24-26 MARCH 1999
BOAC TRAGEDY AFTERMATH
Canadian Transnational Dumps Waste, Responsibility in Marinduque

by CATHERINE COUMANS
BOAC, MARINDUQUE


TODAY MARKS the third death anniversary of the Boac River, this town's major water system, which residents once used as a source of food, irrigation and water for livestock. Three years ago, more than three million tons of concrete-like mine waste burst forth from a badly-sealed drainage tunnel and choked off all life in the 26-km. long Boac River. The river flooded in various locations, inundating cropland and causing people to flee their homes. Two villages were cut off entirely and had to be evacuated by helicopter. Then President Fidel Ramos declared the whole island of Marinduque—some 170 km. south of Manila—a calamity zone.

This tailing spill at the Marcopper Mining Corporation copper mine remains the worst mining disaster in Philippine history and among the most widely reported environmental fiascos in the industry. The national government had acted quickly against Marcopper, filing criminal charges against five of the company's officials, including President John Loney and Resident Manager Steve Reid. Its San Antonio Mine, which had been in operation for only a few years, was also shut down. Loney and Reid have since been indicted along with another Marcopper official.

To this day, however, Marcopper and one of its former major shareholders Placer Dome Inc. deny responsibility for most of the damages caused by mining activities here. At the same time, both companies are actively lobbying politicians at local and national levels to reopen the moribund mine. Marcopper has made it clear that it will not be frightened away by local opposition to the San Antonio Mine's resumption of operations. In 1990, it had estimated the San Antonio Orebody to hold some 200 million metric tons of ore, which would provide it enough work for at least two decades. The San Antonio was expected to yield some 662,000 tons of copper and about 6.9 million grams of gold for a total value of P40.3 billion.

But despite Marcopper's determination to exact more profits from the mine, an increasingly united front presented by Marinduqueños may yet thwart its efforts.

The truth is that the March 24, 1996 spill here was only the latest in a long history of mining-related disasters in Marinduque. Three years of hardship have initiated residents of the municipality of Boac into a wretched fellowship with residents of the neighboring municipalities of Mogpog and Santa Cruz, where 30 years of irresponsible mining under the management of Canadian mining giant Placer Dome have left a legacy of environmental contamination, loss of livelihood, and health concerns.

Today, residents of Boac, Mogpog and Santa Cruz are joining forces. Villagers, nongovernmental organizations (NGOs), local Church organizers, and even local politicians now realize that this may be their last chance to demand a thorough rehabilitation of polluted bays, rivers and land and meaningful compensation for affected villagers. Marinduqueños are also uniting in their opposition to the resumption of large-scale mining on their island. They are determined to protect those communities that have been spared severe damage to date but will likely be targeted for mine waste disposal if the San Antonio Mine reopens.

Placer Dome, which officially divested its 40 percent share in Marcopper in 1997, has claimed that it has no further plans to mine in Marinduque and has repeatedly said that Marcopper has ''new owners." But Placer Dome remains among the objects of the Marinduqueños' ire not only because of its alleged past sins on the island, but also because it has yet to make good on its promise to rid the Boac River of the tailings from the 1996 spill.

In addition, local officials as well as observers now suspect that Placer Dome is being less than forthright about its present relationship with Marcopper.

Placer Dome is among the top five gold mining companies in the world. In its home country of Canada, it is second only to Barrick Gold. In 1998, Placer Dome posted profits of 105 million dollars. The company employs some 8,400 people in its 14 mines scattered worldwide.

Despite its strong showing in the mining industry, its reputation is far from stellar. Placer Dome is in conflict with local communities at a number of its operations, including the Western Shoshone tribe in Nevada in the United States, where the company has been accused of polluting Native American land. In Papua New Guinea, the people of the Strickland River system have been fighting Placer Dome for years, because the company dumps waste directly into the river, leading to environmental damage and serious health risks. The company was also thrown out of Costa Rica recently, for causing environmental problems there.

By the time it spilled millions of tons of mine tailings into the Boac River, Placer Dome had been in Marinduque for 27 years. Although it held only 40 percent of Marcopper shares, it was responsible for the day-to-day and technical operations of the company's mines; in exchange for securing and guaranteeing the loans needed to finance these mines, Placer Dome had been guaranteed the two top management positions. There was therefore no question over who was calling the shots when the accident happened, or who was responsible for snuffing all the life out in another river on the island years before, or for the degradation of Calancan Bay due to mine waste.

