Speaker files bill requiring mining firms obtain legislative franchise to operate

Speaker Pantaleon Alvarez. LYN RILLON / PHILIPPINE DAILY INQUIRER

Big mining companies may soon come knocking on the doors of Congress to seek a franchise under a new bill filed by Speaker Pantaleon Alvarez that makes sweeping changes in the mining industry.

In filing House Bill 6259, the leader of the House proposes amendments to the Philippine Mining Act of 1995, including the addition of a provision requiring all mining operators to seek legislative franchise.

READ: Alvarez pushes for legislative franchises, gov’t reorganization

The 16-page bill also seeks to prohibit all mining activities in watershed areas, shorten the duration of mineral agreements from 25 years to 10 years, and require operators to rehabilitate mined areas within 10 years of the expiration of their permit.

It also states that all mining ores extracted shall be processed in the Philippines, particularly in the province they were mined, and unprocessed ores are not allowed to be exported.

Coauthors of the bill include Majority Leader Rodolfo Fariñas, Minority Leader Danilo Suarez, San Juan City Rep. Ronaldo Zamora, whose family is into mining, and 18 other lawmakers.

“By requiring mining firms to acquire a legislative franchise, the people, through their elected representatives, would be able to scrutinize the applicants, their capability and track record, in order to make sure that only responsible mining firms are allowed to operate in the country,” Alvarez said in an explanatory note.

Under his proposal, all private contractors must secure a legislative franchise as a prerequisite before they can apply for an exploration permit, a mineral agreement under Section 26 of the mining law, or any financial and/or technical assistance deal.

Private contractors currently holding explorations permits, mineral agreements, and financial and/or technical assistance agreements are given one year from the time the law takes effect to secure a legislative franchise; otherwise their permits shall expire, according to the bill.

The Philippines, according to Alvarez, is one of the top mineral-rich countries in the world with an estimated value of $1.4 trillion. In 2009-2010, some P650 billion worth of minerals were extracted in the country.

But the Philippine mining industry is “among the least contributors to the country’s wealth,” peaking at 1.63 percent of GDP in 2007, the Speaker said.

At present, the mining industry contributes a dismal 0.7 percent to the GDP, he said.

The challenge, according to Alvarez, is for the government “to ensure the proceeds of the mining industry translate into sustainable development, environmental protection, and greater transparency and accountability in the industry.”

To ensure greater protection of the environment, the bill includes watersheds and critical watersheds among areas where mining is banned.

Public officers and employees found guilty of facilitating approval of mining permits in such protected areas will suffer a penalty consisting of 6-12 years in jail and a fine of P2 million per violation, as well as perpetual disqualification from public office.

The bill requires private contractors to fully rehabilitate the areas they used for mining and restore the environmental and ecological balance of the area within 10 years from the expiration of their permits.

Failure to do so would mean a penalty of P100 million per hectare that has not been rehabilitated.

The bill also requires that all mineral ores extracted within the Philippines should be processed here in the country and in the province from where they were extracted. It also bans export of unprocessed mineral ores to help develop the mineral processing industry in the Philippines and to benefit the localities where the minerals came from.

Anybody found guilty of illegally exporting or attempting to export raw mineral ores faces the penalty of 6-12 years imprisonment and a fine amounting to three times the value of the seized unprocessed mineral, or not lower than P1 million.

Alvarez said one of the reasons for the insignificant contribution of the mining industry to the country’s economy was that mineral ores in the country, after being mined or extracted, while still unprocessed, were already being exported directly to foreign countries as raw materials. JPV