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44M kilos of fertilizer from South Korea shipped to Philippine landfill

It was intended as an ‘alternative daily cover’ for the sanitary landfill of Carrascal town in Surigao del Sur, but a local environment officer points out there is no study that it is suitable for such use. Rep. Prospero Pichay says it is not fertilizer but waste, and wants South Korea to take it all back.

BY CARMELA FONBUENA/Philippine Center for Investigative Journalism


At a glance:

  • A huge volume of “CMP inorganic fertilizer” from South Korea was shipped to a landfill in Carrascal town in Surigao del Sur in June 2021. 
  • Cebu-based consignee Nano-Platanos Corp. bought the fertilizer for $660,000 or about P33 million, then donated it to the municipality of Carrascal.
  • Carrascal wants to use it as an ‘alternative daily cover’ for its sanitary landfill, but a local environment officer says there is no study that it is suitable for such use.
  • The chief of the Carrascal Municipal Environment and Natural Resources claims the fertilizer is also intended for the rehabilitation of mining areas.
  • Rep. Prospero Pichay says it is not fertilizer but waste, and wants South Korea to take it all back. 

Forty-four million kilos of “fertilizer” from South Korea were shipped to a sanitary landfill being built in Barangay Bon-ot of mining town Carrascal in Surigao del Sur, prompting a new foreign waste dumping investigation in the Philippines and calls to return it to South Korea.

Documents obtained by the Philippine Center for Investigative Journalism (PCIJ) showed that Cebu-based Nano-Platanos Corp. bought a huge volume of “calcium magnesium phosphate (CMP) inorganic fertilizer” from South Korean company Korean Gypsum Inc. for $660,000 or about P33 million. The company then donated the entire volume to the Carrascal local government unit (LGU), which intended to use it as an “alternative daily cover” for its sanitary landfill.

It is not proven to be suitable for such a purpose, however.

“There was no existing study on the CMP as an alternative cover of residual waste,” read a June 22 report prepared by Kenneth Salvani of the Department of Environment and Natural Resources (DENR) field office in nearby Cantilan town. 

The report recommended further study on its use on landfills.

The Environment and Management Bureau (EMB) Central Office of the DENR has begun an investigation into the shipment.

CMP inorganic fertilizer is a type of soil conditioner used to correct the acidity of soil. The shipment from South Korea received certification from the Fertilizer and Pesticides Authority (FPA) of the Department of Agriculture (DA), but the local field office of the DENR and Surigao del Sur Rep. Prospero Pichay Jr. raised concerns about foreign waste dumping.

The DENR in Cantilan town cited the extraordinary volume of the shipment that was shipped to the landfill. Pichay was also suspicious of the “small company” from Cebu that donated the fertilizer.

“I cannot allow the Province of Surigao del Sur to be used as a dumping ground of the waste materials of Korea,” said Pichay. He said South Korea should take back the shipments. 

The chief of Carrascal’s Municipal Environment and Natural Resources Office (Menro), Lawrence Brion Cortes, said they accepted the donation thinking they could use it as soil cover. He told the PCIJ they would wait for the studies to be completed before using it in the landfill.

 ‘Low to moderate toxicity’ 

Mountains of the greyish powdered solid now sit on the grounds of the “Eco-park” inside the area of the sanitary landfill, drawing concerns that runoff from the huge volume of fertilizer during the rainy season will pollute nearby waterways.

The DENR tested samples from the shipment and found that the fertilizer was neither hazardous nor dangerous. However, a material safety data sheet issued by Farm Hannong in South Korea, the manufacturer of the fertilizer, gave instructions to “avoid contaminating waterways if possible.”

“Fertilizers, particularly those containing phosphorus, can stimulate weed and algae growth in static surface waters,” it said.

Cortes said they would cover the fertilizer to prevent leaching. 

The toxicity of the fertilizer is “low to moderate,” based on the safety data sheet. In an extreme scenario where it is inhaled at high levels, it “may cause methaemoglobinemia, where the blood’s oxygen-carrying capacity is reduced.”

If stored in the open, a tarpaulin cover was recommended to reduce dust, although the landfill is far away from residential areas. 

The fertilizer will sit on the grounds of the landfill unless actions are taken to remove it or the municipality finds use for it.

Cortes told PCIJ they could also use the material to rehabilitate mining areas in the town, citing a similar shipment that arrived in October 2019. 

Hindi naman po soil cover lang ang purpose nito. Bale tinanggap po ito ng LGU kasi if ever na hindi ito suitable for soil cover e pwede naming ibigay sa mining company para magamit nila sa kanilang mining rehabilitation (Its use is not limited to being soil cover. The LGU accepted it because it can also be used to rehabilitate the mining companies if it is not suitable soil cover),” said Cortes. 

“Either way naman po  talagang magagamit. Hindi naman po talagang masasayang (Either way, we will use it. It will not be wasted),” he said.

The 2019 shipment, which was also donated by Nano Platanos Corp., was received by Marcventures Mining and Development Corp. It was one of the mining companies that the late Environment Secretary Regina “Gina” Lopez sought to close down.

The fertilizer received by Marcventures is unutilized or underutilized. 

“It is worthy to note that the first batch of the donated CMP given to the [Marcventures] last 2019 was allegedly unutilized until to date due to the Covid-19 pandemic based on the report of the [Marcventures] dated January 15, 2021. As of to date, there are still no updates relative to the utilization of the CMP,” based on a July 5 DENR report. The report also recommended returning the fertilizer to South Korea.

Pichay, who himself used to be president of nickel mining company Claver Mineral Development Corp., said there was no mining area that needed rehabilitation in the province “because most of the area is not yet mined out.”

‘UNUTILIZED.’ Weeds grow on a mountain of ‘CMP inorganic fertilizer’ sitting on the mining area of Marcventures Mining and Development Corporation in Surigal del Sur since late 2019. Photo taken in June 2021 courtesy of Rep. Prospero Pichay. 

 Foreign waste dumping 

The investigation underscores the challenges of policing international trade of waste between countries.

Some cases of foreign waste dumping are more obvious, such as the notorious “Canada waste” in 2015. The shipments of household wastes that arrived in the Philippines were declared as plastic recyclables. South Korea also figured in a waste controversy in 2018, when assorted wastes were declared as synthetic plastic flakes. Both countries eventually took back the waste shipments. 

Less obvious is the technical smuggling of agricultural wastes, said Bureau of Customs spokesperson Vicente Maronilla. 

“People have this impression that if it is organic or chemical based, if it relates to use in agriculture, then it is okay. It is less toxic. Apparently, hindi ganoon (it is not the case),” Maronilla told the PCIJ.

“Even the ones they claim are organic fertilizer, we’re now discovering through DENR that it also ruins certain balances [of the soil] if you don’t use it correctly,” he said.

These kinds of agricultural imports also fall under waste trade, Maronilla said. “It is technical smuggling. Because of multi-use products, nagiging technical na rin ang smuggling e (technical smuggling can happen)…. Sometimes it’s waste. Dina-dump na lang sa atin (They dump it in the country),” he said. 

Customs is also investigating the shipment in Carrascal, although Maronilla said the DENR was leading the probe. 

A July 5 report of the DENR field office in Cantilan took issue with the fertilizer going to a landfill. 

“The volume of the questioned ‘fertilizer’ does not justify their excuse that it will be used as ‘fertilizer.’ In fact, the alleged ‘fertilizer’ was only dumped in a landfill in Carrascal. Clearly, their intention is to make Carrascal, Surigao del Sur a dumping ground,” according to the report signed by environment officer Marslou Bonita.

The report cited communications between the DENR office and the South Korean supplier. “In fact, the Korean principal when asked if the said ‘fertilizer’ can be distributed to farmers, he alleged that it can only be used to cover landfills. Thus, the following circumstances strengthen the undersigned’s belief that they are only making Surigao del Sur a dumping ground,” the report added.

Roldan said fertilizer is a general term that does not necessarily involve farm use. CMP inorganic fertilizer is material intended to be a soil conditioner. “These are soil elements that can be used to amend the soil – if the soil is lacking in some texture,” he said.

Asked about issues raised against the volume of the fertilizer and the purpose for importing it, Roldan said those were no longer FPA’s concerns. 

“Number one, it (Nano-Platanos Corp.) is duly registered. Number two, the analysis is the same as what they have submitted to the FPA. Number three, there are no heavy metals in a level that is deleterious to environmental hazard,” Roldan said.

This attitude is problematic, however, and has made monitoring foreign waste shipments difficult, according to government officials privy to the investigation but were not authorized to speak publicly on the investigation.

Agencies in government cannot work in silos, they said. They said the DA should have alerted the EMB given the huge volume of the fertilizer, scrutinized how it was intended to be used, and anticipated possible problems.

The moment an agricultural product is certified by the DA, there’s little that can be done to stop the Bureau of Customs from releasing the shipments. 

Wala rin kami magawa kapag ganiyan kasi may permit e. (We can’t do anything in that case because it has a permit.) It was given the go signal,” Maronilla said.

 Pichay’s complaint 

On the ground, the investigation has become political because of Pichay’s involvement as complainant. The mayor of Carrascal, Vicentel Pimentel III, is the nephew of Surigao del Sur Gov. Alexander Pimentel.

Pichay filed a complaint with Environment Secretary Roy Cimatu and Customs chief Leonardo Guerrero in a letter dated July 13.

He demanded immediate investigation. “[C]onsidering the volume of said fertilizers, it is obvious that these are wastes being dumped in our country,” he said. 

Pichay said the Cebu company, Nano-Platanos Corp., was suspicious. “Ikaw Filipino businessman, mag-import from Korea ng fertilizer. Tapos ido-donate niya? Ang liit-liit na kumpanya (You’re a Filipino business. You import fertilizer from Korea. You’ll donate it? It’s a very small company),” he said. 

PCIJ tried to reach the company through its office in Cebu twice, but was unable to reach its representatives. The author left her mobile number with two personnel from another company, which apparently shared the telephone number indicated in the customs papers. 

PCIJ also reached out to the South Korean embassy in Manila, but did not receive a response as of posting. Any comment from the embassy will be added to this report. 

Pichay said he was familiar with the fertilizer. He earlier helped the same Cebu company in persuading Marcventures to receive the first shipment in 2019, which he said was a mistake. 

The first shipment was reportedly about 20,000 tons or 20 million kilos, based on a 2019 DENR report, although PCIJ did not obtain documents on the shipment. 

Pichay said he was surprised that another shipment arrived in June when Marcventures had yet to utilize the first shipment.

While DENR laboratory tests showed that the samples were not hazardous or dangerous, Pichay echoed concerns about the volume of the shipment. 

Kapag uulan… sa dami ng volume, madami din ang toxic… (When it rains… given the huge volume, a significant amount of toxic [materials will be released]),” Pichay said. 

 20 million kilos in 2019 

Cortes said the LGU was surprised by the complaints. “Hindi po namin naiintindihan bakit maraming complaints e noong sa Marcventures na unang shipment e na-prove naman na hindi po ito toxic (We don’t understand why there are many complaints when it was proven from the first shipment with Marcventures that the material is not toxic),” he said. 

Kaya po tinanggap namin ito kasi ‘yung 2019 na fertilizer is na-prove naman na okay siya. Same source kaya po tinanggap namin (The reason we accepted it was because the fertilizer back in 2019 was proven to be okay. It came from the same source so we received it),” said Cortes.

The first shipment arrived in October 2019. It was the subject of a Facebook post that raised concerns against toxic wastes, prompting protests in the province and a succeeding DENR investigation. 

The material was found to be non-hazardous, but the circumstances surrounding the donation raised questions even then. 

A 2019 DENR report showed that the fertilizer was originally supposed to be delivered to Libjo Mining Corp., operating in the province of Dinagat Islands, for the purpose of rehabilitating its mining areas. Nano-Platanos was unable to provide a document to prove that the mining company, which was also in Lopez’s list of companies to be shut down, agreed to receive it. 

Pichay said several mining companies, including one operated by the incumbent mayor of Carrascal, were offered to receive the donation but they supposedly refused because they feared that their mining permits would be compromised if the shipment turned out to be problematic. (PCIJ sought the mayor to comment on the probe, but his staff referred us to the MENRO chief.)

Pichay said the shipment was eventually unloaded on a lot owned by his brother in Cantilan town. It prompted complaints from the neighborhood because of the dust, which caused itchiness, he said.

He then persuaded Marcventures to take the fertilizer, which was moved to its mining grounds in Brgy. Pili and Brgy. Sipangpang in Carrascal, where its reforestation activity and nursery are located. 

Pichay said the shipment must be returned to South Korea or more shipments of the fertilizer – he claimed seven more shipments were due to arrive – would be dumped in the province.

Following the complaints, Cortes said he would not recommend receiving more donations of the fertilizer. “Kung sa akin lang siguro, huwag na (If it were up to me, we shouldn’t receive more shipments).” END

*Top photo courtesy of Surigao Rep. Prospero Pichay Jr. 

*This report was produced with the support of Greenpeace Southeast Asia-Philippines. The Philippine Center for Investigative Journalism had full editorial independence. Greenpeace Southeast Asia-Philippines, their officers, and employees accept no liability for any loss, damage, or expense arising out of, or in connection with, any reliance on any omissions or inaccuracies in the material contained in the report. 

‘Maohi Lives Matter’: Tahiti protesters condemn French nuclear testing legacy

By Mong Palatino/Global Voices

More than 1,000 people gathered in the Tahiti capital of Papeete to condemn the failure of the French government to take full accountability for its nuclear testing program in the South Pacific.

France conducted 193 nuclear tests from 1966–1996 in Mā’ohi Nui (French Polynesia). France’s 41st nuclear experiment in the Pacific led to catastrophe on July 17, 1974, when France tested a nuclear bomb codenamed “Centaure.” Because of weather conditions that day, the test caused an atmospheric radioactive fallout which affected all of French Polynesia. Inhabitants of Tahiti and the surrounding islands of the Windward group were reportedly subjected to significant amounts of ionizing radiation 42 hours after the test, which can cause significant long-term health problems.

The July 17, 2021 protest was organized under the banner of #MaohiLivesMatter to highlight the continuing fight for nuclear justice. Campaigners said that despite the statement of former French President François Hollande in 2016 recognizing the negative environmental and health impact of the nuclear tests, the French government has done little to provide compensation or rehabilitation to French Polynesia.

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After analyzing 2,000 pages of declassified French military documents about the nuclear tests, in March 2021 a group of researchers and investigative journalists from INTERPRT and Disclose released their findings on the health implications of the experiments.

According to our calculations, based on a scientific reassessment of the doses received, approximately 110,000 people were infected, almost the entire Polynesian population at the time.

The report has revived public awareness in France about the impact of their nuclear testing program. The French government held a roundtable discussion about the issue in Paris in early July. Though some criticized the French government for their alleged lack of transparency around the clean-up efforts in French Polynesia, officials denied these claims.

Protesters in Tahiti insisted that the French government should do more to address the demands of French Polynesian residents. Some noted that if French President Emmanuel Macron was able to seek forgiveness for the role of France in enabling the Rwanda genocide in 1994, he should at least make a similar apology for the harmful legacy of the nuclear tests in the Pacific.

The #MaohiLivesMatter protest has inspired solidarity in the Pacific.

