Last week Department of Environment and Natural Resources (DENR) Secretary Regina Paz L. Lopez announced that she had canceled 75 mineral production sharing agreements (MPSAs) because these are located in watershed areas.
Among those included in her list was the MPSA of Silangan Mindanao Mining Co. Inc., a wholly owned subsidiary of Philex Mining Corp.
Silangan is a copper and gold project in Surigao del Norte in Mindanao. It is still in the exploration stage, but starting in 2020, it will, for the first 10 years of operation, generate P170 billion in revenues, P31 billion in national and local taxes, and at least 8,000 jobs. Silangan Mining also plans to spend P6 billion over the same 10-year period for social development and infrastructure programs that will benefit Mindanao, an area that President Duterte has targeted as a top priority of his administration’s socioeconomic development agenda.
Silangan Mining secured its MPSA for the Silangan project from the DENR only after a thorough review process by all relevant government agencies and the approval of the host communities and local government units.
Philex, the parent company of Silangan Mining, says it has a long-standing policy to strictly comply with all applicable laws and regulations, particularly those pertaining to social development, as well as environmental protection and rehabilitation.
And the mining firm insists that none of the areas covered by the Silangan Mining MPSA is located in a watershed forest reserve, where mining is prohibited, and that Silangan Mining’s MPSA is valid and can withstand any legal challenge.
Philex concedes that while the DENR, as regulator, has the right, if not also the duty, to enforce faithfully all mining laws, and to wield its powers against errant mining companies, it must do so within the ambit of due process.
What the DENR’s announcement on the cancellation of MPSAs has caused is unexpected economic harm to Philex shareholders, including the Social Security System and its beneficiaries, through a sharp decline in its share price, equivalent to approximately P6.5 billion in shareholder value in one day. More than this, it has put the Silangan project, which is nearing implementation, under a shadow of doubt.
Philex believes that the DENR pronouncement has eroded investor confidence in the entire Philippine mining industry because the regulatory framework of the government agency appeared to disregard due process.
Four tenements of another Philex subsidiary, Philex Gold Philippines Inc. (PGPI), have also been included in the list for MPSA cancellation. Philex says all these MPSAs have been validly issued and are not located in watershed forest reserves. Philex and its subsidiaries have expressed full support for the government’s efforts to protect the environment, combat poverty and unemployment, and to uphold the rule of law and due process.
Needed: Code of conduct in South China Sea
The situation in the South China Sea remains tense, with China continuing to upgrade its military presence there. China now occupies 20 outposts in the Paracels and is now conducting extensive military buildup in eight islands. Latest satellite photographs show that China has built harbors capable of hosting large numbers of naval and civilian vessels. Five of the islands contain helipads, with Duncan Island housing a full helicopter base. And the largest of the Paracels, Woody Island, sports an airstrip, hangars and surface-to-air missile batteries.
Sino-US relations now stand at a “precarious crossroads”, amid growing tensions between the two powers that could send them on a “collision course”. Both Secretary of State Rex Tillerson, as well as senior advisor Steve Bannon, recently warned that China’s extensive and growing territorial claims in the South China Sea could be a potential flashpoint. Countering China’s efforts has become a key test of perceived US commitment to the countries in the region. The prevailing sentiment is that, if Chinese coercion goes unchallenged by the United States, it will send a dangerous signal about the strength of the US alliance system and lessen its appeal as a security partner.
The crux of the issue is the growing aggressiveness of China in militarizing the artificial islands and assertive patrolling of the disputed region. There are also reports of militia being prepared for deployment in the region. This, after China has made it clear that it does not recognize the ruling by the Permanent Court of Arbitration.
Some recent developments may have encouraged China to perceive that its diplomatic moves could yield the desired results in establishing its hegemony in the region. President Duterte’s anti-US statements and willingness to discuss the issue with China may have been seen as a turnaround on the Philippine stand on the dispute. Vietnam, too, has shown willingness to discuss the issue with China through negotiations. In the recent Asean meeting in Vientiane, Lao PDR did not mention the July 2016 ruling, giving the impression that the Asean may not be willing to press hard on the issue. The cumulative impact of all these may have strengthened the Chinese perception that it could take control over the region by neutralizing its opponents one by one. China must realize, however, that other parties in the dispute may adopt different approaches and, like responsible nations, are willing to resolve the issue through negotiations, but they are united in not accepting the Chinese claims.
The situation remains grave with the chances of a conflict taking place. Thus, it is crucial for the disputants to unite and formulate a Code of Conduct (COC) in accordance with international law. Asean will have to take the lead in this respect, but their unity will be essential to achieve a durable peace in the strategically important region. Any further delay in the formulation of the COC could make the situation spiral out of hand, with disastrous implications for regional peace and stability.
E-mail: ernhil@yahoo.com.
2 comments
Lepanto, Philex,Benguet Corporation and even Benguet Exploration have been mining the province of Benguet for the past 40 years and at one time when gold prices hovered at US$800/oz. could have wiped out all foreign debts of the country during the last few years of the Marcos dictatorship. Is there a billionaire Kakannaey, native of Benguet out there who can proclaimed the benefits of gold, silver and copper mining whether open-pit or tunnel mining are for real? Benguet is still better known as the location of a popular TV series and vegetable/salad bowl of Luzon.
The speed at which Gina Lopez arrived at her decision to close down those mines and cancel those MPSAs may be lauded by her blind supporters but to more thoughtful observers, it is suspicious. It takes months to inspect even one mine or weeks to study a locale under MPSA yet Lopez did it practically overnight. Now we know by her own admission that a proper audit was not conducted after all. No wonder she became surly and defensive when asked for details of her ‘audit’. There was never any! She claims she fastracked the decision to stop the damage, damage which existed only in her fevered imagination and doctored Powerpoint presentations. She could have done some good by shutting down illegal small scale mines. After all, a lot of them commit violations easily observed, and many have no permits anyway. But those are too insignificant to someone seeking headlines, so she goes after the big mines, regardless that they have passed the DENR’s and MGB’s rigid inspection.