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John Dryzek’s Discursive Democracy and Environmentalism in the Philippines

abstract

The heightened consciousness for environmental concern has become one of the defining facets of both the past and current decades. It has elicited discussions not only among experts from the domain of the scientifically and technologically oriented sciences, but even among social  theorists especially those primarily involvement in political theorizing. One of the key areas being studied here is the contribution of environmental movements in democratic theory. It is in this context that this article will analyze the environmental movement in the Philippines and the various strategies that it employs in contributing toward greater democratization of Philippine society. To accomplish this task, John Dryzek’s notion of discursive democracy will be used as a conceptual framework. This type of democracy justifies the presence of an oppositional public sphere that operates both outside and against the state to facilitate better democratization.

Introduction

he past decade and the present have witnessed the growing and evolving environmental consciousness both in the global and national arena. While traditional environmental issues, namely, pollution-causing industrial activities, destruction of forest covers, siltation and water pollution, and the use of highly fertilized crops, continue to pervade public discourse, the devastating effects of global warming due to climate change have started to dominate the global discourse on the environment. On the national level, there is also the heated discussion on the issue of mining involving various sectors that include national and local stakeholders,grassroots and elite, nongovernment organizations (NGOs), business, and government sectors. On the local level, issues such as aerial spraying, the plan of putting up coal-fired power plants, and the cutting of trees for commercial purposes have also embraced headlines, therefore eliciting heated debates.

These debates and discourses have exposed the potential harms and actual effects of environmental problems, paving the way for various actions undertaken both by the government and the civil society. At the executive level, quick response mechanisms and long-term disaster risk reduction and mitigation have been setup to respond to both human-made and natural calamities. There is also the renewed vigor toward pushing for programs that include reforestation, use of renewable energy, and pollution control. At the legislative level, various policies, laws and ordinances have been initiated to strengthen responses in mitigating the effects of climate change and other environmental problems. Meanwhile, at the civil society level, activities such as lobbying, conducting dialogue with various stakeholders, holding sit-down strikes, street protests, civil disobedience, and in extreme cases, monkey wrenching, have been undertaken in order to bring the issue of environmentalism at the forefront of policy agenda and reform.

While the collective response from the government always falls short of expectation and is often considered inefficient, ineffective, and controversial, the actions carried out by civil society groups are considered rather radical, excessive, and out of bounds. A significant portion of Philippine society considers environmental movement as mainly, if not only, constituted by the elite. However, there are other groups in the movement which are characterized as insurgents, and the means they employ as terroristic, because of their use of extra legal, extra constitutional and paragovernmental strategies. There are also those who are considered as nuisance because their way of proceeding lacks substance. Given the varied sentiments and expressions that have provided a concrete face to the environmental movement in the Philippines, and given the various strategies employed by different proponents, there is a pertinent problematique that begs to ask the question whether environmentalism in the Philippine context still contributes to democratization, or that it only impedes the democratic process.

This paper argues that the environmental movement in the Philippines, except those that involve terrorism, contributes to greater democratization. Specifically, this greater possibility for democratization lies on the oppositional character typical of new social movements, one of which is the environmental movement. It is, therefore, argued that democratization is best achieved if it is located outside of the state, that is, within the domain of civil society and the public sphere. To defend this position, John Dryzek’s notion of discursive democracy will be used as the overall framework. I will further support this framework by taking into account empirical researches undertaken by social scientists that look specifically at the environmental movement in the Philippines. The discussion will proceed in four parts. The first part will discuss Dryzek’s critique of capitalist states founded on economic rationality and ideology. The second part will discuss the idea of democratization and how it can flourish better with the presence of oppositional public sphere within civil society. The third part will apply Dryzek’s discursive democracy in the context of the Philippines’ growing environmental movement. The last part will present a brief conclusion.

Limits of Capitalist Democracy

Dryzek’s defense of environmentalism as contributory to greater democracy can be better grasped by discussing the primary constraints to this greater democratization. One of these constraints is the presence of a capitalist state with its underpinning principles that include economic rationality and ideology, made operational through the corporatist, constitutional democratic models. The inability of the dominant capitalist state to accommodate the concerns of environmental advocacies, classified as part of the new social movements, shows its lack of openness toward greater democratization. By describing how the capitalist state operates, including its internal relation to economic rationality and ideology, a better understanding of its limits in the face of contemporary environmental challenges can perhaps be achieved.

The capitalist state has previously been effective in incorporating different sectoral concerns to facilitate greater democratization. Political developments show that the capitalist state has assimilated various external demands and transformed them as state imperatives. Dryzek contends that in the historical development of the modern state, it was able to expand its imperatives to incorporate pressing sociopolitical demands.The incorporation of the bourgeois concerns facilitated the breaking away from feudalism, while the accommodation of the proletariat concerns facilitated the development of welfare-type systems. In both of these developments, the capitalist state was effective in facilitating the movement from parochial and authoritarian considerations to better democratic structures. Yet, together with this development, and partly brought about by the need to meet internal demands, is the emergence of state imperative necessary to increase revenue commonly referred to as economic growth (Dryzek 1996; Dryzek et al., 2003). Such economic growth is needed not only by the elite, now represented by the business sectors, to finance their industries, but also by the working class to respond to their growing demands.

Dryzek (1996) argues that while the emphasis on economic growth is taken as a positive step to some extent, it unfortunately renders the liberal capitalistic state stagnant in pushing for greater democratization. Since public discourse focuses on the market and how business investments can help expand the economic pie, other discourses including environmental concerns are constrained, curtailed, or marginalized. Environmental concerns are hardly taken as part of the state imperative, since bringing up environmental issues often threatens the market and leads to the pullout of investors. Such a scenario could result in recession, loss of revenue, and eventually failure of the state. What makes matters worse is that environmental issues are seen as problems which need to be eliminated. It is no wonder that these are relegated to the periphery in relation to state imperatives.

