Figure: Philippines’ Richest Men with CDM Projects, Expected Revenues

Source: Suzanne Nam, “The Philippines 40 Richest,” Forbes, October 15, 2008, http://www.forbes.com/2008/10/15/richest-philippines-billionaires-biz-philippinerichest08-cx_sn_1015phillippines_land.html; For estimated revenues see Annex X: Calculation of Estimated CDM Revenues from the Philippines for details.

Some of these companies have pursued or are pursuing projects that have had devastating impacts on the environment and on communities. A number have been penalized for pollution by the government’s own regulatory agencies. (1)

Table: List of CDM Projects developed by or linked to companies cited for pollution violation by the government

Rewarding mining

The largest CDM project in the Philippines to date, the Montalban Landfill Methane Recovery and Power Generation Project, illustrates the tangle of corporate interests caught up in polluting, carbon-intensive, resource-extractive activities to be rewarded by the CDM.

Accounting for around half of all CDM credits from the country, the project is run by a subsidiary of Nickel Asia Corporation, the Philippines’ largest nickel mining company. (2) Nickel Asia was founded and is owned by mining magnates Salvador and Manuel Zamora, of the wealthy and influential Zamora family. (3) Manuel and Salvador are respectively ranked 20th and 32nd richest men in the Philippines according to Forbes magazine. (4) The two have a combined net worth of nearly $200 million, or the equivalent of the average annual income of around 55,000 Filipino families. (5) Manuel was former president and present director of the Chamber of Mines of the Philippines, the mining industry lobby group. (6)

Nickel Asia has four subsidiaries that own equity or operating interests in various mining operations across the country. The vice-chairman of one of these subsidiaries is Philip T. Ang, the country’s 33rd richest individual. (7) Nickel Asia also has minority interests in Coral Bay Nickel Corporation, the majority of which is owned by a Japanese consortium and ran by Sumitomo Metal Mining Corporation, Japan’s top nickel and second largest copper producer. (8) Together, these subsidiaries dominate the local nickel mining industry, with a combined net income of nearly 15 billion pesos in 2007 -- over a billion pesos more than the budget of the government’s own environmental regulatory agency, the Department of Environment and Natural Resources (DENR).(9)

With the CDM, the Zamoras and their CDM venture partners can expect to earn 0.3 billion to 1.7 billion pesos a year in estimated revenues from their Montalban project -- as much as ten per cent of all their income from mining in 2007 and more than the individual incomes of their Cagdianao or Rio Tuba mining operations. (10) This provides proof that the CDM’s impact on its developers’ consolidated financial sheets may not be negligible.

Apart from chairing Nickel Asia, Manuel Zamora has also been a member of the board of Philex Mining Corporation, the country’s largest copper and gold mining company. (11) Philex has mines in Negros Occidental and Zamboanga and ongoing operations in Benguet and Surigao del Norte. In Zamboanga, it has a coal mining project with about two million tons of coal reserves. It is also into and oil and gas exploration. (12) Half of Nickel Asia’s shares is owned by Luis Virata, the country’s 15th richest man. (13) He also sits on the board of another mining firm, Benguet Corporation, the Philippines’ oldest mining company. (14)

Deforestation

To date, the people who stand to earn the most from the CDM in the Philippines are also among the largest local players in mining, an industry that has been blamed for widespread ecological damage and human rights violations locally and globally. As a report to the United Nations stressed, “The extractive sector is unique because no other has so enormous and intrusive a social and environmental footprint.” (15) Globally, sectors linked to mining accounted for about 12 per cent of all greenhouse gas emissions in 2000 -- nearly as much as from the entire transport sector. This does not include emissions from deforestation, which accounted for 18 per cent of global emissions, to which mining is one of the contributors. (16)

In the Philippines, mining, along with logging, has been among the forces behind the country’s loss of forest cover: from 17 million hectares in 1934 to just three million in 2003 or an 82 per cent decline. While about sixty per cent of the country’s land area was covered with forest seventy years ago, now it is less than ten per cent. (17) And with over half of ongoing and planned mining operations located in areas that are ecologically highly vulnerable and with over a third of approved mining and exploration leases located in intact forests (18) -- much of the little that remains could be lost to extractive industries such as mining.

