[File Photo] Atty. Wilfredo G. Moncano, Director, DENR-MGB [Photo by M.Villegas, Philippine Resources Journal, Nov.2018, Baguio City]
12 May 2021- Atty. Wilfredo G. Moncano, MGB Mines and Geosciences Bureau (MGB) Acting Director, presented through a video some mining industry updates during a webinar that was hosted by Philippine Mining and Exploration Association (PMEA). PMEA President, Joey Nelson Ayson provided general updates on the PMEA activities as well.
Due to the global pandemic and in compliance to the government mandated pandemic guidelines, PMEA will continue to have virtual meetings until physical gatherings are allowed again.
On Moncano’s industry updates, he started by giving a rundown of the current regime on mining in the Philippines.
Current Regime on Mining in the Philippines
- Republic Act No. 7942, Mining Act of 1995 and DAO No. 2010-21, its IRR
- Republic Act No. 7076, People's Small Scale Mining Act of 1991 and DAO No. 2015-03, its IRR
- Executive Order No. 79 (July 6, 2012) regarding the Institutionalizing and Implementing Reforms in the Philippine Mining Sector Proving Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the Utilization of Mineral Resources
Amending Section 4 of EO No. 79, S. 2012 -- Executive Order No. 130, Section 1. Lifting of the Moratorium on Mineral Agreements. The moratorium on mineral agreements under Section 4, EO No. 79 is hereby lifted.
As a review on EO No. 79, this was issued by former President Benigno Aquino III. It has the following salient features:
- Identification and mapping of additional areas closed to mining
- Enforcement of upgraded environmental standards
- Review of performance of mining operations and cleansing of non-moving mining rights
- Rationalization of mining rights/contracts
- Development of value added and downstream industries
- Creation of a Cabinet-level Mining Industry Coordinating Council (MICC)
- Ensure consistency of local ordinances with the national laws and the Constitution
- Promotion of transparency in the mining industry
Moncano enumerated that we currently have this existing regulatory framework:
- Exploration Permit is the initial mode of entry to acquire mining rights for large-scale mining
- MPSA/FTAA are the mining tenement instruments for those ready to develop and commercially operate. MPSA require 60:40 ownership (60% for Filipinos; FTAA may be 100% foreign owned).
- MPSA require Php100 million capitalization
- Production sharing may be in the form of simple Mineral Production Sharing, Joint Venture Agreement, or Co-Production Sharing Agreement.
- FTAA require USD 4 million capitalization during exploration stage, and USD 50 million during the start of development.
- National tax and local taxes, 4% Excise taxes, RPT, LBT, etc.
- Small-scale mining is done inside “Minahang Bayan”. Small-scale mining is limited to Filipinos only.
Current mining policies now face some challenges. Moncano mentioned that one of them is the misconception that mining is pervasive, but he stated that it is only in the media because in reality, actual mining occurrence is small (0.56% of the country's land area). Secondly, he mentioned that mining contributes less than 1% to GDP and employment and so it can be stopped without harm to the country.
Moncano also discussed the industry reforms and what has been done so far.
- DENR Audit and Review
- Use it, Lose it Policy; (1,200+applications denied, 12 approved, MPSA cancelled)
- Faster approval of competent mining applications
- Establishment of satellite MGB Office in mineralized provinces; (Dinagat Island) (implemented in 2017)
- Embedding of MGB personnel in the CENROs and PENROs; (148 personnel) (implemented in 2017)
- Use of high-tech equipment for monitoring and volume surveys (drones, RTKs); (starting in 2017 and continuing)
With regards to environmental standards, we have the DENR Administrative Order No. 2018-19 - Guidelines for Additional Environmental Measures for Operating Surface Metallic Mines. This was issued on 17 August 2018.
DAO No. 2018-19 Provides for the following additional environmental measures:
- Topsoil and subsoil management - Topsoil and subsoil collected from stripping activities shall be stockpiled for revegetation and rehabilitation purposes.
