Philippine Open Contracting in the Mining Sector: Policy and Practices

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.[1]
 
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[2] 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[3].   
 
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[4] 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[5], 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.[6]
 
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[7]”. 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:

• Absence and lack of access to timely, correct and complete data and documents.
• Limited bandwidth causing instability of the contracts portal site.
• The EITI process and open data policy are still not mainstreamed. Though progress has been made, there are still issues of weak record keeping and incompatible file formats. Documents are still stored in pdf or hard copies. Difficulties in file transfer, conversion sharing, system inoperability, connectivity, and coordination within government regional and central offices remain. The absence of a legal framework for sustained disclosure and citizen engagement, through an FOI and EITI laws hinder open contracting implementation in the sector.  Both bills are pending in Congress. The presence of the Data Privacy Act and Bank Secrecy Law also casts a shadow on data disclosure.
• Funding for sustainability remains an issue.
• Digital divide limits the reach and impact of on-line information.
• Culture of sharing has yet to be achieved.

 
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[8] 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.

[1]  The Philippine Mining Act of 1995 and its Implementing Rules and Regulations
[2] https://www.rappler.com/move-ph/issues/disasters/165051-look-back-1996-marcopper-mining-disaster
[3] http://www.chanrobles.com/cralaw/2005februarydecisions.php?id=109
[4] https://data.gov.ph
[5] https://www.foi.gov.ph/downloads/EO-2-s-2016-signed-copy.pdf
[6] International Open Data Charter. http://opendatacharter.net
[7] DAO No. 2000-99, Section 2(o)
[8] http://databaseportal.mgb.gov.ph

*This handout was prepared for the Publish What You Pay Asia Pacific Regional Meeting held last August 8-9, 2018 at Jakarta, Indonesia.