Rep. Manny Pacquiao opposes mining and illegal logging

(The opinions expressed in this commentary are solely those of the author.)

Editorial - Sarangani congressman Emmanuel (Manny) D. Pacquiao continues to oppose mining activities in his district. He's right. And local officials in the Philippines should follow suit.

In recent meetings with municipal mayors, board members and other officials of Sarangani, Pacquiao reminded them of the destruction to the environment brought on by mining activities, according to a statement by his congressional office.

Once Congress resumes session, the eight-time boxing champion will deliver a privileged speech which will implore colleagues in the lower House to oppose mining and illegal logging operations in the country. The first-term congressman recently purchased 10-hectare and 2-hectare lots near his district to be distributed for free to victims of natural disasters such as typhoon "Sendong".

"Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise." - Cato the Elder (234 BC - 149 BC)

Mining 101 >

Mining operations have existed in the country for decades. It's a profitable venture given the rising global demand for minerals. For example, several dozen materials that go into a computer once came from a mining operation. For years, manufacturers in the United States have been facing rising steel prices due to shortages from Asian suppliers, and most pre-order whatever supply is available.

Mining is good business. But it's terrible public policy. Congressman Pacquiao's stance on this issue shows he's a public servant.

For decades, mining has done nothing to improve public welfare in the Philippines. Why?

There are several reasons but the primary one is this: mining activities provide small, almost negligible, benefits to the local economy while exacting enormous social and environmental costs.

Negligible Benefits >

The Philippine government and local government units (LGU's) receive royalty from mineral extraction sites. However, this type of revenue represent short-term cash infusions to the treasury. For most LGU's, these payments almost always corrupt local governance.

Mining royalties have never expanded the economic base of the Philippines. Why? Because its workers remain uneducated. After the local operation closes and moves to another location, it leaves behind a trail of poverty and ecological destruction. This industry does not provide a way for its workers to make a living in another livelihood and/or to climb up the social strata.

There's no transferable skills involved. A miner cannot become a fisherman or a banker after getting laid off. He remains a manual laborer. He goes back to being poor and broke, with a family to feed this time around.

Mining is bad public policy because, over the long-term, income per capita and productivity are not increased. A vast majority of minerals are exported to other countries as raw materials for their industries. Over the long-term, the Philippine economy is almost always never improved.

Investors ship profits (investable capital) overseas to seek returns elsewhere. Thus, mining operations largely develop the economies of other countries, and not that of the host country.

Source of Corruption >

The mining industry is currently fighting to amend the Philippine Mining Act of 1995. They want to be able to pay local officials directly their share of mining taxes. There's a reason for this. The industry doesn't want local politicians messing with their operation.

Mining has long been a source of corruption. In Pantukan, a local mayor and several officials have spearheaded illegal mining operations which have resulted in dozens of people being killed in landslides.

Local politicians build infrastructure to cater to their mining "clients" instead of constituents. Newly-built roads and ports are designed to transport mineral resources (and illegally logged trees) out of the country, and are not designed to foster local trade and area development.

When the miners leave, there is no longer any reason to maintain this infrastructure. A region will not have expanded its economic base because of a continued lack of infrastructure to support other industries.

Limited public funds are ideally allocated towards projects that improve people's quality of life over the long haul, not towards supporting operations that provide short-term infusions of tax revenue.

Enormous Costs >

Miners do not pay for expenses outside of their single-aim operation.

However, local people bear the brunt of enormous social and ecological costs from mining (and illegal logging). As mentioned, social costs come in the form of corruption. Portions of the public treasury are diverted towards "special interests" (mining) infrastructure and not on programs that expand the economic base like education and job training.

Natural calamities, which kill hundreds, routinely occur due to soil depletion and/or instability. Public resources such as underground water and natural streams are permanently harmed. Additionally, damage to the ecosystem harms farmers who depend on agriculture for their livelihood.

Local mining places a downward pressure on the Philippine peso while improving the strength of foreign currencies.

Finally, investable capital (profits) is exported overseas to develop other economies while local communities receive a tiny percentage of royalties.

Conclusion >

The Philippines has had a long history of receiving crumbs from outside industry in exchange for its vast wealth of resources. Officials look at the cash payments from bribes as a way to stay in office.

But if you take a closer look, the country sits atop enormous natural resources such as minerals, natural gas and agriculture, and is indeed one of the most resource-rich nations in the world.

For decades, the Philippines never developed local industries (such as a competitive manufacturing base or processing industries such as energy refineries), to take advantage of these resources. It never developed its massive natural gas repository due to widespread corruption that would impede energy operators from doing their jobs.

Unlike India and China, the Philippines also never significantly improved the quality of its workforce (with the exception of English and medical-related skills) to meet the evolving demands of the global marketplace.

Today, the biggest segment of the Filipino population live at or below the poverty line. Ten percent of the population have chosen to seek work outside of the country.

Who's responsible? There's an easy answer. And it's not the foreigners.