MINING IN THE CARAGA REGION, PHILIPPINES: INSIDERS’ PERSPECTIVES ON EMERGENT SOCIAL AND ENVIRONMENTAL PROBLEMS By Sarah Herbst A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTERS OF SCIENCE Community, Agriculture, Recreation and Resource Studies 2011 ABSTRACT MINING IN THE CARAGA REGION, PHILIPPINES: INSIDERS’ PERSPECTIVES ON EMERGENT SOCIAL AND ENVIRONMENTAL PROBLEMS By Sarah Herbst The Philippines, particularly the Taguibo River Watershed Forest Reserve (TRWFR) is home to some of the world’s most abundant mineral ore deposits. Harnessing those nested natural resources for a developmental purpose is a complex task; posing potential positive or negative environmental and social impacts. The Philippine national government has adopted several forms of decentralization with the aim to give more discretionary power to the local government units who are believed to hold the greatest capacity to be able to efficiently mobilize local natural resources for broad-based socio-economic development. Region XIII is home to the Taguibo watershed, and also to local government units and line agencies which lack extensive horizontal coordination or integration. This can prevent synergies between mining, livelihoods and sustainable development efforts from occurring. Four main institutional arrangements help to conceptualize the drivers of the asymmetric conflict found in the TRWFR: resource tenure and property rights ; decentralization of resource management ; captured power, and political rivalry ; and fragmentation of authority . Regardless of the fact that there are extensive environmental and human risk management laws the local resource base results in a curse rather than a blessing. Campaign support has more clout in the Caraga Region than legal permit; therefore, what is illegal is made legal in the Caraga Region. ACKNOWLDGEMENT I would like to thank my advisor, Dr. Laura Schmitt-Olabisi, for trusting me as a researcher. I was blessed enough to have your wise guidance while thousands of miles away from my native culture. Your dedication to support me through this iterative research process, your critical eye and ability to spend countless hours throughout the past months has made this research possible. In addition to your academic guidance, the financial and personal assistance you provided me with were critical elements in the success of this research process, and for that I’m truly grateful. Likewise, I owe my deepest gratitude to the loving and extremely hospitable Filipino family that warmly opened their home and hearts to a foreign studying scientist. I am grateful for the entire TY family, but I am especially indebted to Atty. Josefe C. Sorrera-TY who was instrumental in my introduction to the Taguibo Watershed Forest Reserve (TRWFR). Without Atty. Josefe C. Sorrera-TY there would be little depth and breadth to my research. Her passion for change enabled me to be aggressive in tackling an extensive and diverse listing of interviewees. I owe my deepest gratitude to all my interviewees; without their openness and kind generosity to share their time and knowledge I would not have been able to make this project worthwhile. To the Father Saturnino Urios University (FSUU) faculty, staff and students; without your warm smiles and kind greetings all of those countless hours transcribing in the Law Library would have felt like an eternity. Then there is my thesis support group (you know who you are) that I must pay amends to; it has been magical and unforgettable. Special thanks must be given to two particular faculty members of Community Agriculture Resource Recreation (CARRS) Department here at Michigan State University (MSU); Dr. John Kerr and Dr. Rene Rosenbaum. Without either of their immense iii critical thinking support, I am sure this thesis would have not turned out as such a success! John’s courses and guiding words further developed my intellectual capacity to be able to tackle such a complex and dynamic natural resource-based topic. In addition, Rene greatly helped me to take a step back and really think about what was structurally going on in the nested communities found in the Caraga Region. He would spare some of his precious time to discuss large topics such as community-based economic development and sustainability which greatly helped me to frame my research project. However, without the patience and flexibility provided by the remaining two committee members I would not have been able to graduate on time! Thank you Dr. Aaron M cCright and Dr. Peter Kakela for all of your time, help and understanding. Finally, I need to emphasize that I would not be here--physically, mentally or even spiritually-- without the unconditional support from my family. iv TABLE OF CONTENTS LIST OF TABLES ........................................................................................................................ vii LIST OF FIGURES ..................................................................................................................... viii Introduction ..................................................................................................................................... 1 Justification for the Study ........................................................................................................... 4 Resource Curse-Unsatisfactory Outcomes .................................................................................. 7 Approach 1-basic macroeconomic perspective ....................................................................... 7 Approach 2- Rent-seeking Perspective .................................................................................... 8 Approach 3- Corporate responsibility Perspective .................................................................. 9 Decentralization Objectives ...................................................................................................... 11 Role of decentralization in development ............................................................................... 12 Decentralization of mineral governance in Philippines ......................................................... 15 Purpose of Research .................................................................................................................. 18 Emergent Research Questions ................................................................................................... 22 Context of the Natural Resource Extraction Industry in Caraga Region, Northeast Mindanao ............................................................................................................................................... 22 History of Mining Rights for the Extraction of Mn Ore at the Taguibo Watershed ............. 27 Research Process and Methods ..................................................................................................... 30 General Overview ..................................................................................................................... 30 Procedure ................................................................................................................................... 33 Subject Population..................................................................................................................... 35 Figure 1 Hierarchy of Government Agencies involved in this inquiry ................................. 36 Table 1 Population of the Philippines and Caraga, CYs 1995 and 2000............................... 37 Table 2 Ranking of Regions in Per Capita Gross Regional Domestic Product, Mindanao Regions, CYs 2002-2003 ....................................................................................................... 38 Data Collection .......................................................................................................................... 39 Data Analysis ............................................................................................................................ 40 Table 3 Sample of Codes ....................................................................................................... 42 Results ........................................................................................................................................... 43 Mining and Sustainability Challenges in Region XIII Caraga .................................................. 43 Macro-overview ..................................................................................................................... 43 Mining, Water and Livelihoods ................................................................................................ 47 Weak Local Government Units ................................................................................................. 50 Table 4 Tenure Systems within the Biophysical boundaries of the Taguibo Watershed ...... 53 Taguibo River Concerns ........................................................................................................ 57 Mining and Conflict .................................................................................................................. 62 Lack of Effective Institutional Arrangements ....................................................................... 62 Weak Local Governance ........................................................................................................... 67 Figure 2 Composition of the Stakeholders involved in the Provincial Multi-Sectoral Investigation