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Vignettes by Peter Wallace


PUBLISHED ON THE OCEANIA VOLUME VI ISSUE 3 MAY – JUNE 2013



THE KIDS KNOW

When there was 5 million or so in the Neanderthal world looking after the environment wasn’t an issue. Chop down a tree to cook the meat of wild animals, who cared. But when there’s 7 billion, well that’s another story isn’t it? I wonder if Malthus will finally be proven right, I for one wouldn’t be surprised. Thomas Malthus you’ll remember predicted in 1798 that “population increase would outpace increases in the means of subsistence”.

The multitude of environmental groups are quite right, mankind is destroying the world. But their all or nothing attitude is not, although I’ll admit it may be necessary in order to get to a compromise. But compromise it has to be.

Ideally we should never chop down another tree, but we have to live. And living needs the use of wood. For wood, of course there’s an easy solution: cut a tree, plant two. But with 7 billion people, where’s the land to plant them on? So, slowing population growth to zero makes some great sense, 7 billion is quite enough. It’s something the Philippine (and I stress Philippine because other Catholic countries don’t hold the same biologically unsupported belief) Catholic bishops and priests might wish to reflect upon.

What is needed is visionary governments with the ability to enforce their visions because the other major impact on the world after size of population is greed. Greed has destroyed forests, overfished seas, and converted land into developments without thought for the environment (where are the parks with carbon-absorbing trees in Philippine cities?).

Which brings us to mining, mining destroys large areas of the earth, but responsible mining puts it back into good shape after. Mining can’t be banned, we need the metals of the earth to survive, to live well. Will we run out of metals sometime in the future? Maybe, but it will be far, far into the future. Major metals are not at a risk of immediate depletion especially because mines have definitely become more efficient in extracting ore. And technology is developing products that more and more use less and less. There are some minor minerals that might face shortage in this century but suitable substitutes will inevitably be found. There’s a strong trend towards recyclable products. Biofuels are but one recent example. And the simple need to make profit against increasing competition is forcing use of ever less metal in any product. What could also slow demand for our limited supply of metals is slow or no population growth.

So concerted efforts to address the population explosion and the success of mad scientists to design less and less metal into their genius designs mean we will likely have all the metal we’ll need for millennia to come. Technology will be developed to extract those metals from where they can’t today too. The earth is pretty big you know.

A dramatic example of technology saving the earth is lighting. We all use light bulbs. The first incandescent bulbs (carbon lamp) were able to convert 100 watts of electricity into 140 lumens of light, so to get 600 lumens (a reasonable amount of light), you needed 430 watts, that was back in 1879. During the 1900’s, you only needed 75 watts to produce 600 lumens with tungsten lamps. But that was still too much, fluorescents were invented. The first fluorescents required 20 watts to produce 600 lumens. Then came CFL’s (compact fluorescent lights) that we all use today. With them 600 lumens needs only 13-15 watts. Now is coming LED’s where you only need 3-5 watts to produce the same light output. That means a smaller generator, that means less fuel to run it, that means less pollutants. It’s the same in ever so many other products. Just wait till we’re all driving electric cars, far less metal in those (all we need is a battery breakthrough. It will happen).

So, let’s mine, but do so responsibly. That’s the real issue, not “no mining” but “no irresponsible mining.” As an added benefit to the wealth it brings a country, it brings wealth and development to where it’s most needed: the countryside. Responsible mines support their local communities. If you want to be cynical about it, it’s in their selfish interests to do so. But whatever the motive, it gets done. Roads get built, schools are created, power plants are supplied, even hospitals (and basketball courts? Or is that just for the politicians to do). Responsible large-scale Philippine mines have planted over 15 million trees in the past 10 years. And members of the Chamber of Mines of the Philippines have pledged to support the government’s National Greening Program by planting more than 24 million trees and seedlings until 2016. So mining is doing something the greenies are not, it’s planting trees not just ranting about their destruction. I wonder how many trees the Church has planted.

When my wife went to school in Baguio, two buses arrived every morning with kids from two mining towns. All the other kids walked to school, their communities weren’t rich enough to buy buses.

In January there was a mining forum and photo exhibit at De La Salle University. Listen to what some of the kids said:

“Prior to the exhibit, my notion of mining is mainly digging for gold and other minerals that can destroy our natural resources. I always had that bad notion because that was the fact presented to me since high school. I even signed the No to Mining in Palawan advocacy to help a friend in her school assignment. But this exhibit was different: I saw how mining helped improve education, provide health care, improve infrastructure, and most of all, improve life of every Filipino.”

