Letting a giant into the house

“What goes around comes around.”  Some years ago, two rather burly-looking men, escorted by a young Filipina, were in my office making a pitch for “responsible mining.” They represented an association of international mining companies. Apparently I had been identified as an “unfriendly” who might be won over. After listening to their pitch, I suggested that the best way to improve the image of the mining industry in the Philippines would be for Placer Dome of Canada to compensate the people of Marinduque for 16 years of pollution of Calancan Bay and the 1996 spill of toxic mine tailings which isolated five villages, buried one, and destroyed the Boac River.

The suggestion was not what the gentlemen wanted to hear, and effectively ended the dialogue.

Fast forward now to three weeks ago, and again I had two male and one lady visitor. The lady was Catherine Coumans, research director of Mining Watch Canada, whose education in the tactics of mining companies began with a seemingly innocent project of Ph.D. research on Basic Ecclesial Communities in Marinduque. The male visitors this time were from Marinduque, and the conversation was about the claim for compensation from Placer Dome, before an American court, now 15 years after the disaster.

Placer Dome which controlled and managed the mine for Marcopper Mining Corp., initially promised compensation and cleanup. The latter, according to a study carried out by the United States Geological Survey, would cost between $60 million and $100 million. In an effort to do it on the cheap, Placer Dome insisted on pumping the tailings into the sea, a procedure which is illegal both in the United States and Canada. When this proposal was rejected, it quietly sold its share of Marcopper to its own wholly-owned subsidiary registered in the Cayman Islands, and declared itself free of all responsibility.

Dramatic as the Boac spill may be, other less-publicized incidents are equally instructive. Twice, before the spill, the company was issued cease-and-desist orders, to stop dumping tailings into Calancan Bay, and twice—once under President Ferdinand Marcos who was later found to own 50 percent of the company and the second time under President Cory Aquino—the order was overturned after an appeal to the president. In the latter case, the company showed its willingness to play hard ball by closing down, shutting off its power generators and throwing the whole island into darkness!

The lesson here is that big international mining companies are quite capable of playing hardball, once they have a foothold in the country. They know well how important for a struggling economy are the capital and jobs which they bring in, aside from electricity, schools and clinics or whatever other services they provide for the local communities. And they know how difficult it would be for a government to tell them to pack up and leave, no matter how egregiously they may violate existing agreements and laws, environmental standards, even the human rights of those whose lands they take over (often indigenous mountain-dwellers).

Neither can a country rely on the good will of company officials. They, especially its local officials, may have the best intentions in the world, but the basic decisions are made in board rooms thousands of miles away, and the board members themselves are looking over their shoulders at stockholders who are concerned with the bottom line. Dr. Coumans found this out years ago when she bought some Placer Dome stock in order to attend a stockholders’ meeting, and later brought two victims of the Boac spill to another such meeting—without  any impact on company policy.

For this reason the World Bank, after an extensive review of its involvement in mining and other extractive industries, has set conditions for its support of such industries in a given country. The first of these is that governments should be strong enough and committed enough to ensure that environmental standards, human rights, free and informed consent on the part of local communities, and equitable sharing of the benefits with the local and national communities are respected. If a government is not capable of assuring this, then “governance should be strengthened until it is able to withstand the risks of developing major extractions.”

Here it is relevant to ask whether the Philippine government, which has been unable even to protect the nation’s forests from locally based logging firms, is capable of disciplining Sagittarius Mines which is pushing for a massive Tampakan gold and copper mining project covering 9,650 hectares in four provinces of Mindanao. Sagittarius plans to employ 10,000 workers at the peak of the construction stage and 2,000 during operations, workers whose jobs would effectively be hostages in the case of trouble between the company and the government.

Sagittarius’ major stockholder (62.5 percent) is Xstrata Copper. Based in Australia and operating in eight countries, it is one of the units within the massive mining conglomerate Xstrata plc. Together with a massive public relations campaign, it has prepared an impressive Environmental Impact Statement (EIS) which goes into very minute detail in noting possible negative impacts both on the physical and the social environment, and measures by which it plans to mitigate or compensate for the negative impacts, aside from the promised economic and social benefits.

Before considering letting this giant into the house, it might be well for the government and especially the local communities which will be affected to check on how it has behaved elsewhere. A visit by government officials and local community members to Xstrata’s mine in Papua New Guinea, for example, and conversations with those impacted by its operations there, and with the local authorities, might be more revealing than the best EIS.