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VOLUME

5/1

PHILIPPINE ENVIRONMENTAL IMPACT ASSESSMENT, MININGAND GENUINE DEVELOPMENT

Allan Ingelson, William Holden, & Meriam Bravante

ARTICLE

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The Managing Editor, LEAD Journal, c/o International Environmental Law Research Centre (IELRC), International EnvironmentHouse II, 1F, 7 Chemin de Balexert, 1219 Châtelaine-Geneva, Switzerland, Tel/fax: + 41 (0)22 79 72 623, [email protected]

This document can be cited asAllan Ingelson, William Holden, & Meriam Bravante, ‘Philippine Environmental

Impact Assessment, Mining and Genuine Development’,5/1 Law, Environment and Development Journal (2009), p. 1,

available at http://www.lead-journal.org/content/09001.pdf

Allan Ingelson, Associate Professor, Faculty of Law, University of Calgary, 2500 University Dr. N.W., Calgary,Alberta Canada T2N 1N4, (403) 220-8302, Email: [email protected]

William Holden, Assistant Professor, Dept. of Geography, University of Calgary, Calgary, Alberta Canada,Email: [email protected]

Meriam Bravante, Graduate, Ateneo de Davao College of Law; former staff member Legal Rights and NaturalResources Center, Philippines, 1998-2007

Published under a Creative Commons Attribution-NonCommercial-NoDerivs 2.0 License

ARTICLE

PHILIPPINE ENVIRONMENTAL IMPACT ASSESSMENT, MININGAND GENUINE DEVELOPMENT

Allan Ingelson, William Holden, & Meriam Bravante

TABLE OF CONTENTS

1. Background and Mine Impacts 3

2. Genuine Development and Sustainability 4

3. Environmental Impact Assessment and Mining 73.1 Evaluation of Impacts 93.2 Project Alternatives 103.3 Cumulative Effects 103.4 Public Participation 113.5 Polluter Accountability 123.6 Appeals 133.7 Time to Consider Input 143.8 Security for Reclamation 14

4. Conclusion and Recommendations 15

1BACKGROUND AND MINE IMPACTS

What is ‘genuine development’ in the context of theenvironmental impact assessment (EIA) for minesproposed to be developed in the Philippines? This articleexamines the EIA process, related legislation,administrative and judicial decisions. The Philippine EIAsystem will be compared with the U.S. NationalEnvironmental Policy Act (NEPA),1 and the Americanexperience with mining. In light of the prevailingeconomic development paradigm in the Philippines wesubmit that the EIA system only superficially considersproposed mining projects and does not promote genuinedevelopment. We provide recommendations to improvethe EIA system to facilitate genuine development.

The Republic of the Philippines is one of severalcountries in the ‘developing world’ characterised by an‘underperforming economy’.2 The country is wellendowed with minerals. However by the early 1990s theability of the mining industry to facilitate economicgrowth was considered to be underutilised and thegovernment is heavily indebted to foreign creditors.3The Asian Development Bank criticised the investmentclimate in the Philippines and called for a liberalisationof its investment laws for mineral development.4President Fidel V. Ramos signed into law the MiningAct of 1995,5 that contained several incentives toencourage mineral development including: a four yearincome tax holiday; tax and duty-free capital equipmentimports; value-added tax exemptions; income taxdeductions where operations are posting losses;

accelerated depreciation; and guarantees of the right ofrepatriation of the entire profits of the investment aswell as freedom from expropriation.6 From 1994 to 1996the number of foreign mining companies in Philippinesincreased by four hundred per cent. In 2007, theChamber of Mines predicted that investment in themining industry would reach $10 billion by 2010.7

Metal extraction and processing can cause environmentalimpacts including wildlife and fisheries habitat loss,changes in water quality, sedimentation, toxins in tailingsponds and effluent, acid generation, dust, and slope.8In 1996 at the Marcopper mine on the island ofMarinduque a plug at the bottom of a copper pit failedand released acidic tailings into the Boac River thatprompted a UN team to declare the river to be‘biologically dead’ a month later.9 In 2005, two cyanidespills were reported in less than one month in coastalwaters near the Rapu Rapu Mine, Philippines.10 Minesites in other countries at which cyanide contaminationhas caused significant negative environmental impactsinclude Baia Mare, Romania, Summitville, Colorado,Grouse Creek, Idaho, and Gilt Edge, South Dakota,U.S.A.11 Acid mine drainage continues to cause longterm environmental impacts in Europe, including minesoperated during the time of the Roman Empire.12

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1 National Environmental Policy Act, 1969, United States, 42U.S.C.A. § 4321-4370 (d) (West 1994) [hereafter NEPA].

2 R. Auty, ‘Industrial Policy Reform in Six Large NewlyIndustrializing Countries: The Resources Curse Thesis’, 22World Development 1, 11-26 (1994).

3 World Bank, World Development Indicators 2007(Washington, DC: World Bank, 2007).

4 R. Rovillos et al., ‘When the Isles of Gold Turn to the Islesof Dissent’, in Emily Caruso et al., eds, Extracting Promises:Indigenous Peoples, Extractive Industries and The World Bank 200-238 (Baguio City: Tebtebba Foundation, 2003).

5 Mining Act, 1995, Philippines, Republic Act No. 7942, 3March 1995.

6 United States Geological Survey, Minerals Yearbook 2005(Reston, VA: United States Geological Survey 1995).

7 ‘Mine Group Sees Investment Growing to $10B by 2010’,Philippine Daily Inquirer, 30 May 2007, page B1-B2.

8 G. Burke, ‘Opportunities for Environmental Managementin the Mining Sector in Asia’, 15(2) The Journal of Environmentand Development 224 (2006); M. Bacsujlaky, Examples ofModern Mines that Damaged Rivers and Fisheries, 2004,available at http://www.wman-info.org/resources/technicalreports/MinesRiversFish.pdf and K. Smith, ‘AcidRock Drainage’, in L. Price et al., eds., Mining in New Mexico,The Environment, Water, Economy and Sustainable Development59-63 (Sorroco: NM Bureau of Geol. and Min. Res., 2005).

9 Geoffrey Plumlee et al., An Overview of Mining-RelatedEnvironmental And Human Health Issues, MarinduqueIsland, Philippines: Observations From a Joint U.S.Geological Survey - Armed Forces Institute of PathologyReconnaissance Field Evaluation, 12-19 May, 2000.

10 ‘Manila Fines Lafayette’, Mining Journal, 13 January 2006.11 See Bacsujlaky, note 8 above.12 Id.

http://www.wman-info.org/resources/technicalreports/MinesRiversFish.pdf

2GENUINE DEVELOPMENT ANDSUSTAINABILITY

Genuine development reflects sustainability. Sustainabledevelopment requires consideration of the economic,social and environmental benefits and costs from miningprojects, and planning to mitigate negative impacts. Atthe Stockholm Conference on the Human Environmentin 1972, the legal implications of managing resourcesand the environment were discussed.13 A WorldConservation Strategy was developed in 1980 by theInternational Union for the Conservation of Nature,the UN Environment Program and the World WildlifeFund. In 1987, the World Commission on Environmentand Development proposed a form of ‘developmentthat meets the needs of the present withoutcompromising the ability of future generations to meettheir own needs’.14 The proposed objectives ofsustainable development include promoting economicgrowth consistent with rational energy use andminimising negative environmental impacts; provide thecurrent generation with employment and basic needssuch as food, clean drinking water and sanitation;integrating economic and environmental decision-making processes and considering the needs of futuregenerations. This paradigm for development promptsgovernments to ensure that each generation passes onto the subsequent generation an environment in noworse condition than what was inherited. Theenvironmental impact assessment process is crucial infacilitating this sustainability objective. Unlikeconventional economic development, sustainabledevelopment focuses on the quality of development andthe needs of future generations rather than justeconomic growth:

