ANY day now, the Aquino administration is expected to come out with an executive order (EO) that seeks to institute vital reforms in the mining sector.

As gleaned from news reports, the yet-unsigned EO would put in place a number of changes. These include replacement of the “first-come, first-served” system in mining applications with competitive public bidding; addition of declared prime agricultural lands and ecotourism zones to areas closed to mining; conduct of the total economic valuation scheme in mining areas before mining applications are approved and mining activities are allowed; review of all existing incentives and mining contracts to see if these are in line with the new mining policies; and promotion of downstream processing.

These proposed changes, however, have made the mining industry and foreign business groups hot under the collar.

The Joint Foreign Chambers (JFC) and the Philippine Mining and Exploration Association Inc. (PMEA) assert that the country risks missing out anew on the benefits of the multibillion-dollar mining industry if the government begins to implement new policies they see as favoring the anti-mining lobby.

The JFC said the draft order as presented “proposes to review all existing contracts and renegotiate or impose an increased government tax or royalty share, and potentially close out granted contracts completely.” The foreign businessmen also pointed out that the draft executive order carried “retrospective legislative implications” and “inferred sovereign risk” that would generate investment uncertainty not only in mining, but also in all foreign direct investments.

The PMEA, for its part, said the proposed reforms would not address project delays due to a permit process that “is prone to land grabbers and claim jumpers.” It also frowned on proposals to include additional taxes and the removal of investment incentives for large-scale operations.

From another direction, the Chamber of Mines of the Philippines (CMP) has also warned Malacañang against rushing the issuance of the draft EO as it might do more harm than good for the mining sector.

“The EO might even translate into a ‘virtual death sentence’ for the industry considering that some salient provisions were deemed prejudicial to the security of mining investments,” said CMP.

To address environmental issues and ensure a fair share for the government in mining revenues, the CMP recommended that jurisdiction over small-scale mining be given back to the Department of Environment and Natural Resources, and that small miners be subjected to the same standards and regulations being imposed on the large-scale mining operators.

Environment Secretary Ramon Paje, who headed the group that drafted the EO, has assured mining investors they should not be unduly alarmed: “We are using existing guidelines…We are just optimizing the provisions to upgrade the environmental standards in the industry, resolve the issue of small-scale mining, harmonize national and local regulations on mining and optimize government revenue from mining.”

The draft EO appears to be a compromise between the mining industry and anti-mining groups who are up in arms against what they see as unabated environmental destruction and failure to uplift the living standards of mining communities.

At this point, therefore, the draft mining policy should be fine-tuned to make it acceptable to both sides.

After all, the prospects of the mining industry are promising, with estimated investments amounting to $14 billion up to $20 billion in the next five years. Mining companies paid a total of P13.83 billion in excise taxes, fees and royalties to the government last year. And projections for the mining industry are likewise encouraging, with over $13 billion in fresh investments seen from 2011 to 2018 that would create 410,000 jobs by 2018.

The common ground should be responsible mining that ensures consistent economic growth but also protects the environment and improves the quality of life in mining communities.