According to Dryzek (1996, 92415), the structural problems in the capitalist state manifest a deeper problem besetting modern industrial societies. This is the problem of economic rationality that has pervaded modern and contemporary societies, affecting citizens’ attitudes and their very understanding of political reality. The economic rationality that Dryzek particularly criticizes is capitalism’s promotion of and preference for individualism. Individualism has been cited as being responsible for the lack of common and shared understanding in responding to collective problems primarily about environmental hazards. Dryzek (1996, 145) succinctly expresses this characterization of the individual that typifies the capitalistic rationality:

Democracy under capitalism is hard to sustain because of the grave-digging individuals that capitalism increasingly produces…Public choice theorists have demonstrated that a politics of unconstrained strategy in pursuit of individual desires is an incoherent mess in which policy outcomes are arbitrarily connected to public preferences, responding instead to the narrow self-interest of politicians, bureaucrats and concentrated interests.

Dryzek (1996, 116-144) further argues that economic rationality has unfortunately become an ideology, if not “the” ideology that has triumphed over other ideologies. Consequently, people are no longer keen to look for and provide other alternatives. Most have accepted that this economic ideology anchored in individualism is the only alternative and, therefore, should be readily adopted. In this condition, the reflexive attitude among citizens is lost, a condition which could unnecessarily put at stake the potential for citizens’ greater participation in public discourse. Applied to environmental issues, democratization in dealing specifically with environmental problems is diminished.

The capitalist state also finds a problematic partner in liberalism, the basic tenets of which are human autonomy and the capacity for reason. These two tenets that help rationalize the market-based and economic rationality have served as foundations of the capitalist state also popularly known as liberal capitalist democracy. This particular democracy functions through a constitutional setup. Although Dryzek (2000, 8-30) recognizes the importance of liberal democracy given the various liberal principles it promotes, he finds the constitutional setup through which it operates as problematic. The liberal democratic model expressed in constitutionalism is flawed because of its adherence to the capitalist rationality of individualism.

Furthermore, constitutionalism is found to be problematic because it cannot account for the various forms of deliberations within the context of the state. Conventionally, constitutionalism operates by way of aggregation in which oftentimes minority and alternative voices are superseded. One example which typifies this is the election where voters are given no access to extensive and varied discourses prior to making choices during the actual exercise of their right of suffrage. This situation is contrary to democracy’s need to account for other forces that include alternative discursive arenas other than the formal ones.

Meanwhile, liberal capitalist democracy promotes corporatism. Only a select and core apparatus of the central government, mostly on the executive level with minimal assistance from the legislative side, run the government. Obviously, similar to constitutionalism, corporatism is unable to promote greater democratization mainly due to its exclusive and secretive procedures as opposed to more inclusive and transparent ones (Bantas 2010a).

Civil Society and Democratization

Owing to problems that beset the liberal capitalist state, Dryzek locates the opportunity for greater democratization in the public sphere specifically in the domain of civil society. It is in this domain where adopting a critical attitude is maintained especially in relation to the main apparatus of the state. It is also in this sphere where individualism is countered by focusing on the common good through republicanism. Finally, it is in this domain where the oppositional character of civil society is revealed, serving as a catalyst for fostering greater democracy. It is in civil society where Dryzek (2000, 81-114) sees the potential for reflexive modernity to be fully realized, where the critical method is recognized and greater democratization achieved. Dryzek refers to this as discursive democracy because of its greater openness for variety of discourses. In defense of his position, Dryzek (1996, 15) writes:

I shall make arguments about the kinds of democracy worth pursuing, on behalf of a democracy that is deliberative, rather than aggregative, republican rather than liberal, communicative rather than strategic, disrespectful of the boundaries of political units, pursued in civil society rather than the state, and consistent with broad rather than narrow definitions of politics.

Dryzek (2000, 81-114) understands civil society as a set of voluntary associations arranged against the state, that is, apart from the state but not designed to takeover state power. It is important to clarify here that Dryzek is not keen in replacing the existing liberal capitalist democracy with another system of governance. Instead, he seeks to locate avenues within the existing liberal capitalist state where greater democratization can be made possible.

At first sight, understanding politics on the basis of how active civil society is appears to be limited. A myopic understanding of politics regards the state as traditionally made up of those bodies or entities that are constitutional in nature. These include judges in the courts of law, political candidates, or government officials in the executive and legislative departments (Bantas 2010b). The traditional definition of the state is inclusive only of the constitutional component that excludes the civil society, relegating the latter to the private domain. This is a dominant view in most liberal democratic literature primarily championed by John Rawls (1995). But Dryzek’s view on politics runs counter to the traditional definition. By privileging the domain of civil society, he believes that greater democratization can be opened. In which case, civil society operates as an alternative venue that is located outside of the periphery of the state, but still political in its character.

Dryzek sees hope in civil society’s being less prone to inclusion, which he uniquely characterizes as being part of the constitutional core of the state. The concept of being less prone to inclusion is self-limiting. It means that it does not seek to share in state power, unlike political parties whose engagement with the state is geared toward taking over power from those that control it. A clear example of inclusion is the role played by labor parties. They started as a social movement carrying the concerns of the working class but later took over the reign of governance from the bourgeois after it gained entry into parliament, thus forming the welfare state. It has to be understood that the role of civil society then was to expose power especially that of the state which sought to control mechanisms that supplanted alternative views and voices. Another democratic character of civil society is exemplified by its being less concerned with a static understanding of itself. In fact, it continues to redefine and recreate its identity, thus making it less hierarchical and more fluid. Finally, it has also positioned itself as a third force in the historical development of the capitalist state, seeking to address the limits of a welfare state model that has mixed liberal capitalism with socialist concerns (Dryzek 1996, 50).

