June 9, 2016

Impunity of Liberal Party Mining Crony to end soon?

Will a Liberal Party illegal miner crony become one of the first casualties of Duterte's crusade against corruption?

Two weeks after the elections and in response to President-elect Rodrigo Duterte's policy statements on mining and the environment, environmental lawyer and Kabataan Party-list Rep. Terry Ridon said, "Now is the perfect time to review all mining licenses, Mr. President [BicolToday]."

“Our presumptive President-elect should follow through with this criticism of SR Metals and order them to cease operations immediately,” Ridon said.

Ridon's Kabataan Party-list is a member of the Makabayan Bloc of the House of Representatives, which is aligned with the incoming Duterte administration [Star].

Duterte slams Roxas Crony

Earlier in March, President-elect Rodrigo ‘Rody’ Duterte Rodrigo “Rody” Duterte accused Liberal Party (LP) and administration bet Manuel “Mar” Roxas of granting illegal favors to mining crony Eric Gutierrez.

“[SR Metals was] assessed by the government to have violated the laws and was fined Php 77 million. Even with the government winning the case before the Supreme Court, ang binayad pa lang nila hanggang ngayon is Php 7 million, and they cannot collect kasi andiyan si Roxas,” Duterte said [TP: Duterte bares Roxas Crony].

SR Metals is a long-time campaign contributor of the Liberal Party. In January, SR Metals owner Eric Gutierrez lent his entire airplane fleet to Liberal Party for use in 2016 presidential elections [Philstar].

LP Pres. bet Mar Roxas and VP bet Robredo on their way to a campaign sortie aboard a helicopter owned by Gutierrez's Air Juan. (Courtesy: Miro Quimbo's Instagram Account)
The cozy relationship between SR Metals and the Liberal Party started right from company's inception, as  LP stalwart and Caloocan City Rep. Edgar Erice is a director of SR Metals from 2005 to present [Congress].

SR Metals and the Liberal Party continuously exchanged favors since then. Liberal Party candidates needed "political machinery" that SR Metals was more than willing to provide, while SR Metals needed impunity, or exemption from punishment for its various abuses against the environment, the government, and the Filipino people.

ThinkingPinoy has previously written five articles involving SR Metals.. These are:
  1. Roxas and Corruption: Campaign Planes, Election Spending, Mining Interests, and Lumad Rights
  2. Malacañang Awards Roxas' illegal miner friend
  3. How to get away with Plunder
  4. Duterte bares Roxas' illegal miner crony
  5. Supreme Court Math: Balance of Power in a Roxas Presidency
These articles, however, were written based on the available information at that time, that's why the picture they paint, while potentially disturbing, is still woefully incomplete.

Thus, to complete the story and to help the incoming Duterte Administration in going after this corrupt company, ThinkingPinoy created a timeline of every relevant piece of information about SR Metals that can be found online. The timeline may be a bit too long for the reader's taste, but ThinkingPinoy included a short summary at the end of this article for those who feel that it's TL;DR.

The Illegal Miner Crony SR Metals, 2006-2016


March: The Agusan del Norte Provincial Mining Regulatory Board approved SR Metals’ small scale mining permit [GR 179669], allowing the firm to mine a maximum of 50,000 metric tons of ore annually [Star]. Liberal Party (LP) stalwart Caloocan City Rep. Edgar Erice was listed as its president of SR Metals [Inq].

Despite the small scale mining extraction limit, SR Metals appears to have intended to exceed it from the onset, with one of its advertising pages claiming that the firm plans to extract 100,000 tons of ore each month. The ad included contact details of a Miguel Gutierrez, a relative of Eric Gutierrez, with phone number 0917.812.003 and fax 02.637.6741 [GMDU].

August: SR Metals started nickel mining operations in La Fraternidad, Tubay, Agusan del Norte [Star]. This was made possible through SR Metals’ Memorandum of Agreement (MOA) with the local Lumad group “Accredited Tribal Sectoral Leaders of Indigenous Cultural Communities of Tubay” [DB].

Tubay locals stage anti-mining demonstrations, leaders were the local Parish Priest, Tubay local Atty. Fortun Carlota, and town councilor Alejor Page. 8 were hurt in the ensuing government-initiated dispersal. [Philstar].