Community leaders of West Papua expressed their support for the protest:

Youth activists from Pacific island nations also took part in the protest:

The International Campaign to Abolish Nuclear weapons (ICAN) Australia issued this statement of support:

As you gather in Maohi Nui on the 17th July we offer our deep respects to your leaders and community members who have long spoken out against the harms imposed by these weapons. We have heard your calls for nuclear justice. We continue to listen closely when you speak of the lived experience of the testing years and the on–going harms.

French President Emmanuel Macron is expected to tackle the legacy of nuclear testing during his visit to Tahiti this month. #

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Kodao publishes Global Voices articles as part of a content-sharing agreement.

For banks that backed PH coal boom, the path to renewable energy comes with roadblocks

Banks in Asia and the Philippines are moving at a snail’s pace in defunding coal. At least 10 Philippine banks gave $841 million in loans and participated in $1.3 billion worth of underwriting activities involving at least five coal companies since the 2015 Paris climate agreement.

BY KAROL ILAGAN/Philippine Center for Investigative Journalism

In 2017, a network of more than 100 organizations filed a landmark climate complaint against the International Finance Corp. (IFC), the private sector arm of the World Bank. 

The Philippine Movement for Climate Justice (PMCJ) accused the IFC of contributing to the climate crisis as it had funded 19 coal power plants across the Philippines through a local bank, the Rizal Commercial Banking Corp. (RCBC), the ninth largest bank in the country in terms of assets.

IFC gave RCBC $253 million to invest in projects that could cause “significant adverse environmental and social risks that are diverse, irreversible or unprecedented,” according to the complaint filed before the World Bank Group in Washington. The IFC, whose funds are pooled from governments all over the world, was in effect violating its environmental and social standards.

Three years later, in September 2020, the IFC announced that it would no longer invest in banks that did not have a plan to divest from coal.

In October, the following month, RCBC also announced that it would no longer finance coal plants. RCBC became the first in the Philippines and only the fourth bank in Southeast Asia to phase out funding for fossil fuel. 

The IFC was initially defensive, recalled Ian Rivera, PMCJ’s national coordinator. Philippine bank managers claimed that getting the money back would be difficult because it was already spent, he said.

“If you claim that it has already been used in constructing the coal plants, then you should be accountable [for] that, particularly in the impacts,” said Rivera, who also represents communities adversely affected by coal operations.

The pronouncements signaled a bold move for financiers who have been backing the recent coal expansion in the Philippines, one of the most vulnerable countries to climate change. They also came at a time when the country’s energy department announced a moratorium on new coal plants. Monetary regulators also released guidelines on how banks could adopt a sustainable finance framework.

IFC and RCBC have joined the list of banks around the world – now more than 100 and counting – that have pledged to exit coal and realign their portfolios with the ambitions of the 2015 Paris climate agreement to cut greenhouse gas emissions and limit global warming. However, banks and coal companies in Asia, including the Philippines, are moving at a snail’s pace in adopting policies that would phase out fossil fuel and pave the way for a credible transition to renewable energy. Asia has the most number of new, operating and planned coal plants. 

Apart from RCBC and Bank of the Philippine Islands (BPI), which just last April announced plans to bring down its coal exposure by half in 2026 and to zero by 2037, no other local bank has followed suit or made public pronouncements. The momentum at the global level is high, but not so much at the local level. (PCIJ conducted an online search for other banks’ announcements on coal divestment, but did not find any so far.)

 Billions of dollars 

In fact, a 2020 study found that at least 15 Philippine banks had channeled a total of $13.42 billion to coal companies and coal projects in the Philippines from 2009 to 2019. More recent data from the German-based non-profit Urgewald showed that at least 10 Philippine banks gave $841 million in loans and participated in $1.3 billion worth of underwriting activities involving at least five coal companies since the Paris agreement.

Moreover, as of writing, banks have yet to submit their transition plans, as required six months after the release of the Bangko Sentral ng Pilipinas (BSP)’s Circular No. 1085 or the Sustainable Finance Framework.

Issued in April 2020, Circular No. 1085 outlines steps in mainstreaming sustainability principles in the financial sector. While it does not explicitly mention coal, the framework adopts the United Nations Environment Program’s full spectrum of sustainability, which includes climate and green finance.

The issuance of the circular is timely, said the BSP, as the impact of the pandemic covers Environmental, Social and Governance (ESG) issues that are all high on the country’s Sustainable Development Goals (SDGs), a set of global goals to eradicate extreme poverty and achieve sustainable development by 2030.

Rivera recalled that when the circular was unveiled in April 2020, some banks held back and asked the central bank to go slow because of the losses they had incurred amid the pandemic.

The issuance of the circular is a welcome development, but how it will be implemented is another thing, he said. “By the end of three years, banks should be transparent about their investments involving environment and social risks. That should be made public and also to guide their depositors and stockholders,” he said.

In an email to PCIJ, the BSP clarified that banks must submit transition plans upon the request of the central bank’s supervising department. Because of the pandemic, the BSP said it would be flexible as regards the submission of the plan. 

The BSP also said it was helping banks adopt sustainability principles. The central bank’s initiatives include webinars that allow “first-mover” banks to share their experiences in Environmental and Social Risk Management (ESRM), sustainability reporting requirements, and the issuance of green, social or sustainability bonds.

Lyn Javier, managing director of the Supervisory Policy Sub-Sector under the BSP’s Financial Supervision Sector, said the central bank was cognizant that banks were in various stages of awareness and capability in managing financial risks arising from climate change.

This was the reason why the circular gave banks a transitory period of three years to make the necessary adjustments, considering that the change won’t happen overnight, she said. Key to this transition is the bank’s plan on how it will comply with standards, including the assessment of its loan portfolio. 

The circular also emphasizes the role of the board of directors in the adoption of sustainability principles as well as in promoting a culture that fosters environmentally and socially responsible business decisions. 

“As banks embrace sustainability principles, the tone that will be set by the board of directors and senior management will then reflect into the bank’s strategic objectives and risk appetite, including in business decisions on which projects to invest in or finance,” said the BSP.

In an email to PCIJ, BPI said it had prepared a transition plan to comply with the BSP’s sustainable finance circular. BPI also said it had established the BPI Group Sustainability Agenda Policy, which will guide the bank in integrating sustainability principles in its corporate governance, risk management, strategic objectives, and operations.

PCIJ sent requests for interviews and comments to the Bankers’ Association of the Philippines (BAP), BDO Unibank, the country’s biggest bank, and Metrobank. Metrobank, the third largest bank in the country in terms of assets, acknowledged PCIJ’s request and said it would answer PCIJ’s queries. The BAP said it was unable to grant an interview. 

 Can a bank be “sustainable” if it still funds coal? 

Several banks even prior to the issuance of the circular have supported the sustainable finance agenda by taking on initiatives in line with the UN’s SDGs. Major banks have issued sustainability and green bonds and financed renewable energy projects.

The Bank of the Philippine Islands (BPI), for instance, issued the country’s first dollar-denominated Asean green bonds in September 2019. According to BPI, the fourth largest bank in the country, net proceeds of the bond sale would be used to finance or refinance eligible green projects, as described in BPI’s Green Finance Framework, developed four months earlier.

As of 2020, BPI has disbursed a cumulative of P130 billion toward 89 renewable energy projects, P29 billion toward 158 energy efficiency projects, and P32 billion toward 107 climate resilience projects. 

Banks like BDO Unibank and Unionbank have also released their own sustainable finance frameworks, which exclude fossil-fuel power generation or transmission from the use of proceeds of their green or sustainability bonds.

These efforts are also all in line with sustainability reporting requirements set by the Securities and Exchange Commission.

But the Center for Energy, Ecology and Development (CEED) said banks should not lump climate and sustainability policies together.

“When we talk about climate guidelines – which is about the Paris agreement – the question is what concrete steps banks are taking to align their investments towards limiting global temperature rise to 1.5° Celsius by the end of the century,” says Gerry Arances, CEED executive director.

“If there is no position or plan on phasing out coal or even a public pronouncement at that, it would be difficult to say that a bank is a ‘sustainable’ bank,” he added.

At the global level, more and more banks are announcing that they will withdraw investments from coal-producing utilities. But activists continue to criticize the financial sector for being slow to act, highlighting how the world’s biggest banks have since continued bankrolling fossil-fuel producers since the Paris climate agreement was ratified in 2015.

The use of coal is the single biggest source of harmful greenhouse gas emissions that induce the worsening climate crisis. Communities hosting coal plants have also been documented to suffer from air, water and land pollution.

 Scorecard tracks new coal commitments 

The Withdraw From Coal Campaign’s April 2021 Coal Divestment Scorecard shows that while banks have garnered better scores on climate action, their coal financing activities have pulled their scores down.

The scorecard is a coal exposure and policy assessment tool developed by environmental groups to help banks rethink their coal financing activities and assess the risks involved. It is the only one of its kind in the developing world. CEED is among the proponents of the campaign. 

The first Coal Divestment Criteria and Scorecard in May 2020 identified at least 15 banks that channelled a total of $13.42 billion to coal companies and coal projects in the Philippines from 2009 to 2019. These banks have either financed projects for power plants, mines, and infrastructure; underwrote coal companies’ various debt issuances; raised capital for coal companies; or directly invested and managed coal assets.

According to the more recent April 2021 issue, BPI remains the country’s top coal financier, having committed to underwrite a bond issuance for AboitizPower Corp., the second largest coal developer in the Philippines. BPI has committed to underwrite over P1 billion of AboitizPower’s new corporate retail bonds to be used to redeem 2014 bonds that were utilized to fund coal plants in Pagbilao, Cebu, and Davao. In total, BPI has funded 15 coal plant projects and six coal developer companies.

BPI clarified that the bank did underwrite AboitizPower bonds whose proceeds were used to redeem the 2014 bonds. The 2014 bonds, the bank said, were used to fund several power plants, including hydropower plants in Manolo Fortich, Bukidnon and Sabangan, Mt. Province.

Moreover, according to the study, BDO, China Bank, and Metrobank had joined BPI as joint issue managers, joint lead underwriters and joint bookrunners for AboitizPower’s newly registered bonds. 

The Philippine National Bank (PNB) and BDO retained their ranks as the second and third largest coal financiers in the country. PNB financed nine coal plants, while BDO, the largest bank in the country, financed at least 14 coal plants. The study found that both banks frequently acted as the mandated lead arrangers and lead issuers for a combined 33 deals. 

Due to its new coal exposure, China Bank rose five ranks to become the sixth top coal financier in the country, the study found.

CLICK to read the Withdraw From Coal Campaign’s April 2021 Coal Divestment Scorecard.

The scorecard uses data from the following sources to determine the contributions of Philippine banks to the coal industry: Thomson Reuters Project Finance International; Final Prospectuses and Offer Supplements for the Issuance of Financial Instruments; Philippine Dealing System Holdings (PDS) Group; Urgewald Coal Financiers Database; and the Global Energy Monitor.

The published scorecard does not include a breakdown of each bank’s coal exposure. A check with the finance data of the Global Coal Exit List (GCEL) 2020, published by German-based non-profit Urgewald, showed that at least 10 Philippine banks gave $841 million in loans and participated in $1.3 billion worth of underwriting activities involving at least five coal companies. (Check out the list of coal companies that are on the Global Coal Exit List 2020.)

The study, published in February 2021, showed that 4,488 institutional investors held investments totaling $1.03 trillion in companies operating along the thermal coal value chain. Urgewald data cover two years, from October 2018 – when leading climate scientists recommended limiting global warming to 1.5° Celsius – until October 2020.

CLICK for a list of Philippine coal companies and coal plants on the Global Coal Exit List 2020.

Vested relationships, interlocking investments 
 

PCIJ did not find publicly available information on banks’ coal investments vis-a-vis its total portfolio. The BSP does not collect such information. Sustainability reports that banks submit to the SEC include some information on their power generation loan mix but not in comparison with their total portfolios.

BPI’s energy generation portfolio, for instance, is broken down as follows: 45% renewable energy, 45% coal and diesel, and 10% gas.

What is reported to the BSP is a summary of outstanding loans to various sectors in production and housing consumption. The sector “Electricity, Gas, Steam and Air-Conditioning Supply,” according to the BSP, includes both coal-based power generation as well as renewable energy and other energy efficiency projects. 

According to BSP data as of March 2021, Philippine banks granted a total of P1.06 trillion to the sector, representing a tenth of the total outstanding loans given by the entire banking system. The share for coal projects should be lower as the figure included other energy projects. The percentage differed for each bank as they had varying exposures to coal.


Finance experts also estimated the figures to be minimal. Lawyer Antonio La Viña said coal investments were so small percentage-wise, which would make it reasonable for banks to let them go, said. La Viña is the executive director of the Manila Observatory, which is also part of the Withdraw From Coal Campaign.

A finance expert, who heads a regional policy think-tank, said coal investments by at least two major banks in the region accounted for under 2 percent of their respective portfolios. The argument put forward by these banks, he said, was the reverse — that they should be given a pass for such small exposure to coal.

In Arances’ view, banks already have internal policies in support of sustainable finance but it would be difficult for them to defund coal because many of these ventures are owned by conglomerates such as San Miguel Corp. and AboitizPower, which are major clients. Many Philippine banks are themselves part of large conglomerates.

“Ang dami na nilang investments na mahihirapan ang isang bangko (They have so many investments, making it hard for one bank). We understand that because it will shake up their whole investment portfolio. So that’s the thing here. Kaya hirap na hirap talaga sila (That’s why it’s so difficult for them).”

For La Vina, it’s all about relationships that banks don’t want to let go. The former environment undersecretary also mentioned the Aboitizes who own Aboitiz Power and Ramon Ang of San Miguel Corp. Aboitiz and San Miguel are the country’s biggest power suppliers.

“For me, it’s more about the vested relationships rather than the real economic value of all of these assets,” he says. “[It’s about] interlocking investments, relationships that they wouldn’t want to let go, or they are afraid that if they stop funding these people for coal they’ll also go somewhere else for other things.”

BPI said it evaluates all financing proposals on the basis of the merits of the project, including financial viability, credit metrics and sponsor support. Projects sponsored by large corporates with strong balance sheets have done well in the past based on credit performance, the bank said.

Large conglomerates with diversified energy portfolios have also put in place their respective ESG frameworks which incorporate, among others, initiatives to pursue more renewable energy projects. These developments are incorporated in BPI’s credit assessment, the bank said.

Ayala Corp., a major coal developer in the Philippines, for instance, announced in April 2020 that it would fully divest from coal by 2030.

 

Southeast Asia is ‘stuck’


A finance expert, who works with financial institutions and regulators in the region, said the big question was how to help banks in the transition, as project lending is not like a tap that can just be turned on or off. 

“A lot of these projects form part of a blueprint and that blueprint has existed for a long time ago and fits with public components,” he said.

It’s also about a credible transition to renewable energy. “Transitioning cannot mean that you say, ‘We need time because the economy is not ready so we’ll take the time to transition.’ It means that you have a serious target,” he said.

The expert sees at least three stumbling blocks: fitting renewable power supply into the power transmission grid, energy security, and political considerations especially between trading partners.

CEED’s Arances backed the expert’s observations, saying the electric grid in the Philippines needed to be developed to match the requirements of renewable energy. A smart grid that can absorb as much intermittent electricity as possible was needed, he said.

