Mining mayhem triggers
eco-disaster in Zambales

First of Two Parts

STA. CRUZ, ZAMBALES – Nickel is not doing too well in the world market these days, but residents here do not seem to mind, even though nickel has become one of this town’s major revenue earners.

That’s because whenever nickel commands top dollar, red dust smothers the town’s main highway and the pier, and red mud cakes the roads. Residents also have to share their small barangay roads with huge, lumbering trucks, and when rains come, floodwaters the color of blood fill their ricefields. Meanwhile, up in the mountains, armed guards hired by mining firms menace real and imagined foes and sometimes engage each other in deadly shootouts.

No wonder Zambales Governor Amor Deloso has taken to describing Sta. Cruz – some 170 kilometers north of Manila — as “parang Iraq (like Iraq).”

Deloso seems to confine such a description to what he and others say is the increased militarization in this town because of mining. But he may well also be describing the helter-skelter way mining is being conducted in the entire province, recalling the mayhem and lawlessness in Iraq. Ironically, according to local officials and ordinary Zambalenos, the situation can be traced largely to no less than Deloso’s mining policies.

The governor himself says that Zambales has become a “battleground between big and small interests, national against local officials, with some intramurals between me and the mayor (of Sta. Cruz).” Yet he is unapologetic about the policies on mining he has crafted, even though lawyers and some local officials say the legality of these are, at the very least, suspect, especially those pertaining to small-scale mining.

These are also why unearthing Zambales’s minerals (which include chromite and gold and are estimated to be worth billions of dollars) has turned the province into a virtual powder keg waiting to explode. Indeed, Environment and Natural Resources Secretary Joselito ‘Lito’ Atienza has called Zambales “the most problematic province in terms of mining.”

Laws bent, ignored

Zambales’s mining mayhem, however, is not only a template of how local governments should not manage the industry. It also reveals how national agencies like the Department of Environment and Natural Resources (DENR) are rendered inutile as laws are bent and manipulated to suit the needs of local officials.

Confesses a mid-level DENR official when confronted with the situation in Zambales: “Our men just deal with small problems on the ground, like conflicts between small miners.”

This is even though it was the DENR that issued the implementing rules and regulations for Republic Act 7076 or the 1991 People’s Small-Scale Mining Law. It is also the DENR that has direct supervision and control over some of the vital bodies that govern small-scale mining, which is aimed at helping generate income for the rural poor.

These include the Provincial Mining and Regulatory Board (PMRB), a five-member body that is supposed to be headed by the regional director of the DENR’s Mines and Geosciences Bureau (MGB). It is the DENR’s implementing agency for the People’s Small-Scale Mining Program. Among other things, it is upon its recommendation that a small-scale mining contract is issued by the governor.

In addition, it is the DENR secretary who has “direct supervision and control over the (People’s Small-Scale Mining Program) and activities of small-scale miners” within the designated area.

Permit or contract

A DENR primer on small-scale mining says either a permit or a contract can be issued. A permit is good for two years and renewable only once. A contract is also effective for two years, but is renewable for like periods.

Both permits and contracts emphasize artisanal work or manual labor; the use of heavy or sophisticated equipment like drilling machines, payloaders, and excavators is prohibited. Too, the law limits the annual production for metallic minerals for a small-scale mining operator at a maximum 50,000 tons of ore.

Clarificatory guidelines signed in 2007 by then DENR Secretary Angelo Reyes say that contracts are issued to cooperatives that will work in sites designated as small-scale mining areas. Permits are issued to qualified individuals who have the “capacity to contract” or a corporation or partnership “authorized to engage in mining, registered with the Securities and Exchange Commission, (with) at least 60 percent of the capital…owned at all times by Filipino citizens.”

Permits cover sites outside of small-scale mining areas; they are issued following the rules spelled out in Presidential Decree No. 1899, a Marcos-era law that remains in force.

Reyes’s guidelines, however, make it clear that both permit- and contract-holders are bound by the “provisions of … the Philippine Mining Act of 1995, the Small-Scale Mining Laws and their implementing rules and regulations, among others.”

Zambales, though, does not seem to believe it needs to follow these laws. Since 2007, it has been one-month small-scale mining permits that allow a holder to haul off 50,000 tons of ores within that period from a five-hectare area. The permits can be renewed twice, after which a miner only has to show proof of active extraction to secure a longer-term permit. And contrary to stipulations in the small-scale mining laws, these allow a holder to use heavy equipment to extract the ore from the ground.

But Zambales Governor Deloso, who is also a lawyer, sees no conflict with his province’s unique mining permits and national laws.

“Nobody can stop a governor from giving a special permit to in any line of business,” he says. “It is not prohibited, therefore it is permitted.”