‘…It requires a change in the content ofgrowth…Sustainability requires views ofhuman need and well-being that

incorporate such non-economic variablesas education and health enjoyed for theirown sake, clean air and water and theprotection of natural beauty’.15

This anthropocentric view of the paradigm fordevelopment focuses on protecting human health bygovernments adopting a more cautious approach (theprecautionary principle) to the regulation of mining, anactivity that can have significant health andenvironmental impacts. Sustainable development canminimise environmental degradation by imposing anobligation on polluters to pay for the environmentaldamage caused by their activities. This includesmitigating the negative environmental and social impactsfrom mining described later in this article. Sustainabledevelopment challenges governments such as thePhilippine Government and mine developers, toconsider and plan for the needs of both current andfuture generations by protecting renewable naturalresources such as water, soil and air, and conservingnon-renewable mineral resources.16 As stated by theUnited Nations:

‘…natural resources of the earth…mustbe safeguarded for the benefit of presentand future generations through carefulplanning and management….Non-renewable resources must be used in suchas way as to guard against the danger offuture exhaustion…Planning must beapplied to human settlement with a viewto avoiding adverse effects on theenvironment and obtaining maximumsocial, economic and environmentalbenefits for all’.17

In 1990, sustainable development was described as an‘emerging cluster of policies’ under which governments‘manage the use of the earth’s environment andnatural resources to ensure the optimal level ofsustainable benefits for present and succeeding

Philippines - Environmental Impact Assessment

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13 P. K. Rao, Sustainable Development Economics and Policy 8(Malden, USA & Oxford, UK: Blackwell Publishers, 2000).

14 U.N. General Assembly Resolution 42/427, Report of theWorld Commission on Environment and Development: OurCommon Future, UN Doc. A/RES/42/427 (1987)[hereafter the World Commission].

15 Id. at 52-53.16 As non-renewable resources such as minerals have a finite

volume, it is more accurate to refer to mineral developmentas quasi-sustainable.

17 Report of the United Nations Conference on the HumanEnvironment, Stockholm, UN Doc. A/CONF.48/14 andCorr.1 (1972).

generations’.18 Sustainable development may becharacterised as a concept, environmental philosophy,process, guiding principle, or a combination of theabove. To date, there is no international consensus onthe exact meaning of the term. The vagueness andflexibility of the concept in part explains its popularitywith governments and regulators:

‘The concept has been approved bygovernments and agencies all over theworld, most frequently in political andpolicy statements and occasionally inenvironmental legislation….Its ambiguityis probably one reason for its popularitywith governments, institutions andindustries; it is capable of being supportedby agencies with vastly different goals. Itis sufficiently flexible to allow a widevariety of policy decisions from a given setof facts. It combines environmental, social andeconomic concerns but does not prioritizethem in the case of conflict; it does notestablish an environmental bottom line’.19

The law reform project ‘Legislative Options forPromoting Sustainable Development’, identified thefollowing principles that characterise a regulatory systemthat reflects sustainable or genuine development:

1. respects ecological integrity;

2. supports efficient use of natural, manufacturedand social capital;

3. promotes equity;

4. relies on participatory approaches; and

5. requires environmental stewardship by all levelsof decision-makers.20

The first principle, respect for ecological integrity, iscritical to promoting sustainable development.Ecological systems consist of micro-organisms, plants,animals, soil, water, air and other components. Respectfor ecological integrity is demonstrated by a legal systemthat prevents irreversible harm to water, air, and soilresources, and enables ‘ecosystems to renewthemselves’.21 Life-support systems such as air, water,soil, and diverse plant and animal species must beprotected to sustain current and future generations. Eventhough ecological integrity has global connotations, local,regional and national action by governments such asthe Philippine Government is important indemonstrating respect for ecological integrity. Aplanning framework is important to facilitate respectfor ecological integrity.

The efficient use of capital recognises that there aredifferent types of capital - natural, manufactured andsocial. Natural resources such as water, soil, air,vegetation, wildlife are characterised as natural capital.Manufactured capital includes the roads, power lines,equipment and other types of infrastructure created inthe development of mines. Social capital consists ofthe knowledge and skills acquired by workers in themining industry. When natural resources such as wildlife,soil and vegetation are depleted due to the environmentalimpacts from mining operations, there is a loss of naturalcapital. At the same time infrastructure developmentwill increase manufactured capital, and the knowledgeand skills acquired by workers in the mining industrywill increase the amount of social capital. To promotegenuine development a balance needs to be achieved sothat natural capital is not significantly depleted and theincrease in manufactured and social capital willcompensate for the loss in natural capital, to providefuture generations with sufficient capital to satisfy theirneeds. Efficient use of capital is suggested bypreventative waste management, full-cost accountingwith the ‘polluter pays’ principle, and the precautionaryapproach.22 As provided in the Rio Declaration onEnvironment and Development, ‘where there are threatsof serious or irreversible damage, lack of full scientificcertainty shall not be used as a reason for postponingcost-effective measures to prevent environmental


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18 N. Robinson, ‘Sustainable Development: An Introductionto the Concept – A Legal Perspective on SustainableDevelopment’, in J. O. Saunders ed., The Legal Challenge ofSustainable Development 16 (Calgary: Canadian Institute ofResources Law, 1990).

19 B. Pardy, Environmental Law: A Guide to Concepts 267 (Toronto:Butterworths, 1996).

20 J. Moffet and F. Bregha, ‘The Role of Law Reform in thePromotion of Sustainable Development’, 6(1) Journal ofEnvironmental Law and Policy 13 (1996).

21 IUCN, UNEP and WWF, Caring for the Earth: A Strategy forSustainable Development 9 (Oxford: Oxford University Press,1992).

22 See Bacsujlaky, note 8 above at 6-9.

degradation’.23 The efficient use of capital facilitatesthe preservation of options for future generations byemphasising the protection, conservation and efficientuse of a variety of non renewable and renewable naturalresources including metals, water, vegetation and wildlife.

The third principle, equity, contemplates a wide distributionof the costs and benefits from natural resourcedevelopment on an intra-generational, inter-generationaland international basis. What is equitable is of course avalue judgment, but the idea is that a broad distributionof the costs and benefits will minimise social conflict.

Public participation, the fourth principle, an integral partof the environmental impact assessment process refersto the opportunity for concerned citizens to express theirviews on natural resource development. Informationcontributed by concerned citizens and environmentalgroups can lead to better informed decisions and mayresult in reduced environmental degradation. Participationin the decision-making process may reduce social conflict.After stakeholders have had the opportunity to expresstheir opinions they may be more inclined to accept thefinal outcome decided by the regulators, as they havehad the opportunity to express their views.

