Lafayette Lament

I noted just before Christmas that the Australian company, Lafayette Mining, which operates on the Philippines island of Rapu Rapu has gone into voluntary administration.

Here is an article by Andrew Hewett of Oxfam Australia that analyses exactly what went wrong with this company.

"Initially lauded as the darling of the Philippines' mining revival program, Lafayette quickly turned sour for local fisherfolk," Hewett writes.

"Just months after the start of mine operations in 2005, two cyanide-laden spills into the sea killed fish and created consumer fear. People refused to buy fish from the island. Communities on the island and surrounding the bay, whose livelihoods depend on selling fish, struggled to feed their families" Hewett continues.

Months later a government-appointed fact-finding commission chaired by Sorsogon Bishop Arturo Bastes accused the company of gross negligence for failing to establish environmental safeguards.

With the mining company under administration Hewett says that "the real question now will be what happens to those communities on Rapu Rapu in the wake of the financial failure of Lafayette".

"Will the mine be abandoned, as so many other mines have been in the Philippines, leaving the local communities to deal with the legacy of continued pollution of their waters and fisheries? Will the administrators start a fire sale of the mine to try to pay off the company's debts to ANZ and others, which may result in another speculative operator without a commitment to social or environmental responsibility?"

Hewett concludes that the case demonstrates that an official complaints mechanism should be established in Australia to inquire into community dissatisfaction abroad.

"Doing so would ensure that Australian mining companies act in accordance with internationally accepted human rights and environmental standards. Compliance with these standards could have benefited all those who have missed out in the Lafayette case - communities, shareholders, mine workers and governments," he says.