Bantay Kita questions the decision of the House of Representatives – Committee on Ways and Means in fast-tracking the approval of the unnumbered substitute bill to establish the fiscal regime for the mining industry.
The bill proposes a margin-based royalty on income for all metallic mining operations outside mineral reservations i.e. margin of 1% up to 10% shall pay 1 percent royalty. The Committee also lowered royalty payments of mining operations within mineral reservation, from 5 percent to 3 percent.
The Committee on Ways and Means also accepted the motion to remove provision on surcharge and banning open pit mining. Speaker Gloria Macapagal-Arroyo who proposed provision agreed into its deletion – this is contradictory to her recent pronouncements to push for a total ban on open pit mining in the Philippines.
Bantay Kita consistently proposes 5 percent mineral royalty payments on all mining operations that would add a total of at least Php 2.5 billion to government revenue. This is also administratively more feasible in terms of transparency and ease of collection. Royalties are to guarantee payments to the government as resource owner. The margin-based royalty on income of operations will not ensure payments for minerals, and if royalty is profit-based, the government will be collecting less over the mine life. Also, will profit information be publicly disclosed so that the community can monitor proper payment of taxes? Will the costs of operations be disclosed publicly? Congress should ask for simulation of tax collection – the government might end up with even lower tax take before the increase in excise tax.
Bantay Kita appeals to the Congress to approve tax regime that ensures fair and equitable share from the one-time extraction of the country’s mineral resources.
Open contracting is anchored on the principles of transparency and accountability around the use of public resources. It involves the disclosure of timely and complete data and documents in open format related to planning, tendering, award, implementation, and termination of contracts. It promotes citizen engagement by providing a platform for participation and feedback in all stages of contracting. This aids in enhanced monitoring, reduced corruption, and improved implementation, among others.
Public procurement in the Philippines embraces these principles. The Government Procurement Reform Act mandates disclosure of information, participation of civil society as observers to the process, and encourages competition. However, mining contracting is governed by a separate law.
The 1995 Philippine Mining Act necessitates the public announcement of exploration and mineral agreement applications. It also provides space for citizens to lodge objections prior to decision-making. The Act deputizes environmental compliance monitoring to a multi-stakeholder group, including civil society. It also requires that any mining activity within ancestral domains must seek prior consent from Indigenous Peoples. The Mining Law allows for exploration permit grantees the first option to apply for mineral agreements, and not through competitive public bidding.
The Philippine Mining Act had been fraught with opposition. The 1996 Marcopper environmental disaster fueled mass opposition against mining. In 1997, constitutionality of some provisions of the Act were questioned. In mid-2000s, the Supreme Court ruled with finality in favor of its constitutionality.
Urgency to implement transparency and accountability measures were paramount due to confusion and conflict surrounding the mining sector.
In 2011, the Philippines co-founded the Open Government Partnership. In 2012, the Philippines committed to participate in the Extractive Industries Transparency Initiative (EITI). The EITI ushered in the opportunity for openness in the sector. Through the country’s Annual EITI Report, relevant data and documents are made available at a single source. The Philippine Government launched a platform in 2014 meant to consolidate data from different government entities in formats intended for easy sharing, searching, and use. By 2015, EITI compliance, access to information law, and open data were among the country’s commitment to the OGP. In line with these commitments, PH-EITI took another step by developing a contracts portal with support from the Natural Resource Governance Institute, the World Bank, Columbia Center on Sustainable Development and the EITI MDTF through UK aid.
The drive for transparency was further accelerated when President Rodrigo Duterte signed the Freedom of Information executive order, calling upon agencies to disclose public contracts and records requested by citizens.
In December 2016, the PH-EITI Multi-Stakeholder Group agreed to the Open Data Policy that describes digital data as having characteristics required for it to be used, reused, and redistributed by anyone, anytime, anywhere.