The fifth principle, stewardship, requires a broadawareness of the objectives of sustainable developmentby government decision-makers, corporations andindividuals and a concerted action to implementsustainability. To effectively implement genuinedevelopment a government should have the broadsupport of industry and citizens:

‘In order to be implemented effectively, theobjectives of sustainable development must bewidely shared; all decision-makers must desireand know how to act in accordance with thebasic principles outlined above. This requiresthat governments promote support forsustainable development through leadership byexample and through education’.24

A comprehensive international study on mining andsustainability released in 2002, has confirmed that

respect for ecological integrity, efficient resource use,the equitable distribution of the costs and benefits frommineral development, stakeholder participation andstewardship are important elements in sustainabledevelopment.25 In 1992 at the Earth Summit,Philippines ‘pledged to pursue sustainable developmentas embodied in Agenda 21, and subsequently thePhilippine Government created the Philippine Councilfor Sustainable Development’.26 Chapter 8B of Agenda21 indicates that ‘an effective legal and regulatoryframework’ is essential to balance environmental andeconomic development goals in national policies.27 Theincorporation of the above five sustainability principlesinto the Philippines impact assessment regulatoryprocess is important to facilitate genuine development.In 2002, at the New Delhi summit, in addition to theduty to facilitate sustainable use of natural resourcesand the eradication of poverty, the importance of publicparticipation and the precautionary principle (that weshall consider in the context of tailings spills) were againrecognised to be important sustainability principles.28

Political, economic, social, and legal forces influenceprogress toward genuine development. In regard to therole of law, Professor Phil Elder noted that the thereare limits on the extent to which a legal system canpromote sustainable development as the law tends tobe goal implementing rather than goal driving.29

However, as Professor Owen Saunders concluded inhis analysis of the role of law in facilitating sustainabledevelopment, ‘Law is a force in itself, capable equallyof promoting values that will preserve and protect theenvironmental interests of future generations or ofinsisting on the economic interests of the present society,regardless of the cost to those who follow’.30


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23 See Principle 15 in the Report of the United NationsConference on Environment and Development, Rio deJaneiro, UN Doc. A/CONF.151/26/Rev.1 (1992).

24 See Bacsujlaky, note 8 above at 12.

25 International Institute for Environment and Developmentand World Business Council for Sustainable Development,Breaking New Ground: Mining, Minerals, and SustainableDevelopment (London: Earthscan Publications, 2002).

26 See Center for Alternative Development Initiatives,Philippine Agenda 21, available at http://www.cadi.ph/philippine_agenda_21.htm.

27 See Agenda 21, in Report of the United Nations Conferenceon Environment and Development, Rio de Janeiro, UN Doc.A/CONF.151/26/Rev.1 (Vol. 1), Annex II (1992).

28 ILA Resolution 3/2002, New Delhi Declaration of Principlesof International Law Relating to Sustainable Development,Report of the 70th Conference, New Delhi, 2002.

29 P.S. Elder, ‘Sustainability’ 36 McGill L.J. 831, 838 (1991).30 J. O. Saunders ed., The Legal Challenge of Sustainable Development

2, 16 (Calgary: Canadian Institute of Resources Law, 1990).

http://www.cadi.ph/philippine_agenda_21.htm

significant environmental impact,36 and compels thepreparation of a written, detailed study and explanationof the negative environmental and social impacts forconsideration by stakeholders including the public.37

However, a discussion of the social impacts of miningin the Philippines is beyond the scope of this article.38

Section 102(2)(C) of NEPA provides that anenvironmental impact statement (EIS) is to include:

in every recommendation or report onproposals for legislation and other majorFederal actions significantly affecting thequality of the human environment, a detailedstatement by the responsible official on:

(i) the environmental impact of theproposed action,

(ii) any adverse environmental effectswhich cannot be avoided shouldthe proposal be implemented,

(iii) alternatives to the proposed action,

(iv) the relationship between localshort-term uses of man’senvironment and the maintenanceand enhancement of long-termproductivity, and

(v) any irreversible and irretrievablecommitments of resources whichwould be involved in the proposedaction should it be implemented.

The EIS is intended to provide useful information tostakeholders to facilitate feedback from those mostaffected by a proposed project so that regulators canplan to mitigate negative environmental and socialimpacts before they arise.39

3ENVIRONMENTAL IMPACT ASSESS-MENT AND MINING

Notwithstanding extensive discussion of sustainabledevelopment in the literature, there has been limitedcommentary by scholars on mining and sustainability.31

In light of the pro-development policy of the PhilippineGovernment that encourages foreign investment in themining sector, sustainability should be considered in alocal, regional, national and global context.32 Given theemphasis placed on base and precious metals mining asa vehicle for economic development by the Philippinegovernment, and the inherent potential forenvironmental and social impacts for genuinedevelopment to occur, mining projects should besubjected to a more rigorous environmental impactassessment (EIA) process. The importance of acomprehensive EIA process is underscored by theunique vulnerability of a ‘resource rich’ country that isenvironmentally fragile.33 EIA is ‘a process foridentifying and considering the impacts of an action’. Itis ‘not about rejecting development; rather it is aboutmaking sure that development proceeds with fullknowledge of the environmental consequences’.34 It iswidely used as a tool for environmental managementby numerous governments often based on processcreated under the U.S. National Environmental PolicyAct of 1969 (NEPA).35 Section 102(2)(C) of NEPA,requires environmental values to be considered by U.S.federal regulatory agencies for projects which have


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31 R. Collin, ‘Review of Legal Literature on Environmental Racism,Environmental Equity and Environmental Justice’, 9 L.J. &Litig. 121, 143 (1994) and J. Otto and J. Cordes, The Regulationof Mineral Enterprises: A Global Perspective on Economics, Law andPolicy (Westminister, Colorado: Rocky Mtn Law Fdn., 2002).

32 G. Gallopin and P. Raskin, Global Sustainability: Bending theCurve 4-7 (London: Routledge, 2002).

33 E. E. Yates, ‘Public Participation in Economic andEnvironmental Planning: A Case Study of the Philippines’22 Denver J. of Int’l L. & Policy 107 (1993).

34 K.S. Hanna, ‘A Brief Introduction to Environmental ImpactAssessment’, in K.S. Hanna ed., Environmental ImpactAssessment Practice and Participation 3 (Toronto: OxfordUniversity Press, 2005).

35 See NEPA, note 1 above at §§ 4321-4370 and L. Ortolanoand A. Shepard, ‘Environmental Impact Assessment:Challenges and Opportunities’, 13 Impact Assessment 231 (1995).

36 See NEPA, note 1above at § 4332.37 Id.38 For a discussion of the social impacts from mining in the

Philippines, see W. Holden, ‘Indigenous Peoples and Non-Ferrous Metals Mining in the Philippines’, 18 The Pacific Review417 (2005).

39 William Ross, ‘Environmental Impact Assessment in thePhilippines: Progress, Problems and Directions for theFuture’, 14 Environmental Impact Assessment Review 217 (1994).

In 1977, President Marcos issued a Presidential DecreeNo.1151 that required an Environmental ImpactStatement (EIS) to precede all actions, projects, orundertakings which may significantly affect the qualityof the environment.40 Another Presidential Decree No.1586 was issued in the following year authorising theMinister of Human Settlements to name the lead agencyresponsible for undertaking the preparation of an EISfor ‘environmentally critical projects’ and projectslocated in ‘environmentally critical areas’.41 No projectdeemed to be either an environmentally critical project,or one located in an environmentally critical area, couldproceed without first submitting an EIS. Upon reviewand approval of the EIS, the President (or his dulyauthorised representative) would then issue anEnvironmental Clearance Certificate (ECC) and onlythen, could the project proceed.42 In 1981, PresidentialProclamation No. 2146 specified those activities thatwould constitute environmentally critical projects andenvironmentally critical areas. Major mining projects arecited as environmentally critical projects in ProclamationNo. 2146.43 The Environmental Management Bureau(EMB), of the Department of Environment and NaturalResources (DENR), administers the EIA system andhas issued Administrative Orders (AOs), includingDENR AO 2002-42 and 2003-30 which havedetermined the nature of contemporary EIAs.

