Environment Secretary-designate Regina Paz L. Lopez wants to take a direct hand in how mining companies will use their social development and management program (SDMP) funds, as she intends to make the industry benefit more people “far beyond their host communities”.
Here’s what Lopez actually said recently, based on news reports: “What I want to do with the SDMP fund is for the Department of Environment and Natural Resources [DENR] to jointly manage it with the mining companies and the community. I want to use their funds in the area-development approach for more impact.”
The Mining Act of 1995 requires mining firms to allot the equivalent of at least 1.5 percent of their operating costs to be spent for the improvement of the living standards of the host community and surrounding areas.
Mining firms are duty-bound to comply with the provisions of the law, or else face suspension or closure. But critics claim that no accounting has been conducted either by the Commission on Audit (COA) or independent third-party auditors as to how the SDMP funds have grown over the years, and how they have been spent.
This has raised concern that the SDMP funds could be used for less than noble purposes, that is, end up in the wrong pockets.
Data compiled by the DENR’s Mining and Geosciences Bureau (MGB) show that P5 billion has been committed in SDMP funds until 2021. The Siana Gold Project in Davao, for instance, is estimated to have an annual average SDMP fund of P12.83 million—or three times the combined IRA and 16 times the development fund of six barangays affected—or P128.3 million over its estimated mine life of 10 years.
Lopez wants to revise the SDMP guidelines that 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 program.
“The SDMP funds should not be limited just to the host communities. Of course, they’re the ones you should take care of. But, if used well, you don’t need to take care of them anymore, because they will use their own money,” Lopez said.
Lopez recently unveiled the DENR’s Integrated Area Development Plan (IADP), which runs for six years on top of the compulsory five-year SDMP. The pilot IADP area is Aroroy town in Masbate province, which is said to have plenty of gold resources. Lopez wants to develop Aroroy into a model municipality hosting a mine site.
On January 30 this year Lopez ordered all suspended mining firms to each open a trust-fund account in the amount of P2 million for every hectare of disturbed land before they can be allowed to remove their stockpiles from mining areas and given export permits.
These mining firms were also directed to follow the guidelines on the creation of the trust fund, including the setting up of a non-governmental organization (NGO), the recipients of the trust fund and the drafting of all company documents.
Lopez’s appointment by President Duterte has not been confirmed by the bicameral Commission on Appointments (CA), because of questions raised about her recent order to close down 23 mining firms and suspend five others based on the results of a mining audit. She also ordered the cancellation of 75 mineral-production sharing processing agreements on the ground that these were located in watershed areas, contrary to law. She again faces the CA on May 3, the first day Congress resumes its sessions, that is, if President Duterte reappoints her to the post, as she has been effectively bypassed by the bicameral body.
MWSS gets new head
Metro Manila’s 12 million water consumers can look forward to clean and adequate supply of the vital commodity with the appointment of retired Gen. Reynaldo Velasco as new administrator of the Metropolitan Waterworks and Sewerage System (MWSS).
With his track record as police general and later as town mayor in Pangasinan, Velasco’s term at the helm of the agency could lead to better coordination between the government and Metro Manila’s two water concessionaires: Manila Water Co. (MWC) and Maynilad Water Services Inc. (Maynilad).
Velasco has vowed to be “fair and just” to all stakeholders and to achieve five main goals: provide safe, affordable, clean water for a total of 20 million consumers of Metro Manila and surrounding provinces; honor concession agreements with the major water concessionaires and fast-track the setting up of sewage-treatment plants; ensure sustainable and sufficient water supply in the next 25 years; develop strong partnerships with local government units, as well as NGOs to promote better services, water conservation and environmental advocacies; and implement a merit-and-reward system for MWSS personnel.
These goals translate to a new meaning of MWSS: “Malinis na Tubig Para sa Lahat”, “Walang Kurapsyon,” “Sapat na Daloy ng Tubig” and “Serbisyong Tunay”.
Velasco’s pledge to honor concession agreements could lead to a speedy and positive resolution of the arbitration cases filed by the two concessionaires against the MWSS for the latter’s failure in the previous administration to uphold the terms of their 1997 agreements with the government.
Velasco’s emphasis on rewarding merit rather than patronage within the organization will also result in a more professionalized MWSS with zero tolerance for corruption and better partnership between the government and its private water concessionaires.
During the previous administration, Maynilad filed two successive arbitration cases before the International Chamber of Commerce (ICC) in Singapore following MWSS’s refusal to abide by the terms of the firm’s original 1997 concession contract with the government.
The provision in question involves the rate-rebasing mechanism in the MWC and Maynilad contracts that are supposed to allow these concessionaires to adjust their water rates once every five years, so they could recoup their multibillion-peso investments and generate sufficient revenue to cover their cash-intensive maintenance, expansion and modernization operations.
MWC had, likewise, filed an arbitration case against MWSS, also before the ICC in Singapore, on grounds that it stands to lose a projected P79 billion until its concession runs out in 2037, because of MWSS’s similar refusal to honor the rate-rebasing process as stipulated in the 1997 concession agreement.
The Supreme Court has already ruled that private operators of government projects have the right to be accorded a “reasonable” rate of return for their investments.
Velasco has described the two concessionaires as “partners in the water service”, which MWSS was willing to work with closely in order to build more wastewater-treatment plants to help reduce water pollution and protect water resources.
Velasco has also announced plans to pursue big-ticket flagship projects, such as the Laiban, Kaliwa at Kanan (Dam) projects, which will ensure adequate, steady and sustainable water supply for our consumers in Metro Manila and adjoining provinces in the next 25 to 50 years.
E-mail: ernhil@yahoo.com.