Journal de la Société des Océanistes

138-139 | 2014 Les mises en récit de la mine dans le Pacifique

The policy of the Philippines and « » towards nation-building

Minerva Chaloping-March

Electronic version URL: http://journals.openedition.org/jso/7067 DOI: 10.4000/jso.7067 ISSN: 1760-7256

Publisher Société des océanistes

Printed version Date of publication: 15 December 2014 Number of pages: 93-106 ISBN: 978-2-85430-118-2 ISSN: 0300-953x

Electronic reference Minerva Chaloping-March, « The mining policy of the Philippines and «resource nationalism» towards nation-building », Journal de la Société des Océanistes [Online], 138-139 | 2014, Online since 15 December 2017, connection on 10 December 2020. URL : http://journals.openedition.org/jso/7067 ; DOI : https://doi.org/10.4000/jso.7067

Journal de la société des océanistes est mis à disposition selon les termes de la Licence Creative Attribution - Pas d'Utilisation Commerciale - Pas de Modifcation 4.0 International. he mining policy of the Philippines and «resource nationalism» towards nation-building by

Minerva CHALOPING-MARCH*

ABSTRACT RÉSUMÉ his paper looks at the extent to which the Mining Cet article examine l’adéquation de la loi minière de Act of 1995 responds to the aspirations of citizen consti- 1995 aux aspirations de la représentation citoyenne, tuencies such as local governments. he law provides the dont les gouvernements locaux. Cette loi fournit le cadre regulatory and institutional framework for the operation régulateur et institutionnel pour l’accueil de grands of large-scale mining in the hope that substantial foreign projets pour inancer le budget de l’État. Elle ofre capital is brought into government cofers. he law also aussi des mécanismes garantissant la consultation des provides for mechanisms to ensure community consul- communautés, le renforcement des pouvoirs des gouver- tation, local government empowerment, concern for the nements locaux, le respect des communautés autochtones indigenous communities, and equitable beneits sharing. et un partage équitable des bénéices. Mais le gouverne- However, the national government – with the country’s ment national – avec l’industrie minière du pays – s’est industry – has focused on foreign investments concentré sur les investissements étrangers aux dépens at the expense of equity and beneit allocations for local d’une redistribution équitable. Des gouvernements communities. Several local governments have blocked the locaux ont interdit le démarrage de gros projets miniers entry of large-scale mining or forbidden open pit mining. ou l’extraction à ciel ouvert. Ces actions, incluant la Such action, including new local legislations, mani- promulgation de lois locales, expriment un nationalis- fests sub-national resource nationalism that is founded me des ressources « infranational » ancré dans la localité on locality and ainity to homeland, and confronts the et le lien au territoire et opposé au gouvernement natio- national government in matters of resource governance. nal en matière de gouvernance des ressources Keywords: resource nationalism, Philippines Min- Mots-clés : nationalisme des ressources, Philip- ing Act, local governments, social imaginaries, pines, Loi minière, gouvernement local, imag- mining policy inaires sociaux, politique minière

In current literature, most discussions on re- tionalism is viewed as a cyclical phenomenon source nationalism have focused on its causes (Stevens, 2008) and is one in which the global and manifestations (Clarke and Cummins, and the national and their relation- 2012) particularly its impact on industry and ship with one another are «tested and reined» investment patterns on the producing country (Ward, 2009). In certain cases, these global-na- and the risks on the part of investors (Bremmer tional landscapes are characterized by long-term and Johnston, 2009; Emel, Huber and Makene, extractive industry dependency that restricts po- 2011; Ernst and Young, 2013). Resource na- licy options of the producing country (Kohl and

* Development Anthropologist, Senior Research Fellow, Philippines-Australia Studies Centre, La Trobe University, [email protected] Journal de la Société des Océanistes, 138-139, année 2014 94 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES

