A trial court in Makati has ordered government regulatory agencies to avoid disrupting the operations of Lepanto Consolidated Mining Company in Benguet, pending resolution of a dispute over its application to renew its mining contract in the area.
Lepanto said it sought arbitration after it was required to seek the consent of indigenous peoples in Mankayan, Benguet as mandated by the Indigenous Peoples’ Rights Act (IPRA) before its application for renewal to operate can be acted upon.
“There is an issue as to the applicability of certain provisions of the IPRA … which issue is now subject of arbitration proceedings,” Lepanto said in a statement.
Under the law, Lepanto must get the consent of indigenous peoples in the area of its operation considered part of ancestral domain. But the company claimed it was exempted from that provision because it obtained its contract seven years before the law was enacted in 1997.
Lepanto’s 25-year contract will expire in March 2015, and it filed for renewal in June last
year. The court’s order was directed at Department of Environment and Natural Resources, Mines and Geosciences Bureau (MGB) and the National Commission of Indigenous Peoples.
MGB Director Leo Jasareno said his office has not received the court’s order and the agency was still processing Lepanto’s application for renewal of its contract.
“If they comply with all the regulatory requirements, then we will renew their contract. It not, then we will not given them the contract,” Jasareno said.
Under IPRA, the company must acquire free and prior informed consent (FPIC) from the indigenous peoples that will be affected by the mining operations, as well as other matters involving their ancestral domain – including the renewal of contracts.
The company, however, claims that it is not covered by IPRA’s requirement of FPIC since it has secured its contract seven years after the law was enacted in 1997.
Lepanto’s 25-year MPSA is set to expire in March 2015. It has filed for a renewal in June 2014.
Since the company has yet to file for arbitration proceedings before the government, the company sought interim reliefs from the court pursuant to the Alternative Dispute Resolution Act.
Pending arbitration and renewal of the MPSA, the Makati RTC issued a writ of preliminary injunction against the respondents – including Department of Environment and Natural Resources (DENR), Mines and Geosciences Bureau (MGB), and National Commission of Indigenous Peoples (NCIP) – from performing any actions that will disrupt, disturb or impede Lepanto’s operations.
In a telephone interview, Mines and Geosciences Bureau (MGB) Director Leo L. Jasareno said that they have not received a copy of the court order, adding that the company has yet to file an arbitration case before the DENR.
“We have yet to receive a copy [of the court order]. As of now, we are still continuing with the processing of their application for the renewal of the contract,” Jasareno said.
“If they comply with all the regulatory requirements, then we will renew their contract. If not, then we will not give them the contract,” he added.
The MPSA is the site of the Far Southeast Project, which is being developed by Lepanto and its South African partner Gold Fields Ltd.
While seeking arbitration, Lepanto is also planning to convert portions of the subject MPSA into a Financial or Technical Assistance Agreement (FTAA), allowing Gold Fields to acquire majority stake in the copper-gold project.
At present, Lepanto holds 60 percent of the FSP, and the remaining 40 percent owned by Gold Fields.
MPSAs are granted to mining firms, which have at least 60-percent local ownership, while Financial or Technical Assistance Agreement allows 100-percent foreign ownership.