Group airs concern over Paje statement on mining policy

MANILA, Philippines - The Chamber of Mines of the Philippines (COMP) yesterday expressed deep concern over media reports quoting DENR Secretary Ramon Paje that there would be no more consultations on the new mining policy crafted by the study group and that appeals over the policy’s implementation should be brought to the attention of the Office of the President.

The legitimate large-scale mining industry, the Chamber said, has been looking forward to more consultations with the study group following assurances made in a press conference by Presidential Spokesperson Edwin Lacierda last Feb. 14.

So far, the Chamber said, there has only been one consultation made with the industry, and that was on Nov. 14 last year when COMP officials were given two hours to present the group’s position before members of the study group on the proposed minerals policy. Paje was not present during that consultation meeting.

COMP is strongly opposed to the DENR’s proposal to convert current and future mining operations into mineral reservations so government can collect an additional five-percent royalty. 

COMP argued that since the government’s share in net mining revenues is already well-above 50 percent, the proposal to tack on an additional five-spercent royalty on a mining company’s gross output is almost “confiscatory and is tantamount to the expropriation or nationalization of the mining industry.”

The indispensable role of the private sector, as the main engine of growth and government’s partner in development is well articulated in the Constitution, the chamber said. Since mining agreements concern both the government and the private sector, there is a need for consultation before arriving at any change in the agreements particularly when this will impact on the mining operations.

“When government unilaterally formulates a decision, private sector confidence in the credibility of government is undermined and perceptions of political risks increase, the Chamber stressed, adding “this impacts the country’s standing as an investment destination. This has been confirmed by results of surveys, which indicate a strong correlation between a country’s investment climate and the amount of capital investment it generates.”

The COMP argued further that an increase in tax imposition affects cost of production. In the mining industry, when cost of operations increase, exploration activities as well as other broad-based services like socio-economic programs that benefit local communities suffer.

“It is unfair for the large-scale producers to be burdened by the proposed policy reform of imposing an additional 5% royalty on top of the two percent excise tax since the leakage in tax collection as confirmed by the government comes from small-scale mining. Projecting the entire mining industry as not paying its fair share of mining revenues to the government when this is not so.”

The Chamber said that giving such an impression is wrong as it paints an undesirable picture of the mining industry already saddled by governance problems that are not of the industry’s own doing.