Farthing, 2012). Resource nationalism has been minerals are in situ, mining companies have to investigated as a demonstration of a resource- go to the areas where the are found. A endowed country’s motivation to expand its host country accommodates foreign companies share of resource rent. to carry out mining within its territory. An inves- What has remained largely unexamined in- ting company receives rights to extract minerals cludes the complex interactions in resource na- under conditions which are largely deined by tionalism and the main actors involved other the political, institutional, socio-economic and than the host country and the foreign investors. cultural of the host country. hus a here is scarce understanding about whether a mutually interdependent relationship develops: resource nationalist position of a state is shared the host country relies on the mining company or concurred, or conversely, challenged by its for foreign capital while the latter is granted cer- citizens. his paper deals with these issues by tain rights in extracting minerals. examining the case of the Philippines. he paper Over time, the form and scope of this contrac- looks into constituent citizens confronting the tual relationship undergo changes. he ensuing centralized control of the State over re- changes have important implications for pur- sources and their development and exploitation. suing the interests of each party. It is during this he paper begins with some deinitions of key instance when resource nationalism not only terms such as «resource nationalism» and «sove- manifests itself but is re-examined by the host reignty» pertinent to mining. I then proceed to government. Resource nationalism involves ac- look into the economic liberalization policy em- tions and motivations of a resource-endowed braced by the Philippine state. his brings the country to ensure primacy over the development discussion to the enactment of a new mining po- of its mineral resources vis-à-vis the participation licy in 1995. he passage of this law and the pro- of foreign investors. It represents the attempts of cess of implementing it have provided a context the host country’s assertion of greater control for the collision of several perspectives on «deve- over how the mineral resources located within lopment» and ideas of equity, locality, and sove- state territory are developed in order to maxi- reignty. I present the narratives which form part mize government revenues from production. of social imaginaries of the key actors in mining. During the 1980s through 1990s, resource-en- he paper ends by tying together the key points dowed countries centred on attracting foreign I earlier raised towards the conclusion: resource investment by boosting the competitiveness nationalism is not plainly an assertive posturing of their iscal regimes for mining. his meant of a government pertinent to administering re- that their policies established generous terms source extraction. Rather, resource nationalism in favour of mining companies. Heeding to is rooted in connectedness to a homeland. Given recommendations of international inancial ins- their shared experiences and common visions of titutions such as the World Bank (Haselip and change in the status quo, key sectors of the Phi- Hilson, 2005; wb-ifc, 2003), many developing lippine citizenry forge actions to confront the countries revised their mining policies. his Philippine state. was a trend that relected in part the stif com- For this paper, I use some of the ieldwork data petition and the apparent exigency to stir and collected during my PhD research (June – Aug promote mining investments (Smith and Naito, 2003, July 2004 to May 2005), and interviews du- 1998). During the period 1985 to 1995, there ring separate ieldworks in March-April 2010 and were over 90 countries that legislated new mi- August 2011. I add some data generated through ning laws, revised substantially their prevailing interviews which I carried out for a recent project1 mining policies, or were formulating new legisla- in December 2013-January 2014. hese are sup- tion (Otto, 1997). Policy changes made by deve- plemented by information synthesized from archi- loping countries include simplifying permitting val materials and critical review of published lite- procedures to provide lexibility in investment rature, government documents, and press releases. agreements. In addition, taxation schemes were becoming more comprehensive to both attract investors and maximize government revenues (unctad Secretariat, 1997). Mining and resource nationalism However, the situation has changed in the se- veral years that followed. By 2003, commodity he continuity of mining as a global industry prices have soared. Host countries have become depends on the availability of minerals to ensure more concerned about obtaining a bigger cut of a stable supply of commodities. However, a rea- the mining revenue pie (Gravelle, 2012). he lity in mining as an economic activity is the im- rise in commodity prices prompted producing mobility of mineral resources. Considering that countries to raise royalty and taxation in their

1. he project is on social mapping and analysis of key stakeholders in exploration and mining in Camarines Norte, a major mining province in the Philippines. MINING POLICY AND NATION-BUILDING (PHILIPPINES) 95 attempt to maximise their income revenues. he afairs of another. Sovereignty is a principle as overall global trend is an increase in the tax bur- well as a practice (Litin, 1997). It is not an «ei- den on mining companies as host governments ther or» matter. A state must not be regarded regard mining companies to be making ample as either «having» or «not having» sovereignty. proits in light of soaring mineral prices. Rather, as Yasin (2010) clariies, sovereignty is In the Philippines, the current president Beni- a matter of degree. James Rosenau (1995: 195) gno Simeon Aquino III issued on July 2012 explains that the sovereignty of a state must be Executive Order 79 (2012), which makes mo- understood as lying within a continuum rang- diications of the Mining Act of 1995 and arti- ing from «convenience-of-state» at one end, to culates the mining policy of his administration. «states-are obliged-to-go along» at the opposite he issuance of Executive Order 79 is partly due end. his means that depending on situations, to the growing clamour of various stakeholders the state relocates its sovereignty from one point (i.e., local governments, communities and civil to another along the continuum. society groups) for a fair share of the value of ex- In a global economic system, a resource-en- tracted resources. In addition, these stakeholders dowed country becomes open to external eco- claim that there has been lack of meaningful in- nomic events beyond its control. It inds itself volvement of communities in decisions and ini- inviting foreign investors in order to generate tiatives afecting them. Resource nationalism, as adequate capital to be able to fully participate this paper discusses, involves what community in the global market. he strength of the state is citizens regard as the core of managing resources tested and demonstrated in the ways by which it for the good of communities. his refers to ai- accommodates the demands of the global econ- nity to the place where a resource is found – and such sense of attachment exists only among local omy. It might appear that as the state fulils the residents. Hence, the idea of «development» that requirements of regional or transnational bodies, appeals to local communities is that which in- its power as a sovereign entity is allocated away. volves their initiatives, systems, and knowledge However, this is not so. he allocation of power in the utilization of natural resources and subse- «away» from the state is authorized or consented quently beneit them. and that the consenting entity remains and is always the state (Yasin, 2010). Rosenau further clariies that under conditions of globalization, Sovereignty and Mineral Resources sovereignty is both saturated by and placed with- in dynamic, persistently repetitive, turbulent po- A key notion that is closely tied to resource na- litical processes. tionalism is «sovereignty». he modern concept of this term is traced to the French jurist and he two elements that are vital to the idea of political philosopher Jean Bodin who made the sovereignty are control and authority (Nagan earliest discussion of the theory of sovereignty. and Haddad, 2012: 435). Litin (1997: 169) According to Bodin (1955: 24), sovereignty is adds a third one which is essentially the most that «absolute and perpetual power vested in a critical as far as the Philippines is concerned, i.e., commonwealth». For the purpose of this paper, legitimacy, which he deines as the «recognized we take the quintessence of the term that is ex- right to make rules». he concept of legitimacy pressed in Bodin’s deinition – the power of a incorporates a clearly normative component state. Bodin noted that this power: and is reinforced by control and autonomy. his means that the idea of sovereignty does not «is in the irst place absolute, in that it is wholly free apply only to a state’s relationship with external from the restraint of law, and is held subject to no bodies. Rather, a state’s sovereignty in governing conditions or limitations» (Merriam, 2001: 7)2 resources involves establishing and maintaining legitimacy before its citizens. In our present-day world, sovereignty of the In the speciic case of the Philippines, the 1987 state is associated mainly with the idea that states Constitution (Article II Section 2) declares the have the power to run their own afairs, inclu- following: ding how mineral resources must be extracted, by whom and under what terms. «he Philippines is a democratic and republican A sovereign state is an autonomous entity and State. Sovereignty resides in the people and all go- no state has a right to intervene in the internal vernment authority emanates from them.»

