Mining IRR: no-go areas, revenue sharing still pending

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Two of the several contentious aspects of the Aquino government's policy on the mining industry have yet to be finalized after the mining council released the rules and regulations on September 11

MANILA, Philippines – Two of the several contentious aspects of the Aquino government’s policy on the mining industry have yet to be finalized after the mining council released the rules and regulations on Tuesday, September 11.

Specific areas in the country where any mining activity will not be allowed — also referred to as the “no-go areas” — as well as the revenue sharing scheme among mining stakeholders and the government, will still need to be ironed out.

The Mining Industry Coordinating Council (MICC) approved the Implementing Rules and Regulations (IRR) of the Aquino government’s Executive Order No. 79 on September 10, according to Environment Secretary Ramon Paje. The IRR will need to be published in a newspaper and will take effect 15 days after.

Below is a signed copy of the IRR.

Mining EO implementing rules and regulations

The IRR had gone through at least 3 drafts and a day-long consultation with stakeholders after the EO 79 was released in July.

No-go areas

Despite these, the MICC still passed on the task of determining the no-go zones to the National Mapping and Resource Information Authority (NAMRIA), the central mapping agency of the government.

Earlier, the Department of Tourism (DOT) was tasked to identify most of the 78 sites that could be developed for tourism activities.

Determining and defining the no-go areas were reportedly a sticky issue among industry players and environmental groups during the drafting of the IRR since there are some applications for, or already approved, mining tenements in select areas.  

“The IRR has clearly mandated NAMRIA, the national mapping agency of the government, to come up with an integrated map. This will contain all the thematic maps for boundaries of cultural lands, eco-tourism sites,” Mines and Geosciences Bureau Director Leo Jasareno explained.  

“Once the technical descriptions are identified on the map, it will now be very easy for the MGB to find out if an area is close or open to mining,” he added. “We will minimize arbitrariness.”

Jasareno said the NAMRIA was given 4 months to finish the thematic maps.

Revenue-sharing scheme

Jasareno also confirmed that the IRR specified that changes in the current revenue sharing scheme on mining activities will be pursued in Congress.

The revenue-sharing scheme is the most contentious aspect of the EO 79 since the “no new mining contracts” regime will be in place until lawmakers pass the mining reform bill.

President Aquino and Finance Secretary Cesar Purisima have been pushing for higher tax collections from mining industry players.

Most large-scale miners are operating under a Mineral Production Sharing Agreement (MPSA), which requires just 2% corporate income tax, among others.

Purisima has also previously said that incentives given to mining players should be scrapped since investors looking for minerals to extract will still come over.   
The MICC will draft the mining reform bill that will be tackled in Congress.

Jasareno said a technical working group (TWG) has been formed to start drafting the bill. “We have assured the industry players that we will expedite the preparation [of the draft].”

Mining accidents

The IRR also added a new aspect in the efforts to minimize impact of mining activities on the environment.

Jasareno said that when mining accidents happen, the individual owners will also be banned from undertaking new mining projects. Under the current Mining Act, only the corporate entity is made responsible for financial, technical, legal and other responsibilities during and after an accident.

“In general, we found that officials of mining companies involved in incidents would be able to take part in new mining projects by creating new corporations…This [provision] sends the message that we must be serious and stringent in enforcing environmental laws and regulations,” the MGB director said.

“If you were a violator, you cannot hide. We will hold not only the mining applicant but also the owners,” he added.

Only those who have followed and implemented the required remediation measures will not be banned, he said.

The current Philex Mining Corp. tailings pond leakage at its Padcal mine in Benguet province did not influence the MICC in adding this provision, Jasareno said.

Philex is facing steep fines for the sediments that spilled from its tailings pond due to torrential rain days before.

Mine leaks have occurred in various mine sites, causing catastrophic environment and financial effects to the host communities.

Small scale mining

The MICC also maintained that small-scale mining activities will be confined to the designated Minahang Bayan areas. Large-scale mining companies will not be allowed to operate in these contract areas of the small scale miners.

The activities of small scale miners shall be restricted to gold, silver and  chromite. The use of water jetting and mercury for the separation of the metals shall be prohibited.

Sale of gold shall only be made to the Bangko Sentral to prevent smuggling, Paje said.

Jasareno also said the IRR provides for a transition period for the small scale miners. “The permit holders are given 6 months to 1 year so they can conform with the requirements of the Minahang Bayan or the People’s Small Scale Mining areas.”

“This is to [address] the apprehension that many will be disenfranchised,” he added.

National vs. local

Another key provision of the IRR is the role of the Department of Interior and Local Government (DILG) in asserting the primacy of national laws over local ones.

Paje said the DILG is tasked to harmonize national and local ordinances regarding mining activities. He stressed, however, that local government units cannot pass ordinances contrary to national laws.  

This was the core issue in the case of the Tampakan, a mining tenement awarded to Sagittarius Mines, a unit of Swiss miner Xstrata.

This provision in the country’s new mining policy is being tested by the standing ban on open-pit mining imposed by the South Cotabato provincial government that prevents Sagittarius Mines from beginning the $5.9 billion copper-gold in South Cotabato.

There are two options to have the ordinance nullified. One is to convince the provincial board to overturn the ordinance or to file a case against the South Cotabato provincial government.

“Until such time that the ban in South Cotabato is nullified, our position is it stays. The DILG has to encourage LGUs to review their ordinances and make sure that these are consistent  with the national law,” said Paje.

“There is a certain sensitivity to this because we have to Local Government Code that mandates that laws be implemented in favor of the local communities,” he added.

There are already 14 provinces nationwide that promulgated ordinances, such as open-pit mining bans, that players said violated the Mining Act.

These provinces include Mindoro, Romblon, Antique, Zamboanga Sibugay, Bohol, Zamboanga del Norte, Samar, Marinduque, South Cotabato, Bukidnon, La Union, Capiz, and Negros Occidental.

There are also 6 provinces and 2 cities asking for a law to ban mining in their areas. These are Catanduanes, Sorsogon, Romblon, S. Leyte, E. Samar, Nueva Vizcaya, Cagayan de Oro, and Davao City. –

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