EDITORIAL – ZTE in Diwalwal

Unless the government wants another scandal, it should show utmost transparency in yet another deal with China’s ZTE group. A corporation has asked the Supreme Court to reconsider a decision handed down on June 23, 2006, which canceled mining operations in the Diwalwal gold rush site, or the Agusan-Davao-Surigao Forest Reserve. The SC’s First Division ruled that the mining permit of Southeast Mindanao Gold Mining Corp. or SEMGMC, a local subsidiary of Marcopper Mining Corp., had expired in February 1994.

SEMGMC probably would not have pursued the case if the government had not entered into a deal with ZTE less than three weeks after the SC ruling was issued. In its petition, SEMGMC said that on July 12, 2006, the government signed a memorandum of understanding with ZTE for a joint exploration of Diwalwal for possible mining operations.

Who knew ZTE was also into mining? The company, whose operations are global, is better known in telecommunications, at least in the Philippines, where it gained notoriety after it became embroiled in a corruption scandal involving a $329-million national broadband network deal with the Department of Transportation and Communications.  ZTE has lost this deal.

Marcopper, for its part, is equally notorious for the mining disaster in Marinduque in 1996, when the company was in partnership with Canada’s Placer Dome. That disaster, which has left serious long-term damage to the environment and the health of residents in Marinduque, might have influenced the high court’s ruling against the company.

Villagers at the gold rush site, who pan for gold under dangerous conditions, don’t want any of the major mining firms entering Diwalwal. Shantytowns have mushroomed around the gold rush site, where fatal accidents are not uncommon. There have been efforts to rationalize small-scale mining operations in the area.

Mining in this country is controversial enough. If the government wants to bring a major mining firm to the gold rush site, the best way to avoid a repeat of the ZTE broadband controversy is to show transparency in the Diwalwal exploration. Or will details of this deal also be covered by executive privilege?