Reply to Ambassador's Investigation Report on OECD Complaint vs. Intex

10 February 2010

OECD-NCP, Norway
Oslo, Norway

Dear Mr. Norheim,

This is to submit our comment to the investigation report conducted by the Norwegian Ambassador to the Philippines, Knut Solem, regarding the complaint filed against Intex Resources ASA for violation of OECD Guidelines on Multinational Enterprises.

This submission is made in behalf of ALAMIN (Alyansa Laban sa Mina), a civil society federation of Oriental Mindoro, Philippines.

We understand that the OECD Guidelines were formulated to reinforce private efforts to define and implement responsible business conduct, particularly of companies operating outside their home countries. Adherence to the Guidelines is to be encouraged by their respective governments.

As such, we welcome the filing of complaint against Intex Resources ASA, a company operating in both provinces of Oriental and Occidental Mindoro, for allegedly violating OECD Guidelines pertaining to environment, human rights, corruption, compliance to local laws, indigenous rights, among others. We participated in the process by submitting our manifestation to the Norwegian NCP, Are-Jostein Norheim, thru our letter dated 6 November 2009. It is our position that the adverse environmental and social threats and impacts of the project violated the OECD Guidelines on several grounds, and therefore, the company should be made accountable and should not continue to take advantage of our country’s weak regulatory environment.

After more than a year after the complaint was filed, it then was forwarded to the Norway Ambassador to the Philippines for investigations as to the allegations raised in view of alleged violation of the Guidelines. The investigation report was recently released, which is now the subject of this comment.

The report, authored by the Honorable Ambassador Knut Solem and Ture Lundh, made it clear that their “primary task is to obtain points of view and then report these.” And they proposed to offer a brief summary of the various claims and points of views on the issue, based from their personal interviews and their short visit to Oriental Mindoro.

At the outset, we would like to register our objection to the process by which the investigation was conducted with clear bias and partiality to the company, selectively presenting the arguments of pro-mining groups, while undermining the crucial issues and contention of those who are opposing the mining project. To substantiate our assertion, here are our observations based from the report:

1. The report made it appear that the investigation was quite extensive, covering ten meetings with more than one hundred persons in attendance. But analysis of the report will reveal that most of the interviewees were selected, wittingly or unwittingly, from the supporters of the project. Three very long paragraphs (a total of 39 lines) reflects the allegations of Atty. Ben de los Reyes, spokesperson of Intex, detailing the alleged social acceptability, making incredulous claim for local support, claiming that the area is not a watershed, vilifying the lead oppositor as being paid in dollars! Other supporters of the project mentioned in the report include Mayor Apollo Ferraren of San Teodoro, Women’s Organization in Victoria led by Elena Evora, some Barangay counselors in Victoria, Mangyan groups of SADAKI and KABILOGAN, “non-Catholic” Christian Churches in Victoria, and Erlend Grimstad, Managing Director of Intex. Congressman Valencia and Mayor Leachon were reported to be reluctant supporters of the project, although both politicians already deny this allegation in public.

2. Close scrutiny will reveal that the report allotted only two paragraphs to anti-mining groups. The first one is a paragraph summarizing the points raised by ALAMIN (Alyansa Laban sa Mina), lumping together several trivial points, but neglecting more substantial issues raised during the dialogue. Another very short paragraph is found on the last page, averring Fr. Edu Gariguez as the “main opponent of the project,” and discussing his agenda for crafting far more restrictive mining regulations. Unfortunately, other relevant issues raised in dialogue and in written submission were sidetracked and not given space in the report.

3. The report failed to include other key stakeholders to the project who are strongly opposing it, including the political leaders of Victoria, Naujan, Socorro, and Calapan. Not even one member of the Provincial Council of Oriental Mindoro was interviewed or included as respondent to the investigation, and none also from the Municipal Council of the stakeholder municipalities, except the three pro-mining ones who were included in the report. The meeting with the Governor of Oriental Mindoro did not materialize due to conflict of schedule and the invitation for meeting was received in a very short notice.

4. The report only considered the position of pro-mining indigenous organizations of SADAKI and KABILOGAN, while neglected to also take into consideration the claim of bigger indigenous organizations (who are opposed to mining), SANAMA and KAMTI, who are the rightful owners of the certificate of ancestral domain claims (CADC), a big portions of which overlap with the mining tenement.

Given the lopsided selection of the interviewees, it is expected that the output of the investigation will reflect the assertions and arguments of the favored group, in this case, the pro-mining participants. The one or two paragraphs from the opposing group comprised only of a token representation and in no way can it outweigh the combined statements of the few but selected supporters of the mining company.

