Typhoon Pablo: its reflection of market and government failures and implications to public policy

BACKGROUND

Typhoon Pablo, internationally known as Bopha, made a landfall on

December 4, 2012 in Davao Oriental province in eastern Mindanao and moved

across Region XI, Region XIII (CARAGA) and Region X during the day bringing

torrential rain, storm surges, flash floods and landslides in eastern. It moved at 22

kilometers per hour (kph) with a maximum sustained wind at 185 kph and gustiness

of 200 kph. Based on NDRRMC estimates, the typhoon as of December 20, 2102

left 1,047 human casualties, 355 of whom remain unidentified, and 841 missing.

Furthermore, it destroyed 66,469 houses, damaged another 101, 758 houses, and

caused agriculture and infrastructure losses amounting to P32 billion. The area

affected are mostly ancestral domain of indigenous peoples (Dela Rosa, 2012).

The damages caused by “Pablo” in Mindanao revealed what can happen

when typhoon is coupled with unabated extraction of natural resources. The areas

damaged are geographically and ecologically connected to places where there were

massive logging and mining operations, and the casualties were killed after flash

floods, accompanied by fallen trees and boulders, swamped entire communities.

Investigations revealed that the disaster was brought about by the combined effects

of disaster unpreparedness, logging and the conversion of forest lands into

plantations for agricultural export. (Quimpo, 2013).

The typhoon did not come as a surprise. In fact, as early as November 29,

2012, PAG-ASA, in cooperation with some local communication networks had

started posting advisories about its coming (http://www.rappler.com). On the other

hand, such calamity in Mindanao is not new. In 2011, Mindanao suffered a

devastating loss when Typhoon “Sendong” triggered massive flash floods in the

cities of Cagayan de Oro and Iligan, killing more than a thousand people.

Regrettably, however, both the government and the people appear to not have

seriously taken Sendong’s warning for a more responsive approach to dealing with

calamities.

While it may be argued that climate change has something to do with the

typhoon’s occurrence in the so-called “typhoon-free” Mindanao, this paper

momentarily veered away from that line of argument. Instead, it limits its scope in

looking into the market and government inadequacies that may have helped

contribute to the disaster brought about by Typhoon Pablo, focusing mainly on the

limitations of these two forces in preparing to address such a fortuitous event.

WHAT MARKET FAILURES MIGHT HAVE HELPED LED INTO THE DISASTER

The issue of environmental protection in general and large scale calamity

prevention in particular is something that the market can not solely manage because

such is an issue with broad and deep ramifications, the control of which goes beyond

the limits of market forces. Failing to solve the issue by itself, the market, if at all

concerned, would require effective government regulation and control. This does not

set free the market of any obligations, however, because by and large it is an

influential factor when it comes to environmental issue.

My assessment is anchored on the major market actors or entities whose

activities can be related with the landslide and flash floods. These are the miners,

the loggers, the farmers, the entrepreneurs together with their workers operating or

doing business in the area, the buyers of goods and services produced or transacted

in the area, residents who may be producers or consumers in their respective rights,

and all other private stakeholders in or for the welfare of the place. With this as the

backdrop, the following market inadequacies are seen to have helped cause the

disaster

1. The miners and loggers have such the power that enabled them to “block”

the flow of information to the point of concealing the externalities inherent

or incidental to their operations;

2. the “public” and inclusive nature of environmental safety which benefits

non-contributors as well provides disincentive to individuals who want

private returns of their investment; and

3. related to the second, few among the actors sell or buy the idea of

environmental protection and safety and yet they produce saleable goods.

The powerful miners and loggers: cartel, information asymmetry and negative externality

Permits for mining exploration and operation in Mindanao have so far been

granted to foreign firms. These are Russel Mines and Minerals, a US-based mining

company conducting open-pit mining in Pantukan; X strata, one of the three biggest

mining corporations in the country, has expanded its operation from Surigao to

Davao del Sur; and four others in Davao City, Talaingod and Bukidnon. The local

miners engage in small scale operation and are mostly “illegal”. Thus, by

government regulation, these foreign mining companies are virtually turned into a

cartel.

