My Thoughts @ 23

Today, our group reported about the Marcopper Mining Case. To give you a short background about the case, below is the summary of who Marcopper is, and what happen.

Marcopper Mining Corporation explores, develops and operates mining sites which produces copper, silver and gold. It is co-owned (40%) and managed by Placer Dome, a Canadian company. Moreover, it is considered the largest employer in Marinduque and created most of the infrastructure on the island. It also makes up most of Marinduque’s revenue, and its mines produce 20% of the country’s copper supply.

Unfortunately, despite the economic benefits it brought to Marinduque, Marcopper has its tremendous environmental damages. On March 24, 1996, the plug that sealed the Tapian pit tunnel (the tunnel that serves as tailings dam) to the Boac River had cracked and this released 2-3 million tons of mine waste into the river. In effect, flash floods isolated villages, agricultural fields were inundated, and drinking water was contaminated. Moreover, fish, shrimp and other sources of foods were killed. The Boac River which used to be their main source of livelihood was then declared dead.

After the disaster, Marcopper and Placer Dome stopped its mining operations. It was found out that Marcopper already knew of the leaks in the drainage tunnel back in 1995, as it sought the help of a geotechnical consultant to plug the leaks. The Bureau of Mines, who monitored Marcopper’s compliance with the Environmental Compliance Certificate (ECC), made no report of this. Moreover, the government tried to cover up its negligence and asserted that environmental laws were dutifully enforced throughout the years. The DENR Undersecretary who approved the ECC even denied that he knew of the Taipan drainage tunnel.

As we can see, at the end, it seems that DENR wants to wash itself away from the fault. But, who issued the ECC for Marcopper to use Tapian pit? Who is supposedly be checking those mining operations? For me, DENR should admit their faults, and do something about it. It is their accountability to protect the environmental claims of the Philippines. That is why in our case analysis, we decided to analyze in the perspective of the DENR. What should the DENR do in order to prevent his kind of issues?

Our group concluded that the DENR in cooperation with the government should implement higher DENR standards for mining operations and shut down companies that do not comply. We want to give emphasis to shut down non-compliant mining companies, as this will immediately give justice to the citizens who are badly affected by their bad practices. If we are to prolong the bad operation of mining companies, then the damage to environment becomes heavier which could lead to another mining disaster.

Last 2015, we had another mining disaster, the Philex mining disaster. Indeed, history repeats itself. It seems that we have not learned from the Marcopper case. For me, the root cause of this is really the implementation of law and the lack of action from DENR. They should not be just issuing ECC without being cautious. They should check and monitor the compliance of mining companies.

In my opinion, the existing law has its own drawbacks and loopholes. In Philippine Mining Act of 1995, Mineral Production Sharing Agreement (MPSA) exists. MPSA is an agreement where the government grants to the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. In other words, the government gets a percentage from the income of mining companies, and this is aside from the usual tax imposed to the company. Therefore, I actually believe that one of the reasons why previously mining companies where not ordered shutdown, is that there is a potential loss of government’s income from it. Aside from that, the process of issuing ECCs is also prone to under-the-table negotiations and corruption. We witnessed how corrupt our government is, and I can’t help but doubt their services.

Lately, our current DENR secretary, Gina Lopez, orders many mining companies who fail to comply with environmental requirements to shut down and immediately stop operating. I agree with her initiative. Although, companies are protesting that this is unfair for them as they are not subjected to due process and that potential income will be lost, and even their workers will lose jobs and income. But, at the end of the day, humans will always need natural resources, and how are we going to sustain it when we keep on abusing it? Just imagine, what if suddenly our water sources at home suddenly become contaminated with mining tailings? Is income still important to us, when we don’t even have a clean water to drink?

Just to give you a short background, ING (International Netherlands Group) is a global financial institution with a strong European base, offering banking services. Our company offers retail and wholesale banking services to customers in over 40 countries. We have a broad customer base, comprising individuals, families, small businesses, large corporations, institutions and governments.

