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National security as a common ground in mining

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Lysander N. Castillo

Thinking Beyond Politics

mining

Last March 20, the Stratbase-ADR Institute held a special study presentation on a familiar topic — mining. The angle examined, however, was peculiar compared to the commonly debated issues surrounding the topic. Indeed, a look at mining from a national security perspective is a new take, which anti-mining groups and their counterparts from the industry have not touched upon.

The policy paper entitled: “Mining Through the National Security Lens,” principally authored by Dr. Ronald Mendoza, argued a novel point that may well push the position of mining to become a significant component in any administration’s agenda.

Dr. Mendoza rightly puts into context the state of mining in the Philippines before making any propositions. Objectively, he points to the “contentious nature” of mining done in a developing country vulnerable to extreme weather. He aptly describes the contention essentially as mining companies being at loggerheads with environmentalists who fear great damage to nature and its ecosystems. Dr. Mendoza qualifies the “disruptive impacts” to be coming from irresponsible mining practices, which, for them, create huge destruction to forest, freshwater, and agricultural resources that is almost always irreversible. Of course, the “fruits of nature” are not the only ones compromised by mining, especially the non-compliant operators, but also critical environmental services such as providing habitat, soil protection or groundwater recharge.

Further, the authors correctly point out some major private sector challenges in mining, thus: “Weaknesses in resource management, questions on fair share of mining revenues, and high business costs have also made the country’s mining sector less attractive to investors.” Despite the myriad of challenges for the private sector, Congress offers a simplistic solution through a ban on the export of unprocessed minerals to “force” industrialization.

On this note, Dr. Mendoza cited what detractors never fail to assert, that is the nominal contribution of mining to the national economy. As observed in the paper, mining’s contribution to the gross domestic product (GDP) of the Philippines has been between one percent and two percent over the past 40 years.

Limiting the analysis at the macro level is certainly understandable since the focus is national industrialization. Otherwise, the contribution of mining, strictly on economic terms, to the local or regional economy, particularly in Mimaropa and Caraga, cannot be downplayed. Moreover, looking at mining vis-à-vis the national GDP must take into consideration the actual footprint of the industry in the country, which stands at merely 0.3% of the country’s total land area. Thus, there is really no reason why any administration should be “mining-centric” when establishing the environmental agenda of the government.

Going back to mining and the Philippine industrialization process, Dr. Mendoza mapped out the former’s potential value and crucial role in the latter, to wit: “To be sure, the Philippine mining sector provides raw materials to 8 out of 11 local industries, the most pronounced of which are found in manufacturing, electricity, gas and water supply as well as construction activities. In fact, according to government estimates, for every 1% manufacturing output, 0.05989% of that come from mining inputs. Each 1% of construction output also relies on 0.01388% of mining raw materials and supplies.”

Unfortunately, the potential for far greater input from mining remains stifled, and perhaps, as the Special Study argued, it is a major piece missing in the country’s push for industrialization. It is reported that the Philippines’ mining output only fills 31% of the country’s annual demand, and for Dr. Mendoza, this highlights the country’s dependency on imported materials for its infrastructure needs.

This dependence becomes even more precarious, national security-wise, when it is China, a growing global superpower encroaching on the West Philippine Sea, that the government is dealing with.

As of 2016, the paper noted, China was the Philippines’ top import source, and fourth largest export destination. Broken down, Beijing is both a vital source of industrial components, and market for the country’s raw materials. In particular, it was observed that importation from China accounted for 79% of the entire steel imports of the country.

Dr. Mendoza’s apprehension over practical dependence on China for our industrial push can be summarized as follows: “While importing capital inputs for industries is not necessarily problematic, the possibility of large debt accumulated as a result of the infrastructure programs, coupled with corruption-laden projects, raises deep concern among groups aware of China’s mixed track record combined with the Philippines’ recent history under the Marcos regime. Chinese projects are expected to be pushed by that country’s efforts to offload its surplus capacity, notably in the construction sector, while its own state-owned enterprises are expected to be influenced not only by commercial motivations. Indeed, even while recognizing that much variety exists in the effectiveness and orientation of different sources of Chinese investment, analysts also underscore that Chinese geopolitical and foreign policy ambitions will be key factors driving these projects and the wider “one belt, one road” initiative as well.”

Indeed, national security can be the common ground for those pushing for and those against mining. In this situation, more urgent than ever before, we must, as Filipinos, protect our sovereignty, and conserve and develop our patrimony for our future generations.

Sustainable development, however, must underpin any move towards industrialization. Failure to do so means threading the path China took, economic development without due regard for the environment, which their people are now paying for.

 

Lysander N. Castillo is an Environment Fellow, of the Stratbase ADR Institute and Secretary-General, Philippine Business for Environmental Stewardship (PBEST).