Is the DoF chief trying to sabotage Lopez?

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Ben D. Kritz

THE row that has erupted in the past few days between the Department of Finance (DoF) and the Department of Environment and Natural Resources (DENR) certainly gives one the impression that Finance chief Carlos Dominguez 3rd is doing his best to stop DENR Secretary Gina Lopez’s drive to clean up the country’s mining sector.

At issue is the planned review of Lopez’s order closing or suspending 28 mines by the Mining Industry Coordinating Council (MICC), a review that was ordered by President Rodrigo Duterte and approved by the MICC (of which Lopez is the co-chair, along with Dominguez) on February 9.

Even though Duterte has on several occasions expressed clear support for his controversial Environment secretary, the call for a review of her decision was sensible, despite it coming across as a move on Duterte’s part to mollify mining stakeholders enraged by Lopez’s order.

The DENR’s mining audit and Lopez’s consequent decision to shut down the mines (23 were ordered closed, 5 were suspended, and about 13 were judged responsible enough to continue operating) was based on significantly more objective analysis than has generally been reported, but it certainly should be reviewed. It is a significant policy decision with enormous economic, legal and social implications, and whatever the final result is—whether it is allowed to stand, is modified, or rejected—that result must be sound and credible.

To be fair to the DENR, it has supported the idea of a review, which was a point made again by DENR Undersecretary for legal affairs Maria Paz Luna this week; after all, Lopez herself signed the MICC resolution on February 9, and reportedly had her own lawyer Christian Monsod contribute to its drafting. What Lopez and the DENR are resisting is what they apparently perceive as Dominguez’s attempt to take control of the MICC review, and subsequently scuttle the mine closure decision.

There is more than a little justification for that concern. The key problem is that Dominguez has demanded P50 million from the DENR budget to fund the MICC review, money that will be used to employ outside experts. The MICC, however, has no procurement authority, so the hiring will be handled by the DoF. Dominguez may have signaled what sort of experts he prefers by detailing DoF Undersecretary Bayani Agabin as Finance’s representative in his absence; Agabin is a former senior vice president for legal affairs for Rapu-Rapu Mine in Albay, and prior to that was an official with the Philippine Associated Smelting and Refining Corp. (Pasar)
Agabin was quick to point out that he hasn’t worked for Rapu-Rapu in 10 years, and hasn’t been associated with Pasar for 15 years, which, as a small sign that some change never seems to come, is exactly the same sort of thick-faced excuse countless government officials have used time and again to dismiss questions of conflict of interest. If he or his boss were truly interested in carrying out a credible review to produce results that would stick, Agabin would recuse himself from it, or Dominguez would appoint someone without prior attachments that could be questioned. The DOF earlier this week accused Lopez of “throwing a monkey wrench” in the works by raising questions about the P50 million budget and Agabin’s involvement; but it turns out Dominguez installed one from the outset.

And Agabin might only be Dominguez’s Plan B. The impression of the DENR, legal affairs Undersecretary Luna’s comments to the media suggested, is that Dominguez is trying to stall the review, preferring to wait until the contentious P50 million budget is approved before proceeding, whereas the DENR wants the review to begin right away. The delay would be more than long enough to keep the review from happening before Lopez is up for confirmation again before the Commission on Appointments, where her chances of being endorsed are shaky at best, and where Dominguez’s artificially created quagmire over the mining review would probably reflect poorly on her. Presumably all Dominguez has to do is wait until Lopez is shown the door, and mining can go back to business as usual.

Some might regard all of this as indication that Dominguez is in the mining industry’s pocket, but there is absolutely no evidence of that, and it would be an extremely irresponsible and unfair allegation to make. Rather, his apparent disagreement with his Cabinet colleague’s and the President’s perspective on mining seems to be just another manifestation of an unfortunate propensity the Finance secretary has for tripping over pesos to pick up a centavo.

On several issues – the proposed draconian hike in the vehicle excise tax is another good example – Dominguez has outed himself as a short-term thinker. Gaming the mining decision review to make sure it doesn’t happen, or if it does, rolls back what Lopez attempted to do, saves the 0.45 percent or so mining contributes to GDP for the present, which is apparently good enough. Perhaps the two longer-term alternatives, either a smaller, more sustainable mining industry that makes a greater contribution or a non-mining economy that generates lower but more consistent revenues require too much effort, or take too long to serve as good résumé padding.

Whatever the thinking behind the sketchy behavior, the right thing to do would be what the DENR is pressing for: allow the mining concerns adversely affected by Lopez’s order to challenge it in court, where specific violations and other details on each side can be aired and resolved with finality one way or another.

ben.kritz@manilatimes.net

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