Case story

  • Philippines

Barangay Council - OceanaGold Corporation, Didipio Gold & Copper Project

Philippines 2006

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OceanaGold Corporation, best known for operating New Zealand’s largest gold mine - Macraes, has been steadily growing its business since its listing on the Australian and New Zealand stock exchanges in 2004.

In the last three years the Company has achieved some significant milestones: In 2006 OceanaGold merged with Climax Mining, bringing a rich portfolio of gold and copper assets in the Philippines into the Company. In 2007 the Company commissioned its second mine - Reefton on the West Coast of the South Island of New Zealand and listed on the Toronto Stock Exchange. In early 2008 its third mine - Frasers Underground commissioned. In 2009 the Company is expected to produce between 280,000 and 300,000 ounces of gold at cash costs of between US$365 - US$405 per ounce.

OceanaGold’s Didipio Gold and Copper Project in the Philippines was acquired through the Climax Mining merger in 2006. The project forms part of the Didipio Project which is located approximately 270 kilometers north of Manila in Luzon Island, Philippines and 100 kilometers to the east of the country’s largest gold-copper mining operations centered in the Baguio area.

The company established a complaints mechanism at its Didipio gold and copper project in the Philippines with the explicit involvement of community representatives in designing and raising awareness of the mechanism, as well as in the investigation and adjudication of complaints. Although this project is on hold at the time of writing due to the global economic slowdown, the process developed by the company offers lessons for others seeking to establish a mechanism trusted by local communities.

OceanaGold inherited a situation of divided support and mistrust amongst parts of the local community on acquiring the project in late 2006. Complaints regarding the mine had been taken up by the Oxfam Mining Ombudsman and were the subject of an Oxfam report.

OceanaGold recognized the need for a credible complaints mechanism to help rebuild relations with the community. It therefore invited the Didipio ‘Barangay Council’ – a recognized body of seven elected officials representing five communities in the project’s surrounding areas, home to some 2,000 people – to work with the company to design the mechanism. Not all Barangay Council members agreed to participate in this process. However it was agreed that those which did participate would inform the others of progress, thus keeping the doors open to their joining the process at a later stage.

The process of designing the mechanism involved a series of meetings to allow representatives of both OceanaGold and the Barangay Council to discuss their concerns, and to air beliefs and myths in relation to each other, and how these could be effectively addressed by the procedure. One concern discussed, for example, was the perception amongst Didipio community members (whether justified or not) that some are favored over others. This was also a problem for OceanaGold as it made it more difficult for the company to negotiate and reach agreements with them. The meetings were attended by translators and held at intervals of several weeks over a period of two months to allow time for participants to reflect on the discussions.



Contributor(s): This article was modified by Admin (1), Nicolaclayre (1), Kyle (1), and Centre on Asia and Globalisation (1).