Mining industry crackdown continues in Philippines

A plan to pursue the multimillion-dollar suit against a global mining firm Barrick Gold Corp is headed for the Canadian courts, after a US court ruled that it was the wrong jurisdiction to hear the claim.

The plan has gained the support of the Catholic Church and civil society groups in Marinduque province to recover the cost of damage left by the 1996 mine tailings spill, tagged as the worst mining tragedy in the Philippines, reported the Inquirer.

The provincial board of Marinduque, in June, issued a resolution to refile the case in a Canadian court against the Toronto-based Barrick Gold Corp., the company that absorbed Placer Dome, the parent company of the defunct Marcopper Mining Corp.

In 1996, one of Marcopper’s drainage tunnels gave way, unleashing about 200 million tons of tailings into Boac River. Traces of mine wastes are still visible in the water today.

The Marinduque provincial government, in 2005, filed a $100-million class suit against the mining company at the Nevada district court in the United States.

But after 10 years of court proceedings, the Nevada State Supreme Court threw out the case for forum non conveniens, meaning the US was a wrong jurisdiction to hear it.

In 2014, Barrick Gold offered a $20-million settlement but the Marinduque provincial board turned it down after it felt that the amount was not enough to compensate for the environmental damage wrought by the mining disaster on the island.

While the decision to reopen the case in Canada drew support, various groups in the province were divided as to whether they would continue engaging the services of law firm, Diamond McCarthy.

The US-based firm originally represented the Marinduque government under a contingency arrangement, meaning it would be paid a fraction of whatever the court awards the province once a resolution or a settlement is reached.

In a letter on Oct. 13, Marinduque Gov. Carmencita Reyes asked the provincial board to grant her the authority to enter into another contract with the firm for the “immediate filing of suit” in British Columbia or Ontario.

Reyes also sought authority to sign an agreement with the New York-based Parabellum Capital LLC as a third party funder. The purpose of a funder is to shoulder the costs during litigation, she said.

But the Marinduque Council for Environmental Concerns (Macec) opposed Reyes’ move to continue engaging lawyers from Diamond McCarthy saying it is “unnecessary and costly.”

“We remain positive and we support the intention of the provincial government to refile the case in Canada, but we strongly oppose the continuous engagement of Diamond McCarthy … for the case,” it said.

Macec instead urged the provincial government to “directly engage the services of Canadian firms [or] lawyers for the case.”

The Marcopper Mining Disaster occurred on March 24, 1996 on the Philippine island of Marinduque, a province of the Philippines located in the Mimaropa region in Luzon. It remains one of the largest mining disasters in Philippine history.

A fracture in the drainage tunnel of a large pit containing leftover mine tailings led to a discharge of toxic mine waste into the Makulapnit-Boac river system and caused flash floods in areas along the river.

One village, Barangay Hinapulan, was buried in six feet of muddy floodwater, causing the displacement of 400 families. Twenty other villages had to be evacuated. Drinking water was contaminated killing fish and freshwater shrimp. Large animals such as cows, pigs and sheep were overcome and killed. The flooding caused the destruction of crops and irrigation channels. Following the disaster, the Boac River was declared unusable.

The plan to pursue the Marcopper case in Canada comes as Philippines continues an unprecedented crackdown on mining operations that was ordered by President Rodrigo Duterte.

A dozen more Philippine mines, mostly nickel projects, are now in danger of being suspended in in the ongoing environmental crackdown on the sector.

The Southeast Asian nation is the world’s top nickel ore supplier, and is the top supplier of nickel ore supplier to China.

The new government launched a review of the country’s 40 metallic mines on July 8.

Eight of the 10 suspended by end-August produced nickel ore, and the closures and the risk of more mines being shuttered lifted nickel prices to a one-year last month.

Duterte earlier warned he could cancel mining projects causing environmental harm, though he told business leaders he was not against mining per se.

"But in making money out of the precious metals of the earth that belongs to the Filipino people, you have to do it right," he told businessmen.

The country's mining sector, one of the world's largest in the 1970s, has since struggled partly due to tougher environmental rules and rebel attacks missing much of the mining boom in recent decades and now facing much lower commodity prices.

The crackdown is led by Gina Lopez, the anti-mining activist who is now Philippines’ environment secretary.

Lopez was earlier quoted as saying mining can cause suffering among the poor and has described it as "madness" even to consider open pit mining because of the environmental impact.

"We must stop killing our future for the interests of a few", said Lopez, a staunch environmentalist. The country has suffered mining disasters, including a 1996 tailings leak at Canadian-owned Marcopper Mining Corp's copper mine in Marinduque that contaminated rivers.

Ramon Adviento, senior vice president at Global Ferronickel Holdings Inc, the Philippines' second-biggest nickel ore miner, said the industry was "shell shocked" by Lopez' appointment.

"I don't think it means the death of the industry, but what we expect to see is the survival of the fittest," he said, adding that there could be a nationwide crackdown on irresponsible miners, likely targetting small-scale producers.

Miners say hardline policies could backfire particularly as the Philippines has become the biggest nickel ore supplier to China after previous top exporter Indonesia banned shipments of unprocessed minerals, shipping 34.3 million tonnes last year.

Mining contributes less than 1 percent to the Philippine economy. Of 9 million hectares identified by the government as having high mineral reserves, only 3 percent is being mined.