- Buffer zone management - A 20-meter buffer zone shall be established inward from the mining tenement boundary, and outward from the edges of the normal high waterline of rivers and streams within the tenement area.
- Maximum disturbed area for nickel mines - The maximum disturbed area for extraction of ore at any one time shall depend on the scale of mining operations.
MGB Memorandum Circular No. 2018-02 - Guidance for Compliance Monitoring and Rating/Scorecard of Mining Permits/Contracts (Issued on 3 July 2018)
- Provides for a Standard Monitoring System that ascertains compliance with the terms and conditions of mining permits/contracts and laws, rules and regulations
- Provides a performance rating system, thru scorecards to determine the compliance level of mining contractors/permittees/permit holders
- Includes exploration projects
- Serves as tool in determining compliant and non-compliant mining contractors/permittees/permit holders
Additionally, Moncano provided an update on OceanaGold (Phils.), Inc. FTAA Renewal. The Philippine Negotiation Panel was convened in December 2020 and continued until February 2021 discussed the supplemental terms and conditions of the possible renewal of OceanaGold (Phils.), Inc. under FTAA No. 01. The Negotiation Panel is composed of the MGB, DENR, DOF and NEDA. The output of the negotiation was signed by all members of the panel and was submitted to the Secretary of DOF and DENR for their comments and recommendations.
Meanwhile, he noted that OceanaGold (Phils.), Inc. agreed to the additional terms and conditions in the proposed supplemental FTAA Contract. The supplemental contract provided an additional 1.5% of the gross revenues for the development of the host Local Government Unit.
Moncano also provided an update on the Implementing Rules and Regulations of EO No. 130. He mentioned that “The Policy Technical Working Group of MGB is now in the third revision of the draft. The previous two drafts were commented to by the Undersecretary and Assistant Secretary of DENR as well as the Offices of Forest Management Bureau, Environmental Management Bureau and the DENR Legal.” Tentative date of Stakeholders Consultation was set last 18-19 May 2021.
Additional Key points from Moncano regarding IRR of EO No. 130:
- There are provisions in the draft IRR on who are qualified to apply for a Mineral Agreement, provision on possible declaration of Mineral reservations, possible royalties and who are exempted.
- Issue on the possible redundancy of a law passed by Congress imposing mineral royalty outside Mineral reservation with the provision in the IRR to declare Mineral reservations is included.
- There is also a provision on the lifting of open pit mining ban.
- The draft IRR revolves around Section No. 4 of Executive Order No. 130 and the PTWG tried to limit discussion on this provision.
Priority Projects - Phase 1
- Phase 1 includes 26 mining projects out of 36 originally listed. The 10 originally listed has slide to Phase 2.
- Phase 2 includes 68 mining projects including those that were moved from Phase 1.
DAO Limiting the Maximum Number of Operating Agreements in One Tenement
- Due to the DENR experience of several disputes/conflicts involving Contractors and Operators, the Secretary thru the Undersecretary for Enforcement, Mining Concerns and Muslim Affairs has instructed the MGB to draft a DAO Limiting the Maximum Number of Operating Agreements in One Tenement.
- The Secretary has pointed out that a Mining Permittee/Holder/Contractor upon applying for a mining tenement they have manifested that they have the Financial and Technical Capability to develop and utilize a mine.
- When the Contractor executes Operating Agreement with several operators, it shows that he misrepresented himself and therefore violated the terms and conditions of the Contract.
Finally, at the end of his report, Moncano gave some updates of movement of some Regional Directors. MGB Regional Office No. XIII is now headed by Engr. Larry M. Herades, former Division Chief of the Mining Tenements Management Division, Central Office. MGB MIMAROPA Regional Office is now headed by Engr. Glenn Marcelo Noble, former Regional Director of MGB Regional Office No. XIII. Engr. Roland A. De Jesus has been promoted by the President as the Assistant Director of MGB. He is the former Regional Director of MGB MIMAROPA.
