Alyansa Tigil Mina - The People's Mining Sector.report

Alyansa Tigil Mina (ATM) is an advocacy group and a people's movement that upholds the rights of the present and future Filipinos against the persisting injustices related to large-scale mining.

The term "tigil-minaN (stop mining) does not reflect the stand of totally going against (to prohibit or ban) all kinds of mining. What ATM is referring to, is stopping the policy regime on large-scale mining being adopted by the Arroyo administration and the Department of Environment and Natural Resources {DENR}, which irrationally exploits mineral resources - undermining the {real value of land' (where minerals are found) to Filipinos and promoting purely foreign-controlled and export-oriented mining industry, that does more harm than good in addressing the fiscal problems, poverty situation, environmental and other socio-political concerns in our country.

ATM, formed in 2004, is a coalition of organizations and individuals from mining-affected communities, NGOs, POs, church-based organizations and academic institutions, that decided to disengage from the series of consultations convened by the DENR regarding the revitalization of the mining industry through the aggressive promotion of large-scale mining in the country.

Much like the Bantay Mina coalition in the 1990s and the Peoples' Call presented at the Dapitan Initiative in 2002, ATM serves as a watchdog that actively engages and challenges the Government, international finance corporations/institutions, multinational mining corporations and other key players to expose their wrongdoings and failures of the laws and policies, their implementation a"nd the practices involved in the mining industry.

Owing to the country's rich mineral deposits, Artisanal and Small-Scale Mining (ASM) has become one of the biggest and most important sectors in the country. It is estimated that the sector supports at least one million of the country's population, or one in every 90 Filipinos. In the past 5 years, the small-scale gold mining sector produced about 80% of the country's annual gold supply, with the majority of production concentrated in Benguet, Camarines Norte, Compostela Valley and different regions of Mindanao.

Yet despite the huge economic projections and the sheer number of people and organizations involved, the ASM sector remains a highly unregulated industry. Many small-scale mining operations remain unregistered and decentralized. Demanding procedures, registration costs, and/or lack of support from the government dissuade many small-scale miners and operators to seek legal accreditation.

Traditional vs gold-rush mining

Republic Act 7076 (RA 7076) or the People's Small-Scale Mining Act of 1991 defines "small-scale mining" as mining activities which rely heavily on manual labor, and do not use explosives or heavy mining equipment. Philippine mining laws do not make a distinction between "artisanal" and ((small-scale" mining.

However, existing literature on mining often differentiates smallscale gold miners as either ((traditional" or "gold-rush" miners. The said particularities can be attributed to how these groups developed.

The People's Mining Sector: A Review and Analysis of Artisanal and Small-scale Mining in the Philippines

Traditional gold mining employs {{chemical-free" methods, heavily relies on manual labor and is carried out by poor communities or indigenous peoples group for collective benefit. Meanwhile, gold-rush mining is done by individuals attracted to profit.

But an overlap on the characteristics of these two groups now exists since the value system in many indigenous communities has changed over time. Many subsistence small-scale miners are also already utilizing new technologies, heavy equipment and toxic chemicals.

Key Players in ASM

There is a power hierarchy in an ASM community dictated by financial capacity, level of skills and access that exist in an ASM community. In an ordinary gold-rush community, tunnel owners and financiers are the ones who get the biggest chunk of the profit. Skilled miners or abanteros are the ones who are directly involved in extracting the ore from the earth while low-skilled miners or atraseros perform the packing and hauling of ore. Women are sometimes designated to other duties such as ore and sack washers. Other actors in an ASM community are the ore transporters and drivers, and processing plant owners and workers who all directly benefit in the mining operations.

The Bangko Sentral ng Pilipinas (BSP) is the sole mandated buyer of the gold produced by small-scale mining. However unregistered gold traders exist in many cities and towns that have ASM operations, offering better rates because of non-payment of required taxes. The black market has so successfully cornered the gold market from ASM that in 2013, the BSP was not able to purchase a single gram of gold.

Small-scale mining permits are given by the Provincial/City Mining Regulatory Board (P/CMRB) and Department of Environment and Natural Resources (DENR).

Issues and Concerns

The lack of access to safety awareness and training, adequate safety equipment, and health care and other social benefits expose small-scale

2 Alyansa Tigil Mina

mining workers to higher risks and poorer work conditions than workers in large-scale mining. Miners are also exposed to regular mine accidents such as falling objects, suffocation from chemical fumes, crushing injuries, erosion, and others. Additionally, women miners are exposed to sexual violence and abuse and child labor exists in many ASM operations.

The rampant use of mercury and cyanide in gold ASM operations also endangers the health and safety of miners and their families. In fact, the ASM sector releases 70 metric tons of mercury annually, making it the single largest emitter of mercury pollution in the country.

Since ASM is an extractive industry, its impact to the physical environment is unavoidable. ASM also encourages money laundering, localized price inflation and social and political resistance to other development programs. Social disturbance and increase in different cases of prostitution and violence were also documented in ASM communities.

Even the conflicting laws governing the ASM sector especially on the authoritative rights to issue mining permits have caused confusion and conflict between the DENR and local government units of mineral-rich provinces and cities. LGUs insist that they have the power to issue mining permits under the "local autonomy" provision of the Local Government Code of the Philippines. Meanwhile the DENR insists that the People's Small-Scale Mining Act of 1991 and the recently-issued Executive Order No. 79 by President Benigno Aquino III mandates that all small-scale mining operations should only be done inside DENR-approved "Minahang Bayan" and be subjected to national government monitoring.

However, many small-scale miners suspect that DENR officials are intent on limiting their operations to Minahang Bayan areas in order to remove them from their existing operations so that the government can award it to large-scale mining operations.

ASM groups in Benguet and Compostela Valley also complained that their applications for Minahang Bayan have been turned down in favour of large-

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the P h i l ippines :3

scale mining applications. Even in a declared "mineral reserve" such as Diwalwal in Compostela Valley, large-scale mining corporations were allowed to operate.

Cases of large-scale mining corporations and foreign investors financing small-scale mining operations in Cagayan, Cordillera, and Mindanao were also documented.

