Mining firm’s new management questioned

Lawmakers questioned yesterday the appointment of a "new management" by Lafayette Philippines Inc., the Australian mining firm that was held responsible for last October’s mine spills that allegedly caused a fishkill in Albay and Sorsogon.

Reps. Edcel Lagman of Albay and Francis Escudero of Sorsogon expressed doubts on the election last Jan. 20 of former Agriculture Secretary Carlos Dominguez as LFPI chairman.

Dominguez told the House committee on natural resources, headed by Agusan del Norte Rep. Leovigildo Banaag, that his election "satisfied the legal requirement" because he owns "one qualifying share," just like the other members of the board.

Lagman said there was an apparent "artificiality in the new management agreement between Lafayette and Dominguez."

"There is this impression that this is some sort of artificial, considering the meager share of Dominguez," he said.

Escudero, whose first district was directly affected, along with the second district of Rep. Jose Solis, agreed.

Escudero said the scheme was "quite convenient (for LFPI), if not totally suspicious."

"Can we unmask the stockholders who elected Dominguez?" he asked.

Under normal circumstances, Lagman and Escudero — both lawyers by profession — said those elected chairman or chief executive officers of private companies should hold a "majority stake," which should entitle them to the designation.

Dominguez said he was "hired as a professional manager."

"You are correct," he told Escudero, who asked if that was, indeed, his status, especially since he came late in the company.

LFPI counsel Bayani Agabin said their company’s legitimacy is solid despite its foreign ownership since Philippine mining laws allow holders of mineral processing permits to be 100 percent owned by foreigners.

In a statement, Lafayette dismissed allegations that Dominguez is fronting or acting as dummy for foreign investors.

"This is completely not true because Mr. Dominguez has only one share in Lafayette Philippines just so he can be a member of the board," it said.

"The issue here is not ownership control but management control which was given to him by the majority owners," it added.

Agabin clarified to The STAR that it is the Rapu-Rapu Processing Inc. that holds the mineral processing permit.

He said it is fully owned by LFPI, whose total investment in Albay is about $50 million.

The mining company — as opposed to the processing firm — is owned 60 percent by the Rapu-Rapu Holdings Inc., a Philippine company, and 40 percent by Lafayette Philippines which the company said is well within the constitutional limit.

The hearing was attended by Sorsogon officials, led by Gov. Raul Lee, and mayors of the affected towns.

Lafayette’s polymetallic project on Rapu-Rapu Island in Albay has been put on hold until the company has made corrective measures against future mine spills.

Gubat Mayor Ding Ramos complained that only "five percent of fishermen are going out to sea."

"Up to now, they (townsfolk) don’t buy fish because of the fish scare. All government agencies should work together to find the cause of this problem," he said.

Benito Doma of Prieto Diaz town, for his part, told the members of the committee: "I don’t want the Marcopper experience to happen again."

But Lafayette, in its statement, insisted that it does not use mercury, saying that various government agencies have confirmed this.

"It is therefore hard to understand why the company is being blamed for mercury contamination which is consequently being touted as the cause of a fish scare and even isolated scabies cases that had been found by doctors to have been caused by bacterial infection," it said.

Nonetheless, Lafayette said it has been "cooperating fully with all parties from Sorsogon and the scientific community to have this issue resolved once and for all. This would stop current speculations on who or what is to blame."

The company quoted Sorsogon Gov. Raul Lee as telling the House committee to wait for the scientific findings to be released before sanctions are even proposed.