Aquino gov't agrees to revise mining IRR
MANILA, Philippines - The government caved in to the mining industry's call to change legally and financially contentious provisions in the recently issued mining rules.
The announcement on the revision in 3 provisions of the mining rules on Monday, September 24, comes after President Aquino called a Malacañang meeting with members of a council responsible for issuing the rules, which the Chamber of Mines said are illegal.
At the mining industry conference on September 19, the industry threatened to sue the Aquino government for the "patently illegal" provisions in the Implementing Rules and Regulations (IRR) of its mining policy.
These revisions would be made just weeks after the Mining Industry Coordinating Council (MICC) released the IRR last September 11 to enforce the Aquino government's policy via Executive Order 79.
Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said in a press briefing on September 24 that the revisions would be submitted to President Aquino for comment and approval.
"We believe that these revisions will clarify some of the things that were not clear with the industry,” said Carandang, who was at the meeting.
“They raised some concerns, we examined whether those concerns are valid, we thought that some of them might be valid, and, therefore, we decided to revise based on reactions not just of the mining industry but of others,” he said.
Carandang also said the MICC “felt, after further examination, that it would be easier to revise rather than to risk some sort of litigation.”
He said the MICC agreed to revise Sections 3, 7 and 9 of the IRR. These pertain to the term of the mining contract and new contracts of existing players.
The revisions are as follows:
Section 3. Definition of Terms
“Expired mining tenements” refer to mining contract/agreements whose 25- or 50-year term has lapsed: Provided, that in the case of the initial 25-year term, the mining contract/agreement shall be considered expired if the parties concerned fail to agree on the terms of the renewal pursuant to Sections 32 and 38 of R.A. No. 7942, the Philippine Mining Act of 1995, and other pertinent laws.
Section 7. Grant of Mineral Agreements Pending New Legislation
No new mineral agreements shall be entered into until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect: Provided, that in the case of expansion of existing contract areas, the same shall be subject to existing laws: Provided, further, that the National Government-Owned Mining Assets may be subject to the Financial or Technical Assistance Agreement (FTAA) in accordance with Section 9 of these implementing rules and regulations.
Section 9. Opening of Areas for Mining through Competitive Public Bidding
Section 2, Article 12 of the Constitution provides that the exploration, development and utilization of natural resources shall be under the full control of the state. Thus, the grant of mining rights and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the government and all expired tenements, shall be undertaken through competitive public bidding.
The mining contract/agreement that may be renewed shall be subject to existing laws, rules, and regulations at the time of renewal. Provided, further, that mining contractors whose tenements are expiring from Sept. 1 to April 30, 2013, shall be given 30 calendar days from the effectivity of these implementing rules and regulations to file renewal applications: Provided, finally, that those mining contractors whose tenements expire after April 30, 2013, shall file their renewal applications not later than six months prior to the expiry of their mining contracts/agreements.
Mining contract term
The members of the mining chamber focused on Section 9, which they said "pushed them to the wall."
Industry leaders also said this provision was inserted in the IRR at the last minute and without proper consideration of its alleged legal flaws.
Under the original IRR, Section 9 stated the government could renegotiate the terms of mining contracts after the first 25 years. This effectively shortens the project period from the current maximum of 50 years.
They said this immediately had an impact on the cashflow and the value of their mining assets.
This was the originally issued IRR:
Carandang said the revisions were unanimously agreed upon by the members of the MICC present, including himself, Executive Secretary Paquito Ochoa Jr., Finance Secretary Cesar Purisima, Trade and Industry Secretary Gregory Domingo, Environment and Natural Resources Secretary Ramon Paje, Energy Secretary Rene Almendras, Socioeconomic Planning Secretary Arsenio Balisacan, Presidential Assistant for Climate Change Elisea Gozon and representatives of the Department of Justice and the Office of the Solicitor General. - Rappler.com
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