In spite of public clamor for total mining and logging ban, these firms being

shielded by cloak of authority continue to operate. I consider this, first, as a market

failure with the support of the government because it is through government

regulation that they are in limited number and as such there is not enough

competition that would have compelled them to do better in terms of environmental

protection, and second, as one that thrived on information asymmetry to conceal

negative externalities inherent or incidental to their activities at the expense not only

of the buyers, but also and more importantly of the public.

As an illustration of the mining company’s propensity to not accept the

negative externalities of their business, the report of Delgado (2013) is one case in

point:

“The representatives of Apex Mining Company, Inc. and the members of Indug Kautawan-Masara faced a deadlock Monday, March 18, 2013, when both parties failed to agree over the latter’s P6.9 million reparation demand which it said is commensurate with the destruction brought by Pablo to their livelihood and properties. They claim that the impact of Pablo would not have been that severe if not aggravated by the mining company whose operations caused the swelling of the Masara River that carried mud and water sweeping

down to their villages. The mining company balked at the amount saying that it is

unreasonable and that “It was not the typhoon that caused the damage. We cannot accept it when you say that we caused the siltation of the river because we have a dam built to prevent that,”

But obviously, the dam that they built is not enough since they admitted to rehabilitate the Masara River, repair damaged roads and bridges, and build another dam in Barangay Tagbaros.

There are also the minor players like the local miners whose operations are

much smaller in scale but whose number may even have greater impact on the

environment. Still, there are logging operators claimed to be operating past the

expiration of their concessions, and the carabao loggers.

The unfactored in cost of logging and mining activities were not as

emphasized as they were after Sendong and Pablo. No less than DENR officials

attributed the high number of casualties in Compostela Valley to illegal logging and

illegal mining, saying that the effects of unregulated mining and deforestation of

critical watersheds on the destructive capacity of the storm were clearly seen in the

falling logs that killed people and destroyed properties, and the frightening flow of

mud, rock and gravel from upland areas made weak by years of unregulated mining,

quarrying and charcoal-making.

There is the tendency to put more blame on the illegal miners and loggers.

Maybe that is partly to justify the government’s issuance of permit to what it calls

legal miners and loggers. I believe, though, that whatever their legitimacy status,

there are compelling indications that they generally concealed the extent of their

operation, and in effect withheld information that would have been vital in disaster

prevention. For instance, a license or permit to operate a mining activity goes with

defined exploration or extraction area but, underground, it is actually difficult to

monitor if the operation is strictly confined within the allowed quadrant. The truth

therefore is left for the concessionaire to divulge – or hide. The connection between

mining area and landslide is easy to establish especially when seen in the

diminishing stability of mined-out or physically-disturbed soil. This is not even

considering the tailings laden with mercury and other poisonous substances that

drain into the bodies of water, or mix with flood waters and immediately kill caved-in

miners in the event of landslides.

On the other hand, the loggers who are more implicated to the flash floods are

supposed to have been monitored more easily because unlike that of the mines,

their activity is not clandestine. However, the fact that some of them operate past

their contract expiration would indicate that they could also conceal other violations.

It is noteworthy to note that the stereotype of Mindanao as storm-free area might

have been abused or intentionally misquoted in this case, for how can logging

concessions with their own experts negate the warnings of climate change and the

hard lessons of logging-related flash floods in Ormoc, in Marikina, and more recently

in Cagayan de Oro?

Environmental Safety as a Public Good

No doubt, safety from disasters could be a public good, though there is one

thing not considered in this case: that in a mining or logging area, vulnerability could

also be sweeping. Thus in terms of proaction, there may have been no compelling

incentive for individuals or groups to join in the calamity prevention efforts knowing

that when it succeeds, they could benefit as well – not to be excluded - anyway. So

the task of promoting disaster management, in cooperation with the government, is

left to the more concerned individuals and private groups.

Few buyers and sellers of calamity prevention efforts: Mindanao is safe

Probably to some extent, the branding of Mindanao as a “typhoon-free” to

entice agribusiness and fisheries investors into the area may also partly explain why

many people appeared not to have been encouraged to integrate calamity

prevention in their order of business. This is in the wake of high demand for their

products, among which are minerals and logs. Just as the above conditions, this

mental conditioning will not allow the market for such services as disaster risk

management to grow and develop making it a constant market failure. Again, the

task will be left to the more concerned entities who find competitors not in those that

provide the same services, but in those who are vulnerable to disaster and yet

reluctant to be relocated to safer grounds.