In fairness, Placer Dome did pledge to clean up the Boac River of the tailings, even as it denied responsibility for the spill, pointing instead to a minor earthquake that took place a week before the tragedy as the real culprit. Yet three years after the incident, some 30 percent of the millions of tons of tailings that killed the river are still in a channel Placer Dome dredged at the coastal mouth of the Boac. The rest of the tailings remain upriver, mainly along the river's banks, or have flowed into the sea where they have covered coral reefs.

Placer Dome has admitted that as of February 1997, the sulphur in the exposed tailings has started to oxidize, causing the formation of toxic sulfuric acid and the potential release of heavy metals, such as cadmium, lead, mercury, zinc and arsenic, contained in the tailings.

Medical tests done in 1996, and then in 1997, by a joint team of scientists from the Department of Health and the University of the Philippines have confirmed that Boac residents living along the river are already suffering from heavy metal contamination. But this is no surprise. Documentation shows that the river has served as a disposal site for waste run-off from a Marcopper mine site since the 1970s. As recently as 1996, a United Nations investigation identified unacceptable levels of heavy metals in parts of the river and noticed toxic mine waste leaching into the river through a faulty waste rock siltation dam.

Placer Dome now wants to deposit the tailings into the Tablas Strait by using what is known as the Submarine Tailings Disposal (STD) system. This method entails pumping the tailings into the sea through an underwater pipe. In spite of enormous pressure from the mining industry to accept the proposal, the Department of Environment and Natural Resources ( DENR) has just turned down Placer Dome's latest application to put an STD system here on the basis that it is "socially unacceptable" to Marinduqueños. Placer Dome spokesperson Hugh Leggatt says the company will continue to advocate this tailings disposal option; the DENR expects an appeal.

A permit to dump the tailings now stuck in the Boac River into the Tablas Strait would set a precedent for long-term sea dumping of mine muck. And should the mine reopen, the still pristine waters off the coast of the municipality of Torrijos is likely to become the next dumping ground.

There is also one crucial fact Placer Dome had neglected to tell Marinduqueños about the STD, but which some local officials have found out anyway: the method has long been banned in the company's home country, Canada.

Canada had experimented with STD, most notably at the Island Copper Mine that started operations in 1971. But the tailings did not stay where consultants predicted they would, spreading instead over a much wider area and into shallow waters where marine life was severely affected. The tailings also remained suspended in the seawater for longer than predicted causing turbidity, which drives away fish. Loss of marine life and potential metal contamination of marine species are among the other problems associated with STD systems. As a result, in 1977, the Canadian government banned the disposal of mine waste into Canadian coastal waters for all new mines.

In 1996, under renewed pressure from the local mining industry there, the Canadian government initiated another thorough scientific review of STD systems at mines around the world. The outcome of this process was the upholding of the ban on ocean disposal of tailings and even tightening the legislation to close existing loopholes. The US Environment Protection Agency has also held firm on its own ban on the practice despite heavy lobbying from the US mining industry.

Canadian government official Robert McCandless, a geologist who specializes in mining issues, is dismayed that Canadian mining companies are promoting STD abroad. "I don't believe they should be advocating doing things that are illegal," he told the Canadian media last December. "When doctors go abroad they continue to sterilize their instruments. They don't change their practices just because they are in a foreign country."

One probable reason why STD is being pushed by Placer Dome in Marinduque is because the method is relatively among the cheapest to do. But McCandless has pointed to the advanced technology used in Canada for containing tailings on land, and while it costs the companies more, the Environment Canada official has suggested that it is this knowledge that should be exported.

Observers, however, say that may be expecting too much of a transnational company that has tried to pass off a major mining accident as being due to an "act of God." In the reams of documentation on the spill here, Placer Dome consistently points to an earthquake that took place on March 17, 1996 as having caused the tunnel to spew the tailings inside it.

