Government to ensure transparency in mining revenues - Ochoa

MANILA, Philippines - Malacañang will impose utmost transparency in the revenues that the government will be earning from operations of mining companies in the country, Executive Secretary Paquito “Jojo” Ochoa Jr. said yesterday.

“High on our agenda is transparency in revenues derived from mining,” Ochoa said in a statement, as he pointed out the need to determine how the mining sector contributes to sustainable development.

According to Ochoa, the government is “taking steps to ensure that profits generated by mining companies translate into state revenues and that mining benefits trickle down to the general public.”

He made the promise in a speech at Hotel Sofitel in Pasay City, where the Mining Philippines 2011 Conference and Exhibition was held.

Ochoa said the Philippines intends to apply for compliance status with the London-based Extractive Industry Transparency Initiative (EITI) to help achieve the much-needed reforms in the mining industry.

EITI is a global initiative that requires participating governments to publicly report the revenues they receive from extractive industry companies and for those companies to publicly report the revenues they pay to government.

This mechanism allows more transparency in revenue reporting.

Meanwhile, Environment and Natural Resources Secretary Ramon Paje yesterday criticized the local mining industry for complaining about the current review of mining permits when only 30 firms given mining permits are actually operating, out of the 339 firms with approved Mineral Production Sharing Agreements (MPSAs).

The 30 mining firms operating, Paje pointed out, account for just six percent of the approved MPSAs.

“So where are the 94 percent?” Paje asked.

Paje likewise challenged local mining firms to stop trading their permits or declare the revenues they have earned from trading their approved permits.

He noted that some firms trade or sell their permits for as high at $30 million.

Paje was reacting to the Chamber of Mines of the Philippines which had scored the DENR for its supposed inaction in the processing of mining permits and the DENR’s plan to impose an additional five-percent royalty fee on mines that will be declared as mineral reservations on top of a two-percent excise tax.

Paje reiterated his stand that the National Government should earn more from the operation of mining firms, disputing claims of the CoMP that additional taxes and fees would “kill” the mining sector.

Paje scoffed at their claims noting that with the current boom — “if their industry is dying, they should shut down.”

He added, “if they are not earning now, when will they earn?”

At the same time, Paje acknowledged that once the boom ends, the DENR is willing to revisit the tax imposition.

Sen. Loren Legarda cautioned yesterday environment officials and local government units (LGUs) to be more circumspect about permitting gold mining operations, amid reports of locals rushing to abandoned mines to pan for gold.

Legarda, chairperson of the Senate committee on climate change and committee on cultural communities, said LGUs should be wary because this might just lead to health and environmental problems, all the more with the fact that 70 percent of gold in the country is produced by small-scale mining industry.

“We must first determine whether the benefits that will be derived from this gold rush are worth the social and environmental costs that result from it,” Legarda said.

Legarda said small-scale mining operations could pollute tributaries and water systems which could result in fish kill aside from adversely affecting the livestock industry and agricultural production.

“The toxic effects of mercury used in gold mining poses great threat to human health even at low doses,” Legarda said.– With Christina Mendez