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|This is the conclusion of Sorsogon Bishop Arturo
Bastes’ statement on the 20th anniversary of the CBCP Pastoral
Letter, “What is Happening to our Beautiful Land?” He writes in
detail his experience as chairman of the Rapu-Rapu Fact-finding
Commission which investigated the environmental violations of
Lafayette, an Australian mining firm.
“Given all of the above, the
Board of Lafayette met on Dec. 18, 2007, and being of the view that
they no longer had reasonable grounds to believe that the Company
could meet its obligations as and when they fell due resolved to
voluntarily appoint Messrs Sutton and McCluskey of Ferrier Hodgson
to the role of Administrator. In making this appointment, the Board
expected that the Administration process would allow all options for
either the sale of the Project or a restructure and recapitalization
of the Lafayette group to be fully explored.” (Directors’
Statement) A very neat way of saying they had gone bankrupt!
“What we feared would happen
has now happened. The flagship mining foreign investor of this
country, certified so by no less than DENR Secretary Reyes, was all
along a financial bluff.
“Those of us from the area,
together with Albay Gov. Joey Salceda, are asking a new DENR, if
“new” it can be called since Reyes is no longer there, and
Atienza has taken his place, to PLEASE, finally, suspend the mining
operation of Lafayette Mining Corp. in Rapu-Rapu following the
firm’s move to go under voluntary administration—a euphemism for
declaration of bankruptcy. DENR should immediately suspend the
permits to mine, mill and transport chemicals granted to Lafayette.
The firm’s financial distress is absolute proof of bad management
and could sacrifice or compromise environmental standards. We and
the Albay Governor are asking: who will maintain the mines tailing
pond once the mining firm seizes to operate? Who will pay the people
of Rapu-Rapu the P16 million arrears in social development programs?
“The DENR has the
responsibility for the integrity of the mine’s facilities to
prevent any mishap especially if some mining chemicals are
misplaced. Given the poor track record of Lafayette, we ask the DENR
Environment Management Bureau to conduct compliance audit on all
environmental concerns—NOW.
“We know that Carlos Dominguez,
chairman and president of Lafayette Philippines, has filed a
petition with the courts for rehabilitation to continue “normal”
operations to protect all its stakeholders. The courts may then
instruct all creditors and suppliers to continue their services and
transactions with the local companies for as long as they are paid
on cash basis. How much cash do they have? How long can they last?
Understandably they will have to have a fire sale—sell whatever
they can to have the cash they need till a knight in shining armour
rides in. Meantime, courtesy of a kindly local court, payment for
existing debts will be suspended until a rehabilitation plan can be
agreed on what will fairly settle all outstanding debts to give hope
for continued operations.
“But has the important lesson
been learned? A company that fails to obtain and retain a social
licence to operate, in other words one that operates without
community approval, is simply not viable—even if one has the
Reyeses’ and whole armies’ arbitrary license to be illogical and
insane, as clearly happened in the Lafayette Rapu-Rapu experience.
“The Lafayette mine is more
than a financial mess. It is an environmental and social failure.
How many of us forewarned the Administration and the DENR that the
project is not socially, technically, environmentally and
financially feasible but, still, they allowed it to proceed. Should
they not be held accountable along with Lafayette to rehabilitate
the island and compensate the local residents for the damages done
by the mine? They also must ensure that enough rehabilitation funds
are available for the affected people in the Island.
“Will not ANZ and the other
banks that have signed the Equator Principles use this opportunity
to demonstrate their commitment to social and environmental
responsibility? Sharing responsibility would be the Banks that now
operate the mine through their Administrator. These banks include
the consortium of lenders (ABN AMRO, ANZ, Investec, SC First Bank,
Standard Chartered, Standard Bank), LG International and KORES,
Korean state companies, and Lafayette’s shareholders. ANZ and the
banks that supported Lafayette should show the communities of
Rapu-Rapu, who will live with the consequences of the failed
investment, what “corporate social responsibility” means in
practice. They can demonstrate this by ensuring that sufficient
funds are set aside for the environmental rehabilitation of the mine
and a sustainable development program for the communities of
Rapu-Rapu.
“To date, the company has not
been required by DENR to set aside money for the final
rehabilitation of the mine. Cannot this terrible Reyes negligence be
remedied by Atienza now? Madame President, it’s your turn to
speak.”
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