Mining firms warn of ‘a hundred Piatcos’
The Chamber of Mines of the Philippines (COMP) on Friday warned the government it could be swamped with hundreds of millions of dollars in suits from mining companies whose operations had been ordered shut down by Environment Secretary Gina Lopez.
COMP chair Artemio Disini told the Inquirer the cancellation of mining contracts meant “lawsuits, big-time.”
“Many people will probably have to file losses, including foreign partners whose contracts may have clauses that entitle them for reimbursement,” Disini said.
The group said there could be a repeat by “a hundredfold” of the compensation ordered by the Supreme Court following the fallout from the voided contract to build Terminal 3 of Ninoy Aquino International Airport by the Philippine International Air Terminals Co. Inc. (Piatco).
The Arroyo administration had scrapped the Piatco contract due to alleged irregularities and then expropriated the terminal. The Supreme Court upheld the contract nullification and the expropriation, but in a final ruling in April 2016 also ordered the government to give “just compensation” to Piatco, which amounted to at least $531 million, including interest.
“Some members (of the chamber) want to go for the attachment of Gina Lopez’s assets, including her ABS-CBN assets,” he said referring to the Lopez group’s broadcast network.
Attachment involves the seizure of a person’s property to settle a debt.
Lopez has insisted she was protecting the environment, which she argued took precedence over corporate and political interests or the stability of capital markets.
Lopez ordered the closure of 23 mines, suspended five others and canceled 75 mineral production sharing agreements (MPSAs)—a total of 103 projects—because they were located in “functional watersheds.”
Dante R. Bravo, president of both publicly listed Global Ferronickel Holdings Inc. and its subsidiary, Platinum Group Metals Corp. (PGMC), said on Wednesday Lopez’s orders amounted to expropriation, takeover, or requisition of investment.
“Under the law, there is an investment guarantee,” Bravo said. “Congress will have to pass a law to pay for this damage or for the return of investment for all the mining companies affected.”
Eventually, such indemnity “will be collected through taxes (and) it’s going to be the Filipino people who will shoulder it,” he said.
PGMC, a major nickel producer, was one of the 23 mines that Lopez ordered closed on Feb. 2 for operating in watersheds and causing siltation in rivers and coastal waters in Surigao del Norte.
Bravo said mining companies would “definitely” seek full reimbursement from the government for the “loss of wealth,” investment and “damage in reputation.”
Bravo said the mining companies will exhaust all legal remedies, including appealing directly to President Duterte or filing cases in court.
“It can be both, it can be either,” he said.
COMP was backed by the Philippine Exporters Confederation Inc. (Philexport).
“Secretary Lopez’s action is posing danger not just to the mining sector, but also to other sectors in the supply chain including drilling, construction, hauling and shipping, processing companies, manpower and transportation service providers,” Philexport president Sergio R. Ortiz-Luis, Jr. said in a statement on Friday. —WITH A REPORT FROM ROY STEPHEN C. CANIVEL AND INQUIRER RESEARCH
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