MINING COMMUNITIES & An assessment of the ANTON MIGUEL RAGOS · FEBRUARY 17, 2015 SOCIAL DEVELOPMENT Social Development and Management Program

SOCIAL DEVELOPMENT and MANAGEMENT PROGRAM  five-year plan  improvement in living standards  responsible, self-reliant communities sustainable development

without compromising the ability of future generations World Commission on Environment and Development as defined by the 1987 “Meeting the needs of the present to meet their own needs.”

REGULATORY FRAMEWORK  Philippine Mining Act of 1995: requires operators to assist in the following: development of host communities promotion the welfare of the locals advancement of science and mining technology.  Various DENR Administrative Orders provide further details

PROJECTS & ACTIVITIES Community Development Mining Technology Advancement Information, Education, & Communication 1.5% of Operati ng Co st 75 % 10 % 15 % ALLOCATION SCHEME

 Companies consult host and neighboring communities REGULATORY FRAMEWORK Preparation Processing and Approval Monitoring, Auditing Review and Evaluation Preparation

 MGB evaluates submitted SDMP  Highlights presented in technical conference  Companies and communities enter MOA  Companies submit Annual SDMP plan REGULATORY FRAMEWORK Preparation Processing and Approval Monitoring, Auditing Review and Evaluation

 Community Relations Officer and communities representatives monitors implementation  CRO submits quarterly reports on ASDMP  MGB conducts semi-annual monitoring, and impact evaluation by end of the programs  Representatives from MGB, companies, communities can call for review REGULATORY FRAMEWORK Preparation Processing and Approval Monitoring, Auditing Review and Evaluation

PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others Infrastructur e School and health facilities; construction or repair of waters systems, road, seawall, multi- purpose halls, barangay office, chapels, other buildings for various purposes, street lights

PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others School supplies and equipment; construction of educational facilities; college and technical/vocational education scholarships; financial assistance to schools (e.g. support for teachers’ salary, school grant, etc.); other capacity building and human development seminars, trainings and conferences

PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others Medical outreach and feeding programs; construction of health facilities; provision of medicines and medical supplies

PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others Agricultural livelihood programs (e.g. crop production, fishery, livestock, poultry, etc.); support for cottage industries; livelihood skills trainings and seminars; various financial support (e.g. support to local businesses and local cooperatives, microfinancing, etc.)

PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others Support for religious institutions or cultural and religious activities (e.g. fiestas, celebrations, sports tournaments, values formation seminars, etc.)

Environmental protection seminars and other environment-related projects and activities; emergency relief assistance; financial assistance to local government; support for youth activities; information, education, and communication programs PROJECTS & ACTIVITIES Infrastructur e Education Health Livelihood Socio- Cultural Others

ISSUES & CONCERNS Planned SDPM spending as ratio of municipal operating expense, 2011 (in %) SDMP can be a significant resource for financing local development programs

ISSUES & CONCERNS  Participation: Responsiveness and Accountability Are the guidelines sufficient to ensure SDMP plans capture community concerns? Do critical stakeholders have ensured participation in consultations? Are recipients identified based on systematic selection process? What is the role of communities in implementing the projects? Is SDMP spending effectively assessed for its soundness and efficiency? Is SDMP spending coherent with the spending program of LGUs?

ISSUES & CONCERNS  Participation: Responsiveness and Accountability  Sustainability Do programs rely largely on continuous company support? Do programs falls under coherent long-term development framework? Are the programs consistent with the objective of creating self- sustaining, self-reliant communities?

CASE OF CARRASCAL  Host to mining operations of Carrascal Nickel Corp. (CNC) and CTP Construction and Mining Corp.  CNC mining project is located in 7 of 14 barangays, and covers 4.5 hectares (19.75%) of total land area of said host barangays.  Planned SDMP implemented from 2008 to 2012, with total budget of PhP6.7 B (PhP1.34B annually)

Social Services (PhP3.14) Infrastructure Projects (PhP2.05) Livelihood Projects (PhP1.54) PhP6. 7 billion 46.7% 22.9% 30.5 % PROJECTS & ACTIVITIES

Poverty Rate Subsistence Rate Unemployment Rate Out-of-School Youth (6-12 yo.) Out-of-School Youth (13-16 yo.) Child Malnutrition Child Mortality No Sanitary Toilet Facility Select Core Local Poverty Indicators from CBMS, Surigao del Sur Economic Health Education

Average Poverty Rate, SDMP vs. Non-SDMP, (in %) SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average Poverty Rate: Proportion of households with income below the poverty threshold Economic Indicators Average Subsistence Rate, SDMP vs. Non- SDMP, (in %)

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average Subsistence Rate: Proportion of households with income below the food threshold Average Subsistence Rate, SDMP vs. Non- SDMP, (in %) Economic Indicators Average Unemployment Rate, SDMP vs. Non- SDMP (in %)

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average Unemployment Rate: Proportion of labor force (15 yo. & above) who are unemployed Average Unemployment Rate, SDMP vs. Non- SDMP (in %) Economic Indicators

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average share of Out-of-School Youth: Proportion of children (6-12 yo.) who are not attending school Ave. share of Out-of-School Youth (6-12), SDMP vs. Non-SDMP, (in %) Education Indicators Ave. share of Out-of-School Youth (13-16), SDMP vs. Non-SDMP, (in %)

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average share of Out-of-School Youth: Proportion of children (13-16 yo.) who are not attending school Ave. share of Out-of-School Youth (13-16), SDMP vs. Non-SDMP, (in %) Education Indicators

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average Child Malnutrition Rate: Proportion of children under 5 who are malnourished Average Child Malnutrition Rate, SDMP vs. Non- SDMP, (in %) Health Indicators Average Child Mortality Rate, SDMP vs. Non- SDMP, (in %)

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Average Child Mortality Rate: Proportion of children under 5 who died Average Child Mortality Rate, SDMP vs. Non- SDMP, (in %) Health Indicators Ave. share of households with no toilet facility, SDMP vs. Non-SDMP (in %)

SOCIAL DEVELOPMENT PERFORMANCE: CARRASCAL Select Core Local Poverty Indicators Ave. share of household with no toilet facility: Proportion of those without access to sanitary facility Ave. share of households with no toilet facility, SDMP vs. Non-SDMP (in %) Health Indicators

Average All SDMP [x ] Non- SDMP [y ] Poverty Rate Subsistence Rate Unemployment Out-of-School Youth (6- 12) Out-of-School Youth (13-16) Child Malnutrition Child Mortality No Toilet Facility t [y-x] p-value [H o : diff=0] H a : diff<0 H a : diff!=0 H a : diff> In short, the socio-economic situation among SDMP and non-SDMP barangays are not significantly different.

In short, the socio-economic situation among SDMP and non-SDMP barangays are not significantly different. Caveats:  Limited to Carrascal. Cannot be generalized nationwide.  SDMP has no impact? Not necessarily.  Possibility of spillover effects not ruled out.

CONCLUDING REMARKS  SDMP could be significant source for financing local development program  Concerns on adequacy of regulations on community consultations and inclusion  Large discretion of mining companies  Lacks assessment of soundness and efficiency

CONCLUDING REMARKS  Allow for direct LGU involvement to capacitate and empower communities  Earmarking for social development  Subject funds to processes of local public finance  Allow for strategic use of funds under municipal jurisdiction  Minimize company discretion to safeguard communities from dependence

THANK YOU!