Dryzek (2000, 87) also characterizes this public sphere that is civil society as oppositional which, he says, is important since historically “democratization indicates that pressures for greater democracy almost always emanate from insurgency in oppositional civil society or never from the state itself” The bourgeois and the working class oppositions are typical examples of this. Their successful struggle against the state leads to the successful integration of their concerns into state imperative, thus creating the capitalist state and the welfare state, respectively.

However, Dryzek acknowledges that because civil society is a heterogeneous place wherein various forms of association outside of the state converge, not everyone in civil society promotes democratization. There are those who would resort to extremist means, while others are still very hierarchical. Thus, Dryzek clarifies that the social movements in civil society that are relevant toward the fulfillment of modernity’s potential are those that can really contribute to greater democratization. In other words, these are social movements that meet the democratic criteria: Self-limiting, fluid in defining its identity, and using democratic means that pursue discourse rather than violence (Dryzek 2000, 100).

In asserting the significant role of civil society, Dryzek narrows down the venue of democratization into the domain of the public sphere. Although he admits that civil society is a heterogeneous association which may or may not promote greater democratization, he believes that the public sphere provides the venue in which discourse promotes alternative discussion of key issues. For purposes of distinction, he classifies further the private domains of civil society that do not seek to participate in public discourse as separate from the domain of the public sphere. These private domains include neighborhood associations, spontaneous groupings, workplaces and other pockets of private associations (Dryzek 1996, 47 -61). With this distinction, Dryzek asserts that it is in the public sphere where the growth of democracy is made possible.

However, it is important to note that while social movements in civil society are defined as self-limiting, it does not mean that civil society is powerless. Dryzek illustrates civil society’s power by characterizing its oppositional strategy. Firstly, political action in civil society cannot only change the terms of political discourse, it can also influence the content of public policy. Secondly, the power of public protest can produce lasting effects by legitimating collective actions as permanent mechanism that responds to issues in the public agenda. This is contrary to the view that public protests produce only burnt-out and co-opted activists. Thirdly, policy-oriented deliberative fora that include conferences and public consultation can be constituted within the civil society itself. Finally, protest in civil society can sow fear of political instability and so draw forth a governmental response (Dryzek 2000, 101).

Dryzek’s theoretical position on the oppositional character of the social movements actually challenges other contemporary theories of democracy. Pluralist theorists like Iris Marion Young and Anne Phillips, both representing the difference democratic position, welcome the inclusion of minority voices into the state imperative to make the state more expansive. Dryzek, however, finds the difference democratic position as counter-intuitive. In his research, he provides concrete evidences of this involving leading countries in environmental discourse, most of which practice corporatist, liberal, capitalist democracies (Dryzek et. al, 2003).

Perhaps a good example of the limits of inclusion can be observed in Norway, where active corporatism is applied as a system of governance. In this scheme, the central government provides extensive support and even funded social movements and groups. Those involved in environmental advocacy in particular received government funding. The result, however, as validated by Dryzek’s research, shows that Norway has the least active environmental groups in civil society, and has less environmental advocacies that challenge state policies. Thus, while Norway presents a good statistic model in responding to environmental problems, it is limited in terms of promoting and giving venue for non state actors to participate in public policy. It is glaring to note that public protests in Norway have been nonexistent, except in the 1980 protests against the creation of a hydropower plant. It is also notable that issues involving whaling, which has been the target of various environmental groups, remain largely unaddressed in Norway (Dryzek et al., 2003).

On the contrary, Germany is a case where its corporatism promotes passive exclusion. Its benign refusal to involve environmental groups in its policy formulation, until after recently, has led to the proliferation of various green groups that include the Green Peace, and eventually, the Green Party. However, despite the creation of a green party, a flourishing civil society does exist and continue to expand, challenging continuously the state apparatus and even its Green Party ally. In fact, at the policy level the presence of civil society is influential in making Germany a leading proponent of environmental modernization and risk society, the two models which are responsible in responding to environmental hazards and threats (Dryzek et al., 2003).

Dryzek, of course, acknowledges that for social movements in civil society to be successful, they also have to become part of state imperatives. This trajectory would eventually lead to the creation of a green state, parallel to that of a bourgeois capitalist state and a welfare state. However, in cases where inclusion becomes benign, or even active to the point that participants in the social movement are co-opted, or that their discursive capacity are depleted or compromised, then the strategies that define the oppositional character must be pursued.

More so, Dryzek notes that inclusion, as well as the desire for that which characterizes social movements, can make the environmental groups lose their democratic character. Their persistence to be included and legitimized can lead to the creation of hierarchies among the members of the social movement itself, thus sacrificing the democratic setup that has sustained it. This is typified, for example, by groups like the Green Peace and the Green Party in Germany which, in acting as political parties, have also elected officials to represent the green movement. In the process, however, these elected officials have ceased to listen and address the voice of their constituents as they were already co-opted by virtue of their membership in the parliament.

Dryzek does not discount the dual strategy which includes both inclusion in the state and maintenance of the oppositional character in civil society. This is the ideal setup. However, there are cases like that of Norway where inclusion presents a greater peril for environmental social movements in civil society. This dual strategy will be further tested in the Philippine context which will be discussed in the next section.

The Philippine Experience of Environmentalism

The understanding of democracy proposed by Dryzek and his view on how it can be broadened and deepened through the social movements in civil society are helpful in grasping environmentalism and its influence in greater democratization. In several of his projects involving green politics, Dryzek outlines a few relevant insights that can also help us appreciate better the environmental movement here in the Philippines (Dryzek 1998, 2005). These insights include, among others, the pursuit of greater ecological modernization where some environmental concerns are incorporated in state imperative, thus creating a green state. Germany is the leading proponent of this model. But we have to take note that even Germany is still characterized by the presence of oppositional environmental groups that are responsible in making the country’s environmental policies democratically oriented. This insight, coupled with the earlier arguments on the limits of capitalist state, and the need for oppositional environmental groups, will be carefully weaved together using the context of the environmental movement in the Philippines.

