Call it posturing or pragmatism, but the recent decision of the South Cotabato provincial government to enlist the ‘expertise’ of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH or German Development Cooperation in Manila for an independent review of the environment impact statement of SMI-Xstrata for its Tampakan Copper and Gold Project could be tied to the tight local elections next year.

South Cotabato Gov. Arthur Pingoy Jr, who has so far resisted calls to review the Provincial Environmental Ordinance, said the results of the German study will determine if the local government will open a review of the landmark but controversial piece of local legislation.

South Cotabato Gov. Arthur Pingoy (foto courtesy of South Cotabato provincial office)

The main mining site of the multi-billion dollar copper and gold project of Sagittarius Mines Inc (SMI), a firm controlled by Swiss-based Xstrata Plc, lies in the remote village of Tablu in Tampakan, South Cotabato.

The Department of Environment and Natural Resources (Denr) early this year rejected the application of SMI-Xstrata for an environmental clearance certificate citing the existing ban on open-pit mining in the province.

“This (review) will hopefully answer all our questions and concerns regarding the Tampakan project,” said Rudy Jimenia, executive assistant to the governor.

Pingoy is running for re-election against Rep. Daisy Avance-Fuentes who is trying to reclaim her old post.

Fuentes signed the provincial environment code that banned open-pit mining in the South Cotabato in 2010, two months before she ran for Congress to represent the 2nd congressional district of the province.

Pingoy and Fuentes were former allies in the Nationalist People’s Coalition but parted ways in 2010 when the incumbent governor joined the Lakas-Kammpi of former President Gloria Macapagal Arroyo.

Pingoy earlier said he will implement the ordinance that bans open pit mining in the province unless ordered by competent court authorities.

Only last month, Pingoy challenged both the national government and pro-mining groups to file a case against the provincial government for passing the controversial ordinance.

“That’s the right forum that can properly decide this once and for all,” Pingoy told Mindanews.

That has apparently changed following his decision to tap the German Development Cooperation which could open the gates for eventual review of the said ordinance.

Poster boy company

SMI-Xstrata has been lobbying hard for the repeal of the provincial ordinance and its plight has become a rallying point by the powerful Chamber of Mines in the Philippines (COMP).

The mining firm was hoping to commence commercial production in 2016 but recently conceded it may have to move its production target to 2018.

The uncertainty led to the issuance of an executive order which introduced policy reforms in the mining industry.

COMP president Philip Romualdez initially welcomed the executive order but is now contesting it following revisions and protests from all sides of the mining issues.

Mining companies said they will challenge what they claim several “patently illegal” provisions in the implementing rules of Executive Order 79 particularly shortening the mining lifespan to 25 years, 5 of which shall be dedicated to rehabilitation.

Under the Philippine Mining Act, contracts could last up to 50 years.

The implementing rules and regulation (IRR) of Executive Order 79 also reiterates 60 percent Filipino ownership of mining claims.

SMI is a wholly foreign-controlled corporation with 62.5 per cent of its shares owned by Xstrata Copper, a subsidiary of Xstrata Plc.  The remaining 37.5 per cent stake of the company is owned by Australia-based Indophil Resources NL.

The Tampakan project is said to contain the largest untapped deposits of copper and gold in Asia with estimated deposits of up to 15 million metric tons and 17.9 million ounces of copper and gold, respectively.

SMI-Xstrata has repeatedly announced it would pour in US$5.9 billion in investments to extract copper and gold deposits in the village of Tablu in Tampakan, South Cotabato.

SMI said “if approved, the mine (is) estimated to yield an average of 375,000 tonnes per annum of copper and 360,000 ounces per annum of gold in concentrate over the 17 year period of mining and ore production.”

If developed, the mine will contribute an average of PhP134 billion (US$2.8 billion) to the country’s annual GDP and 10.4 per cent of the Gross Regional Domestic Product (GRDP) of Regions 11 and 12, according to SMI corporate affairs superintendent Roy Antonio.

But SMI is also the rallying face for resistance from the Catholic Church in the area where it operates, environmental groups, some tribal communities and the communist-led insurgency in Mindanao.

Strong church influence

Bishop Dinualdo Gutierrez, head of the Diocese of Marbel said the move of Pinggoy to tap the expertise of the German Development Cooperation will not change his and the Church’s opposition to SMI’s continued operation in the province.