“The reality is Southeast Asia is actually stuck if coal consumption in Asean is going to increase,” the finance expert said. Projections from a 2014 study by the Asian Development Bank (ADB) showed that while Southeast Asia would increase its renewable generation share by 8% to 27%, it would also increase its share of coal from 36% to 42% by 2030. 

According to the ADB paper, the Philippines is also expected to become the most coal-dependent country in Southeast Asia in 12 years or by 2026.

The current draft of the Philippine Energy Plan (2018-2040) also projects a significant share of coal in the energy mix at 58.9% by the end of the decade. Back in 2014, coal had a 43% share in power generation.

These estimates do not yet take into account the recent moratorium placed by the Department of Energy (DOE) on new coal applications. The moratorium however does not apply to at least 22 proposed coal plants approved for construction.

But the ADB study did find that the growth of renewable energy use in the Philippines would outpace that of coal use, at 151% between 2014 to 2030 against 75% for coal during the same period.

 

 Road to renewable 


Not all is bleak, however. Sources interviewed for this story all said that bringing the share of coal down was possible because technology and economic variables had improved for renewables.

The status quo is changing and previous arguments against renewable energy no longer apply. Cost and efficiency for both solar and wind have improved significantly, with prices going down by as much as 60 percent in the last 15 years. Technology has thus made it feasible for more people to adopt renewables.

Bankability, profitability and affordability are all part of the equation, said Arances. Coal is only deemed the cheapest source of electricity because of the current system. Bid requirements for power supply agreements, for instance, are set so high in terms of wattage, making it hard for renewable energy companies to qualify. 

The lay of the land in the power sector needs to shift out of coal’s favor first and foremost, according to experts. Key to this shift is the Renewable Energy Act, which was passed in 2008 but whose implementation has been delayed.

In fact, in the same year when PMCJ filed the IFC case, the network also filed a mandamus before the Supreme Court against the DOE, claiming that the department did not draw up renewable energy regulations.

Rivera took note of the issuance of the rules for Renewable Portfolio Standards, establishment of the Green Energy Options Program, and reduction of dependence on fossil fuels.

The Green Energy Options Program, for instance, allows consumers to generate their own electricity and encourages utility companies to offer options to consumers who want their electricity to come from renewable energy.

“Hindi nila nilagyan ng provisions kaya natengga ‘yan for more than 10 years (They did not put provisions in place so it was delayed for more than 10 years),” he said.

PMCJ’s case was brought to the Court of Appeals, which ruled in favor of the complaint. The DOE was ordered to draft implementing rules and regulations in 2019.

The problem is systemic, said Greenpeace Campaigner Khevin Yu. Since the energy system is  privatized, all the government can do is to make plans and dangle incentives, which have yet to be implemented since the Renewable Energy Act is still not in full effect. This is one of the major barriers for power companies in tapping renewable energy, he said.

BPI said DOE’s moratorium on the approval of new coal projects was a good start. Different government agencies may consider providing different forms of incentives to boost renewable energy, energy efficiency and even green building portfolios, it said.

Since the passage of the Renewable Energy Act in 2008, the country’s renewable energy mix has remained at about 30% a decade later, with at least 45 more coal projects still in the pipeline. Instead of developing solar power, coal power plants were built.

“What happened was so ironic. Rather than going through a clean renewable energy transition, a dirty energy transition took place,” Yu says.

Greenpeace is now running a campaign to push Meralco, the largest distribution utility in the Philippines, and its power generation subsidiary MGen Power, to move away from coal. In its recent report titled Decarbonizing Meralco, Greenpeace said Meralco relied heavily on dirty power sources, with fossil gas taking up 61% of the company’s energy mix; coal, 27%; and oil, 10%. Renewable energy accounted for a meager 2.6%. The latest data on the company’s current and future power supply agreements showed that fossil fuels would remain dominant at 94% of the mix, with the share of renewables going up by only 6%.

If Meralco moves, it will be a huge game changer for energy transition, according to renewable energy advocates. The pandemic and ensuing lockdowns have exposed the problems of the country’s overreliance on coal as a source of energy. Consumers experienced the controversial “bill shock” last year, which Rivera and Yu said was partly because  consumers paid for the cost of oversupply that could not be utilized by industries during  the lockdown.

The Philippines imports at least 75% of its coal from Indonesia, Australia, China and Vietnam. The rest of the country’s energy needs are covered by a mix of local energy generators, including coal plants funded by banks.

“If we have renewable energy, we can produce energy here and not import and prevent price fluctuations,” says Yu. “Electric consumers will be much happier than now when every month electricity rates are just going up.”


*This report was written and produced as part of a media skills development program delivered by the Thomson Reuters Foundation. The content is the sole responsibility of the author and the PCIJ.

EO 130: Much fuss about paltry gains

by Xandra Liza C. Bisenio and Rosario Guzman

President Duterte recently signed Executive Order (EO) 130 which lifts a 9-year ban on new mining agreements. The economic managers say that Philippine mineral resources have been vastly untapped and could bring significant benefits to the economy. The Department of Environment and Natural Resources (DENR) expects to generate some Php21 billion from two phases of 100 new mining projects. The mining industry can also provide raw materials for the Build, Build, Build program and employment opportunities for the Balik Probinsya, Bagong Pag-asa program, the EO justifies.

EO 130 lifts the moratorium on new mineral agreements, which was set by the Aquino administration’s EO 79, then pending a new revenue law. Save for this provision, EO 79 actually continued and enhanced the destructive features of the Philippine Mining Act of 1995 – opening more mining areas and reservations, including marginal lands, and clipping the powers of local government units (LGUs), say to impose mining bans and declare mining-free zones. EO 130 seeks to intensify these, especially by removing the moratorium – the perceived barrier to full-blast mining – leaving a thicker trail of damage on the environment and communities and with little benefit to the national economy.

Asking for coins

But the Duterte administration has exaggerated how mining investments can help the economy recover amid COVID-19. Like its predecessors, it has mainly focused on mining’s contribution to export earnings, revenues and jobs creation, instead of counting on mineral development for the country’s own industrialization. The Duterte administration uses the same shallow metrics to justify renewing and expanding foreign interests in mining.

But even in these terms, mining has delivered paltry gains. From 2001 to 2020 (available data is for January to September only), total exports of minerals and mineral products grew almost seven-fold from US$537 million to US$3.7 billion, but this contributed only 1.7% in 2001 and 8.3% in 2020 to total Philippine exports.

Ironically, while the country has practically given up its chance to build industries from its own minerals, the exports sector remains dominated by semi-processed electronics and electrical equipment.

Taxes, fees and royalties from mining, despite Duterte’s tax law (TRAIN) having doubled the rate of excise on minerals and quarry resources from 2% to 4%, have remained miniscule – only 0.5% of total excise taxes and 0.07% of total taxes in 2020.

The sector’s contribution to total employment in 2001 to 2020 was also negligible at an annual average share of 0.49 percent.

Foreign direct investment (FDI) in mining from 2002 to 2020 amounted to US$754.8 million, an annual average of US$39.7 million. This translates to an insignificant annual average contribution of 0.95% to total FDI.    

At the bottom line is mining’s little contribution to the national economy. The gross value added of the mining and quarrying sector grew from Php54.4 billion to Php136.9 billion from 2001 to 2020. But its average annual share in the gross domestic product (GDP) has only been 1.02 percent.

These figures have barely changed after more than two decades of the Mining Act, exactly because the law’s vision is for the country to remain merely the resource and host of an extractive economic activity that supports the industries of the industrialized countries. The Duterte government’s goal has also been unambitious, which is to continue orienting mining towards exports and, by offering natural resources for extraction, make the country attractive to foreign investors.

Catering to other countries

Why then, despite small change for the country, is the Duterte administration so keen on easing the approval of more mining applications – 280 pending to date?

Interestingly, unlike its predecessors, the Duterte administration is also talking about a “raw materials” contribution to its infrastructure program. This is notable, because the so-called Philippine mining industry does not have beneficiation, smelting and refining stages for iron ores. What it does have are foreign monopoly processing plants. There is one copper smelter, the Philippine Associated Smelting and Refining Corp. (Pasar), the previous company headed by Department of Finance (DOF) secretary Carlos Dominguez, which is operated by the Anglo-Swiss company, Glencore. There are two gold processing plants operated by Australian firms, CGA Limited and Medusa Mining, and two nickel processing plants operated by Sumitomo of Japan.

What the country also does have are direct purchase agreements for our nickel ores with Australia, Japan and China through Nickel Asia Corporation, also under joint venture with Sumitomo. For instance, in November 2019 before the pandemic, the Philippine Nickel Industry Association inked a memorandum of understanding with China Industrial Association of Power Sources to have the Philippine nickel mining industry supply China’s production of nickel batteries for electric vehicles.

The Philippines is one of China’s major sources of ore supply. On the other hand, about 90% of the country’s nickel ores are being shipped to China. To cater to China’s nickel demand, in 2019, the Duterte government even allowed suspended mining firms to operate, and pushed for the rehabilitation of government-owned nickel mines.

Is the EO simply referring to how these countries, China in particular, would eventually pour in capital, processed minerals as construction materials, technology, and expertise into the Duterte administration’s foreign investment-led and import-dependent Build, Build, Build? If so, that would really be ludicrous.

Interestingly too, available data show that China is the top nationality with ownership in mining tenements in the Philippines and also accounts for a huge number of mining permits and pending applications.

Big bucks for the mining firms

The amounts that the country gets from mining pale in comparison with the gross revenues of the big mining corporations. The gross revenues of all mining firms in the top 1,000 corporations ballooned from Php10.4 billion in 2001 to Php171.1 billion in 2018. Meanwhile, the gross revenues of the mining transnational corporations (TNCs) in the top 1,000 corporations increased from Php1.7 billion to Php78.9 billion in the same period.

The amounts that the country gets from mining pale in comparison with the gross revenues of the big mining corporations. The gross revenues of all mining firms in the top 1,000 corporations ballooned from Php10.4 billion in 2001 to Php171.1 billion in 2018. Meanwhile, the gross revenues of the mining transnational corporations (TNCs) in the top 1,000 corporations increased from Php1.7 billion to Php78.9 billion in the same period.

There are 50 operating metallic mines in the country, composed of 30 nickel mines, 10 gold mines, 3 copper mines, 4 chromite mines, and 3 iron mines. Large mining conglomerates and TNCs control Philippine mineral production.

Accounting for half of gold production as of 2020 are Masbate Gold Project jointly operated by Filminera Resources Corp. and Phil. Gold Processing & Refining Corp. of Australian CGA Limited, and Co-O Gold Project of Philsaga Mining Corporation in Agusan del Sur owned by Australia-based Medusa Mining.

Accounting for 43% of nickel ore production are Taganito Mining Corporation, Rio Tuba Nickel Mining Corporation, and Cagdianao Mining Corp/ East Coast Mineral Resources Co. These are all operated by Nickel Asia, a partnership between local corporates led by Manuel B. Zamora Jr. and Sumitomo Metal Mining Philippine Holdings of Japan.

Other mining TNCs include those from the US, Canada and China. Local oligarchs in mining meanwhile include Ramon Ang (Philnico Industrial Corp.), Lucio Tan (MacroAsia Mining Corporation), Manuel V. Pangilinan (Philex Mining Corp.), Consunji family (Semirara Mining Corp.), and Sy (Atlas Consolidated Mining and Development Corp.).

The legacy of the Philippine Mining Act of 1995 (Mining Act) is full foreign investment liberalization by granting four kinds of mining rights, one of which is the Financial and Technical Assistance Agreement (FTAA) that allows 100% foreign ownership. The Didipio Copper Gold Project in Nueva Vizcaya operated by Australian OceanaGold Philippines Inc. that has been contested by the indigenous people and anti-mining groups was a holder of FTAA until it expired in 2019. Despite feelers put out by the Mines and Geosciences Bureau (MGB) of the DENR to reopen it along with other closed mines, the protests prevailed. In December 2020, however, OceanaGold reportedly learned that the Office of the President of the Philippines has instructed the DENR to inform the mining firm and the Department of Finance (DOF) to finalize the renewal of the mining firm’s FTAA. The Philippine government has also apparently certified that the OceanaGold’s FTAA area is outside the ancestral domain of the indigenous people.

The Duterte administration has apparently used the pandemic crisis again to listen to the demands of big local and foreign mining corporations while remaining deaf to the urgent public clamor for health support, economic aid, social amelioration, and production support. It cites imagined benefits from unleashing hundreds of mining permits even to unexplored areas, while making certain that giant mining firms and even their financial speculators get super-profits.

The Duterte government is banking mindlessly on an otherwise overcast economic future. It has apparently not learned a thing from the bitter, disastrous past that large-scale mining has left behind for us and the future generations to bear.

We badly need people economics

Large-scale mining in the country has always been equated with environmental devastation and disasters. This is precisely because of liberalizing the mining sector to foreign exploitation for export and relegating the Philippine economy to being a mere source of raw materials. Mining investments are simply for extraction, and to maximize gains further, the mining methods employed by the mining corporations are the cheapest and dirtiest.

More than twenty years of the Mining Act are replete with mining scandals of heavy, irreparable blows on the ecosystems, displaced communities, lost livelihoods, encroachment into ancestral lands, and human rights violations. This is while the government has only been feeble in the face of the perpetrators, the mining conglomerates and TNCs who have dodged accountability for such disasters and even continued their operations. The government has even taken over mine sites abandoned by mining TNCs for government to rehabilitate.

Minerals are non-renewable resources, and oftentimes damages are irreversible. Yet, The Duterte government with its EO 130 continues to argue for the reckless exploitation of the country’s vast mineral wealth for other countries’ corporate gains and industrial benefits. This makes the projected gains from large-scale mining even paltrier than they already are. We are giving up the non-renewable resource, the Philippines’ huge potential to industrialize, for nothing.

Neoliberal apologists often ask whether the country can ever have the needed capital for it to tap and make use indeed of its mineral resources. They immediately point out that there is no alternative but to open up mining to foreign investors. Precisely the kind of thinking that has rendered government inutile in its pandemic response.

What we need foremost is the kind of people-centered economics that aspires for national industrialization, of which mining is an integral part. A well-planned utilization of mineral resources for the benefit of the communities and the national economy ensures regulation of mining activities, which is diametrically opposed to liberalization and surrender to foreign ownership. It will also ensure that the sacrifices made by a few will benefit the majority and future generations, and not vice versa.

Instead of neoliberal economics, what we need is people economics that is oriented towards national development, serves the needs of the citizenry, protects the environment, promotes sustainable consumption and production systems, promotes people’s access to land and natural resources for them to harness, and upholds people’s rights and national sovereignty.

Capital can come from progressive taxation, that is taxing the super-rich and big local and foreign corporations. It can eventually come from the values created by well-supported and prioritized agriculture and manufacturing.

But before that, mining giants should be made to pay reparation to the communities they have devastated and their ecological debt to the Filipino people. Again, foremost we need a strong, reliable and pro-people government for this endeavor, one that genuinely prioritizes people-centered pandemic and economic solutions. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Duterte’s new mining order disastrous to environment—groups

President Rodrigo Duterte lifted the nine-year moratorium on new mineral agreements, earning warnings from various groups of further corporate plunder of the environment and more natural disasters.