WHAT THE GOVERNMENT MIGHT HAVE FAILED TO DO

As certain limitations of the market were related to the disaster brought about

by typhoon Pablo, the government, too, has burdens to share with the disaster.

On powerful miners and loggers, cartel, information asymmetry and negative externality

Apparently, the government failed to implement its own regulations on mining

and logging for various reasons including government officials as protectors or

“brains” of mining or logging operations. Compostela Valley Governor Arthur Uy

admitted receiving reports that some local officials in his province are involved in

illegal mining as owners of tunnels in the mining site or as financiers. The governor

reportedly ordered for a fact-finding board to look into the alleged involvement of

said officials. (Regalado, 2012).

As cited by Saligumba (2013), the national moratorium on logging natural and

residual forest declared by President Aquino as EO 23 of February 2011 apparently

has no teeth in Davao Oriental since total log ban is not implemented in that province

up to now. With effective monitoring that is guided a deep sense of social

responsibility there would have been closures of illegal mining and logging

operations. But what happened was that there have been decades of wanton forest

denudation that was not stopped by government laws and policies and now resulting

in this disaster.

There was also the problem of effectively cascading down to the local level

the Disaster Risk Reduction and Management (DRRM) plans of certain areas which

should have broadened the constituents’ knowledge of disaster management. It was

alleged that even local executives poorly understood the plans and that the disaster

and vulnerability maps, together with the GPS facilities provided were not put to use.

Worse, many of the municipal DRRM plans were found copy-pasted from other

municipalities so well that even the names of the original municipalities were also

copied. Here again is exposed one government failure to really take its plans

seriously and not take them as matters of compliance, in this case the plans and

accomplishments on DRRM as a condition for IRA release, and of the Gawad

Kalasag Award (Dela Rosa, 2012)..

The government, through the Regional Risk Reduction and Management

Council (IX) and the Office of Civil Defense must have given the wrong signal of

false hope and confidence when it consistently awarded the Gawad Kalasag to

Davao Oriental for being the “best prepared in disaster risk reduction and

management. There must be a problem in the award when certain local executives

of an awardee-province could not even explain a DRRM plan which is among the

basis of such an award. Regardless of what might have happened in the screening

process, this points to possible “compromised standard”, and which also led to

directly giving the communities wrong information about the ability of the local

government to deal with disaster. This is not to say however that preparedness for a

disaster means no casualty.

On environmental safety as a public good

For its part, the government apparently have failed to educate the people that

if there is a public good, there could also be a public disaster that result from

unabated mining and logging operations. The government, of course, would claim

efforts of convincing them to relocate to safer areas but on the whole, its efforts on

that issue did not work well thus indeed a failure.

On the few buyers and sellers of calamity prevention efforts

The brand of “safety” enjoyed by Mindanao for its economic advantage is

something that must have been corrected by no less than the government, in the

light of the changing climatic patterns. It is true that Mindanao is generally spared

from typhoons in the past, but recently, the entry point of typhoons from the Pacific

Ocean went down south so that they would cross the Mindanao area.

Disaster prevention requires the political will of the local government units

because it is part of their original mandate. There could be no incentive or

encouragement to buy and sell the idea of typhoon-related disaster if no less than

top local government leaders do not buy it in the first place. In an interview by local

media with Davao Oriental Governor Corazon Malanyaon with regard to her alleged

condoning of logging in the province, she not only denied the accusation against her

but also ruled out that “logging is supposedly a non-issue because the devastation

brought about by Pablo was not the result of mining or logging” (Saligumba, 2013)

Allocation of resources

Many people were unmindful of the calls for relocation from their communities

that were declared uninhabitable because of hazards to other places that they claim

have no opportunities for livelihood. In was noted in the report of Regalado (2012)

that the municipality of Pantukan in Compostela Valley is shown by its geo-hazard

map as having a topography and geological features vulnerable to landslides and

other hazards. With heavier and more frequent rains, vulnerability of the

communities to hazards increases. Despite warnings to this effect, however, small

miners opt to stay in their mining sites willing to place their lives at risk for a chance

of finding gold instead of relocating to safer places where there is no alternative

livelihood.

