Kaibigan ng Kaunlaran at Kalikasan (KKK)

Kaibigan ng Kaunlaran at Kalikasan (KKK)

Friends of Progress and the Environment

Responsible mining: Is it possible?

KKK seeks to address environmental issues through the lenses of science and to contribute in the clarification of these issues. It is motivated by the belief that the environment and progress are not zero-sum agendas, therefore a more holistic perspective is possible to minimize conflicts arising from divergent views. When issues arise or when there are diverging perspectives, KKK endorses the use of sound science in the consideration and resolution of the issues.

We live daily with minerals. Our computers have copper, silver, and quartz; the handles and hinges of our beds and desks have hematite; and feldspar is found in the porcelain of our toilet bowls, and iron and nickel in our bath fixtures. Between the mirror and the makeup are numerous minerals including talc, mica, and hematite. From the time we rise from bed, drinking our fruit juices out of that glass made of silica sand, limestone, feldspar and soda ash, until we set our mineral-ridden mobiles on silent at the end of the day, it is practically impossible to avoid minerals. Nevertheless, despite society's ubiquitous use of its products, mining has a tendency to polarize conversations, with some sectors regarding the idea of responsible mining as an oxymoron.

The cards are stacked against mining. Recent history presents a lineup of mining disasters attributed to mining companies in the past that failed to provide environmental safeguards in their operations and abandoned mines when mining peaked in the country in the 1970s, and then closed down as mineral prices dropped. Abandoned, these legacy mines, numbering 22 all over the country, continue to have adverse impacts on the environment and the communities, and the government has no legal recourse since there were provisions in the old mining law to cover this.

One example is an abandoned mine in Sipalay, Negros Occidental, where the dried-up tailings pond contribute to total suspended particulates in the area that are four or five times the standard of the Department of Environment and Natural Resources (DENR) emission standards especially during summer. With no trust or guarantee funds to be used to compensate for damages, or funds to be used to rehabilitate the tailings pond and thus mitigate its adverse impacts, there is not much that government could do.

Other issues leveled against mining include the deforestationof massive tracts of forest land which leads to deforestation and soil erosion, threatening the country's already-vulnerable forest ecosystems. Its potential to compromise the quality of the water resources and availability of food sources can affect the subsistence-level communities that depend on both forest and marine resources for their day-to-day requirements. Also, with the land conversion sometimes comes the physical and cultural displacement of some communities, which can include indigenous peoples (IPs) from their ancestral domains and small farmers. Profits accrue to the corporations, many of which are foreign-owned, while the local governments and local communities complain that they do not receive a fair share in the income.

As a more sustainable response after the harsh lessons learned from legacy mines, the Philippine Mining Act (Republic Act No. 7942) was passed in 1995 in a bid to move towards mining practices that "enhances national growth, effectively safeguards the environment, and protects the rights of affected communities."

With provisions for environmental and social safeguards deemed necessary in any mining operations, including liabilities during the rehabilitation period and until such time that the mine is turned over to and accepted by the State, it is envisioned that previous experience with abandoned mines need not be applicable to new projects, especially as laws and technologies improve and stakeholder engagement becomes an imperative.

The overriding objective of the Mining Act and its RIRR is for mining contractors to guarantee that future environmental conditions are not compromised, social stability is maintained, and no financial liability is absorbed either by the government or the community. Explicit too is the imperative that "mining projects that cannot absorb the environmental and social costs of modern mining shall not be allowed to proceed."

RA No. 7942 and its revised Implementing Rules and Regulations (RIRR) are strict and comprehensive. It has four policy thrusts that attempt to anticipate and respond to the potential and actual negative impacts of mining: 1) protection and rehabilitation of the environment; 2) the promotion of social and community stability; 3) the preservation of options for future generations; and, 4) the establishment of a competitive and prosperous minerals industry. It places strong focus on environmental and social responsibility and mandate all mining contractors to:

  • Rehabilitate the converted land to a physically and chemically stable and self-sustaining ecosystem based on a final land use more productive or proximate to the original land use, as agreed with the communities and local governments;
  • Establish safety and health management systems and ensure continual improvement of safety and health performance based on a risk management approach;
  • Contribute to the establishment of sustainable/alternative livelihood opportunities/skills for the host and neighboring communities during and after the operation of the mine; and
  • Equitably share the economic benefits derived from mining with major stakeholders, i.e., national and local government and communities.

To further improve on these parameters of responsible mining, while addressing limitations of the Mining Act and implementing reforms in the mining sector, Executive Order No. 79 was signed by President Simeon Benigno Aquino III on July 2012.

While regarded as oxymoron by opposition, responsible mining can be seen as the middle ground towards recognizing the positive contributions of mining to development.

