Draft mining bill to address small-scale mining issues

MANILA, Philippines – Two of the numerous provisions in the proposed alternative mining reform bill were discussed and deliberated in the recent hearing of the Committee on Natural Resources at the House of Representatives on Wednesday, November 14.

The two provisions discussed include the proposed multisectoral mining council as well as salient issues regarding small-scale mining, which include ban on mercury use, term limit and adherence to regulatory and environmental measures.

The proposed bill, titled the Philippine Mineral Resources Act of 2012, plans to implement a Mineral Management Plan that ‘provides the framework for the utilization and management of the country’s mineral resources.’ The bill is aimed to address the necessary details overlooked by the IRR including the contentious revenue-sharing scheme.

Multisectoral mining council

One of the salient points discussed in the hearing is the establishment of multisectoral mineral councils as stated in Section 40.

Some of the functions of the council include the approval of mining operations, deliberation and approval of mineral agreements, monitoring of mining operations and establishment of internal rules of procedure. The council’s coverage, however, will be on watershed areas and not provincial or local government territories.

Chamber of Mines legal and policy vice president Ronald Recidoro, however, strongly opposed this proposal, saying it will only spell an ‘administrative nightmare’ for the government.

“Under the proposal, mineral councils are based on watershed area. We are an archipelagic country, there will always be watersheds. This is an administrative nightmare. Who will regulate these councils?” he said.

The composition of the council include representatives from MGB as convenor, affected LGUs, community organizations and affected indigenous peoples, as stated by Section 42 of the bill. AAMBIS-OWA representative Sharon Garin lauded this provision saying the multi-sectoral council’s objective is to give voice to the different sectors involved.

However, Philex legal counsel Enrique Rodriguez quickly refuted this and raised concerns on the composition of the council, saying it’s not representative and lacks technical expert’s input.

“The proposed mineral council is not representative of the large-scale mining industry. How can that be fair? Also, the bill doesn’t include technical experts. Mining is a very technical and intricate industry,” Rodriguez said.

The proposed establishment of multisectoral councils in all mineral-rich watershed areas pose an increase in government size as well as expenditure in terms of employee compensation and operational costs.

Chamber of Mines legal adviser Leo Dominguez disagreed with this proposal, stressing instead that MGB be strengthened rather than create another council.

“Let’s get (MGB) properly sourced, not replaced. All of the best engineers and geologists are somewhere else when they should be with the government. Let’s not make too many councils,” he said.

Small-scale mining

Chapter 6 of the draft bill acknowledges small-scale mining operations and mandates its operations pursuant to Republic Act 7076 or the People’s Small-Scale Mining Act of 1991.

One of the significant points outlined in the bill is the prohibition on the use of mercury in small-scale mining as stated in Section 74.

University of the Philippines – National Institute for Geological Sciences (UP-NIGS) professor Carlo Arcilla agreed on this saying the use of mercury poses health and environmental hazards. Currently, Arcilla and his institute are looking at cyanide as an alternative for mercury in extracting gold but it still not yet final.

Section 72, on the other hand, requires small-scale miners to pass an Environmental and Social Impact Compliance Certificate (ESICC) before being issued their small-scale mining permits. This is similar to the constitutionally-required Environment Impact Statement passed by large-scale miners to obtain the necessary Environmental Compliance Certificate (ECC) needed for operations.

Small-scale mining comprises a huge part of the whole mining industry in the country but it is massively unregulated. According to Recidoro, 60% to 70% of the country’s gold output comes from small-scale miners, yet no taxes are attributed to them, creating a tax loophole in the government’s revenue.

“The government loses approximately P15 billion annually due to illegal small-scale mining,” he said.

MGB legal services head Roberto dela Fuente explained that R.A. 7076 actually has a provision in terms of levying taxes to small-scale miners. The law mandates Bangko Sentral ng Pilipinas (BSP) to put up buying stations in small-scale mining areas. However, such set-up is currently is not happening, according to him.

Despite the glaring provision on EO 79 accommodating small-scale miners through the ‘minahang bayan’ scheme, the daunting task of regulating these small-scale mining operations still loom. A huge number of small-scale miners are still unregulated particularly in the far-flung indigenous areas where communities operate in a different set of law. Another reason is the lack of enforcement of R.A. 7076 itself in identifying small-scale mining operations.

“Small-scale mining law was meant for the poorest of the poor but many projects now is posing as small-scale mining that are actually not,” Chamber of Mines’ Leo Dominguez said.

Aside from the two, the draft mining bill also seeks to increase government share in mining companies’ revenues to 10% from the previous 2%, answering the pending revenue-sharing scheme mandated by the Implementing Rules and Regulations (IRR) of EO 79. Small-scale mining term permit is also outlined for 3 years and extendable to a maximum of 15 years as stated in section 69.

The next committee hearing will be on November 28, 2012. – Rappler.com