Mining is a model of Faustian economics

11

YEN MAKABENTA

First read
IN THE discussion of the future of mining or mining policy, the debate will inevitably be dragged to a contention between economic growth and environment.

Mining will plead its case by highlighting the contribution that it makes to the economy and the gross domestic product (GDP), and the number of jobs and families that it supports.

Environmentalists, in turn, will unfurl their graphic evidence of devastation, waste and greed in the mining of natural resources.

My sympathies in the debate have been shaped in part by my seeing firsthand the impact of mining on some of the nation’s mountains and forests. They have also been influenced by my readings on the epic fight to save the environment and on ecology.


One highly influential reading for me is Wendell Berry‘s classic and respected essay, “Faustian economics,” which was published in Harper’s, May 2008.

Berry is a writer of nonfiction, fiction and poetry. He is noted for his belief that one’s work must be rooted in the environment and be responsive to it. His literary background explains the vividness and resonance of his ideas.

Like tragedy of Dr. Faustus
In “Faustian economics,” Berry essays the theory that in man’s treatment of the environment, in an attempt to master nature, he destroys and creates devastation around him and impoverishes himself. Such destruction is justified as being done for the sake of progress. But it is a delusion.

In the Faustian story, dramatized by Christopher Marlowe in The Tragical History of Doctor Faustus, Dr. Faustus, a man of learning longs to possess all nature’s treasury, to ransack the ocean, and search all corners of the newfound world. To assuage his thirst for knowledge and power, he deeds his soul to Lucifer, in exchange for 24 years of the services of Mephistopheles, nominally Faustus’s slave, but in fact his master. What Faustus reaps from his bargain is hell in the end.

Berry draws a parallel between what man reaps from exploiting and destroying the environment to Faustus’s tragic fate.

Time of inescapable limits
Berry writes: “There is now a growing perception, and not just among a few experts, that we are entering a time of inescapable limits. We are not likely to be granted another world to plunder in compensation for this one. Nor are we likely to believe much longer in our ability too outsmart, by means of science and technology our economic stupidity…We are coming under pressure to understand ourselves to be limited creatures in a limited world.”

In confronting the limits of our reserves of cheap fossil fuel, man is really confronting the end of his customary delusion of “more.”

“Whichever way we turn, from now on, we are going to find a limit beyond which there will be no more. To hit these limits at top speed is not a rational choice. To start slowing down, with the idea of avoiding catastrophe, is a rational choice, and a viable one if we can recover the necessary political sanity…. We will have to reexamine the economic structure of our lives, and conform them to the tolerances and limits of our earthly places. Here there is no more, our one choice is to make the most and the best of what we have.”

A lesson from the arts
Berry draws some of his ideas from the arts. It is the artists, not the scientists, who have dealt unremittingly with the problem of limits. A painting, however large, must finally be bounded by a frame or a wall. A composer or playwright must reckon, at a minimum, with the capacity of an audience to sit still and pay attention. A story, once begun, must end somewhere within the limits of the writer’s and the reader’s memory.

A natural ecosystem survives by the same sort of forms of intricacy, ever-changing, inexhaustible. If we want to make our economic landscapes sustainably and abundantly productive, we must do so by maintaining in them a living formal complexity like that of natural ecosystems. We can do this only by raising to the highest level our mastery of the arts of agriculture, animal husbandry, and ultimately the art of living.

In the arts, no limitless sequence of works is ever implied or looked for. No work of art is necessarily followed by a second work that is necessarily better. In the arts, there are no second chances. We must assume that we had one chance each for the Divine Comedy and King Lear. If Dante and Shakespeare had died before they wrote those poems, nobody would have written them.

The same, Berry says, is true of our arts of land use, our economic arts, which are our arts living. With these, it is once-and-for-all. We will have no chance to redo our experiments with bad agriculture leading to soil loss. The Appalachian Mountains and forests we have destroyed are gone forever. It is now and forevermore too late to use thriftily the first half of the world’s supply of petroleum. In the art of living, we can only start again with what remains.

