these livelihood projects. Based on the experiences of other groups and previous studies, hog raising and other similar projects are more of a “saving scheme,” rather than “income generating,” and may not always yield some gain if non-quantifiable factors and inputs (such as labor) are taken into consideration.

MINING EXPLORATION AND COMMUNITY CONSULTATION

Based on accounts of local NGOs, the mining companies would generally start their consultations with the host and surrounding communities for their mining proposals by introducing the Community Development Programs (such as livelihoods, infrastructure and social services) that the companies would be providing if permitted by the local communities to mine in their areas. Some participants view these projects as a strategy to win the communities over into giving their consent to a mining proposal. This raises the question of whether a company would be willing to provide assistance to the communities even if it would not progress into mine construction and development.

Community decision-making should involve a consultation process and should not be reduced to a simplistic choice between a “yes” or “no” to a mining proposal. While it is widely acknowledged that mining is a major economic sector, some participants felt that the government must also present development alternatives to mining during community consultations to provide other development options on which people can make their decisions. There should be a thorough and critical examination of local concerns and realities – the local conditions; options for local development and priorities; the potential benefits and drawbacks of a mining proposal; the track record of the mining company; impact on land, water, air and biodiversity of a mining proposal – before a decision is made. This is where the value of involving the people as early as the exploration stage lies.

Nevertheless, some participants questioned the value of community consultations if the permits were already issued by the MGB. In some – if not in most – cases, complaints filed by people’s organizations are not addressed on their valid merits but are confronted on aspects not directly relevant to the complaints.

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 19 March 2008

The FPIC requirement under both the IPRA and the Mining Act provides the framework in which consultations with indigenous communities and getting their consent are to be conducted. The NCIP is the legal agency that represents the interests of indigenous peoples. The funding problem NCIP currently faces, however, prevents it from fully exercising its mandate to effectively tackle IP concerns and interests. Participants representing IP groups called on mining companies to work within the framework of the IPRA, respecting the rights of indigenous peoples and the mandate of the NCIP.

ACTION POINTS AND WAYS FORWARD

On strengthening the capacity of the MMTs and MRFC

• Conduct a comprehensive review of the performance and capacity of the MRFC and MMT • Re-engage the diocese and the provincial government in mine monitoring • Expand the membership of the MMT and MRFC. The MMTs should include all the barangays affected by the mining operations. The representatives of the barangays need not be the barangay captain. The indigenous communities and the NCIP should have representation in these monitoring groups. • Study and define all possible paths to take in endorsing a recommendation with EMB and MGB in both Caraga Regional Offices and Central Offices and mining companies and resolving conflicts • Institutionalize at the level of local boards defined procedures and rules at the community and local government level

On exacting more responsibility and accountability from concerned government offices in mine monitoring

• Review and assess the performance of the MGB, EMB, NCIP, the Pollution Adjudication Board (PAB) and other government agencies in implementing mine monitoring • Clarify the roles of all possible legal – executive, legislative, judicial – courses of action • Dialogue with the DENR on its parameters for deciding on multipartite recommendations

On ensuring the mining company’s commitment to its environmental and social controls and measures

• Strict implementation of the law on violations committed by mining companies to their ECC and to existing laws • Review of track records of mining companies in their subsequent application for mining permits

On livelihood projects and community development programs

• Review and assess proposed and implemented community development projects • Facilitate strategic planning for community development programs ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 20 March 2008

• Integrate community development planning with the local land use and development planning

On local land use and development planning

• Review local land use plans • Integrate ancestral domain and indigenous peoples’ ancestral domain management plan in local land use and development planning

On greater recognition of Mamanwa rights

• Delineate ancestral domains of the Mamanwa • Facilitate ancestral domain and resource management planning among the Mamanwa indigenous communities • Incorporate of these plans in the local land use and development plans

POSTSCRIPT: ESSC’S REVISIT IN 2001

In December 2001, MMC suspended its mine operations in Placer and laid off the majority of its workers, claiming that it could no longer continue operations without a DENR permit to raise the elevation of TP 7 that would allow the company to increase the volume capacity of the tailings impoundment structure. This permit was actually issued by the DENR-EMB in January the following year despite lack of social acceptability, but MMC did not recommence its operations. It would therefore appear that the suspension of the mine operation was probably due to more complex reasons.

Following the resignation of the Diocese of Surigao representatives form the MRFC and MMT, the representative of the provincial governor and the REACH Foundation also withdrew from the MRFC and MMT. The Diocese of Surigao, however, continued to protest the issuance of the above permit. The loss of key local stakeholders shows the importance of local monitoring as a critical check mechanism and weakens the credibility of the MMT/MRFC. It does not only reflect negatively on MMC but it also casts a shadow on whether these local monitoring mechanisms in the context of other mining companies can indeed work or not.

Throughout 2001, MMC maintained that its mining operation in Placer was temporarily suspended and, as such, there was no formal declaration of closure. It is possible the suspension will drag on. If the company declares the closure of its operation, there would be a substantial cost associated with rehabilitating the site and the attendant social processes required under the law. Under the law, planning and preparation for mine closure should begin five years before the operation ceases.

In these circumstances, the mine site represents an ongoing environmental liability, and MMC was asked to provide a “care and maintenance plan” for the site with financial requirements and timetable and a monetary bond to guarantee against environmental disasters. Furthermore, the DENR-MGB demanded that MMC must retain a skeleton staff of tailings pond maintenance crew and continue regular monitoring and safety checks of the structure.