The most incontrovertible flaw of the investigation evidently displayed in the very text of the report is the unbalanced treatment of representative respondent-samples. Considering that there are two contending sides or claims, we expected the report to give fair or equal space to both parties concerned. But this basic principle of observing impartial representation was not observed. As it turned out, the report appeared to be merely a rehash of the mining propaganda and it failed to objectively assess the truthful claims or the allegations regarding the breach of the OECD Guidelines.

Aside from being partial, the investigation report came up with false and factual error in its effort to defend the company and to shield it from admitting any wrongdoing. In other instances, the report reiterated the position of the mining company, in complete disregard to the counter-arguments and contrary allegations of the opposing groups and the local government. The lists of these cases are many, but below are some blatant examples:

1. The investigation went as far as outrightly absolving the company from suspicion of corruption noting that: “The embassy has found no reason to suspect the company of being involved in corruption. None of those the embassy has met with accused or even suspected the company of having acted in a reprehensible way. At all the meetings – whether with opponents or supporters – the embassy had the clear and unambiguous impression that the company is considered to be "clean".

Such statement is very far from the truth! On the contrary, during the meeting at the Norwegian Embassy, I raised the issue of the alleged P2-Million “bribery” of the National Commission on the Indigenous Peoples (NCIP) and the P10-Million dike project in Brgy. Alcate, Victoria. Both cases smack the trend of anomalous transaction in exchange for the projection of social acceptability of the mining project. During the meeting at the Embassy, I remember enjoining the Ambassador to look into my submission for the details on these allegations. Clearly, it is not true that not even one respondent suspected Intex of engaging in corrupt transaction!

In the investigation report conducted by the National Commission on the Indigenous Peoples (NCIP), the indictment for inappropriate and highly irregular transaction was clearly articulated by the investigating team: “There is clearly a blatant disregard of, and failure to observe and comply with the procedure which, as a rule, is required in cases when non-NCIP resources are used to finance NCIP mandated and related activities or projects, such as delineation and titling application activities.”

This finding was submitted to the Ambassador, but it was not given any weight at all, and instead, he claims that no such allegation of corruption is raised at all and the company is considered “clean.”

2. The investigation report also asserted that “The embassy has no information suggesting that the company has violated Philippine legislation. Rather the opposite is true; there is much that indicates that the company is focused on complying with international and Philippine guidelines, rules and legislation.”

It is surprising that the report failed to note the very allegation contained in the OECD Complaint alleging that the company is violating Philippine laws, particularly, the Indigenous Peoples Rights Act of 1997 (in relation to observance of genuine free, prior and informed consent of the indigenous peoples) and the Local Government Code of 1991 (in relation to the moratorium ordinance). The complaint and our subsequent submissions attempted to extensively discuss this contravention of the Guidelines, but the investigation did not bother to even glance or take notice of our contention, simply dismissing our side by blanket denial of any violation by the company without any basis or serious inquiry into the issue.

The weak regulatory mechanism in the Philippine government is one of the reasons why even our laws are overturned just to please the foreign investors. The observation of the Ambassador is quite right, and on this comment we totally agree with him: “This is not the least important in a country such as the Philippines, where the authorities in general have run over, not to say disregarded, all opposition in their endeavour to obtain foreign investments and revenue.”

3. On the issue of the project’s social acceptability, the Ambassador’s report took the position of the company, believing its statement hook, line and sinker. And it explicitly concluded that “resistance to the project primarily appears to be found among those who are not directly touched or affected by the project.” And it follows therefore that the Future in Our Hands partners in the Philippines “do not appear to be representative of the elements of the local population.”

This line of argument is the company’s way of evading accountability by limiting the scope of the project’s impact to just a handful of communities who are recipient of their projects (the so-called corporate responsibility programs) and therefore supportive of the mining project.

KABILOGAN and SADAKI, being pro-mining Mangyan organizations, organized by the company, in cahoots with the National Commission on the Indigenous Peoples, represent only the minority of the stakeholders. The definition of “free and informed consent” according to Philippine law requires that a pre-requisite condition of “consensus of all members of the ICCs/IPs” should be obtained. The insignificant number of KABILOGAN and SADAKI is far from being such.

Moreover, the impact area of the project covers not just the small communities of the indigenous peoples but the entire watershed ecosystem of Oriental Mindoro. Since the mining concession covers one of the province’s actual watershed areas as duly declared and identified in its Provincial Physical Framework Plan, the Mindoro Nickel Project threatens the food security and ecological integrity of the province.