2. Bodin was not advocating for an absolutist state. It would be clearer to view Bodin’s idea of sovereignty in the con- text of the political chaos of his time. According to Nagan and Haddad (2012) the public order of Europe and the idea of Christian universality were crumbling under the inluence of the Reformation. he end of the Holy Roman Empire marked the weakening of Christian Universalism in Europe and in turn a legacy of religious wars. hese wars seemed unending and generated social disorder and anarchy. 96 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES

he Philippine national government, in coopera- aimed to rejuvenate the country’s . tion with the country’s mining industry – mainly Known as the «Philippines 2000», Ramos envi- through the Chamber of Mines of the Philippines sioned the Philippines to join the newly indus- (comp) – has been feverishly promoting mining as trializing countries by the year 2000. he pro- the engine of economic growth. However such ac- gram components are outlined in the Philippine tion has caused factions among other key stakehol- Medium-Term Development Plan for the years ders in mining. As an economic activity and as an 1993-1998. It emphasized the need to achieve industry, mining has prompted debates involving global competitiveness for the Philippines (Ra- views from government agencies, mining execu- mos, 1993). he Plan called for a continuation tives, academicians, economists, local government of the policy of liberalization, deregulation, and oicials as well as representatives of the religious globalization (Jurado, 2003) that was started by sector, indigenous organizations, and environ- Corazon Aquino, Ramos’s predecessor. ment and conservation groups. here are several During her term, Aquino began liberalizing reasons why mining remains a polemical subject the economy that involved privatization of more matter in the Philippines: than 250 government-owned and controlled a) an earnest goal, or desperate objective, within the corporations (Gonzalez III, 2001). Aquino is- national government to address iscal diiculties, sued Executive Order 279 in July 1987 to foster b) an eager anticipation of business and industry investment in the mining industry. his law gave groups to seize opportunities for foreign invest- authority to a cabinet-level oicer, the Secretary ment in mining, of the Department of Environment and Natural Resources (denr), to «enter into, for and in be- c) a genuine concern of many citizens about half of the Government», business transactions the long-term adverse social and environmental such as joint venture or production-sharing consequences associated with mining activities, agreements that involve the exploration, deve- including the cultural and economic wellbeing lopment, and utilization of mineral resources of communities especially ater a mine operation «with any Filipino citizen, or corporation or has long shut down, association at least sixty percentum of whose d) a lingering distrust of many citizens in the capital is owned by Filipino citizens» (Executive ability and sincerity of the national government Order 279, 1987, Section 1). his authority and the minerals industry to address the con- which was formerly a prerogative reserved only cerns of communities who are adversely afected for the President of the Philippines was intended by mining operations, and to ease, as it did, the entry of many foreign mi- e) a continuing doubt and skepticism among or- ning companies. ganized citizen groups that exploitation of min- Succeeding Aquino as President, Ramos ope- erals by foreign companies is the right path to ned more extensively the doors to foreign inves- national development. tors for all industries: deregulating, liberalizing In other words, the actions of the Philippine na- and privatizing almost all government owned tional government, which include granting foreign corporations. he Philippines was one of many investors nearly monopolistic rights over mineral developing countries to adopt neo-liberal econo- resources and entitling them enormous tax incen- mic policies to attract more mining investments. tives, is not fully supported by several sectors of the Philippine citizenry. he national government’s he Mining Act of 1995 granting priority rights to those who have the foreign capital, and undermining the aspirations Under President Ramos, Republic Act 7942, of local citizens, negates nationalism. he over- known as the Philippine Mining Act of 1995, centrality of control by the national government was approved. As hoped for by the national go- in directing the exploitation, development and vernment, the passage of this law led to the entry utilization of mineral resources repudiates local of foreign investors. Scarcely a few months after initiatives and mechanisms in addressing resource the law was passed, more than 50 applications for and environment concerns. In efect, enormous inancial technical assistance agreements (ftaas) setbacks have dragged the full implementation were already iled at the Mines and Geosciences of the Mining Act. Until the present, the law has Bureau (mgb). In 1996, 20 of the world’s largest continued to saunter a thorny path. mining companies established oices in the Phi- lippines. hey iled applications for various mi- Economic Liberalization: Launching Phase and ning tenements. Subsequently, the applications Full Realization led to the approval of several exploration projects (Cabalda, Banaag, Tidalgo, and Garces, 2002) In the early 1990s, the 12th President of the and brought euphoria within the Chamber of Philippines, Fidel V. Ramos, pursued his admi- Mines of the Philippines (comp), the mgb and nistration’s grand industrialization scheme that the national government. MINING POLICY AND NATION-BUILDING (PHILIPPINES) 97

