Crew Gold response to “Mining in the Philippines – Concerns & Conflicts” report
Business & Human Rights Resource Centre invited Crew Gold to respond to the report, “Mining in the Philippines – Concerns and Conflicts”, by Cathal Doyle (Irish Centre for Human Rights), Clive Wicks (IUCN Commission on Environmental, Economic and Social Policy)and Frank Nally (Columban Faith and Justice Office), Jan 2007, available online at:
Crew Gold sent the following 2 Jan 2007 press release regarding social and environmental concerns about the Mindoro Nickel Project as its response:
2 Jan 2007
Crew Gold and Crew Mineral’s Engagement in the Philippines
Before last weekend, the undersigned was contacted by a journalist from Dagbladet and informed that Crew Gold had been “voted” the least ethical company of the year by Future in our Hands (FIOH). The main reason for this “vote” seems to be in connection with an announcement ofa closed meeting with an anti-mining activist in September that our shareholders were requested to decline. This is of course an honour that we do not appreciate. We have great respect for FIOH’s cause, even though we do not necessarily agree with FIOH in all cases. In September, FIOH stated that they were only “facilitators” of the group that came to Norway, and that they did not have any knowledge of the Mindoro project, of which the visit was about. There has been absolutely no contact between FIOH and Crew since September, and we find it incredibly surprising that FIOH, which must be regarded as a reasonably serious organization, could go from having no knowledge of the case in September, and without having any contact with Crew to get our comment on both unsubstantiated and implausible allegations, can “elect” Crew to anything. We have little desire to publicly criticize a non-profit organization such as FIOH, but this time FIOH has totally failed and produced an unusually bad report that hangs out many people who work very hard and have created over one thousand of jobs in the Philippines. This “election” can therefore not go unchallenged.
In September, a group of anti-mining activists sent a letter to Crew’s shareholders. We were telephoned by some of them, and made aware of this. After we received a copy of this letter and researched who stood behind it, a group of individuals from the Philippines and international anti-mining activists, we requested our shareholders through a letter to not meet, because of the following main points. 1) The group is not made up of official representatives for the indigenous people, but a collection of individuals from different parts of the world, financed by anti-mining activists, apparently in Norway to get financial support. 2) The meeting would be closed, something we are against in principle. 3) The group has a prejudiced attitude towards mining, so the invitation for dialog has no meaning. 4) Certain individuals in the group have, over many years, presented pure lies and gross misrepresentations.
We think that the allegations that have been set forth over many years have been so absurd that we have earlier chosen not to comment on anything other than that which we perceive to be central, and that is that the project should undergo a feasibility study so that all stakeholders have a concrete proposition to proceed with.
When we now choose to comment this time, it is with the hope that journalists, non-profit organisations and others in the future are somewhat more restrained in drawing conclusions too quickly if they are presented with allegations that seem extremely absurd. Crew has no chance to survive, grow or obtain financing if we do not operate ethically.
Mindoro Nickel Project (MNP) is one of 24 projects that the Philippine government has defined as a “flagship project” that they wish to support and stimulate since they are of a size that is regarded to be extremely important to the country’s economy. The Philippines is extremely well endowed with minerals which are underexploited, at the same time, the country has great challenges with regard to poverty and scarcity of means towards public works. The Philippine government has identified IT, mining and agriculture as the three areas where it considers the country to have a competitive advantage. It wishes to stimulate and build up these areas.
For the sake of good order, we point out that most of the things that come forward are from before the undersigned and current staff took over management of the Mindoro Nickel Project.
