CORPORATE SOCIAL RESPONSIBILITY (CSR): CORPORATE DEODORANT OF ‘LATE’ CAPITALISM

CORPORATE SOCIAL RESPONSIBILITY (CSR): CORPORATE DEODORANT OF ‘LATE’ CAPITALISM
Erle Frayne D. Argonza

Good afternoon from Manila!

The late dictator Ferdinand Marcos, the Philippines’ most brilliant and deviously cunning chief executive, was so elated one day during his tyrannical incumbency. The reason for the unusual elation was this: his soldiers captured Bernabe Buscayno, the first national head of the Maoist insurgent group New People’s Army or NPA, who was a prized catch for the strong man. After some military interrogation, Buscayno was directed to be brought to the presidential palace to face Marcos, who at one point in the encounter, asked Buscayno for a remark. Obliging like a school boy, Buscayno replied that “no matter how evil a person can be, s/he can still be transformed into a good person.”

The enormously witty man Marcos was dumbfounded by the witty remark from the Maoist rebel, for that comment made its mark so clear: Marcos is evil, yet he can still be reformed. Probably pissed off by the stubborn rebel, who never the least conceded to defeat so as to bow in obeisance in recognition of the chief executive, Marcos made sure that Buscayno will suffer miserably inside the prison cell.

You see, I cited that story of Buscayno, as a matter of reflecting on the rationale behind Corporate Social Responsibility or CSR. Buscayno, who has been active in the cooperative movement in the Philippines after his release from prison in 1986 (the year Marcos was overthrown), could very well repeat his witty line when asked about CSR, with a curt reply that “CSR, no matter what evil may be behind it, can be reformed.”

Asians put greater stress on ‘becoming’ as a category more than ‘being’ (Westerner’s granite category), that is why we Asians are inclined to see positive reformations of things or beings whose evils may be irredeemable. And this I can say of CSR: it is an ideological deodorant for Big Business greed, but somehow it can be reformed. To use Organization Development language, it can be ‘re-engineered’.

CSR is already a re-engineering of philanthropy in fact, and belongs squarely to ‘late’ capitalism. Old fogey philanthropy operated with a Victorian underpinning: I possess the money, and you recipient are a Beggar who came to me. You are lucky enough because I am giving you part of my purse, for I have none reserved for you folks save for the theatres, performers and socialite circles thay may the better be served by my extra monies for posterity’s sake. …

Well, Big Business was able to re-engineer its image precisely by reformatting old-fogey philanthropy (which was a reformatted version of medieval charity of the pretentious church Orders or ‘corporations’). CSR appropriated the ‘social development’ practices (social technologies) of NGOs and peoples’ organizations or POs, stressed the supposedly core element of ‘compassion’, and voila! CSR was born! How effable, how sweet, how infinitely Angelic and Godly is this ‘new way’ of helping people by the Gods of Corporate World! Hail capitalism! Hail beneficent Gods!

Deodorant, pure deodorant! Take a look at Lucio Tan, who at one time was the top landlord-capitalist oligarch in the Philippines. A one-time Marcos crony, Tan made enormous fortunes from Marcos’ time to the present, probably with start-up capital coming from the dictator’s purse (but which Tan refuses to admit in public). Tan’s fortunes made him land in the Fortune 500 (world’s richest), yet he was also found wanting in the manner of paying taxes. His unpaid taxes may be worth P80 Billion (almost $2 Billion) today, and is still growing, yet not a single cent was paid to the state by this notorious oligarch for those ‘tax evasion’ cases…Yet Tan has captured the eyes of fund recipients from his CSR give-away items, even as he is fondly regarded as an angelic patron by the same armies of beggar recipients. (Beggar here means not the literal beggar, but the condescending image of oligarchs on recipients: filthy Eaters, ‘useless eaters’).

Capitalism is a system that is founded on greed and hoarding, and no sagely or wise personage, or the most evolved beings could ever rationalize capitalism as a system that will sustain the drive towards Nirvana or represents the final liberation of humans from their subhumanizing hovels of dense life. Besides, this current phase of capitalism—‘late’ capitalism—is now DEAD, and the dead system is rapidly crashing down. Only those materialistic ‘eaters’ whose perceptions are as delimited as their own astigmatic perceptions of reality principles can ever justify that capitalism is still working, for the reality we have today is that of ‘virtual economy’ of the most perverted, evil greed of all.

If CSR would have to survive the times, as ‘late’ capitalism is now DEAD, then now is the time to refurbish its image. Because its life is deeply embedded in the corporate purses, this image-change is hard to imagine at all. But being of the Asian-yogic way of life, being a mystic and development expert at the same time (though now in the twilight of social development engagements), I wish to give CSR a chance and see it grow along the trajectory of the hereafter that was declared by Buscayno: transformed from ‘evil’ to ‘good’.

I’d end this piece by clarifying to you a reality we know among mystics: demons can also return to the Path of Light. Yes, Fellows, those Belzeebub abominations, those Asuras or Demonyos, those Diaboli, or whatever term you may use for the same species of evil demented beings, many of those abominations have already returned to the state-of-balance and are now taking the Path of Light back to the Almighty I Am Presence (God)! Yes! CSR can!