Under EO No. 79 are 17 sections that strive to define responsible mining. It begins with the identification of areas that will be closed to mining operations or the "no go zones" . These include areas that are enumerated in the Philippine Mining Act and in RA 8435, "the Agriculture and Fisheries Modernization Act of 1997" such as protected areas under the National Integrated Protected Areas System, prime agricultural lands, island ecosystems and other critical areas. This administration also excluded priority tourism development areas. Identifying and mapping these areas is not as straightforward as it sounds, as various maps of various natures (geo-hazards, the mapping of the Strategic Agricultural and Fisheries Development Zones (SAFDZ), ancestral lands, etc.) were developed differently, used different references and scales and have overlaps or contested areas. These had to be addressed first by the TWG. The EO provides for the development of an Integrated Map System showing these "No Go Zones" for the common and uniform use of all government agencies and instrumentalities and other stakeholders. On a similar vein, local ordinances are expected to be consistent with the Philippine Constitution and the regulations, decisions and policies of the national government.

Further, EO No. 79 provides for the full enforcement of environmental standards in mining, including the strict prohibition of the use of mercury, especially in small-scale mining activities. Evaluation of the performance of existing operations are to be undertaken by a multi-stakeholder team led by the DENR/MGB and appropriate actions are to be taken promptly against violators.

Under these provisions, mining companies are required to operate in the most efficient, conscientious, and environmentally responsible manner, so that only those able to comply shall be given mining rights. This covers the entire life and operations of the mine, from managing the environmental, safety, and health impacts associated to each stage of the operation up to the final rehabilitation of the land that has been disturbed and converted by the mine. A final land-use plan that is approved by the communities must be in place before operations, so that it can appropriately restore the land to once again become physically and chemically stable, equal or more productive than the original land use. This ensures that the community will continue to benefit economically from that land after the end of the mine life.

Maximizing the potential economic benefits of the mining operations is also stated in the EO with the development of a national program and roadmap for the creation of value-adding activities and downstream industries for strategic metallic ores, paving the way for the industrialization of the local mining industry. An example is the possible establishment of an integrated steel and stainless steel industry. Along this line is also the review of the existing fiscal regime under the Mineral production Sharing Agreement scheme with the end in view of increasing the government's (both national and local) share and allowing for the immediate retention at the local level of the LGU share so that they can immediately use their share for their development needs. A draft bill on this new revenue-sharing scheme has been submitted to the Legislature.

Although no new mineral agreements may be entered into until a legislation that rationalizes existing revenue-sharing schemes and mechanisms has taken effect, exploration permits may be granted under the EO. If found to be commercially viable, grantees have the first option to develop and utilize the minerals upon approval of the Declaration of Mining Project Feasibility and effectivity of the new legislation. Areas with known strategic mineral reserves and resources will be declared Mineral Reservations for the development of strategic industries identified in the Philippine Development Plan and National Industrialization Plan, after proper consultations with all concerned stakeholders.

There are also efforts to better implement small-scale mining operations based on Republic Act No. 7076, or the People's Small-scale Mining Act of 1991 by seriously enforcing regulations that allow them only within officially declared People's Small-scale Mining Areas (Minahang Bayan areas). There is also a provision for concerned government agencies to conduct training and capacity building measures for small-scale mining cooperatives and associations. Small-scale mining are also expected to comply with the Environmental Impact System requirements.

The EO also established a Mining Industry Coordinating Council (MICC), an inter-agency council co-chaired by the chairpersons of the Climate Change Adaptation and Mitigation and the Economic Development clusters of the Cabinet, and additional members from the National Commission on Indigenous Peoples, the Secretary of the Department of Justice, and the president of the Local Union Authorities of the Philippines. The MICC is as an important institutional response to ensure that various sectoral concerns beyond the scope of the DENR are considered when making decisions on mining – such as its impacts on agriculture, on water, on energy, on the local communities, on IPs, etc. The MICC also serve as the Oversight Committee over the operations of the Provincial/City Mining Regulatory Boards.

Reporting periodically to the Office of the President, the MICC is expected to oversee the implementation of the EO with assistance from any government agency and local government units; ensure continuous dialogue among all stakeholders; formulate recommendation to improve allocation of revenues and risk between the government and the mining sector after the assessment and review of all mining laws, rules, issuances and agreements; conduct capacity and institutional building programs for all concerned government agencies and instrumentalities; and create a task force against illegal mining. The EO also provides for the creation of an inter-agency one-stop shop for all mining-related applications and processes.

