by Rocky Dimaculangan VP and TSM National Coordinator Chamber of Mines of the Philippines
The Chamber of Mines of the Philippines (COMP) has, for over a dozen years now, been encouraging its members not only to comply with the law – which should be part of their organizational ethos in the first place – but also to undertake voluntary initiatives that demonstrate recognition of their responsibility to mitigate the impact of their activities on people and the environment, to strengthen stakeholder relationships, and to foster community growth and development.
This “Beyond Compliance” approach has gained more significance in recent years with mankind’s growing need to produce new technologies, including electric vehicles, wind turbines, solar panels and batteries, to address the long-term global shift in temperatures and weather patterns towards a greater energy transition.
“Producing the minerals needed to assemble technologies in response to climate change comes with major sustainability issues,” COMP chairman Michael Toledo says. “It uses a lot of water, leaves a lot of waste, and, if the Philippines goes further into mineral processing, consumes a lot of energy, generating more carbon emissions. To reduce risks and maintain a social license to operate, mining companies must address these concerns.
“Meanwhile, investors and consumers are increasingly demanding that companies take these issues seriously; failure to respond could undermine reputation and lead to difficulties in raising capital,” he adds.
The question thus begs to be answered: how can mining companies cope with these realities in a way that will help them not only survive, but also thrive alongside their stakeholders for many generations?
Global ESG standard for mining
In early 2016, COMP member Philex Mining Corp., through its president, Mr. Eulalio Austin, came across the Towards Sustainable Mining (TSM) initiative and recommended its adoption by the Chamber. TSM – established in 2004 by the Mining Association of Canada (MAC) – is increasingly becoming a global mining standard representing a set of best practices in mining within certain protocols. The program is now being implemented in 14 mining jurisdictions, including Australia.
The Philippines, through COMP, is the first and remains the only Asian country that has adopted TSM.
TSM is a set of tools and indicators to drive ESG performance and ensure that key mining risks are managed responsibly at members’ facilities. Its main objective is to enable mining companies to meet society’s needs for minerals, metals, and energy products in the most socially, economically, and environmentally responsible way.
TSM’s Core Strengths lie in the fact that it is Performance Driven, it fosters Accountability, it promotes Transparency, and it possesses Credibility -- with a nearly 20-year track record as a reliable ESG standard under the guidance of a Community of Interest Advisory Panel or COI.
Despite the fact that the Philippines already has among the strictest laws, rules and regulations in the world that impose on exploration and mining companies many social, economic, and environmental limitations and conditions, COMP members feel they have to do more. Compliance with the law is no longer enough. While TSM is yet another imposition on members, the Chamber made it mandatory to all those with operating mines.
“TSM aligns well with the existing regulatory framework of the Department of Environment and Natural Resources (DENR) and the Mines and Geosciences Bureau (MGB), such as the scorecards, checklists, and the Presidential Mineral Industry Environmental Award guidelines,” says Michael Cabalda, DENR Special Assistant to the DENR Secretary on Sustainability and a TSM Verification Service Provider (VSP). “The program is designed to strengthen the commitment of COMP member-companies to responsible and sustainable mining practices while enhancing the standards we already have.
Dante Bravo, president of Platinum Group Metals Corporation (PGMC) and a member of the COI Panel, says, “TSM’s good governance measures -- the common thread linking the E, the S, and the G – will ensure broader stakeholder engagement and better returns for our members.
“With TSM, they now have a proven good governance roadmap that will help guide them in incorporating ESG into their systems and processes, encourage them to continuously improve, and measure their performance against the world’s best mining operations – with the end in view of becoming among the world’s best themselves,” Bravo, also the president of the Philippine Nickel Industry Association, adds.”
6-Year Preparation
“After we adopted TSM in December 2017, we embarked on a 6-year preparation period that saw our members actively participate in the ‘Filipinization’ of the TSM Protocols,” Toledo says. “That period also saw the formation of our multi-sector Community of Interest (COI) Advisory Panel, the training and accreditation of our VSPs or External Verifiers, the development and cascading of an online self-rating application, a self-assessment dry run, and the ‘mock’ external verification of three volunteer mines: Rio Tuba Nickel, OceanaGold Didipio, and Philex Padcal.”
