Alternative Minerals Management Policy - February 2011


Published on

Alternative Minerals
Management Policy

Legal Rights and Natural Resources Center-Kasama sa Kalikasan
(LRC-KsK/Friends of the Earth-Philippines)

February 2011

Published in: Investor Relations
  • The United States Department of the Interior, Minerals Management Service (MMS), has prepared a final programmatic EIS in support of the establishment of a program for authorizing alternative energy and alternate use (AEAU) activities on the Outer Continental Shelf (OCS), as authorized by Section 388 of the Energy Policy Act of 2005 (EPAct), and codified in subsection 8(p) of the Outer Continental Shelf Lands Act (OCSLA).
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  • Alternative Minerals Management Policy - February 2011

    1. 1. Alternative Minerals Management Policy Legal Rights and Natural Resources Center-Kasama sa Kalikasan (LRC-KsK/Friends of the Earth-Philippines) February 2011
    2. 2. Community Resources <ul><li>Ecosystems </li></ul><ul><li>Communities </li></ul><ul><li>Minerals </li></ul>
    3. 3. The Law and Natural Resources <ul><li>Our law views that all natural resources are owned by the state, regardless of who holds or owns the surface rights </li></ul><ul><li>The government reserves for itself the power how and to whom mineral rights are allocated </li></ul>
    4. 4. Philippine Minerals Policy <ul><li>Small Scale Mining Act </li></ul><ul><li>Mining Act of 1995 </li></ul><ul><li>Mineral Action Plan </li></ul><ul><li>Revitalization of the Philippine Minerals Industry Program </li></ul>
    5. 8. PPP
    6. 9. Council on Foreign Relations, September 23, 2010, New York
    7. 10. P’NOY says . . . <ul><li>I came here to declare that the Philippines is open for business under new management. </li></ul><ul><li>Our doors are wide open for investors, particularly in tourism, business process outsourcing or BPO, mining, electronics, housing and agriculture sectors. </li></ul><ul><li>The Philippines has vast minerals resources that are still untapped. It has one of the world's largest deposits of gold, nickel, copper and chromite. Through responsible mining, we intend to generate more revenues from the extraction of these resources. </li></ul>
    8. 13. Overly generous fiscal and non-fiscal incentive regime . <ul><li>From 1999 to 2004, foregone revenues as a result of these incentives amounted to 100 to 150% of current fiscal deficit (DOF, MGB) </li></ul><ul><li>An example: Lafayette Rapu-Rapu reduced its tax obligations by 91% (2006 Rapu-Rapu Fact Finding Commission) </li></ul><ul><li>Tax foregone from mining.doc </li></ul>Projected excise tax – $70.6 M; Projected income tax –$461.88M Figures are misleading because of numerous incentives given out by Mining Act and Omnibus Investments Act. Export Development Act and Special economic Zone Act of 1995 also provide other incentives. Omnibus Investments Act Mining Act Income tax holidays Incentives for pollution control devices Tax exemptions on imported spare parts, wharfage dues, export tax, duty and impost fees Income tax carry forward losses; income tax accelerated depreciation on fixed assets Tax credit on raw materials and supplies Tax holidays for national taxes Deductions from taxable income for labor expense and necessary and major infrastructure works
    9. 14. Absence of forward and backward linkages Mining has almost non-existent forward linkages with the Philippine economy Most mining operations involve extraction and immediate exportation of minerals for processing abroad. In fact, 85% to 90% of mining gross production value is export value of minerals. There is only 1 smelter and refinery in the country i.e. Philippine Associated Smelting and Refining Corporation. Its Leyte plant smelts raw copper in copper cathodes, which is again exported (to Japan) In 2000, for every peso of output from the mining sector (and this includes quarrying), only 36 centavos of input is sourced locally.
    10. 16. Conflicting / competing Laws <ul><li>RA 7942 – Local Government Code </li></ul><ul><li>RA 7942 – Indigenous Peoples Rights Act </li></ul><ul><li>RA 7942 – Environmental Impact Assessment </li></ul>
    11. 17. RA 7942 <ul><li>It promotes the exportation of raw minerals without maximizing the benefits of such resources for the Filipino people; </li></ul><ul><li>It fails to take into consideration externalities or negative impacts, thus leaving the communities and the local government units to bear the brunt of such impacts; </li></ul><ul><li>It prioritizes exploration, development and utilization of mineral resources over and above food security and environmental conservation; </li></ul>
    12. 18. RA 7942 <ul><li>It grants too much power for decision-making to the President, when resources are the only heritage of the Filipino people, meanwhile disempowering local communities through lack of participatory mechanisms; </li></ul><ul><li>The law is not consistent with sustainable development; </li></ul><ul><li>It grants too many incentives for investments, including confidentiality of information, return of investments, tax-breaks, etc.; </li></ul>
    13. 19. RA 7942 <ul><li>It lacks systems that would ensure payment and compensation of affected communities and local government units; </li></ul><ul><li>It fails to provide for punishment and accountability on social impacts, including human rights violations; </li></ul><ul><li>It fails to provide a rational and comprehensive benefit-sharing among the stakeholders; </li></ul>
    14. 20. RA 7942 <ul><li>It fails to consider the physical characteristics of the Philippines that is not conducive to industries like these, despite claims that the Philippines has a rich mineral resource, when the country in fact is also a rich agricultural country; and </li></ul><ul><li>It allows 100% ownership and control of natural resources to foreigners. </li></ul>
