DENR shifting to TEV in assessing miners

by Jonathan L. Mayuga - September 28, 2016

http://www.businessmirror.com.ph/denr-shifting-to-tev-in-assessing-miners/

The Department of Environment and Natural Resources (DENR) would soon look into the merits of mining projects using the Total Economic Value (TEV) tool, although, this early, miners are already saying this is against the law.

Environment Secretary Regina Paz L. Lopez announced the planned shift to the TEV, after she revealed that 20 more operating mines face suspension based on the findings and recommendation of the audit teams. The DENR had already suspended 10 operating mines since Lopez took over the helm of the agency in June.

The audit criteria include environmental, social and biodiversity considerations on top of the physical or technical aspect in assessing mining operations.

The TEV is a cost-benefit analysis scheme that refers to the value derived by people from natural resources compared to losing them.

‘TEV is scientific’

The “scientific and accurate” TEV system, as described by Lopez, would help guide the DENR in making decisions whether to allow or stop a mining operation.

According to Lopez, while mining companies rake in profits from their operations, the state, which is theoretically the owner of the natural resources, is not getting enough.  Worse, she said, people in the communities are suffering because of the environmental damage.

“People on the ground do all the sufferings, the environment, livelihood.  How are we benefiting here?  What are we losing here?” Lopez, an environmental advocate, said.

Using the TEV scheme, the DENR will monetize the benefits from mining and match it against the relevant costs.

“We will monetize the benefits from mining.  Then we will monetize the destruction…land, water, [impact to] health,” Lopez said.

Lopez added that if the cost outweighs the benefits, it follows that the project should be scrapped.

‘TEV is unconstitutional’  

Dante Bravo, president of Global Ferronickel Holdings Inc., told the BusinessMirror that for existing projects, imposing the TEV will be unconstitutional.

According to Bravo, a lawyer, aside from not being specified under the Philippine Mining Act of 1995, the government will be violating the Constitution in imposing TEV as a means of evaluating existing projects.

“Under the Constitution, you cannot impair contract obligations,” he said.

He said for new mining projects, mining companies may need to study it on a case-to-case basis.

“If the impact of the TEV will be minimal, say for nickel, it will most probably not apply,” he said.

What TEV?

Ronald Recidoro, vice president for legal and policy of the Chamber of Mines of the Philippines (COMP), said there is a need to get more details about Lopez’s proposal.

“We want to know more about her idea of TEV,” he said.

Recidoro added that the COMP, which represents mining industry’s big players is willing to cooperate with the government and will continue to adhere to the highest standard of responsible mining.

“If we are invited to talk about TEV, then we might sit and talk and ask more about her idea,” Recidoro said.

The COMP earlier came up with a statement criticizing the DENR for “changing the rules of the game,” referring to the conduct of the mining audit.

Recidoro also chided the DENR for what he described as erroneous announcement, which gives investors a wrong impression of mining companies that were not really suspended but were merely issued “show cause orders” for minor violations.

“What we are saying is this—the announcement is affecting investors’ confidence and has impact on the stock market,” he said.

The COMP decried the results of the mine audit, which Lopez announced on Tuesday.

According to Lopez, based on the findings and recommendations of the audit teams, only 11 of the 41 operating mines are seen fit to continue their operation, after 20 more mines were found to have failed environmental standards, bringing to 30 the number of operating mines facing suspension.

Experts from various fields, headed by academic institutions, conducted TEV in three mining areas in Palawan, Bicol and Mindoro, and found out that the costs outweigh the benefits.

In all three studies, Lopez said farmers, fishermen, and even those living in the communities suffer the effects of the mining operations in terms of lower agricultural and fisheries production, and the cost of having health problems.

Lopez after irresponsible miners

Lopez reiterated that she is only against irresponsible mining and is willing to work with mining companies that are responsible enough to give communities what they are due.

“I would like to work with mining companies, the ones that want to continue to exist,” she said.

To do the TEV, Lopez said the DENR would tap experts, including agriculturists, foresters, marine biologists, health and tourism, to monetize the cost and the benefits.

To do this, she said the DENR would have to establish a baseline data, identify the major impacts, quantify it and then do the math.

‘Shallow’ programs

Lopez also said mining companies operating in the Philippines can do better than sponsoring scholarship programs, or medical missions, as part of their social development and management programs.

Such programs, according to the DENR chief, are in fact, “shallow.” She wants mining companies to implement programs that would really help alleviate poverty.