Bayan Muna Representative Eufemia Cullamat said she is dismayed with Duterte’s decision that would most likely result in the worsening of the environmental crisis in the country.

“Instead of putting a stop to environmental destruction that causes disasters, he is allowing further exploitation of our natural resources,” Cullamat said.

Cullamat, a Manobo Lumad persecuted for her community’s opposition to further mining activities in their ancestral domain, said mining projects have only brought untold suffering to various indigenous communities around the country.

“The country only earns two percent in royalty taxes in exchange for the tons of soil they extract, the poisoning of our waterways by mine tailings and the loss of livelihood and homes in mining sites,” she said.

In his Executive Order (EO) 130 issued Wednesday, April 14, Duterte amended former President Benigno Aquino’s EO 79, granting permission to the government to enter into new mineral agreements.

“The Government may enter into new mineral agreements, subject to compliance with the Philippine Mining Act of 1995 and other applicable laws, rules and regulations,” Duterte’s order said.

“The DENR (Department of Environment and Natural Resources) may continue to grant and issue Exploration Permits,” it added.

Duterte’s order said new mineral agreements will usher significant economic benefits to the country that can support various government projects, such as the Build Build Build and Balik Probinsiya, Bagong Pag-Asa Program by providing raw materials and new employment opportunities.

‘Unfettered corporate greed’

Environmental group Kalikasan People’s Network for the Environment (Kalikasan PNE) however agreed with Cullamat, adding Duterte’s order will only result in more environmental disasters.

“Mr. Duterte’s order to lift the mining agreement moratorium will be a disaster upon disaster because the Mining Act of 1995 is still in place. We cannot allow this deluge of destructive large-scale mining when communities are still suffering from the converging pandemic and climate crises,” Kalikasan PNE national coordinator Leon Dulce said.

The Mining Act encourages 100% ownership of mineral lands by foreign corporations that operate based on “unfettered corporate greed” and does not orient the mining industry to extract based on people’s needs, he added.

Kalikasan PNE said the law also has provisions that allow companies to renege on rehabilitation, polluter taxation and waste management obligations.

“Mining companies need only to pay P50.00 per ton of waste disposed of in unauthorized areas and only P0.05 for every ton of mine waste and P0.10 for mine tailings in terms of compensation for resulting damages,” the group explained.

“Let us recall that in the industry-wide audit made by the late Environment Secretary Regina Lopez, at least 68 percent of mining companies had been found with serious violations. This revelation already spells the potential disaster that the Executive Order will bring to the environment and communities,” Kalikasan added.

Beneficial to foreign corporations

Economic think-tank IBON said that Duterte’s new order will most likely benefit foreigners, not the local industry.

“Without domestic industries to process and use the minerals, [EO 130] will just mean that the most significant value-added from our finite mineral resources will keep going to foreign firms, industries and economies,” IBON executive director Sonny Africa said.

Africa said that at the expense of even more environmental damage and displacement of rural communities, real economic gains from Duterte’s decision are negligible.

“Even before the pandemic, mining and quarrying only employed around 190,000 in 2019. That’s not even half a percentage point of total employment and the 2-week NCR+ ECQ even displaced more jobs than that,” Africa said.

Similarly, the Php15.5 billion in taxes, mining fees and royalties paid to government in 2019 is negligible even with the additional excise tax under the TRAIN (Tax Reform for Acceleration and Inclusion, Republic Act No. 10963) law,” the economist explained.

“This EO No. 130 is just the latest sign that it really is just business as usual for the economic managers. The refusal to really reform economic policies combined with the pandemic will just mean that people will remain worse off than before the pandemic for many years to come,” Africa said. # (Raymund B. Villanueva)

Canadian parliament asked to probe role of mining companies in PH killings

MANILA, Philippines—The Canadian government is being asked to look into the role of Canadian mining corporations in the extrajudicial killings of environmental and human rights defenders in the Philippines.

Member of Parliament of Edmonton Strathcona Heather McPherson filed a petition in the Canadian House of Commons on Thursday, Feb. 25, accusing Canadian mining companies of being “irresponsible” in the Philippines and elsewhere in the world.

“Canadian mining companies are perpetrating quite incredibly serious human rights abuses and environmental degradation,” most of them against indigenous populations in the Philippines and other countries, McPherson said in a press conference after the filing.

In her petition, McPherson called out the Ombudsperson created by the Canadian government in 2018 to look into the reported human rights abuses.

“With no ability to compel testimony from witnesses, with no independence… and with no investigations conducted into the abuses, the Ombudsperson, despite the mandate and a budget, is just a figurehead,” McPherson said.

‘Canada is implicated’

The parliamentary petition was based on a signature campaign started last year by MiningWatch Canada and the International Coalition for Human Rights in the Philippines (ICHRP-Canada) that gathered a thousand signatures from concerned Canadians.

“Canada is implicated in the rights abuses through its security assistance to the Philippines and the role that Canadian mining companies play in the country,” MiningWatch Canada and ICHRP-Canada said.

MiningWatch Canada’s Catherine Coumans in a press conference after the filing said that in 2019, over half of all reported killings of rights defenders occurred in just two countries, the Philippines and Colombia.

“Mining was the deadliest sector with 50 defenders killed in 2019, Coumans said, citing data from international human rights organization Global Witness.

Coumans added the Canadian government must look into the operations of Canadian mining corporations in the Philippines as they function in a context of gross violation of extrajudicial killings, repression and human rights violations.

“At times, Canadian mining companies benefit from this context of oppression and impunity,” Coumans said.

OceanaGold in Nueva Vizcaya

Coumons cited OceanaGold operating in Nueva Vizcaya province she said stands accused of both human rights violations and of having degraded the environment – contaminating and depleting water resources around its copper-gold mine.

“OceanaGold faces strong and persistent opposition by local indigenous people in the village of Didipio, who are supported by their mayor and governor, as well as by provincial and national organizations,” she said.

Coumans added that many locals and their supporters abroad who are opposed to OceanaGold’s operations had been associated with the New People’s Army, including herself.  

Coumans also recalled the villagers had been violently dispersed, beaten and arrested for blockading the mine site when OceanaGold’s 25-year mining permit expired in June 2019.

ICHRP Canada’s Bern Jagunos for her part criticized the Canadian government’s role on the human rights situation in the Philippines.

Jagunos said the Canadian government declines to speak publicly against the extrajudicial killings in the Philippines, in violation of its own guidelines on supporting human rights defenders especially those who are in grave danger.

“Our organization, ICHRP Canada, has repeatedly requested the Canadian embassy in Manila to meet with defenders who are red-tagged and getting death threats, to visit political prisoners and indigenous communities under attack for their resistance to mining. These are among the tools of intervention in the government’s guidelines to support human rights defenders. Such requests have been ignored.],” Jagunos said.

Jagunos also condemned Canada’s continuing support through trainings of the Philippine military she accused of perpetrating human rights violations.

“ICHRP is calling on the Canadian government to review its relations and programs in the Philippines and to apply human rights criteria in making decisions on funding, bilateral relations and cooperation programs with the Philippine government,” she said.  # (Raymund B. Villanueva)

Marilao’s poultry processing plants fail lab tests

Reporting fellows of the Philippine Center for Investigative Journalism (PCIJ) collected water samples from the waste pipes of plants along the Marilao River. Laboratory tests show they failed to meet DENR standards.

BY ANNIE RUTH SABANGAN, ROBERT JA BASILIO JR., BERNARD TESTA AND RIC PUOD

Part 4 of 4

Part 1: The Bulacan town where chickens are slaughtered and the river is dead

Part 2: ‘The wastewater looked like mud’: EMB goes after Vitarich Corp. 

Part 3: Marilao River polluters get away with small fines

What you need to know about Part 4:

  • The PCIJ collected water samples from the poultry processing plants in Marilao and laboratory tests showed they failed to meet the standards of the Department of Environment and Natural Resources.
  • To help police pollution, a lawyer-environmentalist suggests that non-government organizations help the government evaluate the SMRs of business establishments.  

It was low tide when the PCIJ team made a second trip to Sapang Alat or Salty Creek on Oct. 2, 2019, a week after the first. Renting another outrigger was out of the question as it couldn’t sail through the shallow waters. The team rented a rickety canoe instead, and asked the help of a boatman to paddle towards Vitarich Corporation’s outfall pipes.

PCIJ set out to take more samples of wastewater that the company released to the creek, a tributary of the Marilao River, to bring them to a laboratory accredited by the Department of Environment and Natural Resources (DENR). 

In the succeeding weeks the team also trekked to Brgy. Loma de Gato, home to the biggest number of poultry dressing plants, to do the same. 

Results of the laboratory tests confirmed what residents already knew. The plants had been releasing wastewater that did not meet DENR’s standards. 

Water sample: PCIJ follows instructions from experts

The samples were brought to the laboratory of the Sugar Regulatory Administration (SRA) in Quezon City. 

The PCIJ team made sure to follow instructions from SRA chemists on how to take samples, how much should be taken, where to put the specimens, and by what time the samples must reach the laboratory for testing. 

To ensure that the samples were representative of the conditions of the area, PCIJ also followed the guidelines set by the EMB in its 2008 Water Quality Monitoring Manual, which said samples should not be collected when (1) it’s raining; (2) it’s within 24 hours after a heavy downpour; and (3) the water level is high. 

Wastewater from poultry processing contains high biochemical oxygen demand or BOD and four other oxygen-depleting and fish-killing pollutants: total suspended solids (TSS), ammonia, nitrate and phosphate. 

Based on DENR standards, the BOD of wastewater produced by slaughtering and meat packing businesses like chicken dressing plants should not exceed 50 milligrams per liter (mg/l). 

A high BOD indicates that the wastewater is untreated or undertreated, and thus polluted. A low BOD suggests that the contaminants had been removed from the wastewater and would have less environmental impact when released to a water body. 

TSS are solid materials such as silt, sewage, and decaying animal matter. In poultry processing plants, these may include the buildup of feathers, fat and lard, offal, viscera, blood, and fecal matter in the wastewater. 

The release of liquid waste with too much TSS will block the sunlight from reaching the vegetation in a water body, causing the plants to die and stop producing dissolved oxygen needed by fish to survive.

Ammonia in the form of ammoniacal nitrogen (NH3-N), a colorless chemical gas compound highly soluble in water, can be found in the liquid manure of chickens and other livestock. This type of ammonia can “cross from water to fish” and is said to be the “the most toxic form to aquatic life.”

Chemical compounds nitrate and phosphate, commonly used as fertilizers, can be present in fecal matter expelled by poultry before the birds undergo scalding. 

Wastewater containing too much nitrate and phosphate can hasten the process called eutrophication, or the increase of nutrients that induces the overgrowth of algae. This can cause the water body to turn green and reduce its oxygen content to levels that can also lead to fish kills.   

Other than these five parameters, the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) measures three others – oil and grease, acidity or pH, and temperature – to test the quality of wastewater discharges of these establishments. 

The chicken dressing industry in Marilao River –– a Class C freshwater resource meant for fish propagation, agricultural use, fishing, and boating –– is required to follow all eight parameters, based on DENR Administrative Order (DAO) 2016-08 or the Water Quality Guidelines and General Effluent Standards of 2016.

The regulations are strict on paper but they are not always implemented, based on PCIJ’s experiment.

Vitarich Corp. fails tests

The laboratory results were out five days after PCIJ submitted the water samples from Sapang Alat. 

The lab results of Vitarich Corp. showed mixed results. The level of pollution in the water sample collected from the mouth of the dressing plant’s former outfall was lower than the effluent limits set by the EMB in terms of BOD, TSS, nitrate, and color. 

The water samples were collected nine months since the EMB cemented off a canal where the dressing plant’s effluents used to flow.  

However, samples from the effluent outfall from the rendering plant that Vitarich operates jointly with PSP Aqua yielded BOD and TSS levels that were 346 percent and 15 percent higher than the EMB-set effluent limits, respectively.

These results were based on water samples that the PCIJ team collected on Oct. 2, 2019.

The PCIJ learned from the Legal Section of the EMB’s Clearance and Permitting Division that as of Oct. 28, 2019, the violation notice and cease-and-desist order against the rendering plant had been temporarily lifted so that the facility could release its wastewater for sampling purposes. 

PCIJ also obtained samples from the part of the creek between Marilao’s Municipal Health Office and the Vitarich dressing plant to determine the ambient water quality of Sapang Alat. They were tested for five parameters, namely BOD, DO, TSS, nitrate, and color. 

The area was within the mouth of the creek that emptied into the Marilao River. Upstream, along Brgy. Patubig, the creek meandered through a host of other industrial and commercial establishments, which could also be possible sources of pollution. 

Water quality failed in all parameters, indicating that because of very high pollution levels, it could no longer receive wastewater and still be able to breathe and cleanse itself.

A chemist at the Sugar Regulatory Administration laboratory on North Avenue in Quezon City checks on Oct. 2, 2019 the bottles containing water samples from a tributary creek of the Marilao River in Bulacan and effluent samples from the outfalls of Vitarich’s chicken dressing and rendering plants. Photograph: Annie Ruth Sabangan/PCIJ

Even if industrial establishments like Vitarich discharged wastewater into Sapang Alat within the effluent limits, the creek would no longer be able to take it in because it has already stagnated, said EMB Region 3’s Glenn Aguilar, who monitors the Marilao River.

Sapang Alat’s BOD was over 3,600 times higher than its 7 mg/l capacity, causing the creek’s DO concentration to fall to the “hypoxic” or oxygen-deprived level of 1.13 mg/l.

Based on an undated report on hypoxia by the US Environmental Protection Agency (EPA), conducted in the Gulf of Mexico and Long Island Sound, bottom fishes start to leave water bodies when oxygen levels reach about 3 mg/l. Fish and crustaceans that cannot leave the area may die when it goes below 2 mg/l, and then begin to die in large numbers when it goes below 1 mg/l.

In the Philippines, there is yet no comprehensive study about hypoxia, or the depletion or reduction of oxygen in water bodies, particularly on how aquatic species react under low-oxygen conditions.

Follow the stench: PCIJ checks other plants in Loma de Gato

EMB’s Aguilar said other chicken dressing plants in Marilao were inaccessible to inspectors. Sometimes, the pathway is dangerous.

To verify this claim, the PCIJ team trekked to Loma de Gato, Marilao’s most populated barangay and home to the biggest number of poultry dressing plants accredited by the Department of Agriculture’s National Meat Inspection Service (NMIS). 

While data from the NMIS showed that there were four dressing facilities in Loma de Gato, mostly tucked away in an area called Pook Looban 1, the information was hard to validate via on-site investigation even though the stench was all over the place. 

Most of what appeared to be industrial or commercial premises in Looban 1 didn’t have outdoor signages. Some establishments were enclosed by walls higher than roofs and trees, while others were smack in the middle of sprawling lots buffered from roadways.  

The PCIJ also failed to pinpoint dressing plants within Looban 1 via Google’s web and mobile apps. 

Asked by PCIJ during an interview in October 2019 if not having business signages was legal, Marilao BPLO chief Martin Armando C. Cruz said, “Hindi naman din (It isn’t).”

There should be an ordinance from the municipal council prohibiting the lack of signages, he said.  