[Philippines, 28 August 2008]

BOOST PHILIPPINES’ BUDGET TO 2ND WORLD LEVEL

Erle Frayne D. Argonza

I wish so much to write notes about the planet and all the world’s regions, but I surely find it so irresistible to write reflections about my own country. I’m sure my friends and readers will understand this, me being a patriotic lover of my country and people despite our collective imperfections.

That said, let me focus this time around on the matter of budget. We have a new presidency, a new set of leaders from national to local levels, and I don’t want to miss out on delivering unsolicited advises to our new government concerning budgets.

By the end of this year 2010 our Gross Domestic Product or GDP will hit P8.25 Trillion more or less (it was P7.67 Trillion in 2009). That’s roughly U.S. $183 Billion (nominal value). Add the $18 Billion forecast Net Factor Income from Abroad or NFIA (read: overseas remittances), and the total figure yields $201 Billion.

$201 Billion national income is a 2^nd World or ‘middle income’ country level of wealth. Let us stick to the figure and level so we won’t get detracted by the Gordian knots of discourse. This being so, the Filipinos deserve to see their state funded at 2^nd World level and not any level otherwise.

Let us, for the sake of minimalist discourse, peg an annual budget at 30% of the GNP. The 30%-50% figure is known in scientific parlance as ‘critical mass’. To simplify our discourse, a ‘critical mass’ of budget will provide ample space for fiscal maneuverability, fund social services in fat sums, build more infrastructures, and pay up for state debts.

Any budget that is below ‘critical mass’ is direly undernourished, even as it could jeopardize our way to development ‘maturity’ and higher incomes for our households by 2016. Remember, we can no longer go back to the days of austerity that kept us mired in poor country status for a long time, so let’s better spend—with the expectation that spending will stimulate other sectors to grow.

The budget allocation for this year is a measly P1.5 Trillion. Measly in that it only grew by P100 Billion, or 7.14% from the P1.4 Trillion budget of 2009. A budget, to make sense and impact, must grow by at least 10% ever year.

30% of GNP means that our budget should not be lower than $60 Billion to qualify as ‘middle income’ country budget. Using the P45.50 to the dollar as our conversion rate, the expected budget should be Philippine P2.73 Trillions. That indexical calculation instantly renders RP’s 2010 budgetary appropriation short of P1 Trillion to make sense and impact at all.

Another unsolicited advise is that education, my favorite sector being an educator (teacher & social scientist), should get the largest share of the pie. And this should be at least 5% of the GNP. Let me stress that the benchmark should be GNP and not GDP since the latter unjustly leaves out the overseas workers & entrepreneurs in the equation.

The annual budget for education should therefore be at least U.S. $10 Billion, or Philippine P455 Billions. Contrast that figure to the P150 Billion allocated for education in the 2010 budgetary appropriation, and one can easily see why Philippine education is mired in cesspools.

The P455 Billions could be split up into the following: P250 Billions for primary education, and P205 for tertiary education. The total figures don’t include yet those budgets allocated by local governments for education, which when added to national appropriations could yield a figure much higher—at past 7% of GNP—appropriated for education alone.

Where to get the funds is another question for that matter. Let the question be tossed to the legislature, treasury/finance departments, and central bank to settle. It is important that I have delivered the message here very clearly: that a second world economy must affix budgets at figures befitting a 2^nd world budget.

[Philippines, 30 June 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]

BAILING OUT AILING BANKS IS IMMORAL/CRIMINAL

Erle Frayne D. Argonza

Good afternoon, fellows!

Bailing out ailing banks with people’s money (taxes) is immoral and criminal. I have already stated this contention in previous articles, and I’d re-echo it again in light of the financial fiasco going on in Europe right now.

We’ve had more than enough bad experiences in past crises that point out to massive speculative engagements by banks that have contributed to economic downturns and crash. Japan started the ball rolling by salving big banks with taxpayers’ money in the 1990s, and this practice is awefully wrong and immoral.

Fast forward to the year 2007, when we saw big banks implode as the bubble economy of the USA burst. The same ‘Japanese solution’ at salving ailing banks with taxpayers’ money was again repeated, this time in the USA.

Taxpayers’ money is hard earned revenue for the state for purposes of advancing the general welfare. The priorities for revenues should be infrastructures, social services, pump priming, and ensuring ‘safety nets’ for the marginal classes and groups against the impacts of financial volatilities on the productive sectors.

The solution to ailing banks lies in strengthening regulatory mechanisms. The first agenda on the line is to ban banks from engaging in speculative engagements notably those hedge funds operations. Another agenda is to institute good corporate governance and instilling public accountability by the banking sector.

Bailing out ailing banks in Europe, through taxpayers’ money, can only mitigate the systemic crisis for a while. Also, it will push more folks down grinding poverty due to austerity measures. It is part of the ‘rule of madness’ that now governs ‘late’ capitalism as a whole.

