NPA attack highlights three issues

The New People’s Army attack on the Surigao del Norte mining operations of Nickel Asia’s Taganito Mining Corp. and the Platinum Group Metals Corp. earlier this week has brought into focus three major issues that are sticking points in our country’s quest for development.

One is that the communist National Democratic Front and its military arm, the NPA, for the first time in years (about 25), have engaged in an activity which, albeit deplorable, will gain them not a little popular sympathy.  One recalls that the post-Edsa period saw them more and more marginalized as there was no way their activities could be construed as pro-people, or even pro-poor. These included blowing up roads and bridges (even with Marcos gone), or operating with landowners to undermine the agrarian reform efforts of government (by intimidating the peasants/tenants/workers who aspired to owning their own land—this in the Bondoc Peninsula, according to reports), or blowing up communication towers and airport construction sites.

While the first-mentioned activity really has no explanation, except perhaps inertia, the reasons for the others were clear: the communists, like some landowners, did not want the agrarian reform program to succeed; and they were punishing businesses which were slow in paying “revolutionary taxes.” And they were quite up-front about it.

But the Surigao del Norte attack, at least according to them, had nothing to do with extortion/tax collection. Rather, they claim that it was to protect the people and the environment from the havoc wreaked by mining operations, especially the indigenous people in the area whose lands were being used without their consent and laborers who were underpaid.

The military/government’s view is that this is all propaganda, and the real reason is that the rebels are punishing the mining companies for not paying revolutionary taxes.

That may be the case, but doubts arise: if all the rebels wanted was money, they could have certainly held the 20 or so Japanese investors/visitors for ransom, not to mention the mine manager and the security head (a retired military man). Neither did they have to try so hard to kill the goose that lays the golden eggs, so to speak, by destroying machinery and equipment so wantonly.

Champions of the poor and the downtrodden—that’s the image the NDF/NPA want to promote, and they, alas, might succeed, giving them more leverage in any peace negotiations.

The second issue highlighted by the Surigao del Norte attack is the mining industry itself, and its role in the country’s development. The mining and the environment lobbies are equally emphatic—in diametrically opposite directions. While one side has much deeper pockets, the other side has commitment and dogged persistence in spades.

But we can at least refer to the 2011-2016 Philippine Development Plan (PDP) to see what the government thinks (or says it thinks). And it seems the jury is still out, for there is a lot of hemming and hawing. Significantly, mining is dealt with in both the Industry chapter (Ch. 3) and in the Environment chapter (Ch. 10).

In Ch. 3, mining is cited as one of the key areas for development, along with tourism, electronics and business process outsourcing (BPO). In Ch. 10, though, the reservations start creeping in, with the section on mining titled “…mineral resource development is delivering mixed results.” And it cites a European Union-commissioned study reporting that “legal and illegal mining operations posed serious threat to the forest and to local rivers because of forest clearing and the release of toxins.”  The  volume of metallic wastes and mine tailings generated from 1990 to 1999 are placed at 131 million metric tons and 136 metric tons, respectively. One wonders where those went.

The PDP also points out in Ch. 10 that “an assessment report of a mining project has indicated that the fair share of the government from mining has not been achieved due to the existing incentive mechanism. Issues have been also raised on sharing of the mining industry with regard to foreign companies as well as the undesirable environmental conditions which the Filipino communities will have to deal with.”

Which brings us to the third issue that the Surigao del Norte attack forces us to take a closer look at: Whether under the Philippine Mining Law of 1995, the government is getting its fair share of  mining revenue (remember, that the state owns all those minerals), and if not, what it should do about it. But that will have to wait until my next column. Suffice it to say at this point that Justice Antonio Carpio, in his dissenting opinion in the Supreme Court decision that declared the law constitutional, not only answered with a resounding NO, but went through the arithmetic to prove it (the way he did in the Pimentel-Zubiri case—and of course he was correct).

In the meantime, though, other data are available that will help show the role of mining in the economy, compared with the other “drivers” mentioned in the PDP. Mining employment stood at 169,000 in 2009, accounting for less than one-half of one percent of total employment in the Philippines (employment in BPO was 445,000). The mining industry accounted for 1.1 percent of total GDP  in the same year.

But in case the observant reader gets excited about the productivity implications, here’s another piece of information: the incidence of poverty in the mining sector is higher even than in agriculture. So much for the benefits of mining.