Backgrounder on Placer Dome in Marinduque, Philippines

Jamie Kneen Communications and Outreach Coordinator responsible for: strategic research, social media, and public engagement; our Africa program, environmental assessment, and uranium mining.

The Tailings Spill Disaster of 1996

On March 24, 1996 a massive tailings spill at Placer Dome's Marcopper Mining Corporation (Marcopper) mine in the Philippines filled the 26-kilometre-long Boac River on the island of Marinduque with 3-4 million tons of metal enriched and acid generating tailings. The spill happened when a badly sealed drainage tunnel in an old mine pit burst. The mined out pit, high in the central mountains of Marinduque, had been used as a storage place for tailings from an adjacent mine since 1992. An investigative team from the United Nations, which visited the island shortly after the tailings spill, noticed unrelated leaks in other mine structures and concluded, "it is evident that environmental management was not a high priority for Marcopper." The UN team also noted that had proper risk assessment's been done on the pit "it is possible the present environmental disaster would not have occurred" (UNEP 1996:68-69).

A 30-year History of Mining Disasters and Social Opposition

Placer Dome's involvement with Marcopper was long standing and core to decision making at the mine.

  • From the start of mining by Marcopper in Marinduque, in 1969, Placer Dome has owned 39.9% of the shares in Marcopper, the maximum amount of shares that could, until recently, be legally held by a foreign company in the Philippines.
  • Placer Dome, managed the two Marcopper mines on the island. All Presidents and Resident Managers of Marcopper, from 1969 until 1997 (when Placer Dome divested) came from Placer Dome. This was established in the agreements Placer Dome had with the banks whose loans Placer Dome guaranteed. It made sense, as Placer Dome was the only partner in Marcopper with any mining expertise.
  • Placer Dome guaranteed the loans for successive Marcopper mines on the island.
  • Placer Dome provided the technical expertise for the two mines.
  • Placer Dome was the only mining company involved in Marcopper from 1969-1994. Placer Dome's secret partner in the mine (50%) until 1986, when he was overthrown, was the Philippine dictator Ferdinand Marcos. After 1986, Marcos's shares were taken over and held by successive Philippine governments (Corazon Aquino, Fidel Ramos) until 1994, when they were privatized.

 

In 30 years of mining under Placer Dome's management, Marinduqueños endured one mining-related environmental disaster after another. For 16 years, from 1975 to 1991, Placer Dome oversaw the dumping of 200 million tons of mine waste (tailings) directly into the shallow waters of Calancan Bay, covering corals and seagrasses and the bottom of the bay with 80 square kilometres of tailings. The food security of 12 fishing villages around the bay has been severely impacted for more than 25 years. These tailings are also leaching metals into the bay and are suspected to be the cause of lead contamination that has been identified in children from villages around the bay. Calancan Bay villagers were never asked for their permission for this dumping, they were never compensated for their losses and they protested the dumping vehemently for 16 years. Although Placer Dome executives met regularly with Canadian NGOs during the 1980s over this issue, the dumping was never halted.

In 1993, a dam holding back mine waste at the mountainous headwaters of the Mogpog River burst, flooding downstream villages and the town of Mogpog so severely that houses were swept away, water buffaloes and other livestock killed and crops destroyed. Marcopper's Resident Manager, Placer Dome's Steve Reid, denied any responsibility. However, when the dam was rebuilt an overflow was added for the first time, in an implicit acknowledgement of faulty engineering. Within two years the toxic waste behind the dam was so high again that it flowed freely through the overflow into the river. By the time the 1996 Boac spill occurred, this dam in Mogpog was again in dire need of repair and a source of protest by downstream villagers. The Boac spill happened in 1996 and the repairs on the Mogpog dam were never carried out. The Mogpog River is severely affected by the toxic waste flowing through the dam. According to a report by the Vancouver-based engineering firm Klohn Crippen, "failure of the dam is a virtual certainty in the near term under current conditions" (Klohn Crippen, August 23, 2001). Klohn Crippen warned that failure of the dam will result in "significant downstream property damage" and "the potential for loss of life" (Klohn Crippen, August 23,2001).

One Year After 1996 Spill Placer Dome Divests From Marcopper

The disastrous Boac River spill finally focussed global attention on the mining-related environmental problems in Marinduque. International scrutiny by organizations such as the United Nations put enormous pressure on Placer Dome, as did the immediate criminal indictment in the Philippines of Placer Dome's John Loney and Steve Reid (President and Resident Manager of Marcopper, respectively, the case is still pending).