The PH-EITI Contracts Portal contains over 50 extractives contracts and supporting documents including mining project feasibility studies, and social and environmental monitoring reports, among others. Contracts are annotated for easier understanding. The site is searchable, and some supporting documents are in open data format. Prior to this, contracts were not public. Supporting documents were lodged in different government agencies in physical form.
As a member of environmental mining oversight committees, civil society can assess the company’s compliance to environmental regulations. If a violation is committed, sanctions including suspension, may be carried out. Environmental compliance reports are disclosed through the Philippine extractives contracts portal. Citizens who are not part of this committee can also conduct parallel assessments to validate reports.
Citizens can also validate if the mandatory social development allocations are fulfilled and are aligned with the local development plans of the community. These allocations are intended to contribute to “sustained improvement in the living standards of host and neighboring communities by creating responsible, self-reliant and resource-based communities capable of developing, implementing and managing community development programs, projects, and activities in a manner consistent with the principles of sustainable development”. The social development reports may also be found in the contracts portal. Bantay Kita (BK) assessed the reports and found that it runs the risk of duplicating local government projects. In this respect, BK asserts that it would be more efficient if the allocations support existing local development plans.
By referring to coordinates of an approved mining area as reflected in a contract, communities can potentially check if the mining activities are within the agreed boundaries.
Bantay Kita utilized information in mining feasibility studies as assumptions to conduct fiscal modeling. Results can help Indigenous Peoples and local governments determine if it is beneficial to have mining companies operate in their areas; and if so, to ensure that they get a fair share.
BK informs communities of relevant data in the Portal and capacitates them so that they can validate company reports, make meaningful decisions regarding natural resource management, and demand accountability.
While there are OGP commitments like the EITI, open data policy, and freedom of information that increase openness and support citizen engagement, the contracts portal is an innovation particularly intended to further democratize access to data and related documents in the mining sector. These open contracting initiatives face challenges including:
Strides have been made, but efforts remain fragmented.
Talks are underway between PH-EITI and the Department of Information and Communications Technology (DICT) to migrate the contracts portal. Originally, the portal would have been relaunched by end of June. However, slow government implementation is hampering transfer.
The Mining and Geoscience Bureau developed a website containing similar data. The site contains a list of mining agreements, exploration and mineral processing permits, mine safety, health and environment, employment, geological, operational and administrative data. Though data in this site is more updated, it remains inconsistent and incomplete. Most data are aggregated where granularity is needed, and supporting documents are not provided due to the limited bandwidth.
Aside from the challenges mentioned, there is still a need to capacitate communities; and develop user-centered knowledge products to understand and appreciate data for more meaningful engagement in natural resource management. Opportunities for citizen participation, particularly in the planning, awarding, closure/rehabilitation phases are limited. Where community engagement is present, information symmetry and genuine consent process are questionable. Moreover, a credible selection process for community representatives is lacking. A feedback loop between representatives and their constituents is also missing.
Bantay Kita is working on these issues in collaboration with key stakeholders: through civil society networks like PWYP; targeted outreach to communities, government, and industry; and platforms like the EITI and the OGP, but much remains to be done.
 The Philippine Mining Act of 1995 and its Implementing Rules and Regulations
 International Open Data Charter. http://opendatacharter.net
 DAO No. 2000-99, Section 2(o)
*This handout was prepared for the Publish What You Pay Asia Pacific Regional Meeting held last August 8-9, 2018 at Jakarta, Indonesia.
Bantay Kita calls on DENR to uphold process of public consultations in application for exploration permit
Bantay Kita, a national coalition advocating for enhanced natural resource governance, appeals to the Department of Environment and Natural Resources (DENR) to uphold process of meaningful public consultations as it lifts the moratorium on applications for exploration permit of metallic and non-metallic minerals through Administrative Order 2018-13.
Exploration will determine an area’s mineral potential. This can guide government in identifying if and how much minerals it is willing to develop.
“Exploration requires consent from local government units and communities. We welcome information that would help stakeholders make evidence-based decisions. We expect that necessary data and documents are disclosed to them so that they can arrive at factual conclusions. We urge that the consent process be genuinely applied, and decisions made by stakeholders be respected,” Bantay Kita Coordinator Tina Pimentel stressed.