There is another related issue that the government may have to contend with.

Reportedly, small-scale mining in Patukan is a 30-year-old industry serving as one of

the country’s sources of mineral reserves for export. In production terms, these

small-scale mines realized in 2011 alone a gross production valued at P26.6 billion.

Throughout the whole period of the industry as it produced revenues for the

government, the government allegedly failed to institute any programs to manage the

sector, rehabilitate the geologically-critical areas, and provide opportunities for

sustainable and safer means of livelihood (Lopez, 2012). This clearly suggests

failure on the part of the government to equitably allocate its resources in such a way

that all sectors, especially the marginalized by producing sectors, are provided with

opportunities for safer employment. Or does it fail to strike the balance between

revenue generation and people’s welfare? I guess it also has to settle that.

Problems with electoral cycles

There was an admission of Davao Oriental Governor Uy that the local

government in Pantukan failed to implement a “no-habitation” policy prohibiting

dwelling in Barangay Napnapan, particularly in the area where a landslide happened

in April 2011. Uy stressed the local ordinance was already issued before the Jan. 5

landslide even as the Department of the Interior and Local Government ordered a

“no-habitation” policy in areas in Pantukan identified as landslide-prone. Apparently,

elective officials face the dilemma of enforcing policies and losing votes, considering

that in Compostela Valley alone, 75,000 people, or one in five in the province rely on

mines and disappointing them might not be a tactical choice (Regalado, 2012)

Problems related with bureaucracy: inefficiency

Governor Malanyaon claim that prior to Aquino’s EO 23, she had already

drafted an environment code which imposed a total log ban and was submitted to the

municipal council for immediate action as an urgent measure.  The question,

however, is how come it remains unimplemented? This points to inefficiency and

ineffectiveness in the bureaucracy.

On the other hand, Dewey Clark, Baganga town’s Municipal Planning and

Development Officer admitted that they have not aptly monitored logging activities in

the town, only that they do give permits for “sanitation cutting”.He reportedly sais:

“We haven’t really given attention to that but there’s a task force from Manila who

came here to investigate.” Here lies one problem with the government being virtually

the sole provider of many of its services. When it becomes inefficient, it has no

competitor to take away its clients or “buyers” from it. People end up losing in the

end.

WHAT CORRECTIVE REMEDIES MIGHT WORK

Educate the people on disaster and disaster risk management

Before the people will ever appreciate disaster and participate in disaster

management measures, they should first be enlightened about it through community

forums, or house-to-house campaign, whichever is effective and practicable. As may

be necessary, the government can engage the assistance of community-based

organizations and cooperatives for this purpose. It may also be necessary to start

this activity with children by integrating the topics in their social studies curriculum.

Professionalize technical people at the local government unit

Technical expertise of local government officials on climate change and

disaster risk management must be further honed, preferably through on-site training

or enhancement activities.

Improve effectiveness of the reward system for good performance, and penalty system for violation of rules

It is still important to continue reward systems just like that of Gawad Kalasag,

but this time the procedure must be improved by making it evidence-based.

Convergence among stake holders must be encouraged such that the monitoring of

logging violations, for instance, can be more effectively undertaken jointly by DENR,

LGU and community-based organizations. Likewise worth examining is the possible

setting up of policy for post-monitoring accountability to ensure that monitoring

entities will strive to perform best.

Review policies on IRA

As a policy recommendation, the release of IRA need to be reviewed and not

be tied up with submission of such documents as DRRM plan which will reduce an

important plan into a mere compliance document. The current basis for IRA which

include area, population and income may reconsider actual need of the local units

including if possible requirement to address environmental vulnerabilities.

