EXTRACTIVE INDUSTRY

Mine and all

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THE mining sector has asked the government to lift the moratorium on new permit applications, saying the ruling administration should have a clear-cut policy direction aimed at attracting more investments.

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In 2012, then-President Benigno Aquino 3rd issued EO, or Executive Order, 79 (Mining Law), and then ordered the moratorium on new mining applications.

“Essentially, there is no growth [in the mining industry]if the moratorium is not lifted,” Ronald Recidoro, executive director of the Chamber of Mines of the Philippines (COMP), told The Manila Times in a recent interview. “These pending issues should be resolved immediately so that the mining sector will have an assurance on what will be the direction of the government about the mining industry.” While the Philippines is, indeed, rich in minerals, he noted, the uncertainty being felt by the industry has contributed to the lack of interests by investors. “Nobody wants to invest in the Philippines unless there is a clear clear-cut policy direction from the government,” he stressed.

President Rodrigo Duterte earlier said the miners should allocate funding for cleanups and rehabilitation of mining-affected ecosystem, and ordered industry players to pay the correct taxes. “We have no choice but to agree with the President,” Recidoro said. “A mining company really has a responsibility not just to extract the minerals properly, but, more importantly, to rehabilitate the area once mining is finished.”

Under the current law, Recidoro noted, mining companies are required to set aside a certain amount of their capital for purposes of rehabilitation. And he clarified that miners have been doing this even before the President’s admonition to the industry. Each mining company already has its own final mine rehabilitation in the decommissioning plan. This plan is being formulated by the company in cooperation with the host communities, which have to decide what they want the final land use to be. “So this is now the mechanism, which ensures the area that is being mined will be rehabilitated properly, and will be converted to another land use once mining is finished,” he said.

Also, industry players must allocate funding for a separate environmental protection and enhancement program. “There are specific amounts under the Mining Act, so under that the fund will cover accidents arising from mining operations that will also cover claims by communities against the mines,” Recidoro said. “So under this setup, the community and the government are assured that there is money that can be collected from the company in case of major accidents.”

Recidoro noted that large-scale metallic mines, particularly those that are members of COMP—an association tasked to advance the interests of mining, quarrying, and mineral processing companies—are paying the correct taxes. These members have been participating in the Extractive Industry Transparency Initiatives (EITI), where miners report to the public how much they pay in terms of taxes, royalties, fees, and other impositions. The government also reports how much it receives from the miners. “Now, these two amounts are reconciled by a third-party auditor,” Recidoro said. “Through this method, we will see if the mining companies are paying the correct taxes.”

He revealed that over the last three years that COMP members have been participating in the EITI, there was only a 1-percent discrepancy on the monies reported by the mining companies and the government. This means, he said, that the miners have been paying the correct taxes. “But I can only speak for the Chamber of Mines and our members,” he stressed. “I cannot say the same for the illegal miners, these and those that are not members of the Chamber because some of them are not participating in EITI.”

As to the investment outlook, Recidoro believes that the situation now for the mining industry is significantly better than the previous months under the then-designated Environment Sec. Regina Lopez. “We are still cautious about the way forward because right now there is still a moratorium in place, the orders of Secretary Lopez are still in place, especially the open-pit mining ban, and her decision to close or suspend some 22 operating mines,” he said.

Lopez had ordered the permanent closure of 22 of 41 mines in the world’s top nickel ore supplier, citing environmental-rules breaches as part of her months-long crackdown on the sector she believed had caused extensive environmental damage. “So right now, the investment climate is still a wait-and-see,” Recidoro said. “We tried to communicate with Environment Secretary Roy Cimatu and the message we got is that we should wait. They are still studying the issues, and how these will be resolved.”

He explained there are two ways of looking at the mining industry’s contribution toward the economy: 1 percent of GDP from a national perspective, and 20 – 25 percent of the regional GDP, or where a particular miner operates. He cited Regions 13 (Caraga) and 4 (Mimaropa), for instance. “If you averaged us throughout the Philippines, we are small,” Recidoro explained. “But if you look at our impact in the region, where we have operations, we are big. We are one-fourth of the economy in those regions.”

And this is not to mention the various environmental-protection programs as well as the different socioeconomic and cultural projects—on health, education, livelihood, and public infrastructure—that mining companies implement in their host and neighboring communities.

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