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Friday, October 17, 2008
Rebels, volatile policy threat to mining industry
By Edwin G. Espejo
Contributor
DAVAO CITY -- Defense Secretary Gilberto Teodoro Jr. called on mining companies to link with government for its integrated security plan, as the insurgency problem remains a major threat to the industry's development.
Several mining giants are also reportedly wary on pouring in more investments in the Philippines because of potential risks involved that include volatile government policy on mineral development.
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"There must be synergy among all of us," Teodoro said, who is the keynote speaker of the 8th Asia Pacific Mining Conference.
He proposed that mining companies formalize such linkage by signing with government either individually or as a group memorandum of agreement on implementing the plan.
Authorities are looking into the matter as security threats continue plaguing the country's mineral development projects, dampening investor interest in the Philippines which aims to attract a USD10-billion investments into the mining industry by 2012.
They identified as stumbling blocks to the country's mineral development the various groups which use as front for extortion indigenous peoples with ancestral claims over mining areas.
Other threats to the industry's security are Communist Party of the Philippines-New People's Army (CPP-NPA) and other rebels capable of attacking mining sites, Teodoro noted.
Teodoro said the communist rebel movement is "extorting" money from mining firms to finance its armed rebellion.
He called on mining companies to avoid giving in to extortionists' demands.
"Don't pay - every PhP20 paid can potentially buy a bullet that can kill," he said.
Assuring investors and mining companies in attendance during the conference, Teodoro said the government will deal hard against the CPP-NPA.
He said the defense department is already drawing up a coordinated and integrated security plan for the mining sector.
This will include, he added, deployment of government troops where mining activities are ongoing.
Teodoro also said the Armed Forces of the Philippines (AFP) is considering an "investment defense plan" to contain security threats facing foreign investors in the country.
He likewise disclosed that the AFP is coordinating with the Philippine National Police to draft security protocols in the light of ongoing security threats.
"We will not bend to any armed rebel groups," Teodoro told reporters after he delivered his speech.
He said the AFP will organize and supervise the creation of more Citizen Armed Forces Geographical Units (Cafgus) in areas where the communist rebels are very active.
He however insisted that these Cafgu forces will serve as a security force in their community and not for a particular mining firm.
Aside from the CPP-NPA, Teodoro said the Abu Sayyaf Group with ties to the Jemaah Islamiya and the splinter groups from Moro Islamic Liberation Front (MILF) are also posing security concerns in areas where there are mining activities, particularly in southwestern Mindanao.
"Some groups view the mining sector as a potential revenue source and attacked operations of companies that refused to pay money demanded," he said.
"Mining is an economic growth driver and is among priority sectors under the 2004-2010 Medium-Term Philippine Development Plan (MTPDP)," he said.
But the country's volatile policy on mineral development was viewed by many investors as something to be wary about.
Phil Carney, who spoke on strategic risk and management planning during the same conference, said although there has been a shift in policy direction in the Arroyo government towards mining -- one from "tolerant to active promotion" -- big mining firms want "100 per cent assurance that their investment here are protected."
He said the 60-40 rule on local and foreign ownership in mining firms are holding back foreign investors from pouring in more capital to fast track the exploration and development of existing and potential mining projects.
In December 2006, the Supreme Court however upheld the constitutionality of the Philippine Mining Act of 1995, which allow big-ticket mining firms to own 100 per cent of local mining companies under the financial technical assistance agreement (FTAA).
FTAAs are granted to mining firms with claims in areas in excess of 8,000 hectares.
Mineral development projects below 8,000 hectares are granted mineral production sharing agreements (MPSA).
So far, only two firms have been granted FTAAs.
The Arroyo government has been pushing for the revitalization of the mining industry and has vowed to make the Philippines a "mining country" in 2011. (Sun.Star Davao/Sunnex)
For more Philippine news, visit Sun.Star Davao. (October 17, 2008 issue)
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