Posted: July 31, 2004
Home > Campaigns > Water sources > Water war?
Water war?


Past battles with BenguetCorp
The Baguio Water District’s Bulk Water Supply Project
BenguetCorp’s scheme
The question of capital

Table. Number of Diversion Points Covered by BenguetCorp’s
Water Appropriation Permits

Nothing – except, perhaps, the air that everyone breathes – is more basic to life than water. The right to water is a fundamental human right that is recognized universally – by all peoples, in all cultures; by all communities, in all societies.

Water is, however, fast becoming a scarce and intensely disputed resource. Here in the Cordillera, many conflicts over water sources have erupted between tribes, clans, villages, wards, and neighborhoods. Some communities have attempted to grab control of water sources from other communities that had held these for generations. Some communities have denied others of even the merest access to what ought to be shared water sources. On several instances, such communities’ actions have resulted in war.

Dispute over water has also arisen between municipalities and public water utility firms – between Tuba and the Baguio Water District, for example, at the end of the 1990s.

Unknown to many, a water dispute has been going on since 1998 between communities in the municipality of Itogon and a private firm that is an old enemy of theirs – Benguet Corporation. This dispute may soon come to a head, now that BenguetCorp has obtained the permits necessary for it to appropriate water from almost all the communities’ sources for two major projects. One is its project to develop an Itogon Water District. The other is the Baguio Water District’s Bulk Water Supply Project, for which it has turned out to be the sole surviving bidder.

Past battles with BenguetCorp
CPA affiliates and other Hapit readers will recall that from 1989 to 1994, the communities of Itogon fought a fierce and bitter struggle to prevent BenguetCorp from implementing its plan to convert all of its Benguet Gold Operations into either opencast or underground bulk-mining operations. This would have resulted in the devastation of barangays Tuding, Loacan, Ucab, Gumatdang, Virac, and Ampucao. And so the communities of these areas put up a vigorous resistance, holding barricades for as long as three years. Except for the early surrender of one community in Loacan, their resistance succeeded. It effectively confined BenguetCorp’s bulk-mining to a single opencast operation in Antamok. And this proved to be so unprofitable, the company was forced to suspend the operation in 1999, five years before the projected end of the Antamok open pit’s 13-year minelife.

Totally desertified, the Antamok open pit now figures in BenguetCorp’s plans as the preferred site of the water reservoir that the company will need to develop if it is awarded the contract for the Baguio Water District’s Bulk Water Supply Project.

But in bidding for this contract, BenguetCorp may have been indulging an unwarranted optimism. During the 101 years that have elapsed since the company established itself in Itogon, it has repeatedly had to contend with the hostility of local communities to its plans and activities. The struggle the communities waged against its bulk-mining projects was neither the first nor the last resistance it encountered.

Over the past two years, BenguetCorp has had to confront the resistance of communities occupying the Virac-Ampucao boundary area to the re-operation of its Acupan mines by contract-miners. The only ore remaining in these mines are fragments of veins lodged within the mines’ pillars. The extraction of the ore will weaken the pillars, and this will very probably cause the surface of the ground above, on which the communities live, to sink or even collapse. Thus, in August 2002, before BenguetCorp’s contractors could begin extracting ore from the mines at Level 1300, a level relatively near the surface, the communities barricaded the portal to these mines. BenguetCorp has since provided its contractors with other means of getting to Level 1300. But having to circumvent the barricade, it has incurred substantial losses in terms of productivity.

Since 1998, BenguetCorp’s implementation of its real estate development projects has been confined to the vicinity of its old headquarters in Balatoc, within barangay Virac, because potential investors have been scared off by resistance from the communities that these projects threaten with displacement from the land.

In 1996, the community in Loacan which had surrendered Antamok to BenguetCorp revived its resistance. BenguetCorp was then enlarging the Antamok open pit, and the community tried to stop this. It did not succeed. But the solemn and terrible ritual curses that the oldfolk of the community hurled at BenguetCorp that year apparently worked: the company has not turned a profit since.

Since 1985, the people of sitio Dalisay in barangay Gumatdang have thrice engaged BenguetCorp in a stand-off for control of an important mineral location – the people’s traditional mining site that the company wants for itself quite badly because the ore that small-scale miners have extracted here yields gold of up to 19.2 SG, just 0.1 unit shy of the specific gravity of pure gold. First in 1986, then again in 1996, the community won the stand-off. The third stand-off is still ongoing.

In 1962, two women elders of the community of Gumatdang almost succeeded in using the courts to force the company to close off one of its major tunnels and stop the drainage of paddy irrigation through the tunnel.

In 1932, one of these women had prevailed over the company in a contest for government recognition of water rights. The company wanted the waters of the Muyot Creek for its mines. But the Muyot Creek was then Gumatdang’s primary source of paddy irrigation.

The first resistance that the company had to contend with in Itogon was waged in 1921 by the tongtong of Gumatdang. This non-formal council of the community’s leaders and wisefolk successfully thwarted the company’s first attempt to seize control of the Muyot Creek.

