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close this bookConflict over Natural Resources in South-East Asia and the Pacific (UNU, 1990, 256 pages)
close this folder2. Conflict over land-based natural resources in the ASEAN countries
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View the document2.1 The ASEAN region: great wealth and great strife
View the document2.2 The historical roots of conflict
View the document2.3 The plunder of forest resources
View the document2.4 The transformation of a natural resource: from agriculture to agribusiness
View the document2.5 Conflicts over mineral resources
View the document2.6 Development and tribal peoples: resistance to displacement
View the document2.7 Natural resource abuses: a time for change
View the documentReferences

(introductory text...)

Eduardo Tadem

2.1 The ASEAN region: great wealth and great strife
2.2 The historical roots of conflict
2.3 The plunder of forest resources
2.4 The transformation of a natural resource: from agriculture to agribusiness
2.5 Conflicts over mineral resources
2.6 Development and tribal peoples: resistance to displacement
2.7 Natural resource abuses: a time for change

2.1 The ASEAN region: great wealth and great strife

The countries of the Association of Southeast Asian Nations (ASEAN) produce a major portion of some of the world's most essential natural resources. From the Philippines, Brunei, Indonesia, Thailand, Malaysia, and Singapore come 82 per cent of the world's production of natural rubber, 70 per cent of copra and coconut products, 70 per cent of tin, 56 per cent of palm-oil, and 50 per cent of hardwood. In addition, the region's seas and rivers account for a significant share of the world's supply of fish and other marine products. Thailand and the Philippines, for example, are major tuna exporters to the US market. Thailand is also one of the world's top rice exporters, and the Philippines boasts the largest pineapple plantation in the world.

Because of the abundance of vital resources in the countries of the ASEAN group, the area has been the scene of various local, national, and international conflicts centring on the use, control, and disposition of natural resources. As control over resources becomes a paramount issue in the drive for national and human survival, disagreements and differences in approaches, priorities, and philosophies emerge. Governments often clash over jurisdiction of lands containing valuable raw materials such as oil and minerals. On the other hand, a government often faces opposition from its own citizens regarding the issue of human rights violations committed by the state as it pursues certain national strategies of development. These conflicts are often portrayed in official pronouncements as being between modernity and tradition, but more often than not the conflict simply reflects the intransigence of institutionalized power and its propensity to impose bureaucratic and technocratic planning models.

2.2 The historical roots of conflict

The ASEAN region has been a region of conflict. In varying degrees, the six member countries are continuing to experience social unrest born out of conflicts over the use of natural resources and the distribution of the economic product of this wealth. In the Philippines, a 12,000-man New People's Army (NPA) guerrilla army led by the Communist Party has been a major thorn in the side of the government, first to the Marcos regime and now to the Aquino administration, and a hindrance to the consolidation of power in that country. There has been a resurgence of land conflicts in Indonesia, raising the spectre of the pre-1965 agrarian unrest. In Malaysia, despite the low profile of the armed leftist movement, the government feels insecure enough to continue its Internal Security Act (ISA). Until recently, Thailand was the scene of various encounters between government troops and a well-equipped leftist guerrilla movement.

A common characteristic of the region is its history of colonial or semi-colonial rule. With the exception of Thailand, all of the ASEAN states underwent a period of direct colonial rule, a process that transformed native societies and incorporated their economies into a world capitalist system. Thailand's signing of the Bowring Treaty in 1855 put it into a situation similar to that of its colonized neighbours vis-à-vis the advanced Western nations (Chiengkul, 1983: 30-1). Colonial economic policies were based on the systematic plunder of the natural resources of the subjugated nations. The introduction of Western concepts of property, including private ownership of land, engendered major conflicts and was the cause of countless anticolonial revolts launched by dispossessed peasants and ethnic groups. In the massive transfer of wealth generated by natural resources from the colony to the colonial power, nationalist elites also saw a justification for the launching of nation-wide anti-colonial movements, which eventually gained independence for their peoples. However, foreign exploitation of national resources did not end with the demise of direct colonialism. The Philippines was forced to accept the 'parity' agreement, by which American nationals were granted the right to exploit natural resources with as much ease as Filipinos. Malaya's tin, rubber, and oil-palm plantations continued to be controlled by the British long after the country attained independence. Under Sukarno, Indonesia tried to reverse the pattern by confiscating Dutch estates, but when he was toppled in 1966, his successor, Suharto, opened the economy to foreign participation and influence (Palmer, 1978: 82-3). Thailand became increasingly dependent on the United States for loans and investments. In short, the ending of colonialism did not result in the Ulltyillg of the economies of the ASEAN region to the needs of the advanced industrial capitalist states.

The issue of conflict over natural resources must be situated in the political, social, and cultural contexts of the countries in which they occur, in this case the ASEAN states. The region as a whole will be examined in this chapter, but the emphasis will be on the Philippines.

2.3 The plunder of forest resources

It has been estimated that nearly two-thirds of the world's tropical rain forests are to be found in South-East Asia, mostly in the Philippines, Sumatra, and Borneo. The Philippines, Indonesia, and Malaysia account for approximately 66 per cent of worldwide exports of hardwood; other tropical countries provide 16 per cent, and the remainder comes from temperate countries (Asia Magazine, 1984: 16).

Rapid depletion of Philippine forest resources began during the Spanish colonial period. The island of Cebu was completely stripped of its large hardwood trees to provide lumber to build the Spanish galleons plying the Manila-Acapulco trade route of the seventeenth and eighteenth centuries American colonialists further developed forest extraction and engaged in the wanton exportation of logs to the home country. After the Second World War, a logging boom erupted in Mindanao, particularly in the northeastern and southern parts of the island. Foreign companies, especially American multinationals, pioneered these ventures. Corporations such as Weyerhauser, GeorgiaPacific, Boise-Caseade, and Findlay Millar were active participants in the exploitation of Mindanao forest resources (Tadem, 1980: 46-7).

Environmental and Economic triplications of Depletion

The major issue on the extractive side is the depletion of the forest cover and the wide-ranging implications of this phenomenon.

Although tropical rain forests cover less than 10 per cent of the earth's surface, half of the world's plant and animal species populations are sheltered by them (Asia Magazine, 1984: 16). These forests are massive reservoirs of thousands of yet-undiscovered species.

Philippine forests have rapidly lost their trees. From 1952 to 1977 the rate of depletion of forest reserves was 61 per cent (Tadem, 1980 47). Due to the half-hearted implementation of conservation laws, the rate of forest destruction exceeds reforestation by a margin of nine to one. In 1981 a series of floods brought about by constant heavy rains in northeastern Mindanao left 283 people dead, 14,000 injured, and thousands homeless (Asia Magazine, 1984: 16). This part of Mindanao had been the site of the logging boom of the 1950s and 1960s, and its forest area has been virtually denuded.

The pulp and paper mills that accompany the logging industry are notorious sources of pollution from chemically contaminated wastes, which are often simply dumped into the rivers and seas. The chemicals used in the mills also cause air pollution, and fishing villages along coastal areas are adversely affected on both counts. Fish producers in Agusan del Norte have filed a resolution opposing the establishment of the Manila Paper Mills because the resulting pollution of the Agusan River and the Mindanao Sea will damage the livelihood of thousands of fishpond operators and individual fishermen (Bulletin Today, 1980). It had been noted that Paper Industries Corporation of the Philippines (PICOP), the country's sole newsprint producer, dumps its waste into Bislig Bay in Surigao del Sur with little or no treatment.

The Philippines was the first of the ASEAN group to be extensively exploited for its forest resources and it will likely lose all its virgin forest designated for production purposes by 1990 at the latest, according to a survey by the United Nations Food and Agriculture Organization (FAO). Logging and wood-processing companies are aware of this, and their response has been to shift their attentions to neighbouring Malaysia and Indonesia.

But resources there are also running short. A 1977 national forest inventory ordered by the federal government in Kuala Lumpur reported that 'the country's timber resources will be depleted in about twelve years unless reforestation measures are carried out urgently' (Rowley, 1977: 47). Sabah, which accounts for 46 per cent of Malaysia's total log production and exports 80 per cent of its production, is expected to log its virgin forests within a period of ten years if current rates of felling are maintained. Peninsular Malaysia, which had drastically cut its log exports to only 2 per cent of production in 1979, has begun to court log imports and may have to compete with Japan for Sabah's logs (Gigot, 1979a: 52-3) Of Peninsular Malaysia's total land area of 35.2 million acres, only 17 million (48 per cent) are still covered with some form of forest, according to the Penang-based environmental group, Sahabat Alam Malaysia (SAM).

