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I. Background Information / Additional Perspectives

Since the Philippines is highly dependent on oil imports to meet its

electricity demands, the government saw the need of initiating a series of

reforms in order for the countrys energy sector to meet the demands of the

economy. Until 1987, the generation of electricity was monopolized by the

National Power Corporation (NPC) but because of the power crisis

experienced by the country, the government allowed Independent Power

Producers to generate and sell electricity to the NPC and other customers.

President Corazon C. Aquino issued Executive Order Number 215, which

allowed the private sector to generate electricity. Moreover, R. A. 7718

enacted in May 1995 under the regime of President Fidel V. Ramos which

amended R. A. 6957 provide more opportunities for the private sector to

finance, construct, operate and maintain infrastructure and development

projects by expanding the forms of private sector arrangements to include

build-own-operate, build-lease-transfer, contract-add-operate, develop-

operate-transfer, and rehabilitate-operate-transfer power projects.

Consequently, the government allowed the construction of power

plants specifically coal-fired power plants, in different parts of the country in

the early 1990s. These plants intended to supply the much-needed energy to


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boost the countrys efforts at industrialization.

Quezon Power Limited Co. is the first privately built, owned and

operated power-generating facility in the Philippines. It has an $810 million

worth coal-fired power plant with a capacity of 440 megawatts located in the

town of Mauban, Quezon. It is built under the consortium of three big

companies namely the International Generating Co. (Intergen), a global

power generation and fuel asset development firm; Ogden Energy, a

worldwide developer and operator of independent power projects and PMR

Power, a Philippine power development company.

The said plant project includes a 31- kilometer transmission line in

Barangay Cagsiay I of the said town. It sits on a 100-hectare of land and

foreshore land the said barangay which was once part of a mountain forest in

Mauban overlooking the Lamon Bay.

Under a 25-year power sales agreement, the said project will sell

electricity to Manila Electric Company (MERALCO). Commercial operation

is scheduled to begin in the late 1999. This build-own-operate project

represents a milestone, as it will be one of the first private sectors that will

sell power to a privately owned utility. Unlike other independent projects

financed to date, it will not rely on any government performance guarantees.


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Under the consortium, Intergen, a partnership between P.G & E.

Enterprises and Betchel Enterprises, will provide management services to

QPL while Bechtel Power Corp will provide engineering, procurement, and

construction management services. Intergen is an international developer of

power projects in operation or under construction totaling 5,758 MW.

On the other hand, Ogden affiliates will provide operations services to

the power project. Ogden has over 1,463 megawatts of non-utility power

projects in operation or under construction. It is also the largest operator or

large-scale solid waste- fired thermal generating facilities in the world.

The local government officials and community members welcomed the

construction of the plant with the hope of the development promised by the

construction of the power plant. However, a huge number of the residents of

Mauban were different about the said power project. Moreover, they were not

conceding the Environment Compliance Certificate provision of Social

Acceptability set by the Department of Natural Resources.

Even before QPL was allowed to start the plants construction, several

local non-government organizations based in Mauban, Quezon particularly

the Crusade for Sustainable Environment (CSE) and the Task Force

Kalikasan (TFK-Mauban) of the Parish Pastoral Council of Mauban and


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residents of the said town expressed their opposition to the construction of

the said power plant.

Other environmental groups outside Mauban such as the Babilonia

Wilner Foundation (BWF), Greenpeace, and Legal Rights and Natural

Resources Center-Kasama sa Kalikasan (LRC-KsK) also helped in the

actively campaigned against the construction of the plant. The said groups

actively campaigned against the construction of the plant because they knew

that coal is a dirty fuel and causes pollution to the environment particularly

the air. They also foresaw plants detrimental effects on the environment and

the peoples health. However, they did not succeeded in their move of

addressing their opposition to the said power facility. It was on April 11,

1996 that DENR issued an Environmental Compliance Certificate that

mandates QPL to start its plants construction and later on operation.

In August 1996, a community Memorandum of Agreement was signed

by QPL, the Department of Environment and Natural Resources and the local

government units. The MOA provides monetary assistance and community

benefits. It also requires the monitoring activities of the $ 800 million power

plant.

