Palace rebuffs DENR for denying Xstrata unit’s mining permit

MANILA, Philippines – The Office of the President has ruled that global miner Xstrata’s Philippine unit followed all the requirements for an environmental permit necessary to start commercial operations in its Tampakan gold-copper mine in Mindanao.

In a February 4 decision penned by Executive Secretary Paquito Ochoa Jr (see document below), the Office of the President rebuffed the Department of Environmental and Natural Resources (DENR) for flip-flopping on its decision to grant an Environmental Compliance Certificate (ECC) to Sagittarius Mines Inc (SMI), the local unit of Swiss firm Xstrata.

“There is no question that SMI had fully complied with the requirements of the EIS (Environmental Impact Statement, a requirement for the application for and processing of an ECC),” Ochoa wrote.

SMI elevated its appeal to the Office of the President in July 2012.

Ochoa noted that DENR Secretary Ramon Paje has already agreed with the recommendation of the EIS Review Committee (EIARC) to grant SMI an ECC in late 2011. However, Paje reversed himself in a January 3, 2012 memorandum, citing the local ordinance of the South Cotabato provincial government banning open-pit mining, which is the extraction process for the Tampakan project.

In defending the May 22, 2012 dismissal of SMI’s appeal, Paje then cited the “delicate interplay between local autonomy and national policy.”

Ochoa disagreed. “The DENR was in transgression of its own rules when it took into consideration the existence of the South Cotabato Code prohibiting the use of open pit mining. Without having to express it, the DENR practically denied the issuance of the ECC to SMI regarding the prohibition against open-pit mining an impediment to the same.”

“Effectively, the DENR stretched the requirements of the EIS System in giving the South Cotabato Code the cognizance not called for in this instance.”

“It is this Office’s considered opinion that the prohibition against open-pit mining in South Cotabato is irrelevant to the issuance of the DENR of an ECC,” Ochoa added.

Securing a permit from the local government is separate from the ECC it needs from the DENR, added Ochoa.

Single biggest investment

If it pushes through, the US$5.9 billion Tampakan project will be the single biggest foreign investment in the country, projected to contribute at least 1% to gross domestic product per year of operations.

The start of commercial operations of the Tampakan project was previously pushed to 2019 as it faced various challenges, including regulatory and operational difficulties, and controversies such as violence errupting in the area, as well as the August 2012 death of former Interior Secretary Jesse Robredo who was working on harmonizing local and national concerns. 

On January 21, South Cotabato provincial board stood by its position banning open pit mining in the province.

It is also covered by the no-new-mining-contract scheme imposed by the Aquino government’s new mining policy. – Rappler.com