Executive Order (EO) 79 S. 2012, Section 4 allows the granting of exploration permits, despite the moratorium on issuance of mineral agreements. It also states the exploration permit grantee shall be given the right of first option to apply for development of minerals in the exploration site.
EO 79 Section 6 provides that “mining rights and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the Government and all expired tenements, shall be undertaken through competitive public bidding.”
“In light of the lifting of the exploration moratorium, we implore the Mines and Geosciences Bureau (MGB) to prepare the guidelines for competitive public bidding, with emphasis on transparency and citizen engagement at the soonest. We also appeal to the DENR to release the results of the mining audit which is said to be the basis for the lifting of the exploration permit moratorium,” Ms. Pimentel concluded.
Bantay Kita, a national coalition that advocates for transparency and accountability, lauds Senator Grace Poe for filling Senate Bill (SB) No. 1883 – an act improving disclosure and transparency of the extractive industries. The bill upholds the right of the people to information on matters of public concern such as the mining, coal, oil and gas industries. It also helps ensure that development and utilization of natural resources provide intergenerational benefits to all Filipinos.
“The purpose of this bill is aligned with Pres. Duterte’s call during the SONA to guarantee that extractives proceeds contribute to all, not just a select few, for today and tomorrow,” said Bantay Kita National Coordinator Tina Pimentel.
SB 1883 institutionalizes the Philippine Extractive Industries Transparency Initiative (PH-EITI) which will ensure the sustainability of the disclosure of relevant and timely data including taxes and fees collected by government, and social and environmental monitoring reports. The bill is a timely complement to the on-going fiscal rationalization that impacts extractive companies.
The PH-EITI shall be operationalized through the Multi-Stakeholder Group, which represents all sectors – from the industry, government, civil society, and indigenous peoples.
“With the disclosure of data, communities will be able to make better and informed decisions. EITI offers a space for citizens to engage in resource management,” Ms. Pimentel added.
The direct and non-direct payments received by the local government units shall be provided and disclosed in a detailed report through the Environment and Natural Resource Data Management Tool (ENRDMT). This tool will assist local governments units in tracking proceeds from national wealth and enable them to plan accordingly. The ENRDMT will enable the public to monitor expenditures made against these proceeds, leading to enhanced public financial management and ability to guarantee that proceeds contribute to sustainable development.
The Bill requires a publicly available register of beneficial owners. Beneficial owners are natural persons who ultimately own or control extractive companies.
“A beneficial ownership registry will lead to increased accountability, help track illicit financial flows, ensure correct tax payments, and enable government to enforce foreign ownership restrictions,” Tina Pimentel stated.
52nd PH-EITI MSG Meeting - EITI MSG with the new civil society representatives and Madagascar delegates
Bantay Kita reconvened the Selection Committee to help identify individuals who would best represent civil society’s interest in the Ph-EITI MSG. The seven (7) new civil society representatives were welcomed during the 52nd MSG Meeting at the Palacio del Gobernador, Intramuros, Manila.
The new civil society representatives to the PH-EITI MSG are: Aniceta Baltar, Concerned Citizens of Abra for Good Governance and Atty. Jansen Jontilla, Environmental Legal Assistance Center, Inc. as Luzon representatives, Dr. Glenn Pajares, Sectoral Transparency Alliance on Natural Resource Governance in Cebu, Inc. and Ladylyn Mangada, Philippine Political Science Association as Visayas representatives, and Chito Trillanes, Social Action Center – Ecology Desk, Diocese of Tandag, Surigao del Sur and Nelson Cuaresma, Concerned Advocates Saving Terrestrial and Marine Ecosystems, Inc. as Mindandao representatives. Finally, to represent the indigenous peoples' rights in Luzon, Esther Roxanne Veridiano, Philippine Task Force for Indigenous People’s Rights.