The strong opposition of the Mindoro population to the project had long been established through Municipal Resolutions of the affected communities and in many mobilizations attended by thousands of protesters. The attempt of the company to project a semblance of social acceptability through manipulated survey is objectionable. Intex surveys were marred by serious irregularity and deception. It was conducted by the company itself, with corresponding payment for the enumerators – P50 for each “yes” answer that they will get, and P20 for “no”.

Many respondents came forward to execute their affidavits or sworn statement questioning the process and the deception that they were subjected to. For example, a 68 year-old housewife confessed of having agreed to sign for “yes” because she was told by the enumerator that mining will guarantee a sure job for her unemployed husband. There were also cases of outright falsification of signatures, as in the case of a 30 year-old daughter who stayed in the hospital to take care of her father who suffered from stroke. When she arrived back in their village, she was surprised to learn that her name and her father’s were both signatories to the “yes” survey of Intex! But this was simply impossible not only because of their long absence, but also because her father was paralyzed and could not possibly sign!

4. Regarding the issue of determining whether the area is a critical watershed or not, the report considered it as “core issue.” However, the Ambassador begged off from taking a stand on it, allowing authorities to make expert evaluation on it.

But it is already a well-established fact that the mining concession of Intex is within the critical watershed of Oriental Mindoro. In fact, the Norwegian Agency for Development Cooperation (NORAD), in cooperation with Norwegian Water Resources and Energy Directorate (NVE) funded the project of the Provincial Government of Oriental Mindoro in drafting the Flood Control Master Plan for Bucayao and Mag-asawang Tubig Rivers. The mining concession of Intex Resources is undeniably located within the catchment of the said watershed area.

Supposedly, the established principle of “responsible mining” requires that mining companies should not encroach on watershed areas where social and environmental impacts are very high. The so called “NO GO ZONES” for mining include areas considered as conservation priorities, zones of social conflict, ancestral domains of the indigenous peoples, biodiversity areas, typhoon and earthquake prone areas, among others. Mindoro has all of the above features making it truly a critically threatened island ecosystem.
5. With regard to the legal effect of the mining moratorium, the investigation report insisted that it is not covered by the moratorium since its permit was signed earlier before the ordinance on moratorium was enacted in 2002, therefore it cannot be valid for a law cannot be retroactive in its application. But it should be noted that there is only one Mining Permit that was approved on December 7, 2000, and that is MPSA No. 167-2000-IV, covering only an area of 2,290.6713 hectares.

Intex has other mining application, AMA No. IVB-97, located in Barangay Villa Cerveza, Municipality of Victoria. This is undeniably covered by the moratorium ordinance of Oriental Mindoro since it was only recently approved. Intex has other applications under the jurisdiction of Barangays Pag-asa and San Agustin, Municipality of Sablayan, Occidental Mindoro, namely, AMA No. IVB-101 and AMA No. IVB-103. These areas are also covered by the same prohibition on mining because the Municipality of Sablayan had also passed General Ordinance No. 2007-GO03B declaring a 25-year moratorium on large-scale mining activities within their municipality.

6. The report failed to consider independent studies submitted for its reference to assess the matter more professionally. One research work we recommended was the case study conducted by the Philippine Social Science Council (PSSC) in partnership with the United Nations Development Program (UNDP) in Victoria, Oriental Mindoro. The study attests to the fact that at present, it is mining that is given priority, and the processing of mining permits is given higher priority over the issuance of the indigenous peoples’ title or claim for their ancestral domain.

The other reference document is the study by Robert Goodland & Clive Wicks, Philippines: Mining or Food?. In the said research, it was noted that: “Mining is likely to damage the island’s (Mindoro’s) important food production capacity, its fisheries and its eco-tourism potential and is clearly inconsistent with its sustainable development plan. In the light of other factors, including seismic and climatic conditions, the proposed Intex Nickel project has the potential to cause massive damage for the water catchment area, impacting up to 40,000 hectares of rice producing lands and exasperating flooding of towns and villages.”

There are more inconsistencies, inaccuracies and imprecise assessment of facts, including lapses in terms of ensuring partial evaluation of the data and allegations pertaining to the investigation conducted by the Norwegian Ambassador on Intex Resources case.

We deem that the report investigation is biased and incomplete, and does not reflect the actual reality in Mindoro vis-à-vis the compliance of Intex to the international standard of corporate & ethical responsibility as provided in OECD Guidelines. We believe that the case of Intex in Mindoro is a classic challenge of how the OECD Guidelines can be implemented when “there is an endemic conflict between the goals of corporate profit maximization and those of human rights protection and social development.”

Very truly yours,

Edwin A. Gariguez
ALAMIN, 2/F Patria Bldg., Sto. Nino Cathedral
Calapan City, Oriental Mindoro, Philippines