    15. 21. DAPITAN INITIATIVE 2002 <ul><li>“ uphold indigenous people's rights and achieve a more ecologically sound, gender-fair, equitable system of resource management .” and to </li></ul><ul><li>“ work for a democratic and consultative process in enacting a new legal framework to achieve a wise stewardship of our natural resources .” </li></ul>
    16. 22. Alternative Minerals Management Principles <ul><li>Conservation of mineral wealth </li></ul><ul><li>Rational needs based utilization and domestic use oriented mineral management </li></ul><ul><li>Link to national industrialization and development of agriculture </li></ul><ul><li>Link to larger natural resources management and economic development </li></ul><ul><li>Establishment of no-go zones </li></ul>
    17. 23. Alternative Minerals Management Principles <ul><li>Prioritization of more beneficial land use over mining as well as prioritization of remining, recycling and rehabilitation </li></ul><ul><li>Respect and protection of human rights </li></ul><ul><li>Recognition and establishment of ownership of indigenous peoples over their mineral resources </li></ul><ul><li>Watershed system framework in looking at affected communities </li></ul>
    18. 24. Alternative Minerals Management Principles <ul><li>Local empowerment and local governance through the multisectoral minerals council </li></ul><ul><li>Prohibition of 100% foreign owned corporations in mining operations </li></ul><ul><li>Establishment of corporate transparency and accountability </li></ul><ul><li>Equitable sharing </li></ul><ul><li>Human rights protection </li></ul>
    19. 25. Steps taken <ul><li>2009 filing – HB 6342 </li></ul><ul><li>2010 – HB 206, HB 3763 </li></ul>
    20. 26. HB 3763 in a Nutshell <ul><li>43 pages </li></ul><ul><li>16 chapters </li></ul><ul><li>163 sections </li></ul>
    21. 27. HB 3763 in a Nutshell <ul><li>Conservation </li></ul><ul><li>National Development Plan: National Industrialization and Modernization of Agriculture </li></ul><ul><li>To serve local development needs </li></ul>
    22. 28. HB 3763 in a Nutshell <ul><li>Identification of Strategic Minerals </li></ul><ul><li>Identification of Mineral Areas by the MGB </li></ul><ul><li>Identification of corresponding Watershed Continuums </li></ul>
    23. 29. HB 3763 in a Nutshell <ul><li>Establishment of Multi-Sectoral Mineral Council composed of representatives of the national government (DENR and MGB), representatives from the affected local government units, peoples’ organizations and the local indigenous communities </li></ul><ul><li>(based on the watershed continuums) </li></ul>
    24. 30. HB 3763 in a Nutshell <ul><li>NO-GO ZONES </li></ul><ul><li>The following areas shall not be opened to mining: protected areas, including buffer zones; protection forests; old growth or primary forests; head waters of the watershed; densely populated areas; critical habitats; Critical watersheds; High conflict areas; Climate disaster-prone areas; geohazard areas; Historical and cultural heritage, CARP lands, Prime agricultural lands, Small Islands Ecosystems, and provinces / areas with ordinances against mining activities e.g. Palawan </li></ul>
    25. 31. HB3763 in a Nutshell <ul><li>If MMC OKs mining -it could enter into either a mineral production sharing permit; a joint venture agreement: or a co-production agreement - with an interested party that has submitted a mine development proposal including an Environmental and Social Impact Prevention and Mitigation Plan. (ESIPMP) which will contain a Social Development Management Plan. </li></ul>
    26. 32. HB3763 in a Nutshell <ul><li>TERM of mineral agreement = mine life + five years. </li></ul><ul><li>No term shall exceed 15 years. </li></ul><ul><li>The maximum area allowable will be 500 hectares, no person shall be awarded in excess of the total contract area of 750 has. in any given watershed area. Mandatory consultations shall be made in each mining phase. </li></ul>
    27. 33. HB3763 in a Nutshell <ul><li>Ban on Open Pit Mining </li></ul>
    28. 34. HB3763 in a Nutshell <ul><li>ON CONSENT </li></ul><ul><li>Mandatory consultations in each mining phase </li></ul><ul><li>FPIC process according to traditional and customary practices and beliefs </li></ul><ul><li>For private owners – written consent </li></ul>
    29. 35. HB3763 in a Nutshell <ul><li>ON TAXES </li></ul><ul><li>The following shall be required of the contractor: contractor’s income tax; customs, duties and fees on imported capital equipment; value-added tax on imported goods and services; withholding tax on interest payments on foreign loans; withholding tax on dividends to foreign stockholders; documentary stamps taxes; capital gains tax; excise tax on minerals; local business tax; real property tax; community tax; occupation fees; registration and permit fees; water usage fees; as well as - mine wastes and tailings fees; Performance Bond for rehabilitation; Environmental Insurance. The incentives given to the contractor will be for pollution control or mitigation devices. </li></ul>
    30. 36. HB3763 in a Nutshell <ul><li>ON SHARES </li></ul><ul><li>The national government share will be 10% of gross revenues on areas outside ancestral domains. </li></ul><ul><li>Indigenous peoples shall be entitled to at least ten per cent (10%) from gross revenues on areas that are within ancestral domains. </li></ul><ul><li>Local government units. The local government unit share shall be determined by taking into consideration the classification of the local government, vulnerability and human development index. </li></ul>
    31. 37. Where are we at now? <ul><li>: filed at the lower house </li></ul><ul><li>: search for champions at the Senate </li></ul><ul><li>: CBCP endorsement </li></ul><ul><li>: multi-sectoral campaign coalition </li></ul><ul><li>: round table discussions </li></ul><ul><li>: sectoral discussions – women, HR, environmentalists, religious, LGU, media ; </li></ul><ul><li>: geographical discussions </li></ul>
    32. 38. Support needed <ul><li>More champions </li></ul><ul><li>More volunteers </li></ul><ul><li>More spaces for discussion </li></ul><ul><li>More ideas! </li></ul><ul><li>More resources </li></ul>
    33. 39. Maraming salamat. PADAYON. .