Under the Mining Act, there are three types «I am thinking, rather, of the ways in which people of permits: an exploration permit, a mineral imagine their social existence, how they it together agreement, and a inancial technical assistance with others, how things go on between them and agreement (ftaa). A detailed discussion of each their fellows, the expectations that are normally met, is not permissible in this paper due to limited and the deeper normative notions and images that underlie these expectations.» (2004: 23) space. Among the three, the ftaa has been the most controversial. It is an agreement between In other words, a social imaginary incorporates a contractor and the Government of the Phi- normative ideas, i.e., how matters ought to be lippines and allows 100% foreign ownership. It based on how processes or systems have been grants the contractor rights for large-scale explo- carrying on. hus, a social imaginary blends ration, as well as development and utilization of both factual and normative dimensions of social minerals. An ftaa has a term of 25 years, and ex- existence. It plays an important role in unders- tendable for another 25 years. It requires a mini- tanding, orchestrating, and promoting develop- mum committed investment of US$ 50 million ment in a society. Key sectors of the Filipino for infrastructure and mine development. he population generally share narratives pertinent terms and conditions of the contract, including to what they consider as «development». Actions the government share, are negotiated. he Mi- pertinent to realize desired changes in the sta- ning Act also grants mining companies to occupy tus quo, and other initiatives which are directed an area of 81,000 hectares where the company at achieving betterment of economic, environ- enjoys timber rights, rights and easement mental and social conditions all embody a social rights. he incentives granted to foreign mining imaginary, and are expressed in narratives of key companies include tax holidays and 100% repa- players in mining, about which I now turn to. triation of their capital and proit. he avenue given to foreigners to fully own and control mining operations in the Philippines has National Government become an extremely contentious issue. he situa- tion has triggered what Rosenau describes as ‘tur- he 1987 Philippine Constitution (1987, Article 12 Section 2) declares that the Philippine State owns bulent processes’ that have deined the ebb and low of the Mining Act’s implementation. «all of the public domain, , minerals, coal, petroleum, and other mineral oils, all forces of potential , isheries, or timber, , Social Imaginaries lora and fauna, and other natural resources.» In addition, In this paper, I use the term social imaginary as elucidated by the philosopher Charles Taylor. «the exploration, development, and utilization of He observes that community populations come natural resources shall be under the full control and together to envision their in particular and supervision of the State.» often instinctively shared ways. Taylor refers to these as «social imaginaries». Taylor explains: his is a critical premise and a clear fact that is well- accepted by all sections of the Filipino population. «Our social imaginary at any given time is complex. he narrative of key government oicials per- It incorporates a sense of the normal expectations we tinent to economic development is encapsulated have of each other, the kind of common understan- in key phrases enunciated by former President ding that enables us to carry out the collective prac- Ramos in his state of the nation address in 1993. tices that make up our social . his incorporates some sense of how we all it together in carrying out He presented his program that was hailed as the the common practice. Such understanding is both «Philippines 2000». Ramos stressed that the Phi- factual and normative; that is, we have a sense of how lippines has to engage in «opening the economy» things usually go, but this is interwoven with an idea in order to be at par with competing countries, of how they ought to go, of what missteps would «dismantle the structure of protectionism and invalidate the practice.» (2004: 24) controls», and alleviate poverty which is the «cen- tral thrust of all our programs» (1993, emphasis Taylor asserts that a social imaginary involves supplied). hese ideas have been re-echoed in «something much broader and deeper than the the Mining Act of 1995 and reiterated in a law intellectual schemes people may entertain when issued by Ramos’s successor Gloria Macapagal- they think about social reality in a disengaged Arroyo. Executive Order 2703 (2004, emphasis mode». Taylor describes: supplied) states:

3. National Policy Agenda on Revitalizing Mining in the Philippines issued on 16 January 2004. 98 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES

«It shall be the policy of the Government to pro- presentatives of foreign mining companies. he mote responsible mineral resources operation, purpose was to promote the mineral prospects of development and utilization, in order to enhance the Philippines particularly the 24 priority mi- economic growth, in a manner that adheres to the ning projects5. As earnestly hoped for by comp, principles of sustainable development and with due the conference resulted in the signing of many regard for justice and equity, sensitivity to the culture of the Filipino people and respect for the Philippine Memoranda of Understandings (MoUs) and let- sovereignty.» ters of intent between foreign mining companies and local mining partners (Disini, 2006). Executive Order 270 is impressively benevolent and democratic in its rationale and intent, and is Local Governments also extensive in its coverage. Furthermore, it de- clares as its guiding policy the following (2004, he welcoming stance of the national govern- emphasis supplied): ment towards mining projects and the enthu- siasm of the comp in promoting the Philippines «Government recognizes the critical role of invest- as a haven for mining investments have not been ments in the minerals industry for national develop- shared fully by a few local governments. Across ment and poverty alleviation and shall provide support the Philippines there have been varying degrees mechanisms for a sustained mineral exploration pro- of local government inhospitality towards po- gram, responsive research and development priorities tential mining projects within their speciic and capability building for industry manpower; Clear, political-geographic jurisdictions. Republic Act stable and predictable investment and regulatory 7160, otherwise known as the Local Govern- policies shall be instituted to facilitate investments in mining, leading to a prosperous minerals industry; ment Code of the Philippines (1991) devolved Value-adding as a measure of optimizing beneits certain functions – such as environmental ma- from minerals for the Filipino people shall be pursued nagement – to local government units which in- through the development of downstream industries to clude provincial, municipal and barangay6 («vil- achieve greater productivity and eiciency.» lage») levels of governance. One of the local governments that has demons- Represented mainly by the Oice of the Pre- trated early unreceptiveness towards mining is sident, the mgb, the Department of Trade and the provincial government of Capiz that im- Industry, the National Economic Development posed in 1999 a 15-year moratorium on all large- Authority and other agencies, the national go- scale mining (Capiz Provincial Ordinance No. vernment regards mining as a critical means to 6, 1999). Similarly, the Oriental Mindoro pro- pave the country’s path to industrialization by vincial government declared in 2002 a 25-year generating wealth, employment and other bene- freeze on ‘large-scale mining or extraction in all its in both rural and urban regions (Defensor, forms’ (Oriental Mindoro Provincial Ordinance 2005). he national government acknowledges No. 01-2002, 2002). he following provinces its need for strong partnership with the minerals also have legislations disallowing large-scale mi- industry. hus, true enough, both key govern- ning operations within their jurisdictions: ment agencies and the comp have bonded them- - Albay (ordinance took efect in March 2011), selves into a solid and busy team in marketing - Bukidnon (ordinance took efect in May to foreign investors the Philippines as an invest- 2011, buttressing a related legislation passed in ment destination. 2009), In early 2005, representatives of the national government and top oicers of the comp had - Occidental Mindoro (ordinance took efect in engaged in what they termed as ‘mining roads- 2009), hows’ in various parts of the world including - and Zamboanga del Norte banning specii- China, Singapore, South Africa, Canada and cally open pit mining (ordinance took efect on Australia4. hese roadshows consisted of mee- November 2011). tings and discussions with foreign investors on he most controversial opposition to mining mining investment opportunities in the Phi- by local governments, supported by their consti- lippines. Subsequently in 2006, the comp or- tuent citizens, have been waged in Palawan ganized an international investment mining (misn, 2010), Romblon, and South Cotabato conference in the Philippines attended by re- (Minda News, 2011a, 2011b) because the local

