MRL is an exploration company focused on nickel, copper and gold exploration in the Philippines. They plan to continue their exploration activities, focusing on detailed definition and expansion of the nickel laterite resource they have identified in the Agusan del Norte Region (Agata MPSA).
Key environmental and social issues relating to the project that have changed since the September 2008 ESRS are summarized below along with specific information on how potential impacts and risks are to be addressed by the Company. The updated Action Plan is attached which defines measures required for the project to comply with the laws and regulations of the Philippines, IFC’s Performance Standards on Social and Environmental Sustainability and the applicable IFC environmental, health and safety guidelines.
PS1 Social and Environmental Assessment and Management systems
Social and Environmental assessment
Mindoro has been operating as an exploration company in the Philippines for 14 years, and has developed systematic approaches in managing its exploration activities. The exploration commenced in the Agusan del Norte Region in 2004. Environmental and social impacts related to the exploration activities have largely been identified through a permitting process and supporting studies.
An Environmental Impact Assessment (EIA) was prepared to meet local regulatory permitting requirements for the prospective Direct Shipping of Ore (DSO) mining operations in the Agusan del Norte Region which has been approved by the Government. Since exploration activities resumed in April 2010, Mindoro has continued its permitting process for the DSO mining operation. Meanwhile, as part of Mindoro’s commitment, the EIA will be upgraded to a comprehensive Environmental and Social Impact Assessment (ESIA) meeting the IFC Performance Standards.
The ESIA upgrading process was commenced in early 2008 when Mindoro commissioned the Coffey Environmental Pty Ltd to conduct a social-economic baseline survey in all host and neighboring barangays (communities). This was followed up by validation workshops in the communities in late 2008.
Although the exploration project is not predicted to have any marine impacts, fishing is an important livelihood activity in the coastal villages within this area, in order to assess and minimize its potential impact from any future mining operations. Mindoro has launched a marine baseline survey which will form part of the ESIA upgrade.
Management Programs
Mindoro has developed a Health, Safety, Environment and Community Policy (HSEC), Management Programs, and standard operating procedures (SOP’s) for Exploration. The HSEC Policy contains community relation guidance in managing social, environmental, and health issues in relation to exploration activities. It also includes program objectives, land access procedures for drilling, waste management procedures, pollution prevention measures. The HSEC also focuses on Mindoro’s partnership with local government agencies for promoting environmental, social and economic sustainability in the local communities.
Mindoro also has social programs to promote community awareness of the project and its associated impacts.
Organizational Capacity
Mindoro has an in-house team of experienced geologists and engineers and uses contract drilling companies for drilling operations. The drilling activities for the nickel laterite exploration have been small-scale using only teams on foot
Mindoro have displayed a very strong commitment to social and environmental management in their exploration activities. A core social and environmental team of 5 was retained to continue engagement with local communities even after activities were curtailed in 2009. Since work resumed in April 2010, a social manager has been recruited. Her key role is the development and implementation of a series of outreaching community investment programs to promote income and welfare of local communities and respond to their needs and concerns. Mindoro is still in the exploration stage and consequently does not earn any operating income. Between 10-12% of total exploration costs to date have continuously been spent on social and environmental activities even during the global financial crisis when staffing levels were significantly reduced.
Monitoring and reporting
Mindoro reports its environmental and social monitoring performance to authorized Philippine Governmental agencies on a regular basis and will report to the lenders on an annual basis.
Inspection of drill sites is conducted daily by the environmental officer to monitor compliance of the field workers and the drilling contractor with the company’s HSEC Policy and SOP’s. A check list is used to record environmental and social performance. Performance results are published at drill sites at the end of each month with some incentives to encourage improvement and healthy competition between crews.
Community Technical Working Groups (CTWGs) which are village based participate in various monitoring activities. Community members choose to become involved according to their particular interest (e.g.: rehabilitation, local recruitment, water quality monitoring). Each CTWG have the right to conduct its monitoring with the whole group or via a monitoring committee. The monitoring results are part of the agenda for discussion in every CTWG meeting. The quarterly reports of the company are likewise subject to validation and discussion during these meetings. All monitoring results are therefore provided to villagers. Meanwhile, community liaison officers respond to inquiries during their frequent visits to local communities.
