Friday, January 21, 2005

Marcopper Tax Issues


A YEAR after the infamous March 24,1996 spillage of mine tailings into the largest river channel in Marinduque, public outcry over proposed methods for the disposal of tailings rose to a high crescendo. The mining company, probably felt pushed to the wall, relentlessly paid ads in newspapers, both local and national, installed giant billboards in strategic points in Marinduque including Balanacan Port and the Marinduque Airport, distributed flyers in the thousands "so the people may know". Specifically, to "put on record what benefits and economic contributions its mining operation had generated both for the country in general and Marinduque in particular".

It expressly claimed having paid "PHP 6.5 billion in direct and indirect taxes, contributed US$ 1.3 billion in foreign exchange earnings, provided employment to an average of 1,500 employees with salaries and benefits of over PHP 3.3 billion, invested PHP 247 million in community assistance, generated PHP 635 million in domestic business, and supplied electricity to Marinduque subsidizing electric cost that totaled over PHP 100 million", etc. etc. In a brief span of one year after the disastr it also claimed to have spent USD 40 million for the tunnel and Boac river rehabilitation.

And then Marcopper asked: "Can anybody argue that this is not a more than fair return for the change in the environment that our mining operations had caused?"

"Anong durong kuwarta noon!", might well have been the wide-eyed reaction of the affected families, farmers, fisherfolks, students, professionals, politicians and the unemploed who ever bothered to read the lengthy English and Tagalog ads and flyers. The billboards were in Tagalog.

But these stakeholders must have later also wondered really why the mining firm has been so quitclaim-stingy on the payment of compensation for affected families, the more substantial amount of which is yet to be paid nine years after the tragedy?

Marcopper pays direct and indirect taxes for "income tax, excise tax, customs duties, value added tax, real property taxes, etc." But look now. According to Marcopper Mining Corporation's official audited records, income taxes paid during the period 1980 were as follows:
"1980: P. 45,930,000 1981: P. 0.00 1982: 0.00 1983: P. 7,366,000 1984: P 0.00 1985: P. 0.00 1986: P 0.00 1987: 0.00 1988: P. 174,277,000 1989: 124,825,000"

During the same 10-year period the corporation did not pay (or deferred payment) for "stabilization tax/export and premium duty" except in 1984 when P. 7,649,000 were paid. In 'royalty taxes' P 294,289,000 were paid over the same 10-year period. A grand total of a P 670,366,000 (million, not the whooping billion yet), for taxes in 10 years' time. Foreign exchange earnings totaled US$ 523,937,000 according to the same records.

According to Marcopper's performance records claim, its total sales of concentrate for the same 10-year period is P 7.58 billion or an average of P758-million annually. Naman, naman!

The plain truth is that due to the decline in world market price of coppr, distressed mining companies were extended tax relief by suspending payment of all taxes, duties, fees, and other charges, whether direct or indirect, due and payable to the national and local government. In 1984, the company was issued a certificat of eligibility to suspend tax payment, which explains why Marcopper did not pay taxes for certain years. (Mostly during the Marcos years and in 1987 after the takeover of the Cory government).

Pursuant to Executive Order No. 340 issued in 1988, by President Aquino (lifting the tax suspension of the distressed copper mining companies during the years from 1984-1987), the company paid in 1989 P. 66,709,000 of its deferred tax liabilities under Letter of Instruction No. 1416 leaving a balance of P 748,176,000 as of December 31, 1989.

A year earlier, Marcopper had filed an appeal with the government for condonation pursuant to Presidential Decree No. 2027 (issued by Marcos), which allowed for the waiver of the payment of these taxes. Issued three weeks before EDSA I, the said Decree, however, did not have any covering implementing rules and regulations. For payment of their balance, the company negotiated with the Department of Trade and Industry nd submitted a proposed schedule of payment, as Marcopper's own official report stated. Marcopper also claimed in 1989 and 1990, that "most indirect taxes for other years are not known".

It will be recalled that by the year 1990, the Tapian orebody had been completely mined out. Marcopper's application for registration of the San Antonio Project as a new project commencing in the same year was then approved by the Board of Investments. Approval of the registration as a 'new project' meant that the company was entitled to the enjoment of a new five (5) year income tax holiday. 'Tax Holiday' is in fact the official term for the favor.