To secure an ECC for a proposed mine, the proponentconsults with the EMB. The Bureau decides whetherthe mine is an environmentally critical project andwhether it is located in an environmentally critical area.44

The southeastern Mindanao Protected Areas andWildlife Bureau Director Emmanuel Isip reported thatmining projects are always considered to beenvironmentally critical.45 If the proposed mine is notsituated in an environmentally critical area, the regional

EMB office will conduct the EIA for the project; if theproposed mine is in environmentally critical area, theEMB office in Manila performs the EIA.46 Afterdetermining which EMB office is responsible for theEIA, the EMB creates an Environmental ImpactAssessment Review Committee (EIARC) to conduct a‘scoping’ exercise that involves public hearings, todetermine the probable environmental impacts.47 At theconclusion of the scoping exercise48 the proponentprepares and submits its EIS to the EMB and theregulator is provided 120 days to review the EIS.49 TheEMB frequently holds public hearings during this periodto listen to concerned members of the public,50 andmay make written requests to the project proponent foradditional information. Only two requests for additionalinformation are allowed and the requests may only bemade during 90 days in the 120-day examinationperiod.51 If the project proponent cannot comply withthe request for information from EMB, the responsibleauthority (Regional Director or EMB Director) is tomake a decision based on whatever information isavailable to satisfy the 120-day time limit.52 At the endof the examination period the EIS will be deemedapproved unless expressly rejected by the EMB, and theECC is issued. The EIA process is designed to becompleted in the minimum time with inconvenience tothe mineral developer.

Our attention now turns to eight specific elements ofthe Philippine EIA process based upon their importancein the environmental assessment literature, their overallimportance in evaluating the environmental impactsfrom projects in the context of genuine development.Environmental assessment can be used ‘as asustainability instrument’; however, as Clive Georgenoted, indicators of sustainable development need toidentified and applied by the government in the project


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40 Presidential Decree 1151.41 See Research & Policy Development Team, ‘The More They

Stay the Same: Recent Developments in the EIA System’, 8Philippine Natural Resources Law Journal 49-74 (1997).

42 See Ross, note 39 above.43 Id.44 Environmental Management Bureau (EMB), Revised

Procedural Manual, 2005, Table 1-4 and Annex 2-1a.45 Interview: E. Isip, Director Southeast Mindanao Protected

Areas and Wildlife Bureau, Department of Environmentand Natural Resources in Davao City, Philippines (3 June2005) [hereafter Isip Interview].

46 Id.47 See EMB, note 44 above.48 There is no set time period for scoping in the regulations

governing the Philippine EIA system. At the Palawan NickelProject, for example, the scoping exercise took approximatelytwo months.

49 Philippines, Department of Environment and NaturalResources (DENR), AO 2002-42, Section 2.

50 See Isip Interview, note 45 above.51 Philippines, DENR AO 2003-30, Section 5.2.52 Id., Section 8.2.3.

approval process.53 Intergenerational equity and intra-generational equity are ‘pillars’ of sustainabledevelopment to be considered in the development andadoption of the sustainability indicators.

The elements to be considered include the approach toevaluation of impacts, consideration of projectalternatives, the approach to cumulative effects frommining, the degree of public participation, accountability,scope for appeals, the time allowed to consider EIAinputs, and reclamation requirements.

3.1 Evaluation of Impacts

Mines in the Philippines cause environmental impactswhich include immediate impacts on the biophysicalenvironment such as land disturbance and watercontamination, and more remote impacts such as lossof biodiversity and the displacement of indigenousinhabitants. For genuine development an EIA processmust broadly consider the environmental, human andbiophysical impacts. DENR AO 2003-30 provides foran assessment of direct and indirect project impacts onthe biophysical and human environment54 and states thatthe purpose of an EIA is to ‘protect the environmentand the community’s welfare’.55 However the ExecutiveDirector of the Haribon Foundation, a nongovernmentalorganisation (NGO), reported that the EIA process doesconsider a broad range of impacts but this often breaksdown during the implementation stage.56

Mining can have substantial and far-reaching impactson biodiversity.57 To promote genuine development


environmental impact analyses need to focus on species’habitats. The first major deficiency in the EIA system isthe lack of attention to biodiversity. The Philippineshas been recognised as a ‘biodiversity hotspot’,58 with8,500 plant species and 170,000 animal species.59 Theextinction of a single species is a loss of some naturalresources and global biodiversity.60 Nickel miningprojects are slated in high biodiversity areas such asDinagat Island, notwithstanding the Foundation for thePhilippine Environment identified the area as a prioritysite for biodiversity conservation.61 According toExecutive Director Plantilla, the EIA system makes‘absolutely no effort to consider biodiversity’.62 AttorneyGrizelda Mayo-Anda, the Executive Director of theEnvironmental Legal Assistance Center (ELAC)reported that there was an endangered plant in an areascheduled to become a mine.63 The engineers in chargeof the project merely laughed at the suggestion that theproject should not proceed because of the presence ofa plant, and consistent with Executive Director Plantilla,attorney Mayo-Anda stated that in the Philippines,‘People in mining have no biodiversity perspective’. TheEIA process often ignores provisions to protectendangered species in Wildlife Resources Conservationand Protection Act.64 Clearly the failure to considerbiodiversity in the EIA system indicates a lack of respectfor ecological integrity and does not promote genuinedevelopment.

Another deficiency is the failure to respect ethnodiversity. Globally there are conflicts between minedevelopers and indigenous peoples who reside whereore deposits are situated.65 Mines are being developedin rural areas inhabited by indigenous peoples thatengage in subsistence agriculture and fishing.Approximately two-thirds of the indigenous peoples are‘Lumads’, and one third ‘Igorots’.66 The Executive

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53 C. George, ‘Testing For Sustainable Development throughEnvironmental Assessment’, 19 Environ. Impact Assess. Rev.175-200 (1999). See also P. Bartelmus, ‘MeasuringSustainability: Data Linkage and Integration’, in B. Moldanand S. Billharz eds, Sustainability Indicators: Report of the Projecton Indicators of Sustainable Development (UK: John Wiley andSons, 1997) and H. Bossel, ‘Finding a Comprehensive Setof Indicators of Sustainable Development by Applicationof Orientation Theory’, in B. Moldan and S. Billharz eds,Sustainability Indicators: Report of the Project on Indicators ofSustainable Development (UK: John Wiley and Sons, 1997).

54 See DENR, note 51, Section 1(a).55 Id., Section 3(h).56 Interview: Anabelle Plantilla, Executive Director of Haribon

Foundation of Quezon City, Philippines (20 April 2005)[hereafter Plantilla].

57 See U.N. General Assembly Resolution 42/427, note 14 aboveat 260.

58 J. De Alban et al., Analyzing Mining as a Threat to Forestsand Sustainable Development (Quezon City: HaribonFoundation, 2004).

59 See Hanna, note 34 above.60 See EMB, note 44 above.61 See De Alban, note 58 above.62 See Plantilla, note 56 above.63 Interview: Grizelda Mayo-Anda, Executive Director of

Environmental Legal Assistance Center of Puerto PrincesaCity, Philippines (21 April 2005).

64 See Philippines, Republic Act No. 9147.65 S. Ali, Mining , the Environment and Indigenous Development

Conflicts (Tucson, Az: University of Arizona Press, 2003).66 See Bravante, note 38 above.