Training
Mindoro continues to send its staff to attend training, educational tours, and knowledge sharing programs that are hosted either by relevant governmental agencies or by internal specialists. These include a pollution control officer seminar for environmental officers, basic occupational safety and health and first aid training for safety officers as well as multipurpose in-house training/workshops.
PS 2 Labor and Working Conditions
The company is dedicated to local employment, with only one expatriate working in the Philippines (Mindoro Director and COO and MRL CEO, Tony Climie). At present, the company has 21 regular employees and 11 temporary employees and provides numerous casual job opportunities to the communities it serves. Those individuals whose households were affected by temporary land acquisition have been given priority for causal job opportunities.
Human Resources Policy
Mindoro has developed a series of human resources related policies governing the well being of its employees, which is appropriate for exploration activities. Mindoro’s practices in hiring and promoting staff have demonstrated the company’s belief in equality, fairness and transparency.
Working Relationship and Terms of Employment
Mindoro operates in full compliance with Philippines labor legislation. An employment contract is signed at the time of employment for regular and temporary employees with respect to working hours, overtime payment, vacations, and other benefits and compensation. Mindoro regular employee contracts are based on open-end employment while temporary employee contracts are based on fixed terms covering specific activities.
An abbreviated working contract is signed with each temporary casual worker, the contract contains name of the worker, age, duration of the casual work, wage, daily rate, etc.
Worker’s organizations
Freedom of association and collective bargaining are recognized and respected by the company, and as the project matures, it is expected that unions will develop when the project proceeds to mining development in the long term.
Retrenchment
Mindoro had gradually retrenched 57 employees to reduce operating costs during the global financial crisis from November 2008 to September 2009. The retrenchment was a last resort to survive through the crisis. A careful retrenchment approach was developed in compliance with regulations in the Philippines. Employees were well informed, consulted in advance and in cases where alternative jobs existed, retrenched employees were given priority. Following Philippines regulations, MRL filed retrenchment notices with the Department of Labor and Employment 30 days prior to each retrenchment. This included submission of the written notice of retrenchment with reasons and the number of employee to be retrenched, the agreed retrenchment package, and written confirmation notices received by the employees about to be retrenched. The retrenchment package was provided in the presence of a representative from the Department of Labor and Employment.
Grievance mechanism
Staff meetings are held regularly, keeping employees up to date on activities within the company, and soliciting opinion from employees. The CEO has an open door policy which enables any employee to have direct communication.
Non-discrimination and Equal opportunity
Criteria used in the retrenchment during the global financial crisis were work related only without discrimination against any group/individual. There has been no outstanding dispute or law suit as a result of retrenchment in Mindoro.
Exploration activities resumed in April 2010 with candidates for employment selected on the basis of merit, ability, competence, experience, satisfactory character and employment track record and references. Mindoro is striving to create more jobs for female workers and about 50 percent of the workforce are female.
Protecting the Workforce
Mindoro are strictly following the Philippines law prohibiting any employment of children under age of 18. A careful validation of age is a key part of the Recruitment process. Mindoro has also developed control processes to audit the performance of its contractors in this regard.
Occupational health and safety
Mindoro designated a safety officer to continuously inform/supervise all workers on the specific classes of hazards in their work area. Appropriate PPE is worn by the drilling contractors and their assistants as well as temporary causal village workers. Coordination with governmental authorities has been carried out to ensure compliance with local requirements.
PS3 Pollution prevention and Abatement
Activities continue to be typically low impact, and the social and environmental management of the sites meets good international practice.
Exploration activities include reconnaissance and detailed geological mapping, geochemical soil and stream sediment sampling, gridline and topographic surveying, geophysical surveying, trenching and reverse circulation and diamond drilling. Minimal environmental impacts result from most of these activities, with the exception of trenching and drilling, which involve minor earth moving.