Emerging good practices

Practices of mercury-free and cyanide-free methods of processing gold were already documented in some ASM communities in Cordillera. The Benguet Federation of Small-scale Mining Association aims to phaseout the use of mercury in all ASM operations in the province by 2015. Meanwhile, indigenous small-scale miners from Pasil and Balbalan of Kalinga province have also expressed that they will eliminate the use of mercury in their operations.

The gold-rich province of Compostela Valley is also the first to adopt the Extractive Industry Transparent Initiative (IETI), a global policy that aims to implement a transparncy initiative on extractive industries particularly on mining.

The ASM sector is undeniably a very critical industry in the Philippines because it provides a source of livelihood to thousands of Filipino families. However as an extractive industry controlled by capitalists and local lords, ASM contributes significantly to environmental degradation

4 Alyansa Tigi l Mina

and pollution, conflict and social unrest, corruption, resistance to local development programs, and exposes a greater number of community members to dangers and toxic harm.

In the past decades, the numbers of gold-rush areas have been expanding and their operations have increased, employing heavy equipment and explosives and 24-hours operations. In Compostela Valley, a single tunnel sometimes employs more than 500 workers. Even distinctions between traditional and gold-rush ASM are already blurred since even indigenous communities practicing artisanal mining already use explosives and toxic chemicals.

However, despite the huge percentage of a local population depending on it; it is hard to see the actual contribution of the ASM sector to local poverty alleviation.

In some gold-rush sites visited for this paper, financiers and tunnel owners are mostly "migrant" investors. Most of the skilled miners are also brought by the financier or tunnel owners. Low-paying jobs with minimal responsibilities were given to local residents such as ore packing, hauling and sack washing. LGUs imposed taxes, but this is unregulated since most of ASM operations are not even registered.

But is it clear that those who are in power such as the political and wealthy families greatly benefits from this chaotic state of the ASM sector. Some politicians and armed groups regularly receive contributions from ASM operations.

5

Meanwhile the actual contribution of the ASM sector to national development is even murkier and more difficult to calculate since almost all the gold produced by this sector goes to the black market and not to the country's reserve.

With the lack of national registration and implementing mechanisms to ensure the collection of environmental damages and compensation} the general public will be the one to shoulder the costs of addressing and mitigating the hazards brought by this sector, such as the clean-up of contaminated sites and healthcare support for affected residents and workers.

Recommendations

The DENR's bias in favor of large-scale mining corporations, along with the ineptness and lack of political will of its regional and field offices, may have contributed to the failure to mainstream the ASM sector and discourage many small-scale miners to register their operations. Local politicians and armed groups benefiting from existing set-up further aggravate the situation.


These illegal Artisanal and Small-Scale Mining operations create problems in terms of difficulty in: monitoring environmental compliance, providing necessary technical and technological support, and ensuring workers proper access to healthcare, training and other social services.

The national government must show the people that it will uphold the law and public interest. All mining operations, whether large-scale or small-scale, in environmentallycritical areas and {{no-go mining" zones, should be closed down.

The DENR and concerned P/CMRB should immediately conduct an inventory of all existing ASM operations and pending applications for Minahang Bayan sites should be settled within six months. All unregistered ASM activities outside of declared Minahang Bayan areas after the six-month deadline should be closed down.

In addition, the Congress should enact a new {{Artisanal and Small-Scale Mining Law" that will promote a responsible, sustainable and equitable people's mining sector. {{Artisanal" mining should be made distinct from {{small-scale" mining.

The use of explosives, heavy equipment and toxic chemicals should be banned and all {{artisanal" mining must be limited to tribal areas such as I/Minahang Katutubo./I Meanwhile, small-scale mining must be strictly regulated in Minahang Bayan. Small-scale mining operations should have an extraction quota and be subjected to stricter regulations such as compliance to existing environmental and pollution control, monitoring systems, and social acceptability.

No mining, large-scale or small-scale, should use toxic chemicals or be implemented inside {{no-mining" zones.

The Aquino administration should also mobilize the Bureau of Internal Revenue, National Bureau of Investigation, Philippine National Police and Department of Interior and Local Government to end the illegal market of gold and mercury trade.

The People's Mi ning Sector: A Review and Analysis of Artisanal and Small-scale Min i ng in the Philippi nes 7

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I. INTRODUCTION

BACKGROUND

The Philippines is endowed with rich natural resources and abundant metallic mineral deposits. In terms of occurrence per unit area, the country ranks third in gold, fourth in copper, fifth in nickel and sixth in chromite globally.l

ORE Reserves in Million MT (200S) Gold 3,056

Copper 2,968 Nickel 953

Chromium 18 Iron 410

Aluminium 292

Table 1. Philippine Ore Reserves. Source: 8012011

Gold and copper mineralizations are mostly found in Central Cordillera and many parts of Mindanao while major nickel mineralizations are found in Palawan and Surigao,2

Because of the country's rich mineral deposits, mining has been in e)(istence since time immemorial. Metallurgy has been an important communal activity of the country's early inhabitants. Pre-Spanish gold jewelleries and accessories were excavated by archaeologists in different tribal burial grounds and sites of former sultanate kingdoms.

Artisanal and small-scale mining (ASM) remains a vital economic activity and source of income for many Filipinos living in rural and remote

The People's Min ing Sector: A Review and Analysis of Artisanal and Smal l-scale Min ing in the Ph i l ippines 9

communities. There is no official government data at the time of this . writing, but it is estimated that the sector supports at least one million of

the country's population or one in every 90 Filipinos. It is also estimated that the sector generates or supports at least 20,000 formal and informal small enterprises and businesses.3

Small-scale miners in the country include individuals and family groups doing mining at subsistence level or as a business. It is estimated that of the total number of those engaged in small-scale mining in the country, 75% are in subsistence mining, 15% are small individual or family businesses and 10% are established commercial firms.4

Gold remains the most valuable and most mined metallic mineral in the Philippines. Small-scale gold mining occurs in more than 30 provinces and provides a significant source of livelihood to 200,000 to 300,000 miners, which includes 18,000 women and children.s

For the past five years, the small-scale gold mining sector has been producing an average of 30 tonnes or about 80% of the country's annual gold supply.6 Majority of the country's gold production comes from Benguet, Camarines Norte, Compostela Valley and other parts of Mindanao.