Still, he does subtly acknowledge the prohibition against the use of heavy machinery in small-scale mining by calling the provision “backward” and “impractical.”

It consigns small-scale miners to “kamote mining,” he says, thundering, “How can you get 50,000 tons with your spade and wheelbarrow? It’s like telling me that since my father rides a horse-drawn carriage, I should not drive a car.”

Deloso points to Zambales’s past forays into mining as one reason why he decided to come up with the short-term permit for small-scale miners. He says that big miners, though operating for generations, did not contribute much to the capitol’s coffers, since they sent their taxes directly to the national government. The province even had to repair roads in mining areas that were run down by heavy trucks and machinery, he says.

Permit for P10K

This time around, Zambales issues its one-month mining permit to anyone who can cough up P10,000 as issuance-fee payment. Small-scale miners also have to pay the provincial government an “enhancement fee” of P50 per metric ton of nickel and P60 per metric ton of chromite. There is a P15,000 fee for a Provincial Environmental Clearance Certificate (PECC) as well.

Despite these fees, hundreds of entrepreneurs line up for the permits. One harried employee of the Environment and Natural Resources of Zambales (ENROZ) was reduced to spewing mixed metaphors, saying that the permits have been “selling like hotcakes” and that applicants show up at the ENROZ office “like mushrooms after a thunderstorm.”

The employee said that before Deloso became governor two years ago, ENROZ received just three mining inquiries a month. By mid-2006, it was handling as much as five new applicants a day, aside from those following up on the processing of their permits, making ENROZ’s small office seem like a market on a payday weekend.

Quips Sangguniang Panlalawigan member Samuel Ablola, chair of the capitol’s environment and natural resources committee and who thought of the “enhancement fee”: “Halos lahat na may application. Baka iyong sementeryo na lang ang wala (Almost all land areas have pending mining applications. Maybe only the cemeteries are spared).”

Indications are that most of those permits are granted. In the past, Zambales was netting an annual average of only P3 million in regulatory and extraction fees from mining and quarrying activities. As late as 2006, ENROZ was still reporting a total annual collection of P3.3 million from mining and quarrying. Yet, just a year later, that figure had shot up to P28.3 million — and that excluded monies collected as enhancement fees.

The provincial government does not get the bulk of the income from mining, taking only 30 percent of the revenue. Another 30 percent goes to the host town, while the remaining 40 percent is supposed to go to the barangay where the mining site is.

But Deloso does not seem to mind. The capitol’s share will go to the provincial government’s general fund, he says, and mulls, “I can spend it for school buildings and repair of roads.”

The governor says ENROZ will manage the fund from the enhancement-fee payments, which helped the capitol’s yearly total mining income rise to almost P60 million in 2008. He has already designated Botolan, his hometown, as a beneficiary of the enhancement-fee fund, but is vague about specific projects.

Wild about mining

Botolan, just a few minutes away by car from the capitol, hosts nickel mining companies, among them NiHAO Mineral Resources International, Inc, which is headed by former DENR Secretary Michael Defensor. The town was submerged recently in floodwaters that reached rooftops, after a dam broke at the height of Typhoon Kiko.

Yet despite the revenue windfall generated by the capitol’s one-month mining permits, some local officials are far from being pleased. In fact, Sta. Cruz Mayor Luisito Marty fumes when the subject of the permits comes up in an interview.

“People go wild,” he says. “All of a sudden, there are these little mining companies in our midst.”

It’s bad enough that the capitol does not consult the concerned municipality before issuing the permits. According to Marty, mining firms now also bypass his office and go directly to barangay officials for permission to operate in their chosen area.

Since 2007, a smarting Marty has not issued a mining permit, save for one that went to the firm A3UNA Mining Corporation, which is on the DENR’s list of eight companies permitted to do large-scale mining in Zambales. But miners big and small have nevertheless invaded his town, waving papers from the capitol or from barangay officials.

Fights have broken out over overlapping claims, prompting several overzealous firms to hire security guards, some of whom are described by Deloso as “vicious.” Referring to the big mining companies, he adds, “They all have private armies and camps.”

In January 2008, then DENR Region III Director Anselmo Abungan wrote to Deloso, asking him to refrain from issuing permits already covered by prior mining permits.

Abungan also asked the capitol to secure an area clearance from the DENR before granting a permit. The request stemmed from a complaint by three major mining firms against A3UNA for alleged illegal mining and quarrying. A3UNA turned out to be holding a permit granted by the capitol to small miners.

But Deloso says the problem could have been avoided had the big mining companies approached him before they began operating. “They were boasting that they were protected by the national government, that’s why there was trouble,” he says.

