Strong evidence suggests that labor-hire companies on Dinagat Island, a province in the Caraga region of the Philippines, are abusing workers’ rights in the nickel mining sector, Amnesty International reveals in a new report released today.

The report, ‘Undermining Workers Rights: Labor Rights Abuses in Nickel Supply Chains’, examines labor practices in the nickel mining sector on Dinagat Islands, and outlines numerous examples of workers being employed without contracts, receiving delayed payment of wages and non-payment of compulsory employee benefits such as Social Security System (SSS), PagIBIG, and PhilHealth contributions.

The research particularly highlights systematic unfair labor practices conducted by labor-hire or subcontracting companies through which mining company workforces are employed. It also examines clear implications for the mining companies themselves, linked to abuse of workers’ rights through their business processing units.

Amnesty’s report puts the statistics into perspective, and lifts the smoke screen on what’s systematically wrong in the mining industry in the Philippines.

Butch Olano, Section Director
Nickel Ore for export

According to the Mines and Geosciences Bureau (MGB), the value of mining in Caraga region is at PHP17.74 billion in 2018, or 16.8% of the estimated gross regional domestic product, with an estimated 2,300 people employed by the mining sector in 2019 in Dinagat Island alone.

“Despite the abundance of mineral resources in Caraga, the region remains poor. Dinagat Island in particular, is one of the poorest provinces in the Philippines, with a poverty incidence of 36.7% as of the first quarter of 2019. Amnesty’s report puts the statistics into perspective, and lifts the smoke screen on what’s systematically wrong in the mining industry in the Philippines,” said Amnesty International Philippines Section Director, Butch Olano.

The Philippines is one of the world’s largest producers of nickel ore, and the world’s leading supplier to China. Approximately half of the operating nickel mines in the Philippines are located in Caraga, including in Dinagat Islands, and there is considerable Chinese investment in some of the mining companies operating there.

Chinese investment in the nickel mining sector in the Philippines, and on Dinagat Island, has the potential to have a positive influence on human rights, including the rights of workers but Amnesty’s report findings show the contrary.

This is an outright attempt at deception, which leaves workers in situations of precarity vulnerable to arbitrary terminations. 

Precarious Work

Amnesty International’s research findings exposes strong evidence that workers employed through ‘manpower’ subcontracting or labor-hire companies to work at nickel mine sites on Dinagat Island face abuses of their human rights across the sector. The majority of those employed, who are ‘casual’ or ‘seasonal’ workers, typically work for less than six months at a time during mining season only. One in four workers interviewed for the research said that they did not have written contracts with the mining company or their subcontractors.

“Some of the workers who Amnesty interviewed said that they have worked for the same company for many years but had never even been asked to sign a contract. Even if they did, workers do not understand what’s written in the agreements as the companies make them sign it as ‘a matter of urgency’ towards the end of their employment or only every three months. This is an outright attempt at deception, which leaves workers in situations of precarity vulnerable to arbitrary terminations,” explained Olano. 

Implementing rules of the Labor Code of the Philippines require the signing of a service agreement between the principal and contractor. It allows for the employment of people on a regular, casual or probationary basis. However, seasonal employees are considered regular employees if they have provided one year of service, even if that service is broken because of the seasonal nature of the work they provide, thus requires the signing of an employment agreement.

Amnesty also uncovered that while most workers get the minimum wage, employment in the mining sector can generally be low-paid for many other workers who receive an average monthly wage that is much less than other workers in other industries especially where workers are engaged through subcontractors or labor-hire companies, which is common in Dinagat. The International Labour Organization in 2017 said that a minimum wage earner in the Philippines may not be able to lift his or her household out of poverty.

“When wages are at a minimum only or not paid in a timely manner, it can undermine the ability of workers and their families to enjoy social security, health care, education and an adequate standard of living, including food, water and sanitation and housing. One in five workers Amnesty interviewed also alleged that their SSS and PhilHealth were not properly paid, or not paid at all. Being caught in this situation during a global pandemic can feel like a kick in the teeth,” added Olano.

