Palace lifts ban on new mining agreements

President Duterte has signed Executive Order (EO) 130 lifting an almost decade-old moratorium on the processing of new mining projects held in abeyance since 2012 by former President Benigno “Noynoy” Aquino’s EO 79. 

Specifically, Duterte’s order amended Section 4 of EO 79 signed by Aquino on July 6, 2021, on the Grant of Mineral Agreements Pending New Legislation, thereby allowing the Department of Environment and Natural Resources (DENR) and the Mines and Geosciences Bureau (MGB) to proceed with the processing of new mining project applications.

With the latest signed by President Duterte last Wednesday, new mining operations are also expected  to resume In removing the prohibition, he cited the provision of the Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act which doubled the tax rate for the said resources from 2 percent to 4 percent.

President Duterte said higher tax rate coupled with the “additional rules, regulations, and policies” implemented by the DENR are sufficient grounds to allow the government to enter into new mineral agreements.

“The DENR shall strictly implement mines safety and environment policies. It shall ensure strict implementation of and compliance with the recommendation measures of the Mining Industry Coordinating Council involving all mining operations, including other pertinent laws, rules, and regulations, and terms and conditions of mineral agreements,” President Duterte said in his two-paged EO 130.

‘Welcome development’

MGB Director Wilfredo G. Moncano, in a telephone interview, said Duterte’s latest order in the mining sector is a “welcome development.”

The mining official said he would immediately create a small group that will work on the implementing rules and regulations (IRR) of the new order.

The MGB official said the IRR would focus principally on the grant of new mining permits and declaration of new mining areas as “mineral reservations.”

“All these will be in the IRR. We will immediately work with the Department of Finance [DOF] and other stakeholders to craft the IRR,” he said.

Moncano said big industry players, as well as local government units (LGUs) that host mining projects will be summoned for their inputs in the crafting of the IRR.

In a separate text message, Moncano expressed elation with the issuance of the new order, stressing that the lifting of the mining moratorium will boost the country’s economic recovery effort amid the unprecedented global health crisis brought by the onset of Covid-19 pandemic since last year.

“The MGB, DENR, the mining industry, and the mining investors, among others, who were awaiting this Executive Order that will lift the moratorium in the processing of new mining projects, are elated that the mining sector’s proposal to contribute to the economic recovery of the country during this pandemic is heeded and supported by the highest Executive office of the country. There are mining projects under priority listing right now that are hindered or hesitant to invest and proceed to development and commercial extraction because of the previous EO [EO 79] imposing a moratorium to MGB-DENR on the issuance of new Mineral Production Sharing Agreement [MPSA],” he said.

“The issuance of an MPSA by reason of the lifting of the moratorium through this EO 130 will authorize the mining company to proceed to development and commercial extraction. These are the activities or projects needed that can generate economic activities, revenues, employment, services, taxes, and other indirect economic activities in remote areas in the country,” he said.

Moncano said, however, that the processing of applications and eventually, approval of new mining projects, do not mean that the protection of the environment and safety will be taken lightly.

“On the contrary, strict environmental and safety measures will be put in place. The DENR and DOF will soon craft the implementing rules and regulations for this EO 130,” he said.

The mining industry’s big players, represented by the Chamber of Mines of the Philippines (COMP), has been calling for the lifting of the mining moratorium, blaming President Aquino’s mining policy for the decreasing mining investments since EO 79’s signing in 2012.

Roadblock removed

IN a news statement, COMP said that the lifting of the moratorium on new mining projects is most welcome especially in the time of great national difficulty.

“A major roadblock to the huge potential of the Philippine mining industry to contribute to socioeconomic growth has been removed. We welcome the lifting of the moratorium on new mining projects—in place for nearly nine years—in this time of great national difficulty as a result of the Covid-19 pandemic,” COMP said.

COMP said that mining projects that will be allowed to operate will provide additional government revenues in the form of taxes and fees, royalty fees, and increase in export value, as well as employment opportunities for thousands of Filipinos, especially those in rural areas.