Director of Anthrowatch, reported that seventy percentof all indigenous communities represented by the NGOhave experienced conflict with the mine developers.67

The location of mines on ancestral domains has createdsubstantial impacts on their traditional lifestyle andconflict when residents are displaced from ancestrallands. Indigenous peoples migrate to cities where theylack jobs, shelter, and basic services.68 As notedpreviously genuine development promotes equity.Notwithstanding the danger to indigenous cultures,Mayo-Anda reports that the EIA process pays littleattention to ethno diversity and that it is doubtful thatthe effects on indigenous people would be the basis forrejecting a mining project.69

In regard to potential impacts, the Philippine EIA systemmerely involves highly technical discussions of baselineconditions based on volumes of information.70 The EIAprocess fails to address biodiversity71 and ethno-diversity,72 and there is substantial uncertainty as to whatthe impacts will be.73 As Modak and Biswas have noted,‘Large verbose, complex reports are unnecessary, andcan be counter-productive, as the findings from the EIAmay not be in a form readily accessible and immediatelyuseful to decision makers’.74

3.2 Project Alternatives

In 1998 Gupta and Asher reported ‘In the Philippines,alternative project designs are not considered

important’.75 For genuine development to occur, theextent to which the EIA process considers alternativesto mitigate negative impacts is an importantconsideration.76 An EIA should consider alternativemeans of carrying out the project including notproceeding.77 Presidential Decree No.115178 requiresan EIS to include ‘a detailed statement’ on ‘alternativesto the project’ but does not require consideration ofthe ‘no-action’ alternative. According to Plantilla, theEIA system allows for the identification of alternativesbut since the proponent prepares the EIS, it usually onlydiscusses the option preferred by the mine developer.79

If the proponent does discuss alternatives, other thanthe one it prefers, such discussion is cursory at best.80

Mayo-Anda also reported that consideration ofalternatives is not observed by project proponents.81

On rare occasions the EIA system has rejectedunpopular projects.82 According to Smith, from 1983to 1990, the DENR only denied five applications for anECC. Mayo-Anda suggests, ‘that if the DENR had thewill to reject projects, the system might be better’.83

3.3 Cumulative Effects

An assessment of the cumulative effects from severalindustrial projects is an important consideration inplanning for genuine development. Cumulative effectsassessment is the process in which the effects of theproposed mine are considered in conjunction with otheractivities in the general area. A regional concentrationof mines will cause cumulative impact beyond thosearising from a singe mine that can include water tabledraw down. When operations proceed beneath the watertable, groundwater can flood of the open pit andworkings. Pumping to facilitate mineral extraction canresult in groundwater withdrawal and depletion of an


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67 Interview: Teresa Guia-Padila, Executive Director ofAnthrowatch of Quezon City, Philippines (22 April 2005).

68 R. Stavenhagen, Report of the Special Rapporteur on theSituation of Human Rights and Fundamental Freedoms ofIndigenous People, UN Commission on Human Rights, UnDoc. 4/2003/90/Add.3 (2003).

69 See Mayo-Anda, note 63 above.70 This process of engaging in voluminous, highly technical

and descriptive discussions of the baseline conditions issomething the NEPA regulations specifically direct agenciesof the United States Government to refrain from doing.The NEPA regulations 40 CFR 1502.15 state: ‘Verbosedescriptions of the affected environment are themselves nomeasure of the adequacy of an environmental impactstatement’.

71 See Plantilla, note 56 above.72 See Mayo-Anda, note 63 above.73 Id.74 P. Modak and A. Biswas, Conducting Environmental Impact

Assessment For Developing Countries 22 (Tokyo & New York:United Nations University Press, 1999).

75 A. Gupta and M. Asher, Environment and The Developing World:Principles, Policies and Management 240 (New York: Wiley, 1998).

76 Id.77 NEPA Regulations, 40 CFR 1502.14(d): direct regulators to

include the no action alternative in the EIS.78 Section 4(c), Presidential Decree No. 1151.79 See Plantilla, note 56 above.80 Id.81 See Mayo-Anda, note 63 above.82 Id. See also Plantilla, note 56; Interview: Asis Perez, Senior

Staff Lawyer of Tanggol Kalikasan of Quezon City,Philippines (20 April 2005).

83 See Mayo-Anda, note 63 above.

aquifer.84 Negative groundwater impacts are intensifiedby several mines in an area and reduced stream flowthat can reduce the volume of water available foragriculture. This is critical given the fact that seventyper cent of the income for poor rural residents is fromagriculture and agriculture amounts to forty per centof Gross Domestic Product.85

DENR AO 2003-30 alludes to cumulative effects,86 butthe EIA system ‘routinely fails to consider cumulativeeffects’.87 According to Attorney Asis Perez andDirector Isip, in many cases the proponent does notadequately address cumulative effects in the EIS andthe DENR itself lacks the capacity to considercumulative effects.88 Cumulative effects should beevaluated over time and the DENR lacks the resourcesto do this.89 According to Mayo-Anda ‘if cumulativeeffects were properly being considered, they would notbe allowing mining on Palawan’.90 Genuine developmentis characterised by the efficient use of different typesof natural capital including water, vegetation andminerals. The failure of the EIA system to protectrenewable resources such as water and crops is anotherexample of a deficiency in the EIA process that doesnot provide for genuine development.

3.4 Public Participation

Genuine development requires a participatory approachin the EIA process.91 Deficiencies in the publicparticipation in the EIA process undermine genuinedevelopment.92 DENR AO 2003-30 contains several

provisions that provide for public participation.93

Section 5.3 requires ‘a public hearing as part of the EISreview’ for metal mines unless ‘otherwise determinedby EMB’. However, Yates noted that the ‘EIA systemhas generally excluded local citizens and officials, therebyomitting the participation of those who have the mostrelevant experience and knowledge concerningprojects’.94 He has also reported that in the Philippines,‘Public scrutiny makes government officialsuncomfortable’.95 The first problem with the EIAprocess can be attributed to the discretionary nature ofpublic hearings. DENR AO 2003-30 states that publichearings are ‘mandatory unless otherwise determinedby EMB’.96 This means that public hearings are held atthe discretion of the EMB and it may, if it so desires,dispense with holding them. The second problem is thenarrow definition of who may participate. ‘Stakeholders’in DENR AO 2003-30, are defined as those ‘who maybe directly and significantly affected by the project orundertaking’.97 Under this definition those indirectlyaffected by a project such as members of the localcommunity, industry, local government units (LGU), non-governmental organisations (NGOs), may not participatein the consultation process. There has been a failure todistribute the EIS to members of the public for someprojects as distribution of the EIS to the public forcomments is not required.98 Even though public hearingsare held during the scoping session to identify probableenvironmental impacts, the law treats all environmentalimpact statements submitted to the government by themining proponent as confidential; disclosure of suchinformation is in the discretion of the Philippinegovernment.99 When copies of the EIS are released tothe general public, they are written in English. The EMBwill translate the EIS executive summary into a localdialect but frequently some of its meaning is lost duringtranslation.100 The implementing rules and regulationsunder the Indigenous Peoples Rights Act101 require that,


11

84 See Smith, note 8 above.85 Cristina David, ‘Agriculture’, in Arsenio M. Balisacan and

Hal Hill eds., The Philippine Economy: Development, Policies andChallenges 175-218 (Oxford: Oxford University Press, 2003).

