Miners open to Senate probe on disclosure of beneficial owners
The Chamber of Mines of the Philippines (COMP), which is comprised of the biggest miners in the Philippines, is open to a proposed Senate inquiry that will require them to disclose who their beneficial owners are.
A few days ago, Senator Joel Villanueva filed a resolution urging the Senate committee on public information and mass media to conduct an inquiry on the beneficial owners of extractive companies which include mining, oil, and gas.
The inquiry will help the government check compliance of the foreign equity restriction to the Philippine Constitution as well as ensure that Filipinos are really the ones benefitting from the extraction of these resources.
Ultimately, it will help the government track potential tax evaders in certain industries.
“We see the objective of the resolution as laudable and we will support it,” Chamber of Mines of the Philippines (COMP) Executive Director Ronald Recidoro said when sought for reaction.
Beneficial ownership is a term that refers to anyone who enjoys the benefits of ownership of a security or property without being on the record as being the owner.
A similar issue on foreign equity restriction emerged last month when the Securities and Exchange Commission (SEC) revoked the corporate registration of Rappler for allegedly violating Constitutional restrictions on ownership and control of mass media entities.
Bantay Kita, a governance and fiscal reform coalition, said that by doing the inquiry, it could be determined if companies abide by foreign ownership restrictions.
“The Resolution is timely since the Philippines, as a participating country in the Extractive Industries Transparency Initiative (EITI), is required to establish a Public Beneficial Ownership Registry for extractive entities by 2020,” Bantay Kita Coordinator Tina Pimentel said.
“As government looks for ways to increase taxes to support initiatives like the Build, Build, Build program, ownership disclosure will make it easier to track tax evaders. This can potentially make tax administration easier and raise collection.” she added.
EITI is a global standard of openness in mining, coal, oil, and gas. The initiative asserts that improved governance will ensure that proceeds from resource extraction will contribute to economic growth and social development. The Philippines expressed its commitment to join the EITI in 2012 through Executive Order 79.
By 2020, all EITI countries have to ensure that companies that apply for or hold a participating interest in an oil, gas or mining license or contract in their country disclose their beneficial owners.
Regarding this, Recidoro said that “while there are issues with implementation, we [COMP] see beneficial ownership disclosure as being an integral part of extractive industries transparency.”
The proposed Public Beneficial Ownership Registry will not only identify individuals who ultimately control extractive companies but will also disclose their nationalities.
The Philippines, known for its abundant minerals, oil, and gas reserves, is estimated to possess about 21.5 billion metric tons of metal deposits which is considered as the highest in Southeast Asia.
The country also has potential deposits of petroleum of about 8.9 billion barrel of oil equivalent (booe) or a total of about 1 million square kilometer.
“Disclosure of beneficial ownership of extractive companies operating in the country will peel off corporate layers to allow the examination of ownership among firms, understand the influence of companies or individuals, prevent corruption, and eventually create a level playing field among investors in accordance to our laws,” Villanueva said.