President Aquino issues EO to reform mining sector

Press Release
July 9, 2012

MALACAÑANG –  President Benigno Aquino III has approved wide-ranging reforms in the mining industry under Executive Order No. 79 put in place to strengthen environmental protection, promote responsible mining and provide a more equitable revenue-sharing scheme amid the projected boom in the sector.

Executive Secretary Paquito N. Ochoa Jr. said the new presidential directive, which the Chief Executive signed on July 6, is envisioned to harmonize mining policies and regulations in the country and make players in the mining industry more transparent and accountable.

“The executive order is a product of input from stakeholders at all levels to address their concerns,” Ochoa said. “We are confident that with the EO in place, we will be able to put order in processing mining applications and at the same time reinforce protection of the environment, spur economic growth, and create employment opportunities.”

The presidential order was based on the joint resolution of the Cabinet clusters on climate change adaptation and mitigation, and economic development dated March 16, 2012 to improve environmental mining standards and increase revenues to promote sustainable development and social growth, both at the national and local levels.

EO NO. 79 identifies zones closed to mining applications – either for contracts, concessions or agreements – including areas in the National Tourism Development Plan, critical areas and island eco-systems, prime agricultural lands covered by RA 6657, strategic agriculture and fisheries development zones and fisheries development zones an fish refuge and sanctuaries declared as such by the Department of Agriculture. Mining is not allowed in areas already identified under the existing laws on mining, agrarian and protected areas, as well as in sites that may be determined by the Department of Environment and natural Resources (DENR).

Mining contracts, concessions and agreements approved prior to the issuance of the new directive remain binding provided that companies comply with existing laws, rules and regulations, and the terms and conditions of the grant.

No new mineral agreements will be issued, however, pending the passage of legislation that will rationalize the revenue-sharing schemes and mechanisms. In line with this, the DENR and the Departments of Budget and Management (DBM) and Finance (DoF) are also ordered to ensure the timely release of the share of local government units (LGUs).

“These agencies are likewise directed to study the possibility of increasing LGUs’ share as well as granting them direct access similar to arrangements with the Philippine Export Processing Zones (PEZA),” the EO stated.

The DENR may continue though to grant and issue exploration permits under existing guidelines and laws, and grantees will be given the right of first option to develop and utilize minerals in their respective areas once a new law is in effect.

According to Ochoa, the presidential directive also calls for the full enforcement of environmental standards, tasking the DENR and local government units (LGUs) to ensure that large- and small-scale miners comply with the laws or face appropriate sanctions.

On top of this, the DENR-led multi-stakeholder team is directed to assess the performance of existing mining operations regardless of size, punish violators and purge the list of non-moving mining rights holders.

While the EO allows the opening of areas for mining rights and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the government and expired tenements, this should be undertaken through a competitive public bidding, which guidelines and procedures should be formulated by the Mines and Geosciences Bureau (MGB).

Potential and future mining sites with known strategic mineral reserves and resources, however, may be declared as mineral reservations for the development of strategic industries identified in the Philippines Development Plan and a national industrialization plan.

To improve small-scale mining operations, the EO outlines steps to ensure that activities comply with the Small-Scale Mining Act of 1991 and the Environmental Impact Statement requirements spelled out in Presidential Decree No. 1586. Specifically the law designates Minahang Bayan or the People’s Small-Scale Mining Areas, and mandates the creation and operation of Provincial/City Mining Regulatory Boards.

The use of mercury in small-scale mining is strictly prohibited, the EO stated.

Ochoa also underscored the key provisions of the presidential directive that enjoin concerned national government agencies and LGUs to closely coordinate to harmonize mining policies on conservation, management, development and utilization of the state’s mineral resources.

In fact, Ochoa added, the Union of Local Authorities of the Philippines (ULAP) will be represented in the Mining Industry Coordinating Council (MICC) that will be created under the EO.

The MICC, co-chaired by the head of the Cabinet clusters on climate change adaptation and mitigation, and economic development, is tasked, among others, to conduct assessment and review of all mining-related laws, rules and regulations, issuances and agreements toward the formulation of recommendations for better coordination between the national government and LGUs.

Additionally, the MICC shall launch campaigns against illegal mining, serve as oversight committee over the operations of the Provincial/City Mining Regulatory Boards, monitor the implementation of mining laws and regulate small-scale mining participants, who are equally accountable to the same environmental and social obligations as large-scale mining companies.