On 20 September, individuals from the group came forward in the Norwegian press and stated the following:
1)In 1999, Crew “tricked” the Mangyan people into signing (with a fingerprint) an agreement that they claim gives the company the right to build a mine with a processing plant. It is claimed that this was done with “a cup of rice”
2)Crew digs through burial sites
3)The project threatens “the water reservoirs” and will destroy the foundation of nature and culture for the indigenous people of the area
ANSWER 1: Cup of Rice)
The actual agreement with the Mangyan people was made in 1999 and is written and approved by NCIP (National Committee for Indigenous People) and is based on the Indigenous Peoples Rights Act) which is a law that protects the rights of indigenous people. As the agreement was based on this law and written by the NCIP, the claim that the indigenous people were tricked by a cup of rice is absurd. In addition, the agreement includes a royalty of 2% if the project is realised, which is double the royalty required by the law.
The 1999 agreement does not give Crew the automatic right to start mining activity, as has been claimed. In order for Crew to do this, it must complete a feasibility study and earn an ECC (Environmental Compliance Certificate) which among other things requires social acceptance of the project.This means that the entire local population, including the affected indigenous people (of the Mangyan tribe) and politicians will receive a concrete invitation for a public hearing, when the time comes, before any approval to the develop the project will be considered by the authorities.
In addition, it so happens that Mindex, and now Crew, while in the exploration and evaluation phase of the project, which we are still in, must allocate at least 10% of the actual exploration budget to “community assistance” and “social programs”. The company has already gone far beyond this minimum requirement. Some of the things that have been completed are: the building of a new Mangyan Tribal Hall;the building of a suspension bridge for Mangyans over the Aglubang river, which has been difficult to cross during the rainy season; the establishment and operation of a free medical clinic, with nurses and a doctor three days a week, and transportation to the hospital if needed; the establishment of electricity in the village of Villa Cerveza; the distribution of seed and seedlings; the distribution of animals for raising (oxen, pigs and chickens); the reparation and maintenance of infrastructure such as roads and bridges after the monsoon season; the establishment of a crab breeding farm; support to annual cultural events; support for education, etc. During the exploration program, there were about 150 local employees, of which about half were Mangyans. Jobs were rotated as fairly as possible, so that people would find the work useful and enjoyable.
It should be reasonably clear that the accusation that Crew tricked its way to an agreement with the indigenous people is a complete fabrication and without any basis in reality.
ANSWER 2: Burial sites) I have been informed that there was one episode in 1999 where a test pit was dug near a burial site. When this incident is interpreted as Mindex having acted deliberately and with prior knowledge, it is incorrect. According to the geologist who was responsible at the time, different groups of local workers were engaged in collecting samples. One of these groups chose to work in a different place than they had been assigned, and ended up near an old Mangyan burial site in spite of the fact that there were Mangyan workers in the group. The digging work was immediately stopped and compensation was paid. It is important to realise that these sacred grounds are not marked. They were pointed out to the company by the Mangyans in connection with an agreement regarding compensation to the indigenous people that was made when the field work was planned. We perceive bringing up this incident again after 7-8 years as though it were a regular problem as unserious and worthless attempt at sensationalisation.
ANSWER 3: Water reservoirs and social effects/culture) The discussion about which consequences the project will have or not have, on the environment and/or social effects/culture is of extremely limited value, as long as the exploration work is not finished and the feasibility study is not completed. The point with the feasibility study and the associated environmental studies are that the company, in close cooperation with the local population, shall come up with a concrete proposal to how mineral extraction and processing can take place, so that the environmental and social consequences can be evaluated and accommodated. The group’s allegations regarding the consequences to the environment and/or the local culture now are pure speculation and without any concrete backing regarding the project. We took note of this group’s fears many years ago, as with a number of other interest groups’ opinions, and will of course consider these in the preparation of the feasibility study. It appears that the actual opponents of the project almost have a fanatical wish to deny the local population of something concrete to proceed with, and they therefore construct a hypothetical threat scenario.
What are the challenges with Mindoro?