[Philippines, 07 June 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,

UNLADTAU: https://unladtau.wordpress.com,

COSMICBUHAY: http://cosmicbuhay.blogspot.com,

BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,

ARGONZAPOEM: http://argonzapoem.blogspot.com]

OBAMA VICTORY: ‘14th BRUMAIRE ‘ OF US TECHNOCRACY, HEALING BEGINS

Erle Frayne Argonza

From my highland nest in Manila goes Big Kudos to Barack Obama & US Democrats!

My first elation has to do with the fact that Obama represents my generation of ‘post-industrial babies’, comprising of those aged 55 and younger. Obama represents a broader worldwide trend of leaders who are veering away from intolerant/polarized values towards one of ‘tolerance for difference’. My  generation is the first among the emerging ‘global citizens’, and I could hardly wait to see various sectors worldwide taken over by the most competent and enlightened ones among us, as exemplified by Obama’s take  of the US presidency.

Another source of elation is the fact that Obama is a Black man, the first one ever elected as president in America. His victory sends a clear signal to many countries across the globe—dominated by Whites as majority populace—that the time for change has come. Just across the border, in Mexico, the citizens are still accustomed to choosing a White Man as president: White, and Male. Quite a bit further, down south in Argentina, it’s still White country there, and I wish the minority Colored people or Colorados will get to be Chief Executive, whether they are male or female.

Finally, a source of euphoria over Obama’s victory is his being funded largely by the people’s purses. True, there were fund donations from the wealthy families, but to say that their pockets constituted the cutting edge funding would be to disregard those aggregates of monies that in-flowed to Obama’s campaign coffers from out of ‘couples of dollar bills’ donations from the workers & middle classes. I would dare say that the people’s purses comprised the cutting edge in funding, for the 1^st TIME, which has many governance implications for Obama’s Team.

There are certain sociopathic elements in America, represented by the perennial Democrat candidate Lyndon LaRouche, who have been peddling the allegation that George Soros, through his subaltern Felix Rohatyn, were behind the bulk of funds for Obama. In some other articles published early this year, LaRouche kept on peddling the noxious allegation that Mafia groups were behind Obama’s making as a politician, and that, ipso facto, his funding would come largely from the same criminal rings.

Were it not for LaRouche’s sociopathic and fascistic tendencies, I should really find many of the facts and thoughts that he generated as worth our reflections. Let us challenge the likes of LaRouche to come out with evidences, and file criminal charges in proper channels such as the US Senate, and they better desist from further slanderous and libelous accusations against a political team that is outside of their poll choices.

The people’s purse option, let me repeat, has deep governance implications. It is indicative, first of all, of the immense constituency participation during the polls, which clearly created for them (people) a status as co-partner of the Obama Team. Second, the people’s purse option gave the clear mandate to the Obama Team, comprising largely of noblesse technocrats, that it can exercise a ‘relative autonomy’ from diverse interest groups particularly the financier-technocratic-military elites.

I would prefer to see the Obama victory as a ‘14^th Brumaire of the US Technocracy’, which is a very laudable feat, precisely as a result of that people purse option. 14^th Brumaire refers to that moment in history when Louis Bonaparte declared a coup d’etat in France, a grand act of defiance against the oligarchy that enabled him to exercise ‘relative autonomy’ from the latter. The governance implication of such an act is that the Strong Man was able craft and enforced policy initiatives, unhampered by the pestering demands of ensconced elites.

Obama won his coup equivalent by way of the electoral path, with aid from a vibrant electoral constituency and allied politicians who also buttressed his victory with additional seats in both houses of the US Congress. With solid grounds of support from both the people and the legislative allies, Obama has been practically offered the policy initiative on a golden platter by the electoral heaven of social contract. And the good image exuded by this Team was that of a change-directing Technocracy rather than that of a rambunctious Pedagogue of dangerously perverse hoi polloi.     

With such a grand opportunity of mandate, the Obama Team is enabled to re-engineer the policy environment of America on its initiatives. Lobby groups and ‘whispering mafias’ representing the elites do not have a business making demands on this Team, and must be kept at bay, in practice more than in words as promised by Obama.

The Obama Team should also use this ‘14^th Brumaire’ mandate to begin a long process of healing. The healing work is quite complex, as it entails tasks both on the domestic and international fronts. This healing can begin by the shift in tact from that of the previous hawkishness of the neo-conservatives to the dovish aura of Wilson-Roosevelt-Kennedy greats.

For my own country, Obama should not forget the 1 Million+ Filipinos who died during America’s invasion of the nascent republic, many of whom died as ‘collateral damage’ of a genocidal campaign. White House and Congress should better release their respective statements of apology to my nation, dubbed as populated by “brown monkeys with no tails” by the White combatants (T. Agoncillo, History of the Filipino People). Coupled with this is the return of the Balangiga Bells that were  looted by the US Army after leveling the town of Balangiga in Samar province, with all town folks butchered and all visible structures burned to the ground (ibid).

Obama must also remember the 1 Million+ Filipinos who died during World War II, or who died defending the interest of America in the Far East. Many of the living veterans of that war are waiting for their additional just subsidies, their bones now almost disabled from mobility. World War II was never our war, but was one among the world powers’, and look at what the cruelties and genocidal butchers our people got from defending America here.

