Mining IRR defines ‘no-go’ sticky areas

Mines and Geosciences Bureau (MGB) director Leo Jasareno in phone interview said that the implementing rules and regulations of Executive Order 79 or the mining policy “defined and made clear” areas that will be banned for mining. These areas include prime agricultural lands and island ecosystems.

A private sector representative to the economic cluster meanwhile said that existing rules will be honored such that the ban on open pit mining by a local government will be honored.

The IRR according to Jasareno would be published today, Tuesday, as the draft has been signed by Environment Secretary Ramon Paje yesterday.

Jasareno declined to give details but said “it is already set for publication” today (Tuesday).

Presidential Communications Development and Strategic Planning Secretary Ramon Carandang said Paje was to sign the IRR yesterday and that it would be published in a day or two yet.

The IRR operationalizes and provides all the necessary details to the EO,” Carandang said after the meeting of the Mining Industry Coordinating Council (MICC) in Malacanang.

The approval of the IRR comes two months after President Aquino signed on July 6, 2012 EO No. 79 which institutionalizes and implements “…Reforms in the Philippine Mining Sector by providing policies and guidelines to ensure Environmental Protection and Responsible Mining in the utilization of Mineral Resources.

Carandang said the draft IRR was presented at the MICC meeting for everyone’s inputs and clarification, before it was “wrapped up”.

The IRR was made consistent with the provisions of the EO for smooth implementation.

“It is consistent with the EO, there would be no surprises, no departure from the EO,” said Guillermo Luz, a private sector representative to the economic cluster, which has been consulted by the MIRR in crafting the IRR.

Luz said one of the most sticky items in the IRR involves the identification of areas as “go and no-go zones” based on existing laws, including but not limited to the National Integrated Protected Area System Act of 1992. Luz said the IRR would itemize which areas are these and would be translated to maps to make them physically visible.

“In the past, mining permits were on areas which turned out to be no-go zones. The IRR would clearly itemize these areas but there should be a legal basis,” he said.

Luz said the IRR also reiterates and reinforces the EO’s provision that national laws take precedence over local laws even as they also streamline the procedures in getting clearances.

“The procedures were eased in such a way that they are predictable by setting timelines and responsibility (for those timelines), said Luz.

The IRR, however, would not lead to the overrule of the ban on open pit mining passed by certain provinces where the Tampakan mining project is located as the EO is prospective.

“The ban on open pit mining happened in the past. All current and existing contracts will be respected,” Luz added.

The matter of incentives and revenue sharing issues will have to be resolved through legislation, a draft of which is being prepared.

Carandang said some points that were clarified involve the cement industry: if it is classified as quarrying or manufacturing and on the renewal of their contracts after 25 years.

Carandang said in the past, it is the Department of Environment and Natural Resources (DENR) that determines whether or not a cement company’s contract could be renewed, but under the IRR, “as long as there is no problem then (the contract) should be extended” by another 25 years.

“So we clarified in the EO that if you’re up for renewal after 25 years, and you basically complied with all the requirements, relatively good track record and there’s no real issue against you, then we would extend,” he added.

Carandang said he expects the cement industry players to be “happy with the results of the MICC-IRR. We don’t anticipate any disruption in their business” Carandang said that after the IRR, the MICC is expected to focus on the crafting of a proposed legislation which they hope to complete by the end of September and eventually submit to the economic cluster or the Office of the President for input and review.

He said the proposed legislation would include the proposed tax rates. He said he is not yet sure if the technical working group that has started crafting the proposed legislation had already settled on a specific rate.

“We’re not settled on any one particular model but we are in the process of looking at how it’s done in other countries. You don’t create these revenue formulas in a vacuum. On one hand if it’s too high compared to everyone else, why would they come here? In theory, all things being equal, if your royalties are significantly higher than anyone else to the point that it affects their models, then you’re probably not get the kind of investors that you need. If it’s too low, you might a get a lot of investments but you’re not getting the proper compensation for your national patrimony,” he said.

On the appeal sought by Sagittarius Mining Inc. (SMI) on the operation of the Tampakan copper-gold project in South Cotabato, Carandang said there was no update or decision yet by they are still hoping to come up with a decision within the month.

The DENR initially rejected in January the application of SMI citing South Cotabato’s ban on open pit mining.

The DENR upheld its ruling in May after SMI appealed the decision.

With the crafting of the new mining policy, the Aquino administration hopes that the new measure will generate more revenues for the government in the face of a high demand for metallic resources, as ell as to balance out concerns on environment protection and economic gains. –ANGELA DE LEON, JOCELYN MONTEMAYOR and IRMA ISIP, Malaya