OBJECTIVES OF THE STUDY

This report aims to provide members of Alyansa Tigil Mina (ATM) an introduction to and a glimpse of the existing artisanal and small-scale mining sector in the country, analyse conflicting issues and concerns


surrounding the sector, and provide recommendations on how to deal with these issues and concerns.

METHODOLOGIES USED

Data mentioned in this report were extracted and analyzed from existing literature, studies and researches made by different government agencies, the academe and non-government institutions. This report also cites interviews and information from published news articles and journals made by different media organizations.

Information was also gathered first-hand from interviews with key individuals actively participating or engaged in small-scale mining activities in different areas of the country.

LIMITATIONS OF THE STUDY

Due to logistical and financial limitations, only a few ASM communities were visited for this report. Hence this paper only provides a brief look into the situation of the ASM sector and does not attempt to provide a comprehensive analysis of all issues surrounding the state of artisanal and small-scale mining. Further studies are needed to expand particular aspects or concerns mentioned in this report.

Recognizing previously-stated limitations, only two sites were visited for the making of this paper, but both sites were selected to provide differing insights into dissimilar situations and conditions. One site, located in Itogon, Benguet, hosts artisanal gold mining operations relying heavily on manual labor and done by Ibaloi and Kankaney indigenous groups. These mining lands are subject to patents claimed by an American transnational corporation. The other target area is a gold-rush site inside a protected area and watershed in Nabunturan, Compostela Valley, where mining operations use heavy equipment.

II. DEFINITION OF ARTISINAL AND SMALL-SCALE

The definition of artisanal and small-scale mining varies from country to country because different criteria or parameters are used. For decades, experts have worked to devise definitions of artisanal and small-scale mining but have been unable to reach a consensus.7

Some countries such as Ethiopia and Brazil have made distinctions between artisanal and small-scale mining. Generally, countries that

The People's Mining Sector: A Review and Analysis of Artisanal and Small-scale Mining in the Ph i l i p pines 11

have ASM within its borders define artisanal mining as informal, nonmechanized extraction activities carried out manually by individuals or groups. Small-scale mining however has some' mechanization and has identified production levels.

However this distinction is not relevant to the Philippines. Republic Act 7076 (RA 7076) or the People's Small-scale Mining Act of 1991 defined "small-scale miningH as mining activities which rely heavily on manual labor, using simple implement and methods and do not use explosives or heavy mining equipment.

The existing legal definition of small-scale mining has been a subject of criticism from many small-scale mining federations and groups in the country. For instance, subsistence gold miners in Benguet and some parts of Compostela Valley use explosives and/or heavy machines for digging and hauling, and technically, are not considered as small-scale miners under RA 7076.

The Mines and Geosciences Bureau of the Department of Environment and Natural Resources (DENR-MGB) estimates that there are 2,000-3,000 companies with small-scale mining operations nationwide.8 ln the regions of Cordillera and Davao, some small scale miners organize themselves into associations, cooperatives and/or federations.

Despite the huge economic projections and the sheer number of people and organizations involved, the ASM sector remains a highly unregulated industry. Many small-scale mining operations remain unregistered and decentralized. Demanding procedures, registration costs and/or lack of support from the government dissuade many small-scale miners and operators to seek legal accreditation.

III. TRADITIONAL vs. GOLD-RUSH MINING

RA 7076 defines small-scale miners as any Filipino citizen or company that voluntarily formed a cooperative and is duly licensed by the DENR to engage in the extraction or removal of orebearing materials from the ground.9

However, existing literature often differentiate small-scale gold miners at least, as either traditional or gold-rush miners. The said particularities can be attributed to how these groups developed while for others, the classification is more rooted in the differences in its economic, social and cultural dimensions.

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the P h i l ippines 13

Traditional gold mining employs chemical-free methods and heavily relies on manual labor. It is carried out by communities or members of indigenous peoples group for coiiective benefit. Mining activities with rituals and family members' participation have been observed. Knowledge of the extraction and processing has been handed down from generation to generation through oral tradition.

Meanwhile, gold-rush mining is done by any person or group. It is, mostly undertaken by individuals attracted to the value of gold and stories of quick wealth. There is no existing communal sharing. Miners use toxic chemicals such as cyanide and mercury and heavy equipment to maximize operations and profit gain.

However, an overlap on the characteristics of these two groups exists since value systems in many indigenous communities have changed over time. Many subsistence small-scale miners are already utilizing new technologies and equipment. For example, indigenous artisanal miners on tribal-proclaimed "Minahang Katutubo" sites in Kalinga and Compostela Vall-ey use toxic chemicals such as mercury to process ore. Even Dumagat folks conducting river panning activities inside the KaliwaKanan Watershed use mercury in their operations.

IV. KEY PLAYERS IN ASM

Small-scale mining permits are issued by the Provincial/City Mining Regulatory Board (P/CMRB). The board is composed of representative/s from MGB (chair), the governor or city mayor (vice-chair), the ASM and large-scale mining sectors, and from non-government organizations. The DENR also issues ore-extraction permits to registered small-scale mining organizations and cooperatives.


In traditional ASM gold sites in Benguet, monetary profit from mining operations are equally shared by mine workers. In some areas, Ifsagaok", in which tunnel owners and miners'divide the profits from the mine between all members of the community, is still practiced. Elders, women and children are prioritized,lO

For gold-rush ASM areas where mines are viewed as a purely-for-business venture, various key players exist with different levels of benefits from the mining operations.

In a T'boli mining community in South Cotabato, Mindanao, the key players include land and tunnel owners, financiers, skilled miners or abanteros, ordinary miners or atraseros {ore packers and haulersL ore and sacks washers {commonly women and young workersL ore transporters {haba/-haba/ drivers or horse ownersL processing plant workers and gold traders.ll

The abanteros are usually the ones with the knowledge, skills and capability to engage financiers. Financiers initially provide funds and also engage with venture capitalists to expand site operations. In some cases, land owners can be both financiers and tunnel owners. A few abanteros who have been successful in mining now act as financiers and tunnel owners. Some have even managed to operate processing plants.12

There are also cases where local officials and regulators are involved in small-scale mining operations either as tunnel owners, land owners, financiers and/or gold buyers. Many public officials in Compostela Valley and Davao del Sur amassed their wealth from small-scale mining operations.