Authentic healing will take several decades to undertake. But there is no harm involved by beginning the process now. The Native Americans and Colorados of the USA are expectant, and so are those peoples who suffered from America’s imperialistic adventurisms overseas. Begin the healing now, and put a final end to the USA as Empire.

The Obama electoral coup is total, his technocratic Team’s autonomy ensured. He cannot fail to deliver results as expected, and he must translate that ‘relative autonomy’ into more solid healing and prosperity feats. His massive constituencies must help the Team in this colossal task, to ensure galvanization par excellence, rather than just wait passively for results.

Cheers! Kudos to the Obama Team! Mabuhay!

[Writ 06 November 2008, Quezon City, MetroManila]

REFLECTING COMMUNITY WILDLIFE MANAGEMENT

Erle Frayne Argonza

 

Gracious morning to you!

 

A country such as Tanzania that is known for possessing large swaths of wildlife can provide to us a wonderful database regarding the impact of political and economic changes on community wildlife management.

 

Such is precisely the purpose of a report prepared by the Drylands Programme, as summarized below.

 

[05 October 2008, Quezon City, MetroManila. Thanks to Eldis database reports.]

---

 

Emergent or illusory? community wildlife management in Tanzania

Authors: Nelson,F.
Produced by: Drylands Programme, IIED (2007)

As the country known around the world as the home of the Serengeti and Ngorongoro Crater, few natural resources are more closely associated with Tanzania than its wildlife populations. By the 1980s, Tanzania’s wildlife management practices were under increasing pressure from a set of internal and external forces largely linked with the broad economic and political changes occurring in the country at that time. This led to support for greater local community involvement in wildlife management as a means of pursuing both conservation and rural development goals. This paper considers the outcomes and impacts of wildlife areas in Tanzania, and considers the emergence of community wildlife management (CWM) strategies.

The author highlights that the outcomes of over a decade of CWM in Tanzania reflect broader internal political struggles over land rights, resource governance, and participation in policy formulation, as well as challenges facing efforts to devolve natural resource management to local communities throughout the tropics. The paper concludes with some suggestions for how practitioners in Tanzania and elsewhere might foster more effective and adaptive CWM approaches in light of these outcomes and experiences:

• new institutional models are needed if CWM is to emerge in Tanzania in a more effective and robust manner
• efforts to support CWM need to take greater account of the institutional incentives that influence reform outcomes, and recognise that in most instances enabling CWM will require long-term negotiations between local and central interests over resource rights and uses
• long-term and adaptive strategies for moving the institutional balance of power towards the local level are fundamental to CWM
• development aid agencies and international conservation organisations need to find innovative ways of supporting institutional processes if they are to make more productive investments in CWM.

Available online at: http://www.eldis.org/cf/rdr/?doc=39350&em=240908&sub=enviro

SOCIAL CAPITAL FOR MINING

Erle Frayne D. Argonza

 

[Note: The author is a political economist and social development consultant. The paper was delivered in a panel lecture at the Kamayan Forum, Kamayan Restaurant, 12 noon-2 pm, 19 November, 2004.]

 

 

            This paper advocates for an alternative framework regarding mineral resource extraction. It begins with the contention that mining must be considered as primarily a community undertaking, whether the community be national or local. As such, mining must necessarily depart from market-driven models of extraction, or from state-centered models of development, and proceed to a community-oriented or constituency-based engagement.

 

            To be able to comprehend the theme of this paper, let me begin with a story. About four (4) years ago, a former university student of mine at the University of the Philippines Manila informed me that a mining engineer wished to establish a (mining) foothold in the Cordillera. Accordingly, the engineer heard about my mystical background, and was interested to know if there are indeed precious metals in the proposed project site. That is, the engineer expected me to communicate directly to the invisible elemental entities in the area and ask their permission to establish a mining project.

 

            Not only that. Having heard about my background as a political economist, with diversified interest and studies in indigenous culture, the mining firm he represented wanted to know what acceptable methods to employ in flushing out the indigenous people residing in the area. 

 

            To cut the story short, I declined the offer, even as I registered my vehement opposition to the sordidly profit-oriented venture of this engineer. If mining has to prosper at all, it must begin with the reality that there are people who have been settled for many epochs in the area of extraction. A win-win solution to the mining problem must be executed, not by expelling the local residents but precisely by involving them in the venture.

 

            Let me now share to you another story. In 1998, at the height of the Asian financial crisis, my consulting firm then, the Phoenixkonsult, contracted a project with a client. The project was about yellow clay extraction, with Bicol as the project site. In a small town in Bicol is found yellow clay, a rare material that has various industrial applications as well as aesthetic uses. Incidentally, the area also has some Aeta-related residents as well as marginal peasants.

 

            Being then the board chair of the corporation, or being in a central position to direct the developmental strategies of the firm, I strongly proposed that the project involve the residents in a number of ways.

