Concerns over mining’s impact mount as Marcos Jr eyes foreign investment in Philippine renewables projects

In his second state of the nation address, Philippine president Ferdinand Marcos Jr touts relaxed rules for clean energy investment. Activists fear a new “green lanes” initiative will hurt communities and the environment.

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Anti-mining activists hold a protest action in front of the department of environment and natural resources in Quezonb City, Philippines during the state of the nation address of Philppine president Ferdinand Marcos Jr on 24 July. Image: Alyansa Tigil Mina

Foreign investors interested in opportunities to participate in mining and renewable energy projects in the Philippines will see a further easing of rules moving forward. The strong signal sent by Philippine president Ferdinand Marcos Jr in an effort to boost the country’s investment climate has, however, sparked fears among activists that floodgates for exploration will open and that will hurt local communities and the environment. 

In his second state of the nation address, Marcos Jr reported on his administration’s priorities for the next 12 months. He said: “To create these investment opportunities, we must ensure that an enabling business environment is in place … Building on institutional reforms of recent years, we have created ‘green lanes’ for strategic investments, and expedited the business processes in various sectors and investment modalities.” 

The new “green lanes” initiative mandates all national government agencies to speed up the process of approving necessary licenses and permits for what are considered strategic investments. The announcement was made a week before Marcos Jr’s speech, and the relaxed rules will cover projects that involve mining for transition minerals like nickel and copper, as well as clean energy projects.

The new policy is expected to help the country seize the US$64 billion in investment leads it said it got from the recent foreign trips of Marcos Jr and his economic team in Singapore, Indonesia, the United States, Japan, China, Thailand and Europe.

Jaybee Garganera, national coordinator of anti-mining coalition Alyansa Tigil Mina, called the creation of green lanes a “highly questionable trade and investment strategy”, especially in light of climate change.

“Fast-tracking the process of securing permits and other regulatory requirements through the green lanes would further drown out the voices of the communities and disregard the negative impacts of renewable energy projects on the environment,” he said.

Rene Ofreneo, president of Philippines-based non-profit Freedom from Debt Coalition, which monitors the country’s credit problem, said the mechanism could sideline pre-investment requirements like conducting environmental impact assessments (EIAs) or having a systematic framework to determine and mitigate the potential impact of any new development on the environment in place. It might sidestep free, prior, and informed consent of Indigenous and local communities before acquiring land too, said Ofreneo. 

“These [processes] are time-consuming but they help ensure that no harm is done to the communities, Indigenous peoples and workers. We have one too many disasters in the past due to mining and other infrastructure projects, [and most were] because rules were short-circuited,” Ofreneo said.

In his first state of the nation address, Marcos Jr had pledged that he would prioritise clean energy. He has also been vocal about tapping natural gas as a “bridge fuel” while the country was developing renewables.

A year after he took over, the government announced a ramp up of its renewable energy capacity in line with a national target to utilise 35 per cent clean power by the end of the decade. The department of energy reported over 1,000 renewable energy projects ongoing as of March 2023. Hydroelectric power generation projects take the lion’s share of this effort – there are 435 of these projects.

At the same time, Marcos Jr has approved six new gas plants, along with the renewal of the Malampaya gas field, the country’s only domestic source of fossil gas, by 15 years.

New sovereign wealth fund for clean energy

The country’s first ever sovereign wealth fund, called the Maharlika Investment Fund (MIF), was also unveiled and signed into law a few days before Marcos Jr’s speech. It is set up to support government goals to reinvigorate the economy through its flagship Build-Better-More programme, which looks at enhancing the country’s infrastructure to aid the shift from fossil fuels to clean energy. 

In his 75-minute long presidential address, Marcos Jr highlighted how the gains from the fund can be reinvested into the country’s economic wellbeing. This would be done by “pooling a small fraction of the considerable but underutilised funds” to make “high-impact and profitable investments”, he explained. 

sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country’s surplus reserves.

The move by the Marcos Jr administration has divided observers, with some worried about the timing of the launch and the governance of the fund. Earlier iterations of the proposed fund had shown that it will rely heavily on state pensions, which critics said were irresponsible.

Jaybee Garganera, also treasurer of Bantay Kita, a Philippine-based coalition of civil society organisations advocating for transparency and accountability in the extractive industry, said it is not timely to launch the sovereign wealth fund since there are no surplus earnings from the mining sector.

“With the current fiscal regime and revenue-sharing scheme, [earnings from] mining projects are too little and there are too many tax breaks and incentives for the industry,” said Garganera. Bantay Kita supports defining a new set of criteria to ensure there is minimum government share from mining revenues. Garganera said that these revenues must be directly given to affected communities as social development or royalty payments and not go to the Maharlika Fund. 

Scant detail on climate change issues

Marcos Jr also spoke broadly about climate change in his speech, saying that it is now “an important criterion” in integral national policies, as well as in planning, decision-making and the implementation of programmes. 

He spoke about the need to develop green and blue economies, protect and preserve forests as well as the commitment of the country to meet global decarbonisation goals.

He named taxes on single-use plastic as one of his priority measures, although environmentalists say regulation that would phase out and ban single-use plastics is what is needed. 

In a statement, non-profit Climate Reality Project said the President needs to “walk the talk”. “We look forward to seeing concrete programmes and policies that will accelerate the Philippines’ transition to a low-carbon economy.”

The Extended Producers Responsibility (EPR) act in the Philippines, passed last year, only requires plastic producers to collect, recycle, and manage their waste better, but does not oblige them to reduce plastic. Industry insiders are still looking at how this would impact the country’s informal waste sector. Some have urged the government to prioritise a just transition for waste workers. 

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