The People's Min ing Sector: A Review and Analysis of Artisanal and Small-scale Min ing in the Philippines 15

Meanwhile, licensed gold traders purchase gold produced by ASM operations and subsequently sell these to the Bangko Sentral ng Pilipinas (BSP), the sole mandated buyer of gold produced by small-scale miners. BSP's current gold buying stations include the Mint and Refinery Operations Department in Quezon City and its offices in Baguio, Naga, Davao and Zamboanga City.

However, the selling of gold to the BSP must conform to strict conditions . set by the bank. Due to difficulties encountered by most small-scale miners in meeting the BSP's standards and the physical distance of its gold buying centers, miners usually sell their gold to independent gold buyers. In addition, the imposition of creditable withholding tax of 5% and an excise tax of 2% in April 2012 by Bureau of Internal Revenue (BIR) further discouraged gold miners and traders to sell their gold to BSP.

In a media interview with BSP Assistant Governor Manuel Torres, the official said as much as 95% of gold traded in the Philippines is now made through the black market.13 In Compostela Valley, 60% of the gold produced is believed to be diverted into the black market while in Benguet, sources say that 40% of its gold are traded outside BSP's control.14

For this year, zero gold buys have been recorded by the central bank! 15

Women are also largely seen in the mining industry especially in the ASM sector. According to the International Labor Organization (ILO), 3.5 to 4 million women are engaged in mining activities around the world and 11.5 to 13 million are small-scale miners.16

v. ISSUES AND CONCERNS

A. OCCUPATIONAL HAZARDS AND ACCIDENTS

The lack of occupational and safety standards for ASM workers such as safety regulations, safety awareness, training, access to adequate safety equipment and healthcare, are evident in the two sites that were visited. This leads to higher health risks and poorer working conditions for miners working on ASM operations compared to those involved in large-scale mining.

The rampant use of mercury and cyanide in gold ASM operations further endangers the health and safety of miners and their families, especially women and children. Mercury is one of the most toxic heavy metals known to man. !t bio-accumulates in the food chain and persists in the


environment. Mercury poisoning causes a wide range of serious health problems from skin irritation, memory loss, tremors, brain damage, serious birth defects and death.

The next most common chemical used by gold miners is cyanide. This chemical has the ability to block oxygen transfer from the blood to the tissues. Symptoms of cyanide poisoning include rapid breathing, tremors, convulsion and even immediate death.

Small-scale miners are also exposed to other occupational and health hazards. According to the Institute on Occupational Health and Safety Development of the Philippines (IOHSAD), the leading types of accidents in mines are: getting hit by falling objects, suffocation from chemical fumes, crushing injuries, erosion, poisoning, explosions and being buried or trapped. Additionally, women workers are exposed to sexual violence and abuse.I7

In June 10, 2013, a miner in Pantukan, Compostela Valley named Franol Joy Larafio died when a portion of tunnel where he was working collapsed. The accident area was the same site where a major landslide occurred two years ago and buried a community of small-scale miners killing more than 30 people.18

The ILO reported that the occupational fatality rate in small-scale mining in developing countries is 90 times higher than in developed countries.I9

B. ENVIRONMENTAL DEGRADATION AND POLLUTION

The ASM sector in the Philippines releases 70 metric tons of mercury annually, making it the single largest emitter of mercury pollution in the country.20

Since 2002, mercury use in ASM gold mining has been recorded in at least ten provinces: Benguet, Camarines Norte, Negros Occidental, Zamboanga del Norte, Zamboanga del Sur, Bukidnon, Agusan del Norte, Agusan del SUi Surigao del Norte and Davao del Norte. There are also accounts of mercury use among small-scale miners in Abra, Kalinga, Apayao, Oriental Mindoro, Compostela Valley, Isabela, Nueva Viscaya and South Cotabat021, as well as in the Mountain Province, Quezon, and Rizal.

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the P h i l ippines 17

Since ASM is an extractive industry, its impact to the physical environment is unavoidable. The construction of tunnels may cause destabilization, erosions, landslides, and siltation. Tailings and mine wastes are commonly disposed into bodies of water. The demand for timber for tunnel supports also contributes to the denudation of forests.

In the gold-rich town of Tampakan, South Cotabato, smal!-sca!e miners are utilizing hydraulic or sluice mining operations, a method that employs high-pressure water jets to dislodge or move sediments. Sluice mining, locally called banlas, is an environmentally destructive method and banned by the Provincial Government of South Cotabato.22

ASM sites keep on expanding. For example, since ore reserves in Mt. Diwata in Compostela Valley is depleting rapidly, tunnel financiers and miners are looking for new sites and are expanding the geographic reach of their operations. New ASM sites have been reported in watershed areas of the nearby towns of Maragusan, New Bataan, and Nabunturan.

The overall impact of small-scale mining activities in the country is very hard to measure because of the lack of environmental monitoring, the wide geographical distribution of operations and the non-existent official records on the true number of ASM operations.

Most DENR regional and provincial offices remain inept and lack the political will to penalize violators, thus reducing their enforcement functions to mere issuances of cease-and-desist orders.

C. SOCIAL ISSUES

Child labor is prevalent in many small-scale mining operations. In a 2002 study conducted by IOHSAD in small-scale mining sites in Paracale, Camarines Norte, it was found that children were exposed to extremely dangerous working conditions and to toxic substances, and have very limited access to welfare, health, and safety facilities. Some of the children were involved in actual underground mining while others were involved in the processing and carrying of ores.

