BWorld 162, Open pit mines and open economy

* This is my article in BusinessWorld on October 27, 2017.

Open pit mining (OPM) is not as scary and draconian as many activists would paint it to be. Thus the ban on OPM by the CA-rejected ex-DENR secretary Gina Lopez has little or zero technical basis, only emotional outburst.

The Mining Industry Coordinating Council (MICC), the multi-stakeholder body on the sector has finally decided that the ban on OPM should be abandoned and new DENR Secretary Roy Cimatu has said that he will soon issue a new department order for this.

OPM is done and practiced in many countries including developed ones like the US, Australia, Germany, Sweden and Canada. Mining firms and their stockholders get good income, governments get huge tax revenues, many workers get long-term high-paying jobs, and consumers worldwide enjoy continued supply of electricity, gadgets, appliances, cars, steel bars and numerous other products of mining. (See table)

Now that the uncertainty of OPM banning has been removed, existing mines should be able to continue their production without fear of policy reversals. The image of the country as having fickle, atras-abante investment policies should be somehow corrected.

New, big prospective mining projects in the Philippines will hopefully see the green light for their operations. Two of those big potential projects are (1) the $2-billion MVP-led Silangan gold mine in Surigao del Norte, and (2) the $5.9-billion Tampakan gold-copper project in South Cotabato. The latter is actually the Philippines’ single biggest foreign investment project and is expected to bring huge income for the locals and the government, national and local.

Many local anti-mining groups vehemently oppose the Tampakan project citing thousands of hectares of land that will soon be wasted. That is an outright exaggeration. The copper-gold ore extraction in just one area is projected to be about 2.5 kms. wide, 3 kms. long and about 0.8 km deep, after 17 years of operation. This is significantly smaller than the Hibbing and Bingham Canyon in the US, among other big OPMs in the world.

Government should simply set the parameters and criteria for business to follow based on existing laws, like the Mining Act of 1995. Once government has given its permit and approval for a mining project, it should simply monitor the players that they comply with the laws and penalize violators, not change rules midway and in the process, violate the laws that it is bound to follow and implement in the first place.

The rule of law applies not only to businesses and regulated entities but also to the government. The rule of law applies to both governors and governed, both administrators and administered, both regulators and regulated. If governors and regulators want to exempt themselves from the law and make their own instant rules, that is the rule of men with arbitrary powers circumventing the rule of law.

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See also:
BWorld 151, Mining taxes per hectare of land, September 22, 2017
BWorld 159, Electoral reforms and the President, October 19, 2017 

BWorld 160, A high carbon tax is irrational, October 25, 2017 

BWorld 161, The sin of smuggling and corruption in the Sin tax law, November 02, 2017

Mining 51, Gina Lopez, Roy Cimatu and rule of law

When Gina Lopez was finally rejected as DENR Secretary by the Commission on Appointments (CA), lots of conspiracy hypothesis were flying. And one thing I notice about these comments and opinions is that it seems all of the people who spread such opinions did not watch the 2 1/2 hours CA hearing of Gina last May 02, 2017.

I watched it in full and here are my impressions:

1. Simple questions answerable by Yes or No, Gina cannot answer. Her mind and mouth is full of emotions, little or nothing on specifics, numbers and law.

2. Three questions by Sen. Alan Cayetano: (a) how much of total PH land area is actively mined, (b) beach resorts, how much of total coastal land of the PH have beach resorts, (c) what are the standards and criteria for her recent orders on mine closure — she could not answer.

3. Questions on land multiple titles involving DENR corruption resulting in perennial land grabbing problem raised by 3 Congressmen, what she’s doing about it in her 10 months in office, she was clueless, no specific answer, only generalized ones like “we are cleaning up the department” or “we are computerizing things.” She can suspend or close down many mining firms that follow certain regulations but she cannot suspend or kick out any corrupt officials in her department the past 10 months.

4. Question on very dirty rivers like Marilao river, Pasig river, she answered “structural problems” daw, despite heading the Pasig river clean up commission. She has no specific plans to clean up these rivers.

5. Questions on unabated logging, she has no clear answer.

6. Questions on legal basis, what existing laws, as basis for her recent AOs (Administrative Orders) on P2M/hectare of “disturbed” agri land as deposit — no answer. She argued “my prerogative” as Secretary.  Congw. Josephine Sato who insisted on this issue is very specific in her points — “we are a nation of laws, not of men”. Our actions and policies should be based on existing laws, not on whims of men/women leaders. Bright legislator.

DENR work is more than mining. She’s very hard-working, very passionate, only in anti-mining campaigns. But she’s lazy on other mandates of the DENR. Gina's big problem is her big ego.

I liked Congw. Sato’s rejection of Gina’s “my prerogative as Secretary” answer to her question. Department Secretaries cannot legislate on their own, otherwise Secretaries of DA, DOTC, DPWH, DSWD, DAR, etc. can just issue dozens of AOs or Department circulars (DCS) creating new prohibitions and regulations, new fines and penalties, new subsidies and entitlements — all bypassing Congress as legislative body.

PDu30 made a mistake in appointing her as DENR Secretary even without fully scrutinizing her work ethics, her technical skills. Du30 corrected this mistake by not defending her at the CA.

People who oppose mining and argue “zero mining” are as confused as the people who say “zero fossil fuel”. These people should be riding bicycles or skateboards or just walking/running, or riding horses, cows, ponies. They should not ride cars, jeeps, buses, airplanes, ships because all these use fossil fuels 100%.

People who say “zero mining” don’t want to live in caves. Even barong-barong use mining products like nails, hammer, saw, bolo, etc. Hypocrisy always finds some scapegoats like the “oligarchs”, as if the Lopezes are not oligarchs.

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Last Monday, May 08, former AFP Chief Roy Cimatu was appointed as new DENR Secretary by President Duterte. A retired soldier, then labor diplomat in the Middle East, and now a DENR chief.

Perhaps near-zero official experience in managing an environment agency except in some tree planting activities of the AFP, his appointment is a guessing game for many sectors under DENR supervision — mining, forestry, solid waste, air pollution, coastal resources, rivers/lakes/sea water quality, land titling, etc.

Since all Cabinet posts are political appointees of the President, then it is assumed that the major policies of the appointed Secretary are also the policies of the President.

I am not a fan of “good governance” in a BIG government because it is a contradiction in terms. Big government almost always lead to bad governance because government would over-extend its power of coercion. Like creating a dozen new regulations on top of hundreds of regulations, laws and prohibitions that are already in place. That is what former DENR Secretary Gina Lopez did, creating new department regulations (administrative orders (AOs), department circulars (DCs), etc.) that pile up new requirements on top of existing ones, resulting in the closure and/or suspension of many mining firms.

The big question now is whether the new DENR Secretary will focus on the rule of law, enforce existing laws and regulations before creating new department orders or seek new laws in Congress. Like the laws regulating small-scale mines and quarrying equally implemented as the laws regulating large-scale metallic, non-metallic mines and quarrying.

This act alone of focusing on the rule of law will be a big improvement in the department and in the national government as a whole. A better situation of course is that many existing regulations that are “out of tune” are abolished, or consolidated with others so that instead of having 10 “out of tunes” AOs, DCs and other department orders, they are consolidated into one AO that is more “in tune” with the times.

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See also: 

Mining 48, Sec. Gina Lopez's rants, DENR inaction in other sectors, April 08, 2017 

Mining 49, Ma'am Monsod on poverty in mining areas, April 12, 2017 

Mining 50, Canada mining taxation, April 21, 2017 

BWorld 129, Open pit mines and the DENR Secretary, May 12, 2017