In 2024, all of COMP’s 19 member-companies with operating mines submitted their self-assessment reports on eight TSM Protocols for their January to December 2023 performance via the Mine Site Sustainability Audit app exclusively designed by Nickel Asia Corp., a group of COMP member-firms, for TSM’s implementation in the Philippines. The mines conducted internal audits vis-à-vis the Protocols, and supported the self-ratings with proofs and evidences.
The 16 other COMP member-firms with operating mines are: Benguet Corp.; Cagdianao Mining Corp.; Carmen Copper Corp.; Carrascal Nickel Corp.; CTP Construction and Mining Corp.; Dinapigue Mining Corp.; Eramen Minerals, Inc.; FCF Minerals, Inc.; Filminera Resources Corp.; Hinatuan Mining Corp.; Lepanto Consolidated MiningCo.; LNL Archipelago Minerals, Inc., PGMC.; Taganito Mining Corp.; and TVI Resource Development Phils., Inc.
Climate Change
In 2021, COMP adopted the TSM Climate Change Protocol that brought to eight the number of measurement tools that its members will use to grade their environmental and social performance. This adoption was approved by the COI Panel following the recommendation of COMP’s technical working group that was tasked to align TSM with the Global Industry Standard on Tailings Management (GISTM).
GISTM was issued in 2020 by the United Nations Environment Programme, the International Council on Mining & Metals, and the Principles for Responsible Investment to operators of tailings facilities worldwide, enjoining them to strive for zero harm to people and the environment from the earliest phases of project conception.
“A refocusing of TSM towards climate change adaptation instead of just carbon emission mitigating strategies is an important and welcome development,” says Carlos Primo David, DENR undersecretary and a former COI Panel member. “The efforts must remain strong for reforestation efforts and carbon footprint reduction, but the impact of climate change warrants ensuring business continuity and, more importantly, resilience in our communities in the near future.
“These are even more important owing to the fact the climate change impacts will be more prevalent in tropical island nations such as the Philippines,” David adds. “Therefore, this Climate Change Protocol and its supporting Climate Change Guide will provide mining companies the required focus to attend to local impacts and, through this, enable them to contribute to the global effort to address climate change.”
The Climate Change Guide is the only mine-related reference that provides methods or procedures on incorporating climate change considerations in the mining operator’s decision-making process.”
Apart from approving the adoption of the “Filipinized” version of the Climate Change Protocol, the COI – composed of 14 highly respected individuals from different sectors of society – likewise approved the TWG’s recommendation to revise the Tailings Management Protocol and its three supporting documents.
The six other TSM Protocols – all Filipinized from the MAC version – are Water Stewardship, Preventing Child and Forced Labor, Biodiversity Conservation Management, Health & Safety, Indigenous Peoples and Community Outreach, and Crisis Management.
TSM Rating System
In two Protocols – Crisis Management, and Preventing Child and Forced Labor – a mining project could only Pass or Fail. Either the mine achieves the Indicators and criteria under these Protocols or they do not.
Six Protocols, meanwhile are assessed on a 5-point scale – C, B, A, AA, AAA – where A represents good practice, and Triple A means excellence and leadership.
A member who receives a C-rating means that the company may have the procedures in place but they are not integrated into policies and management systems. Since the TSM rating system presupposes that the member is compliant with the law, a C-rating is already above the word of the law. It is a starting position of conformance with TSM, which asks more than what are required by the law. It is the minimum global industry standard on which a facility can build and improve its performance.
The same goes with the Pass or Fail rating system. A “fail” score means failure to meet global best mining practices in that Protocol, not a violation of the law.
“With TSM, our members are, in effect, upping the ante for themselves,” says Joan Adaci-Cattiling, OceanaGold Phils., Inc. Didipio Mine president and general manager for external affairs and social performance.
“The idea is to see how they fare vis-à-vis the best mining practices in the world – the Triple A rating – and this rating system provides our members the roadmap that will guide them towards best practices based on the principle of continuous improvement,” adds Cattiling, also an ex-officio member of the TSM COI Panel.
First Impressions
Eight mines from COMP’s 19 operating members subjected themselves to external verification in 2024. These mines are: Filminera Masbate Gold Project, FCF Runruno Gold Project, Taganito Mining Co., Cagdianao Mining Co., Atlas Carmen Copper Corp., PGMC Surigao Project, Philex Padcal, and TVI Balabag Gold-Silver Project. The 11 other mines will have their self-ratings externally verified in 2025.