September: The Environmental Management Bureau (EMB) sent a Notice of Violation to SR Metals Inc. [SC]
 A photo of SR Metals' Tubay site. Small scale miners are not supposed to use heavy equippment. Source: Environmental Justice Atlas

November 16: DENR Sec. Angelo Reyes issued a cease and desist order against SR Metals’s Tubay operations [GR No. 179669] for the following violations:
  • The excess in annual production of SR Metals, in maximum capitalization, and in labor cost to equipment utilization of 1:1.
  • SR Metals’ Enviromental Compliance Certificate, which allowed it to commence operations, had no legal basis and are thus null and void from the beginning.

November 20: Agusan del Norte Gov Erle Amante sought the DOJ's opinion on DENR Sec. Reyes's order. In response, DOJ Sec. Raul Gonzales contradicted Reyes as he opined that the limit applies only to extracted Nickel-Cobalt metals [GR No. 179669; Journal]. SR Metals used DOJ Sec. Gonzales to justify continued operations pending a court decision.

It was later reported that the Amante dynasty of Agusan del Norte,  where Gov. Amante belongs, is involved SR Metals' exportation of mineral ore to China [Quitoriano 2009].

December: The Minerals Development Council seconded DENR Sec. Reyes’ order [GR 191705].
SIDE NOTE: With Gonzalez’ interpretation, SR Metals would have been allowed to extract 3.33 million metric tons annually. That sounds like a lot, but how much is it exactly?

SR Metals mines low grade Laterite ore [Mindoro]. A geological study on the Agata Project, situated in the municipalities of Jabonga, Santiago, and Tubay in Agusan del Norte, shows that the Laterite has a density of 1.72 tons/m3 [Cox 2008], so that 3.33 million ton3 translates to 1.94 million m3 of ore.

Now, the iconic Araneta Coliseum has a diameter of 107.98 m (354.25 ft) and a height of 42.67 meters (140 ft) [Araneta], so that its volume is 390,028 m3. That is, according to Sec. Gonzales and SR Metals, a small scale miner can extract five Araneta Coliseums of ore every year.

Surely, the proponents of the Small Scale Mining Law [RA 7076] didn’t mean that.

The Supreme Court affirmed DENR Sec. Reyes’ decision in 2014 [GR 179669].


July: DENR Sec. Angelo Reyes was replaced by former Manila Mayor Lito Atienza [Star].

September: After an order from the Court of Appeals [GMA], SR Metals halted operations pending approval of application for a large scale mining permit [GMA]. So far, SR Metals has generated $73 million (P3.4 billion) in gross sales while it remitted only P30 million in taxes and fees to the local government [GMA; USD1:PHP46.5]. 

October: the Agusan del Norte provincial government required SR Metals to pay extraction fees in response to SR Metals’ large scale mining activities. The Court of Appeals affirmed the LGU’s decision in 2014 [CA-GR SP No. 05089-MIN]. Small scale miners are exempted from paying extraction fees.

December: plunder charges were filed against SR Metals and company president Edgar Erice [TV5]


March: newly-appointed DENR Sec. Lito Atienza issued SR Metals a large scale mining permit. The firm resumed operations later in the same month, with a new extraction limit of 1.5 million metric tons per year [ABS-CBN].

The La Fraternidad Rural Health Unit in Tubay recorded 69 cases of acute respiratory infections, 78 diarrhea cases, 22 skin illnesses and 32 parasitism cases as compared to near zero in previous years when SR Mining has not yet operated in the area [DB].

June: Inside Mindanao published three pairs of before-and-after photos taken in Tubay [IM]:

October: Lumads claim SR Metals neglected to pay royalty fees covering September 2007 to October 2008 per RA 7942. With P2.9 billion in reported revenues during that period, the contested fees amount to P29 million [GMA].

The Environmental Justice Atlas cited the following visible impacts of SR Metals’ Tubay operations [EJAtlas]:
Environmental: Air pollution, Biodiversity loss (wildlife, agro-diversity), Floods (river, coastal, mudflow), Food insecurity (crop damage), Loss of landscape/aesthetic degradation, Noise pollution, Soil contamination, Soil erosion, Waste overflow, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Mine tailing spills

Health: Accidents, Mental problems including stress, depression and suicide, Violence related health impacts (homicides, rape, etc.), Other environmental related diseases, Other Health impacts

Socioeconomic: Increase in violence and crime, Lack of work security, labour absenteeism, firings, unemployment, Loss of livelihood, Loss of traditional knowledge/practices/cultures, Militarization and increased police presence, Violations of human rights, Land dispossession, Loss of landscape/sense of place, Increase in Corruption/Co-optation of different actors, Displacement

SR Metals did not provide proper relocation to 115 families from Sitio Kapuk-an, Barangay La Fraternidad. These families were displaced by the firm’s mining operations [DB].


