EDITORIAL

The unintended consequences of Lopez’s mining shutdown

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ON Monday, the Department of Finance reported that should the recent order of Environment Secretary Gina Lopez be fully implemented—to wit, the closure or suspension of 28 mining operations—the financial loss to local governments across the country will exceed P800 million.

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The exact figure, P821.13 million, is higher than an earlier estimate of P653 million, and is based, the DOF said, on a 100-percent accounting from the 17 affected cities and municipalities in 10 provinces.

Significantly, the income loss does not include the potential income from mineral production sharing agreements (MPSAs), 75 of which were canceled by Lopez in a second order; the foregone revenues from those very likely could be worth billions of pesos.

What is particularly alarming about the financial data presented by the DOF is that three municipalities, all in otherwise impoverished areas, will lose more than half of their operating income. Carrascal, Surigao del Sur, will lose P198.3 million, or 62.3 percent of its total operating income; Tagana-an in Surigao del Norte will lose P70.3 million, or 54 percent of its income; and the municipality of Tubajon in the Dinagat Islands will lose P38 million, which amounts to 55.4 percent of its total operating income.

Under the 1995 Mining Act, local governments benefit from mining in their jurisdictions through real property taxes, local business taxes, mayor’s permit fees, regulatory and administrative fees, and occupation fees. The local government units are also entitled to a share of mining taxes collected by the national government; the loss for this alone will amount to P481.17 million. In addition to all these income streams, the provinces where mining operations are located also collect governor’s permit fees, environmental fees, taxes to offset soil depletion, and where applicable, processing permits for sea vessels to carry away mined ore.

It should be emphasized that the financial loss is not a one-time charge against local budgets, but is an annual shortfall that will burden local governments unless and until something replaces mining as an income source.

Lopez’s contention in defending her moves to largely eliminate mining in the Philippines has been based on two essential points: First, that mining, at least as far as the now-closed or suspended operations are concerned, causes an unacceptable level of environmental damage; and second, that local communities do not receive the economic and social benefits to which they are entitled as a fair return for hosting mining operations. Lopez refers to this second notion as “social justice.”

The details from the DOF beg the question, what sort of “social justice” is represented by removing the biggest source of revenue from local governments in some of the poorest areas of the country, as well as their potential income from future mining activities? The mining shutdown may actually be based on compelling reasons that are a matter of greater national interest, but these consequences of the action are in no way acceptable, and are in stark contrast to President Rodrigo Duterte’s often expressed objective to spread economic growth equitably throughout the entire country.

Before the final decision to carry out Lopez’s orders is made, it is the inescapable duty of the Duterte administration to develop an economic plan, one that can be carried out with immediate positive effect, to provide the affected local governments and the citizens under their care with sustainable alternatives to the lost mining revenue. It is the duty of the administration precisely because President Duterte supported his environment chief’s controversial move; the easy way out would have been to simply repudiate it.

In that sense, the administration may consider it a positive challenge to put its money where its mouth is, as the saying goes, and start now to implement policies that uplift poor communities without causing further harm.

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8 Comments

  1. Hinde ho ba pwedeng hiramin ng mga drug lords ang argument ng mga pro mining. Malaking pera ho ang umiikot ditto. Marami din pong pamilya ang umaasa dito. May mga druglords din po na may mga scholar at bigay todo ang suporta sa simbahan, civic works at mga big time politikos. Sana pagbiyan din ang pagpapatuloy nito.

  2. Negligible compared to government waste. The DSWD CCT racket, the beauty pageants, the FIT subsidy, the senate and congress budget for circuses, the servicing of debts incurred by NPC, the vaccine scam.

  3. The intended consequence of the DENR actions is to protect the environment. That is the important thing. Note that more than half of the mining companies were closed but about 40% of the mining companies were found to be “good” and in compliance with the law. Lost income from illegal operations should never be considered when doing the right thing is what matters.

    • mas okay naman na mag suffer tayo for two years within which time Sec Lopez promised the development of a tourism industry, na mas magiging beneficial sa mga LGUs kaysa naman sa pagnaubos na ang likas na yaman eh habang buhay na nating pagdudusahan.

  4. Your Editorial in paragraph 8 says, among others, ” the mining companies are biggest source of revenues of( these) local governments of the poorest areas in the country .It is clear from your editorial na sa likod ng kinikita ng mga minero, wala itong iniambag sa kabuhayan ng mga tao at talamak pa rin ang kahirapan sa mga bayan o munisipyo kung saan naroon ang mga minahan. Why then are you defending this mining industry over a strict enforcer of the environmental laws?When did we have a Gina Lopez who is not beholden to any political authority?

    • Ung mga nakokolekta ho ba ng mga LGUs na to eh nata translate ho ba to sa actual na benefits sa mga community nila. oh si mayor at gov lang ang nakikinabang kasama na si MAR

  5. Driggs Matabaran on

    There is a need to take care of the environment. However, it is the government that allow mining companies to operate for a number of years already. If the granting of permits is illegal since as Secretary Lopez said these are in the watershed areas, it should not only be the companies that must suffer. Government officials granting such permits also have the liabilities. Closing abruptly existing mining operations will result to adverse economic consequences to families depending directly and indirectly to these companies’ operation. Aside from direct employees, some of these companies also have scholars whose education will stop once support will be terminated by their mining firm sponsors. Operation of micro enterprises in mining communities will suffer and eventually shuts down. Does DENR have a ready solution to address all the problems – revenue losses, job losses, etc. – created by such decision? How effective their solution would be? If eco-tourism as they say will generate better employment opportunities than mining industry, they should have find ways first to ensure that job losses in the mining industry will readily be absorb by it…

  6. This article that defends the interests of the mining companies at the expense of the people only leads me to surmise that the writer fully supports all forms of mining activities regardless of the consequences that those mining activities wreak on the environment. Thanks for that ne – at least I now know where you and your newspaper stand on the environment issue.