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TRANSPARENCY, materiality, competence. Nice words these,
but also, as often happens, they are reduced to mere
buzzwords when those touting them are not really serious
about giving people the best deal possible.
This
time around, though, they’re being bandied about by the
Philippine Stock Exchange (PSE) before the local mining
industry in announcing it would finally bind local
players to the Philippine Mineral Reporting Code (PMRC),
which sets out “standards, recommendations and
guidelines” for public reporting of exploration results,
mineral resources and ore reserves.
The PMRC
is modeled significantly on the wording of the Joint Ore
Reserves Committee Code of Australasia, and is also
attuned to the international codes from Australia, South
Africa, the European Union and Canada.
“[It] is
essential for the purpose of informing investors or
potential investors and their advisers,” PSE president
and chief executive office Francisco Ed. Lim said at the
Fourth Philippine Mining Industry Lecture Thursday.
The
spirit behind the code, he explained, is to encourage
mining companies to provide information in their public
reports that are as “comprehensive as possible.”
And what
do these public reports comprise? Mainly, their company
annual reports, quarterly reports and other reports to
the PSE, or as required by law. The code will also,
henceforth, apply to other publicly released company
information in the form of postings on company web sites
and briefings for shareholders, stockbrokers and
investment analysts.
Similarly, the mining players’ environmental statements,
information memoranda, expert reports and technical
papers, referring to exploration results, mineral
resources or ore reserves, are covered.
Many
months ago, when the mining sector first started working
up a frenzy over the industry’s revival after the
Supreme Court upheld the constitutionality of the 1995
Mining Act, we alluded in this same space to the need to
fast-track the Philippine players’ compliance with the
PMRC.
We were
reminded of just how much opaqueness in the sector—not
just here but also among some of our neighbors—had led
to such scams as that pulled off by a mining firm deep
in exploration in Indonesia, and whose principals were
accused of touting an exaggerated estimate of the metals
in their service site, thus causing the firm’s share
prices to gyrate wildly, eventually burning market
players to the tune of $84 million, when the truth came
out with the mysterious death of the firm’s Filipino
engineer.
Needless
to state, it is hoped that with a reporting code firmly
in place, dangling stiff sanctions like imprisonment
over the heads of violators, the mining sector in the
Philippines
will not see a repeat of similar hoaxes in the field and
in the market. This is crucial especially when one
considers how much the medium-term development plan pins
much hope on a revitalized mining sector as a growth
driver in the economy.
The
code, as it stands, is the product of very meticulous,
comprehensive deliberations among the widest range of
stakeholders possible, and one hopes that, very soon,
the PSE leadership can find solid use for it in
promoting transparency, materiality and competence in
handling information on the mining sector. |