The agreement also included the formation of a Multipartite Monitoring


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Team (MMT) that will oversee and check the plant for public health and

environment safety. The team was composed of representatives of QPL,

DENR, local government of Quezon Province, Mauban, Quezon, Barangay

Cagsiay I, non-government organizations and directly affected families.

MMT is the first monitoring group formed for a power facility in the

country. It is actively operating while plant construction is going on. This

was in compliance with the environmental compliance certificate issued by

the DENR.

On the other hand, the environmental organizations did not stop

monitoring the said facility. The Crusade for Sustainable Environment led by

Mauban resident, Elizabeth Mossman rallied farmers and fishermen against

the Quezon Power plant even past its construction and continued to decry

violations of its ECC issued in 1996.

DENR issued a Cease and Desist Order (CDO) and Suspension of

Environmental Compliance Certificate (ECC) in October 16, 1997,

immediately halting QPL's construction activities in Cagsiay I, Mauban,

Quezon. Much of the evidence presented to DENR was obtained by CSE,

who have been monitoring the activities and violations of QPL since their

ECC was approved. Among the residents complaints which led to the


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cancellation of the companys ECC were the wanton cutting of more than a

hundred coconut trees, intrusion of into farm lots and pollution, destruction of

roads and health hazards from the large volume of dust generated by more

than a dozen trucks passing by the houses daily.

CSE thought they finally succeeded in their motive to revoke the permit

of the said plant to construct and operate but on October 27, 1997; DENR

Secretary Victor Ramos issued an order lifting the CDO and Suspension of

the ECC after QPL submitted a solid waste management plan, a truck traffic

management scheme and a tenant compensation policy.

In a published quote, Mossman express her dismay on what had

happened. She asked why DENR lifted the Suspension and CDO based only

on the companys submitted plans. Mossman doubted about the actual

implementation.

CSE maybe dismayed on DENRs decision but it did not stop them to

monitor the construction of the said power facility. In the morning of Nov.

19, 1999, a freshly unloaded and uncovered coal stockpile was exposed to

heavy rains. This caused a coal leacheate run-off overflow that went into the

Lamon Bay when storm water flowed into the drainage ditch at the north

bypass road.


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At around 1:30 pm of the same day, the run-off basin also affected the

Cagsiay River as the heavy rains continued. The said coal leacheate caused

the discoloration of the said bodies of water.

DENR Secretary Antonio Cerilles directed officials of QPL to mitigate

the discoloration of Cagsiay River and the Lamon Bay after conducting an

aerial inspection in the area.

As many residents and environment groups joint forces in the appeal of

the closure and revocation of QPLs ECC, The said company needs to take

necessary actions to avoid this.

II. Time Context

The year 1999 will be used as the time context in this particular study.

All the facts, events, implications and laws cited in this study will be bounded


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on the said period.

III. Point of View

We are the PR department employed by the Quezon Power Limited Co.

and we were tasked to deal with the situation.

IV. Analysis

A. Situational Analysis

In this case analysis, we will state the Technological, Environmental,

Legal, and the Socio-Economic implications of the incident in Mauban,

Quezon and to the Quezon Power Limited Co.

Technological Implications

Even before the coal spill, the residents of Mauban, Quezon opposed

the construction and operation from of the said power plant. One the reason

why the residents opposed the said plant was the fear that the plant will emit

ink-black smoke that may pollute the air. Contrary to this, the plant was

equipped with state-of-the-art anti-pollution equipment that burns coal


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cleanly. With such equipment, the power plant when operational will neither

cause environmental harm nor pose any health hazard.

The equipment include high-tech devices such as an electrostatic

precipitator (ESP) that removes ash particulates, a flue gas desulfurizer

(FGD) that neutralizes sulfur compounds and special burners that minimizes

nitrogen oxides.

As a result of the installation of the said equipment, QPL is expected to

meet or even exceeded the emission standard established by the DENR.

Similar devices are now being used in coal-fired power plants in the

United States whose government and citizens are known to be very sensitive

to environmental issues.

On the other hand, on January of 1999 about 70,000 tons of steam coals

were unloaded at the power plants storage area in the preparation for the

companys full operation.

The said coal came from Kalimantan, Indonesia and was used to test

the efficiency, durability, capability, and environmental safety of the plants

coal supply.

