Local coal get
away tax-free in approved coal tax
Green groups slam DMCI for
using ‘sneaky tactics’ to avoid regulation
December 12, 2017
QUEZON CITY –
Advocates for consumers, accountability, and the environment
expressed dismay over the ‘midnight exemption’ accorded to local
coal mining companies from the new coal tax approved by both Houses
The coal tax hotly
contested by local coal mining proponents, particularly DMCI and
Semirara Mining and Power Corp. (SMPC)’s Isidro Consunji, was
recently approved through a bicameral session held last December 12.
The mechanism will levy a P50 tax on both local and foreign coal to
be used domestically as both a mechanism for revenue generation and
for helping drive the country’s shift to renewable energy.
“Like a thief in the
night, DMCI and SMPC have successfully influenced Congress to delete
the approved provision including local coal in the coal tax,” said
Atty. Aaron Pedrosa, Secretary-General of the multi-sectoral
coalition Sanlakas. “This goes against the spirit of the proposed
law, which would supposedly rein in the country’s continued reliance
on coal for energy,” he added.
Pedrosa pointed out that
the exclusion of local coal from the tax will only encourage the
expansion of coal mining in the country. “Exempting local coal
producers will incentivize indigenous coal production in the
Philippines, contrary to our commitment to curb our emissions and to
the detriment of the health, security, and livelihood of affected
communities,” he emphasized.
Mining in Semirara,
Antique is the oldest operating mine in the Philippines, and has
invited resistance from local residents due to the destruction of
environment and livelihood from the mining operations and expansion
in the island. SMPC currently is the largest coal producer in the
“It remains to be seen
whether the President will intervene in this blatant arm-twisting
done by this coal company,” said Pedrosa. “We challenge him yet
again to deliver on his supposed strong stance against oligarchs,”
he stated further.
Gerry Arances, Executive
Director for the Center for Energy, Ecology, and Development (CEED)
noted how DMCI mogul Isidro Consunji was very vocal about coal tax,
even threatening consumers with increased electricity prices if the
mechanism should push through.
“The deletion of the
provision proves the suspicion that Consunji, DMCI, and SMPC were
not opposing the coal tax for the sake of consumers, but for their
own business interests,” said Arances. “For forty years, Consunji
has enjoyed the lack of taxation on coal while his workers in
Semirara island suffered dismal, even fatal, working conditions,” he
added, referring to the incident last July 2015 where nine (9) of
the company’s workers and last February 2013 where another five (5)
miners were killed.
Arances discussed that
SMPC has profited billions from the 40 years of untaxed mining
activity through an unfair revenue-sharing scheme. At present, the
coal industry enjoys one of the most lopsided revenue-sharing
agreements in the country, with coal companies able to deduct as
much as 90 percent of gross proceeds from coal as expenses, the
highest recoverable cost among extractive industry,” he added.
SMPC has also gained the
ire of environmental groups due to its refusal to participate in the
Extractive Industry Transparency Initiative (EITI) which aims to
encourage accountability from the mining sector in terms of its
operations and revenue.
“SMPC has never
participated in the EITI despite calls from the Philippine EITI
multi-stakeholder group, which includes the Department of Energy,
the office mandated to regulate the company,” said Tina Pimentel of
Bantay Kita. “This sneaky tactic further shows SMPC’s brazen
disregard for government regulatory functions and its power to
influence advocacy to serve their own interest,” she added.