Manila scraps mining contractFrom correspondents in the...

Manila scraps mining contract
From correspondents in the Philippines
January 30, 2004
THE Philippine Supreme Court cancelled a lucrative mining contract with an Australian company in a landmark ruling today that said the law liberalising the mining industry was unconstitutional.

The court, in a 95 page ruling, nullified several provisions of the 1995 Philippine Mining Act, including those giving the government the power to grant contracts allowing foreign companies to own and manage mining concessions.
The court said the law allows foreigners to manage all the aspects of mining operations, in effect making them owners of the nation's mineral resources and "leaving the state with nothing but bare title".
"These stipulations are abhorrent to the 1987 constitution," the court said.
The court said a provision in the 1995 law allowed the "circumvention" of a constitutional requirement for companies that explore, develop and use the country's natural resources to be at least 60 per cent owned by Filipinos or a Philippine company.

As a consequence, the Supreme Court said a 1995 agreement between the government and Australia's WMC Resources Ltd. to develop and operate a copper and gold mine in the southern region of Mindanao must also be cancelled for violating the constitution.
The WMC contract had been considered a test case on whether the government could allow full-foreign ownership of mining claims.
WMC Resources invested about $US30 million ($39 million) in the project. However, it pulled out in 2000 following complaints from local residents and environmental groups.
It subsequently sold its shares in the project to Sagittarius Mines Inc, a company 60 per cent owned by Filipinos and the rest by Indophil Resources NL, also an Australian company.
The court ruled that the subsequent contract was also invalid because it was based on the 1995 agreement.