Despite the establishment of reforestation programmes by the Kuala Lumpur government, log production declined by only 3 per cent overall in 1980, and this was due almost entirely to the 17.8 per cent decline in Sabah (SAM, 1981 2). Timber output in Peninsular Malaysia declined by only 1. 1 per cent, while in Sarawak timber production rose by 15.1 per cent. In March 1981, the Ministry of Primary Industries announced a government plan to reduce the tree-felling rate from 922,000 acres per year to 385,000 by 1985 (SAM, 1981: 2). The Ministry planned to replant, in Peninsular Malaysia, 65,000 acres by 1985 and a total of 500,000 acres from 1985 to 2000. This programme is considered insignificant in the face of a national logging rate of almost 1 million acres per year.

TABLE 2.1 - Indonesian Timber Output, 1970-1977

Product Type and Year Production ('000 cu. m) Export Volume ('000 cu. m) Export Value (US$'000)
1970 10 899 7 350 100,568
1971 13 706 10 761 168,635
1972 17 717 13 891 230,849
1973 26 197 19 433 583,345
1974 23 380 18 082 725,651
1975 16 296 13 921 499,976
1976 22 741 18 549 780,879
1977 (January-June) n.a. 9 500 450,000
Sawn Timber
1970 568 46.6 1,691
1971 470 80.6 2,804
1972 840 132.2 3,754
1973 1380 337.9 18,226
1974 1919 353.9 26,534
1975 1708 410.4 31,695
1976 1900 643.9 49,053
19771 n.a. 713.0 29,500

Source: Far Eastern Economic Review 2 December 1977, p. 66.
1 Projection.
n.a. = not available.

Indonesia's forests contribute its second highest export eamings, after oil. Overseas sales in 1976 totalled US$830 million. The country has approximately 120 million ha of tropical rain forest, 47 million ha of which is production forest. However, excesses, such as rampant illegal logging, have endangered this vast resource. Logging companies cut indiscriminately in many areas, and in the process they cut down trees of only 40 to 45 cm, in violation of the legal minimum of 50 cm, at times with the tacit approval of forestry officials (Jenkins, 1977: 66). Thus, in many areas 'the whole forest canopy is being or has been destroyed'. The irresponsibility of companies working their concessions, coupled with overharvesting, will soon cause irreversible damage to East Kalimantan's forests.

Widespread logging in Indonesia's outer islands did not occur until the late 1960s, when the new Suharto government adopted an opendoor policy towards foreign investors. Timber exports rose 1,500 per cent from 1966 to 1971, and one-third of foreign capital inflow was to logging through US, Japanese, and Filipino companies (Grossman and Siegel, 1977: 2-3). Indonesia was widely advertised as the alternative to the Philippines for an unrestricted supply of timber for export. A total of 5.6 million ha were offered to investors for exploitation. Weyerhauser, which has closed its operations in Mindanao, quickly moved into Indonesia and occupied a one million acre concession, which it plans to thoroughly deplete by 1990 the year its contract expires (Grossman and Siegel, 1977: 7-8).

Effects of Logging on Agriculture

Logging operations inevitably come into conflict with traditional upland farmers, many of whom belong to non-majority ethnic groups. Relying on slash-and-burn agricultural systems, these hillside farmers depend on their age-old farming practices for survival. Despite the propensity of officials to place equal blame on them for the loss of forest lands, it is an incontrovertible fact that many generations of swidden farming cannot equal the destruction wrought by logging corporations in only a dozen or so years.

TABLE 2.2 - Foreign Investments in Indonesia's Forests, 1970

Nationality of Control Amount Invested (US$ million) Number of Firms Counted in Previous Column Area of Concessions (million ha) Number of Firms Counted in Previous Column Total Number of Firms
United States 62.01 6 2.726 9 9
Japan 70.0 9 2.464 8 12
Philippines 256.0 9 1.647 9 9
Philippines US 238.0 2 1.2 1 2
Malaysia 15.5 14 1.92 14 14
Hong Kong 13.5 4 0.50 4 4
British-controlled 2.0 2 ? - 2
South Korea 53.0 2 0.49 2 2
France 2.5 3 0.37 4 4
Panama 1.5 1 0.l0 1 1
Netherlands 1. 1 1 ? - 1

Sources: Indonesian Observer, 7 March 1969; 'Loggers Locked in a Scramble'. Philippine Lumberman, Vol. 15, No. 10 1969, pp. 22-4; 'Indonesia: Forest Paradise for Foreign Capital', Pacific Report, December 1970; 'List of Foreign Companies Investing in Indonesia', lndonesian Perspectives, September 1970; 'Wilds of Borneo Lure U.S. Lumbermen', Business Week, 27.June 1970, p 51.

1 The Japan Lumber Journal ('Indonesian Forest Development', Vol. II, No. 4, 1970, pp. 24) gives a figure for US investments of US$88 million.

Thus, tribal groups are being squeezed out of their ancestral lands and deprived of their means of livelihood in the name of development. The Manobos of eastern Mindanao have been pushed out of the lowlands and into the forests by settlers, agricultural companies, and ranchers. Now in their last area of retreat, they are still being hounded out of existence. Farmers in One part of East Kalimantan have been ordered not to grow rice to force them to rely on work in the logging concessions (Grossman and Siegel, 1977: 7-8). In South Kalimantan, natives were ordered to desist from continuing with their traditional methods of farming or felling trees to build homes; otherwise, they risked being accused as thieves.

Long-term effects of indiscriminate logging on the soil have also been documented. Abundant tree cover reduces the speed at which rains hit the ground. Without forests, the force of rains strips off the topsoil in which the necessary nutrients that sustain plant life abound (SAM, 1981: 25). What remains is a barren piece of ground with as much potential to support plants as a desert. Siltation of rivers also takes place, blocking water passageways. The 1981 floods in north-eastern Mindanao were caused by heavy rains spilling off barren mountains into the Agusan River. As the river's outlet was blocked by large silt deposits, the flood-waves simply went back upstream, submerging homes and fields to a depth of about 7 metres (Asia Magazine, 1984: 17).

Communities bordering areas where logging concessions operate are often victims of the negative effects of company operations. Many of them have occupied these areas for generations prior to the entry of the loggers. On the other hand, communities built around the timber operations, where logging workers and their families live, are nothing more than temporary camps whose existence depends on the continued supply of timber. Once the resource is exhausted, these communities are abandoned. Many families continually experience this uprooting and dislocation as they follow the companies for the work they provide.

Reforestation sometimes takes the form of encouraging the development of 'industrial tree farming'. Farmers growing food crops are being urged to grow falcatta, giant ipil-ipil, rubber, and other fastgrowing but mainly softwood trees instead, to supply the large timber processing plants being built by both foreign and local investors, usually in partnership with the government. In Mindanao, hundreds of thousands of hectares of land have been reserved for tree farms. Corporations not wanting to deal with small farms have undertaken the cultivation of softwood trees for their own pulp and paper mills.

Tree farms are cropping up in the north-eastern Mindanao provinces of Agusan del Norte and Agusan del Sur and in the southern Mindanao province of Davao del Norte. Various conflicts have emerged. Applications by two large companies, Manila Paper Mills (MPMI) and the Aguinaldo Development Corporation (ADECOR), for the lease of tens of thousands of hectares have already been approved, with thousands of hectares more to be added later. Settler farming communities will most likely be evicted from their lands as a result. The companies are trying to entice farmers into giving up their claims by offering them jobs on the tree plantations or in the pulp and paper plants. The settlers are resisting, however, and are working against the clock to have their claims titled at the Bureau of Lands. The process is time-consuming as well as financially draining, and both money and time are in short supply for the farmers.