This is not an easy question, but we see paradoxically enough that the “opposition” increases when Crew has less activity in the area and that it decreases when there is a lot of activity. At first this looks strange, but if we look at the daily challenges that large parts of the local population experience, it is maybe not so strange after all. Many families have a daily challenge to get enough food on the table, give an education to the children, take care of the family’s health etc. Then of course it quickly becomes that those who create activity through employment and/or give money or other support get people to side with them as long as the activity and/or support is maintained. If the employment or support is discontinued, it is unfortunately so that the local population, from a completely understandable and basic need easily “changes sides” and easily “changes back” again later when there is more opportunity. This also concerns representatives for the group that was in Norway in September.
The project, which has been ongoing for almost 10 years will need at least 4-5 years before it can be operational, is conceptually speaking very demanding to “sell” in a country such as the Philippines when the development phase the project can take place over 2-3 maybe 4 election periods for politicians, while many of those affected have basic day to day challenges. Under these circumstances, to plan many years ahead in time is not always as relevant.It is extremely challenging for Crew, who must plan 5-10 years in advance. We, as a company, but also non-profit organisations and journalists, must try to understand this from the local situation, and be realistic to the real motivation behind people’s and groups’ standpoints from one day to the next. Mindex paid dearly for its experiences that were based on well meant initiatives where gifts or support to certain people or small groups directly affected by the work that the company did, created envy and jealousy amongst those to bordered to the project, but who were not directly affected and therefore did not receive or have claim to the same support. Both the Philippine mining law and the Indigenous Peoples Rights Act state clearly that the right to compensation applies only to those that are directly affected by a project. This interpretation of the legal framework has been confirmed through recent lawsuits. Unfortunately is it so that in spite of what the law states on who has the right to compensation or not, this problem is very central in the complexity of the case and is one of our biggest challenges.
After I was informed by one of Dagbladet’s journalists of the “election” I called FIOH’s manager on Saturday 30 December. My impression was, as mentioned, that the understanding of the Mindoro project was very limited and that the “election” was based on the fact that we requested our shareholders to not meet with the group that came to Norway. I have already detailed the arguments for this, and so I will not repeat them. Through the conversation it became clear that the main argument that FIOH had against the project was that they thought that the project “COULD” (not that it would) have negative consequences for the indigenous people. At the same time it was acknowledged that the project could be very positive for Mindoro, but that the fear of “POSSIBILY” not being heard in the future had greater weight. I was, to put it mildly, amazed and not least disappointed over this defensive attitude based on pure speculation and the fear for something one does not know anything about.
Our experience is that the Philippines, as a relatively young democracy, is extremely alive and well equipped to take care both of its indigenous people, its environmental interests and its local interests. The legal framework, both within the mining legislation and the Indigenous Peoples Rights Act are extremely comprehensive and better than some we have seen in other places. So we think that the fear of not being heard is both over exaggerated and misunderstood.It is not possible to improve a society by deliberately discouraging access to information on the opportunities one has to improve people’s living conditions. This cannot be a correct policy. We are talking about a unique opportunity for Mindoro, which has many economic and social challenges, to solve many of these. We think that it would be directly irresponsible to not explain the project so that the population can make a decision based on an objective and honest basis.
I can assure Crew’s shareholders that the company tries to be 100% ethical in all of its operations and we think that FIOH has conducted its “election” based on groundless arguments.
Only in a couple of years might we be able to evaluate concrete solutions and the related consequences of the project. We have full understanding for, and are willing to take the financial and operational risk that we do not get final approval, but we think that it is meaningless not to give the local people and politicians an opportunity to evaluate a concrete proposal. All of the fears that have been stirred up will be addressed in the feasibility study. We are extremely interested in local support. The most successful mining projects are those with good local anchoring and local employees. Today we have almost 2 000 employees in the Philippines, of which only 7 are foreigners. The manager for the office in Manila is Filipino, as is the manager of the Masara Mine. We will get a meaningful understanding of support and opposition the day that a concrete proposal exists. Let us work constructively together so that we can ensure that all issues have been examined and have been solved in an acceptable way in order to take a rational decision.
Happy New Year
Best regards,
Jan A. Vestrum
President & CEO
Crew Gold Corp Ltd.