It’s a statement that may not go unchallenged. Even ordinary folk have been grumbling over the capitol’s one-month mining permits, which are issued so frequently and speedily that the provincial government has been hard-pressed in keeping up-to-date records.

With a combined staff of just 20 people, ENROZ and the PMRB have also found it difficult to doublecheck an applicant’s claim of having satisfied the requirements and if a permit-holder is following mining rules and regulations.

Theoretically, the PMRB provides the check and balance to the capitol’s power to issue mining permits and contracts. It is also through this body that the DENR keeps tabs on small-scale mining in the area. Yet especially after current DENR Region III Director Danilo Uykieng assigned an underling to attend meetings, the crucial decision-making has been left to the rest of the board members – who are all Deloso appointees.

Rubber-stamp board?

A PMRB member who declines to be named for fear of antagonizing the capitol confirms that all one-month permits go through the board. But the member says that there is a tendency to gloss over the failure of small miners to submit complete requirements.

The member says that instead, the PMRB has tried to focus on ensuring that mining claims do not overlap. Yet the board performs dismally even in that, says the member, because any effort to validate a claim is thwarted by a swift move for a vote.

This has made the board function like a rubber stamp. When the motion is carried, documents granting the permit are readied for Deloso’s approval. According to the board member, the governor signs the papers without knowing how the debates went.

Another PMRB insider says this had exasperated Uykieng, who was said to be even more upset when the board approved small-scale mining permits for areas where there were already large-scale operations. Uykieng, who is supposed to head the PMRB, reportedly said, “What am I here for, if you don’t respect the large-scale permits?”

The insider says Uykieng, who was appointed as DENR Region III director in May 2008, sat in only two board meetings before he began sending an underling to take his place.

PMRB secretariat head Wilson Biag admits some small-scale mining permits encroach into large-scale mining areas. But he says the small-scale miners were there first.

He also defends the 30-day small-scale mining permits by noting that the industry’s big players already control 90 percent of Zambales’s mineral-rich areas. Small-scale miners begin their trade at a disadvantage, Biag argues, so they need all the help they can get.

The boost from the capitol includes allowing those armed only with exploration permits to extract up to 20 metric tons of minerals even in areas that are already legally spoken for. Reasons Biag: “We want to give them (small-scale miners) time to check if there are minerals, before they invest more money into the project.”

The irony is that the month-long permits have become the alternate source of ores for big firms that want to speed up mineral collection.

Biag says the capitol is aware of the practice. “We are trying to resolve this because the permits are non-transferable,” he says. “They come to some sort of an agreement that the small-scale miner is just the claimant, and the big mining firms are the operator.”

For a fixed fee, a small-scale mining permit holder may also totally surrender its site to a major mining company.

No legal basis

Biag says the capitol is drawing up new guidelines to make Zambales’s small-scale mining practices dovetail with the national government’s policies. But to Leo Jasareno, chief of the MGB’s Mining Tenements Management Division, the issue is simple: “These permits are not part of the mining laws. Anything that is not in the mining law has no legal basis. That’s common sense.”

He says that the DENR has been working on an order that will guide governors and local government units (LGUs) in implementing the Small-Scale Mining Act. Jasareno says efforts to draft the guidelines had been hampered by a controversy over the department’s January 5, 2009 order for all extractions to be covered by a Mineral Ore Export Permit (MOEP) before being shipped out.

The MOEP is a DENR initiative to curb ore smuggling. Jasareno says that compliance with the MOEP order has been almost 100 percent. The sole exception is Deloso, who even asked the Court of Appeals last January to have the order rescinded, arguing that it was “an administrative issuance which is not sanctioned by R.A. 7942.”

Jasareno says that once the mining guide for LGUs is finalized, it will address the issues in Zambales. But legal experts like environment and human rights lawyer Antonio La Vina say that all the DENR has to do is to “assert its power.”

“All of the environmental powers of the LGUs are also under the control and review of the DENR,” points out La Vina, who is dean of the Ateneo de Manila University’s School of Government. He says the department can put a stop to what is happening in Zambales “by issuing a cease-and-desist order.”

“That’s the proper remedy,” he asserts.

La Vina also echoes other legal experts in saying that while the Local Government Code gives provincial and municipal officials latitude in developing their own rules, these should never contradict national laws.

To Governor Deloso, however, the issue is more about justice than the law. “I do not understand,” he says, “why the big firms will get all the benefits from mining, and Zambales gets nothing.”

He says his policies are easing poverty in Zambales. After all, says Deloso, very few residents from mining towns like Sta. Cruz now line up in front of his office to ask for money. PCIJ, August 2009