QPL General Manager, Gregory W. Daul gave assurance that both

delivery and unloading of the said coal will be environment friendly and safe.


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Daul added that the said coal has a very low sulfur content, when burned

leaves only few ashes.

QPL was efficient in ensuring that the company has the equipment

needed for them to comply with government standards. However, the

company overlooked the possibility of coal seepage during heavy rains.

Hence, there is a need to upgrade the plants drainage system and wastewater

treatment facility in order to avoid the occurrence of another coal spill.

Environmental Implications

Coal is the most commonly used fuel in many developed countries

since it is low-priced and is widely available from many sources. The world

coal supply is enough to meet projected demands for the next 200 years or

more, unlike oil and other fuel, whose supply was expected to last only for

about 50 years.

Coal can help meet the countrys energy demand but the fact remain

that it is still the dirtiest, most carbon intensive of all fossil fuels, emitting 29

percent more carbon per unit of energy than oil and 80 percent more than gas.

It is one of the leading contributors to climate change, the single biggest


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environmental threat facing the planet today.

When fossil fuels - coal, oil and gas - are burnt, it releases carbon dioxide

(CO2) - the main human- made 'greenhouse gas'. CO2 and other greenhouse

gases create an artificial 'greenhouse effect', thickening the natural canopy of

gases in the atmosphere and causing more heat to become trapped. As a

result, the global temperature is increasing, throwing the world's climate out

of its natural balance and into chaos.

The effects of climate change are further compounded by the production

of toxins released by the burning of coal. Burning coal for energy produces

tremendous amounts of toxic wastes that, over time, destroy the communities

where these coal plants are built.

Communities living near existing coal plants are already experiencing the

effects of the said waste. Even if QPL was equipped with anti-pollution

devices, it is still expected by many environment groups that the plant will

pose environmental harm.

Residents of Mauban, Quezon had experienced the detrimental effects of

the said power plant even before the plant started its operation. Community

and environmental groups raised other issues against the power plant, and

these are the following: discoloration of the river because of a leakage in the


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ash pond where the coal was stored; flooding because of undersized drainage

canal; death in livestock and skin diseases; violations of the ECC terms and

conditions; noise pollution; conflicts in land claims; militarization; and

inadvertent use of access roads.

The complaints of the residents became even more evident as the firm

new coal stockpile got soaked during heavy rains and the leacheate seeped

into Lamon Bay and Cagsiay River causing discoloration. DENR said that

while the coal leacheate is not basically pollutive, it has affected the waters

turbidity. Turbidity refers to the clarity of water; the greater the turbidity, the

more murky the water.

In fairness with QPL, the company has not only acquired anti-pollution

equipment, it also implemented a reforestation program that aims to preserve

the vegetative cover within the plant site and adjacent mangrove areas. It

includes operating a nursery and planting thousands of plant seedlings.

Legal Implications

DENR Administrative Order Number 37, Series of 1997 provides that

major power plants in the country are considered Environmentally Critical


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contribution made by local government units or region; (2) to lessen conflict

of rights among host local government units, the people affected, the energy

resource developers or power producers, and appropriate government

agencies of the national government; and (3) to promote harmony and

cooperation among host local government units, energy-resource developers

or power producers, and national government agencies.

The policy framework included provisions for benefits for the host

community that would be affected by the construction of the power plant. On

the part of QPL, it claims to have complied with all the requirements

stipulated in the guidelines of the DENR-EMB AND the DOE. The company

established an Environmental Guarantee Fund (EGF) of Php5 million per

year to pay for claims on damages for loss of life, serious damage to property

and the environment, and for pecuniary loss or damage suffered by a person

or an entity as a consequence of pollution and/or environmental degradation

arising from a violation of environmental laws and DENR regulations

Likewise, QPL also set up a Multicultural Monitoring Fund to pay for the

honoraria of the members of the Multipartite Monitoring Team (MMT) and

the EGF Committee. It was reported that QPL spent a total of Php 6 million

on the activities of the MMT and the EGF Committee since 1997. The MMT


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is composed of 10 members and chaired by the Provincial Environment and

Natural Resources Officer (PENRO) while the committee for the EGF has 9

members and is chaired by the Regional Executive Director of the DENR.

