Save Palawan Movement Dialogue With Business Community Rockwell 1 May 9, 2011 Christian S Monsod

1. SAVE PALAWAN MOVEMENT
Dialogue with B i
Di l g ith Business C
Community R k ll I
it Rockwell
May 9, 2011
Ch i i S M d
Christian S. Monsod

2. OUR ADVOCACY
We are advocating a ban on mining in:
Island ecosystems
Biodiversity sites
Bi di it it
Watersheds
Agricultural area
Of which PALAWAN is a prime example

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

4. WHY PALAWAN?
g y
Palawan is a fragile island ecosystem with coral
reefs, 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 Princesa
p y

5. WHY PALAWAN
PALAWAN……… CONT’D
CONT D
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
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 60
trillion ($840b -$1.4 trillion as estimated by the
Foreign Chambers of Commerce)
g

6. OUR ADVOCACY NO. 2. WITH RESPECT TO
MINING IN ALLOWED AREAS….
The p j j
projects must be subjected to strict
standards 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.

7. WITH RESPECT TO MINING IN ALLOWED
AREAS….…CONT’D
Serious p
problems of g y
governance, as admitted by
DENR and the mining community, must first be
addressed
No standard yet for resource and environmental
valuation (draft MTPDP 2011-2016, Chapter 10)
2011 2016,
and climate change adaptation
- Institutional i
I i i l incapacity to i l
i implement
“responsible” mining, esp technical experts

8. ECONOMIC ISSUES
( ) Mining industry: Mineral resources are there to
(1) g y
serve the needs of humanity and the country.
Minerals are raw materials for many of our modern
conveniences.
i
Our
O answer: Mi Minerals should not be extracted
l h ld b d
where the full cost of extraction is more than the
benefits. Otherwise
benefits Otherwise, the poor who mainly suffer
the environmental and social costs would be
subsidizing the rich.
g

9. ECONOMIC ISSUES CONT’D
ISSUES……CONT D
(2) Mining creates wealth and development
Our answer: Mining does not create capital.
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?

10. MINING CREATES WEALTH AND DEVELOPMENT…
CONT’D
No id
N evidence that money f
th t from mining i
i i g invested i
t d in
real capital – average mining contribution = 1.5%
of GDP. In many countries, most profits/rent went
f GDP I ti t fit / t t
to mining companies and corrupt officials.
Does this happen in the Philippines?

11. ECONOMIC ARGUMENTS
ARGUMENTS…… CONT D
CONT’D
(3) Mining Industry – Brings in big investments,
huge tax revenues.
Our answer: Big figures are misleading, and
results h
lt have been relatively poor:
b l ti l
- Phil revenue effort = 15.4%;
- Mining industry = 7.8%-9.2% (w/out WHT)

12. ECONOMIC ISSUES CONT’D
ISSUES……CONT D
On collection of excise taxes.
taxes
MGB data show exports were 18%-49% g t
d t h t 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
54%-83%
total annual excise taxes should be.
Is there under-declaration to avoid paying taxes?
under declaration

13. ECONOMIC ISSUES
ISSUES…
y g
The fiscal incentives unnecessary – Extracting
minerals is driven by international demand
Economic literature - “rent” can be taxed
because it is excess over reasonable rate of
return.
The country and local communities do not really
y y
get a fair share of the extracted irreplaceable
capital.

14. ECONOMIC ISSUES
ISSUES…
(4) Mining industry. “Big” contribution to social
industry Big
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
U.S., Canada Australia, etc.
based on: integration strategy triggered by knowledge
development. Are these present in the Philippines?

15. ECONOMIC ISSUES……..
(5) Mining Industry. Mining creates many jobs,
brings employment to rural areas
Our answer: Not true. Extraction activity is
co s de ed o job c eat g dust y a o e
considered low job-creating industry all over
the world. Unless there are backward and
forward linkages, which is not the case in the
Philippines. Employment contribution to
economy – less than 1%.

