Environment and Natural Resources Secretary Ramon J. P. Paje expressed optimism that the new mining policy will further push the government’s agenda on responsible mining while providing mechanisms to enhance environmental protection.
Paje issued the statement following the signing of Executive Order (EO)70 by President Aquino on July 6, 2012, institutionalizing and implementing reforms in the Philippine mining sector.
“The EO provides policies and reforms aimed not only at optimizing revenues from the mining industry for the government but also on improving environmental standards in mining,” Paje said.
According to him, the DENR is mandated under the EO to fully and strictly enforce environmental standards as prescribed by various mining and environmental laws and policies, and that appropriate sanctions shall be meted out against violators.
To ensure industry compliance, Paje said that the new policy provides for the creation of a multi-stakeholder team to conduct a review of the performance of existing mining operations. The review, he said, will be based on guidelines and parameters set forth in the specific mining contract or agreement and other applicable laws, such as the Mining Act of 1995 and the Labor Code.
“Only those that are able to strictly comply with all the pertinent requirements will be eligible for the grant of mining rights,” Paje added.
On the pursuit of environmental protection, Paje said that EO 79 expressly disallowed mining in the following areas: (a) areas expressly enumerated under Section 19 of RA No. 7942 (which include military and government reservations; areas hear public and private buildings, cemeteries, archaeological and historic sites, bridges, highways, railroads, reservoirs, dams and other infrastructures, among others); (b) protected areas; (c) prime agricultural lands; (d) tourism development areas; and (e) other critical areas, island ecosystems, and impact areas identified by the DENR.
“These areas are ordered closed to mining in order to ensure their protection for the future generations,” Paje said.
Paje said that no new mineral agreements will be issued until a new legislation rationalizing the existing revenue sharing scheme and mechanisms shall have taken effect.
Under the current revenue sharing scheme, the government collects excise tax equivalent to 2% of gross production of mining companies and additional 5% in royalties if they operate in mineral reservation areas or a total of 7%.
The EO also stipulates that the DENR may continue to issue Exploration Permits under existing laws, rules and guidelines, pointing out that the grantees of such permits shall have the rights under the said laws, rules and guidelines over the approved exploration area.
“They shall also have the rights to develop and utilize the minerals in their respective exploration areas upon approval of the declaration of mining project feasibility and the effectivity of said legislation,” Paje added.
Under Section 5 of the Order, potential mining areas with known strategic mineral reserves shall be declared as mineral reservations for the development of strategic industries identified in the Philippine Development Plan and a National Industrialization Plan.
Paje said there are currently a total of nine areas throughout the country declared as mineral reservations. They are located in Ilocos Norte, Zambales, Bulacan, Camarines Sur, Samar Island, Surigao del Norte, Compostela Valley, Zamboanga del Norte, and all offshore areas throughout the country.
The mining policy (EO 79) also stipulates that the grant of mining rights and mining tenements over areas of known and verified mineral resources and reserves, including those owned by the Philippine government and all expired tenements, shall be undertaken through competitive public bidding with due consideration of the social acceptability of the mining projects.
To improve small-scale mining activities in the country, the mining policy identifies the following measures to be undertaken: (1) small-scale mining activities in the country shall comply with RA No. 7076 otherwise known as “The People’s Small-Scale Mining Act of 1991” and the Environmental Impact Statement System requirements under Presidential Decree (PD) No. 1586; (2) Small-scale mining operations shall be undertaken only within declared People’s Small-Scale Mining Areas or “Minahang Bayan pursuant to RA No. 7076; (3) Pursuant to Section 24 of RA No. 7076, the Provincial/City Mining Regulatory Board in the provinces and cities where they have not been constituted shall be operationalized within three months from the effectivity of this Order (EO); (4) Small-scale mining shall not be applicable for metallic minerals except gold, silver, and chromite, as provided for in RA No. 7076; (5) The use of mercury in small-scale mining shall be strictly prohibited; and (6) Traning and capacity building measures in the form of technical assistance for small-scale mining cooperatives and associations shall be conducted by the concerned government agencies.
“Limiting small-scale mining operations only in declared “Minahang Bayan” areas will help contain the wastes coming from the operations,” Paje said.
The new mining policy directs the Department of the Interior and Local Government (DILG) and local government units (LGUs) to undertake cooperation with each other while also directing the LGUs to exercise their powers and functions consistent with and in conformity with the regulations, decisions and policies already promulgated and taken by the National Government related to the conservation, management, development and proper utilization of the country’s mineral resources.
The mining policy also provides that “concerned government agencies, particularly the DENR, the Department of Budget and Management (DBM), and the Department of Finance (DOF) shall ensure the timely release of the share of the LGUs in the national wealth, pursuant to Section 289 of RA No. 7160 or the Local Government Code of 1991.
The EO directed the said agencies to study the possibility of increasing the share of the LGUs as well as to grant them direct access similar to existing arrangements with the Philippine Export Zone Authority (PEZA).
The EO also directed the DENR to establish within six months an inter-agency one-stop shop for all mining-related applications and process, to create a centralized database of all mining-related information, and to ensure that mechanisms are established to operationalize the Extractive Industries Transparency Initiative (EITI) in the mining sector in an effort to improve transparency, accountability and governance in the mining sector.