As we close 2011, we share our questions on the mining discussions taking place mainly through paid newspaper advertisements and our seeming inability to adequately respond to the safety and security needs of our people during disasters. Both are continuing concerns in Philippine society, in terms of our struggle to understand how best to respond meaningfully.

On mining

Mining is garnering major media attention, alongside the New People's Army raids on mines, the issuance of provincial open-pit mining bans, and newspaper advertisements presenting viewpoints from industry representatives and the anti-mining advocates. Amid the turmoil, President Benigno Aquino III is expected to make a new mining policy announcement soon.

Recently, the Ateneo School of Government released a policy brief  that listed 10 key questions on mining and its governance and drew responses such as that of Fr Emeterio Barcelon, SJ, in his newspaper column where he raised questions about jobs and hunger that an industry such as mining can address.

There are questions we also ask:

1. Can mining be a driver for authentic national development and nation building?

Can Philippine mining break out of its long-time historical traditional third-world role of supplying raw materials for the industries of modern economies, instead of primarily for its own industrial development?

Governments and mining companies justify the rush to mining as an opportunity to take advantage of the fast-rising appetite and demand of China for crude mineral supplies that is driving up export prices. Indeed, China is hungry for the iron ore, nickel, gold, copper needed to manufacture its fast-growing output of computers, cellular phones, trucks, trains, cars, machinery, machine tools and other goods. In this way, China can further industrialize and make its national economy more productive. According to the Chamber of Mines, the Philippine total mineral reserves, if mined and exported, is worth PhP 47 trillion, and that each mining job generates 28 other jobs.

This may be true. However, it could also be asked if this is the only way that the country can use its mineral wealth? Are there other optimal ways that could make the country even more prosperous and productive, that can create even more jobs, and generate even more income while distributing in a more just and equitable way?

The way the Philippines exported its crude mineral and other natural resource wealth, like its timber, in the last hundred years, mainly to the US in prewar times and then to Japan in the post-war years, fell under a pattern of global distribution of wealth that did not benefit the country's development. Today, the Philippines continues to lag behind industrial Korea, Taiwan, and China.

Iron ore, copper concentrate, and plain gold for instance, need not be exported as such. Iron ore can be processed into steel and finally into finished products such as engines, turbines, motor vehicles, and lathes. Both income and job opportunities rise from the lowest-value-added end of the value chain, iron ore, to the highest-value-added end, the end-products, such as cars or trucks.

The Philippines for example exports iron ore, at roughly US$ 0.03 per kg. Processed into steel, this kg of iron ore worth 3 US cents becomes 0.645 kg of steel. In the same way, 1.55 kg of iron ore worth 4.65 US cents is turned into one kg of steel, but with a new added value this time of 78 US cents, over 16 times as high.

When processed further into an end-product like a car or truck, what was at first iron ore gains even more added value. How much exactly can be calculated based on a number of facts. Steel on the average makes up 70% of a motor vehicle that costs an average of US$ 26,249 (as of 2009 in the US) and weighs 1,375 kg on the average. The worth of each kilo of steel in each car or truck is then US$ 19.09 per kilo. This means that what started out as 4.65 US cents in iron ore is transformed by high added-value manufacturing into US$ 12.32. The added value of the iron ore has thus grown or multiplied 410 times over! This is the opportunity cost of not processing our iron ore exports into cars or trucks - losing the opportunity to add high value by 410 times as much and thus create so much more new jobs.

Philippine copper is exported as crude concentrates at US$ 0.98-1.16 per kg (2009-2010). But it, too, can be manufactured into components of high value-added electronic machinery or gadgets, such as cellular phones that sell for US$ 200 per kg or laptops worth US$240 per kg - 200 to 240 times as much. And then, gold exported as unmanufactured can still be worked locally into gold jewelry, worth at least twice as much and creating more local jobs.

What this figure suggests is that for the longest time, the great bulk of Philippine mining wealth has been inequitably distributed globally because it is hardly processed, and not fully manufactured, locally.