The Muyot Creek is one of the few Itogon water sources for which BenguetCorp does not yet hold an appropriation permit. Standing in the way of permit issuance by the National Water Resources Board are counter-applications for the rights to this, the Ambalanga river, and two other water sources filed by the Gumatdang member-organizations of the Itogon Inter-Barangay Alliance on behalf of their Barangay.

Even though BenguetCorp has been granted the permits to appropriate water from most other Itogon sources, this does not yet mean that it will be able to implement its plans. In almost all cases of dispute with BenguetCorp, Itogon communities have hardly ever been dissuaded by jurisprudence or administrative rulings upholding the company’s legal claims over their ancestral rights to their areas’ resources. The communities have time and again fearlessly engaged the company’s men in physical and militant, though unarmed, struggle.

The Baguio Water District’s Bulk Water Supply Project

Desperation over a chronic water crisis is behind the Bulk Water Supply Project of the Baguio Water District or BWD.

The BWD is supposed to rehabilitate the water supply and distribution system of Baguio, and develop it so that it services the entire urban core of BLIST, the development zone comprised of Baguio, La Trinidad, Itogon, Sablan and Tuba. This urban core – which has already expanded from Baguio to a large portion of La Trinidad and small portions of Sablan and Tuba – currently hosts a population of more than 300,000. The population bloats to at least 500,000 during some weekends, the Christmas holidays, and the Easter Holidays. During the time of the Baguio Flower Festival, there are days when it bloats to at least a million.

The BWD estimates that the workweek population consumes 30,000 cubic meters a day, and the weekend population 80,000 cubic meters a day. It expects that peak consumption demand will reach 112,000 cubic meters a day within the next five years. But the BWD’s water sources can hardly supply even just the workweek population’s current consumption demand.

In fact, the BWD has had to deal with the problem of water shortage since the latter half of the 1980s, when Baguio’s watersheds became denuded. In the 1990s, the BWD tried to gain control of water sources in Tuba. But its efforts were impeded by the resistance of municipal officials who were keenly aware of their own constituents’ domestic and agricultural water needs. Thus in 1997, the BWD embarked on a search for a private firm that could supply it with water in bulk. It posted a call for bids, but the firms that responded failed to identify sufficient water sources. It thus declared a failure of bidding.

The BWD posted a second call for bids in 2003. Four firms placed their bids for its Bulk Water Supply contract: Benguet Corporation, Almagan Mining, Alpa PCM, and Chemitreat-Massco.

The BWD had to disqualify Almagan and Alpa because their technical capabilities for carrying out the contract appeared questionable. Besides, neither controlled any significant water source.

The BWD also considered disqualifying BenguetCorp because the company was going to source the water from within the BLIST zone. It was thus bound to meet up with resistance from no less than the Provincial Board of Benguet, which had previously announced that it would not allow the BWD’s Bulk Water Supply to be sourced from any of the municipalities within BLIST.

The BWD thus pinned its hopes on Chemitreat-Massco, a Singapore-based joint venture that was working with the Benguet Provincial Board on a scheme to get the water from a large source outside the BLIST zone: the reservoir behind the Ambuklao dam.

In the first quarter of 2004, the Provincial Board signed a Memorandum of Understanding with Chemitreat-Massco for a deal to which the Province would commit the use of the dam, and Chemitreat-Massco would commit financial and physical capital for the development of the facilities needed to treat the water behind the dam and course it to the pipelines of the BWD.

But a number of problems were posed by the scheme.

Ambuklao is a silt-logged dam; its reservoir holds more silt than water.

It is true that during months of heavy rainfall, siphoning water from the reservoir at a rate of 50,000 cubic meters a day might prove beneficial: it might mitigate the downstream flooding that has been caused by the overflow of water from the reservoir. But during the rainless months, not enough water might remain in the reservoir to support fisheries.

The Ambuklao reservoir now hosts the tilapia fish pens of many of the families that had been dislocated from the land which had been submerged when the dam was put in operation. The siphoning of the water might result in the these families’ second dislocation.

The dam is located directly downstream of a highly erosive area. It is bound to accumulate more sediments and get silted-up further. Its reservoir, therefore, cannot be expected to serve as a sustainable water source, even for the 25 years covered by the BWD Bulk Water Supply contract.
Awareness of the unsustainability of the Ambuklao reservoir as a water source might have been the reason why, in its draft of its Memorandum of Agreement with the Province of Benguet, Chemitreat-Massco inserted a provision that would have given the firm the mandate to study the development potentials of all water sources within the province. The Board naively viewed this as a provision that would be beneficial to the people of the province. It did not realize that Chemitreat-Massco could use this as a stepping stone to taking control of water supply throughout the province.

Raul Molintas, the Provincial Governor then, reacted strongly. Speaking with the Board, Molintas pointed out that “the needs of the Benguet people should be determined and addressed before water sourced in Benguet [is] used to supply outside [needs],” and that “the province’s municipalities should be the ones applying for water rights, not private corporations”. (Molintas to the Board in a meeting at which he was supposed to sign the MOA with Chemitreat-Massco, 17 April 2004, as cited in Uncharacteristically, for a Governor who had had a history of selling out his province’s resources to big companies – e.g., the San Roque Power Corporation, Luzon Hydro, the Lepanto Consolidated Mining Company – Molintas refused to sign the Memorandum of Agreement that would have clinched the Chemitreat-Massco deal.