Whence did Marcopper's claim come from then? Of course that's propaganda. Marcopper's boastful and deliberate assertions were apparently lifted from the extremely optimistic propagandistic projections it envisioned in 1990, in connection with the new San Antonio project. In its 1989 Annual Report and other official papers, the company stated that during the estimated 20 years of the new project's operating life (1991-2011), "basing it on an average copper price of USD 1.10 per pound... numerous and significant contributions to the national and provincial economies... would be as follows:" (and here we quote):

"1. PHP 6.5 billion in taxes
"2. US$ 1.3 billion in foreign exchange earnings.
"3. Employment of over 1,500 people with a yearly payroll and fringe benefits of over PHp 100-million.
"4. Continuation of Marcopper's community development and barangay assistance program, which in the past 20 years, calculated in 1988 pesos, cost the company over P. 55 million, which includes donations, the establishment of self-help programs, road construction and improvement, building of schools, infrastructures and recreational facilities, etc., all for the betterment of the people of Marinduque.
"5. P. 500 million per year on local purchases of supplies and services which also generates considerable employment.
"6. Continued supply of electricity to the Province of Marinduque"

Putting "on record" what the mining company "paid" and "had generated both for the country in general and Marinduque in particular" using what obviously were figures lifted from the said 1990 "projected foreign exchange earnings and taxes TO BE PAID to the government" seemed curious, to say the least. That's just for Nos. 1 & 2 in the above enumeration.

For No. 3 above, on record, by end of 1989, Marcopper had 1,050 regular and probationary employees at the minesite, with 74 employed at the head office; had around 800 employees when a labor strike occured in early 1996.

For No. 4 above: P 55-million in community development and barangay assistance were spent in 20 years as specified in the 1989 Marcopper Report published the following year. For no apparent reason, the company just decided to be generous by spending P 192 million more in community development during the next five years of distress?

For No. 5: Earlier claim was P 500 million. The company was certainly capable of generating P 635 million in domestic business, but one wonders why the figures are not consistent. As regards the supply of electricity, Marcopper had long ceased to provide this type of positive service, a decision preceded by a demand from the company in June 1997, for an increase in the rate of purchased power, largely perceived to be some kind of tailings-spill related psy-war leveled against the people of the island.

None, no one, appeared to have ever questioned, or studied, the company's "SA IKALILIWANAG NG LAHAT" propaganda materuial. Perhaps cowed or discouraged by the brazen methods and audacity by which they were made? Revenue authorities would know about is and could run agfter them anyway, perhaps, or so a people living in a lethargic, feudalistic environment so thought? Or everyone probably just gulped all the claims without question - hook, line and sinker!

Yet, looking back, within a year before the onslaught of the river pillage and spillage one could recall discussions at the Sangguniang Panlalawigan of Marinduque (Provincial Board), on how Marcopper could be made to pay property taxes to the province instead of to Makati as claimed, the provincial coffers being empty. Sources say taxes owed the province for all those years of mining operation had accumulated from a low of 150 million to a high of P 850 million. That could really have helped the provincial economy if paid then. And then one wonders why the province's leaders all that time did not lift a finger.

All these facts and figures have very serious implications in the way Marcopper makes claims and the methodology they have always imposed, past and present, when addressing current issues related to the damages wrought on the island, its rivers and shores and the impact of the damages on the health of the people living on the island.

These also have very discomforting, disturbing political and social repercussions not all to easy to ignore now. But maybe, we Marinduquenos as a people have known and accepted many of these things all along. Took them all for granted. Ah, yes we have, and the light at the end of the tunnel appears distant. /eli

Thursday, January 20, 2005

RAYMOND C. GO: MARINDUQUE ISLAND'S VISUAL ARTIST

He used to be the high school kid in the neighborhood who did landscapes in crayon for his favorite teachers for nothing. But by then, he was already familiar with the great masters and had already formed a curious opinion: the works they did that took them weeks or months to finish could be done in lesser time now - with all the incredible pigments available in the market, with easy access to the countless tones and hues that had taken the artists of yore countless hurs to prepare today's artist's have lesser problems, he said.

He inferred with some degree of confidence that those masterpieces could be replicated. I just listened, saying nothing. But he said then that he was awed by Da Vinci and Renoir because their works were 'meant to be deciphered'. He referred to some points in their work that would reveal miniature people at close scrutiny. Then he showed me once a copy of some of their work from a thick and old art book. He moved his index to certain points to prove it. I blankly nodded, but still could not figure out his elusive characters.

Then I forgot all about it. I knew he would take up architecture. Wrong. And that so displeased his father. Probably the muses of the night and his invisible people haunted him in sleep. I know that happens.

Because for the next seven consecutive years he would surprise me garnering art awards in various inter-university competition in Manila or making presence at the annual phases of the PLDT directory-cover national competitions in the big city. By his second year at FEU College of Fine Arts in 1998, his entry for the Shell National Competition was awarded third place, chosen from more than a thousand entries.

I did check his work "Poligamiya" at the Robinson's Galleria Exhibit Hall. It had smokey colors and swirling strokes that I had not seen before, I thought, and quite different alright... His father, who came to see him receive his award was there, and beaming.

