POSTSCRIPT / August 18, 2002 / Sunday


Philippine STAR Columnist

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Alvarez adds Picop site to Diwalwal crisis area

DIWALWAL TAKEOVER: Justified or not, Natural Resources Secretary Heherson Alvarez has found an ally in President Arroyo and an excuse to take over, with police-military force if needed, a portion of the idled 184,000-hectare timber concession of PICOP Resources Inc. in Bislig, Surigao del Sur.

The justification for the military-backed takeover came after the outbreak of violence and lawlessness in the 800-hectare mining area on Mt. Diwalwal in Moncayo, Davao del Norte, where some 60 workers have been killed in recent months while clawing for gold and at one another.

The complex Diwalwal gold rush problem simmering for the past 19 years has become a mirror of many things wrong with this country.

Lured by the abundant gold, characters who have the guts and the guns to impose themselves have taken over much of the illicit and primitive mining. Much of the gold extracted – easily running into millions of grams each year — simply vanishes without trace. Workers earn only a pittance and become pawns in the bloody fight for control of the rich areas.

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WHOLISTIC APPROACH: In the latest incident, a worker died and several others were downed when a tunnel suddenly filled with toxic smoke believed to have been intentionally set off. A workers’ protest barricade was smashed by an armored military contingent.

There are policemen and soldiers assigned to Diwalwal, but they have failed to play neutral and effective roles in ensuring order and making government presence felt. Not to be left out, some officials also have made sure they get a piece of the action.

Blood mingles with gold and mercury in Diwalwal. With this picture of anarchy and a virtual absence of government authority, we suggested last time (Postscript, 13 Aug 02) possible government steps outlined in this brief paragraph:

“The logical steps would be to (1) stop everything, (2) disarm all civilians, (3) establish a one-stop composite regulatory agency in the area, (4) register and look after the idled workers, (5) sort out conflicting claims, (6) check the safety and technical integrity of each mine, and (7) establish an integrated management scheme for all mining operations in the area.”

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GMA RELIES ON ALVAREZ: Over dinner the other night at Malacanang, we were told by President Arroyo that after 19 years, a determined government was finally stepping in. Target date was yesterday. Although there were other officials and other agencies mobilized, she gave us the impression that Secretary Alvarez was the lead man.

She also related to us of her efforts to clear things between Alvarez and Picop president Teodoro G. Bernardino. The latter had reaped a libel suit after charging the Secretary with having tried extorting from him “something substantial” when he pressed conversion of Picop’s old timber concession (to feed its paper mill) into a forest management agreements with the DENR. (For his part, Alvarez had said he demanded “substantial compliance,” not “something substantial.”)

We noticed that the President, presumably picking up what Alvarez had told her, said that Picop’s corporate life has expired (which technically means the firm is dead and therefore incapable of taking legal action or dealing with government). She repeated Alvarez’s line that the conversion was not forthcoming unless it paid its multimillion-peso tax deficiencies.

The President’s comment contradicted earlier information we got from Bernardino that the Securities and Exchange Commission had approved the extension of Picop’s corporate life and that the firm has paid its SEC fees (albeit under protest).

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MINE-TAILING TREATMENT: While the Diwalwal hotbed of illegal mining was only some 800 hectares, Alvarez is talking of an 8,800-hectare “expanded area” he needed to rationalize the mining activities. The additional space included by Alvarez was reportedly carved out of the Picop concession area.

We asked President Arroyo about the Alvarez takeover of a sizeable portion of Picop’s concession, and she clarified that the area taken over was only a small portion adjacent to the critical area. She said that space was needed for the common mine tailing processing that the government plans to establish. She has allocated P50 million for the project.

The President also told us that Bernardino was in business with a mayor who had been accused of illegal mining. The same mayor has been accused of harassing small miners.

With the way things are shaping up, Bernardino better keep his eyes open as Alvarez appears bent on chomping off chunks of Picop’s concession using the government takeover of the Diwalwal site as the cover.

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WORKERS RESTIVE: Petrochemical firms, the midstream companies that produce the resin used by factories making plastic items, are asking government to help them by continuing with the 15-percent protective tariff on imported resin.

On Sept. 11, the Asean Free Trade Area (AFTA) council meeting in Brunei will further discuss the implementation of tariff reductions starting Jan. 1. 2003, for various industrial and agricultural products (including resin) entering the Philippines from Asean member-countries.

When senior Asean economic officials met in Manila last Aug. 5-7 for to discuss tariff reduction, they were met by protests and demonstrations staged by industrial and agricultural workers to be affected by the tariff reduction.

Even with 15-percent tariff, some plastics manufacturers still import foreign-made resin. The dollar-denominated imports are expected to increase if the tariff is reduced to 5 percent – and kill the local petrochemical industry.

In self-defense against cheap imported resin, local manufacturers are also asking that the protective tariff be raised to 30 percent.

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INFANT INDUSTRY: The tariff reductions are a commitment to the AFTA based on Executive Order 234 signed by then President Erap Estrada as recommended by the National Economic and Development Authority.

Among the products whose tariff is to be reduced next year to 5 percent is resin. The same raw material for plastics is manufactured locally by four companies under the Association of Petrochemical Manufacturers of the Philippines. They are asking the Department of Trade and Industry to work out a delay in the tariff reduction to 5 percent.

They described themselves as infant industries having started operations only in the late 80s, compared to some Asean members whose petrochemical industries were born some 20 years ago.

They said they cannot compete yet with such Asean members as Malaysia, Indonesia and Thailand, which happen to be also oil producers, and non-oil producer Singapore all of which have mature petrochemical industries.

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(First published in the Philippine STAR of August 18, 2002)

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