16. ECONOMIC ISSUES
ISSUES…..
( ) Mining Industry. RA 7942 is a “model law” on
(6) g y
“responsible” mining. It effectively addresses the
concerns about degradation of environment and
rehabilitation of mined areas.
h bilit ti f i d
Our
O answer. RA 7942 may be a good law on paper.
b dl
But institutional capability to implement/enforce
“responsible” mining is NOT in place in the
responsible
Philippines. There is not even a standard to
measure environmental and social costs

17. 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
industries,
(4) improved chances of human resource and
countryside development by creating self-
reliant communities away from urban
centers. (Pres. Fidel Ramos )

18. WE BOUGHT THE RHETORIC AND MADE IT
PUBLIC POLICY……
(1) responsible exploration, development
and utilization,
d ili i
(2) to enhance economic growth,
(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
sovereignty ” (Pres. Gloria Arroyo)

19. EVEN THE SUPREME COURT INCORPORATED
THE RHETORIC IN ITS DECISION….
“……Control..(to make sure) that these
enterprises contribute to the economic
development and general welfare of the
country,
country conserve the environment and uplift
environment,
the well-being of the local affected
communities.
communities ” (CJ Panganiban in La Bugal
Bugal-
B’Laan case.2008)

20. QUESTION….
QUESTION
Have these expectations been realized?
H th t ti b li d?
Will we repeat the “sins of the past”

21. THE AQUINO ADMINISTRATION ON THE ISSUE OF
MINING VS. BIODIVERSITY
President Aquino s remarks on Sept. 23, 2010,
Aquino’s
in New York to Council of Foreign Relations
“The Philippines….has one of the world’s
largest d
l g t deposits of gold, nickel, copper and
it f g ld i k l d
chromite. Through responsible mining, we
intend to g
i t d t generate more revenues from the
t f th
extraction of these revenues.”

22. THE AQUINO ADMINISTRATION ON THE ISSUE OF
MINING VS. BIODIVERSITY.. CONT’D
p , q
In the same speech, President Aquino said:
“The Philippines is of the view that
The
development and poverty alleviation are
benefits derived from biodiversity. For this
y
reason, the Philippines is committed to
biodiversity conservation and to the attainment
of the objectives of the Convention on
Biological Diversity.”

23. IF THE AQUINO ADMINISTRATION IS DISPOSED
TO BAN MINING IN PALAWAN,,
Can this be done? It seems the President can.
The
Th SC decision i th L B g l B’L
d i i in the La Bugal-B’Laan case on
the principle of “full control and supervision”
under Art. XII, Sec. 2 of the Constitution said
d A t XII S f th C tit ti id
that, “the State retains the power to direct
overall strategy; and t set aside, reverse or
ll t t g d to t id
modify plans and actions of the contractor.”

24. CONT D
CONT’D
In La Bugal B Laag, the SC also said:
Bugal-B’Laag,
“The idea of full control is similar to that
which is exercised by the Board of Directors of a
private corporation..”
“Who
“Wh or what organ of g
h t g f government actually
t t ll
exercises this power of control on the behalf of
the St t ? The C
th State? Th Constitution i clearly clear: th
tit ti is l l l the
President.”

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

26. TO SUMMARIZE OUR POSITION ON THE
ECONOMIC ISSUES:
If the true economic value of mining is, at the
least, disputable
least disputable, applying the “precautionary
precautionary
principle”, why not disallow it in a valuable and
fragile island ecosystem like Palawan? It can be
argued that the SC decision in La Bugal-B’Laan
empowers the President to do thatthat.

27. SUMMARY……. CONT’D
SUMMARY CONT D
Secondly, the government should revisit the
cost-benefit evaluation of mining p j
g projects and
put the institutions in place to implement
responsible mining before moving ahead with
mining. Unlike other businesses, wrong
decisions on mining are irreversible because
mineral resources once extracted are non-
i l t t d
renewable.

28. SAVE PALAWAN FROM MINING MOVEMENT
THANK YOU.