SMI, the bishop said, will still be a magnet for violence and a scourge to the environment.

“Before the entrance of Western Mining Company, we have relative peace. When Sagittarius-Xstrata-Indophil came, trouble started,” Bishop Gutierrez said during a press conference where he condemned the killing of Juvy Capion and her two sons by elements of the Philippine Army’s 27th Infantry Battalion only last October 18.

Capion is the 27-year old wife of fugitive tribal leader Daguil Capion who took arms and is now leading a band of Blaan tribesmen opposing SMI.

The Diocese of Marbel exerts strong influence in over 24 parishes scattered throughout the province.  Two of these parishes are in areas where SMI is operating and have presence namely, Tampakan and Malungon in Sarangani.  But the other 2 towns where SMI is also operating are likewise under the dioceses of Kidapawan (for Columbio in Sultan Kudarat) and Digos (for Kiblawan in Davao del Sur) whose heads are also opposed to SMI.

The Diocese of Marbel is located in Koronadal City, also the capital town of South Cotabato.

A week after candidates for the 2013 local elections filed their certificates of candidacies, Bishop Gutierrez again urged churchgoers not to vote “those who favor open-pit mining because they are villains of the environment.”

Not for review of ordinance

Gov. Pingoy clarified that the review of the EIS (environmental impact study) of SMI will not mean an automatic review of the provincial environmental ordinance although its results will be up for consideration.

“We are doing it to break the impasse between the Social Action (Center of the Diocese) and SMI,” said Pingoy who admitted that it was an initiative on his part to marshal the expertise of the German review team.

He said he is supported by fellow governors from the League of Provinces in the Philippines.  Pinggoy went to Germany early this year.

Bishop Gutierrez however is adamant the review will not change their stand on the potential and real danger posed by SMI’s mining operations in Tampakan.

So what is the use of the German evaluation when the Catholic Church here is in uncompromising mood?

The governor said he is open to a discussion should the German review team gives a favorable review of the SMI EIS.

Will this be an issue in the elections next year?

SMI has repeatedly denied it has been and is supporting candidates for any local elective positions in the areas where it operates.

“SMI did not provide any financial or in-kind contribution to political parties or individuals in 2011,” SMI said, reiterating a policy that has been adopted by the company since Xstrata gained majority control over the mining firm in 2007.

Community presence

But it has been very generous with financial and materiel assistances and aids to local government units that have welcomed their presence.

In host towns where they operate, SMI has been known to be generous with its sustainability programs.

Between 2008 and 2011, SMI poured in P41,386,942 worth of “voluntary social involvement program” for Tampakan and has committed another P7,696,800 for various commitments in 2011 alone.  In Columbio, Sultan Kudarat, it extended P10,953,154 worth of financial assistance and services over the same period while committing another P5,321,000 last year.  In Sarangani province, Malungon got P17,472,947 while getting a P3,198,361 2011 commitment from SMI.  In Kiblawan, Davao del Sur, SMI shelled out P13,851,078 from 2008 to 2011.

SMI further said that since 2011, it has already spent “more than P121 on community development projects.”

Until, SMI came into the picture, the said host towns were among the country’s poorest communities.

In 2009 and 2010, for example, Tampakan’s shares in the internal revenue allotment pie were only P77 million and P95 million respectively.  SMI’ community involvement has somehow filled in the gap that the local government unit cannot extend.

It is no wonder rival political clans in Tampakan, the Escobillos and the Barrosos, are all closely associated with SMI despite their irreconcilable difference.  SMI could make or break the election bid of candidates in host communities of the mining company.

Kitaco Executive Association, a development area composed of Kiblawan, Tampakan and Columbio towns which was obviously organized to coordinate “economic cooperation” in these host communities, has been receiving “support for operating expenses,” according to SMI.   In 2008, SMI gave P1.4M “to fund the operations of KITACO Growth Area Secretariat.”

Incidentally, its security component led by the Philippine Army, Task Force Kitaco, recently figured in the slaying of Juvy Capion and her two sons.  Juvy is wife of Daguil Capion, a fugitive tribal leader who is leading a band of fully armed Blaans that is opposing the operations of SMI.

