The Chamber of Mines of the Philippines (COMP) is confident that the economic policy team of the Duterte administration will prevail in bringing back investors’ confidence in the mining sector.
Nelia Halcon, EVP of COMP, said that, while the policy environment is still positive, investors’ confidence in the mining sector has waned.
She said if the current policy direction of the Department of Environment and Natural Resources (DENR) prevails, there might be some delays in the $23-billion mining projects COMP expects to pour in under the Duterte administration.
“An enabling investment environment, which is what the economic policy team of the Duterte administration promised, [is needed] so that investments will flourish,” Halcon said.
Halcon said metallic minerals production has already declined in view of the uncertainties, as well as the decline in prices of major commodities in the world market.
COMP members composed of the big players in the mining industry are trying their best not only to follow the mining law, but are doing beyond what the law requires in terms of social and environmental management programs, in the wake of government’s tightening of screws on mining.
So far, the DENR, under staunch environmental advocate and staunch mining operations critic Regina Paz L. Lopez, has caused the suspension of 10 large-scale metallic mineral mines with 20 others having been issued show-cause orders after an initial mining audit.
Just last week, Lopez announced the cancellation of the environmental compliance certificates (ECCs) of six mining companies and a property developer for its housing project as part of a review process that involves all development projects.
Lopez had also issued show-cause orders for 11 different development projects, including mining.
By mid of January next year, the DENR chief vowed to reveal the result of the mining audit, which she said will be deliberated upon by the DENR and MGB.
Lopez’s mining audit and ECC review is anchored on a campaign to promote social justice and common good, as she repeatedly said that under her watch, the policy is to stop development projects that cause environmental destruction and suffering to people in the communities.
Under the Duterte administration, Halcon is hopeful of an increase in production brought about by the planned massive infrastructure program that will require industrial minerals, cement and other nonmetallic mineral resources. The industrialization program of government will boost mineral production “if this goes without let up.”
COMP, she said, is communicating more about the industry, which has been demonized, to improve current policy environment in the mining sector.
According to Halcon, the Mines and Geosciences Bureau (MGB) under Undersecretary and Director Mario Luis Jacinto has undertaken a review of Executive Order (EO) 79, which they want repealed to improve the situation.
Among the provisions of EO 79 COMP is protesting about are the establishment of “no-go zones” for mining, the periodic review of mining contracts, and the push for a new mining tax scheme, which they said would make mining in the Philippines uncompetitive.
“We are waiting for the results of the study and we are hopeful the EO will be repealed,” Halcon said.
According to Halcon, despite the suspension meted out to what Lopez describes as irresponsible mining companies, the relationship with Lopez remains “cordial.”
However, Halcon said executives of mining companies belonging to COMP are more confident with Jacinto.
‘Passing mark’
Antimining group Alyansa Tigil Mina (ATM), which is part of the mining audit expressed satisfaction over Lopez’s performance as far as managing the country’s mineral resource is concerned.
“On a scale of one to 10, with 10 being the highest, I would rate the Duterte-Lopez administration with a seven. Its above passing, but not perfect. To the best of my knowledge, the Duterte-Lopez administration has been the most clear about its position on destructive mining, and the directive has been to stop those mining operations that are violating the law or noncompliant with the provisions of the Mining Act of 1995 [Republic Act (RA) 7942] and other mining regulations,” Jaybee Garganera, national coordinator of ATM told the BusinessMirror.
Garganera, however said Lopez’s performance during the past five months, is “far from perfect.”
“We know that Duterte is not antimining per se, but his directives have been clear—to stop mining projects that destroy the environment. And he has stated that we should follow the Australian or Canadian models of responsible mining,” Garganera said.
“We recognize the efforts of Secretary Lopez at the DENR to stop destructive mining. However, I feel that the reforms she wants to institutionalize inside the DENR are too few and too slow,” he stated.
Lopez has been twice bypassed by the powerful Commission on Appointments (CA), which ATM believes is because the top DENR official has many adversaries in the Duterte administration.
Acording to Garganera, as far as ATM is concerned, the Duterte administration and the DENR under Lopez’s watch is on the right track.
“The effort to protect the remaining forests and coastal resources is very evident. The suspension of mines that destroy protected areas and river systems has been done. And the mining audit to establish the conflict between conserving and utilizing our natural resources has been an intervention that is long needed,” he said.
ATM said at least three initiatives from the directives of Duterte at the DENR that are being implemented will benefit the proper utilization of our natural resources, namely, the mining audit, review of the ECCs of all environmentally critical projects and the dismantling of illegal fishpens in Laguna Lake.
According to Garganera, the mining audit process allowed communities and CSOs access to relevant documents that contribute to the negative impacts of mining.
“For the first time, local organizations were able to access contracts, EIAs, ECCs and other attached documents. This is very important in exposing the violations or noncompliance of mining companies. I believe that the mining audit also contributed in the fast-tracked process of issuing the Freedom of Information [FOI] guidelines for DENR,” he said.