Chemitreat-Massco thus withdrew its bid for the BWD Bulk Water Supply contract. And BenguetCorp became the sole qualified bidder. Now, whether or not it wants to, the BWD might have no choice but to award the contract to BenguetCorp.

BenguetCorp’s scheme

It may not have responded when the first call for bids was posted in 1997, but BenguetCorp has since been preparing to win the BWD’s Bulk Water Supply contract. It has been busy acquiring permits from the National Water Resources Board for the appropriation of water from numerous sources. The NWRB has thus far issued it a total of 65 permits:

Table. Number of Diversion Points Covered by BenguetCorp’s
Water Appropriation Permits

Surface water





Itogon-Baguio boundary

Some of the permits cover major springs and rivers – for example, the Bua and Virac springs in Itogon, the springs within the Voice of America reservation along the boundary between Itogon and Baguio, and the Amliang and Badiwan springs in Tuba; the Antamok and Laboy rivers in Itogon, and the Galiano river in Tuba.

Thirty-seven of the permits cover springs, creeks, and rivers that Itogon communities actually use for their domestic and agricultural needs. BenguetCorp’s development and management of an Itogon Water District will allow it to control the communities’ use of these.

BenguetCorp derived its mandate to develop and manage an IWD from the Office of the President when this was still occupied by Fidel V. Ramos. Ramos even awarded BenguetCorp a grant of P1.5 billion for the IWD’s development, allocating some of the government funds that were meant for the San Roque Multipurpose Project.

That was in 1997. Six years since, and BenguetCorp has not yet been able to make much headway in its efforts to develop an IWD. It has been able to install storage tanks, distribution pipes, and meters in the housing subdivision that it developed in Virac. It has been providing the Virac subdivision residents with consistent water service. Beyond this, it has had to reckon with a community resistance that has been relatively quiet but nonetheless effective.

Still, using its Virac Water Service and a bottled water distribution service that it operates through one of its subsidiaries, Agua de Oro, BenguetCorp has succeeded in obtaining from the NWRB a Certificate of Public Convenience and Necessity. It can use this certificate to win additional points in its bid for the BWD Bulk Water Supply contract.

Also, teams employed by government to help with the management of the San Roque watershed.are now assisting BenguetCorp by surveying local water consumption patterns in Itogon.

“They are asking us how many pails of water we use for bathing, doing our laundry, and washing our dishes; how many cups we use for washing our faces and brushing our teeth; how much we use for cooking and drinking; and so on. We cannot give them any clear answers because the water we use is free-flowing. Well, we do not understand why they are asking us these questions, anyway,” remarks an officer of the Itogon Inter-Barangay Alliance.

“They are asking us these questions so that they will know how much Benguet Corporation should leave for us when it sells our water to the BWD,” retorts another.

The question is whether the communities will allow BenguetCorp to get their water and sell it to the BWD – especially if they were to learn of one of the bonuses the company hopes to earn from taking on the BWD’s Bulk Water Supply Project. The project will allow the company to systematically rehabilitate those of its old mine tunnels that have become water-logged, and so “resume . . . mining in several underground levels at subsidized de-watering cost.” (Benguet Corporation 2002 Annual Report)

The question of capital

Another question would be whether BenguetCorp can raise the necessary capital.

BenguetCorp is in deep financial trouble. It has been operating at a deficit which increased from P10 million in 2000, to P47 million in 2001, and to P121 million in 2002. It is thus heavily indebted to domestic banks. It has outstanding long-term debts of more than P1.5 billion, the unpaid interests on which already amounted to another P1.0 billion as of 2002. Also as of 2002, it had incurred additional, short-term debts amounting to P652 million and bank overdrafts amounting to P146 million. As of 2002, its remaining assets were valued at only at P907 million. (Benguet Corporation 2002 Annual Report. The company’s annual report to its stockholders for the year 2003 was not yet available as of this writing.)

It is likely that BenguetCorp will seek capital partnership with a foreign firm, as it has done with some of its recent projects in mining and mineral exploration in various parts of the country. In its annual report to its stockholders for the year 2002, BenguetCorp in facts says that it has already approached several large American water treatment and distribution companies for a joint-venture partnership in the BWD Bulk Water Supply Project. It claims that these companies have expressed much interest.

If BenguetCorp succeeds in clinching a deal with any of the said companies as well as with the BWD, and if it prevails over the resistance of communities to its projects, it will again be exploiting Itogon to line the pockets of Americans with gold – as it used to from 1903 to 1974.

This time, the gold will not be extracted from ore but from water that the residents of the BLIST development zone will pay for at an extremely high price. Besides the P30 to P45 per cubic meter that the BWD will have to charge them in order to pay BenguetCorp, there will be the price of
surrendering control of their most basic necessity in life to this and some American company whose primary interest is profit. # L. Gimenez, APIT TAKO

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