The Multinational Monitor


N E W S   M O N I T O R

Mindanao Plantation Sparks Controversy

by Catherine Caufield

A Philippine government plan to develop an 8,000 hectare palm oil plantation on the southern island of Mindanao utilizing British and World Bank development loans has drawn sharp criticism from Catholic activists in the Philippines and England.

The plantation is a joint venture of the National Development Corporation (NDC), a government-owned company in the Philippines, and the Malaysian-based Guthrie Corporation, one of the largest Asian multinationals. Critics of the plantation charge that the managers of the joint venture have utilized the services of a gang of paramilitary "enforcers" to evict landowners from the area and harass local critics of the project. Their protests have sparked a discussion of the project in Parliament and forced the British government to reassess its role in the project.

The joint venture-called NDC-Guthrie Plantations, Inc. (NGPI)- has received a considerable amount of outside funding. In January, 1983 the British government approved an $11 million loan to NGPI by the publicly-funded Commonwealth Development Corporation (CDC), the British counterpart of the U.S. Agency for International Development. More recently, the international Finance Corporation, an affiliate of the World Bank, approved another loan for the same amount.

Over 40,000 hectares of land, mostly in Agusan del Sur Province, have been set aside for the plantation under a decree by Filipino President Ferdinand Marcos. The Philippine government is trying to convert much of Mindanao into plantations in the hope of earning foreign currency for its beleaguered export economy.

Most of this land is already occupied, either by settlers who have farmed there for several generations, or by tribal people, with deep religious and cultural ties to the land. So far, approximately 1,000 families-some 6,000 people-have lost their lands to the NGPI plantation.

The company's plans for the region involve turning most of these formerly independent people into day laborers on the plantation, at a basic wage of $1.50 a day. Although some 2,000 workers are currently employed on the plantation, many residents in the area oppose the plantation because they believe its employment opportunities will not be permanent. As a Catholic priest who has campaigned against the plantation explained to this reporter, "The farmers put it this way: if you sell your land you lose your security, because land does not die. But a job disappears."

NDC-Guthrie is not the first corporation to run into local opposition in the area. In 1981, the British-based Dunlop Corporation withdrew from a planned palm oil project because of widespread local opposition.

The most serious criticism of the plantation project has been directed at NGPI's alleged use of a renegade band of soldiers to keep order in the area. In August, 1982, the London-based Catholic Institute for International Relations (CIIR) revealed that members of the so-called "Lost Command, " a collection of soldiers, veterans and criminals led by Philippine Army Lieutenant-Colonel Carlos Lademora, were serving as the security force for the plantation. Lademora's soldiers, the report said, have virtual control over the area and intimidate local people who resist the development plans of multinational agribusiness companies. The Catholic group has also charged that Lademora runs an organized crime operation and controls logging and gold mining activities in the region.

Originally organized to fight Muslim secessionists and the communist guerrillas of the New Peoples Army, the Lost Command has become a permanent-and officially tolerated-force in the province. According to the Far Eastern Economic Review, "Lademora has strong ties with top military officials who value his anti-communist guerrillas' record enough to, in effect, condone his alleged abuses."

NGPI has denied that it has used the soldiers to expropriate or forcibly purchase land. However, in a letter to the Overseas Development Corporation, a group of NGPI workers stated that the paramilitary force has caused hardship to local residents. "We workers see that the management and the company guards (the Lost Command) are the causes of the events that frighten ordinary workers and farmers within the plantation area," they wrote. "And because of the tight collaboration between the management and the Lost Command, the workers and farmers practically lost their freedom to express their true sentiments and grievances."

Local residents also dispute the British Commonwealth Development Corporation claims that it has consulted the common people. "The CDC listens to the officials and it does not know of our complaints," one resident said. "But if it would listen to us, perhaps our land would be saved."

The Catholic Institute for International Relations was able to make the Lost Command enough of an issue to force an investigation by CDC. In response to the group's study, the general manager of CDC visited the Philippines last year to convince Filipino officials to remove the troops from the plantation. However, Lademora apparently still had enough friends in the government to avoid being dumped.

When the question of approval for the CDC funds came to a head in January, the British government stopped short of demanding a complete end to the force. Instead CDC settled for an assurance by NGPI that the plantation would have a new security force with no connection to the Lost Command.

But critics maintain that the problems will remain while the Lost Command is in the province. They point to an incident last year in which nine workers were killed after successfully opposing a Lademora-backed candidate in a union election. And while the CDC claims it will not be a party to "land-grabbing" in the Philippines, critics point out that the organization cannot separate itself from the political realities of the Philippines. "The CDC doesn't have to be directly involved in pressuring people," a local priest told this reporter. "They can leave it to the local government and the Lost Command."

While the British government has tried to answer the criticisms of the project, the International Finance Corporation of the World Bank appears to be less worried.

Donald Roessner, who oversees IFC investment in the Philippines, told Multinational Monitor that "we don't know firsthand about the situation," and indicated that the IFC would rely on the CDC's studies. "CDC has taken a number of actions on this," he said. "We're assuming these will satisfy the critics."

Despite all the controversy, the foreign exchange the Philippines will earn from the project will be limited. First, although all the produce of the plantation will be exported, the Philippines will receive only the low-and currently very depressed -price for unprocessed palm oil. And apart from crushing the seeds to extract the oil, a job which must be done very soon after harvesting, all processing will take place abroad.

In addition, the foreign partners are exempt from export and income tax and are free to transfer their profits out of the country.

Catherine Caufield is a London-based writer. She visited the Philippines last year.

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