June: SR Metals ramped up ore extraction operations, increasing output by 60% in Q1 2009, shipping 425,000 dry metric tons of direct shipping ore. [Wallace]

October: In an article published in the peer-reviewed Asian Journal of Biodiversity, it was stated that "[Tubay residents] claimed that the rapid decline of fish catch has become a major problem ...These changes have been observed... since polluting industrial mining and many other destructive human activities take place [Alima & Patricio 2010]."


SR Metals founder Francisco Enrico Gutierrez was a major campaign funder of presidential candidate Benigno “Noynoy” Aquino and vice-presidential candidate Mar Roxas [Tribune, Manila Times]. Former SRMI employees said Gutierrez bankrolled President Aquino’s 2010 campaign in Northern Mindanao, and was appointed LP head in Caraga Region for a time [Inq].

May: Aquino wins presidency, Roxas loses to former Makati Mayor Jejomar Binay [TP: Roxas’ Rise].

August: 3,000 Tubay residents from different barangays signed petitions to stop SR Metals’ mining operations [GMA]. Tubay has a total population of 20,000 [PSA].

December: Tubay Mayor Sadeka Tomaneng said, “The mining activities already affected not only rice producing lands of Tubay due silting of irrigation canals but also vegetable farmers and fisher folks who also complained about destructive mining activities that’s why different sectors had passed resolutions urging closure of S.R. Mining Inc. apart from huge debt due to its unpaid taxes and extraction fees to provincial and municipal government of Tubay.” [DB].


February: Tubay Mayor Tomaneng said SR Metals’ operations aggravates local floods. She also complained that the firm is delinquent in over P200 million in local taxes and fees [MindaNews].

March: Footage showing the extent of environmental damage caused by open pit mining in Tubay was published (see video below).

June: Agusan del Norte governor Erlpe John Amante was ordered charged with violation of the anti-graft law for allegedly favoring small-scale mining operator SR Metals Inc. Amante constantly issued transport permits to SR Metals, allowing the company to transport 672,163 metric tons of nickel ore worth $23.818 million from August 2006 to April 2007, in violation of its extraction limits.[Inq]. Amante was arrested later in the same month [Inq].

July 6: Tubay parish priest Raul Cabonce, a vocal critic of SR Metals, was accused of rape [GMA] and was eventually reassigned somewhere else.

July 11: Tubay locals staged another demonstration, crowd dispersed with water cannons from nearby Cabadbaran City, and with help from the Armed Forces. Atty. Carlota was allegedly murdered in the same event. Fr. Cabonce was among the demonstrators. [Youtube Video, Justice for Atty. Carlota Facebook Page]

July 19: “Official reports” states Atty. Carlota was accidentally run over by his own vehicle [Bombo Radyo]


February: Erice files Erice sues Tubay Mayor Tomaneng for “Grave Abuse of Authority” [Journal]. Meanwhile, Bayan Muna Party-list Rep. Teddy Casiño mulls a congressional investigation on SR Metals’ operations.
February: SR Metals assured displaced people that they will receive concrete houses, electrification and clean water supply, but not all of them were ultimately granted these provisions. The mining firm was also said to have caused the contamination of the river in Tubay, making it difficult for fishermen to earn a living. Moreover, residents were said to be suffering from acute respiratory infection, diarrhea, parasitism and skin infection due to the pollution [ABSCBN].

May 2012: The Ombudsman withdrew graft charges against Gov. Amante, arguing that small scale mining does not entail an extraction limit [Inq].

July: PNoy issued EO 79 that bans issuance of new mining contracts [EO 79], allowing SRMI and other mining firms with existing contracts to hold a de facto monopoly.

August: Tubay residents held a demonstration against SR Metals' reluctance to hire local residents for its mining operations (see video below).

June: SR Metals owner Francis Eric Gutierrez accompanied President Aquino in his official 2012 US and UK trips, where the former was included in the group of “Top 26 Filipino businessmen” that comprised official Philippine delegation [Rap].