PICOP has been the most aggressive in contracting small-scale farmers to grow falcatta with loans available through funds provided by the World Bank and channelled through the Development Bank of the Philippines (DBP) (Tadem, 1980: 48-9). But farmers cannot go fulltime into tree farming, as it takes seven years before any income can be earned. Also, the terms of the contract tie the farmers to PICOP, with the company dictating the purchase price. Earlier promises by PICOP of large incomes have turned out to be false, and many farmers have actually incurred losses due to the delays by PICOP in collecting the cut trees. Although the farmers are totally dependent on PICOP, the company does not rely on them completely for supplies of pulp because it operates its own 33 000-ha tree plantation.

TABELE 2.3 Industrial Tree Plantation and Tree Farm Agro-foresty Farm Leases by region in the Philippines, 1980 (area in ha)

Region Total Industrial Tree
Tree Farms Agro-forestry
No. Area No. Area No. Area No. Area
Philippines 115 47 800 12 87 759 101 9 111 2 930
Region 9 1 324 - - 1 324 - -
Region 10 6 49 657 50 48 987 10 670 - -
Region 11 3 28 843 20 28 103 1 740 - -
Region 12 1 460 - - - - 1 460
Regions 11 79 284 70 77 090 12 1 734 1 460

The tragic consequences of denudation can be observed in the case of the 24 500-ha watershed of Pantabagan in Nueva Ecija province in Central Luzon (ARE Newsletter, 1981: 3). Some 14,000 families were relocated there to make way for the huge Pantabagan Dam, inaugurated in 1976, and the area has been completely denuded. The cause, according to a World Bank study, was excessive logging operations. A number of government-built houses have slid down from the hillside as heavy rains eroded the soft clay under the houses. These farming families crowd the upper slopes of the watershed and try with little success to plant for soil erosion is too swift and extensive. This area is located high above the dam, so they cannot even make use of the irrigation from the project that caused their resettlement and dislocation from lowland homes.

The Social Costs of the Wood Industry

Conditions in both logging areas and wood-processing plants leave much to be desired. Wages are low, legally stipulated benefits are often withheld, and housing facilities are inadequate. In this situation, labour-management conflicts often arise, with workers demanding a greater share of the profits reaped by the corporations.

In 1979 the US-owned Findlay Millar Timber experienced a yearlong strike by its 1,000 workers, who were demanding the three months' wages withheld from them by the company (Reyes, 1984). This confrontation between wood-industry workers and the corporation was bitter, with management resorting to standard tactics of harassment and deception to force the workers back to work. Other major strikes in Mindanao-based wood companies were at Zamboanga Wood Products-40 per cent of which was then owned by BoiseCaseade and at Sta. Clara Lumber in Davao. These conflicts rarely end favourably for the workers, because their unions are short on funds and some labour leaders sell out to management.

If the workers insist on carrying on their fight for higher wages and better working and living conditions, the company can always close down its operations and move to other places. Such decisions are also influenced by the fact that with the rapid depletion of forests, companies would have to move on anyway. When this happens, the workers are the hardest hit. Not having benefited from the logging booms of the 1950s and barely able to eke out a marginal existence in the succeeding decades of logging declines, workers have been left to fend for themselves. The first casualties of the death of any industry the workers and their families, just as they are always the last to taste the benefits of any upturn.

Conflicts between Producers and Consumers

On the international level, there is conflict between the producing countries and the consumers, the latter comprising countries from the developed world. Most of the vital information regarding the world wood market is in the hands of the consumers, and producers have little influence in shaping consumers' demands (Khan, 1984: 4). Asian lumber, for example, is a buyer's market, with Japan exercising a dominant role. Market-access problems increase with the degree of processing. The European Economic Community (EEC) charges 13 per cent tariffs on imports from South-East Asia; the United States excludes from its Generalized System of Preferences (GSP) the most important species of South-East Asia, the dipterocarps; and Japan totally excludes timber from its GSP (Khan, 1984: 4). Log exports, on the other hand, usually enter duty-free.

One aspect of the problem is the low storage prospect of timber because of its susceptibility to fungal and insect attacks. Retention of trees is deemed impractical because of the need to respond effectively and promptly to market changes, and the long distances between the producers and the market (Khan, 1984: 4). High transport costs also cut export earnings.

Japan has come under fire from timber-producing countries in the Asia-Pacific region for 'plundering resources without replacing them and without regard for the impact on local economies'; entering into agreements with 'comprador concessionaires who [have] little loyalty to the producing countries'; and 'undermining the indepeudence of these countries through . . . economic imperialism' (Awanohara, 1979: 88).

Japan has also been criticized for perpetuating the primary level of production in wood-exporting countries and failing to accommodate the 'desire to add increasing amounts of processing; and hence, value, to their products before exporting them' (Awanohara, 1979: 88). Only after incessant and impatient demands from the producing countries was some positive response from the Japanese forthcoming; even then, movement has been slow. From the point of view of Japan's own timber-processing industry, the development of local processing in South-East Asia, for example, does not make sense. Japan's own industry is large and labourintensive, and thus carries some electoral clout. It is also protected by tariff barriers that 'encourage imports of unprocessed timber but [put] a damper on value-added imports' (Awanohara, 1979: 88). According to Awanohara, the Japanese government charges the following import duties on wood:

Unprocessed logs = 0 per cent
Sawn timber = 5 per cent within GSP quota and 10 per cent for remainder
Veneer = 7.5 per cent within GSP quota and 15 per cent for remainder
Plywood = 20 per cent.

Such barriers to trade only increase the distrust of developing countries towards the First World, a feeling carried over from the colonial past in which an international economic order highly favourable to the developed world was fashioned and has largely continued to the present. However, the Third World is becoming more aware of how to deal with a system that works against its interests. Since the 19705, calls for a new international economic order have been growing louder, and the developed world has been forced to listen and respond. The successes of the Organization of Petroleum Exporting Countries (OPEC) and the UN Convention on the Law of the Sea (UNCLOS) have inspired others.

Like other producers of essential commodities exported mainly to First World countries, timber producers have attempted to restructure the international wood market. Private log producers in Malaysia, Indonesia, the Philippines, and Papua New Guinea banded together to form the Council of Southeast Asian Lumber Producers Association (SEALPA) in 1974. The group has reached specific agreements on limiting log exports in order to stabilize prices and, for the longer term, '[has] agreed to minimize log exports and maximize the export of finished wood products' (Rowley, 1977 47). The more ambitious plan, however, is to ultimately regulate world prices and protect the earnings of the producing countries. SEALPA's supply-demand scenario for timber projected a growth in demand far exceeding the supply for a three-year period from 1978 to 1980 (Asia Yearbook, 1980 91-3). This was calculated to encourage the importation by Japan of processed wood products. From 1975 the proportion of logs in total wood imports had fallen at the rate of 1 per cent per year to 64 per cent in 1979.

TABLE 2.4 - Supply/Demand Scenario for South Sea Logs, 1978-1980 (million cu. m)

  1978 1979 1980
Japan 21.8 22. 0 21.0
South Korea 6.9 7.2 7.5
Taiwan 7.0 7.3 7.7
Singapore 1.7 0.9 0.7
Others 1.0 0.9 0.7
  38.4 38.3 37.6
Indonesia 18.9 18.0 16.5
Sabah 12.4 10.0 8.0
Sarawak 4.2 4.5 5.0
Philippines 1.9 0.8 0.5
Others 0.4 0.5 0.5
  37.8 33.8 30.5

Source: Southeast Asian Lumber Producers Association (SEALPA), as reproduced in Asia Yearbook, 1980.

Japan's reaction to the formation of SEALPA was typical of the attitude of developed countries to calls for a new international economic order. In 1975, SEALPA decided to control the export and production of logs for that year to forestall an expected slump in log prices (Stat Romana, 1979: 88-90). Confidently holding a five-month stockpile of logs and lumber, Japan unilaterally slashed the buying prices of logs and lumber 'to break up any wood and forest product cartel in the region' (Stat Romana, 1979: 87). It limited its purchases to low-grade logs from Indonesia, the Philippines, and Malaysia and cut the prices of Philippine logs from US$35/cu. m to only US$25/cu. m, reportedly US$7 below production costs. Although a week after the cut-back the Japan External Trade Organization (JETRO) announced an acceptance of SEALPA's decision, imports were still to be lower in 1975.

