ISSUE ANALYSIS No. 7
April 29, 2008
Series of 2008

The higher the level of corruption in a country, the greater the destruction of the environment.

Environment: A major source of corruption

The higher the level of corruption in a country, the greater the destruction of the environment; likewise, the lower the level of environmental sustainability. This correlation comes not from an NGO or an anti-corruption watchdog but from the World Economic Forum (WEF), the Davos annual meeting of political and corporate leaders from all over the world.

The linkage between environment and corruption is ringing alarm bells not only in the WEF but in other multilateral organizations as well. This may not necessarily out of their concern for the environment, however, but because the funds granted many developing countries including the Philippines to combat corruption have yielded no promising results, worse, are embezzled through corruption itself.

There is another correlation: Developing countries that are highly dependent on extractive industries, such as mining, logging, and the export of resources, show the highest levels of corruption. The WEF, along with Transparency International (TI), Political and Economic Risk Consultancy (PERC), and other institutions see the Philippines as the second most corrupt country in the world and the first in Asia today.

Previously ranked as one of a few countries with the most diverse ecosystems, the Philippines is now facing an environment crisis. Only 17 percent of its forest cover is left and 50 of its 421 major river systems are biologically dead. Mining and other extractive industries threaten farm life, coastal and marine resources, access to water, and spawn epidemics and pollution of all types. Foreign mining firms have, since the 1970s, plundered as much as $30 billion worth of mineral resources from the Philippines. Moreover, some $2 billion is lost to environmental degradation every year.

The environment sector is a major source of corruption as well as political patronage. The plunder of natural wealth has been the material base of oligarchic politics that promotes and practices corruption. It is where the most coveted resources are, and it is where the money is. The mineral wealth alone that remains untapped is worth $840 billion; the first phase of the Arroyo administration’s minerals policy was expected to generate $10 billion in investments.

Teeming with corruption

The large-scale exploitation and extraction of the country’s natural wealth especially timber and mineral resources teems with corruption involving bureaucrats, powerful politicians and their cronies, on the one hand, and transnational corporations and their local partners, on the other. The maze and levels of corruption begin with the TNCs themselves – in their ¬countries business gives legitimacy to bribery.

In the United States, for instance, the Foreign Corrupt Practices Act (FCPA) does not prohibit bribing foreign officials through facilitating or expediting payment "the purpose of which is to expedite or secure the performance of a routine governmental action." On the other hand, the OECD's 1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention”) makes acceptable “grease payments,” “speed money,” “facilitating payments,” or “expediting payments” that are made to ensure the timely delivery of goods and services, such as permits and licenses.

In Canada, the Corruption of Foreign Public Officials Act makes even more explicit about “grease” payments as legal if these are made to expedite or secure the performance by a foreign public official of any routine act that is part of the foreign public official's duties or functions, including the issuance of a permit, license, visas, and work permits.

As a result, foreign firms including mining TNCs offer bribes and allot revenues for grease money sometimes bigger than the normal 22 percent that Filipino business firms normally earmark to get government projects approved. Many TNCs whose mining operations have been banned or restricted in other countries because of pollution are willing to shell out bribe money in the Philippines allowing them to invest in mining exploration, extraction, and exportation while evading tight environment evaluation, monitoring, or even litigation. Awash with trillions of dollars in surplus capital, China’s corporations including ZTE-NBN are willing to offer as much as one-third of their investment capital to corner mining, telecommunications, road development and other major projects. These projects damage the environment, demolish communities, and make the people bear more tax burdens to compensate for losses in enterprises that do not benefit them at all.

The profit objectives of business in extracting billions worth of environment resources are facilitated through the enactment of laws and onerous treaties, the issuance of policies, transactions, permits, designation of areas for operation, sham environment assessments, and other papers. This bureaucratic and policy-making process involves all layers of government including the chief executive, Congress, and even members of the judiciary.

Legal mechanisms

Thus legal mechanisms are used to legitimize and process the plunder of natural resources. But it is the invisible hand of corruption wielded by the powers-that-be which makes this development aggression more expeditious. It is this same hand that protects profitable ventures, beneficiaries of corruption, and the wanton destruction of the environment at the expense of communities, their livelihood and property, and their future. Corruption makes environment laws unenforceable and violators to get away with their crimes. It also makes accountability toothless.

A case in point: When the Supreme Court ruled in December 2004 that the Mining Act was unconstitutional, the bureaucracy’s top honchos flexed their muscle to support the Chamber of Mines of the Philippines’ and the TNCs’ lobby to have the ruling reversed. Millions of dollars were reportedly spent for this campaign. In less than a month, the high court did an about face. A jubilant House Speaker Jose de Venecia boasted before international mining investors in London in June 2005: “We mounted a strong campaign to get the Supreme Court to reverse itself. It was a difficult task to get 15 proud men and women of the Supreme Court to reverse themselves. But we succeeded.”
Corruption is the secret agency that makes environmental destruction possible topped by civilian deaths, epidemics, and calamities. It has led to the depletion of the country’s natural resources ranging from deforestation, slope destabilization, soil erosion, desertification, water resource degradation, defertilization, crop damages, siltation, alteration of terrain and sea-bottom topography, increased water turbidity and air pollution. It continues to threaten the country’s food security.
Given the current propensity to reward corrupt officials while whistleblowers along with anti-corruption watchdogs are intimidated, corruption in the environment sector is here to stay and is sure to worsen. Horrifying will be day when the whole country degrades into a desert and the only life remaining is the social cockroaches – the corrupt oligarchs and crony capitalists.

Corruption breeds in a government dominated by oligarchs who craft development policies motivated by private gain and corporate greed. And yet environment constitutes public wealth and it is just for the people to make an assertion of this basic principle. In the short term, pending legislative bills that uphold transparency in government transactions such as the right to public information should be supported. Independent and impartial investigations of corruption cases and environmental plunder should take their course. In the long term, the campaign for environment conservation and the defense of patrimony should be linked to the overall struggle for land, against corruption, and toward democratic governance.

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