 

First of all, in the feasibility study preparation, the residents can be tapped as eco-scanners to identify possible sites where the material was highly concentrated. Also, the same residents will be constituted into a cooperative, properly trained in social entrepreneurship, and invited to be co-investors in the mining project through their cooperative. A third involvement would be to tap those residents who are physically capable enough as human resource for the extraction and production activities.

 

            Such a scheme is what social scientists and development practitioners like myself refer to as tapping ‘social capital’. Mining should not just be regarded as investment capital, but should also consider the vast wealth of social networks—‘social capital’—that can wield tremendous powers of production. Studies in comparative political economy have shown that developmental pursuits that tapped ‘social capital’ ended up more appreciably better than those that failed to do so.

 

            The development experiences of Brazil are particularly instructive. As documented by such social science luminaries as Peter Evans (see Evans’ works on ‘state-society synergy’), those projects in agriculture, irrigation and urban-based infrastructure and housing in Brazil where a state-civil society partnership was consistently used, turned out really good in results. On the other hand, those projects that were largely state-centered or market-driven and insulated from the community networks eventually faltered, as indicated by typical experiences in most Third World economies.

 

            In today’s evolving global context, state-centered development has become ridiculously passé. In this old framework, the state performs the role of a ‘provider state’—giving out everything such as candies and shelter units to helpless people waiting for the ‘Santa Claus’ dole outs. Such a framework had proved to be disastrous in results. Not only did it reinforce a strong dependency syndrome among the people, it also led to vicious poverty instead of eradicating this malaise. It need not be stressed that much money went to the pocket of state officials and contracting firms’ managers through this old framework.

 

            The new framework delimits the state’s role to that of an ‘enabler state’. In this framework, development efforts are properly the tasks of market players, who possess the investment capital, and civil society players, who possess the vast social networks of ‘social capital’. The state then builds the policy environment and strong institutions that can support and sustain various developmental efforts.

 

            I strongly contend for a ‘social capital’ approach to mining. In this approach, the first thing to do is to recognize the institutional capacity building efforts of people who live in the areas of resource extraction. Stewardship agreements must be concurred between market players and community or social enterprises of the folks, with the state serving as a mediator or facilitator. I am very optimistic about the positive results of this scheme, compared to market-driven and state-centered approaches.

 

            You see, when people, through their social enterprise groups, are motivated to co-direct development projects, the people themselves will do so much to zealously guard and monitor the entire project or enterprise venture. The bonus for indigenous peoples is that they have easy access to the spirit world, to the nature beings in the area (called ‘elementals’ by mystics), beings that can also be tapped to guard the project.

 

            Now, go back to the cranky old models (market-driven and state-centered), and remove the indigenous peoples from the scene of a gargantuan development effort. What will you have?

 

It would be instructive to recall the Celophil and Chico dam projects, both Cordillera-based, that proceeded from the old frameworks. The disastrous offshoots of the projects became the fuel for insurgent groups, largely peopled by the I.P.s, to wage zealously bloody campaigns against the colossal projects.

 

            There is no further reason today for the likes of the Celophil and Chico projects to be repeated. We must have learned lessons from their failures at this juncture. But it seems that those who now wish to revive a mining sector that has been in the doldrums for two (2) decades to go the route of Celophil and Chico.

 

            I wish not to further highlight the folly of any idea today that wishes to pursue development by expelling people like they were deadly toxins. Many advocates of win/lose pursuits are well placed in government even as they dominate the corporate sector.  They simply couldn’t see the folly behind their antiquated approaches, blinded as they are by greed.

 

            As a final statement, let me declare that the framework elaborated in this brief paper is not an official policy framework of state. Rather, it is a policy framework that should be discussed among various quarters and social sectors, the state included. The state after all comprises of a plurality of framework trends operating in a vast array of bureaucratic mechanisms. There is no such thing today as a monolithic state with a singular framework dominating the policy environment. Rather, the state is a fluid field for contestation by various interest groups that are all aiming to influence the shaping of the policy environment.

 

            But this I am optimistic about: if given a chance to prosper, a ‘social capital’ framework for mining will sell like very hot cake. I am very sure about this forecast. And may the communications enclaves allow this idea of ‘social capital’ for mining to germinate and percolate, because whether we like it or not this will be the direction of resource extraction in the foreseeable future. Bar it from crystallizing, and the result will be more resentments leading to more vicious insurgencies. Permit it to galvanize, and the whole nation becomes heroic in the eyes of the international community for setting new precedents. So, which option is the better choice?

 

OBSERVATIONS AND POSSIBLE ADVOCACY POSITIONS REGARDING THE MINING SECTOR

Erle Frayne D. Argonza

 

Date: 10 February 2005

 

[Written for the Office of the President/multi-agency task force on mining advocacy.]

 

BACKGROUND

 

The paper summarizes the observations of this analyst regarding the mining sector. Some prospective advocacy positions are advanced at the concluding part of the report. The references were largely the Mining Act and related reports coming from the DENR

 

Being a constituency-enabling agency, this organization most appropriately considers the ‘constituency criterion’ in addressing problems/issues of advocacy. That is, in regard to mining, the relevant question is: do the constituency groups benefit at all from a revitalized mining sector? This paper will try to answer this question in particular.