Disturbance of flora and fauna habitat minimization
Mindoro has developed a progressive rehabilitation program for disturbed surface areas. For the drilling program, the planned drill-hole sites are inspected by the Social and Environmental Management Team before proceeding to site/pad preparation. Assessment includes inventory of trees to be cut, estimation of the amount or degree of earth moving or ground disturbance, assessment of existing slopes and probable resultant slopes after earth moving. In cases where ground disturbance cannot be avoided, a progressive rehabilitation program is put into place, side by side with the exploration works. There has been some environmental disturbance during the rehabilitation of the road to the project area. Mitigation measures such as planting of fast-growing species along the road side has been undertaken.
Re-vegetation
To support the re-vegetation program, satellite nurseries have been established in barangays close to Mindoro work sites. Tree and fruit seedlings including giant bamboo seedlings are raised for re-vegetation. Upon completion of the exploration work, the drill sites with limited potential for re-use are immediately re-vegetated using tree or fruit species requested by the land owner or user. In hilly or steep areas, the company applies the slope stabilization approach patterned after Slope Agricultural Land Technology (SALT) where contour farming is adopted using leguminous hedgerows.
Mindoro’s rehabilitation of exploration sites is excellent. Any explored areas are revegetated where possible.
Erosion prevention
During exploration work where excavations are being done for the construction of drill site settling ponds or sumps, or excavation of shallow test pits and trenches, backfilling is undertaken once the work is completed. Excavated soil is placed into sacks which are piled around the sump to serve as a buffer zone, preventing erosion and further stabilizing the settling pond/sump. Immediately after exploration is complete, the stockpiled materials are used to backfill the area with soil cover to ensure fast recovery of planted seedlings. Slope stabilization with the use of ripraps, drainage systems, including canals and spill ways, are constructed to divert surface runoff and prevent road scouring. Drainage management ensures there are no impacts from erosion to nearby water systems.
Proper waste segregation is practiced in the project areas. Drill rods, additives and other drilling materials are arranged neatly in the designated area. Spill trays and pails are provided for ready use.
Hazardous Materials
Mindoro complies with the Philippines Hazard Act. Containers of oil and other lubricants for drilling are collected and disposed of appropriately. Fuels are contained in designated areas. Before and after drilling, nearby water sources are sampled and tested in the lab to monitor any changes that may be caused by drilling activities.
PS 4 Community Health, Safety and Security
The exploration activities all occur at a considerable distance from the nearest communities, and as such, pose no nuisance or recognizable impact from noise or dust. No health impacts on local communities are expected from exploration activities.
Although there is precedent for exploration and mining companies to use armed guards in this region to protect employees and assets from attacks, the company only employs unarmed-guards from project impacted villages to protect the drilling sites on the ridge mainly to monitor who is gaining access to the site. Their primary role is to question unauthorized access to the site, and to keep a log of who is passing through the area. Through maintaining a physical presence in the area, the risk of unauthorized access from other nickel laterite operators is reduced.
Mindoro has a strict code of conduct instructing its employees and contractors in interaction with the local communities to minimize any potential impacts on the local community. It is a dismissible offence to violate the code of conduct.
Land Access
Development of access roads has been minimized with drills and drill core being manually carried through the Agata MPSA, the footprint of exploration activities is small. Some very small areas of land have been required for which compensation for access has been paid.
The exploration activities in Agusan del Norte do not require any physical displacement to be undertaken. Land access required for the drilling sites is temporary (only up to about a week). Crops, trees and any other assets of the owner are recorded and compensated at a negotiated rate greater than the regulated rate.
Landowner/users were given first priority for unskilled work during drilling and rehabilitation. A small portion of the income generated has been collected voluntarily and used for the development of community public facilities and meeting spaces. Some limited access roads have been developed from upgrades of existing paths and have been regarded as improvement of local infrastructure for public use.
