Gov’t to monitor mining revenues

Press Release
September 14, 2011

MALACAÑANG  –  The Aquino administration is taking steps to ensure that profits generated by mining companies translate into state revenues and that mining benefits trickle down to the general public, Executive Secretary Paquito N. Ochoa Jr. said on Wednesday.

In a speech at the Mining Philippines 2011 Conference and Exhibition held in Pasay City, Ochoa revealed the country’s intention to apply for compliance status with the London-based Extractive Industry Transparency Initiative (EITI) to help achieve the much-needed reforms in the mining industry.

EITI is a global initiative that requires participating governments to publicly report the revenues they receive from extractive industry companies and for those companies to publicly report the revenues they pay to government. This mechanism allows more transparency in revenue reporting.

“High on our agenda is transparency in revenues derived from mining,” Ochoa said, as he pointed out the need to determine how the mining sector contributes to sustainable development.

“Further reforms are therefore needed to ensure that the acceptability of mining is enhanced and its impact as a driver of economic growth is truly felt,” he added.

Data from the Department of Environment and Natural Resources show that mining contributed P110 billion to the gross domestic product and generated P12.5 billion in tax revenues, royalties and fees for the government last year.

Ochoa said the country’s EITI candidacy and subsequent membership is consistent with the “vision of good governance” of the Aquino administration.

“It will be a strong manifestation of transparency if the payments and revenues received by the government from the development of the country’s mineral resources and how these are utilized are made public,” Ochoa told the conference attended mostly by industry players who comprise the Chamber of Mines of the Philippines.

The Executive Secretary said that while the Mining Act of 1995 has put in place environmental and safety nets to address mining concerns, efforts must be stepped up for awareness and strict compliance of the law.

He also underscored the need to strike a balance between mining and protecting the environment and natural resources toward achieving enhanced social acceptability of mining operations.

Aware that the Philippine mining industry has been the subject of intense scrutiny by various sectors, Ochoa called on industry players to overcome the negative stigma attached to mining and to continue to work hard to gain public acceptability.

“But done in a manner that takes into consideration the importance of safeguarding the environment, we know that mining can contribute significantly both to sustained economic development and poverty reduction in the countryside,” Ochoa said, citing the case of countries like Canada, Australia and Chile where mining has contributed to economic growth and development.

“For mining to be acceptable, it must be guided by the principles of sustainable development, environmental protection, social equity and, of course, good governance,” Ochoa added. “Mining must also be pursued alongside other economic activities that are compatible with it, including agriculture and eco-tourism.”

Speaking on behalf of President Benigno Aquino III, Ochoa also acknowledged the mining industry’s commitment and participation in the National Greening Program (NGP), pursuant to Executive Order No. 26 which the Chief Executive signed on February 24.

Far from the usual reforestation program, NGP is a government priority program that aims to curb poverty, promote food security, environmental stability and biodiversity conservation, and enhance climate change mitigation and adaptation.

The NGP also seeks to substantially increase the number of trees nationwide to improve water quality in rivers and irrigation for farm lands, reduce the potential for flooding, soak up carbon dioxide out of the atmosphere, and lay the foundation for an expanded wood-products economy.

“The program specifically seeks to plant 1.5 billion seedlings in 1.5 million hectares of public lands nationwide in six years, from 2011 to 2016 – more than twice the government’s accomplishment for the past 25 years, which is estimated at 730,000 hectares,” Ochoa said.

Ochoa described as a “step in the right direction” and a “clear manifestation of corporate social responsibility” the announced commitment of the mining industry to reforest 34,000 hectares over the next three years.