Since then, SEALPA has been registering its impact more as a forum than as a cartel. A more effective group has been Komasi, comprising plywood producers from Malaysia, South Korea, and Singapore, which has succeeded in setting a minimum world price for plywood made from tropical logs (Gigot 1979b 53).

TABLE 2.5 - South-East Asian Log Production and Exports, 1979

Country Log Production (million cu. m) Percentage of Log Production Exported Log Exports as Percentage of Total Exports
Peninsular Malaysia 10.2 2 9
Sabah 11. 1 90 52
Philippines 6-7 23 -
Indonesia 31.81 59 -

Source: Far Eastern Economic Review 7 December 1979.
1 Figure is a goal. Total 1978 log production was 26 million cu. m, of which almost 70 per cent was exported.

An international cartel was in the making in 1979 when a member of the International Islamic Fund approached a major supplier of sawmilling equipment in Singapore (Gigot, 1979b 53). Claiming to represent a range of Islamic interests this Singaporean businessman broached the idea of setting up a huge timber-processing complex on the Batam Islands and other islands in the Riau group in Indonesia. To ensure initial supplies, loggers from Sumatra would be brought in. Processed timber would be sold and released at the best possible prices. Malta would provide alternative storage for the timber. Later, loggers in Sabah, Sarawak, the southern Philippines, and Kalimantan would be invited to join in, and log exports to Japan, South Korea, and Taiwan would be stopped altogether. All of these areas have substantial Islamic populations; therefore prospects for co-operation are enhanced. Although there is no clear connection with this plan, Kuwaiti investors had that same year bought into a 300,000-acre concession in Sabah, a Saudi group was negotiating for another concession, and a Saudi prince bought interests in Philippine sawmills.

An international wood cartel is not as easy to set up as one for oil (Gigot, 1979b 53). Most South-East Asian exporters are private entrepreneurs, so unpleasant government intervention is needed to enforce the decisions of the cartel. In addition to storage problems, timber has not been relatively underpriced as long as oil had been. Substitutes also abound for tropical timber, such as softwoods from temperature countries.

2.4 The transformation of a natural resource: from agriculture to agribusiness

The distinction between forestry and agriculture is sometimes a fine one. Shifting cultivators often follow in the wake of commercial loggers, and because of the marginal character of the logged-over land, farming becomes a tedious and unproductive undertaking. In 1974, the Philippine government attempted to turn denuded forest lands into rice-growing areas by requiring logging concessionaires 'to develop areas within their concessions . . . for the production of rice, corn, and other basic staples to take care of the consumption requirements of their workers and the people within their areas' (Tadem, 1978). This law, which was known as Presidential Decree No. 472. was never really implemented because it also granted exemptions to firms in 'financial distress'.

When the Philippines became a rice-exporting country in 1977, it appeared on the surface that Marcos' agricultural policies were working after all. In the midst of the euphoria surrounding the dramatic turnabout, official propaganda conveniently disregarded the costs that accompanied the statistics of increased production. As public awareness gradually grew about the reality-that the economic and social costs far outweighed the benefits of the rice exports-a severe economic crisis, beginning in 1983, suddenly cast the country back into the familiar role of rice importer. This reversal underscored the fragility of a food-production programme that was highly dependent on imports.

Indonesia does not rely on the importation of fertilizers for its rice industry because it is an oil exporter, and the major fertilizers used are oil-based. Yet, until 1986, the country was one of the world's major rice importers. For fiseal year 1983-4, imports were estimated to reach 900 000 tonnes, a 172 per cent increase over the 1982-3 level. Indonesia's rice imports reached the stage at which they affected the world market prices for the commodity. This situation existed for a long time despite the fact that 51 per cent of food-crop land was devoted to paddy fields and yearly growth stood at 4.8 per cent (Sajogyo, 1982: 48).

Thailand's case is different. Traditionally a rice exporter, the country has long been considered a yardstick for determining the quality of rice traded in the world market by other countries. The government relies heavily on foreign exchange from rice exports to support a basically agrarian and primary-product economy. The three years from 1982 to 1985 however, brought the rice industry to a critical point. World market prices had been deteriorating: from a peak of US$500/ton in mid-1981, the price had fallen to as low as US$200/ton by January 1985, a 56 per cent decline (Sricharatchanya, 1985: 48).

TABLE 2.6 - Production of Agricultural Commodities in ASEAN Countries, Various Years ('000 tonnes)

Country 1969-1971 1977 1978 1979
Coffee 173 198 223 267
Tea 65 85 89 93
Sugar 10 322 14 709 14 880 15 995
Rubber. 838 835 900 851
Jute 1 189 1 288 1 497 1 445
Rice 19 136 23 356 25 781 26 35o
Palm-oil 218 525 610 640
Coffee 48 82 105 122
Sugar 16 271 23 126 20 273 20 348
Banana 893 2 125 2 390 2 430
Pineapple 251 427 465 480
Rice 5 225 6 895 7 318 7 000
Cocoa beans 4 19 24 26
Rubber 1 285 1 613 1 607 1 617
Rice 1 696 1 922 1 527 2 161
Palm-oil 457 1 778 1 184 2 600
Sugar 5 856 23 658 20 561 20 000
Banana 1 200 1 700 2 000 1 082
Pineapple 187 l 250 2 000 1 000
Rice 13 475 13 921 17 530 15 640

Source: FAO Monthly Bulletin of Statistics, various issues.

Meanwhile, in the Philippines and Thailand and, to a lesser extent, Indonesia, agribusiness and commercial farming have been growing. This is related to the modernization drive in agriculture in which various actors, both local and foreign, are playing neatly assigned parts. Changes in the social, economic, cultural, and political spheres are also taking place. As is inevitable, the introduction of new methods of production, new philosophies of growth, and new means of surplus generation have engendered conflicts on various levels. The competition for land, for access to its product, and for shares of the surplus are at the roots of conflicts arising in the agricultural sector. The issues are seldom clear, particularly when judgments have to be made regarding the effects of new methods. For example, it is still widely believed that the dislocation of thousands of small farmers to make way for massive hydroelectric projects is justified. The assumption is that the immediate disruption of the productive lives of peasants is only temporary and that in the long run, everyone will benefit from electricity Narrow-minded as this perception may be, it is enough to convince other sectors of the population not directly affected by these projects that sacrifices such as the dislocation of communities must be accepted. Even the affected peoples are made to go along with the scheme through a combination of persuasion, coercion, and intimidation.

The various conflicts that now characterize the competition for land can be traced to the breakdown of subsistence farming in favour of commercialized production, or in some cases, the subsumption of the former to the latter. Subsistence production has its own contradictions, but since this type of agriculture is no longer the dominant mode in the underdeveloped areas in South-East Asia, it is more relevant to examine instead the widespread 'commoditization' that has become the characteristic trend.

The Modern Agricultural Context: Agribusiness

A pervasive characteristic of rural South-East Asia is the inequality in the distribution of land. In Java, 55 per cent of 4.6 million farming families own only 22 per cent of the land while 4 per cent or approximately 400,000 families control 24 per cent (Sajogyo, 1982). Sixty per cent of Javanese households have an average of only 0.2 ha. Tenancy rates in Thailand's Central Plains were as high as 40 per cent as of the late 1970S and continue to be so in the 1980s Farmers engaged in commercial crop production are often in debt and failure to repay on time can mean loss of their lands. In the Philippines, rural poverty has continuously risen, with almost 80 per cent of rural families falling below the poverty line in the late 1980s Landlessness has also increased, and dispossessed workers presently form the majority of the Philippine rural labour force.

A relatively recent phenomenon is the development of large plantations by multinational corporations, the state, or local capitalists for the cultivation or processing of export crops. In the Philippines, multinationals such as Del Monte, Dole, and United Brands pioneered and controlled the banana export industry in Mindanao. Dole joined Del Monte in the production and processing of pineapple for export. Dole also expanded its pineapple operations into Thailand. Transnational agribusiness has exacerbated the conflict between the production of food crops and export crops. Officially welcomed by host governments, this type of agriculture represents a higher level of foreign and local exploitation of resources with minimal benefits for the poor sectors of society.

