Blowing hot and cold for mining; Mindanao’s tragic blackouts

Mining companies are not complaining about government policy towards the industry. What they do want is consistency in policy so they can program their investments. The way it has been under this administration is to blow hot and cold for mining. It does not seem able to make up its mind.

But it may soon have to decide. An Australian mining firm has warned that unless it gets its act together the blows to mining will be ruinous to the nation’s economy. The government’s inability to manage the mining industry properly will discourage investments and without investments much-needed jobs cannot be created. We have been relying on sending our poor countrymen abroad for jobs but soon that too will have to stop with countries closing employment to foreigners.

Oceana Gold, an Australian mining firm, reacted forcefully to threats from anti-mining pressure groups that have asked the Supreme Court to strike down Republic Act 7942 or the Philippine Mining Act of 1995. This would effectively cancel all Financial and Technical Assistance Agreements (FTAA) and Mineral Production Sharing Agreements (MPSA).

Oceana Gold is not the first mining group to speak up about the government’s flip-flopping mining policies. The Sagittarius Mining Inc. has had to postpone its mining operations because of government policy changes.

Tito Lopez, lawyer for Oceana Gold argued “the firm has already invested in its operations — just like other foreign mining firms. Can you imagine the possible impact of canceling the FTAA or MPSA? These foreign companies have already invested a lot in their explorations and actual operations and you will cancel their permits. Will that not discourage foreign investments?” Lopez told the court.

He added that on the issue of the equitable sharing of revenue this was already being addressed by the executive and legislative branches.

Impleaded in the petition are the Department of Environment and Natural Resources (DENR), Hallmark Mining Corp. and Austral-Asia Link Mining Corp, among others. The petitioners were Bayan Muna Party-list Rep. and senatorial bet Teddy Casiño who said it would take a “flip-flopping” by the Court for them to win their case since these issues have already been decided in court. Quezon 4th District Rep. Lorenzo Tañada 3rd and former Akbayan Party-list Rep. and Liberal Party senatorial bet Risa Hontiveros are also among the petitioners.

The petitioners urged the Court to bar the DENR from acting on any application for MPSA, which covers 17,215.4474 hectares covering the three municipalities of Mati, San Isidro and Governor Generoso in Davao Oriental province.

Aside from this, they also asked the Court to nullify the seven MPSAs that it had already reassigned to respondent mining firms.

Petitioners argued that RA 7942 is unconstitutional because it violates Article XII, Section 2 of the 1987 Constitution which provides that “all lands of public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests, timber, wildlife, flora and fauna and other natural resources are owned by the State.”

This is a basic misunderstanding of the issue. The mining sharing agreements are based on a joint venture between the investor and the government so it is not a question of who owns the natural resources. The government remains the owner. Mining investors merely come in with the funds and technology to enable the government to make use of its resources.

Several petitions seek to nullify the law over constitutional issues already resolved with finality in a landmark ruling in 2004, saying “there is a price to pay in changing the rules in the middle of the game.”

It is good news to hear that San Miguel raised $800 M in what was described as the largest corporate bond issue by a private local firm. This comes in handy to help facilitate production and enable it to provide more jobs for the people.

The group is into a wide range of businesses like beverages, food and packaging, power generation, oil refining, mining, airline and tollroads. It has since expanded its businesses to China, Vietnam, Indonesia, Malaysia, Thailand and Australia.

Interestingly, there were more Asian investors than Europeans in the San Miguel bond issue. 

It comes at a crucial time when Ramon Ang, chairman of the group, is set to fulfill his promises for Philippine Airlines to compete with other international airlines. He had hoped to build a new airport to be able to take in more flights in a first class airport.

Things are looking up for the Ramon Ang managed Philippine Airlines. The group recently won the bid for the Manila airport expressway. At the same time negotiations for the lifting of Europe’s blanket air ban against Philippine carriers have been positive.

The resumption of the European flights of Philippine carriers will benefit both the EU and the Philippines.

“I think really we are on a very positive curve. I mean the first major achievement was the lifting of the safety concern by ICAO (International Civil Aviation Organization) earlier this year,” EU Ambassador Guy Ledoux said.

“I think what is important is that a very important dialogue has been reestablished,” he added.

The Philippines passed the ICAO’s safety audit in February, ending three years of being listed among the countries deemed of “significant safety concern” by the international aviation regulator.

It is easy enough to track economic figures, higher GDPs as well as good ratings. These are numbers. But there is the human side to it in the real world.

The optimism about Philippines economic gains must be tested by how it impinges on the lives of ordinary people. This brings me to the question of the power problem in Mindanao. It has wrought untold suffering and prospects for job creation bleak.

This is an emergency problem that needs emergency solutions. Unless the power crisis is resolved soon about 55,000 people will become jobless in the canning factories and deep sea fishing vessel firms in General Santos City, Zamboanga Peninsula and South Cotabato.

Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) vice chairman Salvador France joined by Anakpawis partylist vice chairman Fernando Hicap said the eight-hour blackouts will lead companies to downsize production and erode wages.

“Mr. Aquino should not ignore this economic holocaust in Mindanao. Imagine the impact of power crisis to 50,000 fish workers and fishport workers in Zamboanga Peninsula, General Santos City and the entire Socsargen area,” the leaders said in a statement.