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Wave of foreign investments in mining seen by next year
Thursday, 26 July 2012 21:34 Max V. de Leon / Reporter
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The Philippines will experience a wave of foreign investments by next year once amendments to the Mining Act are passed by Congress as all uncertainties in the country’s mining regime would already be erased by then, Trade Secretary Gregory L. Domingo said on Thursday.

With President Aquino mentioning the need for a new mining law in his recent State of the Nation Address, Domingo added, it is certain that the amendments will be passed by Congress not later than next year.

“[The passage] this year, may be too ambitious but I think some time next year [it would happen],” he told reporters.

The Department of Trade and Industry (DTI), Domingo said, will have significant input in the drafting of the measure, particularly on the revenue-sharing aspect. “We are still trying to determine what would be the fair share.”

He added that the moratorium on new mining activities until the passage of the new law, as mandated by the recently issued Executive Order (EO) 79, should be viewed as a mere temporary setback to investments.

“They have a saying, ‘One step backward and two steps forward.’ This one is half step backward and five steps forward. After that moratorium, events will pour in because the policy environment would be very clear,” Domingo said.

He said even the mining industry is happy with EO 79.

The League of Provinces of the Philippines also welcomed the issuance of the EO, citing in particular, Section 11 or the measures to improve and regulate small-scale mining activities; Section 12, or consistency of local ordinances with the Constitution and national laws; Section 13, creating a one-stop shop for mining applications and procedures; and Section 14, improving transparency of the mineral industry.

The EO, Domingo said, is the initial phase of the country’s mining reform initiative, and the second phase is the passage of the new mining law.

To give more teeth to the reform initiative, the government has authorized the Mining Industry Coordinating Council (MICC) to form task forces that will look into illegal mining and the $5.9-billion Tampakan copper-gold project in South Cotabato in southern Mindanao, among others, a Malacañang official said also on Thursday.

Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office, a member of the Cabinet Economic Development Cluster, said the MICC also formed four technical working groups in line with the new mining policy, during its first meeting on Wednesday.

“We formed technical working groups [TWGs] to move forward on specifics of issues mentioned in Executive Order 79….We also formed a Task Force on Illegal Mining and the Task Force on Outstanding Issues, which would include, but would not be exclusively limited to, the Tampakan project,” Carandang said.

The Tampakan project, operated by Sagittarius Mines Inc. (SMI), has been hindered by a ban on open-pit mining in South Cotabato. Its application for an environmental clearance certificate (ECC) was twice rejected by the Department of Environment and Natural Resources.

SMI has elevated its appeal for a reconsideration of its ECC application to the Office of the President.

When asked whether Malacañang would consider the appeal, Carandang said, “I think the decision on how to proceed with Tampakan will be taken up by the task force.”

Under EO 79, the MICC, if ordered by President Aquino, could create a Task Force Against Illegal Mining to ensure strict compliance with relevant laws.

Carandang said one technical working group is on top of revenue-sharing and economic issues related to mining, which would look into the proper revenue-sharing scheme between the government and mining firms.

There will also be technical working groups on small-scale mining and local government issues, on the environmental impact of mining activities, and on the Extractive Industries Transparency Initiative (EITI).

The Philippines is eyeing compliance status with the London-based EITI, a global initiative that requires participating governments to publicly report revenues from extractive industry companies and for the latter to publicly report revenues paid to the government.

Carandang said the MICC is also going over a draft of the Implementing Rules and Regulations of EO 79.

In compliance with EO 79, the Climate Change Adaptation and Mitigation and Economic Development Cabinet Clusters had constituted themselves into the MICC, led by the heads of the two clusters.

Additional members of the MICC are the justice secretary, the chairman of the National Commission on Indigenous Peoples and the president of the Union of Local Authorities of the Philippines.

The MICC is responsible for assessment and review of all mining-related laws, rules and regulations, issuances and agreements for it to be able to formulate recommendations to “improve the allocation of revenues and risks between the government and the mining sector.”

It will also recommend measures to enhance coordination between the national government and local government units to ensure implementation of mining laws and regulations and to properly regulate small-scale mining players and also ensure they are accountable to the same environmental and social obligations as large-scale mining firms.

The MICC will facilitate continuing dialogue and coordination among all stakeholders in the industry, and serves as the Oversight Committee over operations of Provincial/City Mining Regulatory Boards.

(With Jonathan Mayuga)