Even if QPL followed the directives of DENR in the construction of the

power they still violated the provisions of

Presidential Decree No.1586 that states power facilities should

ensure that their proposed project or undertaking project will not cause

significant negative environmental impact. Hence, the company is also liable

to fines.

Quezon Power Limited Co faces a threat of yet another cease-and-

decease order from the DENR and suspension of their ECC. If not properly

handled by the management, the problem may provoke the authorities to

order the closure of the said power facility.

It may also undergo another public hearing presided by the Congress

just like what happened in 1997 wherein House Resolution number 1409 was

authored by Quezon Rep. Wilfredo L. Enverga directing the House

Committee on Natural Resources to conduct an inquiry into the alleged

irregularities committed by QPL.


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Socio-Economic Implications

The construction of the Quezon Power Plant promised drastic

developments concerning the livelihood of the residents of Mauban, Quezon

and even the construction of infrastructures such as roads. In accordance to

the provisions of DENR, QPL must do necessary programs or projects for

benefit for their host community. QPL promised to do their part for the

development of the community. Hence, most local officials and residents

welcomed the project with much hope.

As early as 1998, QPL started to help its host community. In December of

the same year, the Cagsiay I Multi- purpose cooperative registered with the

Cooperative Development Authority. The said cooperative is a part of the

livelihood program instituted by QPL. The project is a self-help program

where the skills of the members of the cooperative were developed as the

funds of the group grow. The cooperative offers training, seminars and

workshops to hone the skills of the members. The cooperative signed a

Php800, 000 worth of contract with QPL project manager Richard Collins for

the consortiums program.

On the other hand, most of the Residents of Barangay Cagsiay I in


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Mauban, Quezon depends on farming and fishing for their livelihood. With

the construction of the said power plant, a large agricultural land was turned

into industrial to make up for construction of the said facility. Moreover, the

coal spill that happened near the power plant had affected the marine

environment near the place thus affecting the livelihood of the Maubanians

fishermen. Even if the coal spill is not pollutive, consumers are still afraid to

buy fishes and other sea foods coming from the affected bodies of water. The

livelihood programs of the said power plant are not enough as many residents

are afraid to venture in other forms of living.

Nanding Manuba, a resident of Mauban, Quezon said that since the

plant was built, he had experienced pulling up his crab-nets and finding all

his crabs black and strange looking. Furthermore, he stated that the villagers

go to the coast to sweep the carbon off the beach whenever coal spills out

from their stockyard. In addition, some residents gave the carbon back to the

coal plant while others had to bury them under the sand. Manuba expressed

how sad he was when he noticed the water getting darker and how the black

water was overflowing from the plant site. Manubas statement represents the

sentiments of most of the residents.

Not all residents of Mauban Quezon appreciate the companys


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programs. The residents cant forget the previous ECC violations of the

company. As the coal spill happen, the number of residents opposing the

plants full operation also outgrew. A study conducted to measure the social

acceptability of the QPL power plant disclosed by environmentalist groups

showed that residents living the projects site strongly favor the completion

of the power facility while those residing in barangays opposed its

construction. Hence, there is a need for the company to reach out to other

barangays as well.

They even wonder why the government allowed the construction and

operation of the said facility amidst the fact that it is detrimental to the

environment and to their health as well. They felt that QPL is insincere with

its promise of development since it violated the primary provisions of ECC

that they must ensure the safety of their host community.


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B. SWOT Analysis


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V. Problem / Opportunity Statement

The occurrence of the coal spill could be a reason for the government to

Strengths

Owned by multinational

companies

Supported by Mauban Mayor

Fernando Llamas and Brgy.

Cagsiay I Chairman Oscar

Juqueta

Weaknesses

Issued cease and desist order and

suspension of environmental

compliance certificate in

October, 1997 by DENR

Environment groups and some

residents of Mauban oppose the

construction of the plant.

Opportunities

Upgrade the technology and

facilities in the power plant

such as proper drainage system

and wastewater treatment

facility

Chance to gain social

acceptability through

community-based projects

Threats

Negative write-ups about the

company

Possible closure of the power

plant

Increase in the number of

environmental groups that are

campaigning for the closure of

the power plant.