In the Philippines, we are part of ING Business Shared Services (IBSS), which is a young, dynamic and innovative organization that works with ING’s global businesses to optimize the delivery of banking services. We provide support and service to the different global branches of ING. We are committed to ensure accurate and efficient delivery of ING’s financial products across all of its clients globally.

As a financial institution, ING’s role is to support and encourage economic, social and environmental progress, leading to a better quality of life. In terms of economic progress, our financial market products play a vital role in this. Government or corporation requires funds to finance its operations and long-term investments. To do this, these institutions will raise money through buying and selling in the financial markets. And that’s where ING takes place. We provide banking/funds for different needs of the growing society.

ING is also a signatory to the UN Global Compact in 2006. We were committed to contribute in achieving the former Millennium Development Goals and current Sustainable Development Goals (SDGs). We indirectly contribute to many SDGs through the clients and specific projects we finance (such as providing funds for government projects) and the financial services we offer.

Our primary focus is on the goals on promoting sustainable and inclusive economic growth (goal 8) and sustainable consumption and production (goal 12). It’s because as a bank, we are committed to empower our customers and accelerate sustainability within our company as well as with our customers and in society.

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Now, when I was browsing through our corporate website, I discovered a lot of stories and news on how ING participated on minimizing environmental footprint and how it helped for the projects that promoted the betterment of society. One of my favorite stories is about the Dakota Access pipeline loan. Dakota pipeline is actually an ongoing issue as many protesters think it could harm sacred burial sites and contaminate drinking water in the area where Native American tribes, Standing Rock, lives. (For full story, you may visit http://www.bbc.co.uk/newsround/39420698).

Image from: http://www.bbc.co.uk/newsround/39420698

ING, which is one of the lenders, has withdrawn its participation in providing loans for this government’s approved construction of Energy Transfer Partners' Dakota Access Pipeline in the northern United States. This pipeline project will run from the Bakken oil fields in western North Dakota to southern Illinois, crossing beneath the Missouri and Mississippi Rivers, and will badly affect the Lake Oahe near the Standing Rock Indian Reservation where the Standing Rock Sioux tribal is established. The Standing Rock tribe argues that the pipeline will constitute a threat to the region's clean water and to ancient burial grounds.

Given that the tribes are raising their concerns, and many people will be badly affected by the said project, our company ING declines to participate in the project, despite the huge amount of profits it may get from financing the project. ING is actually the first from a group of 17 banks to dissociate from financing the project.

“We are heartened that ING has made the conscience decision to remove itself from a project that tramples on the rights of sovereign nations,” the Standing Rock Sioux tribal chairman, Dave Archambault, said in an article in The Guardian Newspaper.

There are a lot of stories that will show how social responsible ING is. It includes different renewable energy projects, supporting poor economies, animal rights, and many internal company initiatives on how it minimizes the company’s environmental footprint. You may visit https://www.ing.com/ING-in-Society/Sustainability.htm to discover more about these stories.

Here in the Philippines, ING is also doing a lot of CSR programs. My favorite is the Orange Bike Project:

Image taken from: http://www.worldvision.org.ph/press-center/aeta-children-receive-orange-bikes

In cooperation with World Vision Philippines and World Bicycle Relief, ING launched the Orange Bike Project. The goal of the project is to provide bicycles to the children who live far from the school. As we all know, in some provinces, children find it hard to go to school because of the distance and the lack of mode to transportation. With the bikes donated by ING, the children can get to their school faster and safer, thus improving their school attendance and academic performance.

Last October 2013, the first  ING Orange Bike project was launched in the towns of San Isidro and Cordon in Isabela province, where children had to walk at least five kilometers to go to school. Then last 2014, with the help of World Vision Philippines, ING Bank distributed 590 bikes to four high schools in Zambales in the municipalities of Cabangan, and Botolan, the province’s largest town. Recognizing  the significance of the project, Department of Education (DepED) secretary, Br. Armin A. Luistro said, “This will not only help them get to school but also provides a way to teach road safety and environmentalism.” (Subic Bay News, 2014)

For me,this project is really a big help for those children who are far from the school. It gives them an easier way of going to school. Aside from that, bikes are environment friendly, so in that way, environmentalism is also promoted.

