New Biofuel Project in Isabela

Boon or Bane for Local People?
07 October 2011

A Philippines biofuel project would appear to fit the World Bank's definition of a "win-win" scenario with its promise of jobs and conversion of 'idle land'. However a closer look unveils corporate manipulation, political corruption and exploitation of subsistence farmers that typically accompanies so-called "responsible investment"

In recent years the idea of “sustainable biofuels” has taken hold in corporate boardrooms and state policymaking circles across the globe as the “solution” to the triple problem of energy (in)security, climate change, and rural poverty. As this idea takes hold, so does the idea that there is plenty of land available – especially in the global South -- for producing biofuels sustainably, and in ways that will also improve rural poor people’s lives.

The result is a global biofuel boom that is driving forward a complex process of land use change and land property relations change on a large scale in many countries; many observers now refer to this process as the “global land grab”.

Although not as visibly or as dramatically as in Latin America, Africa and elsewhere in Asia, the global biofuel boom has touched the Philippines, likewise prompting a new rush for land there that threatens to undermine local food production systems, livelihoods, stressed ecosystems, and existing national land laws -- all while reinforcing very undemocratic local political relationships.

One case in point involves a new biofuel project called Ecofuel, which has been slowly taking shape in the Northern Luzon province of Isabela since 2007. The project is backed by the P-Noy administration through its “Convergence” strategy framework for rural development (e.g., increasing cooperation and collaboration by Department of Agriculture, Department of Agrarian Reform, and Department of Environment and Natural Resources, towards an eventual merger into a single Department of Rural Development). The President’s three Convergence “czars” – DA Sec. Proceso Alcala, DAR Sec. Virgilio De los Reyes, and DENR Sec. Ramon Paje – were all present at the project’s launch last February in San Mariano.

The Ecofuel Project

The Ecofuel project brings together foreign (Japanese and Taiwanese), with Philippine investors in an ambitious bid to produce “54 million litres of anhydrous ethanol and 85,000 megawatt hours of renewable electricity per year” (“PEZA approves P6-B agro-industrial ecozone”, Manila Bulletin, 21-Dec-2009, downloaded 23-May-2011). According to Green Future Innovations Inc (GFFI) originally, the “special purpose” company behind the project, the plan was to tap 11,000 hectares of land in and around the municipality of San Mariano, Isabela (including several neighboring municipalities, for growing sugarcane as the raw material for bioethanol.

Isabela is home to the largest remnant of undisturbed forest in the Philippines, and since 1997, the largest protected area for biodiversity conservation, through the 360,000-hectare Northern Sierra Madre Natural Park (NSMNP). Some parts of the municipality of San Mariano lie inside the protected area, while other parts lie in the “buffer zone” that straddles the park and the relatively more populated flood plains of the Disabungan, Disulap, and Pinacanauan Rivers.   

Originally GFFI said that 9,000 hectares would be acquired through contract-growing arrangements, and another 2,000 hectares would involve a company managed corporate farm. An anticipated 700,000 tons of sugarcane produced would then be processed at a new “co-generation” processing facility currently under construction in Barangay Sta. Filomena, San Mariano.

Although the plant is supposed to be completed by the end of this year, the land acquisition targets have been scaled back in recent months. One account, for example, says there will be just 6,000 hectares of contract growing in “idle/grassland” areas in the uplands of San Mariano, Benito Soliven, and Illagan, and 1,500 hectares of corporate farms, for a total of 7,500 hectares. Indeed, last year it became clear that the company was encountering some difficulties in locating and locking in all the land believed needed to seal the deal. Part of the problem appears to be actually finding land that could easily be used for the project, and part of the problem is in actually locking in enough of it in time to keep the project large-scale and on schedule. The current goal is to reach 6,460 hectares by August 2011, with the remainder left for bringing online in 2012.

On the face of it, the Ecofuel project may look like it has all the potential to become the kind of “win-win scenario” envisioned by the World Bank and others who are actively re-imagining the “global land grab” as much-needed, large-scale “ethical” investments in agriculture. Isabela is predominantly rural, has a high rate of rural poverty, with few real livelihood opportunities outside of illegal logging in the remote protected forest areas, and corn, banana, and rice farming in the upland buffer zone areas and lowland, flood plains areas. Corn and bananas are the main cash crops, while rice is grown mainly for household consumption. But although Isabela has long been the number 1 producer of corn in the country, corn farming has become increasingly problematic in recent years, devastated by recurring super typhoons, floods, and drought.

In such difficult circumstances, and if produced and processed under certain conditions, could biofuels then not offer a potential lifeline to the province’s small farmers, while also doing good for the environment and even the country as a whole? The Ecofuel managers have promised a number of benefits: create thousands of new farm and off-farm jobs (one news report said the project would generate 15,000 jobs!); increase household and LGU incomes; make idle land productive; improve rural infrastructure; and contribute to environmental protection of the NSMNP by creating alternative livelihoods.

But is this case? In fact, many questions are in urgent need of answers. For instance, what are the conditions under which this project is being undertaken? Who will benefit – and who might not? How will the project impact on existing land use and land property relations, on local people’s livelihoods and food production, and on the already fragile ecology of the area and its surroundings? Who will be held accountable if anything goes wrong? Unfortunately, such crucial questions remain unanswered, even though the project itself has pushed ahead.

Preliminary Findings

It is still early, but insights from elsewhere plus preliminary investigation in Isabela itself is beginning to give a picture of how things are likely to turn out.