 

DEFINITION OF TERMS

 

For easier comprehension, a number of key terms are operationally defined as follows:

 

State: Government of the Republic of the Philippines, with all of its agencies and instrumentalities.

 

Market: All economic institutions aimed at seeking profits, notably: single proprietorships, partnerships and corporations.

 

Civil Society: Non-profit institutions, specifically: NGOs, Peoples Organizations or POs, brotherhoods/sisterhoods & civic clubs, associations (in the generic sense) and cooperatives and social enterprises (civil society with market functions).

 

Community: Territorially-bound, localized grouping of people, with associational life and unique culture.

 

Constituencies: Social sectors, localized community groups.

 

POTENTIALITIES, BARRIERS, ADDRESSING PROBLEMS

 

The developmental and wealth-producing potentials of the mining sector are enormous. The sector is noticeably in the doldrums though. Inspite of the enormous levels of mineral resources possessed by the nation, the (mining) sector produces only around 1% of the GDP, and employs merely 104,000 human resources or 0.30% of the labor force.  Barriers to entry of market players combine institutional, policy, fiscal, technological, environmental, infrastructural and micro-level productions factors. A combination of technological, environmental and financial factors led to the closure of big metallic mineral producers in particular (i.e. Atlas , Marcopper, Lepanto, Dizon).

 

Legislative measures were enacted to address the policy side of the sector.  Among these are: (a) Presidential Decree No. 1899, “Establishing Small-Scale Mining As A Dimension In Mineral Development,” and (b) Republic Act No. 7942, the Philippine Mining Act of 1995. DENR Administrative Order No. 96-40 was put into place in 1997 to serve as the administrative framework of the sector.

 

A debate raged for some time regarding the constitutionality of the Mining Act. The debate had since been resolved, with the Supreme Court deciding to defend the legality and propriety of permitting foreign investors to engage in mining within the Philippine territory, both onshore and offshore, at a 100% ownership scheme. The SC decision finally resolved a key policy barrier, and is expected to lead to synergy of efforts between the state and the market to revitalize mining activities and increase mining’s contribution to GDP in the short run.

 

POLICY ENVIRONMENT AMID SHIFTING POLITICAL REALITIES

 

Based on a review of the Mining Act of 1995, it can be inferred that the policy environment for the sector had become more definitive. Such a definitiveness had encouraged more market players to signify their intention to participate in the sector, from exploration to extraction. However, ambiguities lie in the operational side of the policy, which has implications to revising the present policy. It is quite premature to say though that a comprehensive national policy on mining prevails, this being the product of series of trilateral talks among state, market and civil society players.

 

As can be observed from the introductory provisions of the law, mining intervention is largely a state-market synergy. To quote Section 2 (Declaration of Policy) of Chapter 1 (Introductory Provisions):

 

It shall be the responsibility of the State to promote their rational exploration, development, utilization and conservation through the combined efforts of government and the private sector…

 

Such a policy statement that delimits mining to a state-market synergy, without civil society provision, is explained by the fact that liberal economic policies were the wave of the past three (3) decades when the law came out. The ‘ideological field’ changed the states’ role from ‘provider state’ to ‘enabler state’, while providing greater space for market players to operate—presumably on ‘level playing field’. The policy regime comprised of: liberalization, deregulation, privatization, decentralization, tax reforms, downsizing, and liberalized currency exchange.

 

However, while the policy statement excluded civil society, the other chapters of the law provides for the roles of civil society players along the various phases of mining operations. Invariably mentioned were the following players: NGOs, cooperatives, associations, indigenous cultural communities or IPs, and local communities. This is in addition to small-scale miners covered by previous laws.

 

Such a recognition of civil society as industry stakeholder is a response to the broad challenges posed by a strong civil society on state and market players to fast-track the  redistribution of power, resources and values. Even traditionally market-oriented sectors and engagements must provide space for civil society to participate in the sector, while corporate social responsibility turned into a powerful wave in the corporate world.

 

In sum, using a typical cost-benefit analysis, the policy environment has become more definitive so as to ensure that a revitalized mining would economically benefit market players, most specially but not exclusively corporate players, as well as government coffers in terms of added taxation (e.g. excise tax). However, there are remaining kinks concerning the social and economic benefits of communities and constituencies, or civil society, that must be addressed. Hopefully, a Comprehensive National Policy will eventually address the ambiguities in the constituency side of the equation.

 

While relevant issues concerning civil society stakeholders are not sufficiently addressed, thorny questions will be raised and tensions will prevail during the implementation of the Mining Act. Many detractors will claim that civil society has been reduced to a kibitzer in the Mining Act and related documents, a contention that is not altogether invalid. The Mining Act campaign of government will also be largely biased for market players in the absence of more definitive provisions for civil society benefits. The constituency side must therefore be addressed with immediacy and dispatch, to avoid making the mining sector a mitigating factor in destabilization campaigns.

 

 

PROVISIONS CONCERNING CONSTITUENCIES/CIVIL SOCIETY

 

Non-Governmental Organizations

 

Among the functions of NGOs is policing mining activities. Ch. 2 (Authority of the  Bureau) stipulates that “the Director may deputize, when necessary, …duly registered nongovernmental organization (NGO) or any qualified person to police all mining activities.”