86 DENR AO 2003-30, Sections 3(h), 3(p), 3(w), 4.3(a), and5.2.1(e).

87 See Mayo-Anda, note 63 above.88 Interview: Asis Perez, Senior Staff Lawyer, Tanggol Kalikasan,

Quezon City, Philippines (20 April 2005) and Isip, note 45above.

89 Id.90 See Mayo-Anda, note 63 above.91 See Ross, note 39 above.92 L. Cooper and J. Elliott, ‘Public Participation and Social

Acceptability in the Philippine EAI Process’ 2 Jour. ofEnvironmental Assessment Policy and Management 339 (2000) andH. Welles, ‘EIA Capacity-Strengthening in Asia: TheUSAID/WRI Model’ 17 The Environmental Professional 103(1995).

93 DENR AO 2003-30, Section 1(d), 1(f), 1(aa), and 5.3.94 See Yates, note 33 above at 114-115.95 Id. at 113.96 DENR AO 2003-30, Section 5.3.97 Id. Section 3(gg).98 Compare this to the United States, NEPA Regulations, 40

CFR 1506.10 which require public distribution of the EISand a minimum of 45 days for public comment.

99 DENR AO 97-24, Section 3.1.5.100 See Cooper and Elliott, note 92 above.101 Indigenous Peoples Rights Act, Philippines, Republic Act

No. 8371.

concerns of residents affected by mining, and theresource limitations on residents to participate intechnical discussions that are part of the permittingprocess’.109 For genuine development in the Philippines,the U.S. experience should be considered.

Isip has rated the quality of public participation in thePhilippine EIA system as five on a scale from one toten.110 Mayo-Anda reported that the EIA framework isfor notification rather than a genuine attempt toencourage public consultation and participation andthere is no way it can influence the decision makingprocess.111 Attorney Augusto Gatmaytan, stated that‘it is one thing to be notified, it is another to be listenedto; the government is going through the motions ofhaving public participation’.112 Gupta and Asher havenoted that ‘EIAs are incomplete if people whose livesare touched, by the project either beneficially oradversely, but are not given a chance to transmit theirreactions’.113 An increased level of public participationin the EIA system by a broader range of stakeholdercan promote genuine development and reduce the levelof mistrust regarding controversial mine proposals. ‘Oneof the most certain routes to damage credibility andprompt unnecessary objections is the discovery byaffected citizens that their opportunity for interventionhas been preempted’.114

3.5 Polluter Accountability

An important problem with DENR AO 2003-30 is theremoval of a prior regulatory requirement that all projectproponents, and those preparing an EIS, declare, underoath (subject to prosecution for perjury in the event ofa false statement), that all statements in the EIS aretrue.115 The removal of this provision reflects theperception of the Philippine government that mineoperators are environmentally responsible. In light ofthe Marcopper spill, this approach should be questioned.When queried about the Marcopper tailings spill and

when indigenous peoples are affected by a proposedproject, the EIS is to be translated into their ownlanguage.102 However the Director of Natripal, anadvocate for indigenous people, documents are alwayswritten in English that creates problems for numerousindigenous people that experience difficulty inunderstanding a different language than their nativetongue.103 In addition, access to information is aperennial problem. ‘It is hard for people affected bydevelopment plans to challenge those plans whendevelopers and government agencies fail to supply themwith detailed information’.104

The previously discussed Marcopper tailings spill hasgenerated substantial concern among residents aboutthe health and environmental impacts.105 Now ‘when amining company just explores an area, people in the localcommunities already feel threatened’.106 As residentshave been denied information about the risks ofproposed mines, awareness of the spill promptsopposition to other mining projects. As the internationalMining, Minerals, and Sustainable Development projectconcluded, ‘secrecy does not build trust’.107 Followingthe principles of sustainable development for chemicalsmanagement such as the precautionary principle,proportionality and protective measures, prevention ofenvironmental and social harm, the ‘polluter-pays’,public access to environmental information and publicparticipation could address some of the residentconcerns.108 In his analysis of mining and sustainabledevelopment in the United States Dirk van Zyl notes‘Ultimately sustainable development is a concept ofneeds, an idea of limitations, a future-oriented paradigm,and a process of change. In contributing to sustainabledevelopment, mining companies need to consider the


12

102 NCIP AO 98-1, Section 6(b).103 Interview: Dioesia Banua, Director of Natripal, Puerto

Princesa City (25 April 2005).104 Charlie Pye-Smith, The Philippines: In Search of Justice 27 (UK:

Oxfam Publications, 1997).105 IBON, The State of the Philippine Environment XVIII (Manila:

IBON Books, 2006).106 Environmental Science For Social Change, Mining Revisited

79 (Quezon City: Environmental Science for Social Change,1999).

107 See U.N. General Assembly Resolution 42/427, note 14above at 293.

108 G. Wiser and D. McGraw Jr., Principles and Approachesof Sustainable Development and Chemicals Management(Geneva: Centre for International Environmental Law,2005).

109 D. van Zyl, ‘Sustainable Development and MiningCommunities’, in L. Price et al eds, note 8 above at 133.

110 See Isip, note 45 above.111 See Mayo-Anda, note 63 above.112 Interview: Agusto Gatmaytan, Professor of Anthropology,

Ateneo de Davao University, Davao City, Philippines (27May 2005).

113 See Gupta and Asher, note 75 above at 239.114 See Modak and Biswas, note 74 above at 170.115 DENR AO 96-37, Article III, Section 9(i).

the potential for negative environmental impacts frommine operations, the Executive Director of the PalawanCouncil for Sustainable Development, replied that he‘is confident that technology will prevent anydisasters’.116 Grace Galiste, a mining engineer with theMGB, is of the view that mining companies have the‘skills, expertise, and resources to properly engage inlarge scale mining’.117 Large foreign corporations, inparticular can be trusted, because they are ‘concernedabout their reputation and do not want their reputationto be hurt as this will reduce opportunities for them toinvest in the future’.118

3.6 Appeals

An important element of an EIA process that promotesgenuine development is the ability to appeal decisionsin the EIA process. Most scholars agree that statutoryavenues of appeal are necessary to allow adequate publicinput to proposed developments which have a potentiallydetrimental impact upon the environment, and that thisinput often results in a better decision, and even a senseof community ownership of the solution.119 Genuinedevelopment provides for the administrative or judicialreview of some decisions in the Philippineenvironmental review process.

DENR AO 2003-30120 provides for the possibility ofan administrative review of the issuance of an ECC asthe decision of an EMB regional office can be appealedto the EMB Director. The decision of the EMB Directorcan be appealed to the DENR Secretary, and a decisionmade by the DENR Secretary can be appealed to thePresident. The problem is that in practice, these

provisions have been seldom used. Neither Director Isipnor Attorney Perez were aware of a successfuladministrative appeal of the issuance of an ECC.121

If all administrative appeals have been exhausted, Rule65 of the Philippine Rules of Court can be relied on fora certiorari122 application to review an ECC. In LipinOtadan et al. v. The Secretary of the Department of Environmentand Natural Resources, the Environmental Management Bureauand Rio Tuba Nickel Mining Cor poration ,123 theEnvironmental Legal Assistance Center (ELAC) appliedfor a certiorari order to review the issuance of the ECCfor the Rio Tuba Nickel Mining Project. The ELAClitigated the certiorari application all the way to thePhilippine Supreme Court before, ultimately, losing.124

Although judicial reviews of an ECC are possible, Mayo-Anda reported ‘there must be more of an effort toenlighten the courts on how environmental laws areapplied with respect to the EIA system; on Palawan thecourts need to be better equipped with knowledge ofhow the EIA system works’.125 The Executive Directorof Interface Development Interventions (IDIS), a NGOin Davao, City, stated that, ‘The judges lack anunderstanding of environmental law, especially at thelower levels of the courts’.126

DENR AO 2002-42, states that, ‘It is the policy of theState that optimum economic development shall beachieved without delay’.127 President Gloria Macapagal-Arroyo, in January 2004, issued Executive Order No.270that requires the DENR to take the lead in thepreparation of a Mineral Action Plan that shall set ‘theguidelines and procedures on the simplification andstreamlining of permitting and clearance systems’. Thefirst issue addressed in the action plan was the ‘tediouspermitting process’ for proposed mines. Prior morecareful scrutiny of the potential environmental impactsis now reduced to streamlining the permit approval


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116 Interview: Nelson Devandera, Executive Director ofPalawan Council for Sustainable Development, PuertoPrincesa City, Philippines (27 April 2005).

