Destabilization fund? Mining group unaware
Louise Maureen Simeon, Marvin Sy (The Philippine Star) - March 15, 2017 - 12:00am

MANILA, Philippines -  The Chamber of Mines of the Philippines (COMP) is unaware of any mining company behind destabilization efforts against the administration, saying its members fully support President Duterte and “condemn” such moves.

“We… reaffirm our commitment to work with this administration, and to follow the law and the Constitution,” the chamber said.

However, the chamber warned the administration that it might have to face a $16-billion international arbitration case should stakeholders decide to sue the government for the cancellation of mining contracts. The $16 billion will cover compensation and damages for the mines ordered closed or suspended.

The industry reiterated that like the President, it is also committed to responsible mining and to ensuring that mining is done under the highest standards using the best technology available.

“Illegal mining is a scourge that must be eliminated and we are committed to help government achieve this objective in any way we can,” the chamber added.

The industry also slammed anti-mining advocates and non-government organizations for spreading misinformation,
 following the release of photographs shown by the President in Baguio City where he attended the Philippine Military Academy graduation rites on Sunday and during a press conference on Monday.

“The pictures given to the President show active mining areas and do not present a complete picture of responsible mining. Like any project still under construction, an active mine does not look green or pleasing to the eye. However, mining areas, once completed, are rehabilitated, planted with local species and made useable for agriculture or forestry, or preserved as an eco-tourism site,” the chamber said.

“We will happily enter into a dialogue with the President, together with the MICC, on the review of all mining operations and the possibility of amending some policies to better enhance mineral resources development in the country,” the industry added. MICC refers to the Mining Industry Coordinating Council.

Duterte alleged mining firms were funding the “opposite side” to destabilize him but maintained he would not bow to their pressure to reverse the decision of Environment Secretary Gina Lopez.

An official of the Department of Environment and Natural Resources (DENR) refuted the claims of representatives of the mining industry that Lopez did not accord due process when she ordered the suspension and closure of several mines.

DENR undersecretary Maria Paz Luna branded as “baseless” the allegation of  COMP, which filed a complaint against Lopez before the Office of the Ombudsman on Monday for having violated Republic Act 3019 or the Anti-Graft and Corrupt Practices Act when she “skirted” due process at the expense of the mining firms.

The audits began in July 2016 and took eight months, Luna explained, noting the mining firms were given opportunity to respond to the findings of the DENR.

“The mining companies knew of these audits; they allowed these audits. After the audits were done by the teams, the DENR sent them the audit reports,” said Luna, who heads the department’s legal office.

Last resort

“Arbitration cases may be filed by the mining companies as a result of the MPSA (mineral production sharing agreements) cancellations announced by Lopez. The government is a party to the agreement contracts in the development of the country’s mineral resources as provided in the Philippine Mining Act,” the chamber said.

Based on the Philippine Mining Act, contractors are entitled to the basic rights and guarantees provided in the Constitution and recognized by the government, including repatriation of investments, remittance of earnings, foreign loans and contracts, freedom from expropriation and requisition of investment.

A good number of the mines ordered closed or suspended have bilateral investment treaties (BIT).

The BIT asks host countries to provide certain protections for foreign investments, such as limiting expropriation of investments without due regard for international law standards.

Affected foreign investors, under the BIT, could claim prompt, adequate and effective compensation for their capital investments, liabilities, other investments and advances stemming from the arbitrary cancellation of the MPSAs.

Stakeholders earlier maintained that the current state of the industry might cost the government “several billion dollars” since contractors are entitled to investment guarantees.

The chamber said stakeholders would consider full reimbursement of mining contracts and not mere compensation.

Despite this, the industry remains optimistic that the planned review of the MICC will prevent arbitration cases from being filed.

To date, no mining company has filed an arbitration case against the government as the industry considers it a last resort.

Last month, Lopez announced her decision to cancel 75 MPSAs of mining operations within watershed areas after she ordered the closure and suspension of 28 mining firms.

An MPSA is an agreement wherein the government shares in the production of the contractor, whether in kind or in value, as owner of the minerals, and the contractor gets the rest. In return, the contractor provides the necessary financing, technology, management and personnel for the mining project.

Lopez’s fate

Finance Secretary Carlos Dominguez III told the Commission on Appointments (CA) yesterday the DENR failed to observe due process when it ordered the closure and suspension of 28 mining firms.

Dominguez was invited by Sen. Manny Pacquiao, chairman of the CA’s committee on environment and natural resources, to attend the meeting on Lopez’s fate. The committee was supposed to have a closed-door meeting on whether Lopez would be confirmed or rejected by the CA.

She has been deemed bypassed as her confirmation hearing was no longer scheduled for today, the last day of session before Congress goes on a break. Duterte will have to reappoint Lopez if he wants her to stay on as DENR chief.

