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On October 10, 1996, the day the directors' report was circulating in Echo Bay's Denver executive offices, a firefight broke out on Mindanao between one of the terrorist groups and government forces. Fatalities and injuries were reported on both sides. After the skirmish, Kingking security personnel provided shelter at the mine's guesthouse for the terrorist commander involved in the action.
"Instead of trying to take control of events," Laird says, "we allowed events to take control of us."
The Kingking exploration project covered more than 4,000 acres of steep slopes, thick forests, and tributaries emptying into the Kingking River. "It was rough country,"
acknowledges former Echo Bay board member Jack McOuat, one of the authors of the Kingking project report. "That was probably why it was good country for insurgents."
In fact, the area had been politically violent for 25 years and was, for the most part, controlled by armed Muslim and Communist groups whose members numbered in the thousands. (McOuat, however, says he has "no memory" of the incident with Kapitan Inggo.)
"Mining is a funny business," McOuat says. "If you think you're out there to hit the home run"-by striking rich veins of gold-"you tend to be willing to accept some physical risk. Your tolerance level is better than, let's say, a chartered accountant's might be."
To manage such risks, Echo Bay's security personnel regularly met with insurgent commanders. Sometime in 1995, the company's security staff began trading cash,
supplies, and, in several cases, weapons for intelligence and good "community relations." For Echo Bay, whose senior executives were awarded hefty bonuses for bringing in new foreign projects, giving terrorists money, food, and matériel became an everyday part of doing business.
Two former Denver-based Echo Bay executives, both of whom spoke on condition of anonymity, have confirmed that Laird sent alarming updates and queries from the Philippines-trying to find out who was supplying the funds and how, exactly, they were being spent on the ground. One said Laird's questions were of "serious concern" to him, but that he was stonewalled when he tried to pursue the matter with more-senior executives. The other executive explained that by the time Laird landed in the Philippines, "security was there, was in place, and kind of reported around us"- to more-senior executives.
In a 1998 civil complaint against Echo Bay on an unrelated matter, Robert Wunder, a former Echo Bay senior vice president of project development, claimed that "senior management was repeatedly informed that...there were enormous security problems (which on-site management had been attempting to alleviate, in part, by making substantial pay-offs to government officials and anti-government insurgents)."
When deposed for the case, Echo Bay president Richard Kraus evaded questions about terrorists but admitted he was aware of the security problems at Kingking. He insisted, however, that "the company acted in a responsible way to take appropriate measures to safeguard our people."
Laird counters, "The methods sanctioned by Echo Bay increased the security risks. One does not prevent a nuclear proliferation by supplying enriched uranium. Who in their right mind would get involved with an insurgency?"
The area around Kingking was controlled by the Moro National Liberation Front (MNLF) and the Moro Islamic Liberation Front (MILF). Filipino Muslims, whose religion predominates on Mindanao, have been called moros ("Moors") since the time of Spanish rule in the 17th century. Settlements of Catholic Filipinos had been growing on Mindanao since the 1940s, and in the '70s Muslims revolted, taking up arms against the Philippine government and demanding an independent Muslim state. In that decade alone, some 120,000 people were killed in the fighting.
In late 1996 the government agreed to create an autonomous Muslim region. The MNLF was satisfied and put down its arms, but the more radical MILF, which had between 35,000 and 45,000 soldiers in the 1990s, has continued to fight for an independent Islamic state based on an extremist interpretation of Koranic principles, similar to Afghanistan under the Taliban. The group frequently clashes with the Philippine military and engages in guerrilla warfare, bombing, and kidnapping.
Continued
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Photo above copyright Corbis; used with permission.
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