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Philex pays P311M in royalties; recipients feuding over bonanza

/ 01:34 AM September 29, 2012

Gold and copper producer Philex Mining Corp. has been paying royalties to a Kalanguya community near its Padcal mine in Benguet province since 2008, the first such arrangement between a mining company and indigenous peoples (IPs) since the government passed the Indigenous Peoples Rights Act of 1997.

The company remits 1.25 percent of its annual gross revenue in monthly installments to the Indigenous Peoples Organization of Alang, Pokis, Sabian, Sta. Fe, Olibba and Loakan (Ipo-Apssol) in Tuba, Benguet, Philex legal officer Eduardo Aratas said.

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As of August, Philex had released P311 million to the organization.

But families belonging to Ipo-Apssol have been fighting over the money’s disbursement, claiming that the officials they elected have not managed the funds properly and that no accounting has been conducted to keep track of the organization’s expenses.

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The conflict has resulted in the filing of two criminal complaints for fraud and malversation in the Benguet prosecutor’s office against former Ipo-Apssol president Adam Ventura and his officers, who were ousted by an assembly in June.

The ousted officials responded with a civil suit challenging the legitimacy of their replacements, Minda Bantasan and her officers, who were elected on June 12. The lawsuit also included board member Johnny Waguis, chair of the Benguet provincial board’s committee on indigenous peoples.

On Tuesday, a Benguet regional trial court dismissed Ventura’s civil suit, which sought to restrain Bantasan’s group from assuming office. The court said the dispute of the Kalanguya clans had to be resolved by the National Commission on Indigenous Peoples (NCIP).

“Clearly, [the dispute] is an internal matter, a leadership issue among the members of the Ipo-Apssol,” Judge Jennifer Humiding said. She said the Indigenous Peoples Rights Act (Republic Act No. 8371) had affirmed “the capability of indigenous peoples to settle their own disputes.”

The criminal complaints, however, have not yet been resolved by the Benguet prosecutor, said lawyer Simpson Baldo, who represents several Kalanguya families who voted to oust Ventura and his officers.

Tailings accident

Philex shut down its operations last month because of a tailings dam accident and this may reduce Ipo-Apssol’s royalty payments for the last months of 2012, Baldo said.

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He said the impact of this problem had yet to be discussed by the contending families, which are trying to determine whether their trust fund is intact.

“This [feud] has made a beautiful IP story into a very sad story,” Baldo said.

The royalty arrangements were made in 2007 when the Ipo-Apssol families refused to grant Philex its free prior and informed consent when the company applied for rights to extend its Padcal mine operations.

Rising metal prices

Padcal, the first underground block cave mining operation in the country in 1955, was scheduled for decommissioning in 2011, but it was granted an extension until 2020, owing to rising world metals prices, records of the Mines and Geosciences Bureau showed.

Negotiations brokered by the NCIP and the Benguet government led to the royalty agreement, which was forged by the release of a P60-million initial payment from Philex in 2008. The community also endorsed the extension of the Padcal operations.

Trust fund

Philex had been regularly paying its royalty obligations through a trust fund account in a Makati City bank, according to Baldo. But some Ipo-Apssol members said they never received their share or got a single centavo from the trust account.

Court records showed that Ipo-Apssol’s first officers operated from a verbal understanding that members of the community would receive royalty dividends from the first P60-million advance based on the size of their properties, and the physical and environmental impact of the mine on them.

Baldo said the community managed to keep the dispute private for three years.

In the meantime, only a small segment of the community flourished, while many continued to farm or pursue small-scale mining, he said.

The most vocal critics of the organization called the general assembly that ousted Ventura’s group. The June election was endorsed by the acknowledged council of elders there, Baldo said.

He said his clients decided to pursue the case after Ipo-Apssol members obtained a copy of the organization’s report to the NCIP.

The report detailed expenses and the distribution of royalties from the 2008 amounts that were either allegedly short of the expected payments or were not given to the families intended to receive them.

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TAGS: Benguet, Indigenous Peoples, Indigenous Peoples Rights Act of 1997, Kalanguya community, Mining, Padcal mine, Philex Mining Corp.
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