Is there light at end of Philex tunnel?

By Melvin Gascon
from Philippine Daily Inquirer
Date Published: May 10, 2005

Editor’s Note: This story won first prize in the writing contest among fellows of the 2005 Graciano Lopez Jaena journalism workshop conducted by the University of the Philippines’ College of Mass Communication on May 1-6 at UP Baguio. The author is the Inquirer’s correspondent for Nueva Vizcaya.

IT WAS a painful parting that day for Junior and Ronald, both 9. Ronald was leaving with his entire family-and everything they had-for Naguilian town in La Union.

They have been the closest of friends, Grade 4 classmates at the Philex Mines Elementary School. They had played in the same neighborhood in the mining village of Padcal in Barangay Camp 3, Tuba, Benguet.

Their fathers were employees of Philex Mining Corp. Ronald’s father, who had worked there for the past 23 years, was among those retrenched as part of the company’s decongestion program.

Ronald’s family had to leave the house where he and his two siblings were born. Philex management cut their power and water supplies when their families did not heed eviction orders.

Ronald’s family will have to learn to live without the privileges of free housing, free electricity, and free water that Philex had given them for years. Gone, too, is the free and “heavily subsidized” schooling for Ronald and his sisters, which the company had always been proud to have bestowed for decades on residents of Padcal.

Smooth stop

The issue of decongestion is the latest controversy to hound Philex in its ambitious attempt to be the first mining company in Benguet to officially, and-its officials hope-smoothly close down operations in Padcal. With just about 65 million tons of ore reserves left for it to extract, the company is anticipating total shutdown by 2007 or 2011.

As a “model of responsible mining in the country” by standards of the Mines and Geosciences Bureau, Philex wants to prove that its proposed mine decommissioning and rehabilitation plan in Padcal will work.

According to a Corporate Social Responsibility (CSR) report by the MGB and Colin Legarde Hubo in 2003, the Padcal decommissioning will be “a test case for the company, as there is yet no documented mining community in the country that has developed into a self-reliant political unit at the post-mining stage.”

The eviction of Ronald’s family and those of about 200 former Philex employees, and the controversy accompanying it may just be the first hump in the dark tunnel that the company is leading itself into.

Philex earlier set April 16 as deadline for 113 retired and dismissed workers to leave its mine compound following a court ruling and a labor arbiter’s findings that affirmed the retrenchments and evictions. The eviction order included about 60 store owners, public utility drivers, and workers’ family members.

The evictees, some of whom are either too old or had nobody to take care of them, refused to leave. Philex had to hire trucks to haul their belongings and bring them to any place outside the compound.

“Many of [those who were evicted] decided to go back home to their provinces, and the company helped them to get there,” said geologist Redempta Baluda, Philex environment officer.

She said the company no longer tried to find out if the families were relocating to a house of their own or a rented one, or were just moving in to live with another family.

The decongestion is inevitable, Baluda said, as the company had to cut back on labor and mine camp expenses, which amounted to P5 million a day.

The amount includes expenditures for power and water rationing for about 14,000 Padcal residents, as well as salaries of school teachers and medical and dental staff members.


The issue of eviction is but a microcosm of how the company has exploited the locality’s human and natural resources, said Joan Carling, chair of the Cordillera Peoples Alliance, a militant non-government organization that looks after the welfare of indigenous peoples in the Cordillera.

“To drive away the workers is an act that is very inhuman, after they have exploited these people who have served them for so many years,” Carling said.
She said she did not believe the company officials’ claim that Philex was losing heavily, that it had to retrench its employees and drive away dependents to cut down on expenses.

According to its latest financial report, Philex, for the first quarter of 2004, recorded the lowest metal production in the last five years. This, however, was “partially compensated” for by a substantial rise in the prices of copper and gold, which were reportedly at their highest levels in the last nine years.

Gross revenues during the first six months of 2004 amounted to P1.7 billion compared to P1.8 billion in 2003, and the average foreign exchange rate was more favorable this year, partially offsetting the effects of lower production output, the report said.

Carling claimed that the company seemed to be losing because it was trying to save capital to kick-start operations in its Boyongan copper project in Surigao del Norte and Agusan del Norte, in partnership with Anglo-American Philippines and Anglo-American Plc. According to the company website, the project is set to start commercial operations in 2010.

Civil society groups fear that when the Padcal mine shuts down, the village, which is touted today as a bustling community, will turn into a ghost town, with its estimated 14,000 inhabitants being driven out of the mining compound, jobless and without any source of decent livelihood.

Why? The majority of the mine compound’s present inhabitants are not from the place. Philex records show that 60 percent of the workers are from the Ilocos region, mostly Pangasinan and La Union, while only 30 percent come from the Cordillera, either from Benguet, Mt. Province or Ifugao.