Cruz also claimed that some establishments had opted not to install outdoor signages to avoid unwanted solicitations for money.

Much harder to locate were the dressing plants’ wastewater outfalls. Several times, the PCIJ team waded through the boggy and mosquito-infested edges of Marilao River’s tributaries to look for point-source pipes and drains.

POLLUTION HUNT: The PCIJ team had to wade through turbid and mosquito-infested creeks to look for direct wastewater sources in Brgy. Loma de Gato, Marilao, Bulacan. Photograph: Bernard Testa/PCIJ

In one field visit, the group walked by the roadside and saw a stream where the water was cascading, indicating that direct pollution sources could be farther upstream. 

But it was impossible to walk on the narrow banks of the stream sandwiched between an expansive walled property and a row of houses. 

Taking instructions from a resident, the PCIJ team tried to find another path toward the water body through an inner road that led to a cemetery. 

At the back of the graveyard, the team saw the stretch of the stream beside a nameless, walled establishment that appeared to be the extension of a property earlier seen by the team from the roadside. 

From the side of the establishment, the PCIJ team saw at least three outfalls protruding from the streambank that appeared to be connected to the walled property, which residents claimed was a poultry processing plant. 

Staggering on mossy rocks that stuck out of the streambed, the group inspected the muddy water body that was filled with strands of what looked like chicken feathers. 

The team also saw water  ̶  brown, orange, to reddish in color  ̶  gushing out of the three outfalls and into the stream. 

Too much phosphate 

Early morning on Oct. 25, 2019, the team returned to the area to get wastewater samples from two of the outfalls. The PCIJ had these tested again by the SRA lab for BOD, TSS, nitrate, phosphate, and color.

NO, NOT CHOCO DRINK, ORANGE JUICE, OR VINEGAR. The bottles containing wastewater samples from Pook Looban 1, Brgy. Loma de Gato in Marilao, Bulacan that the PCIJ brought to the laboratory of the Sugar Regulatory Administration in Quezon City on Oct. 25, 2019. Photograph: Annie Ruth Sabangan/PCIJ

Lab results showed that effluents from both outfalls failed in three of the five parameters’ effluent limits, namely BOD, TSS, and phosphate. 

Results indicated that the wastewater did not undergo treatment and had a very high degree of pollution, as BOD concentrations from the first and second outfalls were 5,584 percent and 4,850 percent higher than the government-set 50 mg/l-effluent limit, respectively. 

Also, phosphate concentrations in the effluents were markedly high. The phosphate content of the wastewater in the first outfall was over 8,000 times higher than the 1 mg/l limit set by the EMB, while in the second, the phosphate level was nearly 7,000 times greater than the cap.

Phosphate is used as a poultry product enhancer. The injection of water with phosphate salts into chicken meat is among the steps in poultry processing. This is done to help the protein in the meat bind more water and retain moisture and flavor.  

Researchers had found that the phosphorous-protein content of enhanced meat and poultry products was 28 percent higher than in the same types of product that didn’t use phosphate additives. 

This was according to a 2009 study titled “Phosphorous and Potassium Content of Enhanced Meat and Poultry Products: Implications for Patients Who Receive Dialysis,” by nephrologists Richard Sherman and Ojas Mehta of the New Jersey-based Robert Wood Johnson Medical School. 

In water bodies, too much phosphate is known to hasten eutrophication or the buildup of nutrients, causing microscopic plant-like organisms called phytoplankton to reproduce rapidly. 

This results in the overproduction of that slimy stuff called algae that can make water bodies appear green, brown, red or blue; and form foam, scum or oily films on their surfaces.

More algae mean higher consumption of dissolved oxygen in water, depriving aquatic life such as fish of the life-sustaining gas, leading to the latter’s death. 

The PCIJ team also had the ambient water quality of another Marilao River tributary in Looban 1 tested by the SRA laboratory. 

The group took samples after observing that the outflow of water into the creek, which was near high-walled establishments, was like a flood of frothy latte continuously pouring from a giant coffee machine. 

FROTHY LIKE CAFFE LATTE. The oxygen-depleted creek in Pook Looban 1, Brgy. Loma de Gato, Marilao, Bulacan. Image taken on Oct. 25, 2019. Photograph: Bernard Testa/PCIJ

Like Sapang Alat, the river tributary in Brgy. Sta. Rosa 1 earlier tested by the SRA, this creek in Brgy. Loma de Gato also failed the water quality standards set by the EMB on BOD, DO, TSS, nitrate, phosphate, and color.

But the pollution in this creek was much worse. Its demand for oxygen  ̶ 1,279 mg/l  ̶  was over 18,000 times higher than the EMB standard of 7 mg/l. Inversely, its oxygen concentration was extremely low at 1.16 mg/l.

Also, the phosphate level in the creek was way too high at 48 mg/l, or 9,500 times more than the limit of 0.5 mg/l for Class C water bodies or those, according to the EMB, that should be fit for aquatic resource propagation, fishing, boating, agriculture, irrigation, and livestock watering. 

Effective, lasting solutions needed 

Because of years of abuses by private companies amid weak environmental governance and the failure of regulation, Marilao River is dead and blackened by pollution.

Narrowed and shallowed by volumes of harmful contaminants, the barren and pernicious river can no longer repair itself. During high tide and heavy rains, it often threw up the wastes it could no longer absorb, submerging communities in toxic, persistent floods. 

More lasting and effective solutions are not in sight. Could it be time for a third-party entity to intervene and help fill the gap? 

Lawyer and environmentalist Galahad Pe Benito thinks so, and says the non-profit sector should take the lead. 

Benito, who used to practice in California and is now campaigning for the rehabilitation of the Manila Bay and the tributaries surrounding it, said environmental self-policing worked in other countries because people’s organizations were ready to “pounce on” pollutive business establishments. 

The SMR system is ineffective because compliance is weak and there are no nongovernment organizations (NGO) to countercheck the SMRs, he said.

Walang mga NGOs dito to do the counterchecking and everything…Dito mahina ang compliance natin, so medyo may problema onhow to implement that,” said Benito, who specializes in hazardous and toxic waste regulation, marine pollution, and pollution control. 

The responsibility of monitoring pollution point sources and evaluating SMRs can be assigned by the government to NGOs or to “respectable and independent auditors,” Benito said. 

NGOs’ access to SMRs should not be a problem because under the law, these reports are considered public documents. 

The procedural manual of DAO No. 2007-23 states that, “Upon completion of EMB’s evaluation, the SMRs are considered as public documents.” 

“As such, access [to] these documents by written request of the general public shall be allowed in accordance with applicable rules and regulations.”

The manual further noted that, “The SMR was designed in such a way that there is no need for confidential business information to be included in the submission.” — PCIJ, February 2021


This series was produced with the support of Greenpeace Southeast Asia-Philippines.— PCIJ

Marilao River polluters get away with small fines

The Clean Water Act of 2004 orders plants to pay discharge fees based on the volume of wastewater and pollutants that they release into water bodies. A self-monitoring mechanism in place allows polluters to report unreliable laboratory results, however.

BY ANNIE RUTH SABANGAN, ROBERT JA BASILIO JR., BERNARD TESTA AND RIC PUOD/Philippine Center for Investigative Journalism

Part 3 of 4

Part 1: The Bulacan town where chickens are slaughtered and the river is dead

Part 2: ‘The wastewater looked like mud’: EMB goes after Vitarich Corp.

What you need to know about Part 3: 

  • Many pollutive business establishments, including chicken dressing plants releasing their wastewater into the Meycauayan-Marilao-Obando River System (MMORS), pay the government paltry wastewater discharge fees ranging from P5 to P500. 
  • From February 2016 to August 2018, the DENR collected only P1.4 million worth of wastewater discharge fees from these establishments for the rehabilitation of the MMORS, a drop in the ocean compared with the P11.5-billion fund needed to help revive the long-dead river system. 
  • Regulators have identified 49 mostly toxic substances dumped by polluters into the river system. But environment officers admit they’re unable to detect the presence of these pollutants in water bodies, let alone make erring establishments pay fines. 
  • The Environmental Management Bureau in Region 3 lacks the manpower to check the accuracy of the environmental self-monitoring reports (SMR) being submitted to it by business establishments in Central Luzon.
  • A review of the SMRs submitted by seven poultry and meat processing and livestock establishments operating in Marilao, Bulacan showed that these had many glaring errors and inconsistencies — a proof of the bureau’s failure to vet the SMRs.

In 2019, the Department of Environment and Natural Resources (DENR) issued violation notices to all but one of Marilao’s 11 chicken processing plants. They were punished not for polluting the Marilao River, however, but for technical violations related to their permits or failure to submit various reports.

Four plants in barangays Santa Rosa I, Santa Rosa II, and Patubig –– including two operating inside the compound of Vitarich Corporation –– had no wastewater discharge permits. 

The other plants in Brgy. Loma De Gato either didn’t have Environmental Compliance Certificates (ECC), violated their ECCs, expanded operations without permits, were late in renewing permits, or failed to submit wastewater lab results.

This was how the regional environment office was able to get around its lack of capability to catch and punish which plants were responsible for polluting the Marilao River, part of a river system in Bulacan province that dumps wastes into the Manila Bay.

“Ang ginagawa ho namin is bina-violate namin sila sa mga permit nila. Tapos…pagka hindi pa rin po sila nakakapasa…sa mga permit nila na ‘yon, tuloy-tuloy po ‘yong violation…nila (What we do is charge them with violations through their permits. If they fail to secure permits, their violations continue),” said Glenn Aguilar, a staff member of the DENR’s Environmental Management Bureau (EMB) in Region 3.

Infographic: Annie Ruth Sabangan and Angelica Carballo Pago/PCIJ

Environmental regulators said it had been a challenge to get water samples. “’Yung possible na ma-sampling-an, doon lang kami nagsa-sampling (We only conduct sampling in establishments where it’s possible to get wastewater samples),”Aguilar said. 

The chicken dressing plant of Vitarich Corp. was one of the few that EMB was able to inspect, and it was because its waste outfall was accessible, said Aguilar. “Sila (Vitarich) ang visible, talagang sila lang ang na-implicate (They’re the ones visible, thus they’re the only ones that got implicated),” he said.

Aguilar also accused the plants of making it hard for pollution inspectors to do their jobs. He said they would secretly turn off wastewater discharge when the inspectors arrived to inspect, preventing them from getting effluent samples in real time. It was also difficult for them to locate sewer pipes and waste outfalls especially inside residential compounds.  

Minsan hindi talaga umaamoy. Hindi sila nag-o-operate pagka napapadaan kami (They don’t smell [when inspectors go to check] because they make sure to shut down their operations when they know we are dropping by),” Aguilar said.

Lara Ibañez, Philippine country director of international non-profit environmental watchdog  Pure Earth, said it’s not enough to punish polluters over permits and other technicalities.

She called for the strict enforcement of the 2004 Clean Water Act, passed by Congress to make sure that a thorough accounting of industrial wastewater pollutants and their toll on the environment is conducted regularly. 

She said it’s important to be able to assess direct contributions of pollutive establishments and make them pay for the environmental and economic impacts of their discharges.

“We don’t see how much it (polluting water bodies) is really costing us,” Ibañez said in an interview in August 2019. She said the government should realize that implementing the Clean Water Act makes for sound economic policy because it will prevent environmental issues that have actually been costing the local government more. 

Pure Earth is the new name of Blacksmith Institute, the watchdog that has put a spotlight on the pollution of the Meycauayan-Marilao-Obando River System (MMORS). In 2007, the watchdog named Marilao in its list of 30 “dirtiest” places on earth.

Poultry farms such as this one in Barangay Loma de Gato in Marilao, Bulacan are required to treat their wastewater to curb water pollution in rivers. But several have been known to ignore regulations. Image taken on Sept. 14, 2019. Photograph: Bernard Testa/PCIJ

P5 to P500 wastewater discharge fees

The Clean Water Act imposes wastewater discharge fees, a fund intended to pay for the costs of government efforts to manage and clean up water bodies that absorb wastewater from industrial and commercial establishments. 

However, Ibañez said the fee turned out to be “self-defeating” and the amounts that establishments had been paying did not reflect the true cost of the pollution that they had caused.

From February 2016 to August 2018, EMB Region 3 only collected P1.4 million of wastewater discharge fees from 388 establishments along the entire MMORS, based on documents that EMB Region 3’s senior environmental management specialist Ramjay Dizon showed to PCIJ. 

It’s not commensurate with the P11.5 billion needed to rehabilitate the MMORS, based on experts’ estimates.

PCIJ’s analysis of the payments showed that almost half of them –– 167 establishments –– only paid between P5 and P500 in wastewater discharge fees. Only one establishment paid more than P50,000.

Infographic: Annie Ruth Sabangan and Angelica Carballo-Pago

The wastewater discharge fees are computed based on the volume and the pollution levels of wastewater that plants release. Each establishment is made to pay P5 for every kilo of pollutants multiplied by its annual net biological oxygen demand (BOD) and total suspended fluids (TSS) waste loads in kilos, or the difference between waste load in the untreated water and the final effluent. 

Ibañez said the formula is problematic. It only takes into account two out of 49 water quality parameters set by the EMB –– which include ammonia, boron, and chloride, arsenic, lead, and fecal coliform among others.

The wastewater discharge fee was intended to be a disincentive that would encourage the plants to modify their production practices and invest in pollution control technologies. The paltry fees accomplished the opposite, said Ibañez.

Isipin mo, it’s even more profitable to just pay. I can just pollute and pay kasi mas affordable ‘yon, kaysa maglagay ako ng pollution control (Come to think of it, it’s even more profitable to just pay. I can just pollute and pay because that’s more affordable than putting up pollution control facilities),” she said.

In Marilao, four chicken dressing plants paid wastewater discharge fees during the time period.

Central Luzon Poultry Growers Marketing Cooperative in Brgy. Loma de Gato paid P7,540 in November 2016, P10,675 in March 2017, and P9,486 in March 2018. 

Kaizen Food Enterprises, which operates under or with the Marilao Bulacan Processing Plant in Brgy. Patubig, paid P3,220 in July 2016. RG Dressed Chicken Processing Plant in Brgy. Loma de Gato shelled out P3,577 in the same month.

Vitarich Corp. and Alt Trading in Brgy. Sta Rosa I paid P39,715 in March 2017. 

Self-monitoring reports

The problem is more than the formula, however. Computations for wastewater discharge fees are based on the plants’ declarations in Self-Monitoring Reports (SMRs) that they are required to submit quarterly under the law. 

These SMRs have proven to be unreliable at best and manipulated at worst, according to regulators.

Wilma Uyaco, chief of the Clearance Permitting Division of the EMB’s National Capital Region (NCR) office, said the SMRs were intended to ease the burden of environmental regulators. “’Yung SMR, ‘yan ‘yung self-regulation na tinatawag. Kung ’yan ay magagampanan ng tama ng industries, e ’yun sana ang pinakamaganda kasi ang gobyerno hindi mahihirapan (That SMR is what is called self-regulation. It would be best if industries carried it out correctly so the government would no longer be burdened),” she said in an interview in October 2019. 

However, enforcement has been far from effective, Uyaco said. “E kaso ‘yong self-regulation, hindi pa ready. Kino-comply pero tingin namin hindi 100% totoo (But they’re not ready yet in terms of self-regulation. It is being complied with but compliance is not 100% truthful).”

