Draft mining bill hikes gov’t revenue share, cuts mining term

MANILA, Philippines – A draft mining bill presented before the House committee on natural resources Wednesday, October 17, seeks to increase government share in mining firms’ revenues to 10% from 2%, and set the maximum mining term to 15 years, against the 25-year limit imposed by Executive Order (EO) 79.

Ifugao Rep. Teddy Brawner Baguilat Jr., chairman of the technical working group (TWG), said the bill, titled Philippine Mineral Resources Act of 2012, was able to cover economic issues extensively, but not social, environment and other factors.

This is due to the exigency of passing the new mining law amid the moratorium on new mining contracts mandated by EO 79, he said.

“We would have wanted more exhaustive discussions including public hearings but we feel that we have to bring this to the level of the committee,” he said.

The implementing rules and regulation (IRR) of EO 79 will take effect on October 25.

Revenue-sharing is one of the most contentious issues in the IRR, a concern that the house version of the mining bill aims to address. A TWG was convened to expedite the process of creating a bill that can be presented to plenary.

The committee moved to bring discussions back to the mother committee despite objections from Chamber of Mines Legal and Policy Vice President Ronald Recidoro, who raised concerns over the creation of Multi-Sectoral Mineral Councils (MSMCs) to regulate the industry, as well as the 15-year maximum term for mining contracts.

With less than 3 months left on the legislative calendar, natural resource committee chairperson Francisco Matugas ordered the committee secretary to schedule weekly discussions on the mining bill, separate from other bills in the agenda.

Salient features

Four main provisions are featured on the draft bill:

• the creation of a national industrialization plan;
• the promotion of local mineral processing plants;
• the development of a mineral management plan or framework; and
• the emphasis on state-led exploration, where mining activities will be reserved for Filipino citizens and Filipino corporations.

Section 50 states that only corporations with 60% of shares controlled by Filipino citizens shall be granted mining contracts.

While the IRR cut the maximum term of mining contracts from 50 years to 25 years, the draft consolidated bill of the House seeks to put the maximum term at 15 years, including 5 years for rehabilitation activities.

Recidoro raised concerns over the provision, arguing that discussions should be brought back to the TWG on the matter.

“If we limit permits to only 15 years, there will be no mining companies operating in the Philippines,” he said, citing as an example the Tampakan mine, which is yet to start operations.

Section 40 states that MSMCs will be created to determine whether or not mining operations will be allowed, but their coverage will be on watershed areas, not on provincial or local government territories.

Recidoro also objected to the creation of MSMCs, warning that a similar system in place has failed.

“While this is apparently a measure to make mining more participative, we have already seen what this kind of set up this will do. This is already the set up for small-scale mining where regulated by provincial or city mineral resources boards and we have seen what it can do. There are now 300,000 illegal small-scale miners in the country. If we do the same, you can except the same results,” he said.

MSMCs will be in charge of: determining whether mining operations should be allowed; deliberating and approving proposals for mineral agreements, monitoring mining operations and establishing internal rules.

The consolidated bill maintained the prohibition of open-pit mining, and also outlined areas not open to mining activities, including cultural sites, high-conflict areas, and agricultural areas.

Bayan Muna Rep. Teddy Casiño said there will always be disagreements in the TWG, but it is always the mother committee that has the power to resolve issues.

“Even EO 79 can not go beyond the law itself if the authors think the problem is the law itself. No amount of EO can increase revenue share or other aspects of the law. Despite the EO, we proceed with coming with a legislative measure,” he said. – Rappler.com

Read the Blog on the 2012 Mining Conference for a blow-by-blow account of issues being discussed.

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