The one-time mining of resources
In the book, Deep Economy, Bill Mckibben writes of the mistakes in strategy of developing countries, and how they lose natural resources to waste and greed.

He writes: “The growth that has taken place in China and in other developing countries is in many ways suspect. Much of it has come from one-time mining of resources. Indonesia saw a decade and a half of 7 percent growth in the latter part of the 20th century, but when World Resources Institute recalculated the figures to subtract the value of the extracted oil and logged trees from the country’s stock of assets, that growth rate was halved.

The Cambridge economist Partha Dasgupta says such scenarios are common. “GNP misleads because it does not acknowledge that capital assets depreciate. This happens if increases in GNP are brought about by mining vital assets—for example, degrading ecosystems and depleting mineral deposits—without investing appropriate amounts of output in the accumulation of other forms of capital such as knowledge and skills.”

If someone with political connection manages to gain control of, say, a mangrove swamp that serves as the basis of community fishery, he can cut down the mangroves, put in a shrimp farm, and export the prawns to Japan. He gets rich, and the GNP goes up, but most people get steadily poorer. After four or five years, he abandons the shrimp farm because the waters have grown diseased, eliminating even the few jobs he originally provided.

In studying the three decades between 1965 and 1993, Dasgupta found that the inclusive or actual wealth of every country except China declines, even as their GNPs shot up.

Mining no bargain at all
The Faustian bargain is especially distressing in the case of our mining industry, because after it flattens mountains, cuts forests down, and destroys ecosystems, the economic returns are not so significant.

IBON Foundation says the Duterte administration should stand by the closure and suspension orders issued by Environment Secretary Gina Lopez against large-scale mining operations in the country, and should be wary of arguments about the economic contribution of mining to the economy.

IBON debunked claims that large-scale mining has been beneficial to the economy.

“While mineral exports hit a high $3.4 billion in 2013, mining contributed a measly 0.7 percent to gross domestic product (GDP) in the same year. The sector’s contribution grew to this level only from 0.5 percent after more than a decade of operations,” it emphasized.

The group added that the annual average share of mining revenue to total government revenue in 2009 to 2012 was only 1.18 percent.

“The contribution of the mining and quarrying sector to employment was also negligible at 0.7 percent of total employment,” IBON said.

“More than 90 percent of mineral production is exported for consumption of steel industries in other countries while the Philippines has no such industries, despite the Philippines being one of the world’s top producers of gold, copper and nickel.”

And worst of all, the country has had a string of mining disasters since the enactment of the Philippine Mining Act of 1995.

In short, mining is no bargain at all.

yenmakabenta@yahoo.com

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11 Comments

  1. Kayong pro-mining ay subukan ninyong tumira doon sa lugar na winasak ng pagmimina. Tubig na nilason at kapaligirang mapanganib sa ano mang may buhay –wild and domesticated animals– at damahin kung kayo’y mabubuhay ng matiwasay. Walang katapusang paghahangad aka gahaman ang bumabalot ngayon sa karamihang nasa likud ng mga mining companies. Wala nang damdaming makatao at pagpapahalaga sa kalikasan –binulag ng matinding paghahangad sa materyal na bagay.