In addition to contributing to global climate change, mining has a devastating impact on local communities. Denuded forests, degraded mountainsides, and polluted rivers and seas have resulted in residents being driven from their lands, deprived of access to food, water, and livelihood, and exposed to harmful chemicals. (19) Over the years, a series of large and small mining disasters have inundated rivers, irrigation systems, and farmlands with toxic mining residues, killing fish, aquatic life, and crops, and threatening public health. More than 800 mine sites litter the countryside -- contaminated but abandoned. (20) Apart from the ecological destruction, the militarization accompanying mining projects has spawned violence and human rights abuses. (21)

Among the specific mining operations that have been cited for pollution violations by the government and that stand accused of destroying the environment and violating human rights of indigenous peoples and local communities are the mining operations of the Montalban landfill gas project’s owners themselves. The Zamora mining operations are accused by environmentalists and indigenous communities, and local residents of undermining laws protecting forests, displacing indigenous peoples, poisoning water sources, and cutting-off people from their means of subsistence. In one mine, it has even been implicated in direct violence against residents opposed to its operations. (22)

(To be continued)

* Herbert Docena was a research associate with Focus on the Global South. He can be contacted at

NOTES

1.            Department of Environment and Natural Resources Environmental Management Bureau Pollution Adjudication Board (PAB), “PAB Cases,” http://www.emb.gov.ph/pab/template/PAB_Cases_2008.htm [Accessed 21 June 2009]; Interview with Chino Agati and Dommel Bacate, staff of the Pollution Adjudication Board, August 7, 2009.

2.            Japan Engineering Consultants Company Limited, “Rodriguez Landfill Methane Recovery and Electricity Generation CDM Project Feasibility Study Report,” May 2007, http://cdm.unfccc.int/UserManagement/FileStorage/UANVTQC2ZO4NFMXK4YIWZXZDBGNUTD [Accessed 4 February 2009]; Nickel Asia Corporation, “Welcome,” http://www.nickelasia.com/index.Html [Accessed 5 February 2009]

3.            Antonio Lopez and Sangwon Suh, “The Troubleshooters,” Asiaweek, March 19, 1999, http://cgi.cnn.com/ASIANOW/asiaweek/99/0319/nat1.html [Accessed 5 February 2009]

4.            Suzanne Nam, “The Philippines 40 Richest: Salvador Zamora,” Forbes, October 15, 2008, http://www.forbes.com/lists/2008/86/philippinerichest08_Salvador-Zamora_D8DH.html, [Accessed 5 February 2009]  Suzanne Nam, “The Philippines Richest 40: Manuel Zamora,” Forbes, October 15, 2008, http://www.forbes.com/lists/2008/86/philippinerichest08_Manuel-Zamora_WY58.html, [Accessed 5 February 2009]

5.            Computed using average annual family income of ₱173,000 according to the Family Income and Expenditure Survey and actual average exchange rate from January to May 2009 , US$1=₱47.8, according to the Bangko Sentral ng Pilipinas (National Statistics Office, “2003 and 2006 Family Income and Expenditure Survey, Final Results,” http://www.census.gov.ph/data/sectordata/2006/ie06fr01.htm [Accessed 29 June 2009]; Central Bank of the Philippines, “Peso per US Dollar Rate,” http://www.bsp.gov.ph/statistics/spei_new/tab25.htm [Accessed 29 June 2009]

6.            Nickel Asia Corporation, “Senior Management,” http://www.nickelasia.com/management.html; Roel Landingin, “The Battle for Manila’s Gateway,” Newsbreak, September 14, 2007, http://www.newsbreak.com.ph/index.php?option=com_content&task=view&id=3712&Itemid=88889310 [Accessed 30 June 2009]

7.            Suzanne Nam, “The Philippines Richest 40: Philip Ang” Forbes, October 15, 2008,  http://www.forbes.com/lists/2008/86/philippinerichest08_philip-ang_6a5z.html [Accessed 5 February 2009]

8.            Nickel Asia Corporation, “Our Operations,” http://www.nickelasia.com/currentprocessing.html [Accessed 30 June 2009]; Reuters, “Sumitomo Mining Seeks More Control of Copper Flows,” February 23, 2009, http://www.reuters.com/.../rbssminingmetalsspecialty/idust31372720090223 [Accessed 30 June 2009]  

9.            BusinessWorld, Top 1000 Corporations in the Philippines, Volume 22, 2008, p.88; Republic Act Number 9524: General Appropriations Act 2009, “Department of Environment and Natural Resources,” http://www.dbm.gov.ph/GAA09/denr/denr.pdf

10.            BusinessWorld, Top 1000 Corporations in the Philippines, Volume 22, 2008, p.88.

11.            Zinnia B. Dela Pena, “Philex Mining boosts capital by ₱3 billion via 25% stock dividend,” The Philippine Star, February 12, 2009 http://www.philstar.com/article.aspx?articleid=439424 [Accessed 5 February 2009]; Amy Remo, “Philex Unit Reports Oil, Gas Find In Vietnam,” Philippine Daily Inquirer, June 28, 2009, http://business.inquirer.net/money/topstories/view/20090628-212859/Philex-unit-reports-oil-gas-find-in-Vietnam [Accessed 5 February 2009]; Securities and Exchange Commission, “Statement of changes in beneficial ownership of securities by Manuel B. Zamora,” August 1, 2008

12.            Philex Mining Corporation, “Corporate Profile,” http://philexmining.com.ph//index.php?option=com_content&task=view&id=14&itemid=28 [Accessed 5 February 2009]; “Philex Mining to start coal project by December,” GMANews.tv, June 27, 2008, http://www.gmanews.tv/story/103549/Philex-mining-to-start-coal-project-by-December [Accessed 5 February 2009]