117 Interview: E. Galiste, Mining Engineer of Mines andGeosciences Bureau, Department of Environment andNatural Resources of Quezon City, Philippines (17 June2005).

118 Id.119 S. Bache, ‘Are Appeals an Indicator of EIA Effectiveness?

Ten Years of Theory and Practice in WA’ 5 Australian Journalof Environmental Management 3 (1998) and H. Abaza,‘Strengthening Future Environmental Assessment Practice:An International Perspective’, in N. Lee and C. Georgeeds., Environmental Assessment in Developing and TransitionalCountries 278 (New York: Wiley, 2000).

120 DENR AO 2003-30, Section 6.

121 See Isip, note 45 above.122 Certiorari is a prerogative remedy where a court examines

whether the decision made by a lower body has been madewithin the proper use of jurisdiction available to the lowerbody.

123 G.R. No. 161436, 23 June 2004.124 See Mayo-Anda, note 63 above.125 Id.126 Interview: Lia Esquillo, Executive Director of Interface

Development Interventions of Davao City, Philippines (17July 2007).

127 DENR AO 2002-42, Section 1.

process. To minimise negative environmental impactsto promote genuine development, an EIA needs to bethorough, and ‘time must be allowed to consider theinput made by participants in the review, a principle ofnatural justice and procedural fairness, intended to forcedecision makers to take the EIA seriously’.128

3.7 Time to Consider Input

The Philippine EIA process is designed to be completedin minimal time and with minimal inconvenience to themine project proponent and must take no longer than120 days. The EMB may only make two requests foradditional information from the project proponent andonly within the first 90 days of the process. If theproponent does not comply with a request forinformation the regulator is to make a decision basedon the information available in the limited stipulatedtime. At the end of the 120-day period the EIS is deemedapproved unless expressly rejected by the EMB. MichaelCabalda, Chief MGB Science Research Specialist,reported the system is ‘based upon the presumption thatthe EIS will be a good document’ because the projectproponent has ‘the responsibility of submitting a gooddocument’.129 In the United States it usually takes muchlonger to complete the EIA process for a proposed large-scale mine equivalent, from 18 months to 8 years.130

For genuine development, thorough and carefulconsideration of the short and long term environmentalimpacts from a proposed mine and how to prevent orminimise them is an integral part of the EIA process.Currently the government is fast-tracking applications.As Gatmaytan notes, ‘In the Philippines, delay orabandonment of projects is never an option of theproponent’.131 In the words of Mayo-Anda, ‘EIA ismeasured by a stopwatch and mandated by the skeweddevelopment priorities of the Philippines’.132

3.8 Security for Reclamation

Provisions in the FMR/DP require depositing moneyevery year during the operation of the mine to ensurethat when the mine is closed there will be funds on handfor remediation and reclamation. The Philippinegovernment perceives there are rigorous minereclamation requirements in DENR AO 2005-07,133

including contributing to a Mine Monitoring Trust Fund,that will create funds to monitor environmental impactsfrom mines at the end of their commercial life.134

Operators must deposit money into a MineRehabilitation Fund so that funds are available for theremediation and reclamation of the site.135 Theadministrative order also requires mine projectproponents to create a Final Mine Rehabilitation/Decommissioning Plan (FMR/DP).

Based on his analysis of the U.S. experience with mineoperator bankruptcies and inadequate funds to completemine reclamation, Warren McCullough notes that ‘Legalmechanisms and safeguards for financial assuranceshould not be considered valid until actually tested andproven’.136 There have been situations in the UnitedStates where mining companies have filed for bankruptcyduring the course of operations and left behind landthat requires substantial and expensive remediation andreclamation to address environmental contamination.A site near Summitville, Colorado is one example wherethere is significant remediation and reclamation liability.The mine was abandoned and its operator, SummitvilleConsolidated Mining Corp. Inc. declared bankruptcy.Legal attempts by the United States government to holdthe mine operators accountable and fiscally responsiblefor the U.S. $170 million dollar remediation andreclamation at the mine site failed.137 It is estimatedthat the reclamation cost will be U.S. $71 million dollarsat another site where cyanide was used to extract goldin the western United States, it has been estimated thatthe base and precious metals mining industry is operatingwith an unfunded environmental liability of 12 billion


14

128 See Ross, note 39 above at 238.129 Interview: M.V. Cabalda, Chief Science Research Specialist

of the Mines and Geosciences Bureau, Department ofEnvironment and Natural Resources of Quezon City,Philippines (27 July 2004).

130 See Bacsujlaky, note 8 above.131 A. Gatmaytan, Its too Early for Conservation - Tokenism

in the Environmental Impact Assessment System of thePhilippines 90-05 (Quezon City: Legal Rights and NaturalResources Center, 1993).

132 See Mayo-Anda, note 63 above.

133 See Galiste Interview, note 117 above.134 DENR AO 2005-07, Section 181a.135 Id. Section 181b.136 W. McCullough, ‘Financial Assurance and Bonding: What

Happens When Bankruptcy Hits,’ in L. Price et al eds, note8 above at 121.

137 See Saunders ed., note 30 above.

dollars.138 In light of these significant amounts, it isunlikely that the funds deposited with the PhilippineGovernment will be adequate to reclaim the sites. TheMine Rehabilitation Fund is limited to a maximum ofonly 5 million Pesos. The FMR/DP provisions whichrequire setting aside a limited amount of money duringthe life of the mine are inadequate if the mine operatorin the Philippines become insolvent and abruptlyabandons the mine before the scheduled contributionshave been completed. In this scenario there will be anunfunded environmental liability for the Philippinegovernment and taxpayers.

If DENR 2005-07 required the project proponent topost a bond that would provide adequate funds for minereclamation at the beginning of the project, the aboverisk could be avoided. There is no reclamation fund inthe Philippines like the U.S. Superfund139 to addressunfunded environmental liabilities arising fromabandoned mines.140 If the former mine operator ordeveloper do not pay, the Philippine Government andultimately the taxpayer will end up paying for thereclamation of abandoned mine sites. Inadequatesecurity for reclamation is a problem as the number ofmajor mines increases without security to ensure thatreclamation is completed. If one mine operator defaults,there will be inadequate funds in place to clean up theabandoned mine. Mine reclamation costs then will haveto be obtained from general tax revenue. Ultimately minereclamation can become a significant expense for thegovernment as it has in other countries. Filipino policymakers in their zeal to attract mining investment appearunprepared to risk losing foreign investment capital willface significant costs for mine reclamation in the future.This is an excellent example of the mentality prevalentin the developing world that ‘a bill deferred seems almostas good as a bill unpaid’.141

In addition the FMR/DP provides that mine developersare responsible for contamination only for a ten-year


15

138 S. D’Esposito, ‘Public Perspectives on Mining – There Mustbe a Way to do it Right,’ in Price et al eds, note 8 above at 43.