Weeks after the disaster, as tailings continued to spew forth from the damaged tunnel, then-CEO of Placer Dome, John Willson, made a written commitment to then-President of the Philippines, Fidel Ramos, stating that "I have authorized the following commitments by Placer Dome: The residents of Marinduque who have suffered personal inconvenience or damage to their property as a result of the Marcopper event will be quickly and fairly compensated. Placer Dome recognizes its responsibility to rehabilitate all areas impacted by the tailings flow. This program will include: 1) the rehabilitation of the river system; 2) the remediation of off-river impacts; ...6) the development and undertaking of a program of river and ocean rehabilitation." Placer Dome predicted the clean up would be complete within six months of the spill. A wholly owned subsidiary called Placer Dome Technical Services Ltd. was set up with offices in Manila and Marinduque to manage the clean up and compensation arrangements. Placer Dome dredged a wide channel at the ocean mouth of the Boac River to catch tailings flowing down from the river into the ocean. Large areas of coral coast had already been covered in tailings (UNEP 1996) and continued to be impacted by new tailings coming from the river, even after the channel was dug, because the channel was filled with tailings within months.

By the end of 1996, with the growing realization that the river clean up was not going to be done in six months or even a year, Placer Dome announced that the company planned to divest from Marcopper, but would continue to take responsibility for the ongoing clean up of the river. The commitments made by Placer Dome's CEO to the Office of the Philippine President were reflected in the legal agreements Placer Dome entered into with Marcopper, on February 28, 1997, known as the Environmental Reclamation Agreement (ERA), the Tunnel and River Contract, and the Makulapnit Siltation Dam Agreement (MSDA). In entering into these agreements with Marcopper, Placer Dome stated its wish to "maintain its reputation for responsible environmental management and to maintain its ability to generate income from operations in the Philippines" (MSDA 1997). Placer Dome also recognized the "near insolvent" state of Marcopper (ERA 1997), and made reference to the "technical capabilities and international expertise of PDI" (MSDA 1997) with respect to the work that needs to be done.

In March of 1997, one year after the spill, Placer Dome divested from Marcopper. By then, Placer Dome had announced that it planned to clean up the river by dumping the tailings into the sea via submerged pipes, a disposal method known as Submarine Tailings Disposal, which is enormously controversial internationally and effectively prohibited by law in the US and Canada.

Marinduqueños Oppose Placer Dome's Plans to Dump the Spilled Tailings into the Sea

Placer Dome's first permit application for Submarine Tailings Disposal (STD) was turned down by the Philippine Department of Environment and Natural Resources (DENR), in the spring of 1997. The department was concerned that rich fishing grounds in the nearby Tablas Strait would be severely harmed. A broad coalition of Marinduqueños who vehemently opposed the dumping of mine tailings into the sea hailed the DENR decision.

Placer Dome appealed the DENR ruling and offered to conduct an Environmental Impact Assessment (EIA) to prove that STD could be safely implemented. On March 23, 1998 the DENR allowed the company to conduct an EIA as long as a "major part" of the study focused on "alternative land-based disposal options." Placer Dome brought in Woodward-Clyde (Philippines) to conduct an extensive year-long study in support of STD. In the meantime, tailings continued to make their way into the sea with every major rainstorm. On February 16, 1999, PDI's second request for an STD permit was turned down by the DENR, this time on the basis of "absence of social acceptability as evidenced by the consistent opposition from directly affected stakeholders of Marinduque"

Rather than accept this ruling and set to work to implement the long-delayed clean up in an environmentally and socially acceptable manner, Placer Dome started a local campaign to try to prove social acceptability by implementing local livelihood programs in the affected villages, while collecting signatures in support of STD. Placer Dome also managed to convince the DENR to strike an independent review committee to review Placer Dome's STD plans.

On May 25th, 1999, a congressional inquiry was called in Manila to review complaints by Marinduqueños over the continued delay in the clean up of the river, evidence of increasing toxicity of the river, health affects in villagers near the river, delays in compensation payments, and Placer Dome's continued insistence on STD as a clean up option.

In addition, at the request of island residents and elected officials, an independent team of scientists from the United States Geological Survey (USGS) visited Marinduque in the Spring of 2000. The USGS report focused on the large mounds of tailings still in the river and in the catchment area at the rivers base. It stated that these "will be a long-term source of acid and metals into the environment, and are therefore in need of remediation" (http://geology.cr.usgs.gov/pub/open-file-reports/ofr-00-0397/, p.2). The USGS team also warned about the dangers of STD, stating "there is considerable potential that a highly acidic, metal-enriched, and environmentally detrimental plume would develop in the ocean around the tailings discharge point during tailings disposal"

2001: Placer Dome Prepares to Return Tailings to the Old Pit Even As Study Shows the Pit to be Unstable

Following the findings of the USGS report, the DENR assured Marinduqueños that STD would no longer be considered an option for disposal of the tailings in the Boac River. Placer Dome appeared to accept this ruling although the company continued to insist in the media that STD was the best clean up solution. In the Spring of 2001 Placer Dome started to prepare a plan to return the spilled tailings to the old pit. Marinduqueños requested that the USGS first conduct a thorough scientific review of this clean-up option.

In the spring of 2001, information was made available, through workers at the mine site, that the Vancouver-based engineering firm Klohn Crippen had been commissioned by Placer Dome to conduct a review of all mining-related structures at the mountainous mine site. Through the summer of 2001, Marinduqueños and Catherine Coumans of MiningWatch Canada repeatedly asked Placer Dome and employees of their local subsidiary, PDTS, for a copy of the Klohn Crippen report. On October 3, 2001, Catherine Coumans and a delegation of elected officials from Marinduque, including town officials of Boac, the mayor of Mogpog and a provincial board member, met with Ian Lewis, president of PDTS, in Manila to request the report. Placer Dome refused to supply the report.

