VICE PRESIDENT Jejomar Binay called on government policymakers and regulators to work on harmonizing national and local laws to resolve key issues confronting the country’s mineral sector.
In his speech at the Mining Philippines 2014 Conference and Exhibition, Binay detailed the reforms needed to move the country’s mining industry forward, noting that what the national government must attend to and place among its top priorities is the harmonization of local ordinances with the Mining Act of 1995.
“One of the major concerns is that we have a Mining Law that is considered to be one of the most sophisticated and well-crafted pieces of legislation worldwide . . . this should supersede local laws that run contrary to what [the Mining Act]seeks to achieve,” Binay said.
The vice president cited the case of the $5.9 billion Tampakan copper-gold project in South Cotabato, the country’s largest copper-gold project to date.
Binay said that conflicting ordinances—specifically the ban on open pit mining by the South Cotabato provincial government, which the Mining Act allows – have been delaying the start of the Tampakan project of Sagittarius Mines Inc. (SMI).
“What could have been one of the largest copper mines in the world, with tangible economic impact on the region, is still on hold, awaiting a resolution on local permits,” Binay said.
“We do not know when this legal instrument will be obtained, but we pray that it will come soon enough . . . so they could start their operations,” he said, adding that there should be tighter monitoring and coordination with local government units (LGUs) over proposed ordinances.
Binay also called for consistency in the government’s policies, saying that such policies should transcend political timelines.
He said there should be further studies devoted to the revenue-sharing scheme for the minerals industry, which has already been submitted to the Office of the President for approval.
“A sound policy should survive the changing of administrations and remain responsive in the long-term. From a mining perspective, this means 25, 50 years or even longer than that,” he said.
To recall, the Mineral Industry Coordinating Council (MICC), an interagency body tasked to oversee reforms in the mining sector, approved a new revenue-sharing scheme that would levy a 10 percent tax on gross revenues or a 55-45 percent share of the adjusted net mining revenues (ANMR)—whichever is higher.
To attract investors with the capacity to deploy clean and environmentally safe technologies, Binay said that the government should have clear policy guidelines and rules that foster strong cooperative relationships between the national and local governments.
“Nothing will discourage investment more than a disparity between the positions and policies of government units, and we need to provide a unified conviction distilled from the inputs of all stakeholders and actors,” he said.
“Global competitiveness is crucial to industry and is an objective that must guide any fiscal policy reform. The economic effects of proposals to alter taxation must be carefully studied to avoid stifling the mining industry’s overall competitiveness. The government’s push to increase revenues through the imposition of even higher taxes on mining is a concern, particularly for the long-term effect these may have on the industry’s competitiveness,” he added.
Other areas that need focus, according to Binay, include the retooling and upgrading of regulatory agencies’ capacity to enforce mining and environmental laws; institutionalizing of transparency reforms; and accurate mapping of natural resources.
“We must take an accurate inventory of our nation’s natural resources and, if possible, plot a schedule for harnessing these resources with long-term goals firmly in mind.
Knowing what we have and identifying areas where mining is permitted will serve as a solid foundation for economic policy makers to develop a sustainable and long-term strategy for growth of the mining industry,” he said.