Women work unofficially or are found at the lowest end of the sector's hierarchy. Their work usually involves panning, filling up of measuring boxes, and transporting and processing of ores. Since ore processing requires a lot of dexterity, this task is commonly assigned to women while men perform ore extraction, milling and panning.23


Social unrest and local violence have also been documented in many ASM communities in Compostela Valley. Meanwhile the rising cases of prostitution and child trafficking in Daplahan, Zamboanga Sibugay were being attributed to the illegal mining trade.24

D. CONFLICTING lEGISLATIONS

Two overarching laws govern the ASM sector in the country: Republic Act 7076 and the Presidential Decree No. 1988 titled ((Establishing Small-scale Mining as a New Dimension in Mineral Development" issued during the Marcos regime. However, conflicting provisions in these two laws especially on the authoritative entity for issuing mining permits has resulted in confusion and in some cases, political and social mayhem in mineral-rich provinces.2s

On June 22, 2011, the Department of Justice issued Opinion No. 29 series of 2011 stating that RA 7076 has already repealed PO 1988, thus limiting the power of provincial governors and city mayors to unilaterally approve mining permits. Under the said legal opinion, all small-scale miners seeking a permit to operate must organize themselves into cooperatives and they will only be allowed to mine in areas declared as People's Small-

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the Ph i l ippines 19

scale Mining Areas or Minahang Bayan. In addition, all mining activities will be under national government monitoring.

Executive Order No. 79 issued by President Benigno Aquino III also validated RA 7076 and limited small-scale mining activities to areas declared as Minahang Bayan areas. The same EO 79 also identified as ((no-go" mining zones the country's major tourism development areas which includes Benguet, Camarines provinces and Compostela Valley -the three major gold producing provinces!

Executive Order 79

Executive Order 79 was issued by President Benigno Aquino III in July 6, 2012 to help revitalize, yet again, a mining industry that is already plagued by criticism and opposition from different sectors. The EO aims to address conflicting legislative provisions from PD 1988, RA 7076 and the Philippine Mining Act of 1995, otherwise known as Republic Act 7942.

The salient points of the said EO as relevant to the ASM sector are the following:

Areas closed to mining applications or ((no-go" mining zones: 1) prohibited areas under Sec 19 of RA 7942, 2) protected areas under NIPAS Law, 3) prime agricultural lands and those covered by Comprehensive Agrarian Law, 4) tourism areas identified under the National Tourism Development Plan (NTDP), and 5) other critical areas and island ecosystems;

Small-scale mining activities shall be undertaken only in declared People's Small-Scale Mining Areas or ((Minahang Bayan";

Operationalization of P/CMRBS in every provinces or cities;

Small-scale mining shall not be applicable for metallic minerals except gold, silver and chromite;

Use of mercury shall be strictly prohibited; and

Training and capacity-building measures for ASM cooperatives shall be conducted by concerned government agencies.

According to MGB, Minahang Boyan areas are located in the following: Barangays Diat, Biasong and Boringot and Barangay Napnapan in Pantukan; Hinopoan and Suraban in Nabunturan; and in Tandik, Panuraon


and Lumangga of Maco. These three municipalities are located in Compostela Valley. A Minahang Bayan was also established in Barangay Punta Litaw in Banaybanay, Davao Oriental.26

Also, the gold-rich area of Diwalwal in Monkayo, Compostela Valley was declared a ({mineral reservation" in 2002. The gold-rush area, discovered in early 80's! now hosts more than 10,000 small-scale miners.

However, many local government units insist by virtue of the ({local autonomy" provision of the Local Government Code of 1991, that smallscale mining permits should be approved by the Local Mining Board, hence by the Office of the Governor or City Mayor.

In a ruling issued by the Supreme Court (SC} on April 29, 2013, the high court en banc recognized the role of the LGUs in issuing small-scale mining contracts, but confirmed that their power is not absolute; hence the contracts are still subject to the supervision and control of the DENR.27

E. LARGE-SCALE VS. SMALL SCALE MINING

Issued policies by the DENR and existing legal instruments catering more in favor of large-scale mining industries/corporations may have hindered the development and mainstreaming of small-scale mining sector. In some provinces, overlapping permits issued by different agencies have caused confusion and fuelled local conflicts between miners.

Many small-scale miners also believe that some officials use the Minahang Bayan provision of the law to remove them from their current operational sites, paving the entry of large-scale mining corporations.

ASM groups also complained that most of their applications are being turned down by the DENR-MGB.

The ASM sectoral group Save Pantukan Alliance- filed a petition in 2007 to declare the areas of Diat, Biasong and Boringot as Minahang Katutubo and the areas of Panganason, Gumayan and Lumanggang as Minahang Bayan. According to the group, they have completed the application requirements but decided to withdraw their application because i\tiGB is requiring them to acquire consent from the Nationwide Development Corp. (Nadecor), a large-scale mining company which has an existing mineral production sharing agreement (MPSA) in the said areas.28

Aside from Nadecor, foreign mining firms operating in Pantukan are: Napnapan Miner Resource and Corporation (4,912 hectares); Blue


Mountain Exploration Mining (1,600 hectares); Lion Share Mining Company (4,000 hectares); Southern Horizon (2,000 hectares); and Russel Mines and Minerals, Inc. (1,656 hectares).

In Benguet, patents issued by the former Commonwealth government to American mining companies are still recognized by the national government thus rendering all applications to declare community/indigenous mining sites in the province as Minahang Bayan moot. In 2004, smallscale miners in Bakun filed a petition and asked the DENR to award to them 30 hectares of mining land as Minahang Bayan. Up to this day, the department has not acted on their petition.

Hundreds of small-scale miners in Diwalwal staged a massive protest in 2012 to demand assurance that the local government will not evict them in favor of large-scale mining companies that were granted permit to operate inside the 729 hectares Minahang Bayan. Some of the large scale mining companies allowed to operate in Diwalwal are Nationwide Development Corp., Russel Mines and St. Augustine Copper and Gold.29

In Paracale, Camarines Norte, the lease contract awarded by DENR to United Paragon Mining Corporation (UPMC} overlaps with existing ASM areas.

There are also reports of large-scale mining corporations utilizing smallscale mining operations to their advantage. In Itogon, some miners confirmed that Benguet Corporation used to finance some of the tunnels being operated by the small-scale miners.

Reports of foreign investors such as Chinese mining companies are also utilizing small-scale mining groups as fronts to operate illegally in the country.3D

VI. GOOD _ "-- 'L .... "'. THE VALUE CHAIN

Good practices in small-scale mining operations exist in some ASM sites, especially in Cordillera.