First, the type and character of the Filipino investors alone sets alarm bells ringing. They are business elites tied to three different sectors of big agribusiness – big tobacco, big grains, and big sugar. Key figures in the Ecofuel project and Green Futures are linked to: the Philippine Tobacco Growers Association, the Mindanao Grains Processing Center, the Federation of Filipino Chinese Chamber of Commerce and Industry, Universal Leaf Tobacco (a global trading corporation), and Philsurin, the privately-funded research and development arm of the sugar industry (planters and millers), which has pinned its hopes on large-scale bioethanol projects to revive the industry and carry it profitably into the future.

The Isabela project is clearly a corporate led one, which – experience suggests -- spells trouble for poorer, non-corporate “stakeholders”, especially the rural poor households being targeted for incorporation, either through labor contracts, growers’ contracts, and/or land-lease contracts. So far, field investigation confirms that Ecofuel is going more or less directly into the communities where it hopes to acquire land and labor, talking directly with the people, dangling promises of easy money, and restricting the involvement of relevant state line agencies to mere implementers of corporate desire. The only source of information for local people about the project is Ecofuel, and local DA, DAR and DENR officials (the “front-liners” of state law and policy) are as much (sometimes more) in the dark about the project. They are certainly not coming on board as “regulators”. Pretty much every aspect of the project’s roll-out so far appears to have been controlled by the corporate investors through Ecofuel. 

Second, the very location of the project is suspect. Why this province and this municipality? There seems to be no other reason for centering the project in San Mariano than it is the apparent pet project of the current mayor of San Mariano, local strongman and political dynasty holder, Edgar Talosig “Bobot” Go. A former champion drag-racer, Mayor Go became mayor in 2004, during very hotly contested local elections that pitted the notorious Dy family dynasty against a putative “anti-Dy” alliance that included Grace Padaca (who went on to win the governorship) and Edgar Go. Later, the two erstwhile political allies reportedly had a very serious falling out when Governor Padaca successfully implemented a ban on illegal logging in the province and especially in San Mariano. In the current local political climate, we encountered a lot of fear and/or silence when asking people about the project.

Preliminary field investigation also revealed that the lands being targeted for the project are those already currently used and occupied by small holders and subsistence farmers, both indigenous people’s (IP) and non-IP, through a combination of instruments, namely, Socialized Industrial Forest Management Agreements (SIFMAs), Emancipated Patents (EPs), and Certificate of Land Ownership Awards (CLOAs). Given this fact, the project can be understood as a “land grab” in the sense of coercively causing two sorts of changes. First, it will involve changing land use from forest and/or food production for household consumption and/or local exchange, to industrial biofuel to “feed” a very energy-inefficient (but growing) transport sector. Second, it will involve changing land property relations from small-holder controlled small-farm agriculture, to corporate-controlled industrial agriculture.

It bears stressing that these are lands in both the lowland flood plains and the upland “buffer zone”. In many cases, they can be considered prime agricultural lands because of their proximity to natural water sources (rivers and creeks), to irrigation infrastructure (existing or in the pipeline), and because of their embeddedness in local food production systems. In many cases they are not the empty “idle”, “grassland” areas declared ideal for the project by the Ecofuel managers. This leads to the next point.

Third, the crop chosen for the project – sugarcane -- is likewise alarming. Many of the small farmers targeted for incorporation into this biofuel project know little or nothing about growing sugarcane – or the sordid and sorry history of sugarcane in the Philippines; they are mainly corn, rice and banana farmers. Their specialized (but limited) knowledge makes them, in a sense, vulnerable to the slick marketing skills of Ecofuel managers. Ecofuel is telling them that sugarcane can be grown virtually anywhere and anytime, whether in flood or drought conditions, and it can even withstand the destructive power of super-typhoons. They are not being told about the way in which corporate controlled sugarcane agriculture has destroyed lives and ecosystems elsewhere n the Philippines; or how it takes 1,500-3,000 litres of water to produce just 1 kilogram of sugar from cane (which is a lot!). The list of social and environmental problems associated with monocropping sugarcane for industrial production is too long to elaborate here; suffice it to say that such information is not simply forthcoming.

Meanwhile, Ecofuel is offering seemingly good deals on: (i) labor contracts (but how can the small farmers critically evaluate what are good terms for work they have never done before and if their only source of information is the company?); (ii) with options to also lease out their land to the company -- a supposedly assured income stream without even having to lift a finger (but the amount the company is offering to pay annually is extremely low – just 5,000 per hectare per year); and (iii) with an option even to “partner” with the company through growers’ contracts (but who will ensure that the terms are not onerous and who will enforce them if they are not onerous? how can the smallholders hold the company accountable if it fails to deliver on promises made or if the project leads to unanticipated problems for them?)   


The mechanisms by which land is being acquired and the project moving forward suggests a very urgent need to suspend the proceedings and re-open the discussion of its assumptions, conditions, and possible consequences. The strictly corporate-led and controlled process of disseminating crucial information to those who will be most affected by the Ecofuel project ought to be a clear red flag. If the corporate investors have nothing to hide, then why are they hiding so much? If the government’s “front-line soldiers” in the battle against poverty and for rural development are supposed to be also on the front-lines of ensuring that the state fulfills its obligations to defend, protect and promote the human rights of rural poor citizens, why are have they largely been passive followers so far in the preparations for implementation of this project? And if poverty, neglect, desperation, ignorance, and authoritarian local politics combine to make local people vulnerable to adverse incorporation into “development” projects such as this one, why is the Ecofuel project pushing ahead with the blessing of the Philippine government at the very top??#