Not just a $23-Billion solution

Dindo Manhit, President of the Stratbase ADR Institute

A wide-ranging value chain analysis on the Philippine economy leads us to try new strategies, which can eventually jumpstart “real” development. The fact remains that our country is the fifth most mineralized country in the world; the issue of effective resource management in order to unleash the potentials of this “underground” wealth is a good strategic approach as this can finance development and activate key industries in the process.

Economic endeavors that involve the extraction of mineral resources entail serious environmental considerations. The study of Dr. CP David, Convenor of Philippine Business for Environmental Stewardship under the Albert Del Rosario Institute for Strategic Studies, entitled “Advancing Sound Resource Management as a Requisite for Sustainable Development,” emphasizes the need to strike a balance between mining and ecosystem integrity.

Government seems to be ineffective in enforcing environmental regulations for mining, forestry, fisheries, and solid waste management. This may be the reason for the cyclical and systemic nature of our environmental problems. Balanced environmental governance is the key to realizing and unlocking the transformative potentials of sound resource management and sustainable mining activities.

In a 2017 Stratbase ADRI special paper, Dr. Carlo A. Arcilla, then Director the University of Philippines National Institute of Geological Sciences, demystified a much propagated perception by anti-mining groups that 40% of our land area is being mined or has been opened to mining. Worse, the industry is being charged as the culprit for the destruction of our forest cover. According to his study, however, mining in our country only occupies a minute space that is less than 0.3% of our total land area, debunking the demonizing claims against large-scale mining. The large-scale mining operations are recognized by no less than the Department of Environment and Natural Resources (DENR) as the leading industry when it comes to reforestation because they are mandated to do so under their licenses to operate.

With regard to agriculture, mining could not directly interfere because lands rich in metallic minerals are not suitable for growing crops and existing mining laws do not allow mining in agricultural lands.

Dr. David also noted that the inability or deliberate non-compliance of thousands of small-scale mining operations to comply with the environmental regulations, and the regulator’s limitations in enforcing these, are causing the environmental damage that unfairly reflects on the whole mining industry. Small-scale mining activities are highly unregulated both from an environmental and fiscal perspective and need to be approached as a separate challenge with its own set of eco-political complications.

The developed countries of the world have for centuries realized the value of harnessing their mineral resources as a fuel for industrialization, resources that they exploited to achieve the level of prosperity, that high standard of living, that their citizens now enjoy. The journey was by no means environmentally friendly, but eventually evolved to what is now widely practiced as responsible mining. We now have the advantage of new technologies and tested regulatory models that we can easily integrate to the local environment.

Shifting the government’s regulatory approach from a restrictive to a developmental policy regime of environmental stewardship and responsible mining will awaken the full potential of the Philippine mining industry.

For instance, the Chamber of Mines estimates that the lifting of the ban on new mining permits as enforced by Executive Order 79, will prompt the influx of $23 billion in long-pending direct foreign investments for 11 pending mining projects. These investments equate to massive job creation and livelihood opportunities for millions of Filipinos in undeveloped areas of the country.

Without legislating new taxes, operations of new mining projects will translate to billions in new revenue that will help both the national government and local host communities build new infrastructure and improve public services.

As more mining operations start production, opportunities will open up for downstream industries in manufacturing and services, further enhancing the multiplier effect generated by legitimate mining operations.

All these benefits can only happen when predicated by an industry that strictly adheres by the standards of responsible mining. Recognizing the importance of earning a “social license to operate,” the Chamber of Mines has adopted the mandatory participation of its members in the TSM (Towards Sustainable Mining) Initiative enforced in Canada, one of the most successful mining economies of the world.

Aligned with the DENR’s policy, the Chamber of Mines has been strictly implementing progressive rehabilitation as a standard practice of its member companies. Notable examples of successfully rehabilitated open pit mines are Rio Tuba Nickel Mining Corp.’s in Bataraza, Palawan, Philex Mining Corp.’s Bulawan and Sibutad Projects in Negros Occidental and Zamboanga del Norte, Taganito Mining Corp.’s mine in Claver, Surigao del Norte, and TVI Resource Development’s Canatuan Mine in Zamboanga del Norte.

The government must overcome the stereotypical biases against mining and open its eyes to hard data that verifies the viability and long-term sustainability of a responsible mining industry. If this happens, this will not just be a $23-billion solution; it will be a legacy that will outlive not only political cycles, but many grateful generations.

 

 

This article was originally published in BusinesssWorld.

 

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