Press Release: Extracting info from mining industry remains tough despite transparency initiative

Mining operations scored low in terms of transparency according to the Mining Transparency Index  (MTI) initiated by Bantay Kita (BK)

BK, a coalition of civil society organisations advocating transparency and accountability in the extractive industry, assessed the level of disclosure among operating mining operations. Despite the implementation of the Extractive Industry Transparency Initiative, however, information from the industry remain unavailable to the public.
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The MTI covered a broad range of areas including a mining operation’s commitment to transparency, financial disclosure, social and environmental disclosure, operations disclosure, and documentary disclosure. It was implemented twice to cover the mining projects that were targeted in the first and second report covering the year 2012 and 2013, respectively.

The 2012 implementation covered 29 mining operations. The general index score was very low at 31 percent. They scored high in financial disclosure (63%) and commitment to transparency (60%) while scoring very low in other areas. The average score for social and environmental disclosure was only at 8%; operations disclosure (22%); and documentary disclosure (3%). The 2013 results show a slight increase with general index score at 34%.

The EITI implementation is focused on disclosing payments made to various government agencies and indigenous peoples groups and also contracts. Financial disclosures, however, do not necessarily reflect the impact of extractive companies to the communities. Most disclosures are minimum requirements that are already mandated by government and stock exchanges. Government as regulating authority must be at the forefront of advocating disclosure of information.

Biggest coal company remains defiant, snubs EITI
Semirara Mining and Power Corporation, the country’s single biggest coal mining company, defied EITI for the second time. The company its cost and price competitiveness among regional competitors.
In 2013, the company paid no income taxes and only remitted P1.3 billion as part of government share from coal extraction. The company also claimed expenses almost 81% of its revenues. The non-participation of SMPC being the biggest coal player in the country jeopardizes the country’s compliant-status accreditation. The Department of Energy has not be successful in its attempt to pursue SMPC’s participation.

Mining monitoring reports lack substance, P89 million mandatory expenditures left unaccounted for
According to the 2nd EITI report, monitoring reports on social and environmental protection expenditures lack substance. The report claims that these documents do not explicitly provide concrete accomplishments that are related to their expenditures. These documents are hardly disclosed by companies as shown in the low average score of companies in social and environmental disclosure area of the index. Disclosures by companies are mostly summaries of activities and not the actual documents they submit to government. The Environmental Management Bureau also failed to disclose environmental impact assessment documents of 12 mining companies saying that they have lost track of the approved documents.
Mandatory expenditures in 2013 totaled P2.6 billion pesos. Of the total amount, P89 million remained unaccounted. The report recommends that MGB continue its monitoring efforts of these mandatory expenditures and funds.

Government lost 3 billion from tax incentives granted to mining companies
In 2013, 8 mining companies were granted income tax holidays. Using EITI data, estimates of losses from these tax holidays amount to P3 billion pesos or 34% of what could have been collected.
The process of granting incentives is done by the Bureau of Investments (BOI). The BOI did not disclose the process of granting incentives to the Philippine EITI.
Bantay Kita aims to use the Mining Transparency Index to advance the level of transparency in the extractive industries.