4. he «mining roadshows» in Australia were held in three cities namely Melbourne, Sydney and Brisbane. he author attended the one held in Melbourne on 10 August 2005. 5. he 24 priority mining projects include potential medium- to large-scale mining ventures many of which need capital which local mining companies lack. 6. he barangay is the smallest and most basic administrative political unit in the Philippines. A group of barangay makes up a municipality. A cluster of municipalities constitutes a province. In 2011, there are 42,027 barangays in the entire Philippines (dilg, 2011). MINING POLICY AND NATION-BUILDING (PHILIPPINES) 99 laws are being challenged by mining companies lion to us as part of our share in the excise taxes paid and the mgb-denr, both arguing that national by mining companies. We are not supposed to beg government laws have primacy over local go- the national government but we are compelled to, vernment laws. However, in August 2013, the lest we will never get the money that belongs to us.» denr Secretary conceded not to challenge South (Interview on November 2004, Poblacion, Itogon, Cotabato’s ban on open-pit mining (Business Benguet) Mirror, 2013b). Meanwhile, the governor of Romblon has reairmed his resolve to challenge he misgivings of local government oicials to- the resolution issued by a Regional Trial Court wards the national government about revenues that rendered Romblon’s provincial ordinance, from mining are also expressed in the views of a prominent member of the League of Provinces placing a moratorium on mining, as unconstitu- 7 tional (Business Mirror, 2013a). While disputa- of the Philippines (lpp) . During the 9th Gene- tions have been continuing until the present, the ral Assembly of the lpp in 2012, Governor Joey initiatives of some provinces in legislating ordi- Sarte Salceda described the mgb as needing to nances to restrict mining operations, are likely to heed to the «doctrine of local preference and trigger other provinces to follow suit. the philosophy of subsidiarity» in administering Under the Mining Act and its implementing mining projects (Bicol Mail, 2012). his implies rules and regulations, local governments are en- that provincial, municipal, and barangay levels visaged to realize wealth creation from mineral of government must be the bodies to grant ap- resources to drive growth and provide livelihood provals for mining projects. Salceda also noted and income opportunities for their constituen- that at the same time, mining companies must cies. In particular, the Mining Act provides that pay taxes direct to the provincial and municipal local governments are entitled to a 40% share governments. Salceda is the governor of Albay, from the gross collection of the national govern- the location of Rapu-rapu mine which became ment from mining taxes, royalties and other the irst large-scale mining project that opened fees. In addition, occupation fees entitle the pro- in the Philippines – and eventually advanced to vince to 30%, and host municipalities to 70%. production stage – after almost three decades hese provisions are strengthened by the Local during which no new mine in the country com- Government Code. Section 292 stipulates that menced operation. if a is located in the province, he criticism against revenues from mining is then the provincial government will have a share not only about long delays experienced by local of 20%; municipality, 45%; and the barangay, governments in receiving their allocated share. 35% out of the 40% revenue that the national More important is the ratio of local government government remits to the local government. allocation relative to how much is ultimately ta- hese all seem auspicious. However, local go- ken by the mining companies. Salceda is a major vernments receive their share of tax revenues at critic of what he considers an austerely «Lilipu- a much delayed time. he yearly taxes collected tian» share of local governments from mining. from mining operations accrue to the national In 2010, mining companies in the Bicol Region8 treasury and it would take at least a couple of posted PhP9.2 billion9-worth production du- years for a local government to collect its fund ring the irst half of the year. According to Sal- allocation. he insight of a mayor of a mining ceda, the mammoth amount was for the mining municipality ofers a picture of the situation. companies, not for the people in the region. He added that mining companies paid PhP647 mil- «Our hometown as you know very well is a place of lion10 in taxes to the national treasury and re- mining. But take a look around and tell me, have we mitted a meager share of only PhP90 million11 progressed signiicantly through the 80-decade-long to local governments (Southern Luzon Business operation of that company? he company has been Review, 2011). paying its taxes to the national government every year. We had to wait like beggars for decades before he concerns of local governments are not li- we receive our internal revenue allotment from the mited to the perceived miserly revenues from national government. As for our latest allotment, it mining. he reasons for local governments’ hin- is debasing that we have been prodding the national dering the entry of mining projects, or restrict- government since 2000 to remit about PhP87 mil- ing certain methods (e.g., open pit) of mining

