Europe-PH News

Asserting Mining Rights

March 20, 2012

European Chamber of Commerce of the Philippines

Europe-PH News

Over the mounting debate in the mining industry, the government took caution on the issuance of new executive order detailing mining regulations and instead will formulate a policy statement covering the mining sector. According to reports, the impeding policy statement would include certain important provisions that were supposedly a part of the canceled executive order.

The said executive order was scheduled to be released last February but players in the mining sector raised their concerns over the proposed policies that have been seen to heavily favor the anti-mining lobby.

As a general statement the policy statement will cover details how to implement mining rules and laws, recommendation and general position of government on mining activities.

The draft presidential executive order will propose a competitive public bidding in place of the “first-come, first-served” system in mining applications, the declaration of additional prime agricultural lands and ecotourism zones closed to mining activities, review of all existing incentives and mining contracts and promotion of downstream processing, among others. The Environment and Natural Resources Department had proposed the imposition of a five percent royalty on top of the two percent excise tax.

The Chamber of Mines noted that the country falls behind on the creation policies that will make mining a more lucrative business venture and encourage foreign investments. The chamber revealed that “the result if the latest Fraser Institute survey which saw the Philippines ranking from 66th among 79 jurisdictions last year drop to 88th among 93 this year…”

The chamber urged the government “to implement a decisive policy initiative to further develop the mining sector and realize its potential as an economic growth driver.”

The chamber also noted the grave inconsistencies between the Mining Act of 1995 and laws such as Local Government Code and the Internal Revenue Code that concerns both local and foreign investors.

For their part, the Joint Foreign Chambers expressed their concerns that government should consider the industry inputs and address the root causes of project delays over the proposed mining reforms. JFC appealed along with the Philippine offices of the American Chamber of Commerce, Australia-New Zealand Chamber of Commerce, Canadian Chamber of Commerce, European Chamber of Commerce, Japanese Chamber of Commerce and Industry, Korean Chamber of Commerce, and the Philippine Association of Multinational Companies regional headquarters.

The JFC and the Philippine Mineral Exploration also cited that the “discrepancy between benefits and liabilities was more pronounced in small-scale and unregulated mining” as opposed to those of highly regulated large-scale mining companies.

The JFC also warned government of such measures “unnecessarily damages sovereign credibility on the global stage, and in some case violates the foreign investment protection agreements signed by the Philippines with many countries.” And as such, this could cause uncertainty with investors not only in mining but also interests in other foreign direct investments.

In the same manner, Philippine Stock Exchange president and chief executive Hans Sicat has urged the government to formulate "a clear-cut and decisive policy on the mining industry."

For Sicat, the government should aim for a balance between the gains from the mining industry and protection for the environment. As a potential driver of the economic growth, he noted that the mining and oil index posted a 69 percent growth last year.

"As the government and the various stakeholders continue to find ways to best utilize our rich mineral resources to help spur growth in the economy and provide wealth and livelihood to many Filipinos, it must be ensured that [such] intervention in mining activities are geared first and foremost towards ensuring responsible and sustainable mining which includes stricter enforcement and monitoring of mining laws and guaranteeing that the host communities would be included among beneficiaries of mining activities," Sicat added.

In a joint statement released recently by the Philippines Chamber of Commerce and Industry, Management Association of the Philippines and Philippine Exporters Confederation, the group stated their support over the "advancement of legitimate, responsible mining that properly takes care of the environment during and after operations."

They also underscored the need for government "to decisively implement existing policies that encourage much needed investments and have asked groups opposing mining activities “to assist in monitoring mining activities to ensure that mining firms are operating responsibly with care for the environment."

Fort their part, government through Environment Secretary Ramon Paje, assured the players in the mining industry that provisions are just being maximized "to upgrade the environmental standards in the industry, resolve the issue of small scale mining harmonize national and local regulations on mining and optimize government revenue from mining." 

Source: Manila Standard Today; Special Section; 20 March 2012

 

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