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 21 March 2008

REFERENCES

ESSC. 1999. Mining Revisited: Can An Understanding Of Perspectives Help? City: Philippines

Provincial Physical Framework Plan/Comprehensive Provincial Land Use Plan, Province of Surigao del Norte, Planning Period 1993-2002.

Philippine Mining Act of 1995.

Rural Enterprise Assistance Center REACH Foundation. Organizational Profile.

Ramos, H., M. Cabalda and M. Banaag, 2001. Tailings Dam Accidents and the Use of Chemicals in Mining – Issues, Policy Responses and Lessons Learned from the Philippines. International Workshop on Environmental Regulation for Accident Prevention in Mining – Tailings Chemical Management, Perth, Australia.

Senate Committee on Environment and Natural Resources. Committee Report No. 430. 18 Oct 2000.

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 22 March 2008

APPENDIX 1. ITINERARY FOR THE MINING DIALOGUE IN SURIGAO DEL NORTE

Wednesday, 29 November 2000 5:00 am Travel to Surigao City 9:15 Arrival in Surigao City 9:30 Travel to accommodation in the Diocese Office 10:00 Assignment of room accommodation and settling-in 10:30 Morning tea 12:00 noon Introduction on the Mining Dialogue and introduction of participants 12:30 pm Lunch 12:30 Presentation by Provincial Governor Francisco Matugas Surigao del Norte and Its Provincial Land Use Plan 2:00 Open dialogue 3:00 Presentation by Monsignor Iral Formulation and Implementation of the MRFC and MMT 3:30 Open dialogue 6:30 Dinner

Thursday, 30 November 2000 7:30 am Breakfast 8:30 Travel to Claver – Taganito Mining Corporation 10:00 Tour of Taganito Open-cut Nickel Mine 12:30 pm Lunch 1:30 Presentation by the Technical Working Group Community Livelihood Program in Surigao del Norte 2:00 Open dialogue 3:00 Presentation by REACH Foundation Role of NGOs in Surigao del Norte 3:30 Open dialogue 5:00 Travel to Surigao City 7:00 Dinner 8:00 Wrap-up of the Mining Dialogue

Friday, 1 December 2000 7:30 am Breakfast 8:30 Departure from Surigao City

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 23 March 2008

APPENDIX 2. SAMPLE MULTIPARTITE MONITORING TEAM REPORT

The following is an example of an MMT Report as used by companies in Surigao del Norte. The name of the company, contact persons and complete compliance details are not revealed. Only some ECC conditions with remarks, findings and recommendations are shown below.

X MINING COMPANY MULTIPARTITE MONITORING TEAM REPORT

Company : X Mining Company Office/Plant Address : Barangay, Town, Province

Type of Industry : Open Pit Mining

Contact Person : XXX Environmental Superintendent

Date and Time of Inspection : Month, Day, Year Weather condition : Sunny

ENVIRONMENTAL COMPLIANCE CERTIFICATE (ECC) issued by the DENR through the Environmental Management Bureau to the proposed specific aspect of mining of X Mining Company on specified date

ECC CONDITIONALITIES COMPLIANCE REMARKS (Specific aspect of mining) YES NO

1. The milling rate shall not exceed X Average for quarter was thousand metric tons per day (TPD) of X tpd ore materials

2. Improvement and stabilization of the The conduct of the revised tailings impounding structure geotechnical study by X shall be implemented through the Mining Company conduct of a geotechnical study and application of appropriate engineering works and techniques

3. Riprapping of the side slopes of the Side slopes shall be nearby creeks within the project site stabilized by reducing shall be effected to prevent erosion the height or angle of the slopes

4. Qualified local residents shall be Please see attached given priority for employment report ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 24 March 2008

5. Reforestation program shall be Rehabilitation was noted effected to enhance a self-sustaining at site area X vegetation and to maintain environmental balance in the area

6. All discharges and emissions from Please see attached the mining operations shall conform water analysis result; with the standards set by the DENR Discharges exceeded DENR standard

7. That the quality of surface and Results of the monthly ground water shall be maintained at monitoring was sub- acceptable levels. Their physical and mitted; Result for pH at chemical properties to be monitored X location was found to monthly and results of analysis be acidic submitted to the DENR

8. That the Safety Rules and The safety recommenda- Regulations shall be strictly observed tions made by MGB at all times to prevent health and safety section shall be occupational hazard on the project instituted particularly to the employee

9. The company shall formulate TWG Resolution on workable community development Community Projects plan in coordination with the LGU and presented; Medical stakeholders to address its social mission conducted in obligation within three (3) months Barangay X.

Other findings:

1. Recent tree planting activities were noted in areas X and Y. 2. Though water spraying was observed, excessive dust was noted at the mine complex road. 3. No activity was noted at the pond rehabilitation. Based on the revised plan, Items 1, 2 and 3 under the Water Reservoir/Wetland, wetland vegetation has only been completed. Stage 4, construction of dike drainage, should have been completed.

Conclusions and recommendations

The following are recommended:

1. The EMB, through the MRFC, should impose appropriate action for violating commitment X. 2. Water spraying should not be limited to mine haul roads but should include mine complex roads as well. 3. Pond rehabilitation should be given priority for action.

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 25 March 2008

Appropriate Action

(All MMT members’ signatures)

Attached should be a Field Data Record Sheet, indicating the source of sampling and appropriate sample results and remarks.

ESSC: 2000 Mining Dialogue – Surigao-Manila Mining Corporation 26 March 2008