7. he League of Provinces is a formal organization whose creation is mandated by the Local Government Code. Its objectives, among others, include: to foster unity and cooperation among all provinces of the country, and to serve as a forum of discussion and feedback mechanism on policies afecting local governments. 8. Albay and ive other provinces (Camarines Norte, Camarines Sur, Catanduanes, Masbate and Sorsogon) comprise the Bicol Region. Each of the provinces has mining operations. 9. PhP9.2 billion equates to roughly US$206 million (PhP0.0224 = US$1). 10. PhP647 million is about US$14.5 million. 11. PhP90 million is approximately over US$2 million. 100 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES within their jurisdiction, include the perceived as farmers, ishermen, and in several cases, indi- need to protect, conserve and rehabilitate the genous peoples. In general, local ordinances be- environment; judiciously and equitably use na- come the formal shields of communities against tural resources; and consult with community the probable entry of mining projects into their members (Business Mirror, 2013a; Cleanbiz Asia, towns or villages. In the same manner, local of- 2013; Philstar, 2013; South Cotabato Provincial icials make public declarations that the legis- Ordinance No. 04, 2010). he foreseen reper- lations they enacted are based on consultations cussions of mining operations on the environ- with their constituencies. hus far, this is the ment, are expressed in the explanation of a ba- case, broadly, of South Cotabato and Romblon. rangay chairman why he and his community are Unfortunately in other places (e.g., Cantilan opposed to mining: in Surigao del Sur, Didipio in Nueva Vizcaya), communities are divided in which members are «We do not want mining here in our barangay. Our lamentably categorized as either «pro-mining» or water sources are being destroyed. We are alarmed. «anti-mining». Any mining operation is a major disruption in na- ture’s processes. his means mining brings a serious threat to our water sources, and an invitation to Civil Society landslides and lashloods. It is us, the people in the barangay, that will sufer the harmful consequences of When it comes to dealing with the actions of mining. It is not those at the mgb and the executives the combined strength of the state and the mine- of mining companies much less the foreigners that rals industry, some local governments and com- own the companies. hey do not feel what we feel be- munities who are not convinced about the wis- cause they are not of this place. hey do not unders- dom of opening their doors to mining, look for tand our situation, and they cannot sympathize with support. At both the national and village levels, us. hey come here and stay only as visitors. he mgb and mining companies insist that digging our mine- some help is often found in the Roman Catholic rals is what needs to be done. hat is their own idea, Church. Catholic clergymen, particularly mem- not ours. hey do not live our lives that is why they bers of the politically inluential Catholic Bis- see our coconut farms as dispensable. But this is our hops Conference of the Philippines (cbcp), raise place; we have no other.» (Interview on 30 December an ethical issue pertinent to mining: the 2013, Labo, Camarines Norte) must not be «deiled», the environment protec- ted and the disadvantaged sectors particularly he above insight underscores the attribute the indigenous peoples must not be displaced. of rootedness in a place – the locale. It suggests he clergymen are supported by the advocacy ideas of concord and ainity with the locality. activities carried out by nationalist groups that According to local government oicials, an un- tend to be ideological in orientation and whose derstanding of local situations is a trait which is rhetoric appeals to citizens and communities manifestly lacking among representatives of the desperate for support. heir discourse includes national government and the minerals industry. claims to stop the entry of transnational mining he above remark also draws attention to the no- companies into the Philippines, and views that tions of domain and locality, which are absent foreign mining companies are «imperialist plun- in the discourse of national government oicials. derers». Many nationalist organizations are ei- he claim to locality and attachment to place ther directly allied with or sympathetic to bayan reechoes the viewpoint of Arthur Pingoy, the (Bagong Alyansa Makabayan)12, a leftist supra- governor of South Cotabato Province whose en- organization that coordinates mass movements. vironment code bans open pit mining. In a press bayan takes a political position during elections release where he was asked about his reaction to and represents peasants, industrial workers, wo- Executive Order 79, the governor stated : men, public transport drivers, teachers, indige- nous peoples, and others. bayan organizations «Our ordinance stays unless its validity is challenged are overtly revolutionary and seek involvement in court…We in the local government are in the best position to know what is good for our people and the in any constituency of resistance that they can environment. I will continue to implement the law identify. (anti-open pit ordinance) unless it is declared by the In many ways, non-government organizations court illegal.» (2004: 24) (ngos) and peoples’ organizations (pos) derive their reason for being, as well as the legitimacy he concerns of local governments essentially and stability of their avowed causes from com- incorporate the views and aspirations of local munities. One of these ngos is the Alyansa Tigil communities that include speciic sectors such Mina13 (atm) which plays a signiicant role in