“It was fun and eye-opening, educational, and encouraging,” says VSP Fernando Sajona, a Geology expert and VSP, says of his validation experience. “Those companies that have fully engaged their time and human resources to the initiative clearly understand the importance of TSM. What was particularly revealing is that the companies we visited have, to some extent, been already adhering to the TSM Protocols, even at the very basic level of compliance. This is not at all surprising, considering the many standards and audits our local companies are required to undergo by regulators, particularly the DENR-MGB. Hurdling the “Level B” in most of the Protocols would not be a problem if the mines faithfully follow the provisions of their mining permits. Of course, there are Protocols that the local companies would need to improve on.”
For his part, VSP Joey Ayson, Geological Society of the Philippines chair and Philippine Mining and Exploration Association president, says “It wasn’t as easy as when we were undergoing desktop training. Though the evidences required to support self-ratings have been clearly identified, there were instances when the right documents weren’t submitted, or the wrong ones were, or that the required documents were filed under another criteria or level. But it’s part of the program’s growing pains. This is our first year after all. Interestingly, some companies have already been practicing some form of TSM – the Beyond Compliance method – long before COMP adopted it. They just lacked proper documentation.”
“I realized that all of us VSPs are still on a learning curve. We need to know a lot more, especially in areas within the Protocols that are not aligned with our professional backgrounds or experiences,” adds VSP Roland de Jesus, a retired MGB assistant director. “Some companies have yet to embrace TSM fully but, happily, most have assimilated the initiative’s guiding principles into their organizational culture. This bodes well for the industry.”
Cabalda says he found the process “both challenging and insightful”. “It was detailed and thorough, ensuring each aspect of the TSM standards was carefully assessed and verified. The process was also collaborative, offering plenty of opportunities for learning and growth. Overall, it strengthened my confidence in the system and the value it brings to our minerals sector.”
Advice
“If given the opportunity to advise mines that have not yet undergone validation, I will highlight to them three key points,” stresses VSP Ramon Santos, chairman of the Mining Engineering Board, Professional Regulation Commission. “First, the advantage of having their operations viewed from the outside. This provides a broader and an unbiased perspective. Second, impartial and honest validation of their self-assessments, providing credibility to how they rate themselves. Finally, the VSPs may be able to provide valuable recommendations that may not be apparent to internal auditors during the self-rating process. This is essential to driving continuous improvement.”
“TSM should not be considered as another bureaucratic layer and additional expense, but as an investment in being a responsible and sustainable miner,” Ayson points out. “As TSM encourages a Beyond Compliance approach, a company will easily meet current regulatory requirements and prepare itself well for a green mining future.”
“Operating companies need not be anxious about TSM because it will help them become self-aware on where they stand vis-à-vis global mining standards,” adds Sajona. “Once they align themselves to these standards and continue to strive towards a higher level of performance (the TSM having a multi-tier performance ranking), the evidences will speak for themselves. These will only lead to improved ESG performance, favorable public perception and, ultimately, improved bottom line.”
Public Reporting
The externally verified results will be made public in late 2024. Meanwhile, the highlights of the consolidated self-assessment reports and individual verified results will be discussed in one of the sessions of “Digging Deeper”, a conference to be hosted by COMP on October 17, 2024 at The Westin Manila. The session will seek to determine avenues to further strengthen the members’ strong performance areas, to identify areas for improvement, as well as to find ways to contribute to the enhancement of the country’s policy environment.
“Transparency is essential to secure the trust of, and social acceptance by, host communities and stakeholders,” de Jesus emphasizes. “The transparency feature that can be gleaned from COMP’s public disclosure of externally verified self-ratings demonstrate the industry’s sincerity to inform stakeholders of the status of a company’s operations vis-vis adherence to international standards.”
Cabalda concludes: “TSM isn’t an added burden on the industry. I’d dare say, it helps COMP members to keep pace with the growing importance of global ESG standards. As ESG becomes more central to securing financing for mining projects, TSM can help position our mining industry to meet these demands and stay competitive on the global stage.
“More importantly, demonstrating a genuine commitment to ESG can go a long way in building trust with local communities and other stakeholders – a ‘TSM license to operate’. As these values become more visible, they can help shift public perception, encouraging more balanced and constructive dialogue about the role of mining and mineral resource development in our country.”