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stop the continual construction of the Quezon Power Limited Co. and since

that time, a huge amount of money had already been spent for the plant, it

would be a big loss for the owners of the said power facility. However, if this

problem is handled properly, this could be an opportunity for QPL to gain

social acceptance from the residents of Mauban, Quezon and environment

groups as well.

VI. Objectives (General and Specific)

The overall goal of our crisis communication plan is to avoid the

possible closure of the Quezon Power Limited Co. Specifically, we aspire to:

Assure the residents of Mauban, Quezon specifically of Barangay

Cagsiay I and the environmental groups, such as the Crusade for

Sustainable Environment and other environment groups that the coal

spill wont happen again.

Implement an environmental program to integrate environmental

protection into QPLs business operations.

Cultivate good relationship with the people of Mauban, the companys

host community to gain social acceptability for the companys


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continuous operation.

VII. Targeted / Segmented Publics

The residents of Mauban, Quezon is the primary target of our crisis

communications plan since they were the ones who were affected by the

occurrence of the coal spill.

Our secondary target is the local media in the province of Quezon

particularly the newspapers and radio stations; environment caused oriented

groups based in Mauban, Quezon such as the Crusade for Sustainable

Environment, and the Task Force Kalikasan Mauban and other environment

groups concerned as well; the local government of Mauban, Quezon; the

Department of Environment and Natural Resources and the companys client-

MERALCO.

VIII. Alternative Courses of Action

ACA No. 1 Take Full Responsibility


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Quezon Power Limited Co. must take full responsibility on the

incident. The company must express regret to the residents of Mauban,

Quezon for the occurrence of the coal spill through the local media. The

company will also assure the residents of Mauban, Quezon, environment

groups, local government and its client- MERALCO that the company is

already adhering to the standards and policies set by the Department of

Environment Natural Resources and doing necessary actions to solve the

problem. Accordingly, the company will undertake necessary changes within

the company to prevent the occurrence of the same incident.

ACA No. 2 Offer Bribes to All Concerned People

The company should bribe the local government officials and DENR

officials assigned to monitor the power project in order for them to ignore the

complaints and allegations of the environment groups.

ACA No. 3 Ignore the Complaints

QPL must ignore the complaints of the concerned residents and

environmental groups and continue the construction of the power plant. The


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the actions that the company will undertake immediately to solve the

problem. On the other hand, the long-term action plan includes the set of

actions that the company will undertake in order to achieve its objectives.

A. Short-Term Action Plans

Actions within the next hour after the coal spill: FORMATION OF AN

INVESTIGATING COMMITTEE

A committee composed of the plants general manager Gregory W.

Daul, plant construction manger Richard Collins, plant engineers and PR

head Litz Santana will be formed to investigate the incident and decide on

what actions are necessary to undertake to mitigate the situation. The

company representatives of QPL will go to Lamon Bay and Cagsiay River to

assess the impact of the said coal spill.

Aside from its own investigating committee, the company will also

commissioned an environmental engineering and consulting firm to

independently investigate the coal seepage that flowed to the shorelines

immediately in front of the project site. The said committee will provide a

report and suggestions to the company about the actions they must do to

immediately solve the problem brought by the coal spill. Moreover, they will


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also suggest specific actions that QPL must do to prevent the occurrence of

another coal spill. They will also aid in the actual clean-up operation.

Actions within the next six hours: PRESS RELEASE

Because of heavy rains, QPL cant immediately start its clean-up

operation. The first action that the company will do is to give an official

statement regarding the coal spill through a press release to the local

newspapers and local radio stations. The press release will include the ff:

The companys regret about what happened.

The companys willingness to face their responsibility on what

had happened.

The actions that the company were undertaking to solve the

problem.

The actions that the company will undertake to prevent the

occurrence of the similar incident.

The companys pledge to help in the development of the

community.

Actions within the next 24 hours:

START OF CLEAN-UP OPERATION


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With the help of the environmental firm, QPL will immediately start

the clean-up operation of the coal spill at Lamon Bay and the Cagsiay River.

The company will also cover the newly delivered coal stock in order to

prevent the coal leacheate from escaping from the exiting stockpile.

