TUBA, Benguet – Philex Mining Corp. welcomes and supports recommendations for more transparency in the extractive industries made by an international-standard group, including the posting online of fund releases, strict monitoring of how taxes are spent, disclosure of local-government shares to trace backlogs, and a system to keep tabs of royalties due to indigenous peoples (IPs).
“I’ve always said this—that you can look at our records, look at how we do things, and so you could speak for us,” the company’s CEO and president, Eulalio Austin, Jr., said, following the release of the third report on the Philippines by the Extractive Industries Transparency Initiative (EITI). “We find reports such as these as the best way for us to show you how we operate.”
Stressing that the Philippine government “gained a firm foothold in furthering transparency in the extractive sector” with the first two country reports, the Norwegian-based non-profit EITI said its latest report has adopted the same aim and purpose, but also covers reconciliation procedures in tax payments made by companies in the extractive industries.
“While the objectives remain the same, the third PH-EITI report endeavors to advance the current position of the country in terms of information clarity and transparency; and ensure accessibility of data on revenues from the extractive sector,” the 330-page report, covering the fiscal year 2014 and launched Thursday, May 11, said.
The MSG, or Multi Stakeholder Group, which put the report together, recommended that certification of tax collections be posted on the website of the concerned agency—Department of Finance (DOF), Bureau of Internal Revenue (BIR), DENR-MGB or Department of Environment and Natural Resources-Mines and Geosciences Bureau, or Department of Energy (DOE)—or the Bureau of Treasury (BTr), which is tasked to directly release LGU shares under the new guidelines. This way, “LGUs can know how much to expect as their share,” the report said.
The Department of Budget and Management (DBM) had requested the collecting government agencies to include in the certifications they submit to BTr all the information required by EITI, following recommendations by the first and second PH-EITI reports on the “disaggregation of LGU’s share in national wealth according to the different types and sources of payment on a per company basis.”
The Third PH-EITI Report (FY2013) also recommends, among other things, that the BTr “strictly monitor” LGU compliance on the required submission of fund-utilization reports, a copy of which must be provided as well to the PH-EITI; that the DBM regional offices submit information on LGU shares for earlier years before 2013, when the EITI first reported on the Philippines, to trace backlogs; and the issuance of administrative order requiring companies to take part in the EITI process.
Other salient recommendations in the report include the DENR keeping the MSG up-to-date of MGB activities, as well as the submission to the PH-EITI of electronic copies of SDMPs, or Social Development and Management Programs, and the monitoring reports sent by mining companies to the MGB regional offices. The MSG also wants the NCIP, or National Commission on IPs, to assist the IPs in developing mechanisms for the monitoring of royalties paid toward the welfare of the IPs.
The previous country reports mirrored the Philippines’ significant progress in establishing and running the needed offices, reporting activities and capacity-building, as well as in public-engagement activities required by the EITI, which is also a platform that promotes dialogues and for systematic bilateral disclosures of what is paid by companies and received by governments.
At the launch done during the EITI National Conference, in Manila Hotel, meanwhile, Finance Secretary Carlos Dominguez III vowed that government would be transparent in its policies on the extractive industries and treat fairly responsible companies, including miners, following the rejection of Regina Lopez as Environment Secretary by the powerful Commission on Appointments (CA).
“Never again should suspensions be meted out on the basis of unseen audits,” Dominguez, who co-chairs the Mining Industry Coordinating Council (MICC)—tasked to implement reforms in the mining industry—with the DENR Secretary, was quoted in media reports on his speech during the launch. “Never again should honest industries be subjected to levies without legal basis.”
He was referring to the technical mine audit, described by the DOF in an Apr. 19 statement as “not a multistakeholder review” as required by law, conducted by the DENR on all operating large-scale miners last August. The audit resulted in the decision by then-DENR Sec.-designate Lopez to close down 23 mines and suspend five others.
“We need to encourage and not suppress extractive industries,” Dominguez said at the national conference of EITI, a global standard that ensures transparency in disclosing revenues from natural resources. “They are necessary to help our economy develop, to bring the revenues that government needs, and to create opportunities for the communities that host these industries.”
In the report’s Foreword, President Rodrigo Duterte said, “I have always been for fair and responsible extractive industries. They are the key to spurring development and encouraging economic growth, especially in the countryside where opportunities are sparse and limited.”
The report—which brings together and contains data from seven national-government agencies, 63 local government units (LGUs) hosting extractive operations, 31 large-scale miners, and five oil-and-gas companies—cited Philex Mining’s adherence to its various obligations like tax payments and the implementation of social and environmental projects.
For 2014, Philex Mining led fellow miners in pursuing environmental projects with expenditures of P430.5 million, followed by the Cebu-based Carmen Copper Corp. at P363.6 million, and Taganito Mining Corp., in Surigao del Norte, at P345 million. For social projects in the host and neighboring communities, Philex Mining spent P74.5 million while OceanaGold, which operates the Didipio Mine (in Nueva Vizcaya), spent P79.5 million and, Carmen Copper, P41.6 million.
The latest PH-EITI report said the government collected a total of about P53.33 billion from the extractive industries for 2014, of which P10.88 billion came from mining and P42.4 billion from oil and gas. It added that total variance post-reconciliation amounted to P518.4 million.
Dominguez has lauded the MSG—composed of representatives from the government, the extractive sectors, and civil-society groups—for their “good work” in encouraging all stakeholders to adopt global best practices in the extractive industries. He added that “full transparency” breeds trust among stakeholders and assurance that businesses are run with integrity while regulations are enforced with competence.
“Otherwise, there can only be a cloud of uncertainty, suspiciousness, and fear,” he stressed. “With such an unhealthy cloud, there will be no social peace.”
By HENT
