Email
Print
Community members make their opinions of the mine known. Photo: Shanta Martin/OxfamAUS 
Fast facts
- Resource: Polymetallic (copper-zinc-gold-silver)
- Mine location: Rapu Rapu Island, Albay province, Republic of the Philippines
- Mine operator/owner: Previously Lafayette Mining Ltd (Australia), now the South Korean companies LG International and KORES, and Malaysian Smelting Corporation
- Affected communities: Communities on Rapu Rapu Island and coastal communities in Sorsogon province
Rapu Rapu, the Philippines
In September 2006, the Mining Ombudsman received a request from community-based organisation, Sagip Isla Sagip Kapwa, to help them and communities affected by the operations of an Australian company, Lafayette Mining Limited. The mine, located on a small island called Rapu Rapu, had been operating since 2005. Six months after operations commenced, two cyanide-laden waste spills flowed from the mine into waters surrounding Rapu Rapu Island. These spills were linked to fish kills – a disaster with severe implications for the fisheries-dependent people.
The Rapu Rapu mining project received significant financial support from a consortium of international banks, including ANZ. Prudent lending practices require the assessment of social and environmental risks yet this did not occur. ANZ is also a signatory to the Equator Principles – a set of social and environmental benchmarks that should govern project financing decisions – yet it failed to implement these benchmarks.
Oxfam's response
The Mining Ombudsman visited communities in March and December 2007 to collect documentation and conduct interviews with over 250 stakeholders including residents and fisherfolk, local councillors, members of local community organisations, government officials, Bishops and local priests, and staff from the mining company.
The communities' grievances include concerns about:
- detrimental impacts on the environment, including on local fisheries
- significant negative impacts on livelihoods as a result of a decline in the saleability of fish from seas surrounding the mine
- effects of the mine on health
- increased militarisation
- a failure to obtain local communities’ free, prior and informed consent to mining operations
Throughout 2007 and 2008, the Mining Ombudsman communicated these grievances to Lafayette and its financiers including ANZ.
Oxfam Australia’s Mining Ombudsman raised concerns with ANZ that its continued support for the mine threw doubt on the bank's commitment to social and environmental responsibility and its capacity to implement the Equator Principles. To date, ANZ has not given any information about how the bank prioritised social and environmental concerns.
On 18 December 2007, following a significant decline in its share price and with massive liabilities, Lafayette went into voluntary administration. The mine is now owned by LG International, KORES and Malaysian Smelting Corporation.
The rise and fall of Lafayette signals a warning to those in the Australian mining industry that fail to uphold the highest environmental and social standards in their operations abroad. The case demonstrates that neglect of this duty leads to environmental damage and lasting detrimental effects on the lives of people – it can also lead to financial ruin.
The Mining Ombudsman is working to ensure that mining companies learn from Lafayette’s mistakes and that the ANZ Bank and other financial institutions that have signed the Equator Principles support their commitment to social and environmental responsibility in policy and practice. The Mining Ombudsman will also work to support the people of Rapu Rapu to have their concerns addressed by the mine’s new owners.
Find out more
- Read the Mining Ombudsman case report on the Rapu Rapu mine (PDF 3 MB)
- Read the bicol translation of the report
- Read the Tagalog translation of the report