SAVE PALAWAN MOVEMENT

Di l g ith B i C it R k ll IDialogue with Business Community Rockwell IMay 9, 2011

Ch i i S M dChristian S. Monsod

OUR ADVOCACYOUR ADVOCACY

We are advocating a ban on mining in:We are advocating a ban on mining in:Island ecosystemsBi di it itBiodiversity sitesWatershedsAgricultural area

Of which PALAWAN is a prime example

OUR ADVOCACY CONT’DOUR ADVOCACY…. CONT D

We are not advocating a total ban on We are not advocating a total ban on mining. Mining may have a role in our development, although that has NOT development, although that has NOT happened to date, not even during the mining “boom” of the seventies and the mining boom of the seventies and the early eighties

WHY PALAWAN?WHY PALAWAN?

Palawan is a fragile island ecosystem with coral g yreefs, mangroves, farmlands, watersheds and old growth forests

The economic, environmental and social ,benefits of not mining far exceed the benefits

There is a better business model – ecotourism as proven by Puerto Princesap y

WHY PALAWAN CONT’DWHY PALAWAN……… CONT D

Over the longer term, the carbon stock of Palawan Over the longer term, the carbon stock of Palawan represents a win-win solution with carbon trading.

The carbon stock of Palawan, is estimated by the Palawan Council for Sustainable Development at Palawan Council for Sustainable Development at P130 trillion or more than twice the value of all the mineral lodes of the country of about P47-P60 e a odes o t e cou t y o about 60trillion ($840b -$1.4 trillion as estimated by the Foreign Chambers of Commerce)g

OUR ADVOCACY NO. 2. WITH RESPECT TO MINING IN ALLOWED AREAS….

The projects must be subjected to strict p j jstandards of resource and environmental valuation as required by RA 7942 and the “precautionary rule” on the environment

Test case: Palawan Mt. Mantalingahan study commissioned by DENR/PCSD: Value of water and carbon stock = P70-94b. Value of mining = P15b. Circumvented by moving bounderies.

WITH RESPECT TO MINING IN ALLOWED AREAS….…CONT’D

Serious problems of governance, as admitted by p g yDENR and the mining community, must first be addressed

No standard yet for resource and environmental valuation (draft MTPDP 2011-2016, Chapter 10) valuation (draft MTPDP 2011 2016, Chapter 10) and climate change adaptation

I i i l i i i l - Institutional incapacity to implement “responsible” mining, esp technical experts

ECONOMIC ISSUES ECONOMIC ISSUES

(1) Mining industry: Mineral resources are there to ( ) g yserve the needs of humanity and the country. Minerals are raw materials for many of our modern

iconveniences.

O Mi l h ld b d Our answer: Minerals should not be extracted where the full cost of extraction is more than the benefits Otherwise the poor who mainly suffer benefits. Otherwise, the poor who mainly suffer the environmental and social costs would be subsidizing the rich.g

ECONOMIC ISSUES CONT’DECONOMIC ISSUES……CONT D(2) Mining creates wealth and development

Our answer: Mining does not create capital. Minerals are the wealth/capital built up over Minerals are the wealth/capital built up over millions of years. Mining converts it into another form – money. The money should be used to create real capital to replace it.

Moreover, aren’t there better and less costly ways to raise development financing?

MINING CREATES WEALTH AND DEVELOPMENT… CONT’D

N id th t f i i g i t d i No evidence that money from mining invested in real capital – average mining contribution = 1.5%

f GDP I t i t fit / t t of GDP. In many countries, most profits/rent went to mining companies and corrupt officials. Does this happen in the Philippines?

ECONOMIC ARGUMENTS CONT’DECONOMIC ARGUMENTS…… CONT D

(3) Mining Industry – Brings in big investments, (3) Mining Industry Brings in big investments, huge tax revenues.

Our answer: Big figures are misleading, and lt h b l ti l results have been relatively poor:- Phil revenue effort = 15.4%; - Mining industry = 7.8%-9.2% (w/out WHT)

ECONOMIC ISSUES CONT’DECONOMIC ISSUES……CONT D

On collection of excise taxesOn collection of excise taxes.

MGB d t h t 18% 49% g t MGB data show exports were 18%-49% greater than Gross Value Added of Mining (2004-2008)

MGB data (1997-2009) show under-collection in mining of excise taxes was 54% 83% of what mining of excise taxes was 54%-83% of what total annual excise taxes should be.Is there under-declaration to avoid paying taxes?Is there under declaration to avoid paying taxes?

ECONOMIC ISSUESECONOMIC ISSUES…

The fiscal incentives unnecessary – Extracting y gminerals is driven by international demand

Economic literature - “rent” can be taxed because it is excess over reasonable rate of return.return.

The country and local communities do not really y yget a fair share of the extracted irreplaceable capital.

ECONOMIC ISSUESECONOMIC ISSUES…

(4) Mining industry “Big” contribution to social (4) Mining industry. Big contribution to social upliftment of rural areas

Our answer: Not true. Actually small amounts, even under RA 7942 = approx. 2%-3% of estimated profits

“Sustainable mining” is an oxymoron. Sustainable development like in the U S Canada Australia etc development like in the U.S., Canada, Australia, etc. based on: integration strategy triggered by knowledge development. Are these present in the Philippines?

ECONOMIC ISSUES……..

