Government News Analysis

Pits of despair

Philippine President Rodrigo Duterte says he will review Environment and Natural Resources Secretary Gina Lopez’s decision to close up to 28 of the country’s 41 metal-ore mines. This is not because, as his critics would have it, he’s bowing to the ‘might’ of the mining sector. He’s not; he’s bowing to common sense and trying to avert a catastrophic outcome that would detrimentally impact the whole economy.

He says: “We get something like 70 billion pesos a year out of the mining operations in the entire Philippines. We have to also take (that) into consideration.”

And we certainly do. But there’s going to be a far bigger bill to pay than that. When all the costs have been totalled up, the invoice for Lopez’s mad mines policy will be well over PHP100 billion. That’s not loose pocket change; it represents a major financial deficit which this government could do without.

Let’s put it in a budgetary context. It would wipe out most of the PHP129.67 billion that’s earmarked in the 2017 national budget for the Department of Social Welfare and Development (DSWD) – the body that ultimately will be expected to deal with the social fallout from this decision if it’s allowed to go through. And, just for the record, it more than wipes out all of the PHP92.97 billion which the Department of Health is due to receive.

According to the Philippine Statistics Authority (PSA), “In 2015, a family of five needed at least PhP6,329, on average, every month to meet the family’s basic food needs and at least PhP9,064, on average, every month to meet both basic food and non-food needs. These amounts represent the monthly food threshold and monthly poverty threshold, respectively”.

The mining industry estimates that 195,000 direct and indirect mine workers could be laid-off if Lopez’s order gets the nod. This is down from the 219,000 workers who were employed in the mining industry in the third quarter of 2016 according to Lopez and the Mines and Geosciences Bureau. In other words, she’s already lost 24,000 jobs since October. That represents an 11% retrenchment of the industry to date, following the earlier revocation of licences, fines and other penalties imposed by Lopez.

The current workforce, along with their families, represents a population of 1.2 million. This figures have been corroborated by both Duterte and members of his Cabinet, and appeared in a statement issued by Malacañang Palace last week that sought to allay fears over Lopez’s closures announcement.

Apart from lost government earnings, then, the big bill for self-styled eco-warrior Lopez’s loopy injunction will come in the form of social-welfare payments. And that could be crippling. Let’s do some rough maths to get us in the ballpark.

That population, 1.2 million, represents 240,000 families of five. If each family, as the PSA states, has average “basic food needs” of PHP6,329 per month, in total these families need to find PHP1,518,960,000 every month to eat. Over one year that’s a food bill of PHP18,227,520,000. Add to that another PHP3,275 per family per month for “basic non-food needs” and that takes this population’s basic monthly living costs up to PHP2,304,960,000. Over 12 months that’s PHP27,659,520,000. And that’s just to reach the poverty threshold.

If the DSWD has to foot this bill, it would mean that the 17.29% (PHP19.11 billion) increase it got in its budget from last year would, in effect, be replaced by a 21.33% (PHP27.66 billion) decrease from 2016’s allocation.

But, of course, it doesn’t end there. The resultant loss of consumer wealth will have a knock-on effect – starting in those areas where businesses are geared to support the mining communities. Suppliers of goods and services there will see their profits reduced leading to layoffs in the retail and services sectors. Mining in many of these areas is the prime source of income. So there’s another bill looming.

Furthermore, the cost to the country’s export industry isn’t just loss of earnings. There’s likely to be a human cost there too as shippers and ports start laying off workers involved in ore shipments. And then there will be the hefty legal costs; most of these orders will be challenged in the courts.

This past week, Lopez ordered the cancellation of 75 contracts for undeveloped mines – immediately erasing any future earnings and job-creation potential. Totally, her plans neuter US$22 billion of mining investment.

We’re fairly sure Finance Secretary, Carlos Dominguez, and other members of the Cabinet have looked at these numbers, as we have, with abject horror. They’ll be hoping that sanity will prevail – as will the miners and their families and all those who depend on the mines staying open.

But Lopez has put Duterte in a very difficult position. This could cause a split in the Cabinet and polarise feelings in the country at large. An environmentalist himself, Duterte also wants to ensure that the country’s land and waters aren’t destroyed for mining profits. And of course they shouldn’t be. But Lopez’s policy isn’t primarily aimed at that – though that’s how she’s tried to sell it. Her objective is to completely destroy the mining industry. Her pathological hate of miners seems to be a bigger motivational force than any environmental consideration.

Meanwhile, she’s done nothing about removing illegal – and environmentally very destructive – miners from the Philippine countryside. Why is that? If this is about environmental damage wreaked by mining, logically that’s the first sector to deal with. These people steal from the land, pay no taxes, and have no regard whatsoever for land, forests, rivers, safety standards or anything else. They’re as destructive as illegal fishing is to fish stocks and coral reefs – something else that comes under her brief which she’s failed to address. She’s done precious little also to tackle the country’s polluted waterways – the open sewers of fifth and discarded garbage that stagnate in towns and cites the length and breadth of the archipelago. These revolting eyesores now seem to be an acceptable part of the landscape. The rivers are dead as a result, but she can’t go after the miners for that so they’re left as they are.

The more we see of Gina Lopez and her policies, the more we are of the opinion that this has less to do with stewardship of the Philippines’ natural resources – or the environment for that matter – and more to do with her personal vendetta against ‘big business’, and in particular, the mining industry.

Her rational state also concerns us. Telling the soon-to-be-displaced workers – if she gets her way – that the government will spend PHP8 billion to erect “blue lagoons and enchanted rivers” in ecology zones which will hire the jobless miners, is about as out of touch with these families’ daily needs as its possible to get. These people are despairing for their future. That remark is like the one attributed to the Queen Consort of France, Marie-Antoinette, in 1791, after being told that the French people had no bread. Her solution was: “Let them eat cake”.

Well, that didn’t work out too well for Marie-Antoinette or the people of France and we’re pretty sure Gina Lopez’s panacea will prove equally hopelessly ineffective. She has no exit strategy to deal with the mine closures; consequently, her decree will create a social vacuum. And guess what’s going to fill that? Crime. If families don’t have the money for food and basic needs, they’re left with just two options – beg or steal. After all, who are they going to borrow from?

And so, it is the miners and their families – the poor people who every single Philippine politician since the year dot has claimed to want to help – who will pay the biggest bill of all. None of this, however, will impact even slightly on Gina Lopez’s lifestyle.

She’ll still be able to jet off to some ashram in California or wherever to de-stress with yoga and yoghurt. She won’t miss any meals – unless she elects to undergo some detox regimen or some spiritual fast. She won’t be worried about the cost of school books or shoes for the children, or affording cheap detergent to wash the family’s clothes, or how she can make the rice go further. This is just part of the collateral damage which apparently is acceptable to her if she can put the miners out of business. And all those who cheer her are in a similarly fortunate position in life.

Of her policy, Lopez has said: “My issue here is not about mining but social justice – if there are businesses and foreigners that go and utilise resources of an area for their benefit and the people there suffer, that’s social injustice”. So what does she call it when she utilises her position as the steward of those resources to benefit her personal policies and the people suffer?

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