St.

Paul University Surigao

St. Paul University System
8400 Surigao City,Philippines
Cor. San Nicolas & Rizal Street
College of Engineering

In partial fulfillment of the Mining Engineering Program of College of

Engineering of St. Paul University Surigao

A Case Study

Long term income effect of Claver Mineral Development

Corporation (CMDC) in the IPs

Prepared by;

Araneta, Eleza M.
Reyes, Mariel E.
Roma, Sunshineclen
Tisang, Baby Ann D.

Submitted to;
Engr. Nathaniel D. Tiu

December 13, 2018

 Introduction

To attain rapid economic development, many countries engage to various activities to acquire

natural resources. One of such activities is mining. Mining is an important economic activity

which has the potential to contribute for the development of an area gifted with the resource.

Anthony Bebbington et al. (2008: 901ff) state that mining conflicts in the 2000s were

primarily characterised by labour struggles and conflicts between trade unions on the one hand

and governments and mining companies on the other. The current territorial expansion of

industrial mining (e.g. into indigenous territories and areas with small-scale agriculture and

livestock farming) has resulted in a shift and an expansion of actor constellations in conflicts

over mining and has widened the range of the topics of conflict to include: conflicts over

working conditions and the development of new mining areas; over territorial control and access

to water and land; over the effects on local livelihoods, gender relations and ecosystems; and

over government regulations concerning the conditions for mining activities and the distribution

of the profits and tax revenues (Bebbington 2012; Bebbington/Bury 2013; Bush 2004).

Based on an empirical examination of mining conflicts, there are three identified types of

conflict: conflicts over the effects of mines on the livelihoods of local communities; conflicts in

which local communities negotiate with mining companies over compensation, job promises,

etc.; and conflicts between local communities and the central government over the distribution of

taxes, profits and rents from mining activities (Arellano-Yanguas 2012).Mining affects the

strong cultural ties of indigenous communities and leads to the loss of their culture and identity.

In particular, this study is aimed to analyze the long term income effects of CMDC to the IPs in

Claver, Surigao del Norte.

 Review of Related Literature

Industrial mining is currently booming worldwide. Encouraged by international financial

institutions, in particular the World Bank, many governments have placed enormous hopes in

mining as a motor for economic development (Bebbington et al. 2008: 889; Campbell 2008).

Dr. Roberto B. Raymundo (2017) state that the mining sector has always asserted their

contributions to the economy in several ways particularly through the amount of investments

they generate and jobs created directly by these operations. Employment outside of mining is

also induced indirectly when mining companies purchase various goods and services from

different industry suppliers within the local community, municipality and province. The firms

provide livelihood programs for the communities where mining operations are being conducted,

finance and set up schools for children of the community as well as for indigenous people,

provide health care services and implement social development programs for residents in the

community to ensure stable sources of livelihood even after the mining companies have left the

area. Historically, the mining sector has employed only small numbers of Indigenous workers.

In the early 1990s, the number was measured in the hundreds (Taylor 1993); but by 2011, this

had increased to more than 7,000. Between 2006 and 2011, the number of Indigenous people

employed by the mining industry more than doubled. There was also a marked increase in

participation of Indigenous women in mining over this period.

Most of the Philippines mineral resources are located within the ancestral domain of its

indigenous peoples. By law, it is required that indigenous peoples give their free, prior, informed

consent (FPIC) before any projects proceed within their territories. The fact-finding team learned

of several incidents where companies violated the legal guidelines and ‘engineered’ the required

consent. There are many vocal advocates for the rights of indigenous peoples, local communities
and protection of the environment. Such advocates include an active and well-organized civil

society with a history of challenging legislation and policy, the Catholic Bishops Conference of

the Philippines (CBCP), and indigenous peoples’ organizations. The development of mining

under current is understandably a major and controversial issue (Doyle et al. 2007).

Regional increases in demand for labour in mining areas generated by the mining could

increase local wages, irrespective of whether workers are employed in mining. Household

income provides a measure of financial well‐being that takes into account the incomes of others

with whom people live. When comparing financial living standards of households, it is important

to adjust income for differences in household size and composition to reflect differences in costs

of living (Hunter et al. 2015).

Conflict between indigenous peoples and the mining industry is widespread, and

hostilities can be deeply entrenched and explosive. Community blockades, lawsuits, adversarial

negotiations, public protest and non-governmental campaigns are common examples of the

conflictual relations that exist between many indigenous groups and mining companies around

the world. The United Nations estimates that there are between 350 and 500 million Indigenous

People worldwide, comprising over 5,000 distinct groups (Whiteman and Cooper 2000).
 Statement of the Problem

This study aims to determine the long term income effect of Claver Mineral Development

Corporation (CMDC) in the IPs living near the area. The researcher in this study intends to find

answers to the following questions:

 How the mining company impacted the IPs in the area?

 Does the effect made by the mining company contribute to the long term decreasing and

cumulative income of the IPs?

 How did they manage the condition to limit the agitations by the IPs in their areas of

operation?

