NPA threat additional financial burden to mining firms, says report

MANILA, Philippines - The threat posed by communist rebels has become an additional financial burden to mining firms in the Philippines, a multinational risk consultancy said.

In a report released to its clients last Oct. 10, the Pacific Strategies & Assessments (PSA) cited the need for the government to provide enough security to investors.

“The NPA (New People’s Army) threat has effectively become not just a security concern for mining firms, but also an additional operational and financial burden that has to be incurred if they want to continue operations in the Philippines,” PSA said.

“As is, the Philippine government’s role does not end in attracting foreign investors, but also includes providing adequate security to businesses,” it added.

PSA, whose clients include financial institutions and embassies, said mining firms have become attractive targets for the NPA as the rebels have long been strategically positioned in mineral-rich regions.

PSA released the report in the wake of attacks by the NPA against three mining firms in Surigao del Norte this month.

About 200 NPA rebels torched equipment and took hostage a number of mining employees of Taganito Mining Corp. (TMC) last Oct. 4 in Claver town.

Another NPA group attacked the nearby Platinum Metal Group Corp., also in Claver. Three hours later, another mine site operated by TMC’s sister company THPAL Mining was also attacked.

The rebels burned 10 dump trucks, eight backhoes, two barges and the guesthouse of TMC. The military placed the property damage at about P3 billion.

The rebels said the attack was meant to punish the mining firms for allegedly destroying the environment and the livelihood of farmers.

Authorities believe the attacks were triggered by the refusal of the three firms to pay the “revolutionary tax” demanded by the rebels.

PSA, however, said the communist rebels seem to be bent on stopping the mining activities in the area.

“The manner in which the attacks were carried out implies that the NPA meant not simply to extort from the mining firms, but rather to completely stop mining operations in the area and to make an example out of the mining firms,” it said.

PSA also described the atrocity as “one of the NPA’s biggest and most daring punitive actions in recent history.”

“While the Philippine government insists that the attack was an isolated incident, this was not the first rebel attack against mining firms this year and is likely not the last,” it said.

PSA said it monitored at least seven attacks against mining firms from January to August this year.

“In 2010, PSA monitored only four incidents for the entire year. Except for one, all of the incidents this year were motivated by extortion,” the report read.

Latest military data show that the communists extorted more than P95 million in 2010 and P1.5 billion since 1998 from investors and politicians.

Military officials said the NPA raised about P136 million in 2009 through the collection of “revolutionary taxes.” Mining firms, logging companies and plantations are said to be the usual targets of the extortion activities.

Meanwhile, Surigao del Norte second district Rep. Guillermo Romarate Jr. filed on Wednesday a House resolution for an investigation in aid of legislation into circumstances behind the NPA attacks on the three mining firms in Claver town.

Romarate said the probe sought by House Resolution 1821 will focus on the validity of the NPA allegations that the three mining companies have engaged in “wanton and indiscriminate” mining in the mountains of Surigao del Norte and have violated the rights of indigenous groups.  – With Ben Serrano