Kitacao Executive Association head Mayor Marivic Diamante of Kiblawan branded Daguil a bandit.

Battle royale

Rep. Daisy Fuentes however warned SMI not to meddle in the local elections.

“I told them, it is your loss if you do that,” said Fuentes who claimed to have received reports that strong pro-mining lobby groups have been sending overtures and feelers to some candidates in next year’s elections.

When asked to comment, an SMI media relation supervisor Manolo Labor said the congresswoman could be joking.

Basin joke lang ni Cong Daisy.  As company policy, we have always been neutral,” the PR man of SMI said through SMS.

Fuentes, also former governor of South Cotabato, is running against her former partymate, incumbent Gov. Arthur ‘Dodo’ Pingoy.

The former governor said there is a prevailing and strong anti-mining sentiment in the province and issues on the environment have ranked 9th in voters’ concerns in a study reportedly conducted by a “reputable” survey firm.

She declined to name the survey firm, however, but said it will be a suicide for SMI if it will throw its hat in the local political exercise.

According to Fuentes, 20 percent of those surveyed said they are concerned about the environment.  In a tight race, their votes could tilt the balance between winning and losing the election.

Rep. Daisy Fuentes will try to reclaim her old post directly pitting her against incumbent Gov. Arthur Pingoy. (FOTO COURTESY OF SOUTH COTABATO CONGRESSIONAL OFFICE)

But Fuentes also made it understood that she is not against SMI.

She said she is willing “to cross the line” if SMI will address her concerns.

“When I signed the (provincial environment) code, I wrote a cover letter citing two reasons why.  SMI could have easily undertaken steps to address those two concerns,” Fuentes said.

She asked SMI to identify and construct a water impounding site to replace the water will be lost in the province’s aquifer once the mining firm starts operations.  She also said SMI must identify and immediately reforest a buffer zone that will protect the lowlands from the environmental impact of its operations.

E, hindi nila ginawa (But SMI did not do that).  They opted to spend for the travel of village officials who otherwise cannot also speak up because of the strong influence of the church,” Fuentes lamented.

She likewise took a dig on the move of Pingoy to employ the services of a German review team.

Nakaduda (It’s suspicious).  Saan sila kukuha ng pera (Where will they get the money) to pay for the Germans,” Fuentes asked adding that the Sangguniang Panlalawigan (SP) has not authorized such review nor did it allocate funds for the purpose.

The SP is dominated by allies of Fuentes and has resisted any attempt to review the provincial environment code.

Baka naman sa SMI or mining groups galing ang pera,” Fuentes wondered.(Does the money come from SMI or mining groups?)

Fuentes said she never received any money from SMI for her political activities.

Pingoy however said the study will come at a minimal cost and will be shouldered by the League of Provinces of the Philippines.

But on Wednesday (October 31), Pingoy said the EIS review has been called off after receiving flak from various environmental groups.

Nag-create kadto sang controversy kay naggula man sa news, amo na nga gin-call off sang GIZ (It created a controversy when it came out in the news, that’s why it was called off),” Pingoy said

But Pingoy concedes that SMI and mining will be one of the major issues in next year’s election.

“Even in the national level and more so in South Cotabato,” Pingoy said.

He said voters in South Cotabato are abreast with mining and environment issues and that the Catholic Church has been in the thick of polarizing the line between pro and anti-mining interests.

Pingoy reiterated that unless ordered by a competent court, he will implement the provincial environment code signed by his predecessor and now chief political rival.

Section 22 (b) of  the Provincial Environment Code states that “open pit mining shall not be allowed in the province of South Cotabato.”

Pingoy really have no choice.  Fuentes still exerts strong influence in the Provincial Board that is controlled by her allies and party mates.

Both Pingoy and Fuentes are weighing strong public sentiments against mining and the influence of the church in swaying the voting preference of their constituents in the coming elections.

But they also knew that SMI and strong pro-mining lobby group would like to see and deal with local executives and officials that will make life easier for the mining company.

Pingoy and Fuentes are expected to slug it out in a tight gubernatorial contest that also includes a third candidate, former Koronadal City mayor Fernando Miguel.

Until they decide to finally question the constitutionality of the provincial environment code, SMI will have to wait until the results of the 2013 local elections in South Cotabato are in.

Between now and the May 2013, many things can still happen.