3 mining firms question Aquino cancellation of FTAA in Palawan

MANILA, Philippines – Amid the debate over mining, three firms have petitioned the Court of Appeals to reverse its resolution, which upheld President Benigno Aquino III’s authority to cancel the “midnight deal” they entered into with the Arroyo administration that allowed them to conduct large-scale mineral exploration in Palawan.

In a joint 34-page petition, McArthur Mining Inc., Narra Nickel Mining and Development Corp. and Tesoro Mining and Development also asked the appellate court to issue a temporary restraining order to prevent the Office of the President from implementing Aquino’s April 6, 2011, order.

The President’s decision voided the Financial or Technical Assistance Agreement (FTAA), which the mining firms had secured from then outgoing president Gloria Macapagal-Arroyo, which covered the towns of Narra, Bataraza and Rizal towns in Palawan.

The FTAA was signed by then Executive Secretary Leandro Mendoza on April 5, 2010, barely a month before the presidential elections.

In seeking for a reconsideration of the court’s February 28 ruling, the mining firms insisted that they were not afforded due process when the President cancelled the FTTA.

They also questioned the authority of Malacañang to unilaterally void the mining permit without their consent “based on a non-existent ground.”

“The Office of the President had no jurisdiction to unilaterally cancel, revoke or terminate the FTAA in violation of the clear terms of the FTAA, including the latter’s arbitration clause,” the petition said.

“The FTAA is a valid, binding contract between the government and the petitioners which deserves respect and breach of which by the government exposes it to significant liability,” it added.

The mining firms argued that the President violated the provisions of the Mining Act of 1995 and the FTAA, which allowed “a dispute resolution mechanism on issues relating to the validity of the FTAA.”

The mining firms also urged the appellate court to stop the Mines and Geosciences Bureau from granting the request of their rival company, Redmont Consolidated Mining Corp., for an exploration permit for the same areas.

Aquino’s order stemmed from Redmont’s complaint, which claimed that the mining permit given to McArthur was approved with grave abuse of discretion.

But McArthur et al. said Redmont’s petition raised the same legal issues, which the Supreme Court has yet to resolve in a pending petition for review that McArthur filed in the high court.

In that petition, McArthur asked the high tribunal to set aside the appellate court’s October 2010 ruling, which sustained the decision of the Department of Environment and Natural Resources to annul the exploration permits because of the ownership issues of the Canadian mining firm.

In its February 28 resolution, the appeals court said McArthur and its partner mining firms “give us the impression that the Office of the President cannot cancel or revoke the FTAA because it is one of the contracting parties to it… We beg to disagree.”

“The petition is bereft of merit… (I)t may be stated parenthetically that the right to appeal to the President reposes upon the President’s power of control over the executive departments,” the court ruled.