The EMB’s NCR office co-chairs the governing board of the MMORS Water Quality Management Area with EMB Region 3.

Enforced since 2004, the SMR system has two objectives under DENR Administrative Order (DAO) No. 2003-27: (1) allow establishments to demonstrate compliance with environmental laws; and (2) allow the EMB to confirm or validate that these firms comply with these laws. 

Submitted every quarter, the SMRs are filled up by pollution control officers accredited by the DENR to report production capacities, actual outputs, number of operating hours in a day, number of workdays in a week, and quarterly water and electricity consumption. 

It also reports the volume, types, and names of industry-specific wastes generated, emitted, or discharged, and how establishments dealt with the environmental impacts of their byproducts.

For poultry processing plants, this means disclosing the total number of chickens dressed, volume of water consumed per day and per quarter, chemical wastes generated from processing chicken, and how these wastes were stored, transported, treated or recycled, and disposed of.

The report also includes the cost of treating wastewater, investments made in the water treatment plant, the location of the facility’s wastewater discharge, and the water body where the wastewater was discharged. 

Establishments must have their wastewater tested quarterly by a DENR-accredited third-party laboratory and report in their SMRs the concentrations of BOD, TSS, phosphate, acidity or pH, oil and grease, and nitrate, among others.

Sample copy of the first two pages of the 16-page SMR. Source: Department of Environment and Natural Resources
Sample copy of the portion of the 16-page SMR that asks establishments to provide data about the sources and treatment of their wastewater. Source: Department of Environment and Natural Resources

Wrong math, old lab tests, expired discharge permits

Uyaco said plants have cited unreliable lab tests in their SMRs, however, showing low oxygen demand in effluents to show that the treatment facilities of the establishments were effective in cleansing their wastewater. 

[S]ino ba naman ang maniniwala, septic tank lamang ang treatment facility nila pero ang result ng analysis na sina-submit sa SMR super mababa ’yung BOD?…Hindi ganoon katotoo ang result (Who would believe the results of the lab analysis in the SMR showing a very low BOD in wastewater, when an establishment’s treatment facility is just a septic tank? The results are not reliable),” she said.

About 50% of the submissions were inaccurate, said Mario Bangloy of the EMB-NCR’s Water and Air Quality Management Section in an interview with PCIJ in October 2019. 

(K)ung ‘yung sinasabi mo na hindi tama itong nire-report…medyo malayo sa (katotohanan), siguro kalahati (If you’re  asking about incorrect reports… those that are a bit far from the truth, maybe it’s half),” said Bangloy.

The PCIJ requested Uyaco to review 2018 SMRs of seven poultry and meat processing and livestock establishments operating in Marilao. She found at least three glaring errors –– wrong math, old lab tests, and expired discharge permits.

She found discrepancies between per quarter declarations of total water consumption and the breakdown of water usage in six SMRs. Uyaco cited at least one chicken dressing facility declaring to have consumed a total of 25,000 cubic meters (m3) of water during the third quarter of 2018, but the sum of its reported daily consumption of domestic water, cooling water, and process water showed it consumed more. Its total water usage for one quarter was 28,440 m3 or 3,440 m3 more than what it declared.

Saan nanggaling ang ibang tubig nila (Where did the rest of the water come from)?” Uyaco asked. 

While Uyaco didn’t want to second-guess the reasons behind the discrepancy, she said the mathematical errors resulted in lower fees for the plants. “(B)ababa ‘yong masisingil sa kanilang bayarin, ‘yung wastewater charges… kasi hindi nare-report ng tama (Collections from their wastewater charges would decrease because it’s not being reported correctly),” she said. 

Establishments have submitted old laboratory tests results, too. Uyaco spotted one chicken dressing establishment that used lab test results dated March 2018 for its SMR submitted for the third quarter.

Mali na itong date ng (lab) analysis n’yaDapat hahanapan ‘yan o dapat hindi ‘yan tinanggap. Bakit ‘yan ang report mo? (The date of the lab analysis is already wrong…They should have asked for a new lab test result or they should not have accepted the SMR. They should have asked the establishment why its report was like that),” said Uyaco, irked by her discovery. 

Like Vitarich Corp., many establishments were found to be using expired wastewater discharge permits. 

The establishments are required to write on the first page of their SMRs the wastewater discharge permit reference numbers, date the permit was issued, and the date it will expire. One poultry processing facility used a 2016 permit for its third-quarter filing in 2018. 

Of the seven Marilao-based poultry and meat processing and livestock establishments that Uyaco reviewed, six had expired wastewater discharge permits. Three had permits that expired as early as 2015 and 2016.  

Clearly, Uyaco said, these establishments must not only be compelled to correct their SMRs but also be made answerable for their violations. 

A “substantive evaluation” of the SMRs as mandated under DAO 2003-27 should have been done before the issuance of notices of deficiency against the erring establishments, she said.

If they were given time to address their deficiencies but were unable to solve the problem, the establishments should have been slapped with notices of violation, said Uyaco. 

Poultry processors tampering with wastewater samples?

There are allegations that plants have been tampering with their wastewater samples.

Kung ang treatment facility mo ay ganito tapos magsa-submit ng result ng analysis na ganoon kalinis, na ganoon kababa ang BOD, so makakapag-isip ka na something is wrong, or something has happened di ba? Ganoon ‘yun (So if your treatment facility is like this and then you submit results of water analysis as clean as that, with a very low BOD, then you make one think that something is wrong, or something has happened, isn’t it? It’s like that),” said Uyaco.

She said several cases have been reported to her by pollution inspectors.

(M)ay nagsasabi rin sa amin pag nag-i-inspect na ganito raw ang ginagawa ng third-party laboratory, dinadagdagan na ng chemicals ‘yung container…kaya pagdating doon mababa ang result (There were those who told us that upon inspection they would find out that this was what third-party laboratories do, they put chemicals into the container…that’s why when it reaches the lab, the result is low),” the EMB official said. 

Dinadaya talaga kasi intentional ‘yung ganoon. Kaya ’yun kung may mga info silang nakukuha, inilalagay ko ’yan sa reports (It’s being tampered with because those things are intentional. That’s why when they get pieces of information like that, I include them in the reports),” she added, referring to reports she writes in relation to the evaluation of SMRs.  

A DENR-accredited third-party laboratory housed at Ateneo de Manila University in Quezon City also confirmed the allegations. “It can [be tampered with]. That’s true,” Armando Guidote, director of the Philippine Institute of Pure and Applied Chemistry (Pipac), told the PCIJ in 2019.

Guidote, professor at the Ateneo’s Department of Chemistry, was quick to add that while tampering was possible, it did not necessarily mean that it was the result of collusion between a business establishment and a third-party lab, especially when the latter did not know where and how the wastewater samples were taken. 

“Our analysis is based on the samples that they (establishments) bring,” Guidote said.

At the EMB office in Region 3, Elisa Dimaliwat, chief of the bureau’s Environmental Monitoring and Enforcement Division at the time of her interview with PCIJ in 2019, said she would rather trust in the capability of establishments to do honest-to-goodness self-monitoring with the assistance of accredited third-party testing firms. 

She said the laboratories that analyzed the effluent samples of establishments went thorough screening by the DENR. “Naka-accredit ‘yan… kasi ang third-party lab hindi n’ya p’wedeng lokohin ‘yong resulta n’ya, masisira s’ya, ‘di ba po? (They’re accredited…Third-party labs can’t tamper with the results or they would ruin themselves, won’t they?)” Dimaliwat told the PCIJ. 

It would also be hard for companies to fabricate information in their SMRs as they would risk being shut down, she said.

Bangloy said not all inaccuracies were a result of deliberate moves to fake SMRs and cover up pollution.

SMRs require 200 pieces of information spread over six modules, he said. Incompetent pollution control officers or PCOs my be responsible for the errors.

“The [SMR] is so technical. Saan ka makakakita ng engineer [na PCO] sa isang gasolinahan? Mga cashier lang, mga ganoon… (The SMR is so technical. Where can you find an engineer working as a PCO in a gasoline station? Usually, cashiers and the like act as PCOs in these kinds of establishments),” he said.

DENR guidelines require establishments classified as big generators of pollution to hire licensed engineers or chemists with at least two years of relevant experience in environmental management. Small generators of pollution may hire graduates of technical courses related to the job, or they must have reached at least third-year college.

The PCOs may also be a professional in the fields of engineering or physical and natural sciences, with at least three years of relevant experience in environmental management, or a different field but with at least five years of experience. 

Too many reports, too few people, too little time

The EMB is supposed to exercise oversight of the self-monitoring process, validating their declarations and checking that they have complied with environmental requirements. 

SMRs found to be incomplete are supposed to be returned to the companies, which would have 30 days to revise and correct their reports.

But the bureau rarely returned incorrect SMRs. “Hindi madalas (Not often),” said Dizon of the EMB Region 3’s Environmental Monitoring and Enforcement Division, when the PCIJ asked him in late 2019.

Hindi nare-review lahat ng SMRs…Additional burden sa amin. Sa dami ng firms baka di namin kayanin (Not all SMRs can be reviewed…It’s an additional burden to us. We may not be able to review everything because there are so many firms),” added Vicente dela Cruz, chief of the division’s Chemicals and Hazardous Waste Management Section, in a phone interview in early 2019.

In 2018, a total of 3,816 business establishments from seven provinces submitted SMRs to the EMB office in Central Luzon, based on data culled by the PCIJ from the bureau’s Management Information System Unit.

If each establishment submitted four 16-page SMRs in a year, that meant that in 2018, a total of 15,264 SMRs consisting of 244,224 pages needed to be reviewed.

The Environmental Monitoring and Enforcement Division only had 15 staffers, according to Dizon. Each staffer would have needed to evaluate 1,018 reports — nearly 16,300 pages — if they were to review all of the reports.

What makes the work harder, said Dizon, is the limited time allowed under DAO 2003-27 — only 30 days — to act on problematic SMRs. The division also has other responsibilities.

After the 30-day period, the incorrect reports can no longer be reviewed and the deficiencies cited in the documents can no longer become the basis for the issuance of violation notices. 

The establishments can then go scot-free. — PCIJ, February 2021


Next: PCIJ brings water samples from Marilao River to a laboratory for testing

This series was produced with the support of Greenpeace Southeast Asia-Philippines.— PCIJ

‘The wastewater looked like mud’: EMB goes after Vitarich Corp.

Four reporting fellows of the Philippine Center for Investigative Journalism (PCIJ) took a motorized boat to Marilao River to search for the outfall pipes of the town’s biggest chicken dressing plant. It wasn’t easy.

BY ANNIE RUTH SABANGAN, BERNARDINO TESTA, ROBERT JA BASILIO JR. AND RIC PUOD

Part 2 of 4

Read Part 1: The Bulacan town where chickens are slaughtered and the river is dead

What you need to know about Part 2:

  • A PCIJ team sails into Sapang Alat, a creek where Marilao’s biggest chicken dressing plant releases wastewater, and discovers how the water has turned into a garbage dump.
  • While the Municipal Health Office has the mandate to go after pollutive industries, it has not been able to exercise its powers.
  • A closure order from the Department of Environment and Natural Resources’  Environmental Management Bureau finally prompted the operators of the dressing and rendering facilities of Vitarich Corporation to take action, but an environmental officer thinks the solution is unsustainable.

It was a rainy Tuesday and it was high tide at the Marilao River. On Sept. 24, 2019, when the coronavirus pandemic was still months away, a PCIJ team took a motorized outrigger boat into the river and embarked on a search for the waste pipe of a poultry processing plant.

The brown liquid waste that flowed from pipes jutting from the compound of Vitarich Corp., one of the country’s biggest poultry and feed firms, was visible from a window of the Municipal Health Office (MHO) of Marilao. Getting to its location in Sapang Alat (Salty Creek) wasn’t so easy, however. 

It was near impossible to wade through the sludge on the river bed. The team rented a boat in Brgy. Poblacion and sailed to the creek, a tributary of the Marilao River, and waited for high tide because otherwise the boat would be stuck in the shallow and rocky parts of the waterway. 

Marlo (not his real name), a fisherman who served as guide, knew the river like the palm of his hands; but the search would still turn out to be arduous. The waters were still, but the boat had to stop at least five times. Occasionally, Marlo had to reach into the putrid water with his bare hands to weed out the trash caught by the boat’s propeller. 

Baka hindi sa lunod ako mamamatay nito, baka sa dumi at baho (I will not die here because of drowning, but because of filth and stink),” quipped one of the team members.

It was almost one hour of this before the team reached the bridge at the mouth of the creek, where the water turned visibly foamy from the viscous effluents coming from drain pipes lining the riverside. The water body had been abused like this by residents and businesses alike, although some are more responsible for its death than others. 

It should have been a warning of what awaited the PCIJ team inside Sapang Alat, but the members were not prepared for what they saw when Marlo shut down the motor of the boat and turned the outrigger towards an inlet that leads to the creek. 

It was a garbage dump. The water turned a darker color, thicker, and filthier from a mix of solid and liquid waste. Marlo had to use a bamboo pole to propel the boat, which often got stuck in mounds of trash.

The fetid and filthy inlet in the Marilao River in Bulacan leading to a creek called Sapang Alat. Image taken in September 2019. Photograph: Bernard Testa/PCIJ

Dead fish floated on the water. A rotting tilapia was discolored and its eyes were missing. A disfigured janitor fish –– bloodied, bloated and burnt –– looked monstrous with its teeth exposed. 

Siguro napadpad sila dito, inanod noong nag-high tide. Patay na ‘tong sapa na ‘to e, wala nang mabubuhay na isda rito (Maybe they were carried here by the waters when it was high tide. This stream is dead. No fish will survive here),” Marlo said.

Glenn Aguilar, who monitors the river as staff of the Environmental Management Bureau (EMB) Region 3 office of the Department of Environment and Natural Resources (DENR), linked the fish’s death to the absence of oxygen in the waters. 

“It’s an indication na patay na ‘yung tubigAng isda hindi siya mabubuhay kung walang oxygen (It’s an indication that the river is dead…. The fish can’t survive without oxygen),” Aguilar said in an interview later.

While the janitor fish is known to live and multiply even in polluted waters, Aguilar said it’s not capable of surviving in dead waters for a long time.

DEAD FISH IN A DEAD CREEK. A distended janitor fish found in Sapang Alat beside a chicken dressing plant in Brgy. Sta. Rosa 1, Marilao, Bulacan. Image taken in September 2019. Photograph: Annie Ruth Sabangan/PCIJ
REEKING CREEK. Poultry feces and innards floating in Sapang Alat, a tributary of Marilao River in Brgy. Sta. Rosa 1. Image taken in September 2019. Photographs: Annie Ruth Sabangan/PCIJ

The team also found a big plastic bag filled with creamy matter floating on the water. A stomach-turning smell was released when the receptacle was opened. It contained decaying chicken entrails. 

This part of the creek was flecked with a brownish and yellowish substance smelling like poultry feces, too.

The boat continued to follow the creek’s meandering course upstream, towards Vitarich Corporation’s outfall pipes. There was a place where trees grew and wild weeds crawled on the banks of the creek. One large tree was bedecked with dirty plastic trash. Here, where there was thick vegetation, bubbles of air rose from the water and made for an eerie atmosphere. 