Dominguez briefed Pacquiao’s committee on the review being done by the MICC, which he co-chairs with  Lopez, on the mines’ closure and suspension.

Lopez was not around to face Dominguez since she is currently in the US on a retreat, which was questioned by Senate Minority Leader Franklin Drilon and Sen. Loren Legarda.

Dominguez explained that the MICC has the mandate of reviewing and assessing all mining-related laws, rules and regulations, issuances and agreements, and to ensure the continuing dialogue and coordination among all stakeholders in the mining industry.

Last February, the MICC approved a resolution forming a multi-stakeholder committee that will review and advise the DENR on mining companies in the country.

Dominguez lamented that Lopez agreed to the review and even brought a lawyer with her, only to change her mind later. “I don’t know what to say,” the finance chief said.

During yesterday’s hearing, Dominguez,  brother of Paul Dominguez, who is involved in the $5.9-billion Tampakan copper-gold project in South Cotabato of Sagittarius Mines Inc., affirmed the claims made by the mining industry players and noted that the Union of Local Authorities of the Philippines, the Department of Labor and Employment and the Department of Social Welfare and Development have all noted that they too were not consulted on the decision against mining firms.

“Quite frankly, my job is to make sure that deficiencies of others are covered,” Dominguez said.

“As also a responsible member of the Cabinet, I had to make sure that the potential liabilities of the government are covered. So if it takes us to do a proper due process so that the mines stay closed and we do not have any potential damage claims, I have to make sure that this is done. This is the job of the MICC,” he added.

Like the COMP, Dominguez warned that closing mining operations without due process could lead to the filing of cases against the government, which would cost “a heck of a lot of money” if these reach international arbitral tribunals.

“It’s my job to make sure that our expenses are for the benefit of the people and not for paying for somebody’s mistakes,” he said.

Asked by Drilon about the statements made by Duterte last Monday supporting the position of Lopez on the imposition of a mining ban, Dominguez said that he “can’t read the mind of the President.”

“I don’t know what he meant but there are procedures that must be followed,” Dominguez said, adding that he knows the President as a stickler for rules and procedures.

A number of the affected mining firms have filed their respective appeals to the order of Lopez before the Office of the President. Dominguez said that until the President signs the closure orders, the issue remains unresolved.

Dominguez stressed Lopez’s post “requires more than a crusader” as he noted the mining industry’s importance and contributions to the economy – providing raw materials for cellphones and cars, without which “we all go back to stone age.”

Sen. Alan Peter Cayetano indicated Lopez may have been more “arbitrary” than strict.

In a presentation prepared for the CA, Finance undersecretary Bayani Agabin noted that the closure of the mining firms, if it pushes through, would cost the host local government units around P821 million annually.

Agabin said eight LGUs in particular stand to lose over 50 percent of their revenues if the mining firms are closed because they rely heavily on these operations to prop up the local economy.

Philex praised

In a press conference in Malacañang on Monday night with Senate President Aquilino Pimentel III and Speaker Pantaleon Alvarez, Duterte cited the need for a no-nonsense dialogue with the mining industry to address the urgent concerns raised by environment groups.

He had also said he was not totally anti-mining and cited Philex Mining Corp. for its responsible industry practices that could be emulated by other firms to help protect the environment.

He mentioned the rehabilitation work done by a Philex company in its gold mine in Sibutad, Zamboanga de Norte when it closed in 1999.

Philex’s final mine rehabilitation and/or decommissioning plan for Sibutad covered hundreds of hectares with over half a million trees of different species, even if only 38 hectares had been used for actual mining operations.

Duterte also cited Philex’s P1-billion rehabilitation and clean-up of Balog Creek following an accident in the firm’s operations in its Padcal Mine in Benguet in 2012.

“So I’d like to say thank you to these two companies. I do not know them but if you’re like them – there is denudation and you immediately reforest, then the Filipino people will be happy, especially if you plant trees. It takes about 30 years to grow a tree,” Duterte said.

He exhorted Filipinos to undertake massive tree planting as “our payback” to the environment.

Dominguez also cited Philex’s “excellent record” in dealing with accidents, referring to the Padcal mine.

No effects yet 

Amid the hullabaloo, not a single mine has actually been closed, Danilo Uykieng, Mines and Geosciences Bureau (MGB) assistant director, told the House committee on good government.

“It’s business as usual for them. Nothing has changed. All of the 41 companies that have been audited are operating normally. They get the transport and export permits they need,” he said.

Former MGB director Leo Jasareno, a consultant of Lopez, informed the committee that based on the agency’s mining audit, the secretary had ordered the closure of 22 mines and the suspension of four others for various violations of laws.

“But all of these companies are operating because they have pending appeals with the department or Malacañang. Their decision to appeal temporarily stayed Secretary Lopez’s closure and suspension orders,” he said.  –  With Paolo Romero, Jess Diaz, Rhodina Villanueva

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