(5) Mining Industry. Mining creates many jobs, (5) Mining Industry. Mining creates many jobs, brings employment to rural areas

Our answer: Not true. Extraction activity is considered low job-creating industry all over co s de ed o job c eat g dust y a o ethe world. Unless there are backward and forward linkages, which is not the case in the Philippines. Employment contribution to economy – less than 1%.

ECONOMIC ISSUESECONOMIC ISSUES…..

(6) Mining Industry. RA 7942 is a “model law” on ( ) g y“responsible” mining. It effectively addresses the concerns about degradation of environment and

h bilit ti f i d rehabilitation of mined areas.

O RA 7942 b d l Our answer. RA 7942 may be a good law on paper. But institutional capability to implement/enforce “responsible” mining is NOT in place in the responsible mining is NOT in place in the Philippines. There is not even a standard to measure environmental and social costs

MINING IS LONG ON RHETORIC AND SHORT ON RESULTS. BUT WE BOUGHT THE RHETORIC AND MADE IT PUBLIC POLICY……

“Long term, high profit mining translates into (1) higher revenues for government, (2) more decent jobs for the population, (3) more raw materials to feed the engines of

downstream and allied industries and downstream and allied industries, and (4) improved chances of human resource and countryside development by creating self-countryside development by creating self-reliant communities away from urban centers. (Pres. Fidel Ramos )centers. (Pres. Fidel Ramos )

WE BOUGHT THE RHETORIC AND MADE IT PUBLIC POLICY……

(1) responsible exploration, development d ili iand utilization,

(2) to enhance economic growth,(3) in a manner that adheres to the principles (3) in a manner that adheres to the principles of sustainable development

(4) with due regard for justice and equity, sensitivity to the culture of the Filipino

people and respect for Philippine sovereignty ” (Pres Gloria Arroyo)sovereignty.” (Pres. Gloria Arroyo)

EVEN THE SUPREME COURT INCORPORATED THE RHETORIC IN ITS DECISION….

“……Control..(to make sure) that these enterprises contribute to the economic enterprises contribute to the economic development and general welfare of the country conserve the environment and uplift country, conserve the environment, and uplift the well-being of the local affected communities ” (CJ Panganiban in La Bugalcommunities. (CJ Panganiban in La Bugal-B’Laan case.2008)

QUESTIONQUESTION….

H th t ti b li d?Have these expectations been realized?

Will we repeat the “sins of the past”

THE AQUINO ADMINISTRATION ON THE ISSUE OF MINING VS. BIODIVERSITYMINING VS. BIODIVERSITY

President Aquino’s remarks on Sept. 23, 2010, President Aquino s remarks on Sept. 23, 2010, in New York to Council of Foreign Relations

“The Philippines….has one of the world’s l g t d it f g ld i k l d largest deposits of gold, nickel, copper and chromite. Through responsible mining, we i t d t g t f th intend to generate more revenues from the extraction of these revenues.”

THE AQUINO ADMINISTRATION ON THE ISSUE OF MINING VS. BIODIVERSITY.. CONT’D

In the same speech, President Aquino said:p , q

“The Philippines is of the view that The Philippines is of the view that development and poverty alleviation are benefits derived from biodiversity. For this yreason, the Philippines is committed to biodiversity conservation and to the attainment of the objectives of the Convention on Biological Diversity.”

IF THE AQUINO ADMINISTRATION IS DISPOSED TO BAN MINING IN PALAWAN,,

Can this be done? It seems the President can.Can this be done? It seems the President can.

Th SC d i i i th L B g l B’L The SC decision in the La Bugal-B’Laan case on the principle of “full control and supervision”

d A t XII S 2 f th C tit ti id under Art. XII, Sec. 2 of the Constitution said that, “the State retains the power to direct

ll t t g d t t id overall strategy; and to set aside, reverse or modify plans and actions of the contractor.”

CONT’DCONT D

In La Bugal-B’Laag, the SC also said:In La Bugal B Laag, the SC also said:“The idea of full control is similar to that

which is exercised by the Board of Directors of a which is exercised by the Board of Directors of a private corporation..”

“Wh h t g f g t t ll “Who or what organ of government actually exercises this power of control on the behalf of th St t ? Th C tit ti i l l l th the State? The Constitution is clearly clear: the President.”

CONT’DCONT D

Th i f “i i t f t t” ld The issue of “impairment of contract” would not even arise because, if we follow the logic of L B g l B’L thi t t d i i f La Bugal-B’Laan, this amounts to a decision of the Rio Tuba Board.

TO SUMMARIZE OUR POSITION ON THE ECONOMIC ISSUES:ECONOMIC ISSUES:

If the true economic value of mining is, at the least disputable applying the “precautionary least, disputable, applying the precautionary principle”, why not disallow it in a valuable and fragile island ecosystem like Palawan? It can be fragile island ecosystem like Palawan? It can be argued that the SC decision in La Bugal-B’Laanempowers the President to do thatempowers the President to do that.

SUMMARY CONT’DSUMMARY……. CONT D

Secondly, the government should revisit the cost-benefit evaluation of mining projects and g p jput the institutions in place to implement responsible mining before moving ahead with mining. Unlike other businesses, wrong decisions on mining are irreversible because

i l t t d mineral resources once extracted are non-renewable.

SAVE PALAWAN FROM MINING MOVEMENTSAVE PALAWAN FROM MINING MOVEMENT

THANK YOU.