To date, he has garnered more than 20 such honors, his works have been exhibited at the Manila Metropolitan Museum, Ayala Museum, GSIS Museo ng Sining, SM Megatrade Center, Ugnayan Gallery and other art venues, he has already established a group of artists, "Dagta", recently mounting an exhibit at the National Museum (Marinduque Branch), and Tahanan sa Isok in Boac. He now drives a sports car, is also into antiques, and business ideas...

I did not have to check if ever he had changed the art views he told me years ago. His brief account of a work he entered to the Bonifacio Painting Competition organized by the National Historical Institute (NHI), would to me suffice, you see. It was just hours before the competition deadline. He still had not touched his brushes and palette for the composition that had gestated in his mind for sometime. With just about four hours to work on it, he took on his canvass feverishly till the sun was up. Wondering if the work (yeah, he finished it just the same), would be accepted - oil certainly takes sometime to dry up - he delivered that singular surge of masterpiece, a kind of realistic-impressionistic rendition of the Great Plebeian.

The face looked very old and greyed, a startling contrast to the still melting colors and the young artist's fresh brushes and strokes. A telling and rusting bolo rendered below the unsmiling portrait appeared to sum up the hero's essence.
They phoned him a few days later. His Andres Bonifacio was perfect for the grand prize of fifty grand, a new master work permanently house now at the Bonifacio Centennial Museum in Maragondon, Cavite.

His turn now, I guess: RAYMOND GO!

Tuesday, January 18, 2005

Marinduque Review of Favorite Destinations

I LOVE MARINDUQUE, THE LAND OF BIRTH, THE HOME OF MY PEOPLE.
IT WAS ONCE THE MOST TALKED-ABOUT, MOST COVETED SMALL ISLAND IN THE WORLD.

SOME OF THE BIGGEST TRANSNATIONAL CORPORATIONS SEE BILLIONS OF DOLLARS IN THEIR EYES WHEN THEY HEAR HER MAGICAL NAME WHISPERED.
LARGE-SCALE MINING OVER MANY DECADES DESTROYED HER FOREST RESERVES. HER LARGEST RIVER CHANNELS AND HER SEAS SERVED AS DUMPING SITES FOR TOXIC MINE WASTE ALL THROUGHOUT.

AMID THREATS OF ACID MINE DRAINAGE AND HEAVY METAL DREAD, MARINDUQUENOS HAVE BEGUN TO HATE THE MINING CORPORATIONS. FOR THE RAPE AND PLUNDER THEY'VE DONE TO THE ENVIRONMENT.

HER PEOPLE WITH REAL PER CAPITA INCOME OF PHP 13,545.00 HAVE REMAINED POORER. AND SO TO SAVE THEMSELVES FROM THEIR TAPIAN PIT (PUN INTENDED), BEHOLD! THE TOURISM INDUSTRY! MAYBE.
SO WHERE DO WE START? WHERE DO WE BEGIN?

BOAC BEACHES: "ideal for swimming and picnics... 15 kilometers of the west coast from Maligaya to Cawit..."

BUT! Further north from Balanacan (Mogpog), down south to Cawit could be found 'neath the waters, the world-renowned mine tailings from Marcopper mines. Tailings that escaped from Tapian pit drainage tunnel and traveled the 27 km. humdrum course of the Boac River, all the way down to Tablas Straight that embraces these beaches. The sea endlessly caress the relaxing, tantalizing beaches of the towns of Mogpog and Boac.

At one time the mines announced unabashedly that the tailings could actually "nourish" the beaches and introduced the concept of "beach nourishment". The people were perplexed with the new idea. Or gobbledygook.

Acid Mine Drainage (AMD) is a direct rsult of oxidation. AMD contains acids aand heavy metals. Acids may result in skin infection, whereas, absorption in the body of heavy metals may result in different types of cancer, leukemia and other diseases crated by toxic poisoning.
Many of the dreadful diseases have afflicted some residents in the areas surrounding Calancan Bay, north of Marinduque, former mine waste dumpsite. No, you probably won't get sick in one dip or two, but really, no one could say as some still think of the dollars in the event the mines are reopened.

Most seagrass beds and coral reefs along these beaches have been destroyed by the tailings. Snorkeling is no more fun like it used to be. Tailings in some areas could stick to the soles of your feet as you wade through. Could be yakky sometimes!

PAADJAO FALLS: "series of gently cascading falls (100 ft) that settles into a 15-foot fall. Hunt for nature-formed bathtubs downstream and enjoy jacuzzi-like effects."

