Environmental Damages from Accident-Induced Mining Pollution
Attributes
Medium: Land
Country: Philippines
Analytical Framework(s): Change in Productivity Approach
Unit(s): Foregone Income from Affected Activity Reflected in Productivity Losses
Study Date: 1997
Publication Date: 1998
Major Result(s)
Category | Resource/Environmental Good | PHP, forgone income per household, per annum (1997) |
PHP, forgone income per household, per annum (2014)1 |
USD, forgone income per household, per annum (2014)2 |
---|---|---|---|---|
River-Based Livelihood (Number of Households Engaged) | River Fishing (39) | 5,599.00 | 10,445.05 | 233.54 |
Rice Farming (Number of Households Engaged) | Tenant (14) | 11,017.00 | 20,552.43 | 459.52 |
Rice Farming (Number of Households Engaged) | Farm Laborer (7) | 6,386.00 | 11,913.21 | 266.36 |
Rice Farming (Number of Households Engaged) | Land Owner (3) | 1,487.00 | 2,774.03 | 62.02 |
Rice Farming (Number of Households Engaged) | Crop Trading (55) | 23,093.00 | 43,080.45 | 963.22 |
Rice Farming (Number of Households Engaged) | Kangkong Farming (16) | 3,847.00 | 7,176.66 | 160.46 |
Rice Farming (Number of Households Engaged) | Vegetable and Other Crop Farming (9) | 2,932.00 | 5,469.70 | 122.29 |
Non-River Based Livelihood (Number of Households Engaged) | Laundry (6) | 4,954.00 | 9,241.79 | 206.63 |
Non-River Based Livelihood (Number of Households Engaged) | Coastal Fishing (35) | 17,938.00 | 33,463.70 | 748.20 |
Non-River Based Livelihood (Number of Households Engaged) | Fish Retailing (4) | 14,540.00 | 27,124.66 | 606.47 |
About the Inflation Adjustment: Prices in Philippines (PHP) changed by 86.55% from 1997 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.87 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: It must be taken into consideration that since in this study, one purpose of damage valuation was to serve as a basis for damage compensation, changes in the economic values of environmental goods affected by the pollution were estimated in terms of productivity losses in the affected economic activities. The change-in-productivity approach was seen as an appropriate basis for damage compensation because it provided an objective measure of the pollution damage in terms of forgone income. Thus, the measure of environmental damages due to the mining activity/accident was the foregone income of households from the activity affected by the pollution, as reflected in the productivity loss in that activity. This study did not use the more common methods of valuation (i.e. contingent valuation, travel cost, hedonic pricing) due to the difficulty with or inapplicability of such methods in similar pollution-related events.
Study Details
Summary: The study valued the foregone income of the residents of the Municipality of Boac, the economic livelihood activities of which were affected by the Marinduque Island mining accident. This estimate was then used as a measure of the resource damage to the environment from the accident-induced mining pollution posed on the livelihood of the local residents affected by the pollution, and also provided a minimum value of the lost market use values of the affected natural resources (i.e., river and coastal waters). The study demonstrated the application of a few economic valuation methods to estimate environmental damages from pollution, though the principal method used was the change-in-productivity approach to estimate foregone income from economic activities affected by mining pollution.
In terms of direct use values of the river and coastal waters affected by the tailings spill, the present value of the estimated total damages over a 10-year period amounted to PHP 162 M under the "with long-term rehabilitation" scenario and PHP 180 M under the "with short-term rehabilitation" scenario. The estimated foregone income in 1996 of PHP 50.1 M was slightly more than 50% of the total provincial income of PHP 95.0 M and was more than two times the total municipal income of Boac of PHP 21 M in 1996.
Site Characteristics: Marinduque Island, having a total land area of 959.2 km2, is located about 170 kilometers south of Manila. The provincial population in 1995 was 199,910. Almost 25% (44,609) of the population reside in the provincial capital, Boac. Situated in the Island is the Marcopper Mining Corp. (MMC), and has been engaged in open-pit mining in the municipality of Sta. Cruz, Marinduque since the onset of 1970. After moving to another mine site within the island in 1989, the drainage tunnel in the previous pit was plugged with concrete to serve as disposal pond for the mine tailings. Seepage was sighted in 1995, which consequently broke on March 24, 1996, heavily polluting the Boac River at a rate of 5-10 m3/s. About 1.6 million cubic meters of tailing were deposited along the 27-km span of the river system and the coastal areas near the river mouth west of the island-province. The environmental disaster left Boac River virtually dead, adversely affecting the local residents in Boac whose livelihood activities were river-dependent, not to mention that the Boac River also provided non-economic uses such as recreation.
Comments: Survey and sampling biases for the estimation of impact on household livelihood activities were not discussed, though policy implications were considered. The formation of some guidelines for the conduct of a systematic natural resource damage assessment for events leading to the release of hazardous substances to the environment was recommended based on the values reported in the study.