  2. George F Guillermo on

    Mineral land is one of the land classifications of the public domain as prescribed by the Phil Constitution which must be explored, developed and utilized by the country. It comprised about 3% of the total land area (30 million hectares) of the country. These are legally proclaimed in accordance with the Constitution as Mineral lands. The Constitution mandated the State to undertake mining activities by 3 options: undertake it directly by the State or by co-production and joint venture, or by production-sharing agreement. In doing this properly, the State must develop and continue to improve the science and technology in the development and utilization of the mineral resources as mandated by the Constitution to optimize the mineral sector contribution to the economy especially in sustaining the creation of jobs for the country.
    Since 70 % of the total land area of the country is mountainous or practically watershed areas, almost all mineral lands/resources are located in the mountains or watersheds, thus the context or basis why Sec Lopez is closing down the mining firms because they are located in watersheds is misleading or she does not know what she is talking about. Being located in watersheds is normal and a given reality for mineral lands. Actually, strictly speaking, no land area in the country which is not a part of a watershed.
    To have sustained growth and productivity, the country needs a body or agency specialized in the development and improvement of the science and technology of natural resources which is unlike today that the Environment Department (DENR) itself is the one limiting the growth of the natural resources sector as its common option in confronting environmental issues/challenges is to “closed down” mining firms instead of finding technological or science-based solutions. This situation greatly contributes to the poor and inappropriate policies on natural resources particularly on the forestry sector that prohibits harvesting of natural forest in spite of its inherent renewability and/or massive growth of vegetation. Natural forest is consist of 4-5 generations of trees: mature/semi mature trees, maturing trees as over-story trees and pole-sized/young trees, saplings and seedlings as understory trees which comprise about 60-70% of the total population of trees. These saplings and seedlings need space to grow both on the ground for soil nutrients and above for sunlight. But these understory trees will naturally die or grow stunted if the overstorey trees are not selectively and gradually harvested as they continue to develop a “closed-canopy” crown that only them (over-story trees) can receive sufficient sunlight, depriving the understory trees of sunlight for their growth/survival.
    The “no tree cut” policy of the government has caused the poor farmers no option but to make kaingin-making instead as a way of converting the forest into agricultural land so they can plant camote or corn for their survival because they cannot get any economic benefits from the forests. The destructive “kaingin-making” technology persists since until now the DENR has not developed a sustainable harvesting technology nor a policy that allow regulated harvesting by upland farmers/communities living adjacent to natural forests. Kaingin-making is the number one cause of deforestation in the country, not illegal logging or cutting as only those over-story trees and worst the pole-sized trees are cut as saplings and seedlings are left behind since they cannot be utilized as lumber by illegal loggers/cutters.
    Also, poor technology on mining industry resulting to adverse impacts to the environment but can be corrected by the adoption of appropriate and science-based technology. We need more science -based technology to be developed on the proper utilization of our natural resources to optimize the contribution of the natural resources sector to the economy and alleviating poverty in the country. Environment and development can go together. This can only happen when we reorganize the DENR by removing the natural resources sector from the control and bias of anti-natural resources/mining managers, to grow and developed a science-based agency/sector run and/or managed by highly motivated, God-fearing, patriotic, talented and gifted scientists and technologists.

  3. Gina Lopez should be supported. She has clearly pointed out that the mines closed were those operating in watershed areas, which is against the law. The mining companies should not try to blur the issue by their claims of mining being a 70 billion peso industry. The question is into whose pockets is that 70 billion pesos going? The government or the miners? And how much of that 70 billion pesos actually remains in the country to fuel the country’s development?

  4. No, the mining law does not require an open pit mine to be filled in and replanted at the end of mine life. The approved “conditional” ECC for the Tampakan open pit mine had no such plan to backfill the pit and return the land back as closed canopy forests and swidden lands. At end of mine life the toxic pit, stockpile and tailings dam are to be maintained by the government forever. The Mining Act of 1995 was drafted by the mining industry to liberalize mining, and the law opened watersheds that supply potable drinking water and irrigation systems built from government loans to be mined out. But after 22 years of the Mining Act the industry has only managed to increase its contribution to the economy from 0.5% to 0.6%. Its total share in government revenues has averaged a measly 0.87%. GDP is not measured over land area, but over the national economic production. Of mining revenues, the government receives an average of less than 10%. In Caraga the mining sector employs only 0.5% of the labor force. Mining revenues generated in Caraga went to very few.