While doing this project, I can say that our company is doing great in terms of CSR. As one of the financial giants globally, we understand our value and impact to the society. We operate not only for the sake of gaining profits, but also for our mission to contribute to the success of the global society. We strongly believe in sustainable development, and that preserving the environment and supporting the betterment of the society will lead us to a further success. As learned in the class, CSR should be part of how the company operates, and that’s how ING do business. In our daily operation, we are always mindful of our social responsibility, and that could be the reason why we are recognized globally. Our efforts in making the society better have paid us well in terms of public trust and good company reputation.

Today, in our class, one of the cases discussed was about the CSR in Lamoiyan corporation. Honestly, I have no idea with who Lamoiyan is, it was only in the class where I found out that they are the manufacturer of Hapee toothpaste. I am familiar with Hapee; I see it on groceries and sari-sari stores everywhere in the Philippines. Their endorsers are quite big as well. However, I still prefer other brand to use, because my family sticks to that brand ever since the toothpaste world has begun.

Anyway, one of the notable things about Lamoiyan is employing deaf people in their company. As we all know, it’s hard to get a job when one of your senses is impaired, especially in our economy when there’s a lot of normal people looking for a job. Now, with this kind of initiative, opportunities are given out to hearing impaired people and of course, this is really a good initiative. As stated in UN under article 1 of human rights, “All human beings are born free and equal in dignity and rights”, which should implies that as long as we are qualified regardless of whether we are impaired or not, we should have equal rights for job opportunities. And this is what Lamoiyan promotes, the equality between normal and impaired people.

As I said, I’m not really familiar with Lamoiyan Corporation, which makes me believe that the company is relatively small as compared to other toothpaste manufacturers. Now, my reflection is this: If small companies can do initiatives like that, then bigger companies have no excuse not to take part in hiring these impaired people. Obviously, Hapee is not the number one toothpaste brand in our country, but the company was still able to sustain this initiative. Although they have other products like Dazz dishwashing liquid, Licealiz shampoo…etc. Among all those product Hapee is the most popular one, which does not even make it to number one or two in terms of competitiveness.

I think that if all companies will be hiring impaired people, depending on the nature of job, our labor force will be more diverse, opening opportunities to different people with different abilities. It’s like giving equal chances among all. According to Lamoiyan owner, Dr. Cecilio Kwok Pedro which is a graduate of De La Salle University, deaf employees are actually the best. In an interview in ABS-CBN news, he said, "If it’s just manual (referring to the job), if it’s just using the hands or the eyes, they’re as good as you and me—in fact, they’re more focused because of their handicap.”

I remember when I was working in JP Morgan Chase in Taguig, one of our colleague is lame, suffering from Polio. Having a polio does not hinder him from doing a job well done, since the job only requires computer operational tasks and walking or running is not really a requirement. I believe hiring impaired people does not really make any disadvantages to the companies as long as they are fitted to work on the nature of the job.

Recently, I've read an article about Southstar Drugstore who's hiring PWDs as employees. These employees who are initially hired under probationary will have a chance to become permanent employees once they passed the evaluation process. Majority of these PWDs are distributed along different branches of the drugstore in Manila, while others are in the main office. According to the drugstore, this is not for a charity cause, they are really open to hiring PWDs, and said that these employees will be treated just like other employees. 

For me, the initiative of Southstar Drugstore is really helpful for the disabled. They are actually hiring people with autism which is usually viewed by the society as mentally disabled making them appear as if they are not capable of doing any job. Of course, now that a company is accepting them, it just proves that they are capable of having a job, just like an ordinary person. Furthermore, this initiative indeed promote equality between PWDs and normal person. 

Another benefit of hiring PWDs in the company is that they stay in the company. On an HR perspective, employee retention is one of the top goals since hiring new workers is costly for the company. Millennials nowadays are labeled as job hoppers since they tend to switch jobs from time to time (and I am a bit guilty with it). But for the impaired people, since only few companies are looking for them, there is a greater probability that they will stay long in the company. 

