THE Philippines’s Extractive Industries Transparency Initiative (EITI) will ask participating companies to include in their voluntary tax-payments report details of spending for social-development programs, the Mines and Geosciences Bureau (MGB) said.
MGB Director Leo Jasareno said this is to address concerns raised during the Philippine EITI meetings on the lack of mechanism to verify financial soundness of spending by companies to ensure sustainability of projects implemented under the Social Development and Management Program (SDMP) system.
Jasareno said that so far, mining companies operating in the Philippines are compliant with the SDMP’s provision of the mining law as approved by the MGB.
The MGB, he added, regularly monitors the implementation of the SDMP spending of mining companies.
“We have resolved that in the next reporting, the SDMP will be included. We are talking here of transparency; this will heighten information about mining companies’ social responsibilities,” he said.
Mining companies are required to allot funds for social-development programs under the law and it has been a part of the MGB’s job, he said.
“This fund is private but we treat the fund as a public fund. Without this fund for social development, it is a ground for cancellation of mining contract,” Jasareno said.
Mining companies voluntarily submit their financial reports, including tax payments, to the Philippine EITI. The Philippines is batting for membership to the International EITI to ensure transparency in reporting profits and taxes, the government’s share in mining, including coal, and oil and gas.
Only two of so-called material companies whose annual earnings or revenues are more than P1 billion have so far declined to take part in the initiative.
Voluntary submission of their financial reports to the Philippine EITI, Jasareno said, speaks well of the companies’ character. “It means, the company can be trusted for being transparent.”
Most companies implement livelihood, education and health programs. Mining companies also implement infrastructure projects that benefit communities such as roads, bridges, schools and health, and day-care centers.
SDMP is mandated under Republic Act 7942, or the Philippine Mining Act of 1995. The group Bantay Kita said 21 years after the law took effect, development programs barely made a dent on local development.
Cielo Magno, Bantay Kita national coordinator, said mining’s benefits do not trickle down at the local level, even with taxes collected from mining, because their share in mining profit does not directly go to the coffers of the concerned local government units (LGUs).
SDMPs are required expenditures for mining companies which must be equivalent to at least 1.5 percent of their annual operating costs. Of the amount, 75 percent must be spent on community-development programs; 15 percent on mining technology and geosciences-advancement programs; and 10 percent on information, education and communication programs. It is implemented for a five-year period until the end of the mine’s life.
Bantay Kita cited a published report authored by Anton Ragos, entitled “Mining Communities and Social Development: Assessing the Philippine Social Development and Management Program,” which criticized the existing monitoring of the MGB as being “weak.”
The report said the MGB office is mandated to conduct semi-annual monitoring of the implementation of the approved SDMP.
He said mechanism to ensure genuine community consultation should be put in place wherein the decision on the composition of community representatives will not rest solely on the mining company.
13 comments
The SDMP is a good concept that can stand more improvement. Right now social development projects are identified and decided on only by host barangays. Technically, the province and municipality have no say in what projects or activities may be funded by the SDMP. This results in silos of development where only the host barangays enjoy the full benefit of the mining project, while outlying barangays and municipalities feel no benefit whatsoever.
The SDMP can be improved by including the municipal and provincial development officers involved so they can incorporate the SDMP into their local development plans and better identify projects that will have longer-lasting impacts for more people.
I agree sir. But the question is: Are mining companies willing to expand coverage and spend more than what they are required by law?
Mining companies are mandated by the Mining Act to spend a minimum amount equivalent to 1.5% of their annual operating budget for social development projects identified by their host and neighboring communities. Over and above the SDMP, companies can still choose to spend for CSR projects–ie, those that were not chosen by the community but which the company feels is still needed by the community. CSR projects have no limits.
Given that SDMP is mandatory, companies won’t really mind if the coverage is expanded. Their only role in the process is to fund the project. It’s the community that must be aware of their needs and priorities.
Many companies spend way more than the minimum 1.5%, especially where large projects like building (and maintaining) a community health center/hospital or road networks are involved. Rio Tuba in Palawan and Philex in Benguet are prime examples.
Thank you for yoyr response ande0 explanation, sir. Can you e-mail me your celfone number for future refence of my reports? jonlmayuga@yahoo.com
Is there a provision in the Philippine Mining Act of 1995 pertinent to the limit of SDMP coverage? Are mining companies prohibited to expand outside their host communities?
The IRR of the Mining Act limits the SDMP to “enhancing the development of the host and neighboring communities” effectively excluding other LGUs in the province that are not hosting mining projects. While expansion is not prohibited, the process for identification of SDMP projects is also limited by the IRR only to host and neighboring communities.
Transparency will help improve the people’s perception of mining and mining companies. They should submit an audited report of the SDMP fund they used, where or how they used it.
The SDMP is a 5-year plan with annual implementation programs. Expenditure and accomplishment is monitored by a tripartite body composed of reps from the company, the DENR, and civil society. The audit/inspection team must be satisfied that the company is fully implementing their social development program. otherwise, it could mean a cease and desist order from the DENR. Now, with EITI, the public will also have access to the data and expenditures made by the mining companies.
Mas maganda kung ang bahagi ng kita mapupunta sa programa na may pakinabang ang lahat lalo na pag may aksidente sa minahan. Kalbo na ang bundok natin kaya di maiiwasan sakuna. Magtanim rin dapat ng maraming puno at bigyan ng kabuhayan mga tao sa paligid ng minahan. Yun lang po.
Apart from SDMP, mining companies are also required under the Mining Act to make an Environmental Protection and Enhancement Program (EPEP) that they must fund and implement every year. Mining companies are also required to deposit to a Contingent Liability and Rehabilitation Fund (CLRF) which is under the control of DENR. Lastly, at leat 5 years before mine closure, companies have to start depositing to a final Mine Rehabilitation and Decommissioning Fund (FMRDF) that will ensure funding for rehabilitation works that will be necessary to restore the mined-out area to its former condition.
Lastly, mining companies are the biggest contributors to the National Greening Program (NGP). In the last three years alone, mining companies planted a total of 20 million trees throughout the country–more than any other sector or industry. This 20 million is over and above their normal and regular progressive rehabilitation activities.
Kaya maraming kontra sa mining kasi nakakasira ng kalikasan. Ipapasara daw ni P. Duterte ang mga minahan sa Mindanao pag di umayos. Sa Zambales, naging sanhi ng baha at pagkalason ng dagat at ilog ang minahan. Iyong mga ganung minahan dapat ipasara dahil iresponsable.
Thank you for your comments. May the discussions on mining elevate further for people to understand better its benefits, as well as impacts to environment, and what can be done to promote responsible mining for the benefit the people.
Thank you for your comments. May the discussions on mining elevate
further for people to understand better its benefits, as well as impacts
to environment, and what can be done to promote responsible mining for
the benefit of the people.