At the outset, it has to be stressed that the Philippines has one of the most vibrant civil societies in the world, including groups that push for greater environmental movement (Holden and Jacobson 2007, 149). Moreover, it is interesting to note that while the Philippines is a developing country where democratic institutions are not yet stable, and where its environmental movement has to take into consideration equal if not greater concerns of poverty and access to resources, it has manifested some parallelism with developed democracies especially the role and impact of its environmental movement.

Parallel to the critique raised by Dryzek on the capitalist state, the environmental movement in the Philippines has also exposed the existing Philippine nation-state as limited in responding to environmental issues and concerns. While it is understandable that the government has to give importance to economic growth to respond to the problem of poverty, it has also failed to take into consideration issues on environmental threats which, if not properly managed, will have devastating effects. Its attitude is characterized as highly supportive of economic concerns, and tentatively if not almost benignly supportive of environmental issues. This is very much observable in the various environmental issues that have confronted the country, both nationally and locally. The Philippine government then typifies the problems that beset the liberal capitalist state for its lack of open attitude toward democratization.

A case in point is the issue on mining which, at the national level, has rendered the government hostage to the business industry long perceived as the pipeline of the country’s economy. Businessmen and corporations behind the mining industry have used the discourse on poverty alleviation and economic growth to legitimize the existence of mining even in key biodiversity areas. And yet mining has generated minimal revenue for the state. It has also caused a lot of environmental damage at the immediate and long term levels (Monsod 2012). The government’s priority on economic growth as a means to address poverty has been held captive by the dominant discourse of the mining industry that promotes mining as a response to the problem of poverty. This is manifested by the hesitant move of the present government to issue an Executive Order (EO) governing the mining industry, despite voluminous inputs from various civil society organizations and consultants, experts included (Villanueva 2012). After the issuance of EO 79 that attempts to synchronize mining activities in the Philippines, it was criticized mostly from the ranks of environmentalists not only because of its palliative measures but more so because it has privileged business and economic concerns over environmental impact. We can also add here the insistence of the previous government to stick to the Mining Act of 1995 (RA 7942) and the present government’s EO’s framing that is still anchored in that same problematic mining act (Tabora 2012).

It can be noted that the issue concerning mining—while most recently being highlighted in the media—has already been a long standing advocacy among environmental groups. In fact, even the Catholic Bishops’ Conference of the Philippines (CBCP) has issued statements and has initiated actions both at the national and local level as early as 1996. Pastoral letters and mass mobilizations were strategies used by the church. The issuance of the EO 79 in 2012 can be considered as one of the major gains in the decades of resistance against state policies that are privileging the mining industry to the detriment of the environment. Parallel examples at the local level can be also cited. For one, there is a failure on the part of the Davao City government to significantly look into the potential effects of the coal-fired power plant proposed as solution to the threat of power crisis. Some of these effects would include, among others, air and water pollution, not to mention displacement of residents. The issue of power crisis is, of course, given more weight over the threat to life and environment because it can affect the business industry and, in the process, affect the local economy.

For another, there is the recent issue involving the Shrine Hills in Marina, still in Davao City. While the Mines and Geosciences Bureau (MGB) and other geological experts have classified the place as unfit for further development that will involve construction of industrial and residential infrastructure, no significant position is gleaned from the local government both at the executive and legislative levels (Lacorte 2010). The suspicion is that significant influence of various developers (representing the business sectors) has made the local government hostage and blind to the impending threat this development plan poses to the immediate residents of Shrine Hills in particular, and to Davao City in general.

These accounts affirm Dryzek’s frame that the existing liberal capitalist system anchored in economic rationality can curtail greater democratization and, in the process, relegate environmental concerns to the margins. The government’s attitude on the mining industry at the national level, and the coal-fired power plant and the Shrine Hills development issues at the local level, has clearly manifested this structural and systemic problem. It can, with reason be said here, that the government has privileged business and economic concerns over environmental concerns.

The oppositional character of environmental groups in the Philippines is manifested by the existence of various advocates as early as 1979. Groups like HARIBON and the Philippine Federation for Environmental Concerns (FPEC) plus other local movements are a few examples of these groups (Magno 1993, 6). More recently, the Alyansta Tigil Mina is at the forefront of the more ecologically sound policies related to mining. Of course, there are local groups that are involved against the creation of a coal-fired power plant and the industrialization and commercialization of Shrine Hills.

The issue on mining, in particular, has mobilized various groups that include the academe, church, NGOs, and people’s organizations (POs) that are directly affected by it. -What is more interesting though is that members of civil society groups have found allies even among several members of the business sector. The best example is Ms. Gina Lopez who represents ABS-CBN, a top media conglomerate in the Philippines.

The responses of these groups include formal strategies like conducting conferences on mining, such as the ones organized by Ateneo de Davao University (Actub and Pilapil 2012) and Ateneo de Manila University, to name a few. This is coupled by the use of various media campaign blitz, courtesy of ABS-CBN’s anti-mining position as influenced by the high-profile advocacy of Lopez who heads the ABS-CBN Foundation. To be included as well are the various forms of lobbying done at the halls of congress for the passage of an Alternative Mining Bill or the Minerals Management Act to replace the problematic RA 7942. These are also ably supported by various protests both at the halls of congress and even at the headquarters of mining companies or the actual mining sites. We also have to include the pastoral letters released by the CBCP that condemn, in particular, the commercialization and materialism promoted by the mining industry (Holden and Jacobson 2007). All of these have exacted significant pressures on the government to issue an EO governing the mining industry. When it was finally released, it was however received with dismay by environmental groups and local communities, especially those directly affected by mining.