Consultation
The Social-Environmental team is sent to new exploration areas ahead of the geologists and drillers to explain the planned exploration activities, seek permission from the surrounding communities for the exploration, to negotiate any land access compensation required and to develop a relationship with the communities to ensure a positive working relationship between them and the community. In all cases, written consent is attained from the landowner and/or user, either individual or village based association, which also states agreed compensation rates, disturbance period and reinstatement conditions. Mindoro’s land access procedure is known by communities and is strictly followed.
Grievance
Community liaison officers have been functioning as a direct channel of communicating with local communities. Normally, community liaison officers rotate on a one-week long residence in each local community to maximize the opportunities to hear concerns. All community liaison officers are trained to handle community concerns and needs, and they have a direct reporting system to the social manager who also visits the local communities. At the time of the project appraisal, there are no outstanding grievances and local communities expressed their strong support for the project.
PS 7 Indigenous Peoples
There is no IP community physically or economically displaced or otherwise directly impacted by exploration activities or by land access. One IP community is indirectly and lightly affected by the development and the use of the existing access road to the exploration camp site.
The access road passes a village named Coro where two IP groups (the Manobo and the Mamanwa) currently reside. The village of Coro is experiencing indirect impacts from additional 5-10 light vehicles per day travelling through the village. During a meeting in the village of Coro, people spoke favorably about Mindoro’s exploration and expressed their high level support to the project potential mining activities.
The village comprises mainly Mamanwa and Manobo tribes and a small group of ethnic Filipino. The Mamanwa were traditionally a nomadic tribe, they came and settled down in the village some 40 years ago, while the Manobo have been traditionally sedentary. Both the Manobo and Mamanwa speak their own distinct language as well as the Visayas spoken by mainstream Filipino’s in the area. The Manobo and Mamanwa are physically distinct but no longer practicing their old customs and tradition religion. The Mamanwa and Manobo are all tenants and they do not own the land on which they reside.
Free, Prior, Informed Consultation
Identification of the local Indigenous community was conducted in 1999 by the National Commission of Indigenous Peoples (NCIP) prior to any MRL’s activities in the areas. Neither indigenous people nor indigenous customary lands were recognized. Interaction between the village of Coro and MRL commenced in 2005 when MRL recognized the village Coro as an indigenous village through its extension of a farm to market road. Formal engagement with Coro commenced in late 2005 with extensive consultation and community development activities. Under the Philippines Indigenous Peoples Rights Act free prior informed consent (FPIConsent) of indigenous peoples is required for a project to proceed. The NCIP therefore conducted another field based investigation and declared the existence of the Free Prior Informed Consent (FPIConcent) in early 2008. A Memorandum of Understanding was signed between the Mamanwa, Manobo, Mindoro and the NCIP.
IFC confirmed that Free Prior Informed Consultation had been undertaken during its first appraisal in 2008 and this was reconfirmed during the May 2010 second appraisal.
Development benefits
The area where the village of Coro located is not considered a Certificate of Ancestral Domain Claim/Title (CADC/T) area under Philippine law, and therefore the company is not required to pay a 1% of revenue royalty to indigenous peoples as otherwise would applied. Mindoro recognized the vulnerability of the IP groups, and are determined to maximize sharing of project benefits with the IP community. Mindoro have volunteered to contribute the 1% revenue royalty to the IP’s in the area regardless. This generous agreement has the potential to dramatically improve the livelihoods of the indigenous peoples in the area.
The Memorandum of Understanding and subsequent royalty agreements are understood to have been developed through Good Faith Negotiations. Once Mindoro start generating revenue, the 1% royalty will be managed through an Ancestral Domain Sustainable Development and Protection Plan (ADSDPP).
Meanwhile, Coro residents were given first priority for jobs on the road upgrade work which was undertaken. Mindoro has also assisted the village of Coro in applying for ancestral domain rights on the area. The Mamanwa and Manobo tenants are being granted access by the local government to a large piece of land nearby. Design and development of that piece of land into residential areas and lands that could generate sustainable income for the village have been regarded as the village’s top priority. Mindoro expressed its willingness to assist the village in partnership with the local governmental agencies at the village’s own efforts for such development.
