New mining policy to be issued piecemeal

SINGAPORE – The government may release a series of policies for the regulation of the mining industry instead of just one executive order (EO) as some proposed changes may require legislation, an official said.

“The mining policy may not be a one-shot deal. It may not come in one EO and may come in a series of policies,” Mines and Geosciences Bureau (MGB) director Leo Jasareno said at the 8th Asia Mining Congress here Monday night.

He said that some proposed reforms, particularly, increasing the share of the government by raising taxes from mining operations would require legislation.

“Part of it will be legislative, meaning part of the policy will be for the executive to ask Congress for some laws that will address the issues, so it is not just one policy,” he said.

He said that for the government to collect higher taxes from miners, for instance, Congress, would have to look into the possibility of imposing taxes through legislation.

He said that while the government is leaning on pushing to collect more from mining firms, it has yet to finalize the appropriate mechanism on how to increase its share from mining.

He said in his speech at the same event that the government through its mining study group, is currently formulating a mining policy to address the different issues faced by the mining industry.

“This mining policy is envisioned to address the raging environmental and social issues and bring about stability in the business of mining,” he said.

Among the challenges faced by the industry, he said, are the perception of mining being destructive to the environment as well as the lack of monitoring capability of the government and inventory of the country’s mineral resources.

The government, he also said, is not getting sufficient share in revenues from mining which has resulted in some local government units opposing such operations in their respective areas.

He said the mining industry is facing other challenges such as security of investments and small-scale mining operations which have unsafe mining practices.

He said that discussions for the formulation of the mining policy are covering certain focus areas such as ensuring that mining operations contribute to sustainable development and that international best practices to promote good governance in mining are adopted. 

In ensuring that mining would contribute to the country’s sustainable development, discussions, he said are being held on creating an inter-agency council on mining, conducting public auction for mining tenements and looking into insurance coverage for the environment as well as perpetual liability for the discussions on adopting international best practices, he said, include supporting the participation of the country in the Extractive Industries Transparency Initiative, which sets the global standard for transparency in revenue management derived from extractive industries like mining, oil and gas, as well as the creation of a task force against illegal mining.

Other focus areas being discussed in the formulation of the mining policy, he said are how to ensure environmental protection by identifying additional areas closed to mining as well as how to guarantee equitable benefits from mining through the promotion of joint venture agreements and financial or technical assistance agreements (FTAA) which provide better sharing schemes.

Under the FTAA, a license which allows a foreign corporation to legally own and control a majority stake in large-scale mineral resources in the Philippines, he said, the government gets a bigger share or 50 percent of the miners’ revenues.

He said discussions have likewise covered how to harmonize regulations and the affirmation of the primacy of national laws over local ordinances as well as how to undertake effective and efficient management of both small and large scale mining operations through the conduct of training, establishment of provincial or city mining regulatory boards and cultural mapping of indigenous peoples areas.

He said the government has not set a new target date for the release of the new policies for the mining sector.

“There is no specific timetable but it (mining policy) is considered an urgent one,”he said.

President Benigno Aquino III earlier said the mining policy would be released in February but the rules were not issued as planned as the government cited the need for more consultations.

The government, Jasareno said, is moving fast to finalize the policies as it seeks to ensure that the industry would be a viable option for growth and that the country would remain a key mining destination in the world.

The country’s metal output rose nine percent to P122.15 billion in 2011 compared to the previous year amid favorable metal prices in the world market.