Strictly require free and prior informed consent (FPIC) for infrastructure and extractive projects in the ancestral domain

It has been noted that most of the areas affected by the disaster are ancestral

lands. By law, any project that are to be established in such lands must be subjected

to free and prior informed consent (FPIC) of the host communities. With due respect

to such a process, new projects must strictly undergo FPIC provided that information

symmetry to ensure that the indigenous peoples decide on the basis of truth, or at

least logical assumption. In the event that FPIC warrants the establishment of such

projects, then an effective monitoring system, with the inclusion of an independent

private organization, must be integrated and carried out.

Alternative employment to residents of uninhabitable areas

In order to make relocation more effective, there must be direct information

about DRRM to describe the safety situation of the community. To socially prepare

the peope for relocation, there might be need to organize them Organize people to

socially prepare them for relocation, and eventually make This will be followed with

provision of opportunities for livelihood in the new sites that will be strengthened by

giving incentives to those who stay. To discourage people from going back to their

old sites, some barriers may be instituted like cutting off services – akin to what was

done in Albay.

Benchmarking for good practices on good governance

Best practices on good governance can be learned by the local government

from others with similar situations. Benchmarking may be done on such areas as

environmental protection, monitoring and evaluation, engagement of civil society

organization, and on all the recommendations cited above.

REFERENCES:

Dela Rosa, Nikki. Dec 22, 2012In http://opinion.inquirer.net/source/philippine_daily_inquirerQuimpo, Frances in http://opinion.inquirer.net/42617/typhoon-pablo-grim-reality-check-on-natural- Regalado, Edith. Jan 13, 2012 - 12:00am In http://opinion.inquirer.net/source/philippine_daily_inquirerSaligumba, John Rizle. in http://davaotoday.com/(http://www.rappler.com).

Annex. Typhoon Pablo Bopha - Timeline of key events

17 January, 2013 - 15:20 Source: UN Office for the Coordination of Humanitarian AffairsCountry: Philippines (the)

From 30 November - The Government of the Philippines initiates preparedness measures such as early warnings, pre-emptive evacuation, establishment of evacuation centres, pre-positioning relief items and alerting response personnel in anticipation of the imminent landfall of Typhoon Bopha (locally known as Pablo).

3 December The National Disaster Risk Reduction and Management Council (NDRRMC) meets with the Humanitarian Country Team (HCT) of the Philippines to discuss preparedness measures for Typhoon Bopha/Pablo.

4 December / Day 1 of the Emergency. Typhoon Bopha makes landfall in Davao Oriental province in eastern Mindanao and moves across Region XI, Region XIII (CARAGA) and Region X during the day bringing torrential rain, storm surges, flash floods and landslides in eastern Mindanao. The Government of the Philippines supported by the HCT commence preparations for a joint rapid damage and needs assessment in Mindanao.

5 December / Day 2. The United Nations Resident and Humanitarian Coordinator (UN RC/HC) meets President of the Philippines Aquino Jr. III and the Secretary of Foreign Affairs (DFA) to reiterate the offer of international assistance.

6 December / Day 3. The Government accepts the offer of international assistance through the UN RC/HC to assist affected communities, particularly in the areas of food, shelter and camp management. Joint government-HCT rapid needs assessment takes place in Davao Oriental and Compostela valley provinces in Region XI.

7 December / Day 4. The President and the UN RC/HC visit the worst affected areas in Davao Region to see first-hand the situation on the ground.Joint government-HCT rapid needs assessment takes place in Agusan del Sur and Surigao del Sur provinces in CARAGA and in Iligan City, Camiguin and Bukidnon provinces in Region X.

8 December / Day 5. Joint government-HCT rapid needs assessment were released.

10 December / Day 7. Typhoon Bopha/Pablo Response - Action Plan for Recovery is launched in Davao, requesting $65 million. Clusters are rolled out at the regional level in Region XI and CARAGA

12 December/Day 8. Coordination hubs established in Nabunturan, Compostela Valley and Trento, Agusan del Sur

27 December/Day 23. The Emergency Relief Coordinator approves $10 million from the Central Emergency Response Fund (CERF).

15-16 January/Day 43-44. DSWD together with the UN RC/HC and key donors visit Compostela Valley and Davao Oriental Provinces in Region XI.

25 January/Day 53. The revision of the Typhoon Bopha/Pablo Response - Action Plan to be launched in Manila and member state briefing in Geneva