All the aforementioned responses of the various groups within civil society have typified the latter’s oppositional character. Although it may not be as radical as that of its counterparts’ in other countries, partly due to the Filipinos’s lesser inclination for direct confrontation, it is as equally vibrant as theirs. The feature and dynamism of this oppositional character affirm Dryzek’s position that indeed greater democratization is possible in the Philippines as evidenced by the convergence of various groups. The case of environmentalism here has also demonstrated that greater democratization can be achieved outside the peripheries of the state and into the domain of civil society. This supports further the understanding that the political arena should be extended beyond the state in order to broaden the democratic space. The environmental movement further concurs this point in that the response to the mining issue in particular has been wanting, and is in fact very limited within the apparatus of the state. Instead, it was pushed further by the pressure generated by civil society. It has to be affirmed as well that pressure is not only local and national; there is also a significant influence from among international groups like Green Peace that has aided in lobbying and broadening the discursive space and content.

The Philippine experience of environmentalism is quite unique. Because its democratic governance is weak as compared to its Western counterparts, and because corruption and lack of political consciousness among its citizens prevail, there is a greater challenge for collaborative effort to be forged between civil society and the government. This is in no way similar to inclusion referred to by Dryzek. Instead, it simply calls on the civil society groups especially those that are involved in environmental advocacy to also assist the government in strengthening its governance mechanism and in promoting greater democracy. Some of these strategies would include greater involvement among environmental groups in the crafting of laws and policies affecting the environment, as well as instituting some watchdog groups to check on the implementation of these laws, policies and projects at the local level. Lobbying for more environmentally oriented ministers to head environmentally related government agencies can also be suggested as one of the strategic courses of action here.

In view of this openness toward a collaborative strategy, it can be argued that the effectiveness of the environmental movement in the Philippines toward green oriented policies is propelled by a dual strategy. On the one hand, the oppositional public sphere is supported by environmentally oriented executives and legislators who push for environmental policies. This is partially valid for without the support of consultants and experts from within the cabinet, the push for an EO on mining would not have been realized. More so, the passage of the Alternative Mining Bill or the Minerals Management Act will only be realized through the dedicated support of able legislators who possess heightened environmental consciousness and commitment. On the other hand, there is the strategy of an empowered participation of civil society groups. The significant push from the oppositional groups within civil society has also been crucial in propelling the government to act on environmentally related concerns.

However, this dual strategy has to take into account some crucial issues. While it is true that there are allies of the state like executives and legislators, they are small in number. Given the inefficiency and corruption in the government and its lack of commitment and political will in responding to environmental issues, there is the possibility that no significant progress can be expected from its ranks unless it is constantly challenged by members of the civil society. Inclusion in the state by way of incorporation of socially oriented party list groups and socially oriented individuals could render them ineffective by way of getting them accustomed to the inefficient and unjust culture within the government itself (Magno 1993, 12). Furthermore, it has to be stressed that most of the cross-cutting and frontier initiatives that serve as responses to environmental threats usually emanate from the democratic, discursively updated civil society groups that enjoy the support of international network. This is not the same as the actions done by the government which are all too often slow in responding to hazards and threats, and dependent upon its civil society counterparts for initiatives.

Thus, the frontier toward greater democratization still hinges upon the oppositional character of civil society itself. This is notwithstanding the less than promising prospect for greater democratization in the incumbent Philippine government, coupled with the long process of making the state apparatus effective and efficient. Studies conducted on the relationship between civil society and the state have shown that the strength of the civil society in the Philippines, especially in pushing for policies ranging from labor issues to human rights violations, is one of the most vibrant (Ferrer 1997, 1-9). While there are strong suggestions for gaining greater familiarity with the mechanisms of governance governing civil society and in calling for further assistance to strengthen the national and local government (Lopez and Wui 1997, 1-20), we still cannot discount the fact that the oppositional role of civil society has been successful and has remained to be an effective strategy.

Conclusion

The capitalist state is embedded in a rationality that is liberal and individualistic made manifest in the liberal constitutional model. This system limits the achievement of more democratization, especially on issues related to the environment. As such, the potential for expanding the democratic space, as Dryzek suggests, has to be anchored instead in the oppositional public sphere of civil society as demonstrated by the social movements like environmentalism. As a social movement, environmentalism helps challenge the dominance of capitalism in our democratic systems. The greater push for policies involving responses to environmental problems are being championed by civil society groups that resist inclusion in the constitutional core of the state, without sacrificing their capacity for collaboration. The same situation is found in the Philippines. The environmental movement exerts pressures to create and re-create policies on mining and other issues concerning the environment. However, while a dual strategy might be an ideal way to proceed, there is still for the time being a need to capitalize on the power created by the oppositional character of the environmental movement and the pressure it exerts on the government.

Autonomous or Dependent Capitalism in the Philippines: A Perspective from Agribusiness

No definition of dependency has been universally accepted by students of economic development. Nevertheless, the elements of this imprecise concept continue to be used despite the severe attacks on its inadequacy as a general explanation of the past and its limitations for planning change. It is now used primarily as an expression to describe a situation where poorer countries appear unable to progress autonomously because they are said to depend on the advanced capitalist countries for investment capital, technology, and information to raise productivity. Several writers argue that the earlier “normal” growth of capitalism in Europe and North America generated imperialistic capitalism that has constrained more recent efforts at growth in poorer countries into a “dependent” form. Recent studies in Brazil and Colombia show that industrialization was begun by local entrepreneurs, most recently with participation by state-owned enterprises, but there nevertheless has been increasing dominance on certain economic sectors by foreign corporations, some of which have taken over local firms. Moreover, autonomous growth has been diluted by the reliance of both states on foreign loans for development investment.