Agricultural modernization and increasing commercialization have not necessarily meant social progress and economic prosperity. Agribusiness expansion often results in the physical eviction of the actual cultivators. Food-producing communities have been displaced by the development of the banana and pineapple export industries in Mindanao. A Philippine corporate farming programme launched in 1974 also resulted in displacement. In the early 1980s the Philippine government joined with local entrepreneurs and Malaysian transnationals to introduce large-scale palm-oil production in eastern Mindanao. Several thousand settlerfarming households were displaced to make way for Guthrie's 8 000-ha plantation. As late as 1976, the Soyear-old Del Monte subsidiary, Philippine Packing Corporation, forcibly ejected 371 farmers in the Pontian Plains in Bukidnon province by Sloughing through five barrios (PPI, 1983: I). In 1980, on the 13 000-ha Hacienda San Antonio-Sta. Isabel in llagan, Isabela, 300,000 people were threatened with eviction by a large corporation owned by businessman Eduardo Cojuangco, a Marcos crony (PPI, 1983: I). Anca Corporation wanted to transform the newly purchased hacienda into an agribusiness plantation growing coconut and ipil-ipil pulp trees.

The shift from food crops to export crops raises the issue of priorities for agricultural production. severe problems of malnutrition among the majority of the population, it would have been more beneficial if emphasis had been placed on food production for domestic consumption rather than on exports. Ironically, ASEAN countries are also food importers. Philippine and Indonesian wheat imports from the United States under Public Law 480 constitute a drain on local resources. Although PL 480 allows importing countries to pay in their local currency, the process has the overall effect of creating a need for a product that previously was not in the local diet. Even during the years of rice exportation, poor Filipino farmers subsisted on meagre diets that were often nutritionally inadequate.

Agribusiness Versus Land Reform

Agribusiness development brings about conflict between itself and land reform and equity-oriented rural programmes. Large-scale plantations necessarily involve the concentration of land in the hands of a few individuals and corporations. In the Philippines, a land reform programme initiated upon the declaration of martial law in 1972 has been proceeding slowly. Covering only 33 per cent of tenanted lands and 6.8 per cent of total crop area, the Operation Land Transfer (OLT) programme had, as of 1983, benefited only 9 per cent of its targeted number of farms (MAR, 1983). In Indonesia, since the Suharto coup, the land reform programme has been frozen, and those clarnouring for its implernentation are invariably said to be communist-inspired.

A successful land reform programme is a necessity in a country where feudal and semi-feudal relations of production persist. These relations are sources of serious social conflict. Agrarian movements in South-East Asia, and in other areas where similar conditions prevail, revolve around issues of oppressive precapitalist land tenure arrangements such as share-cropping, exorbitant land rent, and usury. Although agribusiness sometimes does away with the old mode of production, it often replaces it with more exploitative structures. In many cases, agribusiness exists alongside old subsistence or feudal modes, the reason being that companies can keep the cost of production low by making the producer directly responsible for reproducing its labour power. Thus labour reproduction does not enter into the determination of plantation wages, which can then be maintained at levels lower than subsistence. This can be observed in both the Philippine and Thai experiences. Wages of Filipino sugar workers are often below subsistence, and if relied on solely, cannot sustain a worker's existence. But since field-work is seasonal, the worker can return to his home (frequently an outlying island) and engage in subsistence or share-cropping cultivation.

Even if plantations are able to completely transform tenants into fulltime agricultural workers who depend wholly on their wages, conflicts still arise. Workers discover that their living conditions are no better and are sometimes worse. The highest yearly income of a Filipino plantation worker in 1983 (as legislated by a presidential wage order) would amount to P8,600. If two family members are working (and this is rare), the total income would still fall below the estimated minimum subsistence income of approximately P20,036 a year required for a rural family (Almazan and Ibanez, 1984). Unlike tenants, plantation workers have no alternative sources of food and income. To add to the gravity of the situation, few plantations pay the minimum legislated wage to their workers. Corporations can easily apply for and secure exemptions from the minimum-wage rule by pleading insolvency or a distressed situation. Another way by which companies circumvent the law is to hire non-permanent contractual or probationary workers and renew their contracts every few months.

Agribusiness and the National Economies

Agribusiness also leads to a monopolistic type of capitalism. Huge capital resources and extensive international marketing contacts are needed for a successful operation. Only the largest corporations, often multinationals, have access to or control over such resources. Conflicts arise between these huge monopolies or oligopolies and the aspirations of local entrepreneurs for a greater share of production and the market. Often local competitors are pushed out after being driven to bankruptcy. Those who manage to survive inevitably enter into joint-venture arrangements with the foreign firms and end up as junior partners. The dominance of multinational agribusiness over certain types of agricultural products in underdeveloped countries serves as a hindrance to the full development of local industries under the control of national capitalists. Indigenous development and nationally oriented growth do not take place at all.

In some instances, however, the transfer of control from foreign to local firms results in the substitution of native, often statecontrolled, companies for foreign monopolies. In the Philippines, marketing monopolies in the sugar and coconut industries were established with the aid of government decrees. Ostensibly the monopolies are private firms, and private individuals sit as board directors. However, the presence of government officials and the fact that marketing control was achieved only through state intervention makes government denials ring hollow. Public outcry against this anomalous arrangement, the disenchantment of a significant section of local entrepreneurs left out of the lucrative market, and demands by no less than the International Monetary Fund and the World Hank for the dismantling of the monopolies led to certain steps being taken by the Marcos government to accommodate other local businessmen. The individuals who controlled both the sugar and coconut industries were leading Marcos cronies. However, it remains to be seen whether these arrangements can be overturned under the Aquino government.

Even as agribusiness firms and state monopolies are developing highly integrated and large-scale agricultural systems, with deleterious effects on society and the national economy, small-scale farming (especially of rice and maize) has had to cope with the technological changes brought about by the Green Revolution that began in the 1960s (Feder, 1983). Green Revolution technology involves the extensive use of high-yielding varieties of seedlings (HYVs), massive inputs of fertilizers and chemical pesticides, a degree of mechanization, and, in some cases, supervised credit.

Although the new technology may have increased crop production, this has been achieved at the cost of damaging the natural ecosystem of paddy fields. Rivers and farm animals are poisoned and extra sources of food (fish and snails) are lost to the farmers (Fegan, 1982). The import-dependent character of the new system poses even greater problems and conflicts. Studies in the Philippines have shown that the tremendous increase in the costs of production due to the expensive inputs have exceeded crop-yield increases by a margin of five to one. In the Philippines, the prices of fertilizers and pesticides increased by more than 100 per cent in 1983-4 alone. Farmers in Central Luzon cut down on fertilizer use or planted less to minimize costs. The result was a decline in rice production and the government had to begin importing rice.

Government support prices for rice farmers have been inadcquate to meet rising costs in Thailand as well. In 1985 Thai farmers were demanding a paddy price of B3,500 a kwien (ton), which is B 500 more than the national average farmgate price. Declining paddy prices in the Thai central plains have forced farmers into greater indebtedness running into tens of thousands of baht each (Sricharatchanya, 1985: 49). The government's dilemma is that it must maintain low farmgate prices for rice in order to subsidize the urban consumer. Instead of taking steps to lower the costs of farm production as an alternative to raising rice prices, governments are apparently locked into the narrow perception that the only factors subject to state intervention are the farm support price and the retail price of rice. Thus the consumer is pitted against the farmer, and both groups are protesting. Farmers' groups are asking why the fertilizer and pesticide companies (mostly multinationals) are not being made to bear some of the costs. Besides, the farmers argue, they are consumers, too.

The Political Consequences

The conflict between agribusiness interests and farmers in the Philippines was brought to a climax when some 5,000 farmers belonging to the Alliance of Central Luzon Farmers (AMGL) staged protest Marches in several provinces on 4-5 February 1985, ending at the Ministry of Agriculture office in Metro Manila. The peasants were joined by hundreds of supporters from the student, worker, urban poor, and professional sectors in a camp-in demonstration in front of the ministry. The AMGL presented the following demands:

1. A drop in fertilizer and pesticide prices to the 1 October 1983 level;
2. A new small-farmer credit scheme in which interest rates do not exceed 12 per cent per year;
3. A write-off of all small-farmer debts incurred in the government Masagana 99 programme.
4. Strengthening of the palay (paddy) support price without increasing the price of rice;
5. Lowered gasoline and electricity costs in order to minimize irrigation fees; and
6. Establishment of a nationalistic agro-industrialization programme and implementation of genuine land reform (AMGL,1985).