 

Another important role of NGOs concerns the environmental side of mining. Section 70 (Environmental Impact Assessment) under Chapter 11 (Safety and Environmental Protection) stipulated the following:

 

That a completed ecological profile of the proposed mining area also constitute part of the environmental assessment. People’s organizations and nongovernmental organizations shall be allowed and encouraged to participate in ensuring that contractors/permittees shall observe all the requirements of environmental protection.

 

 

Indigenous Peoples

 

The Mining Act was very clear about IPs as stakeholders in the sector, from the exploration phase through the post-production phases such as royalty provisions. Chapter 3 (Scope of Application) contained two (2) relevant sections on IPs, to note:

 

Sec . 16. Opening of Ancestral Lands for Mining Operations. No ancestral land shall be opened for mining operations without the prior consent of the indigenous cultural community concerned.

 

Sec. 17. Royalty Payments for Indigenous Cultural Communities. In the event of an agreement with an indigenous cultural community pursuant to the preceding section, the royalty payment, upon utilization of the minerals shall be agreed upon by the parties. The said royalty shall form part of a trust fund for the socio-economic well-being of the indigenous cultural community.

 

It can be remarked that the provisions are progressive enough. However, Section 17 does not contain specific  benchmark ceilings that define how much can the IP community receive as royalties. In the absence of such a benchmark ceiling, the IP group can end up at the losing end, as royalties can be defined in the marginal figures by the mining companies involved. Also, corrupt leader-officials from the IP side can appear on the scene to aggrandize a large portion of the royalties.

 

Not only that. IP groups can always cite the USA case as the most progressive instance of IP treatment. In the USA today, various ‘affirmative action’ measures have taken place to ensure that the native Americans become co-owners of gambling centers, tourist spots and various market concerns in their localities. Many native Americans today own middle class residential structures and live middle class lives precisely because they all benefit as being co-owners rather than just be treated as beneficiaries of trickles from ambiguous royalties. The mining sector doesn’t seem to be prepared to cross swords with any IP group citing the USA case.

 

Cooperatives and Associations

 

Cooperatives and associations were clearly stipulated as among the permissible participating market players in the sector. They were lumped up together with partnerships and corporations, notably in Chapter IV (Exploration Permit). The chapter defined the geographical limits of operations by market players, without discriminating against any particular form of stakeholder.

 

Whether in onshore or offshore operations, the limits applying to partnerships and corporations will likewise be benefited by cooperatives and associations. Let us cite for example Secion 22 (Maximum Areas for Exploration Permit):

 

 

(a)    Onshore, in any province –

For partnerships, corporations, cooperatives, or associations, two hundred (200) blocks.

(b)   Onshore, in the entire Philippines –

For partnerships, corporations, cooperatives, or associations, four hundred (400) blocks.

      © Onshore, beyond five hundred meters (500 m) from the mean low tide level –

For partnerships, corporations, cooperatives, or associations, one thousand (1,000) blocks.

 

Corollary provisions in Chapter 5 (Mineral Agreements) also stipulated the same stakeholders as participating market players. The chapter set the limits on maximum areas for mineral agreements, without discriminating against any form of stakeholder, inclusive of cooperatives and associations.

 

There was no clear definition, however, of association. Just exactly what sort of associations can participate in mining intervention in a given area? This question must be answered by the operating guidelines affecting the sector.

 

[Note: 1 block approximately equals 81 hectares.]

 

Marginal Miners

 

Aside from stating that a previous law (RA 7076) already defined the scope and limits of participation by small-scale miners in the sector, the Mining Act also contained important provisions affecting the said miners. Chapters 4 and 5 referred to them as ‘individual miners’, with maximum ceilings of geographical areas considerably smaller that those of partnerships, corporations, cooperatives and associations.

 

Mining Communities

 

The Mining Act also cared to ensure the development of mining communities. Chapter 10, titled “Development of Mining Communities, Science and Technology,” articulated on provisions about the locality being a beneficiary of a mining intervention within its folds. Section 57 (Expenditure for Community Development and Science and Mining Technology) states: “A contractor shall assist in the development of its mining community, the promotion of the general welfare of its inhabitants, and the development of science and mining technology.”

 

Another section of the same chapter, Sec. 61 (Donations/Turn Over Of Facilities), defined how a mining community can benefit from the post-operational facilities left behind by a mining operator. The section stipulates the following:

 

…Prior to cessation of mining operations occasioned by abandonment or withdrawal of operations, on public lands by the contractor, the latter shall have a period of one (1) year therefrom within which to remove his improvements; otherwise, all the social infrastructure and facilities shall be turned over or donated tax-free to the proper government authorities, national or local, to ensure that said infrastructure and facilities are continuously maintained and utilized by the host and neighboring communities.

 

Labor

 

First of all, the latest mining law is very friendly towards children, and strictly prohibits child labor. Section 64 (Mine Labor) under Chapter 11 (Safety and Environmental Protection)  contained the following unambiguous provision: “No person under sixteen (16) years of age shall be employed in any phase of mining operations and no person under eighteen (18) years of age shall be employed underground in a mine.”