ATM said a deeper and more comprehensive study on the social impacts of mining should be done.
“Relying only on paper checklist of compliance is inadequate. Actual impact assessments on the livelihoods, human rights, health, mobility and participation of mining-affected communities must be clearly established,” Garganera pointed out.
Garganera said it is desirable that a total economic valuation (TEV) of natural resources to be impacted by mining should be done, with state colleges and universities in areas that are hosting mining projects playing an important role.
Not too strict
Meanwhile, ATM defended Lopez against allegations that the DENR chief is too tight against large-scale mines, while being lenient on small-scale miners.
“Just looking at large-scale mining, I don’t think the Duterte-Lopez administration is being too strict or tight. They are merely implementing the mining law [RA 7942] and other regulations,” Garganera said.
According to Garganera, the DENR has not been able to perform its mandate, but said local governments are equally accountable to the regulatory lapses on small-scale mining operations.
Garganera said the DENR central office is not able to register, track or monitor where and who are doing the small-scale mining operations. Likewise, he said the local government units (LGUs) have been remiss in submitting reports and updating their own database of small-scale mining operations.
“The conflict in regulating the small-scale mining industry is due to the fact that we have two laws right now regulating the small-scale mining industry. RA 7076 [People’s Small-Scale Mining Act in 2001 and Presidential Degree (PD) 1899 in 1984],” he explained.
In some cases, the problem on small-scale mining’s unchecked operation is because of the conflict of interest of many LGU officials.
“Some of them are actual owners, financiers or subcontractors of small-scale mining,” he said.
According to Garganera, the Duterte administration must introduce a new policy on small-scale mining that clearly repeals PD 1899 and adopting more strict policies on monitoring their operations, especially the use of illegal toxic chemicals, such as mercury.
Repeal Mining Act of 1995
ATM maintains its position that the Philippine Mining Act of 1995 should be repealed.
The group believes that the law did not establish clearly the role of mining in the country’s development and industrialization effort.
“RA 7942 was passed to make sure that foreign investors and mining companies will have access to our mineral resources in order to supply the global chain or industries and manufacturing of developed countries. There was little intent to develop the Philippine mineral downstream industry,” Garganera said.
Garganera added that a clear downstream industrial plan is needed. To do that, he said the government needs to harmonize existing laws and policies that are in conflict with the mining law.
“For instance, why do we allow mining in protected areas and prime agricultural lands when these are clearly no-go zones, according to the Mining Act itself? Also, the decisions of local governments and indigenous peoples to reject mining must be respected. These two issues are clearly covered by the Local Government Code of 1991 and the Indigenous Peoples Rights Act of 1997. So these policy conflicts must be resolved,” he stressed.
ATM said the government also needs to delineate clear no-go zones against mining projects.
“These means already declared protected areas, watersheds, fragile island ecosystems and prime agricultural lands must not be opened for mining. We foresee that water would be a major issue in the next two decades, so we must protect our water sources,” he said.
Meanwhile, to address the proliferation of illegal small-scale mining operations, Garganera said the DENR must complete an inventory and registration of all Minahang Bayan all over the country.
LGUs, he said, must be compelled to report small-scale mining operations in their areas and the BIR must go after the taxes of small-scale mining. He added that some LGU officials must be charged at the Ombudsman or Sandiganbayan on their conflict of interest in owning or operating small-scale mining operations.
He challenged COMP, which is blaming small-scale mining for painting a bad picture of the sector, should take the lead in exposing illegal small-scale mining operations.
The MGB reports that for the last 10 years, the industry only contributed between 0.7 percent and 1.0 percent to the country’s GDP. Garganera said this is largely due to a mining-tax policy that only imposes 2-percent excise tax and 5-percent royalty payment, and allows export of raw minerals without imposing tax on mineral exports and by providing tax holidays to incentivize investments.
Instead of pursuing mining liberalization, the government must invest on agriculture.
“As an agricultural country, we need to reinvest in broadening and modernizing agriculture. This is imperative for rural development. Agricultre has far more better forward and backward linkages to the economy, and there are more families employed by agiruclture,” he said.
The government, he said, should also sustain our services sectors including business-process outsourcing , construction, financial and ecotourism.
“I think that the PDP [Philippine Development Plan] should clearly set the direction of balanced investments and focus on these economic sectors.
“It makes more sense to improve the reliability and consistency of roads, airports, electricity and communications to really spur economic growth,” he said.
Garganera also reminded that the government of the reality of climate change.
“We should ensure that our water [fresh] and coastal resources are adequately protected and prepared for climate change factors,” he ended.
1 comment
Is this article written by Jonathan Mayuga from Business Mirror or a Jonathan Mayuga from COMP? Nowhere in the article the author addressed Ms. Gina Lopez as the secretary of DENR. Also the EO 79 was a product of the Aquino presidency that put a moratorium on new mining ventures as to review the current 2% tax government imposes on mining thereby aiming to increase government’s share.