Roadmap for sustainable mining pressed

MANILA,  Philippines - Various stakeholders agreed Tuesday for a need to map out ways to amend current laws in the mining industry in the wake of the mine tailings incident involving Philex Mining Corp.

Christian Monsod, vice-chairperson of the Climate Change Congress of the Philippines,  said his group supports President Aquino's  executive order 79, and six accompanying directives to address the gaps in the present mining framework, particularly  on governance and the protection of the environment and prime agricultural and fishing grounds.

According to Monsod, the EO rightly deferred to the Congress the task of promulgating the new fiscal regime. Only Congress has the power to tax, he said.

“We agree with the proposal to do away with all tax incentive schemes for mining in addition to higher take on mining revenues that also considers both the boom and bust character of mining operations,” said Monsod, who forwarded the proposal before the Senate committees on environment and natural resources, and on health and demography which are conducting the inquiry into the mine tailing incident last year.

Monsod also recommended that the requirements imposed on mining such as royalties to indigenous peoples’ and community social development projects should be removed.

It is the government that should be providing these services, he said.

Philex airs side

Mike Toledo, senior vice president for corporate affairs, said the firm is open to study proposals to increase the excise taxes imposed on mining operations, as well as Monsod’s proposal to do away with the tax incentives.

Toledo welcomed the probe saying it is giving them a chance to explain  to lawmakers and stakeholders the issues surrounding the Padcal Mine site incident in Itogon, Benguet.

Toledo  told the Senate hearing that  Philex has started its rehabilitation project in the area.

According to Toledo, the Mines and Geosciences Bureau and Pollution Adjudication Board (PAB) of the Department of Environment and Natural Resources (DENR),  have given  their separate go-signals to the company to resume temporary operations for four months, so it can complete a P2-billion “beaching” process that is meant to fortify the repaired Tailings Pond No. 3 (TP3).

This beaching process, which was recommended by the foreign engineering experts that Philex had tapped to help the company in its P4-billion rehabilitation and remedition work, is meant “to ensure the safety of both the workers and residents of the host-communties and protect the environment—in time for the rainy season this June or July,” Toledo said.

Toledo said environmentalists' charges regarding the Padcal incident were “pure fiction” because there was neither toxic spill nor human casualty in the Benguet accident

The Mines Bureau Cordillera Administrative Region suspended the operations of Padcal Mine on August 2, 2012 at the height of enhanced monsoon rains that broke the mine's tailings storage facility a day earlier.

About 20.6 million metric tons of mine waste spilled from the tailings pond and contaminated the immediate environment, including the Balog Creek that merges with the Agno River.

Philex, DENR open to study tax proposals

On proposals to increase taxes, Toledo said the firm is “open to a review and a study, for as long as the form of taxation is progressive, equitable and will take into consideration all the other taxes and payments and royalties that mining companies have been paying through the years.”

Environment Sec. Ramon Paje said the government is open to proposals to expand the excise tax from two percent to seven percent which is the international standards on mining.

Paje added that he is also inclined to support proposals to take away tax incentives from the mining sector.

The Department of Trade and Industry (DTI) already removed tax holidays, Paje said, adding that the DENR will be supportive if Congress makes a law defining the terms on the matter.

“Tax holidays on mining has been removed. We have done it administratively but if Congress would want to do it through legislation, then we can do it,” Paje said.

“In effect,  what we want to have is that…we would  accept extractive industries like mining but they have to pay for it,” the DENR secretary said.

“Our share now is two percent excise tax. If we consider excise tax as a tax, then we want share. What we are asking from Congress is that Congress will ask pass a scheme that will prescribe the sharing scheme,” Paje added.

“We want to follow the international standards which is seven percent. If Congress will pass higher than that, we will be happy. But if Congress will pass higher than that, the international standards can guide us,” he said.