wrong policies diving away investors

Wrong policies driving away investors
FROM A DISTANCE By Carmen N. Pedrosa (The Philippine Star) Updated January 28, 2012 12:00 AM

At the Arangkada Philippine Forum hosted by the Joint Foreign Chambers of Commerce held at the Grand Ballroom of the Marriott Hotel last Thursday, President Aquino promised “a more clear-cut policy on its mining industry by next month amid complaints from foreigners that inconsistent rules have stymied investments.”

Many are puzzled how a country as rich as the Philippines ranking fifth in the world for mineral reserves, including large reserves of gold and copper should be so poor. Last year mining made only about 1 percent of gross domestic product with total production at $1.5 billion. This is unbelievable compared to what other countries with less mineral wealth have done to use their resources to tackle poverty.

Aquino said “he would receive a commissioned report by mid-February with recommendations on needed mining policies.”

Sounds good and businessmen in the meeting welcomed the news. Why should foreign investors stay in such a hostile atmosphere when there are others who lay the red carpet for investors.

Julian Payne, president of the Canadian Chamber of Commerce, said the country has tremendous mining potential but that the government’s current policy is confusing to businessmen.

John Ridsdel, president of the mining company TVI Minerals Processing Inc., said “there is a lack of consistency between national government and local government policies, and that the approval process for mining permits is cumbersome and needs to be streamlined.”

He urged the government to crack down on illegal and dangerous small-scale mining, which involves an estimated $43 billion in illegal production, representing a huge loss of taxes and causes environmental damage. Compare the two, $43 billion without proper governance as against $1.3 billion because it is being stymied by bad governance.

I hope Aquino will soon understand what is at stake in this effort. It is true there must be a balance between environment and maximizing gains from mining but that is not what is happening. What we have are irresponsible small miners without expertise and knowledge of responsible mining proliferating. And of course, here’s the bigger rub — with good governance, the government can gain revenue without having to raise taxes from the poor and middle class. We are losers twice because of current policies — endangering environment and failing to raise government revenues. It is a formula for keeping this country poor.




We should look at responsible mining in other countries like Chile for example. The mining sector in that country is a pillar of the Chilean economy. Copper exports account for more than one third of government income.

We are very rich in copper. A big mining company like Sagittarius Mining Inc.’s project in South Cotabato has already spent millions in community development, building infrastructure and meeting all the requirements to be allowed to mine what could be their biggest copper mining project in the world. It still has no ECC permit from local authorities with the help of foreign NGOs against mining and misguided anti-mining groups not to mention NPA raids to exact revolutionary taxes.

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