TREE OF TRASH. The PCIJ team passes by a garbage-bearing tree as they sail upstream to look for more pollution point sources. Photograph: Bernard Testa/PCIJ

Finally, the sound of water rushing like a waterfall was heard. There it was –– the outfall pipe from the compound of Vitarich Corp. The team collected water samples.

The PCIJ team would later learn from the EMB and the Municipal Environment and Natural Resources Office (MENRO) that the pipe wasn’t from the dressing plant itself, but from the feather rendering facility that converts feathers of slaughtered poultry into animal feed ingredients. It was operated by PSP Aqua Resources, a business partner of Vitarich Corp. 

The PCIJ team would take another boat trip the following month, in October 2019, to Sapang Alat to collect more water samples. The team also set off to search for the drain pipes of other poultry processing plants in Brgy. Loma De Gato.

SHORT BUT ARDUOUS SAIL. Google satellite view of the area in Marilao, Bulacan where the PCIJ team boated and looked for pollution point sources in September and October 2019. Landmark icons by Annie Ruth Sabangan/PCIJ
Screenshot of a Google satellite map showing the proximity of Vitarich’s dressing and rendering facilities to the Marilao River, its tributary creek Sapang Alat, and the health office and municipal hall of Marilao, Bulacan. Landmark icons by Annie Ruth Sabangan/PCIJ

Cease-and-desist order

Eight months earlier, on Jan. 24, 2019, the EMB Region 3 office ordered two plants inside the compound of  Vitarich Corporation to “cease and desist” from releasing wastewater into Sapang Alat. 

EMB said the dressing and rendering plants –– operated by Alt Trading and PSP Aqua Resources, respectively –– did not have discharge permits. 

In two separate but identical violation notices, then EMB Region 3 Director Lormelyn Claudio said their treatment facilities were “not properly operated and [were] therefore discharging untreated wastewater,” which was a violation of the Clean Water Act. 

File photo of the waste outfall of Vitarich/ALT Trading’s chicken dressing plant in the margins of a creek in Brgy. Sta. Rosa 1, Marilao, Bulacan. Sapang Alat creek had solidified due to the unabated discharge of untreated effluents into the river tributary. Image taken in January 2019. Photograph: Bernard Testa/PCIJ

Three days after the cease and desist order was issued, on Jan. 27, Marilao’s environment officer Reynaldo Buenaventura accompanied EMB pollution inspectors to Sapang Alat to seal a canal that dumped wastewater from one of the Vitarich plants into the Marilao River. 

It was part of the national government’s efforts to clean up Manila Bay. On the same day, DENR Secretary Roy Cimatu declared from the Baywalk in the country’s capital the start of the rehabilitation of the bay. 

Marilao River is part of Meycuayan-Marilao-Obando River System that dumps wastes into the bay.

Ang tubig parang hindi na liquid e Parang lupa na. Ibig sabihin hindi na umaagos…. Nagso-solid na e (The water no longer looked like it was liquid. It looked like mud. It means it’s no longer flowing…it has solidified),” Buenaventura told PCIJ. 

Water sampling analyses conducted by the EMB showed that the plants’ wastewater discharges exceeded effluent limits. The polishing ponds –– which were supposed to improve the quality of the effluents before it was released into the river–– were no longer capable of cleansing wastewater at that time, according to Climaco Jurado of EMB Region 3’s Environment Monitoring and Enforcement Division.

The violation notices barred the plants from resuming operations until the issues were rectified.

Viscous liquid and solid wastes were clogging this polishing pond of Vitarich’s chicken dressing plant in Brgy. Sta Rosa 1, Marilao, Bulacan when pollution inspectors from the EMB in Region 3 went to the facility on Jan. 18, 2019. CONTRIBUTED PHOTO/PCIJ

Vitarich sought to distance itself from the violation notices issued against the dressing and rendering plants inside its compound. While the company owned the two plants in question, Vitarich lawyer Mary Christine Dabu-Pepito told PCIJ that the plants were operated by its business partners.

“They are in the best position to answer whether these violations indeed occur and what were the steps they undertook to address the issues raised in the NOVs,” she said in a May 12, 2020 e-mail responding to PCIJ’s questions. 

“At any rate, Vitarich requires its business partners to operate within the bounds of law, including compliance with environmental laws and regulations,” she said.

Ramiro Osorio, officer in charge of the EMB’s legal office, disagreed. In an interview on Aug. 8, 2020, Osorio said Vitarich also bore responsibility because the company is the project proponent and holder of the environmental compliance certificates (ECC), issued to the rendering facility in October 1997 and the dressing plant in October 2008. 

The ECC “is a project-specific permit” that makes the proponent directly responsible for the project, he said.

Copies of the two 2019 stop orders obtained by the PCIJ from EMB-Region 3 showed that they were addressed to the president of Vitarich Corp., the operations manager of PSP Aqua, and the manager of Alt Trading. 

Wala pong pakialam ang DENR do’n kung sino ang nag-o-operate ng rendering plant. Kung sino ang nakapangalan sa ECC, sila ang ire-regulate namin (The DENR isn’t concerned with who operates the rendering plant. Whoever is named in the ECC is the entity we will regulate),” said Osorio.

Source of wastewater discharge

Eduardo Lazo –– an executive at both the chicken dressing and rendering plants –– said they did not secure a permit to discharge because the rendering facility was not supposed to have effluents. 

What happened was that wastewater from the dressing facility overflowed, he said, carrying chicken feathers from the rendering plant into a drainpipe. He maintained that the rendering plant did not release wastewater. To address this problem, he said PSP Aqua installed a separate pipe to catch raw feather materials and redirect them to a digestive chamber.

“The feathers must first be filtered out of water. Then the wastewater from it will pass through the dressing plant’s wastewater treatment facility. So wala na kaming discharge (So we no longer have a discharge),” he said.

Lazo said the discharge that PCIJ found gushing at the back of the Vitarich compound in September 2019 did not come from the rendering plant but from the ice plant that was also located within the premises. 

Does the ice plant need a discharge permit from the EMB? “I don’t think so…Ano ito e, tubig na malinis na galing sa pinagtabasan ng yelo (It’s just clean water that comes from ice cuttings),” said Lazo, referring to the effluent.

The wastewater samples collected by the PCIJ were warm. 

EMB-Region 3’s Jurado, who inspected the rendering facility in January 2019, rejected Lazo’s claim. In an interview on Oct. 14, 2019, Jurado said PSP Aqua was issued a CDO because it was “discharging without discharge permit.”

Kasi ang claim nila wala silang discharge kasi naka-line lang sila sa dressing plant. E noong pag-inspection namin, meron silang sariling wastewater discharge. Nakita talaga namin (ang) pipe galing sa kanila (Their claim was that they didn’t have a discharge because they were linked to the dressing plant’s wastewater treatment system. But when we inspected the facility, we found out that they had their own wastewater discharge. We really saw that they had their own pipe),” Jurado said.

Wala silang polishing pond (They didn’t have a polishing pond),” he added, referring to PSP Aqua’s lack of treatment facility for its own wastewater. 

MENRO’s environmental management specialist Dan Ezekiel Martin, who also inspected the rendering plant before the CDO was issued, also said that PSP Aqua had its own wastewater discharge.

Jurado said PSP Aqua fixed the problem after it  “re-channeled” its pipe to the dressing plant’s wastewater treatment facility.

Dressing plant’s wastewater treatment system overhauled

In October 2019, the EMB’s Environment Monitoring and Enforcement Division recommended the lifting of the CDO after the dressing and rendering plants rectified issues raised. 

It was around the time the PCIJ team made its second visit to Sapang Alat and, by then, the effluents were no longer spilling out as a result of the CDO.

Records from the Marilao government showed that the improvements coincided with the entry of a new business partner –– Barbatos Ventures Corp. –– to replace Alt Trading as Vitarich’s business partner to operate the dressing plant. Barbatos was granted a government sanitary permit on July 12, 2019.

The EMB also recognized the efforts to fix the treatment facility of the dressing plant, according to Glenn Aguilar of EMB-Region 3. “[I]naayos muna nila ‘yong treatment facility…. Pabalik-balik sila dito sa amin, pinapakita ‘yung [lab] results ng [wastewater] sampling nila (They fixed the treatment facility first…. They were here several times to show the lab results of their wastewater samples),” Aguilar told the PCIJ in an interview on Oct. 28, 2019. 

Lazo said Alt Trading complied with the EMB requirements. “The CDO was given to Alt Trading and they were able to fully comply,” Lazo told PCIJ during a July 21, 2020 interview. He was referring to the conditions set by the EMB, which included treating the effluent from the chicken dressing facility so that it could conform to the government’s wastewater quality standards.

Lazo said Barbatos also started a P6.1-million project, composed of a three-phase process, to overhaul the dressing plant’s wastewater treatment system. He said Barbatos knew that treating the facility’s wastewater wouldn’t be enough and an overhaul was needed as grass had grown on the pond and one could walk on the hardened scum., Phase 1, worth P2.3 million, included the installation of polyethylene liners on all five of the dressing plant’s treatment ponds to prevent the seepage of wastewater.  

Phase 2 involved the placement of floating aerators on three of the five ponds, which was worth P2 million.

Phase 3, which was in the pipeline at the time of Lazo’s interview with PCIJ in July 2020, would be the installation of a water clarifier and filtration system that would cost P1.8 million.

“When the system is in place, only clear water will come out of the last two ponds,” Lazo said. 

In a June 2, 2020 report, the Marilao government’s Joint Inspection Team (JIT) noted improvements in the dressing plant’s wastewater treatment facility. The discharge was clean and no longer smelly, according to the report signed by Buenaventura and business licensing head Martin Armando Cruz.

Lazo welcomed the results of the JIT inspection and said the “ultimate objective” of Barbatos was “to no longer need a permit from the DENR to discharge wastewater.”

“That’s because we will no longer generate wastewater. We will be able to recycle all the water we use,” he said. 

This remains to be seen, however. Dan Ezekiel Martin, the MENRO’s environmental management specialist who inspected Vitarich’s dressing facility with EMB staffers in 2019, saw a bigger sustainability challenge.

Production in the dressing plant kept increasing, but the size of the area for wastewater treatment remained the same, he said.

Kasi normally, sa gano’n kalaking dressing plant…dapat hectares ang usapan ng laki ng area ng [wastewater treatment] pond (Because normally in a dressing plant as big as that…we should be talking in terms of hectares of wastewater treatment pond),” Martin told the PCIJ in an interview in September 2019, noting that there were only five waste stabilization ponds in the facility.

As of 2018, the production capacity of the dressing plant was 50,000 a day or 1.2 million birds a month, based on the self-monitoring report (SMR) submitted by Alt Trading. It was over three times its production capacity a decade earlier, in 2008, when it had an output of only 15,000 birds a day.

Stench lingers

Despite the interventions, however, Lazo admitted the facility would continue to stink.

Kasi…hindi mo puwedeng sabihin na 100% mawawala ang amoy, kasi you’re dealing here with waste. Iyong raw feathers may malansang amoy na ‘yan kasi (You can’t say that the odor will be gone 100% because you are dealing here with waste. The raw feathers already have a fishy smell),” Lazo said.

Lazo claimed that the rendering plant was necessary because it solved Marilao’s waste disposal problem. 

“If, say, Marilao dresses 300,000 chickens a day, that means producing 30 tons of feather waste daily if you don’t have a rendering plant…. No dumpsite will accept that huge volume of waste. It’s a high-maintenance waste. You have to bury it and address the odor. Decaying feathers smell like dead humans,” he said.

Like hair, chicken feathers are made up of fibrous protein called keratin that is resistant to being biodegraded or decomposed by bacteria, he explained.

The Business Permits and Licensing Office (BPLO) shared Lazo’s position. BPLO chief Amado Cruz said Vitarich’s rendering plant also collected chicken feathers from other dressing plants in the town and helped address poultry waste disposal in Marilao and the entire Bulacan province. 

Kasi…kung itatapon mo itong feather sa basurahan or sa isang sanitary land facility, mapupuno tayo sa dami ng residual feather…kung walang centralized na rendering plant dito sa Vitarich (We would all be swamped with feathers if you threw these in the trash can or in a sanitary land facility and…if there’s no centralized rendering plant in Vitarich),” he said, stressing that feathers don’t decompose easily in a landfill. 

Sanay na ang mga tao dito sa amoy…. Alam nila ‘yung nature ng business kaya alam din nila pag ‘yun pinasara, mawawalan ng workers (The residents are used to the smell…. They know the nature of the business that’s why they also know that if it would be closed, there would be no more workers),” he added. — PCIJ, February 2021

This series was produced with the support of Greenpeace Southeast Asia — Philippines.

Next: Poultry processing plants responsible for the pollution of Marilao River have gotten away with small fines.— PCIJ

The Bulacan town where chickens are slaughtered and the river is dead

In this four-part investigative report, PCIJ shows how poultry processing plants in the town of Marilao in Bulacan have dumped untreated or undertreated wastewater into the dead Marilao River.

BY ANNIE RUTH SABANGAN, ROBERT JA BASILIO JR., BERNARD TESTA AND RIC PUOD/Philippine Center for Investigative Journalism

Part 1 of 4

What you need to know about Part 1:

  • The town of Marilao in Bulacan province has the biggest number of chicken dressing plants nationwide, slaughtering more than 24 million chickens yearly.
  • The annual operations of chicken dressing plants in Marilao produce an estimated 169,000 cubic meters of wastewater or enough to fill up 68 Olympic-size pools.
  • This huge volume of wastewater is regularly released into the Marilao River, a major tributary of the Manila Bay, which was declared biologically dead in 1989.
  • Lack of resources and personnel prevents municipal government offices from gathering sufficient evidence to establish the extent that the dressing plants are responsible for the pollution of the river.
  • There were efforts to revive the river, but so far failed. 

You know you’ve reached Marilao, a booming municipality in Bulacan province that’s usually less than an hour’s drive from Manila, when a putrid smell of some biological degradation invades your nostrils. Here you will find a cluster of chicken dressing and rendering plants, which have become undesirable landmarks for the town in Central Luzon. 

Kapag sumasakay ako ng jeep galing Muzon, kahit nakapikit alam kong nasa Marilao na ako dahil sa amoy (When I ride a jeep from Muzon, I can tell that I’m already in Marilao even when my eyes are closed because of the smell),” said a female resident, referring to her regular commute to Brgy. Sta. Rosa 1 in Marilao from Brgy. Muzon in nearby San Jose del Monte City.

Marilao’s foul odors, coming from the Marilao River and its tributaries, are so notorious that it is the occasional subject of contempt on social media. The culprit, according to residents, are the poultry processing plants in the adjacent barangays of Santa Rosa I, Santa Rosa II, Patubig, and Loma de Gato that release wastewater to the river.

The smell is worse during dry season, residents said, when there’s no rainwater to dilute and dull the odor of the polluted water.

Bata pa ako naaamoy ko na ‘yan. Ang anak ko, may asthma. Sabi ng pedia huwag siyang i-expose sa amoy at huwag paglaruin sa daan. Mahina raw kasi ang baga niya (I’ve been smelling that foul odor since I was young. My child has asthma. The pediatrician said he should not be exposed to the smell and should not play on the street because his lungs are weak),” said another resident operating a carinderia or eatery in the same barangay.