12. Bagong Alyansa Makabayan means «he New Patriotic Alliance». For related information, see http://www.philip- pinerevolution.net. 13. Alyansa Tigil Mina stands for «Alliance Against Mining». More information is available at http://alyansatigilmina.net/. MINING POLICY AND NATION-BUILDING (PHILIPPINES) 101 providing the channel through which communi- ted and ishing which was a major livelihood for ties have been able to articulate their apprehen- more than 20,000 families in 42 communities sions towards mining projects. atm is an alliance stopped due to the low of mine tailings burying of large and small organizations with the com- the channels and the valley loor (sepo, 2005)14. mon cause of confronting «the oicial line of he tailings spillage drew calls from mainly the thinking about mining». he atm (2014) is: country’s Catholic clergy, church-based organi- zations, civic-oriented groups, and conservation «[…] a coalition of organizations and groups who and environment activists for opposition to mi- have decided to collectively challenge the aggressive ning in general and the outright scrapping of the promotion of large-scale mining in the Philippines. Mining Act in particular. Composed of Non-Government Organizations, People’s Organizations, Church groups and academic institutions, the atm is both an advocacy group and Mining Act petitioned as unconstitutional a people’s movement, working in to protect Filipino communities and natural resources that are Partly as an apprehensive response to «more threatened by large-scale mining operations.» Marcoppers in waiting», and as a circumspect reaction towards the entry of foreign mining As an association of pro-environment activist companies to the country, a group of ngos iled organizations, and advocates against large-scale on 10 January 1997 a petition at the Philippine mining, the organization is calling for, among Supreme Court questioning the constitutionali- others, the scrapping of the Mining Act of 1995 ty of the Mining Act and its implementing rules and the passage of an Alternative People’s Mining and regulations. he group of ngos was led by Act. atm claims that it is not against mining. the Legal Rights Center-Kasama sa Kalikasan Rather, it «is against the policy regime in pro- (lrc-KsK). Known as the La Bugal-B’laan Case, moting foreign-controlled and export-oriented the petition called for the Supreme Court to nul- large-scale mining» (Alyansa Tigil Mina, 2014). lify the Philippine Mining Act of 1995 and the ftaa entered into in 1995 by and between the Implementing the Mining Act: an arena of social Philippine Government and Tampakan Mine- imaginaries ral Resources Corporation, Inc. his company was owned by the Australian Western Mining 15 he Mining Act was passed in March 1995. Corporation (wmc) . Although wmc is the only formal private respondent in the case, the entire As described earlier in this paper, the year wit- minerals industry had actually been handed the nessed the scores of mining companies iling ap- legal challenge. plications for exploration and mining projects in he key issue of the appeal pertains to the the Philippines. Barely a year after however, the unconstitutionality of the ftaa provision of ecstatic momentum within the national govern- the Mining Act because, as claimed by the pe- ment and the minerals industry dissipated. his titioners, such provision allows 100% foreign was due to a combination of historical, political ownership in large-scale exploration, develop- and economic factors. he process of implemen- ment, utilization and exploitation of mineral ting the Mining Act has demonstrated the clash resources in the Philippines by iling ftaas. of social imaginaries. Such practice, the petitioners argued, violates the constitutional provision that the natural re- he disaster that stimulated mass opposition to sources of the Philippines are a national heritage the Mining Act which foreign companies, through ftaas, should not exploit. On 24 March 1996, a major tailings spillage From the time the La Bugal-B’laan case was occurred at the Marcopper mine in Marinduque iled in 1997, the Supreme Court had not issued Island. An estimated 1.5 to 3 million cubic me- a decision. In January 2004, after seven years ters of mine tailings lowed into the Makulapnit of deliberations, the Supreme Court decided River, Boac River, and ultimately the ocean at that the provision of the Mining Act allowing the Westside of the island (Plumlee, Morton, foreign-owned corporations to operate and ma- Boyle, Medlin and Centeno, 2000). It was a nage mining activities in the country contravenes catastrophe of unprecedented proportions in the Constitution on the grounds that it was in the Philippines: agricultural ields were inunda- the nature of a «service contract» (Panganiban,

14. Inquests on the accident established that the mines’ pollution problems had been occurring for many years. Previous penalties were imposed on the company for its marine disposal of over 200 million metric tons of tailings in Calancan Bay resulting in marine pollution and siltation of about 0.84 km2 during 1975 to 1986 (Ramos, Cabalda and Banaag, 2000). However, permanent closure was never enforced. 15. In 2004, Western Mining Corporation (Australia) sold the project to the joint venture of Sagittarius Mining, Indo- phil Resources, Xstrata Holdings and J.P. Morgan. 102 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES

2005). he Supreme Court ruled in favour of and Atty Cesar Europa challenged at the Su- the petitioners, thereby nullifying the Mining preme Court the constitutionality of the ipra. Act’s ftaa provisions that allowed the execution he petition is perceived by observers as a coun- of service contracts with foreign irms for explo- termove to the La Bugal-B’laan case. he issues ration and mining ventures. he Supreme Court in the petition pertain mainly to the ownership also declared null and void the ftaa entered into of minerals, property rights, priority rights and by and between the Philippine Government and self-delineation by the iccs/ips. he petitioners wmc. also questioned the powers and jurisdictions of the ncip and the applicability of customary law to the settlement of disputes involving ancestral domains and ancestral lands as violating due Enactment of a law to protect indigenous process of law. peoples rights With the legal challenge confronting the ipra, the government withheld the release of the ncip’s While the Mining Act was wedged in a legal budget in September 1998. hus, the ncip was challenge, a policy to protect indigenous re- precluded from performing its functions. Indi- source rights was enacted by the Congress of genous and other concerned sectors were asking the Philippines: Republic Act 8371, otherwise why the government did not also suspend the known as the Indigenous Peoples Rights Act implementation of the Mining Act, which was (ipra). Its inal passage16 on 29 October 1997 similarly facing a legal challenge before the Su- was the result of a decade of lobbying, delibe- preme Court. On 6 December 2000, the Su- rations and consultations by concerned ngos, preme Court dismissed the petition against the peoples’ organizations and indigenous peoples’ constitutionality of the ipra (see Supreme Court representatives with the support of public inte- of the Philippines, 2000). Subsequently, the rest lawyers who are themselves environmental petitioners iled a motion for reconsideration. activists. However on 21 September 2001, the Supreme he ipra is a realization of the State policy on Court resolved and declared that the ipra is rights of indigenous peoples and cultural com- constitutional. munities as declared in Section 22, Article II of the Philippine Constitution. he ipra provides for formulating procedures to set right the his- torical injustices sufered by indigenous cultural Reversal of earlier ruling on the Mining Act communities/indigenous peoples (iccs/ips). In this way, the ipra exalts the state «by its belated As earlier noted in this paper, the Supreme Court but profoundly signiicant acknowledgment that ruled in January 2004 against the Mining Act. some laws are not rooted in the colonial past, Expectedly, the High Court’s decision caused a but originate and endure in our indigenous heri- stir within the Oice of President Macapagal-Ar- tage» (Leonen, 2004: 154), royo, the denr, and the mining industry. hus, he ipra created the National Commission the mgb enjoined by the private respondents and on Indigenous Peoples (ncip) as «the primary the minerals industry represented by the comp government agency for the formulation of and immediately appealed the High Tribunal’s deci- implementation of policies, plans and programs sion. hey argued, among others, that the Philip- to promote and protect the rights and well-being pine Constitution allowed foreign contractors to of iccs/ips and their ancestral domains as well as have reasonable management over mining pro- their rights thereto» (RA 8371, 1997). he ipra jects and the Mining Act ensured a fair and equi- gives explicit recognition to and protection of the table sharing of the proceeds of mining projects rights of iccs/ips «to their ancestral domains to between the contractor and the state. ensure their economic, social and cultural well- he appellants also asserted that annulling the being». he ancestral domain of iccs/ips not ftaa provisions would deprive the country bil- only covers the physical land they occupy but lions of dollars of potential investments from the totality of resources and environment inclu- outside. he President of the comp argued that ding mineral and natural resources underneath. the Philippines has already lost at least $20 he ipra provides for priority rights to iccs/ips billion-worth of export revenues because the in the extraction, development or exploitation Mining Act was not fully implemented since of any natural resources within their ancestral its passage in 1995 (Clancy, 2005). he comp domain (ncip Administrative Order 3, 2002). worked closely with the Oice of the Solicitor A year after ipra was enacted, two lawyers, i.e., General and then iled a motion for reconside- Isagani Cruz (a retired Supreme Court Justice) ration to the Supreme Court to plead for an oral