COORDINATE WITH THE CLIENT AND THE AUTHORITIES

The company will also coordinate with the Department of

Environment and Natural Resources and comply with the directives of the

said regulating body through the Multipartite Monitoring Team. QPL will

also give periodic reports to the projects MMT about the mitigating activities

of the said power firm.

QPL will ensure MERALCO, the power facilitys client that the

company is doing necessary actions to solve the problem and comply with

the directives of DENR in order to avoid the plants closure.

Actions within the next 48 hours: DIALOGUE

QPL will also conduct a dialogue with the local government officials

such as Mauban Mayor Fernando Llamas and Barangay officials of Mauban,

Quezon, representatives of the Crusade for Sustainable Environment and


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TFK-Mauban and community members in order to express the companys

regret on what had happened and assure them that the company is taking

necessary actions in order to prevent the occurrence of the similar situation.

Through this dialogue, QPL will explain the caused of the coal spill.. QPL

General Manager Gregory W. Daul will state that the company had started

the process of covering the newly delivered coal stock and had instituted

other mitigating measures that had been proven effective in preventing coal

leacheate from escaping from the existing stockpile.

This dialogue will also give opportunity to the said participants to ask

questions regarding the coal spill and other environmental issues of the said

plant.

QPL will invite the said participants to the power plant to show their

anti-pollution equipment. This aims to eradicate the fear that the company

will pose further environmental harm when it is operational.

Furthermore, the company will also reiterate the companys

commitment to help in the development of the community.

B. Long Term Action Plan

ENVIRONMENTAL MONITORING PROGRAM

To uphold its commitment to sustainability and environmental protection,


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Quezon Power will also undertake an intensive environmental monitoring

program. The program will serve as an important part of the plants

compliance with the requirements of its Environmental Compliance

Certificate (ECC), which was issued in 1996. This program will help the

company to avoid the previous violations of the company.

To ensure that the coal spill wont happen again, QPL will monitor the

plant and conduct a coastal clean-up in a quarterly basis. Moreover, the

company must facilitate a proper drainage system leading to a wastewater

treatment facility that will avoid coal seepage in case of heavy rains.

The company will continue its reforestation program. It will facilitate

over 100,000 indigenous trees and plants along the plant site.

SUSTAINABLE DEVELOPMENT PROGRAM

On the other hand, to show that QPL adheres to its promise of

sustainable development, the company will continue to implement

sustainable development programs. Asenso, Mauban!, is a long-term program that focuses on education, health, environment, livelihood,


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infrastructure development and community relations. The programs are

largely geared towards freeing the people of Mauban, Quezon from the

clutches of poverty thus, enabling them to be productive citizens.

The said program also aims to reduce cases of malnutrition,

dependency, and illiteracy in the said town. Through feeding program, QPL

will assist elementary students suffering from malnutrition. It also conducts

regular medical and dental missions through free clinics at the plant site and

community visits.

In cooperation with local government and community-based

organizations, QPL will continue its support in the construction of basic

social infrastructure in the municipality such as roads, bridges, schools, water

system, markets, health centers, and a stable and reliable electricity

infrastructure.

Under its sustainable development program, QPL will also initiate

skills enhancement and livelihood development programs. A project that

aims to enhance the training skills of public elementary school teachers in the

field of Math, Science, and English will be implemented. Also, QPL will

provide training programs to farmers and small entrepreneurs. They will also

provide vocational-technical scholarship program for out-of-school youths.


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Moreover, residents will be given trainings on meat processing,

cosmetology, massage trainings, construction painting, and cooperative

development to enable them to augment the income of the residents of

Mauban, Quezon

INFORMATION, EDUCATION AND COMMUNICATION

PROGRAM

In coordination with DENR, QPL will also conduct information,

education and communication programto various schools and villages within

the province of Quezon on bio-diversity, forest conservation, proper waste

management and sustainable development practices.

PUBLIC SERVICE ANNOUNCEMENT

A public service announcement will be featured in local radio stations

that aim to highlight the companys role in the development of Mauban. The

said PSA also aims to motivate the residents of Mauban to be responsible

citizens of the town.

With the implementation of the said actions, it is expected that QPL


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will earn acceptance from the residents of Mauban and the environment

groups.

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