Can the economy, by manufacturing high-value mineral-based products, break out of the old box of underdevelopment and global maldistribution of wealth? Can mining be part of a larger, comprehensive and more long-term strategic industrial and developmental master plan more attuned to modern, highly productive economies, as in China, South Korea, and Singapore?

2. Can mining help curb poverty and re-distribute wealth to its employees, communities, and common public good?

This question leads us to even more questions: Can the bulk of income from mining be largely distributed to employees (through much higher wages), mining and local communities (through much larger revenue shares and subsidies), and the Philippine public sector (through much higher taxes or high government equity shares in the mining companies)?

Can the country and mining communities capture and distribute this bulk of mineral wealth for their own benefit and wellbeing, if they are not able to manufacture and sell it as high added value?

According to the Mines and Geosciences Bureau, the mineral sector generated in 2009 an added value of PhP 88.2 billion, of which PhP 9.1 billion or 10.3% went to national and local taxes, fees, and royalties. This tax contribution may seem huge. But think out of the box: is this really that large, if we would consider that these minerals could yield 200 or 400 times more income and create so many times more jobs if the country would only tread a developmental path?

Recently, government officials proposed an additional 5% royalty tax but both the Chamber of Mines and the Joint Chambers of the Philippines (representing the multinational companies) shot down the proposal as unacceptable and unattractive to foreign investors. But this raises another question: how can these foreign investments curb poverty if in the first place they are premised on what globalization requires, low taxes and cheap labor? This leads us to the next question.

3. In our development plans, can we as a nation expect or require mining companies, mostly foreign investors, to comply with an industrial and developmental strategy that is oriented to full-fledged Philippine manufacturing of the country's mineral wealth?

This raises new questions. In our development strategies, do we have a Plan B? I/n the event that foreign investors do fail to tune in and sign on to such an industrial policy, is the Philippine government programmed to step up to the plate and take the lead, as what happened in Japan, Korea and China?

4. Can mining companies practice adequate governance and environmental justice?

And so, even more questions: Can the mining companies, the government, the communities and scientists/technologies devise and agree upon unified ways to value the ecological resources not just according to conventional economic accounting, but based on their services as watersheds, repositories of biodiversity, carbon sinks, and centers of cultural and aesthetic appreciation? How can adequate environmental protection be ensured without first knowing how to definitively measure and thus monitor and evaluate it?

5. Can mining with its taxes, jobs, and other economic benefits offset its environmental and social costs?

Can this question be answered at all if there is still no definitive way to accurately determine the environmental costs beforehand? And finally, if these questions cannot yet be answered with the needed scientific accuracy, isn't a moratorium on mining appropriate, as argued by the Ateneo School of Government?

On disaster preparedness

As relief and rehabilitation efforts continue, we are again struck aghast by the wide swathe of disaster and numerous loss of lives (nearly 700 with many more missing and unaccounted for) that emerged after the flash floods brought by typhoon Sendong last weekend.

Questions of emergency preparedness, implementation of early warning systems, river management, infrastructure that restrict water flow, settlements in river banks and steep slopes, local government response and capacity to respond, come to mind.

But these are also questions that we struggled to respond to since Ormoc in 1991 and the subsequent flooding and landslide disasters every year after. We have since obtained more knowledge about our vulnerability and the risks faced every time a typhoon comes our way, which is about 20 annually. We have geohazard maps, a reinvigorated national disaster management council and its local counterpart in cities, towns, and barangays, a national disaster management law, more informed and more frequent issuances of weather bulletins and flood advisories, we have predicted rainfall volume information available, we are more linked to international weather stations.

Yet, we still continue to have casualties of such proportions that indicate the absence of preparedness and alertness. Why is that?

In this season of hope, joy, and peace, we ponder on these questions and look forward to a New Year that will give us more energy, creativity, and caring for a better and safer society. A blessed Christmas to all!