December: Another set of graft raps were filed against Tomaneng, Assistant Ombudsman Elvira Chua issues hold departure order. [Inquirer]


August: the National Labor Relations Commission (NLRC) said SR Metals committed labor violations. The Court of Appeals upheld this decision in 2015 [CA-GR SP No 06031].

May: PNoy's Liberal Party allied with Agusan del Norte's Amante Political Dynasty [Inq].

December: Presidential Communications Development and Strategic Planning Office (PCDSPO) Sec. Ricky Carandang was reportedly planning to join a SR Metals after his resignation in Malacañang [MT].


January: Carandang, after resigning from his PCDSPO post, was reported to be working for Air Juan, one of SR Metals’ sister companies [MS].

September: The Gutierrezes were identified in media reports as the owner of the helicopter used to take aerial video footage of the “Hacienda Binay” in Rosario, Batangas [Inq].

SR Metals received the Platinum Award for Surface Mining Operations Category at the 2014 Presidential Mineral Industry Awards [Star].


March: Government execs still won’t touch mining case [Inquirer]. Meanwhile, non-profit responsible mining advocate Bantay Kita said the government lost around P2.01 billion in revenue because of income tax breaks given to mining firms, including SR Metals [BK].

May: Lumad group Kalipunan ng mga Katutubong Mamamayan ng Pilipinas (Katribu) said SR Metals’ mining plunder could be source for campaign funds [Tribune]. In other news, SR Metals was also accused of the following: Illegal closure of public road, illegal dismissal of workers, failure to provide proper relocation site for displaced residents, and non-payment of business taxes and other fees [Manila Times].

A TV5 report provides more details:

September: Increased militarization of Agusan triggers Lumad exodus, 68 people summarily killed since 2010, 13 since March. All the murdered IP leaders were opposed to Nickel Asia and SR Metals, both of which are owned by LP financiers [TV5]. Meanwhile, SC fines SR Metals a paltry Php 7 million for over-extraction, despite the latter earning Php 2.9 billion from illegal mining. [Senate]

November: SR Metals was declared Best Surface Mine in the 2015 Presidential Mineral Industry Awards [Star].

December: SR Metals submits a "Transparency Report", showing P2.6 billion in revenue for 2013. However, the report shows zero royalty payments to Lumad groups, zero local tax payments [PH-EITI].


January: PNoy awarded SR Metals the “Presidential Mineral Industry Environmental Award”, saying SR Metals “performed well” in terms of environmental protection, safe operations, and helping local communities [TP: Illegal Miner].

February: Records show Gutierrez’s Air Juan planes are tax-exempt, a privilege accorded to no other airline company [Interaksyon].  

April: the Supreme Court ruled on Basiana Mining vs DENR & SR Metals where Basiana, the original holder of mining rights over SR Metals’ Tubay site since 1997, sued DENR for issuing a mining permit for the same site to SR Metals in 2006. The Supreme Court essentially denied Basiana’s petition for lack of jurisdiction and advised Basiana to appeal the case to the Office of the President (PNOY) [GR 191705].

Meanwhile, Eric Gutierrez was reportedly preparing to leave the country if Roxas loses in the May elections [NC].

TL;DR: The Crux of the Matter

Here are several observations that basically summarize what was in the timeline.

First, SR Metals violated its small scale mining permit, prompting then DENR Sec. Reyes to demand its closure. The firm defied Reyes' order and Reyes was eventually removed from DENR. Atienza, Reyes' replacement, issued a large scale mining permit to SR Metals, despite SR Metals' history with DENR.

Second, SR Metals has been destroying Tubay's environment, endangering Tubay residents' health, evading financial responsibilities to Lumads and LGUs,. However, the Liberal Party chronically turns a blind eye on SR Metals' crime spree in exchange for campaign funding and related favors.
Proof of this are the Presidential Awards given to SR Metals in 2014 , 2015, and 2016, despite SR Metals' checkered history and despite its plethora of pending court cases.

Third, it's ironic that one of the factors that led to VP-elect Leni Robredo's win is her ability to scour more parts of the country than her rival Bongbong Marcos. This ability was made possible by SR Metals' campaign planes, a luxury that not all VP candidates enjoyed. Moreover, Robredo's silence on the SR Metals issue which was one of the most talked about subjects in Q1 2016, is disturbing.

Now that the Liberal Party today has been decimated by defections to the Duterte camp, how can SR Metals expect to maintain the impunity it enjoyed for the past 10 years?

We will know the answer by next month (ThinkingPinoy). 

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