Mining firms say dispute with DENR could cost $16B

LEGAL ACTION. The mining saga is feared to play out in the courts with COMP chairman Artemio Disini (right) and COMP vice president for legal and policy Ronald Recidoro filing a graft complaint against Environment Secretary Gina Lopez. File Photo by Inoue Jaena/Rappler

LEGAL ACTION. The mining saga is feared to play out in the courts with COMP chairman Artemio Disini (right) and COMP vice president for legal and policy Ronald Recidoro filing a graft complaint against Environment Secretary Gina Lopez.

File Photo by Inoue Jaena/Rappler

MANILA, Philippines – The Philippine mining industry warned on Tuesday, March 14, that its dispute with the Department of Environment and Natural Resources (DENR) over 75 cancelled mining agreements could cost the government billions of dollars.

In a statement, the Chamber of Mines of the Philippines (COMP) said that “government might spend an estimated $16 billion if arbitration cases are filed by mining firms whose Mineral Production Sharing Agreements (MPSAs) were cancelled.”

The potential arbitration cases stem from the MPSA cancellations announced by DENR Secretary Gina Lopez last month.

COMP noted that the government is a party to contracts covering the development of the country’s mineral resources as provided in the Philippine Mining Act.

It added that a good number of the mines ordered for closure or suspension have bilateral investment treaties (BIT). The BIT asks host countries to provide certain protection for foreign investments, such as limiting expropriation of investments without due regard for international law standards.

“Affected foreign investors, under the BIT, could claim for prompt, adequate and effective compensation for their capital investments, liabilities, other investments and advances stemming from the arbitrary cancellation of the MPSAs,” COMP pointed out.

The chamber however said it remained optimistic that the “principled intervention” of the Minerals Industry Coordinating Council (MICC) will prevent the filing of arbitration cases.

The MICC, which is co-chaired by Lopez, is conducting a 3-month review of the mining audit that led to 28 mining firms being ordered closed or suspended prior to the cancellation of 75 MPSAs.

The review started this month and is being carried out by technical experts with no known ties to mining and with the cooperation of the DENR.

In the meantime, COMP has also filed a graft complaint against Lopez before the Ombudsman, alleging that she did not follow legal process and behaved unethically in her closure of the 28 mining firms.

What plot?

In a separate statement released on Tuesday, COMP also “vehemently denied any involvement in a  plot to destabilize the administration”.

It was reacting to President Rodrigo Duterte's statement on Monday, March 13, when he talked about the prospect of a total mining ban while linking mining firms to the opposition.

"I know mining is funding the opposition side... I know that some of you are giving money to destabilize [the government]," he said.

“The Chamber of Mines fully supports the administration of President Duterte and are unaware of any mining company that is supportive of any destabilization efforts against the administration. We condemn such efforts and reaffirm our commitment to work with this administration, and to follow the law and the Constitution,“ COMP said. – Rappler.com