There is a clear power asymmetry between workers, on one side, and the mining and subcontractors companies, on the other. Fear of retribution is a factor, many of them said they simply do not make complaints “to avoid trouble”.

No one to turn to

Amnesty conducted 50 interviews in 2019 and 2021 and interviewed 100 people in total within five municipalities in Dinagat Island. Most of them talked about work-related abuses such as the absence of an employment contract and non-payment of benefits, but while they know that they can file complaints, they also revealed numerous barriers that are preventing them to do so.

“There is a clear power asymmetry between workers, on one side, and the mining and subcontractors companies, on the other. Fear of retribution is a factor, many of them said they simply do not make complaints “to avoid trouble”. One government representative noted that owners of mining companies are considered ‘big shots’ meaning they can potentially exercise undue social and political influence on the handling of complaints made by workers. Amnesty also found out that a lot of the labor rights violations are perpetrated by the politicians who are businessmen,” explained Olano.

Workers also face practical barriers like the need to travel to Butuan City where the Department of Labor and Employment (DOLE) regional office is located. The travel from San Jose, Dinagat is a two-hour bus ride and another two-hour ferry ride out of the island. This is the same if they want to file a complaint to the National Labor Relations Commission (NLRC), or to check their contributions with SSS or Pag-IBIG. Complainants also need to cover their own expenses, including lawyer’s fees – the Public Attorney’s Office (PAO) for the whole Caraga region only have 52 lawyers with 3,000 clients each. In the case of those who actually file complaints, they often need to wait for a very long time for their complaints to be resolved.

Decent work

The Philippine Labor Code establishes that, in situations where a mining company engages workers through a subcontractor, there exists solidary liability, that is, the mining company is liable along with the contractor or subcontractor for any violation of their workers’ right. Chinese companies engaged in overseas mining investment and cooperation are also expected to follow guidelines for social responsibility developed by the China Chamber of Commerce of Metals Minerals and & Chemicals Importers & Exporters (CCCMC). CCCMC has recognized the importance of due diligence, including in relation to supply chains and human rights.

“Even though the Labor Code establishes solidary liability between the mining company and subcontractors which makes them equally liable for any violations to right to work, the use of sub-contractors actually allows Chinese mining companies to circumvent Philippine labor law, shift the blame to the subcontractors and evade accountability. This is where the Philippine government should step in. Ensuring decent work that respects fundamental human rights, including right to fair conditions at work, safety and remuneration also means strengthening government institutions mandated to enforce labor standards in the mining sector,” said Olano.

Amnesty International Philippines is urging the government to equip relevant line agencies with better resources to have greater capacity to monitor the situation in mining sites, and in instances of labor disputes, a guarantee of fair and timely resolution. The Philippine government must also harmonize relevant legislation, and related orders, rules and regulations such that it is consistent with the UN Committee on Economic, Social and Cultural Rights’ General Comment No. 23 on the right to just and favorable conditions of work.

“It is the low paid, those in precarious employment and working in dire conditions that are exploited and deceived. It is the marginalized, those in minority communities, who often face the greatest threats of discrimination,” explained Olano.

Amnesty’s report exposes abuses of workers’ rights within Dinagat Island, but it represents the general need for the Philippine government to address pre-existing conditions of poverty and lack of access to better work opportunities, further driving insecurity which brings people to their knees. Especially amid the pandemic, forcing workers to settle to sub-standard condition and treatment at work almost constitutes to modern slavery which is unconscionable in all its aspect.

“In Dinagat, though the national government looks at the area as critical for mining, 17 new mining applications were filed after President Duterte lifted the ban on mining in April this year. This is not only telling of the Duterte legacy, it also cements the fate of the labor sector under his regime as it favors profit not people – it is and has always been anti-poor.” Olano concluded.