The identification of more mine-free areas in the country is the centerpiece of the administration’s mining reforms program under Executive Order No. 79, which the President signed on July 6. A copy of the order was released Monday.
“One of the most important provisions here is Section 1, expanding in effect the areas close to mining,” Environment Secretary Ramon Paje said at a press briefing in Malacañang. “We call them the ‘no-go’ zones. Before this EO, the no-go zones were confined [to] the protected areas.”
Other highlights of the executive order:
Moratorium on the grant of new mining agreements until Congress shall have come up with a revenue-sharing scheme between the government and mining firms.
Consistency of ordinances with national laws.
Confining small-scale mining to designated areas to be called “Minahang Bayan.”
Review and possible renegotiation of existing contracts.
Awarding of areas with verified reserves through public bidding.
State ownership of mine tailings and wastes upon expiration of contract.
Formation of a Mining Industry Coordinating Council to implement industry reforms.
Ban on the use of mercury in small-scale mining.
On top of the protected areas cited in the Philippine Mining Act of 1995 and the National Integrated Protected Area System, EO 79 bans mining in these areas:
Tourism development areas identified by the National Tourism Development Plan (NTDP);
Prime agricultural lands such as plantations and other properties devoted to valuable crops;
Fisheries development zones and marine sanctuaries as declared by the agriculture secretary; and
Island ecosystems to be determined by the Department of Environment and Natural Resources (DENR) through mapping technology.
“Based on the DOT (Department of Tourism) submission, there were 78 sites identified by the DOT in the NTDP as no-go zones. This, in effect, will be completely banned for mining activities,” said Paje.
The new EO also reiterated the government’s commitment to fully enforce environmental standards by setting up a multistakeholder team that will review the performance of existing mining operations.
The team, to be led by the DENR, is tasked with recommending actions against firms that do not fully comply with state regulations on mining and the environment.
5-percent royalty
Aside from widening the areas banned from mining, Paje said the EO would seek to boost state revenues from mining by including a 5-percent royalty in future mining contracts and areas to be declared as mineral reservations by the President.
The new order also seeks to increase occupational and application fees, and to sell abandoned ores and valuable metals in mine wastes and mill tailings.
“You know, before, mine wastes (were) considered wastes. But, now, we found out that based on recent technologies, we can extract other metals or other forms of minerals from the mine waste so it is now a resource or input for new processing. Therefore, we put in this EO that all mine wastes, all mill tailings should be considered owned by the state and, therefore, should be disposed of through competitive bidding,” the environment secretary said.
Windfall
Paje said the government expected a windfall of P50 billion from the sale of mining wastes; P760 million from occupational fees upon filing (it used to be paid only when the Financial Technical Assistance Agreement [FTAA] was approved); and up to P16 billion from royalty payments from the existing 33 mining operations in the country by 2016.
“We would like to somehow tell the investors, the business community that we will respect existing contracts and, if they invest, we will protect their investments.
Paje said there were 300 existing mineral production sharing agreements and FTAAs of which only 33 were in operation. Of the 33, 11 are in mineral reservations and have been paying royalties to the government.
“It (EO) will not affect, I think, the mining industry. It will only affect a few—those who are in the final stages of their exploration activities,” said Paje. “This is the reason why the President said ‘put a break. Stop issuing new mining contracts if we cannot get the best or the optimal revenue for government,’” the environment secretary said.
Moratorium extended
Paje said the new EO would extend the moratorium on the grant of new mining agreements until Congress shall have finalized the proposed revenue-sharing scheme between the government and mining companies, specifically the 5-percent royalty government wants the mining firms to pay.
“Some people will be happy with this provision. Some of course will be affected. We have to wait for the new legislation pertaining to revenues before we can sign new agreements on mining. But, of course, this provision also respects the existing mining contracts. It will respect existing mining contracts,” said Paje.
Exploration permits only
While Congress deliberates on the royalty formula, Paje said the DENR would grant only exploration permits, review existing mining contracts for possible renegotiation and remove idle mining rights holders.
Paje said that the EO would spur the government to renegotiate any mining contract in order for the state to take a slice of the windfall profits of mining firms, specifically from the steep rise in metal prices.
“We only get 2 percent in excise tax and that is somehow hurting government. The instruction of the President is to copy best practices because these mining companies are also operating in Canada or in Australia, for example. If they are operating in Australia, they must be paying that same royalties and charges and taxes, right? So the question is: ‘Why don’t you want to pay (the same) in the Philippines?,”’ he said.
To further help increase government revenue, Paje said areas with verified reserves would be awarded through public bidding instead of the previous policy of assigning these to certain groups on a first come, first serve basis.
Bidding, ‘Minahang Bayan’
A provision of the EO also limits small-scale mining to “Minahang Bayan” or people’s small-scale mining areas. This provision effectively reins in local government units, which are known to grant mining permits in their jurisdictions.
Paje said the EO would straighten out the guidelines on small- scale mining by declaring that only Republic Act No. 7076 or the People’s Small-Scale Mining Act of 1991 would be recognized.
“We also have a very comprehensive provision pertaining to small-scale mining. With the opinion given to us by the Department of Justice, we will only be using one law and that is RA 7076 which states that all small-scale mining can only happen or occur inside what you call ‘Minahang Bayan.’ We have to contain them in one place so that we can contain the wastes and we can treat them properly,” he said.
Paje noted that Presidential Decree No. 1899 had allowed local government units to issue mining permits anywhere which made it difficult to contain and treat effluents.
“With this provision of ‘Minahang Bayan,’ we will contain them in one place; we can put one tailings’ pond; and we can treat the wastes efficiently,” he said.
Conform to nat’l laws
The EO also directed the Department of Interior and Local Government to ensure that governors and mayors conform with national regulations and policies.
The EO explicitly limited the LGUs to “confine themselves only to the imposition of reasonable limitations on mining activities.”
Paje added that the EO would ban the use of mercury by small-scale miners, who are also prohibited from digging up metallic minerals except gold, silver and chromite.