“The industry’s positive impact on host communities can be clearly seen in regions around the country where mining has been allowed to flourish, such as in Caraga and Mimaropa,” COMP said.

“The removal of this policy roadblock will undoubtedly help encourage both local and foreign investments into the country. Since 2010, investor interest in the Philippines has declined. Executive Order 130 will help bring the Philippines back on the investment map,” the group added.

COMP believes that adequate social and environmental laws, rules, and regulations are already in place to mitigate the impact of mining on communities and the environment.

“Despite this, the members of the Chamber of Mines of the Philippines have voluntarily adopted the Towards Sustainable Mining program, a global social and environmental performance standard that compels us to operate beyond mere compliance.  We have also subscribed to the Extractive Industries Transparency Initiative to further demonstrate our commitment to the highest standards of transparency and accountability in business,” the group added.

Reforms under way

Sought for comment, COMP Executive Director Ronald Recidoro said he anticipates that the new order will bring about significant reforms in the contracting and regulation of new mining projects.

“Government focus is really on strict compliance with social and environmental regulations and revenue generation. [The] industry will be happy to meet government halfway,” he said via text message to the BusinessMirror.

Asked if it the new order would make mining in the Philippines competitive while ensuring that both government and the private sector are equally benefiting from a new mining revenue-sharing scheme, he said the order to the DENR and DOF is clear.

“The order to the DENR and DOF is to formulate the terms and conditions in the new mineral agreements that will maximize government revenues,” he said.

“We’ve had a lot of discussions with our counterparts in the DOF and we [have] both agreed that the fiscal regime should be rational. For us, that means we must maintain our competitiveness as an investment destination. Because if the mining tax regime is ‘too onerous,’ it will also not attract the kind of long-term investments that we are all looking for,” he pointed out.

Betrayal of Lopez’s legacy?

The anti-mining group Alyansa Tigil Mina (ATM), for its part, expressed surprise and dismay with the issuance of Malacañang of EO 130.

“This is a betrayal of the Duterte administration against the legacy of former DENR Secretary Gina Lopez and treachery against the future generations of Filipinos,” Jaybee Garganera, national coordinator of ATM told the BusinessMirror via text message.

“President Duterte has completed his turn around—from claiming to protect the environment and stop the destruction of forests by destructive mining—to a pro-mining President. Lifting the mining moratorium exposes his administration’s support for mining projects that will impact our water, food supply, forest, biodiversity, indigenous communities and fragile island-ecosystems,” Garganera said.

Garganera lamented that the lifting of the mining moratorium was made one week before the celebration of Earth Day 2021.

“The minions of this regime led by DENR Secretary Roy Cimatu and DOF Secretary Carlos Dominguez have once again failed the Filipino people in standing up for ecological integrity and environmental sustainability. This will be the saddest Earth Day celebration for many communities,” he averred.

“In the middle of a climate crisis and this pandemic, corporate interests and profit has won again over the welfare and benefits of man,” he added.

Garganera said ATM would not take Malacañang’s action sitting down.

“We will mobilize all our members to intensify and broaden the resistance against mining, especially those who stand to benefit from this new policy. And we will defy this callous government who keeps turning a blind eye against mining-affected communities and  environmental defenders,” Garganera said.

Amended provisions

The revisions in EO 79 stipulated in EO 130 include the giving authorization to DENR to “formulate the terms of and conditions in the new mineral agreements that will maximize government revenues and share from production,” through royalties in accordance with existing laws.

The task of “rationalizing existing revenue-sharing schemes and mechanisms” will be handled by both DENR and DOF.

EO 130 retained the original provision of EO 79 in terms of allowing the grant of new mineral agreements subject to compliance with the Philippine Mining Act; granting of Exploration Permits; and the mandate of DENR to review existing mining contracts.

EO 130 is set to take effect immediately after its publication in a newspaper of general circulation.


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