In contrasts to such views, J. Cypher refers to evidence from several countries that local capitalists and governments have more scope and achievement in the face of transnational competition than the dependency model allows, so instead of dependency, he prefers to talk on degrees of asymmetry of interdependence. Cypher’s argument is in line with others who assert that it is essential to identify the circumstance of accumulation in each country: that is, who controls resources, how surplus is produced and appropriated, who plays the entrepreneurial roles, and what sort of relations exist with foreign enterprises.

In the case of the Philippines, S. Ressnick has suggested that merchant capitalism developing under colonial conditions became capable of establishing an independent capitalism. He traces the emergence under colonial authority of a native landed elite that was able to concentrate resources for production of export crops, while some used the proceeds to become urban merchants. During the nineteenth and the early twentieth centuries, some of these merchant capitalists invested in the processing of agricultural products and other industries with a location advantage, such as glass, construction goods, chemicals, and footwear. The capital came not only from international trading profits but also directly from the agricultural sector. Although not all capitalists subscribed to a nationalist ideology, the prospects for industrial capitalists development appeared to rise after independence when government introduced various measures to foster the growth of industries and of supportive financial institutions. Such encouragement did not necessarily alienate non-industrial capitalist because in the Philippines as in many developing countries, most of the few scores of ruling families are represented in all sectors: landowning families have branches that own financial and industrial enterprises. These linkages also spread into the organs of the state and into foreign enterprises either in joint ventures or through employment in such enterprises.

The measures to stimulate industrialization simultaneously encouraged a new wave of foreign investment in manufacturing. This raised the issue of whether emerging Philippine capitalism could enhance its autonomy, maintaining both economic and political power to accumulate capital and direct it into more complex industrial production, as well as into a capitalist transformation of agriculture. In the world context, it would clearly need a strong state to nurture local accumulation. Most observers would agree that despite the past decade of authoritarian government and increasing roles for state organizations, the Philippine state has failed to prevent the dilution of such a nationalist project even though the individual local capitalists may thrive with their individual and joint ventures the most critical observers would assert that the state has gone out of its way to facilitate penetration by alien corporations by providing access to land, credit, financial incentives, and joint ventures with state bodies. Other critics would say that regardless of intentions, the state’s scope for policy-making has been massively constrained by commitments to foreign lenders, especially the World Bank and International Monetary Fund.

Evidence From The Philippine Banana Export Industry

The Philippine banana industry developed in the late 1960’s in response to the opening of the Japanese market in 1963. It was a time when the import-substituting industrialization of the 1950’s had been checked by the devaluation of the peso, the lifting of exchange controls and when many infant industries had closed doors or, in some cases, been bought out by foreign investors. In contrast, exporters and some commercial interests (domestic and foreign-owned) had benefited, and the Japanese banana market appeared a new source of profits for those with access to suitable land. There was scope for a purely Filipino development. The Philippines had a natural freight advantage over Latin American Exporters to Japan.

A number of Filipino landholders quickly developed small plantations (usually below 20 hectares), selling to Japanese firms already importing from Taiwan. However, quality was poor, and sales for several years were only a few thousand dollars. Neither the Filipino nor their Japanese buyers possessed the production and packaging technology that had recently revived the profits of the American Transnational Corporations (TNCs). The Filipino firms failed to try to buy such technology independently, while the government’s agricultural extension service offered outdated advice to prospective growers.

However, the TNC’s were also keen to capture the Japanese market and recognize the locational advantage of a Philippine base. In 1962, United Fruit entered a joint venture with several Japanese firms to import bananas. In highly confidential negotiations with the Philippine government in 1963, United Fruit almost succeeded in leasing 8,000 hectares of a penal colony for a banana plantation, even though the colony’s existing cash crops yielded an income more than double the proposed rent. A nationalist outcry prevented consummation. In the same year, government’s National Development Company acquired 5,500 hectares occupied mostly by small-scale settlers and, in an act almost certainly unconstitutional, leased the land for 25 years (renewable) to Dole Philippines Incorporated, subsidiary of Castle and Cooke.

The Filipino partners were Manila businessmen and lawyers associated with the Rizal Commercial and Banking Corporation (RCBC) and included Geronimo Velasco (later Minister of Energy under President Marcos) and Juan Ponce Enrile (later Secretary of Justice and Minister of Defense). In 1964, Castle and Cooked took over the Standard Fruit and Steamship Company and soon afterwards set up Standard Philippine Fruit Corporation (Stanfilco) as a 66 percent owned joint venture with the House of Investments. Stanfilco made the first effective entry into the banana industry in 1966 by setting up an independent grower’s scheme under which it contracted to buy the output of growers to whom it would supply all necessary inputs, including advice and credit. The great majority of growers were owners set up three corporate subsidaries of the House of Investments. By 1981, Castle and Cooke and its associates controlled the output of 6,770 hectares and held about one-third of the Japanese Market.

Among the banana enterprises that preceded the entry of the giant transnationals was Hijo Plantation, owned by an American closely linked with a Japanese buyer, Fuji Fruits. The owner lacked financial resources and in 1966 sold almost all his stockholdings to a consortium comprising Fuji Fruits (28%) and the owners of a Manila Bank, his main creditor, (65%). This consortium bought the neighboring American-owned Twin Rivers plantation, but lacked the knowledge to develop large-scale banana operations until 1968. Then, another transnational entered the global banana trade and began contracting local producers. This was Del Monte, already established in pineapple production in the Philippines through its subsidiary the Philippine Packing Corporation (PPC).

As a new entrant to the trade, it was vital for Del Monte to build its market share by taking part of the Japanese market. Its strategy was to contact with large-scale associate producers to achieve a supply base of at least 5,000 hectares. Del Monte did not set up a new local subsidiary like Stanfilco but used PPC to provide technical services to its growers and as a conduit for production loans. By 1972, eight Filipino corporations (five of which were owned by investor in Manila and Cebu City) had signed contracts with Del Monte. Several came to regret it. This was because of dissatisfaction with the cost and quality of technical services supplied by PPC. The owners of Hijo Plantation contracted only for the output of Hijo, while they used their newly acquired skills to develop their Twin Rivers plantation as an independent supplier to Fuji Fruits. Two other Del Monte growers likewise set up independent plantations to expand their output free of what they saw as the unfavorable terms of Del Monte’s contracts. However, by 1982 Hijo had terminated its contract with del Monte, while four of the other corporations under contract had sold out to employees and associates of Del Monte. For two of them, the sales were a way out of financial difficulties, and for the other two, the funds were needed for reinvestment in other business.

