JFC opposes bills seeking to amend the Mining Act

The Joint Foreign Chambers (JFC) has opposed several House bills declaring mining-free zones in the country stressing the pending bills seek to amend the Philippine Mining Act of 1995, Republic Act No. 7942 (Mining Act), which they said need no changes.

In a letter to Rep. Arnel Ty, chairperson of the committee on natural resources at the Lower House, the JFC has urged for respect of the Mining Act.

“It is our position that the House bills are inconsistent with the Philippine Constitution and the Mining Act and should not be considered and approved by Congress,” according to the JFC statement.

It submitted some points which they believe will provide guidance on promoting mining as a viable and stable industry, under existing constitutional and legal structures, which creates jobs, empowers communities and enables sustainable ecological and economic development, and bereft of erratic and inconsistent mining policy.

First, the JFC said that 30 percent of the Philippine land area with a total of 9 million hectares has high mineral potential. Of this, the actual mining footprint for the existing operating mines when added together is only 60,000 hectares or only 0.2 percent of the total land mass of the entire Philippine archipelago. To put things into proper perspective, 60,000 hectares is approximately 36 percent, or a little over a third of the total land area of Quezon City.

Yet, for such a small area of actual coverage, the mining industry contributes almost 1 percent of GDP and in areas like the Surigao and Palawan provinces, where it is has significant operations, the contribution to the local economies are substantial. The Fraser Institute of Canada has ranked the Philippines in the top 10 countries most attractive for mineral development based on mineral potential alone. However, the country ranks within the bottom 10 least attractive locations for international responsible mining investments because of policy and bureaucratic obstructions and the lack or government support for mineral development. Current government policy has imposed an official moratorium on new mining applications since July 2012. This has stalled the growth of the industry.

Secondly, the JFC stated that RA No. 7942 of 1995, the Philippine Mining Act was enacted to resuscitate the industry. It opened the doors to potential developers of mining projects. By providing significant social and environmental safety nets, the law is considered to be a model legal framework for sustainable development and among the best in the world.

Mining should respect the community and environment, which proper implementation of the Philippine Mining Act will achieve. In comparison to other mining laws of other countries, such as the UK, US, Australia, and Canada, where mining plays a strong role in the growth of their first world economies, the Mining Act is deemed as being at par, if not better, including social and environmental obligations of mining companies.

Third, the foreign businessmen stressed that legal challenges delayed implementation of the Mining Act for a decade until the Supreme Court in 2005 ruled with finality that the law is constitutional. Under the law, foreign investors can enter into Financial and/or Technical Assistance Agreements (FTAA) and be granted permits for exploration and mineral processing.

Given the very significant capital requirements and long lead-times to develop large mines, this ruling opened the way for the industry to grow with some of world’s largest mining companies expressing serious interest to invest in the Philippines, with target investments ranging from hundreds of millions to several billion US dollars.

That interest, however, has since waned after the imposition of the mining application moratorium. Thus, there is a need to revive interest by providing for a more stable investment environment for the industry.

The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean chambers and PAMURI. Combined, they claim to represent over 3,000 member companies engaged in over $100 billion worth of trade and some $30 billion worth of investments in the country, including mining companies.