16. he law’s passage had a considerably lengthy history in which one change built incrementally upon another. Cir- cumstances leading to the enactment of the law can be traced to as early as 1974. MINING POLICY AND NATION-BUILDING (PHILIPPINES) 103 hearing of the case in order to explain better the Act and its implementing rules and regulations implications of the decision. hus, an exhaustive provide for mechanisms to ensure community constitutional review and the oral hearing in the consultation, local government empowerment, Supreme Court were held in July 2004. respect and concern for the indigenous cultural In December of the same year, the Supreme communities, and equitable sharing of beneits Court reversed its January 2004 decision: it de- of natural wealth. However, the national govern- clared the Mining Act of 1995 as constitutional. ment has not paid attention to actualizing, in he High Court ruled that the mining laws that full, these principles. his was due to the mgb were questioned earlier – the implementing rules and other government agencies having been fo- and regulations (irr) crafted by denr, and the cused on the external dimension of the state’s re- ftaa with wmc-Philippines which was execu- source nationalist posturing – the government’s ted in 1995 – do not breach the constitution. It relationship with foreign investors. he national airmed the legality of the ftaa. In other words, government, in close partnership with the mine- there was nothing unconstitutional about the rals industry, has devoted so much resources to ’s implementing rules and regula- the prospects of generating foreign investments tions, and foreign ownership of large-scale mi- but serious issues of equity and allocating bene- ning operations is legal. its from mining have remained unresolved in the local communities. his article demonstrates that local-level deci- sion-making – enshrined in the Local Govern- Conclusion ment Code – brings in the participation of communities in matters of resource governance. he involvement of communities legitimizes the his paper looked into the Mining Act of 1995 legislative actions of local governments. Local and the extent to which this law accommodates governments formulated relevant ordinances or responds to the aspirations of constituencies that have restricted or completely blocked the such as local governments, which are assumed entry of large-scale mining or speciic methods to represent the aspirations and concerns of local such as open pit mining in the provinces. he communities. legislations, which incorporate the concerns of Under the Mining Act, the exploitation, deve- communities whose lifeways are threatened by lopment and utilization of the country’s mineral foreseen adverse impact of mining, have created resources involve two major actors: the state that the eiciency and efectiveness in local resistance owns the resources, represented by the national against the actions of the national government government; and the mining companies bringing and mining companies. his resistance becomes in the much needed foreign capital. However, a long-run because the confrontation between na- mining project is not complete with the settling of tional government and local government is about the terms and conditions of the contract between legislations that clinch the claims of the latter these two parties. A mining project involves the and repudiates the actions of the former. In other default participation of other important players words, the confrontation concerns the rule of law that include the following: a) members of com- and the autonomy of local governments. munities whose aspirations and notions of «good Local governments have served as efective life» or «development» have been shaped by their corporate bodies for not only articulating the relationship to their homeland and the resources concerns and interests of constituent communi- that support it; b) local government oicials who ties vis-a-vis the distant national government but assume to represent the interests of their consti- also securing the legal bases of long-term resis- tuent communities; and c) civil society groups tance. he unwelcoming initiatives of local go- whose goals include directly challenging the neo- vernments towards foreign mining projects aim liberal policies of the state. to conserve mineral resources and prevent fore- Resource nationalism is a position that sup- seen environmental problems that are associated ports the goal of a state to generate revenues. with mining operations. he organizing initia- However, this is not true if the particular form tives of other actors such as civil society groups of resource nationalism that the state espouses are critical in creating venues where views and is not shared or concurred by the larger num- activities of local populations and community ber of its citizens. he case of the Philippines leaders are considered, coordinated, and forma- demonstrates the deicient legitimacy of the lized both in the formulation of ordinances as state – before its citizens at the local level – in well as in ensuring their implementation. he mineral resources governance. he anomaly lies actions of lower-level political-administrative in the over centralized approach of the national units manifest sub-national resource nationalism government in decisions and actions pertinent that is founded on locality and ainity to home- to the exploitation, development and utilization land, and confronts the national government in of the country’s mineral wealth. he Mining matters of resource governance. 104 JOURNAL DE LA SOCIÉTÉ DES OCÉANISTES

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