Del Monte’s first contractors, the owners of Hijo Plantation, recognized the scope for expansion of the industry. In 1969, it entered a joint venture with Sumitomo Shoji Kaisha, which needed to guarantee a supply for its import business to compete with the American TNCs. A year earlier, United Fruit had signed a purchasing and technical advice agreement with Tagum Agricultural Development Company (Tadeco), a 1,024 hectare plantation contiguous with the penal colony that United Fruit had tried to lease in 1964. Tadeco is owned by Antonio Floirendo. The Following year he enterea joint venture with the Department of Justice to use 3,000 hectares of the penal colony as a banana plantation. Nationalists criticised the project as a betrayal of national interest. It was presumably inspired by some questionable agreements with the United Fruit, which in contrast to the other TNCs, benefited from the economics of scale accruing to their sole supplier. The overhead costs of infrastructure were spread across the output from a single contiguous block of 8,000 hectares, easily the largest of the Philippine banana plantations.

United Fruit also benefited from their ownership of an importing firm in Japan. At the same time, it is important to note that Tadeco itself became the most profitable to all the producers from 1973-1982. Floriendo, previous owner of three or four modest provincial businesses, was able to establish a wide range of subsidiary companies in both the province and Manila. He acquired eight percent of Citibank’s local subsidiary, FNCB Finance. He invested as well in British real estate and bought, for $11 million, a sugar refinery in the United States. Nationalists would no doubt prefer to see those agricultural profits invested in Philippine development. Nevertheless, it is clear that Floriendo has gone beyond the role of the average comprador – he is not merely a buying and selling agent for foreign traders.

The prospects for the banana industry in the early 1970s attracted many other individuals and corporations apart from those associated with the four TNCs mentioned. Three other Japanese trading companies, namely; (Mitsui-Noria Kiosha, Toyo Menka, and Mac Trading Company), and one smaller company, the Nekano, sought Filipino partners for joint ventures. Two more companies, Ataka and Company and Sanko Trading Company, offered loans to Filipino commodity suppliers to set up plantations. By 1981, out of seven companies set up on these bases, four had collapsed: Desidal Fruit, Mabuhay Agricultural Corporation were taken over by bigger corporations, Only one, Sonano Fruits, survived in a marginal condition. Many factors including poor management and excessive debt-equity ratios were involved in these failures, but one contribution came from the intervention of the state.

Just after Martial Law was imposed in September 1972, the first and largest growers successfully urged the government to prevent over supply and price collapse by limiting the area of production to 21,000 hectares distributed among nineteen companies with existing exports. This limit was imposed by letter of instruction (LOI) No. 58 in 1973. Several late entrants nevertheless maintained or even enlarged their plantings but were unable to cope with problems of poorer land and inadequate scale. The restrictions were undoubtedly a sensible measure, but they where imposed precisely as devised by the larger corporations which stood to benefit most. At the same time, the government continued to allow corporations to register for tax benefits under the Export Incentives Act. Thirteen corporations out of a total of twenty-six registered, one as late as 1979. From 1975 to 1977 alone the total value of benefits was P107 million.

Reference has been made to corporate entrepreneurs in the banana industry being based in Manila of the Second biggest city, Cebu City, because the industry attracted some of the most financially powerful groups in the country. Not all of these committed themselves heavily. The industry was seen as just another area for profit because such groups had extremely diverse interests, centering on financial institutions, but spreading widely across primary, secondary and tertiary activities. To take one example, the dominant owners of the group of corporations associated with Hijo Plantation are mostly stockholders in the Far East Bank and Trust Company (FEBTC). About a quarter of the equity of this bank is held by Chemical Bank and Mitsui Bank.

In 1979, FEBTC had 161 director interlocks with 112 major companies, including the country’s biggest investment house, 38 of the largest agribusiness enterprises. Much the same could be said of the base groups of several other banana corporations. Ten banking groups dominate the Philippines Economy, and members of six of these had equity in banana corporations. The few corporations established by small entrepreneurs without connections failed.

Given the characteristics of many of the investors and of the prospects for the banana industry in its early years, it is not surprising that there were few problems of initial finance. As noted above, the TNCs provided loans to growers or guaranteed loans, borrowing from both foreign and domestic sources. Unfortunately, most details are confidential, but it is known that United Fruit guaranteed loans to Tadeco of at least US$1 million from a Boston Bank. Del Monte had loaned over P30 million to local growers in 1975, of which an unknown proportion was borrowed from local banks. Castle and Cooke’s loans to its subsidiary, Stanfilco, amounted to P50 million by 1978 (repayable in dollars). Stanfilco however had borrowed a further P63 million more from local banks.

Most of the Filipino corporations had no difficulty borrowing from local banks. In later years, however, those with poor records had to turn increasingly to dollar loans from foreign and local banks. In a period of a deteriorating exchange rates, repayments compounded their crucial problems of cash-flow. This contributed to the take over of two of Del Monte’s growers. The ease of credit and laxity of government supervision meant that some Filipino corporations were set up with what had, over the years, become acceptable financial practice of massive debt-equity ratios. For instance, one borrowed P12 million to augment a paid-up capital of only P50,000 and later collapsed with P23 million debts. On the other hand, the more responsible corporation quickly repaid debts to the TNCs using funds generated internally or borrowed from local banks to give themselves greater independence. This companies were able to survive and even make profits in the very tight market after 1978.