The Philippine Institute of Volcanology and Seismology (Phivolcs) confirms that there was indeed an earthquake a week before the accident. But Phivolcs personnel describe it as being such "insignificant" event that no Marinduqueño had reported feeling it. Phivolcs had not deemed it necessary to issue a bulletin.

What investigations following the spill have revealed, though, is a corporate culture of environmental negligence, set at the highest level by managers Loney and Reid. In 1996, the United Nations team that visited Marinduque several weeks after the accident noted that "it is evident that environmental management was not a high priority for Marcopper."

The UN researchers questioned Marcopper's use of the mined-out Tapian pit as a containment for tailings from the new San Antonio mine, and wondered why no environmental impact assessment was carried out for this plan.

They wrote that "the unconventional use of the Tapian Pit as a containment system for tailings particularly because of the presence of a disused drainage tunnel near its bottom, should have been sufficient to ensure that risk assessment and contingency planning were carried out. Furthermore, it is clear from cross-sectional diagrams of the drainage tunnel ... that fracture zones and ground water seepage were likely to occur along its entire length. It is possible that had such risk assessment been carried out then the present environmental disaster would not have occurred."

Documents from the Office of Boac Mayor Roberto Madla also show that seepage in the hillside near the tunnel was first reported to Resident Manager Reid as early as August 1995. Reid commissioned an independent consultant's report, which indicated that the tunnel may be failing. Reid then had teams start drill work in order to install a second plug in the tunnel. It was while this work was in progress that the tunnel's concrete plug collapsed and the tailings from the pit spewed forth into the Boac River.

Marcopper engineer Rick Esquirres speculates that when the drillers bored into the tunnel, the sudden release of air from the tunnel may have reduced the pressure holding the tailings back, causing the already weakened concrete plug to collapse. But this drilling is absent from the documents Placer Dome produced soon after it launched its "earthquake" theory.

Meanwhile, questions are now being raised as to who really owns Marcopper these days, after a lawsuit filed against the company revealed the existence of yet another firm that supposedly had more than a minute investment in Marcopper.

Following the 1996 tailings spill here, Solid Banking Corp. took Marcopper to court to recover a multi-million-peso loan. The bank won the case in May 1997, and Marcopper was ordered to pay almost P60 million plus interest, attorney's fees and the cost of the suit. Marcopper appealed and the case eventually ended up in the Regional Trial Court of Boac where an Auction Sale of Marcopper's property was scheduled for September 1998. But on August 26, 1998, a firm called MR Holdings, Ltd. suddenly announced itself in a "Third Party Claim" stating that the "properties levied on" are "owned by MR Holdings, Ltd., not by Marcopper Mining Corporation."

Documents filed by the lawyers for MR Holdings and dated September 9, 1998, identify MR Holdings as "a foreign corporation organized and existing under the laws of the Cayman Islands" and as "an indirect wholly-owned subsidiary of Placer Dome, Inc." The Cayman Islands are a well-known haven for companies trying to hide assets and avoid paying taxes. Ex-Marcopper President John Loney and Placer Dome's senior vice-president Alexander M. Laird both sign documents for MR Holdings. Placer Dome's address in Vancouver and an address in the Cayman Islands are provided as addresses for MR Holdings.

Court documents further reveal that MR Holdings paid off Marcopper's Asian Development Bank (ADB) loan on March 20, 1997, and at the same time assumed, through an Assignment Agreement with Marcopper, the ADB's mortgage on the mine. On December 28, 1997, Marcopper signed a Deed of Assignment through which it ceded all its properties in Marinduque—including land, mining rights, buildings, and machineries—to MR Holdings, effective December 31, 1997.

Confronted by the Canadian media about MR Holdings, Placer Dome said that it had already divested itself of its MR Holdings shares. But there is no evidence of such in the court documentation, and Placer Dome has refused to provide the Canadian media with documentary proof of this claim.

Marinduqueños have long regarded Placer Dome's efforts to establish good relations with local people, through its supposed clean-up of the Boac River, as well as the company's push to seek acceptability for the STD as having links to Placer Dome's desire to mine again in Marinduque. Unless Placer Dome lives up to its own policy promises of transparent stakeholder relations and provides Marinduqueños complete documentary proof that it is not part of MR Holdings, any goodwill gestures the Canadian transnational makes here will always be suspect.

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