• Mining disaster


    Ben D. Kritz

    EVERYONE concerned should have known it was coming, but Department of Environment and Natural Resources (DENR) Secretary Gina Lopez’s edict last week ordering the shutdown of 18 mining operations and the suspension of five others seemed to catch the mining industry and the rest of the government by surprise.

    The Chamber of Mines of the Philippines (COMP), which saw several of its members shut down by Lopez’ order, reacted instantly and bitterly to the news, saying it would cost the country at least P66 billion, and result in the loss of about 1.2 million jobs. The order was arbitrary and ignored the recommendations from a lengthy audit of the industry and a review from the Mines and Geosciences Bureau (MGB), and completely disregarded due process, the mining group said.

    Lopez only fanned the flames of controversy with her explanation, which was not really an explanation at all but an unctuous statement to reporters that she was under no obligation to discuss how she arrived at her decision or provide the presumably conflicting recommendations from the MGB. Why should I, if I disagree with them, she retorted, adding that she was very unhappy with the bureau because it took six months to conduct its review and prepare its conclusions.

    Ever since her appointment last year by President Rodrigo Duterte, Lopez has made it clear that mining was her Public Enemy Number One, and that she would put a stop to as many mining operations as she justifiably could. To that end, she launched a stringent environment and regulatory audit of every company in the industry; some operations were deemed to be equal to the standards, and some were not.

    To be fair to ardent environmentalist Lopez, there are mining operations that probably should be shut down, and up until last week, many of the larger firms—particularly those who have operations in other countries, and have a bigger public image challenge to manage—were supportive of Lopez in this respect; one bad operator tends to make the entire industry look bad.

    Unfortunately, Lopez went too far in the way she handled the shutdown order, and discredited not only herself and her agency, but the entire industrial regulation framework of the Philippines.

    First of all, revoking an environmental compliance certificate—which is the specific power the DENR holds to stop any sort of industrial operation—should not be a matter of the subjective personal prerogative of the DENR secretary. If the relevant laws allow that, it is a grave legal shortcoming that Congress must address immediately. If, on the other hand, that is simply Lopez’s perception of her powers in spite of the law, then she needs to either be put in her place by her boss in Malacañang, or removed from the DENR before she is permitted to do any more harm.

    And contrary to what Lopez thinks, it certainly is not her prerogative to withhold the findings from the MGB because she disagrees with them, or for any other reason. Those recommendations were of a regulatory nature, involving—for the most part—publicly listed companies that are obliged to publicly disclose even the smallest material change to their businesses. It is possible that Lopez, by withholding that information, is actually forcing companies into violating securities rules, which would be something that most judges would likely find objectionable, if one or more of the affected firms pursued a legal remedy. Beyond that, Lopez’s position is a slap in the face of the public, particularly under the current administration, which is making some small but still significant advances toward greater transparency in government policy and action. While as the head of the MGB’s parent agency Lopez may not be compelled to accept its recommendations, the public coffers still pay the salaries of the people who made them, and the public is entitled to know how its money has been spent.

    If Lopez’s decision is allowed to stand as is—without objective justification and a clear connection to a uniform set of rules or standards—it will send a chilling message to any large-scale investor that process reliability is a concept that doesn’t exist here. Lopez might also consider that expressing her distaste for mining in such an opaque way will not impress the sort of investors she presumably would want in their place—those in the highly-regulated renewable energy sector—who need to be able to count on consistent policy and regulation for a long period of time in order to make their investments viable.

    A change in the perception that caprice rules the Philippines is a part of the change that was supposed to be coming with the election of Duterte; it is probably a safe assumption that no one expected it to be a change for the worse.



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