A series of dialogues between peasant leaders and the Agriculture Minister during the demonstration ended in a stalemate as officials contended they were powerless to act on the demands and that only the President could help the peasants. The peasants then demanded to meet with Marcos himself, but before this confrontation could be arranged, government troops moved in and violently dispersed the peasants in the early morning hours of 13 February 1985. The farmers and their supporters were chased 3 km to the nearby campus of the University of the Philippines, where they were sheltered by students and the Catholic Church. Though none of their demands were granted, the farmers had made their point and had been heard.

A resurgence of peasant unrest is also brewing in Thailand. Deteriorating conditions for the Thai peasantry set the backdrop for a three-day demonstration by 3,000 farmers joined by members of the opposition Chart Thai Party in front of Government House on 8-IO January 1985 (Sricharatchanya, 1985: 49). The peasants came mostly from the central and upper central plain provinces. Prime Minister Prem Tinsulanond averted a major political crisis by paying the demonstrators a predawn visit on 10 January. In this instance, Prem handled the farmers in a better way than his Philippine counterpart; while the Thai farmers remain dissatisfied, an immediate crisis was averted.

These two examples bring up the issue of peasant organizations and their role in the process of rural change. ASEAN governments generally regard independent rural organizing efforts with suspicion and try to set up state-sponsored groups that champion the maintenance of existing conditions. The extreme case is Indonesia, where the government takes an almost paranoid attitude towards peasant organizations formed independent of state supervision (Mortimer, 1975). Suharto's fear is that there will be a revival of the militant Parti Komunis Indonesia-led organizations that disrupted Javanese society during Sukarno's rule with their revolutionary calls for change among the hundreds of thousands of peasants they mobilized. Because of this history and the government's attitude, minimal rural organizing is undertaken in Java and outer islands.

In the Philippines, there has been a long history of peasant organizing dating from the American colonial period (Constantino, 1975). National organizations arose concurrently with the founding of the Communist Party in 1930, with heaviest activity in Central Luzon, a traditional area of agrarian unrest. Despite the proscription of the CPP, these organizations survived, but they were finally made illegal shortly after the Second World War. The final burst of activity was the abortive Huk peasant rebellion from 1946 to 1954, which was violently suppressed and ended a traumatic first phase in radical peasant organizing. In the years that followed, only moderate and church-sponsored peasant groups were active. Radical groups did not re-emerge until 1964, and a split within the CPP in 1967 led to the birth of a new communist party and the NPA. The NPA currently numbers around 10,000-15,000 armed regulars scattered all over the country. Its main aim is to carry out an agrarian revolution in the Philippines with the peasantry as its main force. The major political conflict in the Philippine countryside today is that between the NPA and the Armed Forces of the Philippines. The NPA platform is based on the issues of lowering land rent and eliminating usury and, in the long term, the implementation of a comprehensive land reform programme that will redistribute land to the landless and organize production around co-operatives and collective farms where feasible.

2.5 Conflicts over mineral resources

The struggles over the world's mineral resources by various countries has often provided impetus for wars, whether of a limited scope or world-wide. Shortages of iron and steel for Germany's industries and the spectre of 4 million workers going jobless are said to have influenced the decision of the Kaiser to participate in the First World War (Eckes, 1979). Japan in the Second World War coveted the rich mineral resources of East and South-East Asia to support an industrial expansion programme.

South-East Asia, particularly the ASEAN countries, holds major reserves of some of the world's most important and strategic minerals (Balai Asian Journal, 1981:14-17). The Philippines is the third largest producer of chromite after South Africa and Zimbabwe it has the third largest reserves of cobalt after Zaire and New Caledonia; it was the ninth largest producer of copper in 1980; and it is a major producer of nickel and silver. Indonesia has the highest reserves of tin in the world24 per cent of 10 million tonnes. Malaysia, which ranked fifth in reserves, produced the most tin in 1980 25. 36 per cent of the world total. Bauxite deposits are found in both Indonesia and Malaysia; zinc is found in both Thailand and the Philippines. Thailand also produces tungsten ore, lead ore, antimony, iron ore, and manganese.

TABELE 2.7 ASEAN: Mineral Production and Exports, 1976

  ASEAN Indonesia Malaysia Philippines Singapore Thailand
Tin Concentrate
Production1 115 23 64 - - 28
Export Volume1 102 13 693 - - 20
Export Value2 692 83 4633 - - 146
Copper Concentrate
Production1 1 158 223 78 857 - -
Export Volume1 1 158 223 78 857 - -
Export Value2 381 86 29 266 - -
Nickel Concentrate
Production1 29 144 - 15 - -
Export Volume1 21 94 - 12 - -
Export Value2 83 24 - 59 - -
Iron Ore
Production1 1 196 292 308 571 - 25
Export Volume1 883 207 9 667 - -
Export Value2 5.36 0.16 0.2 5 - -

Sources: Asian Development Bank; Land and Mines Department, Malaysia; SGV-Utomo, Indonesia; SGV-Na. Thalang & Co., Thailand.

1Thousand tonnes.
2US$ million.
3Net export figures, i.e. export of tin concentrates from ore mined locally only.
4Figures estimated on basis of ore production.

International Disputes

The potential for conflict lies in the relationships between these countries and the world's major industrial powers, which are heavily dependent on the supply of raw or lightly processed minerals to fuel their economics. Data compiled by the Japanese Ministry of International Trade and Industry (MITI) show that Japan's degree of dependence on other countries for key minerals in 1982 was as follows: coal (81.8 per cent), iron ore (98.7 per cent), copper (96.0 per cent), lead (83.9 per cent), zinc (68.5 per cent), tin (98.4 per cent), aluminium (100 per cent), and nickel (100 per cent) (MlTI, 1982: 100). Asian countries are the main source of Japan's raw materials, particularly minerals.

In 1974 a major trade crisis arose between the Philippines and Japan (Stat Romana, 1976: 88-90). In December 1974 the three major buyers of copper concentrates in Japan-Mitsubishi, Nippon, and Mitsui Smelting-announced a 30 per cent cutback on purchases of Philippine copper effective the following month. Japan's dumping of refined copper in the international market reduced foreign demand for the Philippine produce while internal recession resulted in a slump in domestic sales. Since 80 per cent of Philippine copper was sold to Japan at that time, the cutback severely affected the country's trade balance, which showed a larger deficit compared to the previous year. The Philippine government tried to invoke the newly ratified Treaty of Amity, Commerce, and Navigation with Japan in urging Tokyo to withdraw the cutback, but the Tanaka government rejected the proposal and the crisis was extended up to the middle of 1975.

Another aspect of international disputes over minerals is related to the moves towards industrialization made by developing countries, as seen in the plans to set up mineral-processing facilities in their own areas. The Philippines' plans to set up an integrated steel mill have been on the drawing board for many years but have not been implemented because of the lack of cooperation from Japan. Instead, what the Philippines obtained through Kawasaki Steel, a Japanese conglomerate, is the now-infamous iron-ore sintering plant. Thirtytwo per cent of the US$250 million copper smelter's equity ended up in the hands of a consortium of Japanese firms, whick also constructed the plant from funds provided by the Export-lmport Bank of Japan (Tadem, 1983: 107-8). Fifty-eight per cent of the plant's output is committed for export to Japan. In order to repay the loan-at a high 18 per cent interest refining charges have been set at a level higher than that charged by Japanese plants. Filipino mining companies, which have been ordered by presidential decree to sell a fixed percentage of their production to the smelter, have repeatedly complained about this imposition. Lately, it was discovered that the plant's facilities were faulty, and a few months into production it had to shut down for major repairs.

Another case in point of Japan's exploitation of the Third World's need for technological and financial support and mineral resources is the Asahan aluminium project in North Sumatra, which includes an aluminium refinery and a hydroelectric plant, costing US$1 billion. The second largest Japanese investment in Asia, this project has raised a host of issues touching on national development, resource extraction, social dislocation, and environmental degradation which are discussed more fully in Yoko Kitazawa's chapter in this volume. Fears have also been expressed that the project will only reinforce the dependence of the Indonesian economy on Japan.