139 In the United States, the Comprehensive Environmental Response,Compensation, and Liability Act (CERCLA) 42 U.S.C. 103created a pool of funds (referred to as the ‘Superfund’) forthe rectification of unfunded environmental liabilities.

140 See Perez, note 88 above.141 R. Westin, ‘Intergenerational Equity and Third World

Mining’, 13 University of Pennsylvania Journal of InternationalBusiness Law 187 (1992).

period after closure. As processes such as acid minedrainage occur over a much longer time framework(centuries) a decade is far too short to address the longerterm environmental impacts from mining. Anotherproblem is with the Philippine regulatory in the FMR/DP, is the failure to incorporate ‘risk-basedmethodologies/approaches’. Assessing risk is asubjective process and risk-based methodologies do notprovide the high standard of protection that would beexpected when planning for a worst-case environmentaldisaster wherein the mine operator goes bankrupt at thepoint in time when closure and reclamation costs arethe highest.142

4CONCLUSION AND RECOMMEN-DATIONS

Genuine development strives to promote harmonyamong human beings and the environment, and promptsgovernments to balance economic, social andenvironmental objectives. Sustainability requiresplanning for the needs of current and future generations,and optimising the use of natural resources. The conceptfocuses on the quality of economic growth and guidesstrategic planning to minimise environmentaldegradation and social conflict. Environmental impactassessment (EIA) can be used as an effective tool topromote genuine development. Notwithstanding the factthat the Government of the Philippines has indicatedthat it is committed to sustainable development inPhilippine as enshrined under the Agenda 21, thisanalysis of the regulatory approach to EIA for proposedmines suggests otherwise. The EIA process fails topromote genuine development. EIA in the Philippinesdoes not respect ecological integrity nor facilitate anefficient use of natural capital. It fails to promote bothintra-generational and intergenerational equity and doesnot incorporate a participatory approach. There is a lackof environmental stewardship on the part of the nationalgovernment. In regard to the evaluation of potential

142 G. Emlen Hall, ‘The Forest Service and Western WaterRights: An Intimate Portrait of United States v. New Mexico’,45 Natural Resources Journal 979 (2005).

impacts from mining, the EIA process does not respecteither biodiversity or ethno diversity. The system failsto consider alternative means of carrying out a proposedproject to minimise negative environmental and socialimpacts. The system does not allow sufficient time toconsider input provided in the process to mitigatenegative environmental and social impacts. Theapproach of the Philippine government to facilitatequick project approval is contrary to genuinedevelopment. Bureaucrats merely go through themotions of assessing the environmental impacts ofprojects in the minimum amount of time and with theminimum amount of inconvenience to the minedeveloper.

The EIA regime does not effectively address cumulativeeffects. Renewable natural resources such as water, fishand crops which are crucial to the survival of manyresidents in regions where agriculture and fishing arethe predominant subsistence activities are not protected.A participatory approach is lacking in the EIA process.There is limited access to information by residents whomay be affected by a proposed mine and a lack of publichearings. In addition there is a significant restriction onthe parties that can participate in the ‘consultation’process, and therefore limited public input. In manyinstances NGOs are not allowed to intervene as the rulesindicate only parties directly affected by a project areeligible to participate in the EIA hearing process.Frequently indigenous peoples cannot appreciate thepotential impacts from proposed mines as theinformation that may be available through the EIAprocess is not in a language that the indigenous residentscomprehend. Genuine development could be promotedif a broader range of stakeholders were allowed toparticipate in the EIA process surrounding proposedmines. To facilitate genuine development in thePhilippines, the system must provide for more publicinput and serious consideration of that input in the EIAprocess.

The system discourages judicial review of administrativedecisions. An EIA must be completed in minimal timewith minimal inconvenience to the mine proponent.Even though security is required by the government toencourage reclamation of mine sites, based on the U.S.experience, the amount of funds that must be depositedwith the government is nominal, and may well beinadequate to protect future generations from problemssuch as acid mine drainage and water contamination.

Currently, the Philippine EIA system is a tokenismdesigned to make it appear as if the environmental andsocial impacts of proposed mining projects are beingevaluated when in reality there is no serious intent to doso. It is merely a process designed to make it appearthat proposed mines are subject to environmentalscrutiny when in reality the system merely facilitatesproject approval. The overarching priority of thePhilippine government is to encourage mining, not toseriously evaluate and weigh the potential economicbenefits of a proposed mine along with the negativeenvironmental, social and cultural impacts. If in thefuture the Philippine Government decides to pursuegenuine development, the deficiencies we have identifiedin the foregoing discussion must be rectified. As astarting point the five principles we have discussed whichare characteristic of a regulatory system that promotesgenuine development (respect for ecological integrity,efficient use of natural capital, promoting equity, aparticipatory approach and environmental stewardship)must be integrated into the EIA process.

Respect for the core principle of ecological integrity isfacilitated through a regulatory system that maintainsand restores environmental quality through planning tominimise the environmental impacts from mining, theenactment and enforcement of environmentalprotection legislation, reliance on the precautionaryapproach when there is uncertainty about theenvironmental impacts from mines, and an approachunder which polluters pay for the environmental damagecaused by their activities. It should be recognised thatprofitable mining does occur in jurisdictions where thelegal system insists on polluter accountability and wherethere is meaningful input from local residents onproposed mine development in the EIA process. Thelaw can influence development decisions by imposingrestrictions on the scope and nature of mining activitiesand where they proceed, and can encourage corporatedirectors to implement sustainability policies and adoptbest mining practices. To mitigate negativeenvironmental impacts, effective remediation and longterm monitoring to ensure the integrity of tailings dams,is an issue that needs to be addressed in theenvironmental impact assessment process to avoid arepeat of the serious problems observed near theMarcopper Mine and where cyanide spills have occurred.The Philippine Government should recognise thatserious problems can arise with some mining projectsdue to the displacement of indigenous people, water

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pollution, and social disruption and these problems canmake mineral development a source of long-termpoverty not prosperity. We submit that genuinedevelopment requires an environmental impactassessment process that incorporates sustainabilityindicators which should prompt both the governmentand mine developers to carefully evaluate theenvironmental and social impacts of proposed projectsin the Philippines and mitigate the negative impacts.

The approach of the Philippine government towardproposed mines is not unique. Other governments withdeveloping economies have considered EIA to be aprocess that is ‘holding up development, or at leastdelaying it’.143 Abaza has noted that there is a commonperception in the developing world that ‘EIA isantidevelopment’.144 Lee and George have noted thatmany governments with developing economies fail tounderstand that the purpose of an EIA ‘is to assist thedevelopment process, not to prevent development fromtaking place’.145 To promote genuine development thesegovernments should realize that EIA has been usedsuccessfully in other countries in Europe, the UnitedStates and Canada, to provide for economicdevelopment to accommodate the needs of the presentgeneration and at the same time to minimiseenvironmental and social degradation so that futuregenerations will be in a better position to satisfy theirneeds.

143 See Gupta and Asher, note 75 above at 237.144 See H. Abaza, note 119 above at 274.145 N. Lee and C. George, ‘Introduction’, in N. Lee and C.

George eds., note 119 above at 6.

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