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The Philippines’ mining dilemma: Navigating critical minerals demand, environmental conservation and indigenous rights

The demand for critical minerals like nickel, cobalt and rare earth elements has surged in recent years due to their indispensable role in modern technologies and green energy solutions. Under the Paris Agreement, achieving global climate stabilization goals necessitates a fourfold increase in mineral requirements for renewable energy technologies by 2040.

The Philippines, endowed with substantial but largely untapped reserves of copper, gold, nickel, zinc and silver, stands poised to benefit economically from this global demand surge, urging greater investment in its mining sector. Presently, only 5 percent of these reserves have been explored, with a mere 3 percent covered by mining contracts. President Ferdinand Marcos Jr.’s administration has actively pursued increased investments from countries such as the United States and Japan to diversify the critical minerals supply chain away from China. In the first quarter of 2023 alone, the Philippines was China’s largest supplier of nickel ore, exporting 3.48 million tons. However, geopolitical dynamics and territorial disputes in the South China Sea have prompted the Philippine government to seek closer alignment with the United States, aiming to expand further into the critical minerals market under the Biden administration’s Inflation Reduction Act.

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Efforts between the U.S. and the Philippines to develop the critical minerals sector are already underway. On November 16, 2023, the University of the Philippines Public Administration Foundation and five Philippine government agencies, in collaboration with the U.S. Agency for International Development and the U.S. Commercial Service, signed an MoU to launch a $5 million technical assistance program. This initiative aims to bolster the Philippines’ critical minerals sector, supporting its aspiration to become a significant player in the global clean energy value chain.

During the MoU signing event, Environment Secretary Maria Antonia Yulo-Loyzaga underscored the importance of sustainable resource management, while Ernesto Perez, director of the Anti-Red Tape Authority, highlighted streamlined regulations and environmental preservation efforts.

Environmental conservation is of paramount concern not only to Philippine government agencies but also to the country’s indigenous populations. Despite comprising approximately 15 percent of the total population, indigenous communities witness nearly 60 percent of all mining activities occurring on their ancestral lands.

Open-Pit Mining (OPM) stands as the predominant and most destructive mining method employed in the Philippines. The large-scale removal of vegetation and topsoil devastates habitats and fragile ecosystems across the island archipelago, recognized as one of the world’s 17 megadiverse countries, boasting over 52,177 described species. OPM is notorious for causing extensive contamination of water bodies and deteriorating air quality due to heavy machinery operations and the dispersion of particulate matter.

Although the Department of Environment and Natural Resources imposed a ban on OPM in 2017, this measure was reversed in late 2021 by Environment Secretary Roy Cimatu, citing the imperative of economic growth amidst the COVID-19 pandemic. The lifting of the OPM ban poses significant environmental and livelihood threats to local populations, particularly those on ancestral lands. These practices frequently proceed without the knowledge or consent of Indigenous peoples, ostensibly safeguarded under the Indigenous People’s Rights Act of 1997 (IPRA).

However, the preceding 1995 Philippine Mining Act appears to supersede such protections under the IPRA, asserting, “Mineral resources are owned by the State and the exploration, development, utilization, and processing thereof shall be under its full control and supervision.” This creates a clear conflict between the state’s claim to mineral ownership and its supervision versus the IPRA’s recognition of Indigenous peoples’ rights to negotiate terms and conditions for natural resource exploration in ancestral domains. The IPRA mandates Indigenous Free Prior and Informed Consent (FPIC) for the granting of any concession, license, lease, or production-sharing agreement within these domains. FPIC processes typically involve village leaders or elder councils, theoretically consulting representative institutions to ultimately decide on granting concessions for external operations, including mining.

However, further scrutiny reveals that the FPIC requirement often fails to ensure adequate representation of Indigenous community interests. Local governments have been known to circumvent FPIC clauses by appointing an “alternative” council of Indigenous elders who, unlike their representative counterparts, tend to favor mining practices and grant concessions for the use of “their” ancestral domains. A study by the German Society for International Cooperation found that 38.2 percent of reviewed cases where FPIC was “granted” exhibited multiple violations, primarily stemming from inadequate information provided to Indigenous communities.

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