Environment Secretary Regina Paz L. Lopez’s orders to suspend the operations of 28 mining operations and cancel a total of 75 mineral production sharing agreements (MPSAs) on Valentine’s Day have sent shock waves to the global nickel market. The worry is that the mining closures can impair the global market supply, considering that the Philippines currently accounts for about a quarter of the world’s nickel-ore supply. The closure orders will remain in place while the Mining Industry Coordinating Council consults with stakeholders, including local communities, said Lopez, whose department has audited the affected mining firms.
On the cancellation of MPSAs, Lopez said this was done to protect the country’s watersheds. She said protecting the watersheds, a source of freshwater supply, is mandated by law—the Philippine Mining Act of 1995—and is enshrined in the Constitution. An MPSA is an agreement wherein the government shares in the production of the contractor, whether in kind or in value, as owner of the minerals. In return, the contractor shall provide the necessary financing, technology, management and personnel for the mining project.
Meanwhile, stakeholders said they have yet to receive any order on the cancellation or suspension, even if the Department of Environment and Natural Resources (DENR) has said it has already sent out notices. They alleged there was a grave abuse of authority, owing to the lack of due process, which requires that the accused be given the opportunity to respond to violation charges. “Parties must be heard, evidence presented and any decision should be based on substantial evidence,” they said.
Philex Mining Corp., for example, has voiced out its concerns, after it was informed that its wholly owned subsidiary Silangan Mindanao Mining Co. Inc. (Silangan Mining) covering the Silangan project was included on the list, even as Silangan Mining has not, to date, received any cancellation order or any notice of a cancellation proceeding from the DENR or any other government agency.
In a press statement, Philex said Silangan Mining is a copper and gold project in Surigao del Norte in Mindanao, with an expected investment opportunity of P40 billion. “Mindanao is an area where President Duterte has declared his fight against hunger, poverty and underdevelopment. It is expected that, starting 2020, the Silangan project will, for the first 10 years of operation, generate P170 billion of revenues, pay P31 billion in national and local taxes, and create at least 8,000 employment opportunities. Silangan Mining is also expected to spend P6 billion over the same period for social development and infrastructure programs that will benefit Mindanao. The project will promote much-needed development in an area that, in the words of Duterte, has long been neglected,” Philex said.
Philex explained that Silangan Mining secured its MPSA for the Silangan project from the national government after a thorough review process by all relevant government agencies and the endorsement of the host communities and local government units. The company stressed that none of the areas covered by the Silangan Mining MPSA is in a proclaimed watershed forest reserve, where mining is prohibited. “Silangan Mining, is, therefore, confident that its MPSA is valid and can withstand any legal challenge,” Philex said.
If this is the case, the DENR’s haste to cancel the MPSAs could adversely affect the Philippine economy. As a regulator, the DENR’s duty is to faithfully enforce all mining laws and to act against irresponsible mining firms. However, it must do its duty well within the bounds of the law. The agency must be reminded that responsible mining companies can be the government’s partners in nation-building.