Aquino govt's mining rule is illegal
Editor's Note: Before Chamber of Mines of the Philippines president Benjamin Philip Romualdez introduced keynote speaker Vice President Jejomar Binay at the 2012 Mining Philippines Conference, he spoke for the first time on the position of mining firms regarding a rule on Aquino government's executive order on mining. This speech was delivered at the Sofitel Philippine Plaza, Pasay City on 19 September 2012.
Watch a portion of his speech below.
The Philippine mining industry is at a crossroads. After being the “raging bull” of the Philippine stock market from 2008 to early 2012, mining stocks have sputtered to become a “sitting bull” in the PSE by this month.
Metal prices have weakened, starting when China announced in March a drop in its GDP forecast and a contraction of its manufacturing index in August.
These developments come at a time when our government is seeking more revenues from the industry and, while at it, has extended the moratorium on new mining projects until a new revenue measure has been agreed upon. As we’ve pointed out, the moratorium has, according to the Bangko Sentral ng Pilipinas, already caused an outflow in foreign direct investments in the mining sector in 2011 to the tune of P10 billion.
The P2 billion in mining investments we are expecting this year will not happen. The P2 billion in mining investments we are expecting next year will
not happen. The P16 billion in mining investments we are expecting in this administration will not happen.
Despite the already huge contribution of large mining taxpayers to government’s total tax collection from the industry, this sector is committed to
work with government in its thrust to raise additional revenues. Our members are carefully and deliberately studying the issue, taking into consideration the high risks assumed by mining investors, the instability of global metal prices, and the competitiveness of the Philippines vis-à-vis other mining jurisdictions worldwide.
We view Executive Order 79 as government’s recognition of the role of responsible mining in our country’s development. We are also of the view that the improved regulation that EO 79 espouses will in due time encourage the return of investments.
The tremendous challenges notwithstanding, we in the Chamber of Mines of the Philippines remain optimistic that we will be able to overcome. We are kept afloat by our firm belief that mining will one day achieve its full potential to contribute in a much bigger way to our nation’s socio-economic growth.
Our determination to stay the course and forge ahead can be gleaned from the theme of this year’s conference: “Shaping the Future of Philippine Mining”.
This year’s Conference will highlight governance issues, particularly on transparency, environmental concerns and social responsibility. These
highlights – matters over which we have control – underscore the industry’s determination to manage its future in an environment that promises great opportunities for sustained development amidst a challenging global and national landscape.
Our optimism is likewise reflected by the fact that we have maintained high participation levels of the industry’s various stakeholders in this year’s
conference and exhibition. Indeed, mining is for people with a long-term view. A country rich in minerals run by a government bent on curbing corruption remains an attractive destination for resource development.
We look forward to the enriching discussions on various issues that affect mining, specifically on the way forward for an industry that has time and again proven its resilience in the most difficult circumstances to survive, to thrive, and to serve.
Today, we are deeply honored by the presence of our keynote speaker for this conference. His pronouncement of support for responsible minerals
development as a means to alleviate poverty in our country demonstrates his deep understanding of our industry and its potential. His support provides us the inspiration to move forward with our advocacy of sustainable development through responsible mining in the midst of these challenging times.
Before I introduce our guest of honor, I wish to request him to convey to the President a provision of the IRR for EO 79.
The industry is shocked with Section 9 of the implementing rules on EO79, which mandates that the terms and conditions of the second 25-year term of mining contracts would be renegotiated by the government.
This provision effectively shortens mining contracts to a mere 25 years in violation of Section 32 of the Mining Act, which guarantees the mining companies of a second 25-year term under the same terms and conditions. This provision is patently illegal and contrary to the assurances of government that mining contracts will be respected.
It is thus my privilege to introduce to you, ladies and gentlemen, the Vice President of the Republic of the Philippines – Honorable Jejomar Binay.
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