  5. I don’t know what stage of the mining process the writer has witnessed, but it mining involves excavation which is unattractive by nature. But so is the excavation for roadwork or construction. It would be foolhardy to ban construction on the basis of how ugly it is at the outset. Just as a buiding can be beautiful on its conclusion, a mining site’s open excavation is filled in and replanted once mining is ended, for the law requires it. Perhaps that rehabilitation is the part the writer has not seen?
    IBON likes to point out the small amount the mining industry supposedly places in national coffers, but the operative word is *national*. Naturally, mining has a small contribution to the GDP when you consider that the total land area devoted to it is *less than 3%* of the country’s total land mass. But when you consider it’s contribution to the *local* economy where the mines are located, there is a marked difference. In Caraga the contribution of mining to the regional domestic product is at 22%.
    No one denies there is illegal mining, usually by small-scale miners, and maybe this is what Mr. Makabenta saw. Yet to date Gina’s rampage has not even attempted to audit them, reserving her bile for the large scale miners who are more closely monitored and, unlike the small scale miners, pay regular taxes and fees. The Mining Act of 1995 he mentions was drafted precisely to avoid his Faustian economics. But like many laws in the Philippines, it is not this world-class legislation that is flawed, but its enforcement. And when it is ‘enforced’ it is done without due process being followed, as in the case of the supposedly extra-judicial closures of some mines and suspension of mining permits.

    • No, the mining law does not require an open pit mine to be filled in and replanted at the end of mine life. The approved “conditional” ECC for the Tampakan open pit mine had no such plan to backfill the pit and return the land back as closed canopy forests and swidden lands. At end of mine life the toxic pit, stockpile and tailings dam are to be maintained by the government forever. The Mining Act of 1995 was drafted by the mining industry to liberalize mining, and the law opened watersheds that supply potable drinking water and irrigation systems built from government loans to be mined out. But after 22 years of the Mining Act the industry has only managed to increase its contribution to the economy from 0.5% to 0.6%. Its total share in government revenues has averaged a measly 0.87%. GDP is not measured over land area, but over the national economic production. Of mining revenues, the government receives an average of less than 10%. In Caraga the mining sector employs only 0.5% of the labor force. Mining revenues generated in Caraga went to very few in the region.

    • if I follow your logic, why were mining site left like fully shaved head. do mining companies require strict coordination from lean government personnel to comply basic requirement as a pre-requisite prior to issuance of business permit or whatever formalities to commence mining? denr was forced to close mining operations because of non-conformance as agreed. the due process is visible. what more you and I want? instead of yawning, implement what is required, request for inspection, rectify comments, and do re-mining again. I guess, it’s that simple.

    • The Mining Act IRR requires environmental bonds and programs from these companies, like 10% of CAPEX, and mine rehab funds. An Environmental Work Program and Environmetal Protection and Enhancement Program are required outlining how the rehabilitation will be carried out. This involves not only refilling but regrading and re-greening. An example of this can be seen in Philex Mining’s refilling and reforestation of a discontinued tailings pond. Also with Hinatuan Mining Corporation that restored a mined out area to a point where UP Los Banos uses the location as a research area. You can see the results on their Facebook page. If there is any failure of these mechanisms, it is usually attributable to faulty enforcement.

  6. Mining is obsolete. We don’t need to extract minerals from the ground.

    The technology to produce any element in an industrial scale has already been discovered.

    Just Google for “Russian Scientists Announce Historic Discovery Rendering the Entire System Obsolete”

  7. the only successful “mining” operation so far was done by no other than Madame Imelda R. Marcos

  8. When you rape a virgin and give her a “handsome amount” of P10,000 or even P100,000, do you say it is “responsible rape”? Well, it may not be a perfect analogy with mining. But that is what it is. There is no such thing as responsible mining.

    Calling those who fight for life not only to protest against extra judicial killing and capital punishment. Mining in the Philippines is an unnoticed burning question vis-a-vis whether on March 1, 2017 (Wednesday) Gina Lopez should be confirmed or ousted from DENR by the Committee on Appointments.

    I suggest that the Department of Education, professors, clergy, pastors and textbook writers must review and update our Moral Theology, political science and even Catechism books. They must include a chapter or in the very least least some pages of lurid pictures and discussion on the evil of mining. Bishops, priests, businessmen should take a hard look to where their patromonial investments are locked up.

    while there is almost none as yet in our classroom textbooks, simply google or see in u-tube “Gina Lopez” and the word “open pit mining”. The footages at Surigao or even mining in Marinduque will give you a handful of lessons yelling a statement that there is no such thing as “responsible rape” of our virgin forests, watersheds and mountains.