Foreign exploitation of the natural resources of Third World countries is also exemplified by the Gunung Bijih copper mine in Irian Jaya (Seigel, 1976). The first mining venture approved by the Suharto government, it is a transnational venture involving US, West German, and Dutch corporations. Freeport Minerals, a Texas-bascd American firm, is the main beneficiary of the project and was awarded a generous work contract by the Indonesian government, which gives it a virtually free hand in the 38 square mile contract area, in addition to granting a three-year tax holiday.

The mine began operations in February 1973, and during the next 23 months it earned profits amounting to three times Freeport's original equity investment. Because the firm's contract specified that it need not pay dividends until 1 January 1987, the Indonesian government sought a renegotiation of terms in order to cash in on the windfall. The resulting adjustments, however, did not cause any substantial loss for Freeport, even though it agreed to forgo the second and third years of its tax holiday.

Effects of Mining on Local Communities

Large-scale foreign-supported mining operations and their expansion not only affect Third World economies at the national level but would also have an impact on the livelihood of farming communities who are forced out by the companies. A case study of the growth of Atlas Consolidated Mining and Development Corporation in Cebu province in the Philippines shows the gradual takeover by the company of agricultural lands (McAndrew, 1983: 535). Atlas is reported to be one of the top five mining firms in the world. In the town of Toledo, where Atlas has its main copper mining operations, data from the Bureau of Census and Statistics show a marked decrease in the number of farms planting maize (the province's staple food) and the area planted to the crop. In 1960, 5,074 Toledo farms were planting maize over an effective crop area of 12 549 ha. Eleven years later, only 1,570 farms were still operating on an effective crop area of only 2 500 ha. Total maize production also dropped from 149,794 cavans (1 cavan = 50 kg) in 1960 to 18,715 cavans in 1971. In 1960 more than half of Toledo's total population were considered to be farmers, but this dropped to only one-fourth by 1970-1 (McAndrew, 1983: 53-5).

The McAndrew study cited here also revealed that few farm families displaced by Atlas were taken on by the company as employees. Citing a survey by a University of the Philippines team, the study pointed out that only 14.5 per cent of Atlas rankand-file workers lived in Toledo. Most of the farmers displaced by the mine simply migrated out of the town.

Mining operations often pose grave dangers to the safety of mine workers and surrounding communities. Inadequate safety measures could result in landslips, the bursting of bunds, and other mishaps. In Malaysia, a single landslide in Gunung Ceroh in 1973 killed 30 people, and 29 more died in twelve landslips from September 1974 to November 1976 (CAP, 1978). The gravel pump method used by more than 55 per cent of Malaysian tin mines is often responsible for accidents resulting in deaths. Malaysian tin mining had its blackest week in March 1981 when 27 people died in three separate landslips within a period of 8 days: in Puchong (19 deaths), Kampar (5 deaths), and Tanjung Tuallang (3 deaths). From 1963 to 1981, there were fifteen major mining disasters in Malaysia, with a total of 157 lives lost.

Environmental hazards are also a by-product of the extraction and processing of minerals. Mining generates a high percentage of waste materials. Only a small portion of pulverized rocks is extracted-e.g. 0.05 per cent of gold and 0.5 per cent of copper. The rest is impounded in tailing ponds and rock dams. Thus, more than 99 per cent of extracted earth and rocks turn to waste or silt. The adverse impact of these wastes on local communities is receiving increasing documentation. For example, in 1980 some 3,000 farmers in La Union province in Northern Luzon filed for damages to an area of farmland comprising some 3.782 ha that had been affected by mine tailings from three mining firms (Danguilan-Vitug, 1980: 19, 23). The farmers asked for pI,300 each as compensation for the loss of one year's harvest. A team from the Ministry of Agriculture inspected the damage and estimated the loss caused by the mine tailings at 20 cavans/ha/yr. Thus, instead of harvesting 60-80 cavans/ha/yr, the farmers produced only 40-60 cavans/ha/yr.

In the llocos region, also in Northern Luzon, four major rivers are heavily polluted, thus affecting the livelihood of nearly 500,000 farming families (Belena, 1980 9). The Bureau of Soils has confirmed that mine wastes discharged into these rivers cement soil in irrigated rice lands and thus choke the rice paddies. Moreover, waste from mines, unlike eroded topsoil, renders rice-fields infertile. An ad hoc committee on pollution created by the Provincial Regional Office for Development discovered that 75 000 ha of farmland in Pangasinan and La Union provinces are directly affected by pollutants from the mines in Benguet. Nineteen towns in these two provinces receive fine sand, cyanide, and mercury from the mines every year. Rice harvests have dropped between 5 and 40 per cent yearly with the damage in the two provinces estimated at P388 million/yr.

Traditional fishing grounds also suffer from pollution from mining. Aquatic life has all but disappeared from the Agno River. In 1980 a team of researchers from Silliman University conducted an underwater study of marine life in and around the tailing discharge area off the coast of Toledo in Cebu (McAndrew, 1983 60-1) It was discovered that within the vicinity of the pipeline, all the animals found were dead, and the ocean bottom was heavily silted and devoid of benthic organisms. The report stated that 'it is difficult to attribute the death of these animals to factors other than the acute sedimentation of the bottom brought about by the dumping of mine tailings' from the Atlas Consolidated Mining and Development Corporation (McAndrew, 1983). Dr A. S. Alcala, head of the research team, concluded forcefully that 'in the light of recent data on marine pollution by mine tailings dumped directly to the sea, such as those of Atlas . . . it is a mistake to consider disposal of copper mining wastes to the sea a safe procedure' and that 'sea disposal of mine tailings is inimical to sea life, especially the benthic forms' (McAndrew, 1983).

The Social Costs of Mining Activities

Mine workers receive relatively low wages in spite of the hard physical work and danger they face. In the Benguet gold mines in Northern Luzon, miners strip to their underwear before they enter or leave the underground mines and are subjected to the radioactive rays of a metal detector. Constant daily exposure to these harmful rays has resulted in various ailments to the miners, including rapid ageing, general malaise, and loss of sexual potency. In 1978, 1,138 Benguet workers resigned for health reasons. Conditions in the mines are appalling, as described in the following report:

Crawling into the mine tonnel is a whole new nightmare. Extending some 60 miles, the labyrinth weaves into the core of the earth from 3,000 to 5,000 feet underground At that depth, temperatures soar to a blistering loo degrees Fahrenheit, so hot that miners don nothing but briefs and helmets for work. Like overheated machines, these miners are cooled periodically by dousing from a water hose. The dark and dank tunnels also expose them to dust, grime and toxic gases. Inadequate oxygen is another risk.... The biggest spectre that haunts them, however, is the dreaded cave-in. Blasting rocks to ferret out the ore, miners expose themselves constantly to landslides, failing rocks, and the very real possibility of being buried alive (Bala' Asian Journal, 1981: 24)

Conditions for the families of miners are just as bad. At Benguet, the 'free housing' means a 'one-room affair, 3 by 7 meters, shared by two families, totalling 10 to 17 persons', and a family of six 'sleeps in an area the size of a dining table, elevated from the floor ... while another family sleeps underneath' (Bala' Asian Journal, 1981: 24).

The low wages and poor working conditions have precipitated many conflicts between mine workers and mine owners. Perhaps the longest mine workers' strike in South-East Asia occurred at the Atlas copper mines in Cebu (McAndrew, 1983). Started in 1966 with a walk-out by almost the entire work-force, it continued into 1985, with some 800 to 1,000 workers of the original 4,000 still on strike. The workers originally asked for housing allowances, more decent transportation to and from work sites, salary increases, and safety equipment. The conflict dragged on because the company, which was largely owned by foreign nationals and corporations, consistently refused to negotiate with the union and instead invited another union to organize in an effort to break the strike. The company even specially constructed a camp for two companies of Philippine Constabulary (PC) troops to police the strike. Seabs flown in by helicopter continued the work of the strikers. Despite the dispute, Atlas that year (1985) experienced its most profitable season ever, and although reluctant to share this windfall with its workers, it declared a stock dividend of 25 per cent.