13.            Suzanne Nam, “The Philippines Richest 40: Luis Virata” Forbes, October 15, 2008, http://www.forbes.com/lists/2008/86/philippinerichest08_Luis-Virata_MZTH.html [Accessed 5 February 2009]

14.            Reuters, “Benguet Corporation,” http://cn.reuters.com/investing/quotes/companyofficers?symbol=BC.PS&viewId=bio [Accessed 30 June 2009]; Businessweek, “Benguet Corporation,” http://investing.businessweek.com/research/stocks/people/board.asp?ric=BC.PS [Accessed 30 June 2009]

15.            John Ruggie, “Draft Interim Report of the Secretary-General’s Special Representative on the issue of human rights and transnational corporations and business enterprises,” (UN Doc. E/CN.4/2006/97), February 2006.

16.            This include: Iron And Steel – 3.2%, Aluminum/Non-Ferrous Metals – 1.4%, Coal Mining – 1.4%, Oil and Gas Extraction, Refining, and Processing – 6.3% (World Resources Institute, Climate Analysis Indicators Tool (CAIT) Version 6.0, (Washington, DC: World Resources Institute, 2009), http://cait.wri.org/ [Accessed 29 June 2009]); Kevin A. Baumert, Timothy Herzog, Jonathan Pershing, “Navigating the Numbers: Greenhouse Gas Data and International Climate Policy,” World Resources Institute, 2005, http://pdf.wri.org/navigating_numbers.pdf [Accessed 9 February 2009]

17.            Germelino M Bautista, “Economics of Philippine Mining: Rents, Price Cycles, Externalities, and Uncompensated Damages,” Ateneo School of Government, p.34, http://gator366.hostgator.com/~ateneo/index.php?option=com_docman&task=doc_download&gid=6&Itemid=30 [Accessed 16 February 2009]

18.            Marta Miranda, Philip Burris, Jessie Froy Bincang, Phil Shearman, Jose Oliver Briones, Antonio La Viña, and Stephen Menard, “Mining and Critical Ecosystems: Mapping The Risks,” World Resources Institute, 2003, p.21, http://pdf.wri.org/mining_critical_ecosystems_full.pdf [Accessed 16 February 2009]

19.            Christian Aid and PIPlinks, “Breaking Promises, Making Profits: Mining in the Philippines,” December 2004, pp.17-21, http://www.pcij.org/blog/wp-docs/PIPLinks_Christian_Aid_Breaking_Promises_Making_Profits.pdf [Accessed 16 February 2009]; Cathal Doyle, Clive Wicks and Frank Nally, “Mining in the Philippines: Concerns and Conflicts,” Report of a Fact-Finding Trip to the Philippines, July-August 2006, p.2, http://www.epolitix.com/fileadmin/epolitix/mpsites/MininginthePhilippines_Report.pdf [Accessed 16 February 2009]

20.            Ronnie E. Calumpita, “857 Abandoned mines pose health menace, says NGOs”, The Manila Times Reporter, October 11, 2005

21.            William N. Holden and R. Daniel Jacobson, “Mining amid armed conflict: nonferrous metals mining in then Philippines,” The Canadian Geographer 51 No. 4 (2007): 475-500.

22.            Citizens' Assessment of Structural Adjustment (CASA)-Philippines, “The Impact of Investment Liberalization and the Mining Act of 1995 on Indigenous Peoples, Upland Communities and the Rural Poor, and On the Environment: A summary report,” April 2001, http://www.saprin.org/philippines/research/phi_mining_sum.pdf [Accessed 16 February 2009]; Jimbot Sumook, “Truck plows through human barricade, 1 dead, 1 hurt,” Bankaw News, April 29-May 5 2001; World Rainforest Movement, “Mining: Social and Environmental Impacts,” 2004, pp.89-90, http://www.wrm.org.uy/deforestation/mining/text.pdf; Palawan NGO Network Inc., “Letter to Mr Kyosuke Sinozawa, Governor of Japan Bank for International Cooperation,” June 9, 2006; Katherina Mana-Galido, “Revitalized Mining Alarms South Palawan,” Environmental Legal Assistance Center, July 12, 2005; Ben Serrano, “5 Protesting Tribesmen Missing; Barricade vs. Mining Firms Continue,” Mindanao.com, January 31, 2009, http://mindanao.com/blog/2009/01/5-protesting-tribesmen-missing-barricade-vs-mining-firms-continue [Accessed 16 February 2009]; “Atienza aborts IP uprising in Caraga,” Manila Bulletin, March 19, 2009; Cathal Doyle, Clive Wicks and Frank Nally, “Mining in the Philippines: Concerns and Conflicts,” Report of a Fact-Finding Trip to the Philippines, July-August 2006, p.33-34.