When Philippines President Duterte gained power in the election of May, 2016, he appointed new Cabinet Secretaries for all government departments.
The choice of appointees was quite mixed. The most interesting selection was the appointment of Ms Gina Lopez, the daughter of the owner of one of the largest media empires in the Philippines, as the Cabinet Secretary in charge of the environment and mining.
The confirmation process in the Philippines requires the approval of the presidential choice by the Commission on Appointments (CA), a powerful committee of elected politicians from the House of Representatives and the Senate. Some of President Duterte’s choices have been approved by the CA, one rejected and others are still yet to be confirmed.
On 3 May 2017 the CA met to vote on the appointment of Gina Lopez to the position of Cabinet Secretary to the Department of the Environment and Natural Resources (DENR), and their decision was to reject President Duterte’s choice. The vote was not on party political lines, but a surprising division did emerge: 8 members of the CA supported Ms Lopez and these were all from the Senate; and 12 voted against her, and these were all from the House of Representatives.
In reacting to the CA decision, President Duterte said that it was a loss to his Government. And he referred to the power of “lobby money” in the decision reached by the CA. In a subsequent comment by a spokesman for the President the word “money” was ‘walked back’, but the point remained clear: the CA had been influenced by the mining industry lobby.
Indeed, the families of at least one member of the CA who voted against Lopez have major investments in the Philippines’ mining industry.
It would not have been unreasonable to expect those members of the CA with mining connections to excuse themselves from the vote on grounds of ‘conflict of interest’. But they did not.
The Philippines has no monopoly on ‘conflicts of interest’ on the part of politicians, nor on behind-doors lobbying of legislators. The United States, which has been critical of President Duterte since his election, has a particularly robust (meaning unhealthy) influence by special-interest lobbyists over members of Congress. And it can be argued that this week’s Australian Government Budget did not contain a desirable roll-back of the negative-gearing rort for housing investment because so many members of Parliament themselves personally benefit from this tax lurk.
During her year as (unconfirmed) Cabinet Secretary, Ms Lopez made large changes to mining activities in the Philippines. She cancelled 75 mining contracts which suspended or closed existing mining operations, she banned prospective open-pit mines, and she insisted that some mines pay rehabilitation funds.
A criticism which has been made against Ms Lopez’s period in charge of the department was that she showed some arbitrariness in applying various decisions against some mining companies, and it has been claimed that she did not follow departmental procedures for making these decisions. Maybe so. And maybe she might have expected her Department to ensure that all her decisions were consistent with the regulations.
With her strong personality, and aggressive approach, Ms Lopez’s attitude created huge interest in the Philippines public and led to strong divisions. And as she pushed her decisions forward, indigenous groups were also split. Some indigenous people have been badly treated by some mining companies, but many still want the mining jobs for their people.
The Philippines mining sector makes up 0.6 percent of Gross Domestic Product, contributes 4 percent of total exports, and employs 218,000 (0.5 percent of total employment). The Philippines is a major world producer and exporter of nickel ore. These figures represent important contributions to the Philippines economy.
The thrust of Ms Lopez’s decisions related to whether the mining companies to which she took exception had abided by the terms of their licenses and other obligations. Lopez argued (and when she argues, you don’t want to be on the receiving end!) that the mining companies that she targeted were in breach of their requirements with respect to remediation of mining sites, contamination of waters and run-off, treatment of local communities including indigenous groups, and even breaches of human rights.
In sum, Ms Lopez was determined that mining companies must abide by the conditions of their licenses. How outrageous of the Minister! The mining industry had to stop her. It did.
All around the world mining companies are rather good at ignoring their license conditions, ignoring their obligations to the environment, fobbing off their obligations to local communities, side-stepping laws and avoiding taxes. In many countries in Africa, mining projects were approved by cosy cliques of leaders and elites, and the benefits did not get down to the people or even into the national treasury; indeed, non-mining industries were often damaged by the high exchange rate that the mining projects brought. In Australia, too many finished mining projects remain unremediated by sleight-of-hand changes to ownership or an artificial continuation of mining activities; large multinational mining companies engage in clever profit-shifting games which deny Australian tax-collectors their due; clever negotiators have bamboozled government authorities to ensure that tax does not have to be paid for decades; and when a government stands up to them (as the Gillard Government tried to do) the miners put together glossy and expensive television campaigns to terrify governments and influence election results. In South America even large multinational miners lack the care required to avoid disasters which kill many. In West Papua (Indonesia), away from access by the media, big miners cause environmental damage and are accused of major human-rights abuses.
But, further, the mining industry is like no other industry. The material it mines and sells is finite and cannot be replaced. Hence there is an inter-generational dimension to mining: once the mineral has been mined and sold it is gone and it is therefore especially beholden on politicians today to ensure that mining companies not just abide by the conditions under which they have been licensed but, additionally, behave in ways which benefit future generations.
The products that mines produce are essential to modern life. But it is the role of ministers for mining to ensure responsible behaviour by miners. To ensure responsibility to the community, to the tax authorities and to future generations. And to the environment.
The Philippines needs a mining minister like Gina Lopez who will put environmental protection ahead of back-room lobbying. Other countries with mining sectors also need mining ministers like Gina Lopez.
The future of Planet Earth depends on it.
Mike B. Bradshaw has been an officer of the Treasury, Canberra, an investment banker, and a consultant in Europe, the USA and Asia. He now works on project financing.
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