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Governance and Market Failures in Mining: Lessons from the Marcopper Mine Disaster in Marinduque, Philippines

42 Pages Posted: 26 Oct 2013  

Ronald U. Mendoza

Ateneo De Manila University - Ateneo School of Government

Tristan A. Canare

Asian Institute of Management - Policy Center

John Lindon

Asian Institute of Management

Date Written: October 25, 2013

Abstract

The Philippines sits atop vast mineral deposits estimated to be worth around PhP 47 trillion. Yet mining in the Philippines has a mixed track record as far as its impact on human and economic development. This paper tries to draw lessons from the Marcopper Mine in Marinduque, Philippines, using a framework — what we call a "mining and inclusive growth causality chain" — to begin to think through how extractive industries can contribute to inclusive growth. Essentially, there is a chain of inputs and events that — when properly executed by various stakeholders — could lead to very strong economic and human development outcomes not just for the communities directly affected by the mine, but also the country as a whole. Too often, this chain is easily broken by both governance and market failures. Addressing these failures through such means as proper consultative mechanisms, transparent and professionally managed wealth funds, and accountability arrangements for key stakeholders (including mining companies, government agencies, and key regulators) could all contribute to a properly functioning "production chain" that sees natural resource wealth transformed into development outcomes.

Keywords: mining, corporate social responsibility, responsible mining, inclusive growth

JEL Classification: F2, F21, O16, O19

Suggested Citation

Mendoza, Ronald U. and Canare, Tristan A. and Lindon, John, Governance and Market Failures in Mining: Lessons from the Marcopper Mine Disaster in Marinduque, Philippines (October 25, 2013). Available at SSRN: https://ssrn.com/abstract=2345228 or http://dx.doi.org/10.2139/ssrn.2345228

Ronald U. Mendoza (Contact Author)

Ateneo De Manila University - Ateneo School of Government ( email )

Katipunan Road
Loyola Heights
Quezon City, 1108
Philippines

Tristan A. Canare

Asian Institute of Management - Policy Center ( email )

Eugenio Lopez Foundation Bldg
Joseph McMicking Campus, 123 Paseo de Roxas
Makati City, Metro Manila
Philippines

John Lindon

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

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