Marilao has the country’s biggest number of poultry processing facilities, slaughtering tens of millions of chickens annually to supply fresh and freshly frozen food to consumers nationwide.

Of the 149 poultry dressing plants accredited by the Department of Agriculture’s National Meat Inspection Service as of November 2019, almost one-fourth or 34 facilities are in Region 3 or Central Luzon. (See infographic 1)

Twenty are operating in Bulacan province and 11 of them are in Marilao. The industry was among the top employers in the town, according to the Business Permit and Licensing Office, with each plant providing jobs to about 300 residents. (See infographic 2)

It’s a thriving industry that has helped turn Marilao into the richest town in the province, tripling its revenue in the last decade to P793 million in 2018.

Like many industrial towns in the country, however, Marilao has struggled to strike a balance between economic growth and environmental protection.

Infographic 1: Annie Ruth Sabangan/PCIJ

Infographic 2: Annie Ruth Sabangan/PCIJ

Poultry processing uses water to turn broilers into meat products that are safe for human consumption. In Marilao, wastewater from the establishments flow into waterways connected to the Marilao River.

Seven of the 11 poultry processing facilities in the town discharge their effluents to a creek, either from the “rear end of the last pond,” “compartment,” or “tank” of their wastewater treatment plants, based on self-monitoring reports (SMR) that the plants filed with the DENR in 2018. (There is no data available to PCIJ on the other four dressing plants.)

The same seven dressing plants reported using nearly 169,000 cubic meters of water annually to slaughter 24 million chickens. That’s enough wastewater to fill up 68 Olympic-size swimming pools. (See infographic 3.)

Infographic 3: Annie Ruth Sabangan and Angelica Carballo Pago/PCIJ

Water is a huge requirement for poultry processing plants. Workers dip the heads of the chickens into electrified water to put them to sleep, and use hot water to loosen and pluck the feathers. They need chlorinated water to wash equipment for removing the chicken’s internal organs and thoroughly rinsing their carcasses. They also use chilled water to protect poultry meat from bacteria. 

Foodnorthwest.org, a trade association in the U.S., estimates that approximately 3.5 to 7.0 gallons of water is required to dress each chicken with an average slaughter weight of four pounds. Using this ratio, PCIJ computation shows that between 10 billion and 19 billion liters of water were used to slaughter 763 million heads of chicken killed for food in the Philippines in 2019, based on figures from the Philippine Statistics Authority (PSA).

If untreated or undertreated, wastewater from the plants releases oxygen-depleting and fish-killing pollutants such as ammonia, nitrate, phosphate, and total suspended solids.

The succeeding parts of this investigative series will show evidence that this was the case in Marilao. 

Infographic 4: Annie Ruth Sabangan and Angelica Carballo Pago/PCIJ
Infographic 5: Annie Ruth Sabangan and Angelica Carballo Pago/PCIJ

Residents’ complaints

Residents have long complained about the operations of the poultry processing plants, believing that their constant exposure to the foul odors has aggravated their illnesses.

Diyan nanggagaling. Abot ang amoy hanggang doon sa bahay namin sa Patubig (That’s where it comes from. The smell reaches our house in Brgy. Patubig),” complained an aging female tuberculosis patient. She particularly blamed a big poultry processing plant in Brgy. Santa Rosa 1 near the Marilao exit of the North Luzon Expressway, for the reeking smell of Sapang Alat (Salty Creek), a clogged and heavily polluted creek adjoining the Marilao River.

The Municipal Health Office (MHO) is aware of the residents’ complaints and their concerns about the possible dangers to their health, according to Evelyn San Miguel, one of only two sanitation inspectors at the MHO.

She also has a good view of the outfall from the compound of one of the poultry processing plants –– where the liquid waste from its plants falls out from its pipe –– from a window of the MHO building. “Brown ‘yung inilalabas (The discharge is colored brown),” San Miguel said in an interview in September 2019, the same month that PCIJ sailed into Sapang Alat.

The fetid and filthy inlet in the Marilao River in Bulacan leading to a creek called Sapang Alat. Image taken in September 2019. Photograph: Bernard Testa/PCIJ

San Miguel said they forwarded these complaints to the Business Permit and Licensing Office (BPLO) and the Municipal Environment and Natural Resources Office (MENRO). 

The chief of the BPLO, Martin Armando Cruz, downplayed the residents’ complaints, however. While the poultry business was the most “water-intensive” of all industries in Marilao, he told PCIJ he didn’t think the poultry business was among the most pollutive.

Cruz said the poultry processing plants were releasing chlorinated but clear water, a claim that was contradicted by other interviewees for this report and PCIJ’s own findings.

“‘Yung wastewater naman nun puti…. Madaling i-clear [kasi] walang chemicals e. Chlorine lang. Kayang-kayang linisin (The wastewater they release is white…. It can easily be treated because there are no chemicals. It’s just chlorine. It’s easy),” Cruz told PCIJ in an interview in October 2019, referring to the effluents discharged by the dressing plants. 

Cruz conceded that the fetid odor from the plants, particularly from the town’s biggest plant along Sapang Alat, were a nuisance. But he didn’t think it was the cause of the illnesses of Marilao residents. 

“Yes, [it’s a] nuisance. But is it pollutive? Nakamamatay (Is it deadly)? Nakakasakit (Does it cause illnesses)? Sa aming observation, hindi naman (Based on our observation, it’s not),” Cruz said. 

Cruz was inclined to believe that domestic wastes caused more harm to the river than the wastewater from Marilao’s industries, although he admitted that the LGU had made no assessment of the chicken dressing industry’s wastewater.

Hindi kasi kami nagtse-check no’n, wala kaming testing ng water…ang DENR ang [in-charge] do’n (We don’t check that, we don’t conduct water testing…the DENR is the one in-charge of that),” said Cruz.

The residents interviewed for this story requested to hide their names out of fear that the business establishments would go after them for their comments.

A dead river

The Marilao River, a tributary of Manila Bay, has been biologically dead since 1989. It can no longer sustain any life form. 

For fish and other aquatic species to survive and thrive in a freshwater resource like the Marilao River, the water body needs to contain 5 milligrams of dissolved oxygen (DO) per liter of water (mg/l), according to DENR standards.

But the DO levels in the river have not even reached 3 mg/l in the last decade, based on tests conducted by the Region 3 office of the DENR’s Environmental Management Bureau (EMB), which conducts ambient water quality tests on the river. 

Meycauayan River is already likely to be low in oxygen levels, causing several marine animals — including fish — to die. Photograph: Bernard Testa/PCIJ

Scientists call this condition “hypoxia,” a depletion or reduction of oxygen in water bodies that turn them into “biological deserts” or “aquatic cemeteries.” 

The river’s biological oxygen demand (BOD), which represents the amount of oxygen consumed by bacteria while they decompose organic matter in the water, has been rising, too. 

The river’s BOD should not exceed 7 mg/l under better circumstances because, above that level, bacteria will use more oxygen to decompose wastes and thus rob fish and other aquatic animals of survival gas. However, EMB tests showed that the recorded BOD level of Marilao River was a high of 44.52 mg/l in 2018 or four times its level of 11.09 mg/l in 2008. It was an indication that pollution had worsened throughout the last decade.

This is a shared challenge among the industrial towns in Bulacan. The Marilao River is part of the Meycauyan-Marilao-Obando River System (MMORS), a heavily polluted river system that is considered the second top pollution source of Manila Bay.

MMORS is responsible for about a third of the organic matter going into the historic natural harbor in the country’s capital, next only to Pasig River, which accounts for 60%, according to a study by the Partnerships in Environmental Management for the Seas of East Asia, implemented by the United Nations Development Programme.

Infographic 6:  Annie Ruth Sabangan and Angelica Carballo Pago/PCIJ

Other industries are polluters, too

While residents point to the responsibility of the poultry processing industry for the pollution of Marilao River, the local government doesn’t have the capacity to gather sufficient evidence to establish the extent that the industry is at fault.

The poultry processing facilities are certainly not the only polluters of the river, which is host to households and other types of industries that produce different types of waste. There are metal and textile factories, manufacturers of plastic products, biscuit and bread makers, and soap and detergent businesses, among others.

Which of these entities contribute the most pollutants to the river? What businesses or industry sectors have effluents with the highest BOD or ammonia? Which ones discharge the most volume of sludge laden with toxic and non-biodegradable heavy metals like lead, arsenic, and mercury? 

Along or near the Marilao River’s Expressway Bridge alone — one of three water sampling stations in the river — there are almost 2,000 commercial entities spread in nine Marilao barangays. Tabing Ilog, Patubig, Sta. Rosa I, Sta. Rosa II, Saog, Lambakin, Loma de Gato, Prenza I, and Prenza II are the town’s business hubs.

The Region 3 office of the EMB also earlier identified 433 establishments in the entire Central Luzon whose wastewater flows into the MMORS.

Which ones among them don’t have wastewater treatment plants or have inefficient effluent cleansing facilities? What businesses are the worst river and fish killers? It would take special types of tests to determine all this.

In an interview in September 2019, when PCIJ was starting this investigation, Marilao Municipal Environment and Natural Resources Office (MENRO) chief Reynaldo Buenaventura admitted they still couldn’t measure the extent of pollution from particular plants or industry sectors because of lack of resources and personnel. 

Marilao is only capable of employing “end-of-pipe” pollution solutions, which requires cleaning up wastes when these have already polluted the river, he said.

May river patrol boat kami, dalawa, galing sa DENR. Araw-araw silang nagpa-patrol pero ‘yung solid waste lang ang nakukuha (We have two river patrol boats from the DENR. The boats patrol every day but they only collect solid waste),” Buenaventura said.

EMB’s usual ambient water quality tests, which gather “primary parameters” such as dissolved oxygen, biological oxygen demand, and other conventional pollutants, don’t trace the sources of pollution, either.

These tests can only give hints and symptoms of the water pollution problem in the Marilao River, but not its direct causes, said Glenn Aguilar, among the EMB staffers in Region 3 who monitor the river.

Failed efforts to revive the river

Several administrations attempted to revive the Marilao River, but efforts have failed to reverse its DO and BOD levels.

The Marilao River was among the 19 priority rivers monitored by the DENR under its “Sagip Ilog” (Save the River) Program, a 2004 initiative that sought to improve the river’s water quality by raising dissolved oxygen levels.  

In 2004, the Marilao River Council was formed to rehabilitate the water body. A project called “Clean the Marilao, Meycauayan, and Obando River System” was launched, involving local government units (LGUs), the EMB, the Bureau of Fisheries and Aquatic Resources, the river councils, and the Asian Development Bank. They envisioned a “fishable, swimmable, and drinkable” river system. 

In 2005, Marilao became a part of a stakeholders’ group composed of the three LGUs that have jurisdiction over the MMORS. As a major tributary of Manila Bay, the heavily polluted river system in Bulacan became a focus of efforts to rehabilitate the natural harbor.

There was little to show for all these efforts, however. In 2007, Marilao, along with its neighbor, Meycauayan City, suffered global disgrace after New York-based environmental watchdog Blacksmith Institute included the town in its list of 30 “dirtiest places” on earth. The list raised an alarm over how the town’s industrial wastes were being “haphazardly dumped” into the river. 

In 2008, the Supreme Court issued a continuing mandamus or order to the Department of the Interior and Local Government (DILG) and 12 other agencies to clean up and preserve Manila Bay, resulting in renewed attention to the Marilao River. The mandamus stemmed from a January 1999 petition by a group of residents, who won the case in a Cavite court and the Court of Appeals. Ten government agencies, including the DENR and the DILG, appealed to the Supreme Court and lost.

The order prompted Marilao’s MunicipalPlanning and Development Office (MPDO) to conduct an inventory of commercial establishments and households adjacent to the Marilao River and its tributaries, supposedly to pinpoint pollution hotspots. 

What did they find out? Nearly 60% of the 756 households identified did not have septic tanks, while 71% of 91 business establishments had no wastewater treatment facilities. 

It was the first and last comprehensive inventory of households and businesses near the river, said Edmundo Canape, a senior staffer at the MPDO, who signed the 2009 report. Succeeding inventories would only check a percentage of the commercial establishments and households.

In 2011, the Supreme Court again issued a resolution enjoining government agencies and local governments surrounding Manila Bay to implement the 2008 mandamus. The high court cited the 42-year-old Presidential Decree 1152 or the Philippine Environmental Code, which requires all local governments to implement a waste management program.

Part of the directive was for LGUs to address water pollution at source by (1) inspecting all factories, commercial establishments, and homes along the banks of the major river systems in their areas; (2) determining if they have wastewater treatment facilities or hygienic septic tanks based on specifications prescribed by law; and (3) requiring non-complying establishments and homes to set up facilities or tanks within a reasonable time. Otherwise, they faced fines or closure. 

Still, the pollution of the Marilao River continued to worsen.

In 2017, then Marilao Mayor Juanito Santiago issued Executive Order 2017-09 for the town to comply with the High Court’s 2011 resolution. 

In 2018, the DILG flagged Marilao’s weakness in environmental governance. The municipality got a score of 45.91% in a DILG assessment and was one of 19 towns and cities in Bulacan that scored below the passing mark of 75%.

The DILG found that Marilao didn’t follow the Supreme Court directive when it inspected only 15% of the target number of septic tanks and wastewater treatment facilities. No single notice of violation was also issued by the LGU against establishments that failed to comply with Republic Act 9275 or the Clean Water Act of 2004. 

The DILG also noted the town’s failure to relocate informal settlers living along the river banks.

No environmental officer for a long time

In the wake of its failing marks from the DILG, Marilao’s MPDO took new steps to address water pollution at source. 

Based on a 2019 report provided by MPDO staffer Salvador Ramirez to PCIJ, they inspected about 1,000 homes in 16 barangays yearly — a small percentage out of some 50,000 total households — from 2016 to 2018. Notably, the inventory didn’t include business establishments.

The MPDO was simply undermanned. The office established the Marilao River Inspection, Inventory and Monitoring Team (MRIIMT) to attend to its old problem, but Ramirez said this team was a one-man squad. 

“So that time…kami lang dito. Ako. Ako ‘yung bumababa (So that time…it was just us here. It was just me. I was the only one who went to the field to inspect),” said Ramirez.

It was only in 2018 that Marilao would create the Municipal Environment and Natural Resources Office (MENRO) and hire Buenaventura to become its environmental officer. 

The Local Government Code of 1991 does not require the designation of an environmental officer. The town apparently never found the need to have one until Buenaventura was appointed to the post in January of that year. He would later assume the tasks from the MPDO.

In 2019, PCIJ asked Buenaventura if it was possible to send the LGU’s river patrol team to go after dressing plants found dumping untreated effluents into narrow, muddy and clogged tributaries.

Buenaventura dismissed it. “Hindi maaabot ng bangka ‘yun (That can’t be reached by the boats),” he said. 

A PCIJ team discovered it was an arduous task, but it was doable under the right conditions.  — PCIJ, February 2021

This series was produced with the support of Greenpeace Southeast Asia — Philippines.

Next: PCIJ reporting team takes a boat to Marilao River to search for the outfall pipe of a notorious poultry processing plant.— PCIJ