Since 1991, the Benguet Federation of Small Scale Miners Associations has been promoting the use of "mercury-free" methods for processing gold. The federation, which is composed of 75 small scale mining associations

The People's Min ing Sector: A Review and Analysis of Artisanal and Smal l-scale Min ing in the P h i l ippi nes 23

and cooperatives with 30,000 members, is also aiming to phase-out mercury use in all ASM operations in Benguet by 2015.

Practices of mercury-free and cyanide-free methods for processing gold were also reported in some ASM operations in Mountain Province and Kalinga.

Participating small-scale miners in the recent Kalinga Provincial Summit on Artisanal and Small Scale Gold Mining expressed their commitment to eliminate the use of mercury.31 Held on June 3-4, 2013 in Tabuk, Kalinga, most of the summit's participating miners came from the towns of Balbalan and Pasil.

Similarly, small-scale mining participants of the ASM Conference held on November 15-16, 2012 in Ateneo de Davao recognized that their sector contributes to the creation of environmental hazards and have expressed willingness to be assisted and to work with proper authorities.

The Workers Cooperative of Emerald Mountain, a mining association turned cooperative in Barangay Kias, Baguio City, also employs other model practices for ASM, such as but are not limited to: imposition of strict regulations on the number of tunnels, strict regulation against minor workers inside the tunnels, ID system for workers, allocation of a special fund for emergencies and disaster response and organizing regular health check-ups for their members.

In Nabunturan, Compostela Valley, the local government designated 20-hectares to Minerals Processing Zone and banned the construction of bull mills, crashers and processing plants outside of this zone. All plants are also required to have their own tailings pond and treatment facilities. This effort is an initiative of the LGU to regulate pollution. Inside the-zone, common dumping areas for treated tailings were also identified.

Compostela Valley is also the first province to adopt the Extractive Industry Transparent Initiative (IETI), a global initiative that require companies to publish the taxes and fees they are paying while the local government units are also mandated to disclose the amounts that they are receiving from the industries.32

VII. "'-1I"-"."--U"

The artisanal and small-scale mining sector is undeniably a very critical industry in the Philippines because it provides a source of livelihood to


thousands of Filipino families, mostly belonging to poor and marginalized communities.

However, like all extractive industries controlled by capitalists and local lords, ASM contributes significantly to environmental degradation and pollution, conflict and social unrest, corruption and resistance to local development programs, and exposes a greater number of community members to dangers and toxic harm, especially women and children.

In the past decades, the numbers of gold-rush areas kept on expanding creating massive concern on the environmental and social impact of this sector.

Many gold-rush small-scale mining operations in Compostela Valley and Camarines Norte can already be characterized as large-scale operation since miners used heavy equipment such as backhoe and electric drills and extraction operations are done 24-hours a day. A single tunnel also employs more than 500 workers. Meanwhile, distinctions between traditional and gold-rush ASM are already blurred since even subsistent indigenous communities practicing artisanal mining are already using explosives and toxic chemicals thus contaminating critical ecosystems, watersheds, ancestral lands, and important key biodiversity areas (KBAs) .

Yes, the small-scale sector provides income and livelihood to many, but does its benefits really outweigh its impacts? Does the sector really contribute to poverty alleviation and fuel local economic growth?

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the Ph i l ipp ines 25

Due to the decentralized and heterogeneous nature of this sector, there are no black and white answers to these questions. Cases vary from one province to another, from one ASM community to the next.

In the small-scale areas visited in Nabunturan and New Bataan (both in Compostela VaileyL most of the financiers are migrants who came from other provinces such as Davao del Norte, Davao City and Cebu. Tunnel miners and security guards are also migrants brought by their respective financiers and owners. Thus jobs with minimal income such as packing and hauling ores are given to local residents. In New Bataan, a hauler may earn P300 daily, barely enough to sustain their family expenses for the day.

In Barangay Virac, Itogon, most of the small-scale miners are former workers or relatives of former employees of Benguet Corporation, the transnational corporation once operating in the area. Since most of them are already living in the said ared for more than 20 years, they are already registered as residents of said barangay.

LGUs sometimes earn from the ASM sector by imposing taxes, sometimes in fixed amounts per bag of harvested ore. But because this is an unregulated industry, collected taxes are just based on the declaration of ASM associations and/or tunnel owners.

26 Alyansa Tig i l Mina

It is hard to deny the fact that one of the glaring reasons why small-scale operations thrive in many provinces is because those who are in power benefits from this sector. Political families and prominent groups thrive from venturing into small-scale mining operations.

In one media interview, Compostela Valley Governor Arturo Uy admitted that during the 2010 campaign period, he received a donation of P20 million pesos from one mining site alone.33 Also one tunnel owner in Nabunturan that was interviewed for this paper also confirmed that they regularly pay {{revolutionary tax" to members of the Communist Party of the Philippines - New People's Army (CPP-NPA).

In the context of national development, it is difficult to assess how much is the sector's contribution, if any, can be linked to national progress since the ASM sector's major production goes to the black market, rather than the country's mineral reserve inventory. BSP recorded an unprecedented zero gold buys for 2013 and it shows that almost all small-scale miners in the country cater the black market to sell their goods. In 2008, the DENR reported that at least 3 million metric tons of various mineral ores were illegally shipped out of the country to China alone.

With the lack of official registration, monitoring and similar systems to ensure the collection of environmental damages and compensation, in the end, it will eventually be the general public who will shoulder the huge costs of addressing and mitigating the hazards brought by small-scale mining sector, such as the clean-up of contaminated sites and healthcare support for affected residents.

VIII. RECOMMENDATIONS

A. REGULATION AND IMPLEMENTATION OF THE LAW

Both the national and local government units should be held responsible for the chaotic state and lack of regulation of small-scale mining activities in many parts of the country.

The DENR's central bias in favor of large-scale mining corporations, along with the ineptness and lack of political will of its regional and field offices, may have contributed to the failure to mainstream the small-scale

The People's Mining Sector: A Review and Analysis of Artisanal and Small-scale Mining in the Philippines 27

mining sector and discourage many small-scale miners to register their operations. Meanwhile, local politicians and armed groups benefiting from existing set-up further aggravate the situation.

