By: Michael Reckordt
The German government and the European Union

You might wonder why a guy from a country far away is writing an article Aquino and Miningabout mining in the Philippines. The city of Essen in Germany is more than 11.000 kilometers away from Davao (twelve times the distance between Davao and Manila). So, why does mining in the Philippines matters to us? Both Germany and the EU are involved in mining in several ways. First, we have neoliberal policies supporting mining. Second, our companies and investors frequently visit the Philippines. Third, our consumption of resources exceeds the natural resources that are available in our own country. And fourth, German civil society is engaged in solidarity work as well as NGOs and development agencies to support Filipin@s fighting for their rights. These are significant connections and interactions. Let’s try to get a clearer picture what is happening.

German and EU policy

A few years ago, the German industry (“Bundesverband der Deutschen Industrie” (BDI); they call themselves “the voice of the German industry” but they are “Federation of German Industries”) had a debate with the German government about natural resources. What was the problem? Germany no longer has any (big) mining companies that are active in foreign countries. Germany only has quarry and coal mining industry but no resources like The Blue Structure of the Orange Systemcopper, gold, nickel or silver are found in the country. That was not a problem as long as the prices for raw materials were very low, as they were in the 1980s and 1990s. It was very cheap for the German industry to buy raw materials and resources in the world market – and most Germans are very proud of their car industry, machineries industry. These are all, industries that use a lot of raw materials, especially copper, steal, and such raw materials – to buy raw materials in the world market. But in the late 1990s new competitors and emerging markets came up in this world market. China, Russia, India, Brazil, but also countries from Southeast Asia like the Philippines, Indonesia or Thailand started producing computer, cell phones, cars, notebooks and other high-end products that require a lot of resources. Consequently, prices for copper, nickel, rare Earth materials and other metals start rising.In reaction to that, the EU published in 2008 the “The Raw Materials Initiative – Meeting our critical needs for growth and jobs in Europe” (European Commission 2008). It was a very neoliberal agenda, saying the EU must prevent other countries from discounting their export of raw materials, in order to introduce high taxes on mineral consumption. Instead of that the EU pushed for open (not only) raw material markets all in the world, where European companies and investors can invest and mine, if they want to. In 2011, they published a new initiative called “Tackling the challenges in commodity markets and on raw materials” (European Commission 2011). This paper was not as harsh anymore, but nevertheless, the goal was clear: to provide Europe and the European industry with all the raw materials they want to have. It is not about global fair consumption, it is not about resource-justice and it is not about having Human Rights, climate change and ecological sustainability in the center of the interests.To be honest, the Philippines are not in the core of these papers, because with the “Mining Act of 1995”, the government already provides most of the wishes the European industry has.

  • Under the FTAA foreign companies and investors can own 100 percent of capital shares in the Philippine mining sector.
  • Companies can hold up to 81.000 hectares (offshore up to 324.000 hectares).
  • The time range of the concessions is 25 years, but could be extended up to 50 years.
  • The use of water and forests in the concession area is for free.
  • There is repatriation of investments, remittance of earnings, freedom from expropriation and requisition of investment.
  • Extras are e.g. tax-holidays or the possibility to get machineries in and out without import or export taxes.

Investments

There are a lot European mining companies already in the Philippines. BHP Billiton, for example, was one of the developers of the Pujada Project in Mindanao, but dropped out in 2009 because of disagreements with their local partner. Also Xstrata, a company from Switzerland, is active in Mindanao. They developed the Tampakan Gold and Copper Project. Xstrata has more than 60 percent of shares in Sagittarius Mining Inc, (SMI) and control over the management of the Tampakan project.

Also almost all big companies are traded in European stock markets like London or Frankfurt. Thus, German and European investors can invest in these mining companies. There are no German mining companies in the Philippines but German money is involved. The Deutsche Bank (German Bank) and the Commerzbank (Commercial Bank) are giving loans and credits. The Deutsche Bank is for example a minor shareholder of Xstrata ,and the Commerzbank gave loans to Lepanto for their gold projects in the Cordillera Administrative Region (City of Mankayan). Also, the German logistics company DHL has announced that they are interested in working with mining companies. As you can see, there is http://www.asienhaus.de/public/archiv/German_Money_for_Philippine_Gold.pdf).

Minerals in your Cellphone

Resource consumption

The resource consumption of an average European is three times as high as the consumption of an average Asian and four times as high as that of an average African. Imported resources are used in nearly all products of the industry. E.g. cell phones contain plastics, ceramics, copper, gold, silver, tantalum, nickel, iron, palladium and much more raw materials. In six (!) normal cell phones is as much gold as Xstrata/SMI will extract from one ton (!) of minerals in Tampakan. Xstrata/SMI reported that in the totaling 2.4 billion metric tons, a ton has an average grade of 6.5 kilogram of copper and 0.26 gram of gold. In 2010, 5.1 billion mobile cell phones were in use worldwide. That means also a lot of waste. The UNEP says that there are 40 million tons of electronic waste each year in the world, 8 to 9 million tons from the EU alone. If you could reduce the consumption and start a better recycling system, you could spare new large- and small-scale mines.

But it’s not only the industry and the “normal consumption” of resources. A lot of people use, for example, gold as an investment, because prices are more or less stable and increased over the last decades. German investors used 127 tons of Gold for this purpose in 2011! So, 127 tons of Gold were produced exclusively for the purpose that some Germans packed it into a safe and feel secure.

Solidarity

ZenarchyThere are a lot of NGOs and social movements in Europe and Germany working on mining issues. Some published an “Alternative resource policy” for the German government. Also, there are comments on the European strategy that criticize the policy paper and urge the European Commission to re-think their neoliberal agenda. They ask for putting Human Rights, Indigenous Rights and ecology in the center stage.

More and more information is available for the public, politicians, and also for banks and companies to re-think their investments. There are also lobby activities to speak with German and European parliamentarians. Sadly, in Germany as in Europe the conservative and neoliberal parties are in power.

Last year, we visited the mining areas in Tampakan (Mindanao) and Mankayan (Cordillera Adm. Region, Luzon) to speak with the affected people. We will publish a book later this year to inform the German about public what is happening.


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