 

Labor in FDI (foreign direct investments) controlled firms have relevant provisions for Filipino labor, as contained in Chapter 10 (Development of Mining Communities, Science and Technology). To cite the key provisions:

 

Sec. 59. Training and Development. A contractor shall maintain an effective program of manpower training and development throughout the term of the mineral agreement and shall encourage and train Filipinos to participate in all aspects of the mining operations, including the management thereof. For highly-technical and specialized mining operations, the contractor may, subject to the necessary government clearances, employ qualified foreigners.

 

Sec. 62. A contractor shall give preference to Filipino citizens in all types of mining employment within the country insofar as such citizens are qualified to perform the corresponding work with reasonable efficiency and without hazard to the safety of the operations. The contractor, however, shall not be hindered from hiring employees of his own selection, subject to the provision of the Commonwealth Act No. 613, as amended, for technical and specialized work which in his judgement and with the approval of the Director, required highly-specialized training or long experience in exploration, development or utilization of mineral resources: Provided, that in no case shall each employment exceed five (5) years or the payback period as represented in original project study, whichever is longer…

 

While the provisions are sterling instances of ‘affirmative action’ measures for Filipino labor, certain quarters can raise the howl that labor is treated in the traditional way as wage labor. There is no provision at all that stipulates a far more progressive scheme on profit sharing. We may as well anticipate such howls to come, added to another age-old issue of  ‘nationalization’ pertaining to the sector.

 

Environment

 

The concern for ecological balance was taken up in one whole chapter (Ch. 11/Safety and Environmental Protection). This chapter signifies the changes in developmental approaches, in that this time around development cannot be left to market forces alone. The risk to a purely market-driven development is the further degradation of the environments and destruction of human habitats mitigated by severe ecological damages. Section 63 stipulates provisions on mines safety and environmental protection. Section 64 defines mine labor, as previously mentioned.

 

Other interesting and relevant sections are: Section 68 (Reports of Accidents), which penalizes mining firms that fail to report mining-related accidents within a given time; Section 69 (Environmental Protection), which mandates participating market players to undertake an environmental protection and enhancement program; Section 70 that mandates the conduct of Environmental Impact Assessment, with civil society participation as mentioned earlier; and, Section 71 (Rehabilitation) that requires contractors and permittees to “technically and biologically rehabilitate the excavated mined-out, tailings covered and disturbed areas to the condition of environmental safety…,” with stiff penalties for failing to undertake rehabilitation.

 

 

EFFECTING WINNABLE ADVOCACY BY CLARIFYING POLICY & OPERATIONAL AMBIGUITIES

 

This analyst argues that the mining campaign could be a potentially winnable one, and can be a focal point to reverse prevailing perceptions about the state. It is further argued that the crux of the winnability lies in providing clearer, unambiguous guarantees to the social benefit & acceptability aspect of the entire mining sector. The following positions are advanced for deliberations and adoption:

 

v  Draft a Comprehensive National Mining Policy. Such a policy must pay respect to the evolving trend of tripartite state-market-civil society synergy in all forms of developmental endeavors and all phases of program and project execution. The national policy must ensure that constituencies are co-partners in the sector and are not just mere kibitzers that can ‘perform a role’ when contingencies arise.

 

v  Call for a Mining Summit that should involve precisely the three (3) sectoral stakeholders, namely: state, market, civil society. The output of the summit should be clear, definitive and doable policy agenda that can serve as input for the drafting of the national policy and revision of the mining act to incorporate the changes in the policy framework.

 

v  Revise the mining act in accordance with the summit covenant drafted and adopted thereof. The law should not just limit the participation of NGOs to monitoring activities and the conduct of EIAs but should be broadened to include  participation in the periodic review and assessment of the entire mining industry and drafting of policy covenants in the succeeding years.

 

v  Define specific benchmark ceilings for the royalties that should go to the IP communities where mining is involved. Such a ceiling should not be lower than five percentum (5%) of the income after taxes derived from the specific cite. [5% is the standard brokerage fee in various enterprises.] The accounting system that can define the benchmark should likewise be clearly defined. The basis for the royalty should be ‘social capital’, which means that the norms, values, institutions of the community must be properly valuated and regarded as equity or equivalent for royalty purposes.

 

v  Define clearly what ‘association’ means, by defining who can constitute an ‘association’ that can participate as a market stakeholder. Should local, broad-based community associations be involved in mining, as co-partners of partnerships, corporations and cooperatives, than the ‘social capital’ of the members should be considered as an equity capital equivalent to no less than five percentum (5%) of the authorized capital requirements for the concerned mining project.

 

v  Stiffer penalties on those market stakeholders that violate child labor policies should be added to the mining act. Section 64, Chapter 11 of the law should be amended accordingly.

 

v  Provide incentives to partnerships and corporations that will share profits to their laborers. The higher the percentage of profits shared to the workers at any given time, the greater the incentives, notably tax incentives.

 

 

END