Mining Sector Can't Deliver Jobs

By Stella A. Estremera
Friday, December 2, 2011 
Published in the Sun.Star Davao newspaper on December 03, 2011.
 

DAVAO CITY — A policy paper by the Ateneo de Manila University School of Governance (ADMUSoG) points to official records that show the mining industry does not deliver the promises of economic boom and job generation that those pushing for mining operations in Mindanao, among them National Government officials, are always saying.

 

In the paper entitled “Is there a future for mining in the Philippines?” released just Friday by ADMUSoG, a copy of which was emailed to Sun.Star Davao, it was pointed out that employment generation as claimed by those pushing for mining is but a drop based on official records at that.

Based on the Mines and Geosciences Bureau (MGB), mining and quarrying sector has not even breached one percent in terms of employment contribution to the national total.

 

“Recent data has shown that it has been 0.5 percent since 2008 until 2010. So far, for the first half of 2011, contribution has been reported as 0.6 percent (in contrast to agriculture at 33 percent in 2011),” it said, adding even in other parts of the world, mining is a low employment generator.

 

“The Tampakan project, with expected investments of $5.9 billion, will provide only 2,000 permanent jobs,” it said.

 

The sector’s contribution to other sectors is also very small as compared to what other sectors are contributing.

 

Citing economist and former National Economic Development Authority Director General Cielito Habito’s paper for the Asian Development Bank in 2010 entitled, “An Agenda for High and Inclusive Growth in the Philippines”, it underlined the fact that labor compensation in the mining sector accounts only for 13.3 percent as compared to the average 20.7 percent in all other sectors.

 

“The sector has a backward linkage index of only 0.46, meaning there is relatively little input from other domestic industries; even the forward linkage of 0.82 indicates that the sector is below average compared to all other sectors in generating further domestic economic activities. Minerals are being exported with little value-adding that could have generated further employment and industry linkage,” the report said.

 

This simply means that benefits from mining operations do not trickle down nor ripple much.

MGB records show exports of minerals and mineral products averaged 4.5 percent of total exports and was at 4.3 percent in the first half of 2011, while exports of non-metallic minerals was a meager 0.4 percent for the past four years.

 

Agriculture, in comparison, has been contributing eight percent, while the main economic drivers remain to be the manufacturing and service sector, which contributes 50 percent of gross domestic product.

 

Admitting that there are few available studies on poverty incidence in mining areas, these few show no perceptible improvement in the lives of local residents where mining operations operate.

 

“In a recent study by Balisacan (Balisacan, Arcenio, 2011, Multidimensional Poverty in the Philippines: New Measures, Evidence, and Policy Implications), the poverty incidence among individuals engaged in mining has continued to increase, compared to workers in other sectors. In 2006, income poverty in the sector was at 34.64 and by 2009 it increased to 48.71,” the policy brief said, adding: “The mining sector also shows a high deprivation in health and education compared to other industries.”

 

It then points to a 2003 poverty incidence report by the National Statistical Coordination Board (NSCB) where Bataraza in Palawan, where Rio Tuba has been operating nickel mining for the past three decades, poverty incidence is twice the national rate.

 

Bataraza is also in the bottom 25 percent of municipalities on poverty incidence, the report said.

What cannot be denied is that benefits from mining operations like new roads and other infrastructure is only while there is something to be mined. There are no economic benefits after the mines stop operating because the ore have all been extracted.

While all these and more seem to describe mining as based on official records, there is no study that quantifies social and environment costs.

 

Citing the recent attack on mining facilities in Surigao del Norte by the New People’s Army (NPA), the study said government should have an accounting of how much it costs to provide security for these operations, in terms of logistics and manpower for the Armed Forces of the Philippines and the Philippine National Police.

 

But there is no such data available. Operations that affect coastal areas are also costing local governments, like the ones in Negros Occidental and Ilocos provinces, because these have to invest in coastal ecosystem protection, but again, there is no study that measures this as part of the cost of mining.

 

Among other facts disregarded, the paper states, “Losses to government and community investments are not accounted for in the decision to allow coastal mining.”

 

Given the facts of how little mining contributes and what is not being measured in terms of its costs to local governments and communities as well as the National Government, the paper continued: “Is this a responsible thing to do – to base decisions on guesswork? Should we exercise caution instead? How much benefit will we forego if we decide to exercise precaution? Can we afford to gamble our future for so little benefit that extends to so few? Can we afford the cost of conflicts that leave so many with ill feeling, which could prevent cooperation in more inclusive productive activities? Unless we gain a better handle on the value of what we lose in exchange for mining, we have no rational basis for decision-making.”

 

More so, it urged the National Government to recognize the rights of indigenous peoples and local governments to say no to mining, as talks are growing louder that President Benigno Aquino III will be coming up with a new mining policy that will curtail the role of locals in deciding the fate of big mining companies that intend to dig up their mountains.

 

“We, the current generation, are potential beneficiaries of mining operations. But we must remain aware of our responsibility as caretakers of our nation’s wealth for the enjoyment of our children and their children. The country’s mineral resources are limited and exhaustible. Do we really have to pressure ourselves to cash in on the benefits now? The Ateneo School of Government’s position is that the country could wait for better conditions and negotiate better terms on the basis of better information,” the paper pointed out.

 

Stating that ADMUSoG is neither for nor against mining, it stressed that it does not shy away from “taking a principled stand on issues, after rigorous examination of facts and engaging stakeholders with different perspectives in honest and candid discussions.” (Sun.Star Davao/Sunnex)