Mining council buckles down for review

Posted on February 20, 2017
http://www.bworldonline.com/content.php?section=TopStory&title=mining-council-buckles-down-for-review&id=140923

THE GOVERNMENT is scrambling to contain spreading business concern over twin decisions by the Environment department earlier this month to cancel the permits of nearly a hundred mine projects, so far, with the Mining Industry Coordinating Council (MICC) buckling down this afternoon to organize a review sought by miners.

A Feb. 17 memorandum of the National Economic and Development Authority (NEDA) called the 19 members of the council to an “MICC-Multi Stakeholder Review Team Organizational Meeting” at 2 p.m. this afternoon at the Bangko Sentral ng Pilipinas compound in Manila.

The Department of Environment and Natural Resources (DENR) last Feb. 2 announced its decision to shutter 23 of the country’s 41 operational metal mines and suspend five others for violations such as being located in watersheds and polluting surrounding bodies of water, sparking an industry outcry that prompted the MICC to convene a week later.

At the end of the Feb. 9 meeting, the MICC -- consisting of members of the Cabinet clusters on Economic Development and on Climate Change Adaptation and Mitigation plus representatives of the National Commission on Indigenous Peoples and of the Union of Local Authorities of the Philippines -- issued a resolution providing for a “multi-stakeholder review” and ensuring that due process, which miners say has been lacking, is observed.

That meeting was followed five days later by DENR’s announcement that it was putting 75 undeveloped mines nationwide on the chopping block as well.

Affected miners have said they would appeal to President Rodrigo R. Duterte and some said they were ready to take the DENR to court.

Business groups had initially said the impact of sanctions should not spill out from the industry, but announcement of the 75 other projects for termination spawned warnings of erosion of general investor sentiment.

‘... THIS IS THE LAW’
In a statement yesterday, the Finance department quoted Secretary Carlos G. Dominguez III -- who co-chairs the MICC with Environment Sec. Regina Paz “Gina” L. Lopez -- as saying MICC’s “technical working group... will decide what to do” next.

“As discussed during the (Feb. 9) MICC meeting... there is a need to observe due process,” the statement read, quoting Bayani H. Agabin, Finance undersecretary in charge of the Legal Services and the Domestic Finance groups.

“Due process is both substantive and procedural. Substantive due process means that there are valid grounds in law to support the cancellation. Procedural due process means the procedure for cancellation as provided for in the contract or under relevant laws was followed,” he explained of the technical working group’s focus of review.

While it remains to be seen how much time the review of DENR’s decision will take, Mr. Dominguez reiterated to reporters last Friday that the process will look into each affected miner’s contract with the government. Republic Act No. 7942, or the Mining Act of 1995, provided two kinds of such contracts: mineral production sharing agreements (MPSAs) that allow 60% foreign ownership and financial or technical assistance that allow full foreign ownership.

There are 311 MPSAs, including those of the 98 projects now up for termination.

“[I]t is the resolution of the entire MICC that it’s important to follow the due process. If you read that (resolution), I think ‘due process’ is mentioned two or three times,” Mr. Dominguez told reporters last Friday.

“And, by the way, each case is different ha, because they are individual contracts and I’m not sure that all the contracts have the same terms,” the Finance chief emphasized.

“And as the SolGen (Solicitor General Jose C. Calida) said during the (Feb. 9 MICC) meeting: what is the law is the contract. The law between the parties is the contract. So you have to look at the contract.”

Asked to react to Ms. Lopez’s description of the MICC as just a recommendatory body that cannot change her ruling, Mr. Dominguez replied: “Following due process is not recommendatory -- that is the law.”

“The law is not recommendatory. The law is to be followed. And we are reminding that this is the law.”

SIGNALS MIXED
Mr. Duterte himself has sent mixed signals on the matter, expressing unqualified support for Ms. Lopez last Feb. 2 -- a few hours after she first announced mines to be sanctioned -- then seemingly backpedaling during dinner last Friday in Baguio City with members of Philippine Military Academy (PMA) Class 1967 and then saying in his speech before PMA cadets and alumni the following morning that “man-made diseases like extractive industries” threatened the country.

“Kay Gina Lopez... ang gulo na (The issue with Gina Lopez is getting out of hand),” Mr. Duterte said in his speech last Friday evening.

“But... I will review. There’s such a thing as... exhaustion of administrative remedies,” he added.

“I will... not judge her now... kung mali talaga, eh wala akong magagawa, if it’s destructive to the environment [then there is nothing I can do but uphold Ms. Lopez’s decision to shutter mines and suspend others],” he explained, adding, however: “But if... medyo (the damage is not that much)... then we correct it.”

At the same time, he acknowledged that mining’s gross value added to the economy -- though estimated at less than one percent of gross domestic product since at least 2012, a year after the government stopped processing new permits -- was still a factor to consider.

“We get something like P70 billion a year out of mining operations in the Philippines, so... we have to also take (that) into consideration...” Mr. Duterte told members of PMA Class 1967.

Miners have been reeling from unfriendly state policy since 2011, when the administration of former president Benigno S. C. Aquino III imposed a moratorium on new mining permits that was extended indefinitely through Executive Order No. 79 -- which formed the MICC -- signed on July 6, 2012.

MGB reported last Feb. 2 that metal mineral production dropped eight percent to P100.56 billion last year from 2015’s P109.84 billion, blaming “[p]oor base metal price, a string of mine suspension and... non-operation due to unfavorable weather conditions” for the sector’s “lackluster performance.” -- reports from Janina C. Lim with E. J. C. Tubayan