2.6 Development and tribal peoples: resistance to displacement

The survival of a large number of tribal peoples in South-East Asia is increasingly being threatened by the development and implementation of large-scale infrastructure projects that are designed to maximize the extraction and utilization of natural resources. On one side of the conflict are ranged the national government and its economic planners, international funding agencies, giant foreign corporations and their local partners, and the military. Against the enormous power wielded by the forces of the establishment stand the relatively small communities of tribal peoples with their 'pre-modern' concepts of property ownership, their simple modes of production and selfsufficient economic systems, and their communal styles of living. They often are fighting a losing battle.

In Belaga, Sarawak, there have been plans for two hydroelectric dams financed by the Federal government to be constructed across the Balui River in Gian Bakun (SCS News, 1984). At a total cost of M$9 billion with a power output of 2 400 MW, and covering an area of 600 sq. km, the project will be the largest in South-East Asia. The power to be generated will be more than enough for Sabah and Sarawak's projected industrial power needs, so it is also proposed that electricity from the project be sold to the Philippines,

Indonesia, and Singapore, as well as Peninsular Malaysia. This would involve the laying of the longest cable in the world-672 km.

For the 10,000-12,000 people living in the area, however, the hydroelectric project can only mean an end to their way of life with no bright prospects for the future. The people comprise the Kayan, Kenyah, Kejaman, Ukit, Penan, and other ethnic groups. They were never informed or consulted about the project, and they are apprehensive about what the dams will do to the rivers that are their chief means of communication and transport. The rivers have already been polluted by the activities of logging companies, which have refused to pay compensation for the damages.

In Northern Luzon, in the Kalinga-Apayao and Mountain provinces, tribal hill peoples are struggling against the incursions of giant dam projects that will mean their extinction as a people (Caring, 1980). The Chico River is the longest and most elaborate river system in the Cordillcra mountain ranges in Northern Luzon. Four dams, with a total capacity of 1 010 MW, are to be built with funds from the World Bank. Officially named the Chico River Basin Development Project (CRBDP), it would cover an area of 1 400 sq. km. Total affected population is estimated at 100,000 in six towns in Mountain Province and four towns in Kalinga-Apayao. These people belong to the Kalinga and Bontoc tribal groups. The lands in question are the ancestral properties of the communities and are considered sacred.

Chico IV alone would uproot more than 5,000 Kalingas from their ancestral villages, destroy 1,200 stone-walled rice terraces, and ruin 5O0 ha of valuable fruit trees. Traditionally involved in tribal wars among themselves, the people saw the need to unite in order to safeguard their homes, families, and heritage. Thus in 1975 began the struggle of the Kalinga and Bontoc peoples against the Chico dam project. The local movement became a national symbol of protest against similar projects in other regions of the country and an international issue that drew the attention of people all over the world facing similar problems. The area was heavily militarized as the tribes prepared to resist the dam at all costs. Inevitably, the NPA began gathering support and was able to win over many of the tribal residents. The government tried to gain the support of tribal leaders through bribery, intimidation, and force, but the Kalingas and Bontocs persisted. Finally, the government relented under local and international pressure and the World Bank itself decided to postpone the dam project. In the meantime, more than 100 people had died.

While attention was being showered on the Chico dam, the government was quietly building an even bigger project farther north in Kalinga-Apayao (Ibon Facts and Figures, 1979). Known as the Apayao-Abulug River Hydro-Electric Development Project, it was projected to cost about P5.2 billion to construct and will inundate 9 400 ha where some 18,000 members of the Isneg tribal group live in the town of Kabugao. It appears the National Power Corporation (NPC) has learned the wrong lesson from the Chico experience. Instead of becoming more open about development plans and how they affect the people in Apayao, the NPC seems to have become more secretive, in the hope of avoiding another public outcry of the same magnitude as the Chico controversy.

In Abra province, also in Northern Luzon, some 55,000 Tingguian tribal peoples were involved in confrontation beginning in 1977 with the Cellophil Resources Corporation (O'Connor, 1981: 5). Owned by a close friend of President Marcos, Cellophil began operations on its 200,000-acre logging concession which it had acquired in 1972 and 1974. The company set out to construct a pulp and paper mill and planned to expand into a rayon-staple fibre plant in neighbouring La Union province. Life was made difficult for the villagers by Cellophil. Those who refused to sell their lands had to fence off their property or were accused of trespassing; bulldozers filled up irrigation and drainage ditches; the mill rapidly destroyed fishing, one of the Tingguian's alternative sources of livelihood; pasturelands for the water buffalo were lost; and the people faced the depletion of their forests as well as the likelihood of erosion, landslips, floods, and drought.

Like their neighbours the Kalingas, the Tingguians fiercely resisted Cellophil, and the Marcos government responded by launching a military campaign against the protectors beginning in March 1977. Sympathetic church leaders were hunted down and persecuted. One parish priest, a native Tingguian named Fr. Conrado Balweg, was forced to go underground and later joined the NPA. Many farmers have been detained, and numerous military abuses, including the killing of civilians, have been committed. Because of the intensified military campaigns, hundreds of residents have evacuated into towns in the northern part of Mountain Province (Biag, 1983).

These cases point to the seeming irreconcilability of the many conventional viewpoints regarding national development and the interests of tribal peoples in South-East Asia. Governments must recognize the rights of tribal groups and strive to preserve and develop their societies within the context of their centuries-old systems, instead of pursuing a policy of extermination of traditional cultures in the name of modernization and progress. Otherwise, national unity can never be achieved.

2.7 Natural resource abuses: a time for change

The extraction, transformation, and utilization of natural resources have resulted in great damage to the environment and spawned conflicts at various levels between labour and capital, corporations and tribal communities, and governments of the developed and the developing worlds. The role of the state as the primary agent for the supervision and disposition of natural resources is a crucial factor in the analysis of these conflicts. Related to this is the rise of militarization, especially in areas where the victims of development have begun to fight back and assert their rights.

The depletion of forest and, to a certain extent, mineral resources has already reached crisis proportions in South-East Asia. The degradation of the ecosystem only emphasizes the critical nature of the problem. The displacement of local communities, including tribal peoples from their homes and traditional sources of livelihood without adequate alternatives being offered is a violation of human rights. While corporations reap large profits from their operations, the workers and their families subsist below the poverty line and endure poor living conditions. Labour conflicts are immediately traceable to the exploited condition of the workers in the forest and mineral industries. In agriculture, which is a transformation of a land based resource, peasant land rights are constantly being violated by the expansion of agribusiness concerns as land reform programmes are half-heartedly implemented, if at all. Food crops are being replaced by export crops, and malnutrition remains a major problem.

Industrialized countries are heavily dependent on raw material producing countries for mineral and forest products, but they also control international trade and dictate the prices as well as the traffic in such goods. Capital and technology are also monopolized by the First World. These countries are generally indifferent to the development of the processing capabilities of the primary-product producing countries, and in cases in which transfer of technology is undertaken, it has been confined to the less desirable types such as heavy-polluting or energy-consuming ones.

There is obviously a need to change existing priorities for development in the ASEAN countries. A stronger position must be taken against the monopolistic control being exercised by the developed countries over local resources. Considering that ASEAN countries possess sizeable forest and mineral reserves, the possibilities for these states to come together and demand a revision of trade and investment patterns are bright and attainable. Presenting a unified position, ASEAN countries can enter into negotiations with raw material-importing countries and arrive at mutual agreements. The industrial countries must be made to realize that unless they agree to negotiate for change, their traditional sources of primary products may be lost or unilateral restructuring may have to be undertaken.

Internal conflicts are a different matter, however. The governments of the ASEAN states range from mildly to overtly authoritarian. In many cases, internal sources of tension such as labour conflicts and peasant unrest have been dealt with by state repression. In this way, governments lose their credibility with the population and popular sympathy shifts to opposition groups, including those promoting radical alternatives. Bureaucratic anomalies, financial scandals, widespread corruption, and foreign biased economic programmes all serve to erode the government's position. The state becomes identified with the interests of logging and mining companies, usurious international funding agencies, and foreign agents. It is not surprising that official policies are perceived to have benefited only these interests while causing great harm to the peasantry, workers, and tribal communities.


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