These illegal artisanal and small-scale mining operations create problems in terms of difficulty in: monitoring environmental compliance, providing necessary technical and technological support, and ensuring workers proper access to healthcare, training and other social services.

The national government, through the DENR, must show the people that it will uphold the law and public interest. All mining operations, whether large-scale and small-scale, existing in environmentallycritical areas, inside ({no-go mining" zones or in violation of NIPAS Law, IPRA Law and other laws should be closed down immediately.

The DENR, with the concerned P/CMRB, should immediately conduct an inventory of all existing small-scale mining activities. Pending applications by small-scale mining groups or associations for declaration of Minahang Bayan sites should be settled within six months, provided these applications are not in areas closed for mining operations. All unregistered ASM activities outside of declared SSM areas after the sixmonths deadline should be closed down.

LGUs should designate centralized mineral processing zones for artisanal and small-scale mining operations, as well as ensure that proper tailings ponds and treatment facilities are in place. Mine waste should be treated and disposed of properly and in full compliance with existing laws.

Furthermore, all provinces with existing mining operations should adopt the Extractive Industry Transparent Initiative (IETI) to ensure transparency and accountability of all stakeholders involved in this extractive industry.


B. CURBING THE UNDERGROUND TRADE

President Aquino expressed a strong commitment to curb illegal trade in the country by getting rid of corruption at the Bureau of Customs. Yet the sale and trade of illegal gold and other minerals are happening right under law enforcers' noses. Not only is the country losing millions of pesos in taxes but it is also losing its gold and mineral reserves to the black market at alarming rates.

Gold buyers abound in major cities near mineral-rich provinces such as Baguio City, Tagum City, Davao City, and they should be closely monitored. Many of non-registered gold sales between owners and local buyers to independent non-BSP buyers happen in public gatherings and expositions hosted in major hotels and centers. According to Department of Finance (DOF), these gatherings are even advertised in newspapers of general circulation.34

The use of mercury for artisanal and small-scale mining operations should be strictly prohibited and trade of mercury should also be stopped. Gold sellers who continue to cater the underground market to avoid payment of tax should be apprehended. As BIR Commissioner Kim Henares mentioned in a mdia interview, the 7% tax imposed on gold sales is relatively smal1.35

The Aquino administration should mobilize the BIR, National Bureau of Investigation (NBI), Philippine National Police (PNP) and Department of Interior and Local Government (DILG) to end the illegal market of gold and mercury trade.

C. POLICY DEVELOPMENT

While the Executive branch is doing its job on regulating the current chaotic ASM sector, the Congress should enact a new "Artisanal and Small-scale Mining Law" that wi!! repeal the existing conflicting provisions of existing laws. A responsible, sustainable and equallyshared people's mining sector must be promoted by the government. Artisanal mining should be made distinct from Small-scale mining.

The People's Mining Sector: A Review and Analysis of Artisanal and Smal l-scale Mining in the Ph i l ippines 29

The use of explosives, heavy equipment, and toxic chemicals should be banned and all artisanal mining should be limited to tribal or locallydeclared areas such as Minahang Katutubo. Further sectoral support must be provided for artisanal mining since it is mostly poor families and indigenous groups who depend on this activity for daily sustenance. Support must be provided to ensure that their operations will not pose cn\lirf"'lnrY'Icnt-:lI -:lnrl ho ... l+h .. i ... I" ... '-IIVII"""IIIII,-,.",UI UII\..4 11\.:.01\.1111..)",,).

Small-scale mining must be strictly regulated in People's Small Scale Mining Areas or Minahang Bayan. No mining, large-scale and small-scale, should use toxic chemicals and be implemented inside "no-go mining" zones. SSM operations should also have an extraction quota and be subjected to stricter regulations such as compliance to existing Philippine Environmental Impact Statement (EIS) System, pollution control, monitoring systems, and social acceptability.


1 P h i l i p p i n e Board of I nvestments, The Philippines Miner al Potenti al, J u n e 2 1, 2001 . 2 I b id 3 Ed m u n d Bugnosen, Country Case Study on Artis anal Sm all Scale Mining: Philippine,

2002. 4 I b i d . 5 Environmental M a nagement B u reau - Department of Enviro n ment a n d Natura l

Resou rces, Nation al Str ategic Plan for the Phase-out of Mercury i n Artisanal and Sm all-sc ale Gold Mining in the Philippines 2011-2021.

6 I bi d . 7 Center for Development Stud ies - U n iversity of Wa les Swa nsea, N ovember 2004,

Livelihoods and Policy in the Artis anal and Sm all-scale Mining Sector - An Overview. 8 Al ave Kristi ne L., P h i l i p p i n e D a i ly I n q u i rer, Government to clip LGUs power to Grant

Mining Permits, 26 August 2011. 9 Section 3c of Rep u b l i c Act 7076 or People's Sma l l -sca le M i n i ng Act of 199 1 . 10 The Alternative Foru m for Research i n M i n d a no, Ba ntay Kita Occas iona l Paper

Series N o . 2012-02, A B ackground Study on the Sm all-Sc ale Mining Oper ations in Benguet and South Cotabato and their Imp act on Econom the Environment and the Community.

1 1 I bid . 12 I b i d . 1 3 Lucas, D a x i m L. P h i l i p p i n e Da i ly I n q u i rer, Smugglers now control 95% of Philippine

gold trade, 19 November 2012. http ://business . i n q u i rer. n et/93838/smugglers-nowcontrol-95-of- p h i l i p p i ne-gold-trade.

14 Environ mental M a nagement B u reau - Department of Environ ment a n d Natu ra l Resou rces, Nation al Str ategic Plan for the Ph ase-out of Mercury i n Artis anal and Sm all-sc ale Gold Mining in the Philippines 2011-2021.