“I was shocked by the pictures I saw. Instead of selfish desires of mining companies, I saw fruitful villages. Instead of destruction, I saw harmony among villagers of the communities. I never imagined that communities can be so well-developed even if they are near mine areas.”

“From the pictures with captions, I learned that there is such a thing called rehabilitation process wherein they rehabilitate the lands and mountains that they mine and they give back more, especially to the community. For me, this is a big bonus to the argument of how mining can be positive.”

“CSRs have to be stapled in every mining firm. I contemplated on SMI, OceanaGold, Rio Tuba, and Mindoro Nickel and was surprised on how they take CSR seriously in the sense that the environment is part of their company value.”

“Responsible mining is possible and that the true problem is on small-scale mining companies that do not pay their taxes to the government.”


Or this one: I realized that some people who stand up for a certain cause do not really understand what they are fighting for sometimes. The forum opened my eyes to a world of possibilities not only in mining but in other aspects of life. I learned that before I take a stand on certain issues, I must be able to know the concerns of both sides. Don’t you wish NGO’s could think like that?

It was probably best summed up in this: Before the photo exhibit, and forum, my answer to the question “is mining good or bad?” is definitely bad as I was too focused on all its disadvantages that I concluded mining as an evil in all its aspects. But after the privilege of attending this event, I must say that mining could be good as well, as long as 2 conditions, and I stress, are satisfied: one, they must do responsible mining; and two, that they do not go beyond what they should, i.e., that they take into account the sustainability of natural resources.

But I think I liked this best: The mining industry is not the problem. It is the government, the policies that they issue, and some practices that make things complicated.” “I think what destroys nature and communities is not mining per se, but greed and thirst for power, which cause people to do illegal mining, and the government to enter into corruption. Indeed.

It’s sad that the President has been so badly informed on mining, he has not seen what the kids saw. It’s particularly sad as in October last year he, through his office “Reiterated the potential of the mining industry in the Philippines given the estimated untapped mineral wealth amounting to 951 billion dollars. He said the Philippines wishes to take advantage of this wealth in the most equitable and environmentally -friendly manner.”

“The issuance of Executive Order 79 earlier this year, which laid out the legal framework under which mining can be practiced in the Philippines, is putting an end to years where mining was often seen as an environmentally harmful and socially unacceptable industry.”

“Soon, we expect a bill to be passed through Congress that will make sure that the benefits of mining will be experienced, in an equitable manner, by all stakeholders—from the investors, to the government, and to current and future generations of Filipinos.”

Well, that’s not what happened. Instead new mining ventures were brought to a stop as the taxes to be paid were sent to Congress to decide. No one invests when you don’t know what taxes you’ll pay. It’s something that need not have happened had the President been properly informed. Because, in fact, the government does get a fair share of the revenues earned under the present law.

If you put mining on hold (which essentially is what Executive Order 79 has done), it doesn’t just slow down the development of mines, it deprives local people of livelihood. The loss of taxes means fewer schools can be built, and less exports means fewer dollars for the kitty. And miners, those already here and those interested to come, will start to look elsewhere for more welcoming environments. These are permanent losses, they don’t come back once the tax regime is known. In fact, because of the mines that now won’t start till a new tax law is in place government will lose revenues that will take many, many years to recover, if at all. Certainly it means the Aquino government has lost revenue the next three years could have brought in (some miners, foreign and Filipino, are in Myanmar today because of the doubts EO 79 has raised). Potential investors in other fields wonder if it’s wise to invest in a country that can change the rules of the game so arbitrarily, so they don’t come; or worse, being here already, they leave and go to neighboring countries that understand the fierce competition for limited capital investment. The loss isn’t just short-term; it’s long-term and widespread.

The President should listen to the kids. Mining is compatible with environmental protection – if it’s done responsibly. As the kids saw. And it brings wealth to everyone.

PETER WALLACE is President of THE WALLACE BUSINESS FORUM, a now well-known thinktank and consultancy he formed in 1982 after seven years of managing MNC businesses in the Philippines. He is on the Boards of a number of business chambers, and was a founding member of ANZCHAM and has been on the Board ever since.

For more information about The Oceania, please call (632) 755 8841 or email communications@anzcham.com

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Ian Porter
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Ian Porter
2012 - 2013
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2010 - 2012
Richard Barclay
2002 - 2010
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2000 - 2002
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1999 - 2000
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1994 - 1999
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1992 - 1994
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1990 - 1992
Peter Wallace
1987 - 1990
Simon Israel
1986 - 1987
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1984 - 1986
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1981 - 1984

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