Finally, EO 79 provides for greater transparency in the sector, beginning with the creation of a publicly accessible and comprehensive centralized database of all mining-related information from government agencies and instrumentalities, including Information and data gathered from the conduct of Resource Accounting or Full-Cost Benefit Analysis Studies, in line with the Wealth Accounting and Valuation of Ecosystem Services and the National Climate Change Action Plan. Public competitive bidding will be used for the grant of mining rights and tenements over areas with known and verified mineral resources and reserves, and the development and use of all valuable metals in abandoned ores, mine wastes, or mill tailings that belong to the State.

Most importantly, through the EO, the government expressed its support for and commitment to participate in the Extractive Industries Transparency Initiative (EITI) for greater transparency, accountability and governance in the sector. The EITI is a global standard designed to "promote open and accountable management of natural resources… [and] to strengthen government and company systems, inform public debate, and enhance trust." It believes that extraction of natural resources, which include minerals, can lead to inclusive economic and social development if properly managed, otherwise, it can lead to conflict and corruption. Countries that implement EITI must disclose information on "tax payments, licenses, contracts, production and other key elements around resource extraction" while mining companies must disclose all payments made to any government office. At present, there are 48 implementing countries, including the Philippines.

Since the EO was signed in 2012, there have been major headways made by the MICC, beginning with the approval of "Go/No Go Zone Map" for mining on January 2013, which was prepared by the Technical Working Group on Environmental Protection and Legislation, and has been approved by the MICC. The map integrates the various maps on protected areas, watershed reservations, strategic agricultural and fishery development zones, and tourism development areas. Based on the map, the DENR-Mines and Geosciences Bureau (MGB) has accepted amnd is processing 144 mining applications outside the "no-go" zones.

A full enforcement of the environmental standards in mining has been prioritized, which has led to the suspension of several mining applications; the continuous moratorium on the acceptance of mining applications and grant of new mining permits in Palawan; and the issuance of DENR Memorandum Order 2013-01 on February to increase the minimum capital requirements for the issuance of the Exploration Permit, Mineral Production Sharing Agreement (MPSA), and the Financial or Technical Assistance Agreement. DENR also issued Administrative Order (AO) No. 2015-02 to harmonize the implementation of the Philippine Environmental Impact Statement System and the Philippine Mining Act, and AO No. 2015-07 to mandate all mining contractors to secure ISO 14001 Certification, which is the Environmental Management System. The Mines and Geosciences Bureau also conducted and completed the first review of existing mining operations, which resulted in 43 MPSAs recommended for cancelation.

The revised Implementing Rules and Regulations (IRR) of the People's Small-scale Mining Act was approved in January 2014, followed by the issuance of DENR AO No. 2015-03 for its immediate adoption and implementation. The salient provisions of the IRR included the provisions of EO 79, the provision of centralized custom mills within a mineral processing zone inside a Minahang Bayan, limitation of the total term of a small-scale mining contract to six years, the imposition of a royalty payment in mineral reservation; and the adoption of current regulations on the transport and export of minerals and mineral products.

One of the most significant gains was made on June 3, 2014, when the MICC approved the draft bill entitled "An Act Establishing the Fiscal Regime and Revenue Sharing Arrangement for Large-scale Metallic Mining," which has been endorsed to the 16th Congress. In August, MICC signed a Memorandum for the President for the DENR to process new mining applications provided that these are in advance-exploration stages and already have approved Declaration of Mining Project Feasibility, and that the mining companies agree to pay the government share in the amount not less than the share provided under the proposed fiscal regime and revenue-sharing agreement.

Strengthening transparency, the DENR-MGB has already started to compile several mining-related data in a centralized database accessible to the public. The database now includes information on mining tenement, lands geology, mining technology, mineral economics, mining environment and safety, metallurgical technology, and marine geology.

The country also completed and submitted the 1st Philippine EITI (PH-EITI) National Report to EITI International on December 29, 2014, which is one of the requirements to make the Philippines a compliant member. The report aims to confirm whether the income tax payments of the companies from the Philippines' extractive industry match government's collection for the year. Since the publication of the report, the Philippines is now undergoing a validation process before it is declared an EITI-compliant country.

The Philippines' commitment to the EITI is especially critical and must be maintained to make accountable all stakeholders involved in the management of the country's resources and improve existing management and monitoring systems, lessening the chances of degradation, corruption, and conflict that can potentially arise from mismanagement.

While all these actions demonstrate government's resolve to address the many challenges of mining in the country, much still needs to be done to ensure that the objectives of the law and the EO are achieved. Government's capability to closely monitor and evaluate mining operations needs to be strengthened. However, it can be said that with these mechanisms in place—taking into account the lessons learned from the legacy mines and alert to any gaps in the law that or system must be addressed—the idea of responsible mining has moved away from mere rhetoric and into a more workable framework for inclusive development.

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