15 Magtu l is, Prinz P. P h i l ip p i ne Dai ly I nq u i rer, New tax rules hinder BSP gold purch ases, 6 May 2013. http ://www. p h i lsta r. com/business/2013/05/06/938705/new-tax-ru leh i n d e rs-bsp-gold-purchases

16 Lu, J i n ky Le i l a n ie, Journa l of Women's I nternationa l Stud ies Vol 13, Occup ation al He alth and S afety in Sm all Sc ale Mining: Focus on Women Workers in the Philippines, 3 J u ly 2012.

17 I b i d . 1 8 Lim, Fri nston L . , P h i l i pp ine Da i ly I n q u i rer, Com Val mining tunnel coll apse: 1 de ad,

1 rescued, J u n e 12, 2013. http ://newsinfo . i n q u i rer. n et/425343/comva l-m i n i ngtu n ne l-co l l a pse-l-dead-l-rescued

19 I LO News, Sm all-sc ale mining on the incre ase in developing countries, 17 May 1999. htt p ://www. i lo .org/globa l/a bout-the-i l o/newsroom/news/WCMS_OO7929/lang-en/i ndex . htm

20 Enviro n mental M a n agement Bureau - Department of Enviro n ment a n d Natura i Resources, Nation al Str ategic Pl an for the Phase-out of Mercury i n Artis anal and Sm all-scale Gold Mining in the Philippines 2011-2021.

21 Ban Toxi cs, The Price of Gold: Mercury Use and Current Issues Surrounding Artis anal and Sm all-Sc ale Gold Mining in the Philippines, December 2010.

22 Sarmiento, Bong, S . Su nSta r Davao, Sm all-sc ale miners eye oper ation in Tampakan, 16 Fe bruary 2012. http ://www.su nstar.co m . ph/davao/loca l-news/2012/02/16/ smal l-sca !e-m iners-eye-operation-ta m p a ka n-206384

The People's Mining Sector: A Review and Analysis of Artisanal and Small-scale Mi n i ng i n the P h i l ippines 31

23 Lu, J i n ky Le i l a n ie, Journa l of Women's I nternationa l Stud ies Vol 13, Occup ational He alth and S afety in Sm all Sc ale Mining: Focus on Women Workers in the Philippines, 3 J u ly 2012.

24 Jac into AI, G MA News O n l ine, I l lega l min ing breeds ch i ld l a bor, p rostitution in D i p l a h a n, 21 M arch 2010. http ://www.gmanetwork.com/news/story/186685/ news/regions/i I l ega I-m i n i ng-breeds-ch i Id- Ia bor-prostitution-i n-d i pi a ha n

25 J i m en o, J a i leen F . P h i l i pp ine Center for I nvestigative J o u rna l ism, Mining M ayhem Triggers Eco-dis aster in Zambales, 18 August 2009. http ://pcij . o rg/ b log/2009/08/18/m i n i ng-mayhem-triggers-eco-d isaster-i n-za m b a les

26 BSI G l ob a l Resou rces, MGB scours for more "Min ahang B ay an", J u ly 12, 2012. http://www. bsigl o ba l resou rces. net/2012/07 /mgb-scou rs-for-more-m i n a h a ngbaya n . ht m l

27 Torres-Tu pas, Tetch, P h i l ipp ine D a i ly I nq u i rer, LG U power over s m a l l-sca le m i n i n g l i m ited, says SC, 29 A p r i l 2 0 1 3 . http ://newsinfo . i n q u i rer. net/399321/lgu-powerover-s m a l l-sca le-mi n ing-l i m ited-says-sc

28 BSI G l ob a l Reso u rces, MGB scours for more "Min ahang B ay an", 12 J u ly 2012. http ://www. bsigloba l resou rces. net/2012/07 /mgb-scou rs-for-more-m i n a h a ngbaya n . html

29 P h i l i pp ine N ews Agency, Sm all-scale miners occupy Compostel a Valley bridge to dem and assur ances, 18 M ay 2012. http ://www. i ntera ksyo n . com/a rtic le/32252/ s m a l l-sca le-m iners-occu py-com poste la-va l l ey-bridge-to-demand-ass u ra nces

30 P h i l ipp ine Dai ly I n q u i rer, MGB warns sm all-sc ale mines used as 'fronts', 14 J u ly 2011. http ://newsi nfo . i n q u irer.net/23789/mgb-wa rns-sma l l -sca l e-mines-used-as% E2%80%98fronts%E2%80%99

3 1 Newsdesk, Ka l inga s m a l l-sca le miners vow t o e l i m i nate u s e o f mercu ry, 5 J u ne 2013. http://newsdesk .asi a/ka l i nga-s m a l l -sca l e-miners-vow-to-e l i m i nate-use-of-mercu ry/

3 2 Oca m po, Vas D. M i n d a nao Times, Transparency i n P H mining urged, 26 August 2013 . http://www.m i n d a naoti mes.net/tra nspa rency-i n-ph-m i n i n g-i n d ustry-u rged/

33 Ra ppler.com, Sm all-scale Mining mining: A 3-decades industry th at kills, 5 J a n u a ry 2012. http ://www. ra pp ler. com/nation/698-sm a l l-sca le-min i ng-a-3-decade-industrythat-k i l l s

34 Dela Pena, Zi n n i a B . P h i l ipp ine Sta r, Seller of gold, other precious metals to p ay taxes in advance, 24 Apri l 2013. http ://www. phi lsta r.com/business/2013/04/24/934108/ se l lers-gold-other-precious-meta ls-pay-taxes-adva nce

35 Domi ngo, Ron n e l W. Ph i l i pp ine Dai ly I nq u i rer, Gold seller p aying less t ax th an they should-BIR, 14 Nove m ber 2012. http ://business . i n q u i rer. net/92798/bir-chief-o p poses-gold-tax-suspe ns i 0 n-says-trade rs-payi ng -I ess-tax-th a n -th ey-s h o u Id


ATM National Secretariat c/o HAR I BON Office, 2/F Santos and Sons Bu i ld ing

# 973 Aurora B lvd . corner Dapdap St. , Anonas, Cubao , Quezon City 1 1 09 P h i l i pp ines

Tel . : +63 (02) 434.46.42 lac 27 Fax: +63 (02) 434.46.96

Emai ls:

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J a n u a ry 2014

Alyansa Tigil Mina - The People's Mining Sector.report

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