BUT! Before flowing down as gentle cascades, water runs through silted ricefields upstream where carabaos refresh themselves in great abandon. Upstream dwellers raise poultry and swine along the water periphery.

When checking out, one should be very careful in getting down the 15-foot fall because you couldn't wait to tell your company unsuspectingly having fun down there and enjoying the nature's jacuzzi below. You just might fall off the cliff.

Water flowing through Bocboc Falls (that's the original name before it was re-invented and renamed Paadjao Falls), one of the few tributaries in Mogpog comes from the municipality's main watershed area. That's in the periphery of the same earth dam that eventually polluted the Mogpog River. Iin some parts down Mogpog River you could see water afflicting the river ranging from peach to brown to gruesome red and toxic green, to gory violet prompting some to ask, "kung hindi ito polluted, ipainom kaya natin sa kanila?"

TRES REYES ISLAND OF GASPAR: "white-sand beach on eastern side of the islet nearest mainland."

BUT! 'White sand'? They're crushed corals! Tons and tons of crushed corals, a wonder by itself, you'd even wish to bring some home soon for your aquarium. The old Elephant Fantasy Club owners were enthralled and succeeded, in fact, in transporting huge bulks to their tiny island to create a small strip of a beach to complete their fantasy.

Familiar sights and smell when you walk along the boulder-strewn Gaspar beach. No deep wells in any of these islands. Resident children and young adults just hide behind your shoulders and back of the boulders to, you know...

BATHALA CAVES: "complex network of seven caves', one is 'favorite residence of pythons'.

BUT! The former sea disposal system used by the mines involved a series of pipes and tunnels from the minesite to Calancan Bay. Between the minesite and Calancan Bay (you have a map?), we find the 'complex network of caves' located in Barangay Ipil. Some of the rusting pipes left behind by the vandals after selling them as scrap are still found here, there and everywhere.
In 1997, the areas of Botilao, Ipil and Kamandugan, three adjoining villages, were subject of a 'Declaration of a State of Calamity for Health Reasons', issued by Pres. Fidel V. Ramos. Random testing showed that 59 out of 59 children had high level of lead in their young blood. Fifteen of them were sent to Manila for detoxification in 1999 and media had a field day.

Testing conducted by the UP-National Poison Control and Information Services (UP-NPCIS) in March 2000 showed "elevated lead and cadmium level found in soil and sediment samples from Calancan Causeway" in the vicinity.

What about the air they breathe there? The following environmental assessment done on the same date by the same team tells it all:
"Ambiant air for lead taken in 2 sites in Botilao were above the EPA standard of 1.5 ug/m3 with level of 2.47 ug/m3 near the school house and 1.3 ug/m3 near the coastline".
Visitors to the caves could already see the environmental degradation of the wise expanse from Barangay Baliis all the way to the Calancan coastline. They shoud be ready for the shock and depression that could set in after seeing and believing.

MALBOG SULPHUR SPRINGS: "...its lukewarm, sulphuric water bubbles, out from the deep bowels of Mt. Malindig. Peculiar smell due to sulphur."

BUT! Peculiar smell due to sulphur, and mammals that look like goats and cows grazing just a meter away from the pool and allowed to do all their thing up to no more than ten meters away. Smell also includes stronger emanations from the waterless comfort rooms nearby, you instantly know they're not from the bowels of Malindig.

MT. MALINDIG: "Marinduque's highest peak at 1,157 meters."

BUT! The first 952 meters have been cleared of endemic plants and trees by original settlers and now planted to crops. Wild boar, monkeys and deer have been driven away. Only the final 200 meter ascent is where biodiversity still thrives but is seriously threatened.

If by chance you make it there, be still and know that you have not come to destroy or take away anything. That's Marinduque's last bastion of former life and hope, therefore sacred. Pray. Take nothing and leave only your footprints as true nature-lovers often say.

THEN, THINK AGAIN. IF YOU HAVE COME TO SEE UNSPOILED WONDERS YOU WON'T FIND THEM HERE.

BUT IF YOU HAVE COME TO KNOW MORE ABOUT THE PEOPLE, THEIR HISTORY AND CULTURE, READY TO GET ENMESHED IN THEIR FOLK BELIEFS, METHODS, ENVIRONMENTAL CONCERNS AND WITCHCRAFT, THEN YOU HAVE COME FOR THE RIGHT REASONS.

CERTAINLY, YOU'LL FIND OUT WHY THIS 959 SQ.KM. OF AN ISLAND COULD STILL BE CALLED A PARADISE IN THAT RESPECT.

IN THE END, YOUR MARINDUQUE EXPERIENCE, COULD STILL BE A GOOD THING THAT WILL MATTER IN YOUR LIFE FOR A LONG, LONG TIME.

HAVE FUN!!