Significance of the Study

The significance of this research work lies in the fact that it seeks to investigate the long

term income effect of Claver Mineral Development Corporation into the IPs. The researchers

will also seek solution on how the relationship between the indigenous tribes and the company

will develop and this will also stand as a recommend policy directives to improve the company

situation regarding to the IPs living in the area. Outcomes and recommendations will serve as

guide to other mining companies in the country.

 Scope and Limitation

This study is conducted primarily for the purpose of identifying the long term income

effect of Claver Mineral Development Corporation (CMDC) in the IPs. The conduct of the study

is only limited on the availability of data provided by the researchers through interviews for

relevant information, reports and other documents.

Location of the study

The area is located in Claver, a municipality in the province of Surigao del Norte. The

municipality has a land area of 322.60 square kilometers or 124.56 square miles which

constitutes 16.35% of Surigao del Norte's total area. The municipal center of Claver is situated at

approximately 9° 34' north, 125° 44’, in the island of Mindanao. Elevation at these coordinates is

estimated at 8.1 meters or 26.5 feet above mean sea level.

Figure 1. Location of the study area (Google Map, 2018)

 Methodology

Types of Data

The data collected included observations, perceptions, and opinions with regards to the

income effects of the mining company within the surrounding community especially to the IPs

residents in the area.

Sources of Data

Data for this study were from primary and secondary sources. Primary data included

interviews with officials near the operating area for relevant information. Secondary data were

from books, relevant articles from journals, reports and some were also obtained from the

internet and other sources particular to the researchers study.

Sampling Design

A qualitative research approach was employed to undertake the researchers’ purpose. It is

important for the researchers to understand the motivations and the processes of the people who

were involved whom will take part in their research. This enables robust informed consent and

promotes research that meets the needs and expectations of the affected community.
 Conceptual Framework

Process
• identified long term
income effect of the
• Qualitative Research CMDC to IPs
• Interviews
• Analyzing Data
collected
Input Output
 Results and Discussion

Indigenous people have benefited from the mining has been a topic of debate, particularly

in view of the evidence that Indigenous people did not experience enough substantial economic

gains from previous mining operations. It is particularly vital when working with Indigenous

communities, where there is a history of exploitative research practices. This led the researchers

to proceed and conduct the study in the area.

Claver Mineral Development Corporation held an operating company concession known

as the Shenzhou Mining Group Corp. and was consider as one of the nickel mining companies

active in the region surrounding Claver, Surigao del Norte. The company was then reported as

one of the operating mine causing huge environmental destruction within the ancestral domains

of the indigenous Mamanwa and Manobo tribes. In the year 2011 of May, a petition was given to

the Supreme Court demanding an immediate stop of the active company for they filed a report

which shows the company created serious damaged to pollution of river, marine ecosystems, and

damaged irreversibly mangroves and corals in which the crucial livelihood resources of the IPs,

particularly fish stocks, were negatively affected and polluted as well as increasing food

insecurity due to declining fish populations and coral bleaching. There are indigenous residents

claimed to suffer from health impacts, such as difficulties in breathing, vomiting and lost bowel

movement and exposure to heavy metals that may cause cancer.

The concession company SGMC was ordered to vacate the area as it violated the

contracts with CMDC as well as the environmental laws and moreover because of its unbearable

impact to the IPs. Claver Mineral Development Corporation signed a new Joint Venture

Agreement (JVA) with another company which is the CCIL Mining and Mineral Resources
Corporation (CCILMMRC) to continue exploiting the concession area but as of now the

company is doing some process to lessen the impact made by the SGMC.

In this year, the Claver Mineral Development Corp. are in working process to acquire the

requirements needed to uplift the suspension given to them by the Philippine government

because of the previous large environmental destruction the company brought to the indigenous

peoples.

Moreover, the revenue of the company changes every period and the IPs are entitled to

have a 1% share whereas the mining site is located on their ancestral land. As of now, the IPs

had already their share enough to sustain their livelihood. Investing part of the mining company

CMDC revenue to finance the affected IPs especially in terms of the long term income effect is

standard and compensation to impacted indigenous peoples is almost always marginal.

 Mitigation Measures

Key mitigation measures are important to make mining less destructive to the environment and

specific targets should fully address to land use, territorial aspects and its income effect to the

IPs. It is not easy to compensate indigenous peoples for their loss of wealth. Remedial actions

require stepping beyond monetary compensation. Actions might include a long term sequence of

monetary steps or non-monetary, training, environmental restoration, and extended financial

arrangements to guarantee that indigenous peoples retain or recover their ability to accumulate

living.
 Conclusion

This paper outlines for a mining company to adopt responsible mining and to give focus in terms

of its income effects especially to the IPs. Claver Mineral Development Corporation acted more

responsibly and learns to their previous mine operations to achieve sustainable progress more

specifically when it comes to the indigenous peoples. As of now, it has been clarified that the

disagreement between the IPs and the company CMDC are in peace and will try to develop good

relationship to each other.

Recommendation

Strong efforts are highly needed in remediating the affected area and should be well intensified

by the company especially the IPs residents. It is recommended that further researches are

needed to conduct into the assessment of intervention measures adopted and implemented by a

mining company in reducing or mitigating the economic, social, and environmental and health

impacts of the mining activity on the people especially the IPs in the surrounding communities.
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