A news report said Malacañang has remanded the appeal of Sagittarius Mines Inc. (SMI) to the Department of Environment and Natural Resources (DENR), which earlier denied the application for an environment clearance certificate (ECC) by the Tampakan-based mining firm.

In January last year, the DENR cited the existing provincial environment code of South Cotabato which bans open-pit mining as a reason behind the denial of the issuance of an ECC to SMI.

SMI then appealed to President Benigno Aquino III to overturn the rejection.

The issue created a loud reaction not only from SMI but also stirred the whole business community which said reinvigorating the mining industry will help improve the Philippine economy.

The president, instead of immediately acting on the appeal of SMI, created a body to draft a new mining policy in the light diametrically conflicting interests between the mining industry and environmental groups, particularly the Catholic Church that are against destructive forms of mining.

In March last year, both pro and anti-mining groups squared off in a national summit.  Instead of finding common ground, it further fueled the animosities between them.

This led to the government to decide that a new mining bill should already be in order to amend some provisions of the 1995 Philippine Mining Act.

The core issue in the case of SMI is the conflicting positions taken by the mining firm and the provincial government of South Cotabato.

The provincial government believes it was granted the power to protect the environment in a manner it may deem fit under Republic Act 7160 or the Local Government Code.  Citing the landmark law, the South Cotabato provincial government banned open pit mining in the province putting it in a direct collision course with SMI which said it will have to extract 15 million tons of copper and 17.6 million ounces of gold – at its main mine development site in Tampakan, South Cotabato – through open pit mining.

SMI, on the other hand, insists that the local environment code contravenes the Constitution which promotes mining industry in the country and did not impose a ban on any particular mining method. The Xstrata-controlled mining firm also said code violates the 1995 Philippine Mining Act or RA 7942.

The local government unit of South Cotabato has been steadfast in its position to ban open pit mining, resisting pressures from the national government.

In November 2010, the late local government secretary Jesse Robredo issued a memorandum circular urging the province to review its environmental code saying it is inconsistent with the Constitution.

South Cotabato Gov. Arthur Pingoy however said unless ordered by a competent court or the code is amended, he will implement and enforce its provisions.

Then late last year, Robredo’s successor Mar Roxas III said the South Cotabato provincial could be sanctioned administratively for issuing “ordinances and resolutions on mining contrary” to RA 7942.  Roxas was upheld by Justice Secretary Leila de Lima who also said that the validity of the code “may stand on its own and therefore, remain valid until judicially declared as null and void.”

“Judicial declaration of nullity of ordinance is an available remedy,” the DOJ further said.

But SMI has resisted temptation to go to the courts to assail the constitutionality of the controversial environment code stating that it is mere contractor to the Financial Technical Assistance Agreement now owned by SMI after the latter bought the rights from previous holder Western Mining Corporation.  Not only will it be catastrophic for the company if it loses in a court battle that could take years to resolve, but already way behind schedule, a looming court battle could end hopes of the company ever going into commercial production by 2019.

The national government is also reluctant to take the cudgels for SMI.

And clearly, the provincial government will not be stupid enough to question the legality of its own ordinance before any court.

By remanding the ECC issue to DENR, is Malacañang sending signals that it wants SMI to be given relief by way of an ECC issuance?  Is Malacañang also passing the burden to the provincial government of now potentially going to court to defend its ban on open pit mining?

DENR Secretary Ramon Paje has already said he will base his decision in reviewing the SMI case on the opinion of the DOJ, virtually assuring that an ECC for SMI is forthcoming.

Already, SMI welcomed Malacañang’s decision to remand the ECC issue to the DENR that had already rejected it.

Will the provincial officials of South Cotabato succumb to pressure and threats of possible sanctions once they insist on denying SMI the necessary provincial permits in order to proceed with its project once an ECC is already issued?

And will they amend the code that was hailed by progressive and environmental champions as a shining example of local autonomy?

How will this issue affect the local elections in South Cotabato?