On October 9th, a congressional inquiry was held to review Placer Dome's plans for the clean up of the river, delays in compensation, and the need for greater transparency around studies commissioned by Placer Dome. On the evening before the Congressional Inquiry a faxed letter from PDTS president Ian Lewis arrived at Congressman Edmundo O. Reyes Jr.'s office announcing that he did not intend to attend the inquiry. Not long after that, a fax arrived with a leaked letter from Klohn Crippen addressed, among others, to Ian Lewis of PDTS. The letter is dated August 23, 2001. It is an urgent appeal for action following the release of their report on June 14th. The letter highlights the conclusions from Klohn Crippen's June 14th report that five structures need remediation in the near future and that two structures (the dam at the top of the Mogpog River and the pit containing mine waste), are in such bad shape that failure is a "near certainty in the near term under current conditions." The Klohn Crippen letter refers twice to potential for "loss of life" downstream as a result of collapse of these two structures and notes that collapse of the pit "would threaten the safety of any mine personnel that might be in the vicinity when the failure occurred."

Given the urgency of this information and the imminent nature of the threat to human life, it is unconscionable that Placer Dome not only refused to release this report to immediately affected stakeholders, who were in fact asking for it, but also took no steps whatsoever to warn people of the danger they faced, or to mitigate that danger by immediately implementing the recommendations in the Klohn Crippen report. Instead, when the information became public on October 9th, Placer Dome made statements to the press in Canada that because of their divestment in 1997 they no longer had any responsibility for these dams and structures and so could not be held legally liable for any disaster that might happen.

Placer Dome Unexpectedly Pulls Out of Philippines

On October 11, 2001 Secretary Alvarez of the Department of Environment and Natural Resources issued an order to CEO Jay Taylor of Placer Dome, Ian Lewis of Placer Dome Technical Services, Inc. and to the new owners of Marcopper Mining Corporation (MMC) to "immediately conduct remedial measures" on the weakened structures that were the focus of the Klohn Crippen report. Secretary Alvarez added that "Should an untoward incident happen for failure to implement this Office's directive, the Office will be constrained to file appropriate actions (civil, administrative and criminal) against the officers of MMC and PDI." Placer Dome was supposed to start remedial action of the dangerous mine structures within two weeks time. Placer Dome did not comply.

In December 2001, without warning or consultation, Placer Dome Technical Services closed its office in Marinduque and its office in Manila and pulled out of the Philippines, leaving behind the toxic mine tailings in the Boac River, the threat of five dangerously unstable mine structures, built while Placer Dome managed the mine, and the incomplete compensation of Marinduqueños who had been affected by the 1996 spill.

Placer Dome undertook these substantial changes without any form of consultation with the elected government officials of Marinduque, or with local affected stakeholders This is in direct contradiction to commitments of transparency and consultation that Placer Dome has made to the people and government of Marinduque following the tailings spill disaster of 1996, and in contradiction to Placer Dome's own Sustainability Policy, which commits the company to, "Adhere to high standards of ethics and transparencyin the conduct of our activities, in a manner that will demonstrate trust and respect. ... Communicate with stakeholders and work towards consensus based on honest discussion and a mutual understanding of concerns and needs. Provide for effective involvement of communities in decisions which affect them, treat them as equals. Consider as a stakeholder individuals, groups, communities or governments which may be directly affected by our activities, and provide them with information relevant to their concerns."

Marinduqueños now live in fear of the next tropical storm that might collapse one or more of the unstable dams in the mountains, unleashing tons of toxic mine waste on lower lying villages. They also worry about whether the toxic waste that is killing the Boac River will ever be removed. Placer Dome's Jay Taylor denies responsibility for his company's legacy in the Philippines, saying that the company's pullout "closes the chapter on this whole story" (Toronto Globe and Mail, December 18, 2001).

In fact, however, Placer Dome remains connected with, and ultimately responsible for, the clean up and compensation in Marinduque. Placer Dome says it has "entered into a number of agreements with Marcopper" that require Marcopper to further clean up the river and compensate affected residents, using funds Placer Dome has made available. Placer Dome says engineering firm URS Corp. — Philippines will oversee the operation. Placer Dome has, in effect, contracted Marcopper to carry out the work it had committed to do. But the agreements Placer Dome has entered into with Marcopper are confidential and so shareholders and stakeholders have no insight into the exact nature of Placer Dome's ongoing role or its financial commitment. For local stakeholders, the secret nature of these agreements makes it impossible to monitor compliance or hold parties responsible for the ongoing delays in the removal of tailings from the river and in compensation payments. What is certain, however, is that Placer Dome is still involved in Marinduque and should — as Klohn Crippen predicts — one of the dams fail causing human tragedy, Placer Dome's name and that of Canada will again be linked to a mining disaster in the Philippines.