Sweeping mining reforms earn PH ranking in global resource management index

The Department of Environment and Natural Resources (DENR) has welcomed the Philippines’ ranking in the recent global report issued by the Revenue Watch Institute (RWI), indicating that the government has made “meaningful progress” toward better management of mineral resources in the country.

In its 2013 Resource Governance Index, the New York-based policy institute gave the Philippines a score of 63 out of 100 under the "institutional and legal setting," its highest on any component, as a result of its "comprehensive mining legislation."

 

The country also ranked 23rd overall among 58 resource-rich countries surveyed on the quality of governance in the oil, gas and mineral sectors.

According to DENR Secretary Ramon J. P. Paje, such good showing for the country in the institutional and legal setting category was due to the Aquino government’s initiatives to reform the mining sector.

He cited President Benigno Aquino III’s Executive Order (EO) No. 79, which seeks to balance important concerns on mining development in reinforcing environmental protection measures, promoting responsible mining, providing a more equitable revenue-sharing scheme and providing coordinative mechanisms among stakeholders including local government units (LGUs).

“The international community has noted the comprehensiveness of our mining laws and how they facilitate transparency, accountability and open or fair competition,” Paje said.

He added: “This is indirectly a recognition that the issuance of EO 79 by President Aquino was indeed the perfect vehicle to reform the mining industry and improve government royalty rates while at the same time ensuring intergenerational equity.”

EO 79 bans mining in prime agricultural and fishing areas as well as in 78 designated ecotourism sites, including almost the entire province of Palawan. It also disallows the issuance of new mining permits until Congress passes a measure increasing the royalty tax imposed on the gross earnings of mining companies to 5 percent from the current 2 percent.

The presidential directive calls for a thorough review of existing mining operations to ensure compliance with mining and environmental laws. It likewise underscores the need for national laws and local ordinances to be harmonized to ensure the proper management and regulation of the lucrative industry.

Based on the RWI study, the Philippines ranked in the top half of countries surveyed on all four components, “suggesting that the government has made meaningful progress toward improved resource governance.” Norway, United States and United Kingdom topped this year's survey.

Aside from institutional and legal setting, other index components are reporting practices, safeguards and quality controls, and enabling environment.

RWI said the Aquino administration provides more information than its predecessors, noting that maps of licensing areas are posted online and copies of contracts can be requested from the Mines and Geosciences Bureau (MGB), an attached agency of the DENR.

The policy institute also said that the MGB regularly publishes information on mineral reserves, production, investments, approved operations and disaggregated revenues.

The Bureau of Internal Revenue reports annual tax data, and the DENR publishes royalty receipts, it added.

RWI aims to promote effective, transparent and accountable resource management through the resource governance index, which measures the quality of governance in the oil, gas and mining sectors of 58 selected countries.

The Philippines was particularly measured for its mineral resources, having produced 11 percent of the world’s nickel in 2010. The country’s rich natural resources also include major copper deposits, chromium, gold, and silver; minerals made up 8 percent of merchandise exports in 2011.#