PH mining transparency report to be released in December

Pia Ranada
The report will disclose mining contracts, revenue streams and export data of major mining companies and show how much mining contributed to the Philippine economy

MANILA, Philippines – The first comprehensive report on transparency in the Philippine mining industry is set for release in December, promising to give the public easy access to mining contracts, revenue records and more.

This was the announcement made by Marie Gay Ordenes, National Coordinator of the Philippine Extractive Industries Transparency Initiative (PH-EITI), the group behind the report.

As of writing, 78% or 40 of the 51 major mining, oil and gas companies have executed a waiver allowing the Bureau of Internal Revenue (BIR) to give the group access to the companies’ tax information. This is crucial to the report, which seeks to reveal the inner workings of the mining sector, usually kept hidden from public view.

“The natural resources the extractive industries take from us, we will never get back. So it’s important we know how much they are making and how much of that goes back to us,” said Department of Finance Assistant Secretary Teresa Habitan during a September 3 event held in Manila.

The report, based on 2012 records, aims to cover 51 large-scale mining companies and significant operating oil and gas companies – those that reported total revenue or assets of more than P1 billion (US$23 million*).

They are composed of 39 large-scale metallic mining companies, 11 oil and gas companies and 1 coal company. (TIMELINE: Philippine mining laws and policies)

The 40 who have allowed the BIR to disclose their tax records for the report are:

35 mining companies:

  1. Benguet Corporation/Benguet Nickel Mines, Inc.
  2. Cagdianao Mining Corp
  3. Hinatuan Mining Corp
  4. Rio Tuba Nickel Mining Corp.
  5. Taganito Mining Corp.
  6. Carmen Copper Corp.
  7. Filminera Resources Corp
  8. Lepanto Consolidated Mining Co.
  9. OceanaGold (Philippines), Inc.
  10. Philex Mining Corp
  11. Philsaga Mining Corp.
  12. Platinum Group Metals Corp
  13. TVI Resource Development         
  14. Zambales Diversified Metals Corp.
  15. CTP Construction and Mining Corp.
  16. Berong Nickel Corp.
  17. Eramen Minerals, Inc.
  18. Apex Mining Co., Inc.
  19. Philippine Mining Development Corporation (PMDC)      
  20. LNL Archipelago Minerals Inc.
  21. Rapu-Rapu Minerals, Inc.
  22. SR Metals, Inc.
  23. Leyte Iron Sand Mining Corp.
  24. SinoSteel Phils. H.Y. Mining Corp
  25. Cambayas Mining Corp.
  26. Marcventures Mining and Development
  27. Johson Gold Mining Corporation
  28. Shenzhou Mining Group Corp.                     
  29. Krominco, Inc.
  30. Oriental Synergy Mining Corp.
  31. Adnama Mining Resources Inc.
  32. Shuley Mine Incorporated
  33. Carrascal Nickel Corporation
  34. Ore Asia Mining and Development Corp.
  35. Greenstone Resources Corporation

5 oil and gas companies:

  1. Shell Philippines Exploration B.V (SPEX)
  2. Chevron Malampaya LLC
  3. PNOC- Exploration Corporation
  4. Nido Production Galoc. Pty. Ltd.
  5. Galoc Production Company

The first Philippine EITI country report will be the first single document that contains all of the companies’ record streams, mining contracts and export data or what minerals they export and to which countries.

Though all the revenue records are with different government agencies “there is no unified system of bringing all the information together for easier analysis and comparison,” said Ordenes.

“Mining contracts, for example, are with the relevant government agencies but to access them you have to write to the head of the department. Through the EITI, we plan to disclose all these contracts,” she added.

By showing which incentives regime each company is under, the report shows readers what perks from the government each company enjoys – whether it’s tax holidays or exemption from duties for the transport of equipment. (READ: Draft bill for new mining tax regime finalized)

The report also puts the government under scrutiny. Agencies like the Mines and Geosciences Bureau, Department of Energy, Bureau of Internal Revenue, Bureau of Customs, National Commission on Indigenous Peoples and local government units with jurisdiction over mining sites were asked to turn over records on how much they received from the mining companies.

The document will shed light on the company’s finances and budgeting. How much does the company set aside for its Contingency Liability Rehabilitation Fund, the fund the law states companies should use to pay for environmental damage and rehabilitation.

How much do the companies pay indigenous peoples or local governments in order to mine in their domains? The report will also detail how these royalty fees are used by the IPs or the LGU – if they go to building schools, roads or social services.

The data-gathering and analysis was done by an Independent Administrator (IA) contracted by the PH-EITI team through public bidding. The selected IA is Isla Lipana, athe local arm of Price Waterhouse Coopers, a group which has done the EITI reports of other countries.

For transparency, Isla Lipana consults a Multi-sectoral Group composed of civil society organizations, local government officials and other stakeholders throughout the process of crafting the report.

Spotting discrepancies

Beyond reporting facts, the report will also identify discrepancies between data from the companies and data from the government. If the data does not match, the two parties must explain the mismatch and try to reconcile the numbers. Whether or not there was a reconciliation will be indicated in the report.

All the data should show the reader what contribution the mining industry makes to the country’s economy.

One part of the report will show the mining sector’s share in the Gross Domestic Product, how much employment it generates and how much the government receives compared to how much the company makes.

The report, intended to be made annually, promises to cure the perceived ills of the mining industry including mining companies that underreport their revenue for lower taxes or keep essential information from local communities who would be the most affected by mining operations.

“There has always been a lack of transparency in the dealings of the mining companies with government and more so with the communities affected by their work, hence, EITI is critical,” said Tess Tabada of Bantay Kita, the coalition representing CSOs in the PH-EITI’s Multi-sectoral Group.

For greater access, the report will be translated into different languages and dialects, said Ordenes. The group will bring the report to local governments and explain its contents to communities.

Interestingly, the PH-EITI’s foremost proponent is the Chamber of Mines of the Philippines. She said the coalition of mining companies had been pushing for the process since 2005.

“They want the public to know how much they are contributing to the country,” she explained.

The EITI report is currently being implemented in 39 countries and has disclosed around $1 trillion (P43.58 trillion) in revenue. Close to 80 of the world’s largest oil, gas and mining companies participate in the EITI process.

Participation by the Philippines in the EITI is required by the Mining Reform Act. The process officially began after President Benigno Aquino III signed Executive Order No 147 creating the PH-EITI in November 2013. – Rappler.com

Iron ore mining pit image from Shutterstock

*$1 = P43.58

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Pia Ranada

Pia Ranada is a senior reporter for Rappler covering Philippine politics and environmental issues. For tips and story suggestions, email her at pia.ranada@rappler.com.