Bill requires franchise for mining firms

Mining companies may have to add a franchise from Congress to an already long list of requirements to operate should a bill filed by Speaker Pantaleon Alvarez become law.

Under House Bill No. 6259, Alvarez proposed amendments to the Philippine Mining Act of 1995 to add a provision requiring mining operators to knock on Congress’ doors for a franchise.

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

It also requires the processing of ore in the Philippines, particularly in provinces where they were extracted and barred their export.

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

Requiring mining firms to acquire franchises from Congress, said the bill, would allow the people “through their elected representatives” to closely examine applicants “to make sure that only responsible mining firms are allowed to operate in the country.”

The bill would make a legislative franchise a prerequisite for mining firms to apply for exploration and other permits from the government.

Companies currently holding permits would have one year from the law’s effectivity to secure legislative franchises or their permits would be deemed invalidated.

The country, Alvarez’s bill said, had an estimated mineral deposit worth $1.4 trillion. In 2009-2010, at least P650 billion of minerals were extracted, the bill said.

The mining industry, however, is “among the least contributors to the country’s wealth,” said the bill. At its peak in 2007, the mining industry contributed only 1.63 percent of the country’s gross domestic product, it said.

Adding another layer to the requirements for mining companies to operate, the bill said, would “ensure the proceeds of the mining industry translate into sustainable development.”

To improve environment protection, the bill listed watersheds as areas off-limits to mining.

Public officials or employees found guilty of allowing mining in areas where it is prohibited would face jail terms of six to 12 years and fines of up to P2 million.