By 1981, seven corporations had failed or sold out without ever issuing dividends. In fact, two of these had stockholders’ deficits exceeding P18 million, considerably more than the value of their assets. Owners of failing corporations seem to have suffered no penalty. They merely sold off their assets, sometimes leaving unpaid arrears of rents and taxes. Some had their debts condoned. This may have been because of the interlocking nature of the financial and social networks of the wealthy – that is, economic entities are interlinked by ties of kinship, or what Zeitlin and Ratchiff call ‘kinecon groups’ in Chile.

While four corporations went out of business, six were taken over and others merely survived. There were a minority that flourished. Chief among these was Tadeco: its privileged access to government land at low rent enabled it to declare stock dividends of P26 million, 1973-1976. During this time, however, it did not distribute cash dividends. By 1982, its assets reached P290 million, and undoubtedly it was this major source of accumulation that financed Floriendo’s emergence as a transnational entrepreneur. Two other groups also made the industry a source of accumulation. In the period 1973-1979, when profits were already declining, the three corporations associated with the Far East Bank and Trust Company declared, in total, dividends of P15 million cash and P13 million stock. Their combined assets reach P137 million.

However, in terms of the national economy, the benefit was diluted by the fact that the three corporations had 24, 27 and 40 percent of their respective equities held by foreigners. The second group that was successful for many years was a joint venture of some of the owners of the Bank of the Philippine Islands and the Insular Bank of Asia and America, two of the biggest banks in the country. They established Lapanday plantation as a growing for Del Monte, but later used some of its retained earnings to set up another company selling directly to Japanese buyer. Later still, they took over one of the ailing plantations in which Mitusi-Norin Kaisha had a 15 percent interest. Lapanday was for long the most productive farm in the industry and yielded P24 million net profit in 1971-1978. It distributed P13 million stock dividends.

However, its performance declined in the late 1970’s. In 1981, it terminated its contract after a dispute with Del Monte, but the burden of foreign costs caused heavy loses. In 1982, the group sold all three of its plantations to local employees of Del Monte for an undisclosed price. A severe drought reduced banana supplies and basically increased the price earned by bananas in Japan. It was primarily the transnational marketers that benefited, rather than the Filipino growers of Del Monte.

A final point to make on the financial aspects of the corporations is that, as would be expected in a capitalist system, there was a trend to concentration of ownership. Sixteen separate groups entered the industry forming, with subsidiaries, twenty-five-corporations. By 1981 the processes of failure and takeover reduced the total to nine groups, of which only two had a majority of provincial rather than metropolitan or foreign ownership.

Figure 1. Corporate groups in the Philippines banana export industry, 1983
[Refer to the PDF File p. 5]

Analysis and Conclusion

The story of the industry as sketched above seems to indicate a failure of an independent attempt by Filipino capitalists to take advantage of a new opportunity. Rather than retaining control by merely hiring the needed skills in production and marketing, a new set of entrepreneurs compromised their autonomy by the nature of the contracts and other arrangements made with the dominant TNCs. These then left far less scope for later attempts at independent production and marketing. Financially, too, several Filipino Corporation found themselves stifled by becoming indebted to the foreign corporations, although there is no doubt that the industry could have been financed from Filipino sources.

Organizationally, Filipinos in the banana industry seem to have retained control of ventures that ended in bankruptcy. For instance, David and Tsuda concluded that the Filipino capitalist is often willing to surrender organizational control so long as he is assured shared of the profits. In a situation where the opportunities for national capitalist are perceived as constrained, one might expect that state action could make a difference. As shown, the main direct state intervention in the banana industry was to impose restrictions on planting. Although this had been requested by Filipinos themselves, they were all suppliers of or are in joint ventures with aliens. The independence might have retained a greater share of final value by selling directly to Japanese buyers, cutting out the TNC traders. This benefit, however, could only have followed if the independents had collaborated. TNCs benefited from their size and experience in trade, less directly, the state’s export incentive were available to all banana corporations, with or without foreign participation. This was part of the government’s drive for exports and for foreign investment. The state’s incentive continues to favor TNC investment in food and agriculture so that recent years have seen rapid expansion in rubber, palm oil, pineapple, fisheries, and others.

At the same time, there has been increasing state participation and control in some major commodity areas, notably sugar, coconuts, crops, and rice. This is paralleled by a trend for the state to enter joint ventures with aliens and to take over ailing manufacturing and financial companies. To a degree this means the state is preempting part of domain of local capitalists and broadening its scope for direct accumulation rather than through its fiscal processes. It has been suggested that the government is using its powers in these ways to counter the strength of the longer-established oligarchs. However, as Wurfel argues, “the occasional policy conflicts between industry and export agriculture… are… muted by the bridge of family ties between both sides.”

The increasing role of the state ought to enhance its position vis-a-vis foreign corporations. In practice this appears not to be so. Whether the highly centralized authority of the State imposed by the World Bank and IMF is arguable, it is clear that the economy is open to foreign capital. Apart from the example given of Floriendo, other Filipino investments include the government’s Land Bank which finances agrarian reform. At least two private banking corporations and the state-administed Unicom have bought the largest copra mill in France. While financial dealings do not demonstrate any significant independent power for Filipino capitalists, they do qualify the image of total dependence. It might be more significant if the accumulated funds were invested in the country to generate exports with Filipino ownership and perhaps technology.

In summary, it may be said that Filipino capitalists probably have more scope for autonomous behavior than they or others recognize. However, they are usually unprepared for the challenges while the Kinecon networks present easier mechanisms of profit. The government on the other hand, facilitates continued penetration by TNCs in the name of structural adjustment through competition. As Fernandez concluded for Colombia, the more deeply foreign capitalism penetrates, the more disastrous will be any sudden attempt to reverse or eliminate it.