In terms of employment costs for the impaired, companies spend money for charity programs such as donating to the poor, hosting charity events, sponsorship, etc... Instead of giving them assistance through this charity programs, which is also costly, why not give them a stable job? This is a more permanent solution in terms of supporting their daily needs. Feeding programs will definitely feed the handicaps for a day, but providing those jobs will definitely feed them for years, making them more stable and independent. And I believe that this is really the true meaning of CSR. It’s the ability to include social responsibility in the daily operation of the company, making it a truly sustainable CSR program, dedicated to make contributions for the betterment of the society. 

Today, in our Business ethics class, we discuss about the meaning of Corporate Social Responsibility.  In the class, we define CSR as how the company takes into consideration its impact to society and environment as it runs its business. We don’t just look CSR as an act of charity. Therefore, CSR is more dependent on company’s daily operations and its employees’ practices. It’s more than just a onetime charity event wherein company just help and feed others for a day. I should be something that is sustainable. The company should analyze its operations, and think of a way to further improve and benefit the society.

We are also presented with the pyramid of CSR. In this pyramid, starting from the base, we have:

1. Economic Responsibilities – This is actually the base foundation, the responsibility of the company to make profit. It’s because how will the company sustain its operation if there are no profits generated? Thus, it is necessary for a company to earn profit and become financial stable.

2. Legal Responsibilities – This responsibility entails adherence to the government rules and regulations. Companies are governed by the government to ensure the protection of its citizens and that the company’s operation is not illegal. Without this, the company will become free to do anything which could lead to abuse of its people and harmful products.

3. Ethical Responsibilities – This refers to the responsibility of companies to be ethical. CSR will not exist if the company and its employees are unethical. Companies should always do what is right and just. They should not cause harm.

4. Philanthropic Responsibilities – This is the top of the CSR Pyramid, which simply implies that this is really the requirement for a company to be considered socially responsible. These responsibilities include contributing to the society, protecting the environment, and helping the society to achieve an improved life.

Moreover in a more modern version of CSR pyramid, sustainability is added. CSR should be sustainable, meaning it should last and continue to be practiced in the long run. In other words, it is not temporary.

One of the examples discuss in class is the operation of Lamoiyan company. Lamoiyan, which is known for manufacturing Hapee toothpaste, is open to hire deaf-mute employees. In fact, 30% of their workforce consists of these people with disabilities. This is actually inspiring because the company is giving opportunities to the disabled, eliminating the usual job discrimination among these kinds of people. This, of course has a great impact to society in terms promoting equality, and this is what true CSR is. We include CSR on the daily operation of the business. It’s not just about charity.

On the contrary to CSR, our case study for today is about the fall of Enron. Enron is used to be one of the top performing and largest company in the US. Its fall started out when it was discovered that they are hiding details on their financial statement. They did not include on their books some of their liabilities, and there are unearned income that has been recorded already as their income. The company also pays money to their external auditors so that these activities will remain hidden. They also have a bad practice of eliminating underperforming employees, and retaining only the best performers. This can actually promote unhealthy competition among peers instead of teamwork. When their unethical practices were discovered, the company started to fall and later on filed bankruptcy. The executives of the company were even put to jail.

This case is indeed a learning experience for both the company and the government. After this incident, government has implemented stricter business policies and accounting principles has been revised. This has a huge effect to all companies, given that they would need to abide now on stricter rules. Other companies should mark this as a bad example, and should do the opposite. There should be transparency and integrity in making the financial statements. External auditors should not be accepting any bribes from its clients.

I agree with the conclusion of the group reporters in the class, wherein in order for Enron to bring back what was lost, they would need to establish new ways of processes and hire new employees. For me, there should be a better compliance and controls team with regards to their financial accounting and activities.  They should also promote ethical values among their employees. Company’s operation is highly dependent on the type of people it has. There should be no conflict of interest between the two parties.

All in all, I realized that doing good business requires good business ethics and CSR. Values are such important things in running the business. If negative values such as greed are planted in the minds of employees, then it will just be like Enron, at the end it falls down.