Did DENR, Solgen sit on crucial mining issue?By Edwin Espejo Aug 15, 2013 10:33AM UTC
Was it an oversight? Or a deliberate neglect?
Whatever, the government’s failure to spell out a clear mining policy has led to the decision of Glencore-Xstrata International Monday to ‘downsize’ its operations in the Philippines and cut back the budget for the embattled copper and gold project of Sagittarius Mines Incorporated (SMI) in Tampakan, South Cotabato.
SMI executive vice president Justin Hiller earlier said permitting issues involving the provincial government of South Cotabato have not made possible for the company “to make adequate progress toward our Project goals.”
In 2010, the provincial government of South Cotabato passed an ordinance banning open pit mining in the province.
Although SMI was able to obtain an environmental compliance certificate early this year, it still needs to get the approval of the provincial government.
South Cotabato Gov. Daisy Avance-Fuentes has insisted on implementing the controversial environment code.
In two letters by Interior and Local Government secretary Mar Roxas, copies of which were obtained by Rappler, it now appear that the Environment and Natural Resources secretary Ramon Paje sat on the recommendation of the former to be a co-petitioner to a petition to nullify the South Cotabato ordinance.
Roxas earlier requested Solicitor General Francis Jardeleza to file the petition to declare unconstitutional Provincial Board Resolution No. 84, S. 2010, which became the basis of the ban on open pit mining in South Cotabato.
Nothing has been reported on the said proposal to file a petition.
Roxas earlier contended that national laws should prevail over local ordinances.
The Philippine Mining Act of 1995 or Republic Act 7942 did not prohibit the use of open pit mining method.
The Roxas letters came after intense lobby from the mining industry for a clear cut government policy on mining.
The Aquino government earlier suspended the issuance of new mining permits until new rules and regulations are crafted.
The government is also keen on collecting more shares from mining companies operating in the country other than the 2 percent excise tax and other scheduled fees.
Chief Justice Ma. Lourdes Sereno had said the Supreme Court may have no other choice but to review contracts between the government and mining companies under the Philippine mining act.
But it could also open the mining law to more scrutiny as petitions have also been re-filed to declare its constitutionality even though RA 7942 was already upheld by the Supreme Court as constitutional in 2005.
SMI has repeatedly refused to contest the provincial environment code before any regular court insisting that it is mere contractor of the Philippine government through the Financial Technical Assistance Agreement.
Glencore-Xstrata, which owns 62.7 percent of SMI, said it will retrench 920 of SMI’s regular and contractual employees following a decision to revise the latter’s work plans to focus on resolving issues which h also includes securing a new free and prior informed consent from host tribal communities.
SMI has claimed that its mining operation will boost the economy of Region 12 (or the Soccsksargen region, which included South Cotabato) by 10%.
Based on SMI’s feasibility study, the mine is expected to pay the government $7.2 billion in total taxes and royalties per year under the current tax regime after a 5-year recovery period.
While the local government recognized the contribution of mining to the economy, it said the taxes the industry pays do not offset the environmental risks involved in their operations.
Those figures however now become as they are as SMI has not given any timetable when it could go on commercial production following Monday’s decision.
In December last year, SMI announced it will go on commercial production in 2019.
That now appears unattainable target.