Mining ban in 78 ecotourism sites

BAGUIO CITY—President Aquino said on Sunday night that mining activities would most likely be barred in 78 ecotourism sites in the country identified by the Department of Tourism (DOT) to nurture and sustain tourism growth.

Responding to questions about an executive order (EO) on mining in a media interview at the Mansion House here, Mr. Aquino added that Palace officials who had been instructed to craft the country’s new mining policy are “very close” to submitting the executive order for  his final approval.

The President said that before the weekend, Malacañang held a meeting, which filled the entire Palace Heroes’ Hall with representatives from government departments and agencies and stakeholders concerned about the EO on mining.

“One of tourism’s inputs is they have identified 78 ecotourism sites where we will not allow in all probability mining. It will be too much of a risk, especially given the fact that they just reported that we’re on track to surpass the growth in tourism arrivals,” he added.

Mr. Aquino said the DOT had reported 400,000 tourist arrivals in January.

“You multiply that by 12 months…. So they’re really very optimistic that we are on the road to reaching the 10 million [mark] by 2016,” he added.

The President said  Palace officials working on the EO on mining have told him “that they are very close to submitting it to me for a final approval.”

He added that discussions on the EO on mining include the government’s desired fair share in mining revenues—currently at 2 percent—and the proposals go as high as a 50-50 share.

The President declined to say what he believed to be the government’s fair share in mining revenues under the new policy, but said among the proposals being studied is a 50-50 share.

“There are proposals for a 50-50 [share]. But until I get the proposed changes in the policy and the reasoning behind each and every facet of this new policy, I feel it’s not proper for me to comment at this time. It’s like asking so many people to work on it, only to ignore their advice.”

When asked whether the 30-percent tax on miners to be imposed by the Australian government is among the models being considered by the government, Mr. Aquino said the situations in Australia and the Philippines are different, seemingly indicating that the latter can push for an even higher take in mining revenues.

He added that Australia is a continent with a population of 20 million, and environmental damage inflicted by mining activities would be different there than in the Philippines. “Can we really compare the probable environmental damage of areas that they call the outback compared to places like Palawan? That’s not apples to apples.”

Mr. Aquino said that his administration is not in favor of a total mining ban as it would encourage unregulated small-scale mining, but is only out to ensure that the government gets its “fair share” of mining revenues. “We want to be able to also be part of the processing and we want to maximize the utility of the resource for our people.”

He added that the government only gets 2 percent of total mining revenues, which share is supposed to “take care of everything that might happen if there is a disaster” related to mining activities.

“And, of course, those of us who remember what happened in Marinduque and the promises that were made are really very wary. So that is one of the actual details that are being discussed—what represents fair?” the President said.

Still, the government should look into the enormous contribution of the mining industry by thinking of the public-sector share rather than government share in mining.

Offering his insights about mining’s economic contribution, TVI Resource Development (Phils) Inc. President Eugene Mateo wrote a letter addressed to Mr. Aquino, sharing his company’s experience of doing business and contributing to the economic development of the country.

According to Mateo, the mining industry’s contribution to the Philippine economy should not be measured by the taxes it pays to the government alone, but also the indirect taxes and the enormous economic drivers the industry can inject into the economy.

Mining companies, he said, are required to invest huge funds and often provide services that the government, because of its limited resources, could not possibly provide the people, particularly in remote areas where “the state is absent.”

Roads, hospitals, schools, even peace and security which the government could not provide in the hinterlands are provided by mining companies, he noted.

He said mining companies, in effect, is “relieving the government of having to make expenditures that they would otherwise have to do” which he said is also taxation by another name—contributing to local government benefits as well as to the national government.

TVIRD, he said, which operates a copper mine in the hinterland of Zamboanga del Norte, one of the 10 poorest provinces in the country has contributed to the local economic development of the province through infrastructure.

He said significant amount of the company’s fund were used to help improve and maintain a provincial road to be able to operate.

Approximately P94 million on provincial road construction and maintenance since 2004 at Canatuan have been spent by TVIRD so far, he said.  The road is used by the communities as well as by TVI—facilitating, for example, the first bus service that the municipality of Siocon has ever had.

Since there were insufficient schools, hospitals or other government services in Canatuan, the company provided the communities with such basic services, over and above the taxes it pays to the government.

“In addition to the mandated Social Development and Management Plan expenditures of P68 million, we have also spent P36.5 million in health facilities, medical personnel and an ambulance service,” he said.

Also, as companies are required to pay a royalty to the indigenous people as landholders, in effect another form of taxation, TVIRD paid a total of P164.5 million in the period 2004-11.

“Through our contribution in infrastructure, services and IP royalties, the State has in effect been relieved of having to spend those funds, constituting a contribution by the mining operation to the public sector that is the equivalent of taxation,” he said.

All these investments, according to Mateo, were made despite the “risks” on the part of the company.

“As with any mining company a huge amount of risky exploration was done—at great expense—before an economically ‘viable project’ was found for development. The ‘viable project’ has to cover not only its own capital requirements and operating expenditures but has to pay also for all of the unsuccessful ventures that preceded it,” he said. –Mia M. Gonzalez and Jonathan Mayuga, Businessmirror