“We had adopted the policy that those from the area are the priority [in job placement]. The problem is, the job openings required skills which the applicants, who are locals, did not have,” Baluda said.

While Philex may claim to have helped residents of Padcal and of neighboring communities venture into small-scale industries, these projects are not at the level that could provide self-help for the communities to cut the “culture of dependence” on the company, Carling said.

Philex is looking at the prospects of agro-forestry (growing of gmelina, ipil-ipil and coffee), swine raising, and the handicraft industry as possible alternative sources of income for the people.

So what would happen to the structures at the Padcal mine site after the mills stop running?

There’s nothing in the present laws, even the Philippine Mining Act of 1995, that requires a mining company that has closed down its operations to turn over to the community all the assets of the mining project.

According to Carling, a bill, that was introduced by former Benguet Rep. Ronaldo Cosalan, was killed at the Lower House reportedly due to intense lobbying by giant mining companies.

Mined out

What is only mandated in present laws, said Carling, is for companies to rehabilitate “mined-out” areas.

According to Baluda, Philex would be put under a 10-year rehabilitation program, and the site may be converted either into an ecotourism destination, a miners’ barracks or an industrial zone.

In addition, the three mine tailings dams will be “re-vegetated” and converted into grassland.

While insisting that the soil at the tailings ponds is not toxic, the Philex official said houses might not be built there because the dried-up earth was not stable enough to support any building.

Rehabilitation may be easier said than done. Carling cited the case of the abandoned mines of Benguet Corp. in Itogon town, which had turned what used to be vegetable farms into wasteland, and where the mining compound, though a virtual junkyard, was now off-limits to local villagers.

“Even if the company will not rehabilitate the area, government does not go after these mining companies. They leave the area and go scot-free,” she said.


If Philex’s present environment programs were a gauge of its ability and sincerity to protect and rehabilitate the environment, it would not seem to be faring well.
While officials claim that the company has been spending millions of pesos for its environment programs, the efforts appear not to have borne fruit.

In 2004 alone, Philex spent some P113 million for “environmental expenses,” but officials could not cite a single creek or spring that has been revived because of its reforestation projects.

“It is a normal phenomenon in the hydrologic cycle that at this time of the year (summer), water is rather scarce. In all places, supply is really deteriorating,” Baluda explained.

But Carling said: “The reforested areas were mere patches [on the mountains], so that the effects on the environment are not readily felt. I think this is more of the PR [public relations] side of things.”

CPA officials claim that a bigger volume of the already-scarce water supplies coming from natural springs is being sucked by mining activities, depriving local residents of water for domestic use. Residents now depend on the daily ration of water supplied by the company.

The decline in water supply becomes even more menacing with reports of alleged toxification of the Bued River, into which Philex dumps its effluents.

Faced with uncertainties, Philex officials cannot help but be cautious about their pronouncements on the looming project phaseout.

But Baluda tries to fan the embers of hope that the company will not be ending its operations by 2011 after all.

“We’re still in the process of trying to find other mineral deposits in nearby areas,” she said.

“So it’s not totally definite that we will end the project soon.”

This was affirmed by Edgar Prangan, mine division chief, who said Philex’s Padcal mines were there to stay for many more years.

Even so, he said workers might find hope in the company’s mining expansion in the legendary Kennon Road in nearby Barangay Camp 4, and portions of the Philippine Military Academy reservation in Camp 6.

Or, they may be re-hired for the Boyongan copper project in Mindanao.

Claims vary on the health risks that miners and milling plant workers face in the course of their work.

Carling said there had been cases of Philex workers having developed respiratory diseases and hearing defects. Cases are not recorded among active workers because of alleged falsification by the company’s medical personnel on its workers’ true state of health.

But Baluda denied this, saying that independent medical teams had been regularly conducting check-ups on the Philex personnel, and their findings supposedly matched company diagnoses.

One miner said he was aware that the health hazards he was facing while working on an eight-hour shift 700 meters below the surface, in a pitch-black, dusty and sooty environment, might not manifest overnight.

“I do not feel anything bad. I just don’t know in the future,” he said in Ilocano.

“It may be the most dangerous job, but it’s the only one we have,” he continued, as he positioned his pneumatic drill against a 7-foot boulder.

As the drill loudly rattled against the solid rock, he and his three companions did not budge.

They did not have protective goggles, earplugs, gloves and overalls – just sheer guts and the desire to earn a living for their family.

Then the miner put down his drill. He turned and pointed his headlamp at the next tunnel he would enter. The beam pierced the darkness, but he could see nothing-no end-point, no light at the end.


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