Coexistence

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The appointment of environment advocate Regina Paz L. Lopez as head of the Department of Environment and Natural Resources (DENR) may be considered the most controversial among President Duterte’s Cabinet appointments. She took the post in June 2016 and served for almost a year, but she was rejected by the Commission on Appointments in early May this year.

Her appointment came at a time when the mining industry was under a ban: then-President Benigno S. Aquino III signed in 2012 Executive Order 79, which suspended the granting of mining permits until a new revenue-sharing scheme between the government and the industry was passed into law.

The industry faced another challenged with the appointment of Lopez. She carried out environmental audits of all mines in the country and banned open-pit mining. Early this year she ordered the closure of 23 mining operations, the suspension of five others in 10 provinces and later ordered the cancellation of 75 mineral production sharing agreements between the government and mining companies.

I will not discuss the issues involved in the former secretary’s actions, particularly because the inter-agency Mining Industry Coordinating Council, which is cochaired by the finance and environment secretaries, is currently undertaking a three-month review of Lopez’s orders and is reviewing all other mining contracts as mandated under the law.

What I want to point out is that there are lessons to be learned from what happened at the DENR and in the mining industry as a result of Lopez’s short tenure.

One, we can expect the normalization of the industry, which will be good for the economy, and will save a lot of jobs while creating additional employment and attracting more investments.

Two, this is not to say that there will be no improvements. The former DENR chief’s actions brought to light the failure, perhaps both by the government and the industry, to abide by the provisions of law mandating responsible mining, so as to protect the environment.

So the third lesson is that, as a result of the Lopez directives, miners will now be fully aware that they should be more fully responsible.

President Duterte’s directive to new Environment Secretary Roy A. Cimatu, which the latter revealed to the media, was clear and firm: “All that I ask of you is just to be true to yourself, to be true to your country and protect the environment. But remember there is a mining law…it has to be regulated and allowed.”

In line with the President’s directive, Cimatu said he was open to allowing new mining projects—because the law allows them—as long as these comply with the requirements of responsible mining.

In other words, mining and environment protection can coexist. As Finance Secretary Carlos G.
Dominguez III aptly put it, “One could be environment-friendly and business-friendly at the same time.”

The Philippines is recognized as one of the world’s richly endowed countries in terms of mineral resources. Data from the Mines and Geosciences Bureau (MGB) show that, as of 2015, the country’s gold resource and reserves stood at 4.46 million tons, chromite at  79,005 million tons, copper at 7.38 billion tons, bauxite at 117.8 million tons and iron at 959.13 million tons.

I saw an online report saying that only 1.4 percent of an estimated 9 million hectares in the country are potential sites for metallic minerals, such as copper, gold and others.

It’s obvious that mining offers a big opportunity to grow the economy, but the industry currently contributes less than 1 percent to GDP. At constant 2000 prices, the gross value added of the mining industry even declined by 2.8 percent, or from P23.54  billion in the first quarter of 2016 to P18.84 billion in the first quarter of 2017.

Mining is a capital-intensive industry, and foreign investors provide such capital. In 2014 investments in the mining industry totalled $1.19 billion; in 2015, the amount declined to $924.92 billion, according to the MGB. Figures for 2016 were not available.

No wonder that, according to BMI Research, a unit of the Fitch Group, the Philippines is a laggard in Asia in terms of investments in the mining industry. Based on the BMI’s index on mining risk and rewards, the Philippines scored 45.1 out of 100, lower than the average for Asian countries of 55.6.

I hope, with Secretary Cimatu at the helm, the Philippines will not only remain as one of the most mineral-rich countries in the world, but also one of the biggest producers—with the mining industry playing a bigger role in generating employment and growing the economy while preserving the environment for future generations of Filipinos.

 

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

 

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Manny Villar has distinguished himself both in politics and business. He was one of the two Filipino politicians in history, who had been elected both as Speaker of the House of Representatives and President of the Senate. In business, he was the first indigenous Filipino dubbed as the first "Brown Taipan", who made it to Forbes’ list of dollar billionaires. From a small gravel-and-sand retailer, he built Vista Land & Lifescapes to become one of the country’s top integrated property developers. He built more than 300,000 houses in more than three decades, a record that remains unchallenged to this day.