Presentation to the American Chamber of Commerce of the Philippines Legislative Committee Meeting Wednesday, August 29, 2012 Roderick

ck R. C. Salazar (rrcsalazar@fnslaw.com.ph) CoManaging Partner Fortun Narvasa & Salazar Law Offices Corporate Secretary Australian-New Zealand Chamber of Commerce Philippines, Inc. Why is the Philippine Mining Industry in a state of flux? Changing rules in the middle of the game. President Benigno Aquino III signed on July 6th Executive Order No. 79 entitled Institutionalizing and Implementing Reforms in the Philippine Mining Sector Providing Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the Utilization of Mineral Resources (EO 79) EO 79 aims to: 1. 2. 3. Increase revenues of government from mining Improve environmental standards Put consistency in national and local laws pertaining to mining.

Salient Features of EO 79 in relation to Pending Legislation: a. Moratorium - No new mineral agreements shall be entered into until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect. - EPs continue to be granted with first option to develop no longer exclusive right. Pending Bills at House of Representatives: 1. Draft Consolidated Bill to HBs 206, 1139, 2717, 3749, 3763, 4315 & 4726 - Alternative Minerals Management Bill i. HB00206 - The Philippine Mineral Resources Act of 2009 Principal Author: Taada, Lorenzo III Status: Pending with Committee on Natural Resources - since 2010-07-27 ii. HB04315 - The Peoples Mining Act of 2011 Principal Author: Casio, Teddy A. Status: Pending with Committee On Natural Resources - since 2011-03-09
This bill seeks to reorient the mining industry towards wise and sustainable development and judicious use of our mineral resources. It defines the significant roles that mining in attaining a progressive, independent and self-reliant economy. The bill addresses the need for an alternative framework of the mining industry anchored on the principles of social justice, respect for peoples rights and welfare, environmental conservation, defense of national sovereignty and patrimony and national industrialization.

iii.

HB03763 - The Philippine Mineral Resources Act of 2010

Principal Author: Bag-ao, Kaka J. Status: Pending with Committee on Natural Resources - since 2010-12-07 iv. HB01139 - Amending Chapter IV Section 20 of Mining Act by facilitating approval as well as cancellation of Exploration Permits Principal Author: Bichara, Al Francis Status: Pending with Committee on Natural Resources since 2010-08-02 HB02717 - Authorizing Provinces to issue both small and large scale mining permits. Principal Author: Amante-Matba, Ma. Angelica M. Status: Pending with Committee on Natural Resources since 2010-08-31 HB03749 Requires mining firms to reforest lands and forests Principal Author: Rodriguez, Rufus Bautista Status: Pending with Committee on Natural Resources since 2010-12-06
Mining firms are mandated to reforest 100 hectares of land for every one hectare of land they destroy or excavate in the course of their mining operations.

v.

vi.

vii.

HB04726 Adds to areas closed to mining applications those declared by LGUs as no mining zones Principal Author: Casio, Teddy A. Status: Pending with Committee on Natural Resources ince 2011-05-31

2.

HB05781 - The Philippine Mining Code of 2012 Principal Author: Pichay, Philip Arreza Status: Pending with Committee on Govt Reorganization - since 2012-02-08
This bill shall be known as the Philippine Mining Code of 2012. The bill institutes a new framework for the Philippine mining industry and consolidates all laws regards to mining. The bill creates the Department of Mines which shall absorb the powers and functions of the Mines and Geosciences Bureau.

3.

S.B.No.1359 the Philippine Economic Environmental and Natural Resources Accounting Act of 2010 Introduced by Senator Loren Legarda Pending since 07-13-2010.

b.

Establishment of Mineral Reservations for development of strategic industries of potential and future mining areas with known strategic mineral reserves and resources 5% royalty to Govt. Primacy of Constitution and national laws over local ordinances. LGUs limited to imposition of reasonable limitations on mining activities that are consistent with national laws and regulations

c.

Provinces that have passed Legislation Banning Mining: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Capiz Marinduque Palawan Romblon Negros Occidental Eastern Samar Northern Samar South Cotabato Zamboanga del Norte Guimaras Oriental Mindoro Occidental Mindoro Davao Oriental Zambales

Pending Legislation Banning Mining in Specific Areas : 1. 2. 3. 4. 5. 6. 7. HB06216 - Carigara Bay Area, Northern Portion of Leyte Province and Biliran Province; HB06218 Second District of Sorsogon; HB01064 - Cagayan de Oro City HB04815 - Province of Romblon HB04915 Province of Catanduanes HB05684 Davao City Senate Resolution No. 492 - Sibuyan Island

Pending Bills Re LGU Share in mining taxes: 1. HB04410 direct remittance to Host LGU of its 40% share - amending Local Government Code. Principal Author: Gonzales, Neptali II Main Referral: RULESStatus: Approved by House on 2011-05-16, transmitted to on 2011-05-24 and received by Senate on 2011-05-24 S.B No. 2987 increases LGU share in National Taxes from 40% to 50% Sen. Aquilino "Koko" L. Pimentel III

2.

d.

EO 79 expands coverage of areas closed to mining under Mining Act and National Integrated Protected Areas Systems Law, also dubbed by DENR as no-go zones, namely: 1. prime agricultural lands; 2. fisheries development zones; 3. tourism development areas (TDAs) as identified in National Tourism Development Plan (NTDP) 4. Other critical areas, island ecosystems, and impact areas of mining identified by DENR through mapping technology.

f. g. h. i.

Creation of Mining Industry Coordinating Council (MICC) Creating a One-stop Shop for all Mining Applications and Procedures Opening of areas for mining through competitive public bidding. Disposition of Abandoned Ores and Valuable Metals in Mine Wastes and Mill Tailings through competitive public bidding. Regulation of Small-scale mining activities 1. Reiteration of compliance with Peoples Small Scale Mining Act and PD No. 1586 on Environmental Impact Statement System Small-scale mining operations only within declared Peoples Small-Scale Mining Areas or Minahang Bayan Creation of P/CMRBs in provinces and cities where not yet constituted Small-scale mining not applicable for metallic minerals except gold, silver, and chromite Use of mercury in small-scale mining strictly prohibited Training and capacity building measures, technical assistance for small-scale mining cooperatives and associations LGUs, DENR, and MGB to strictly implement Peoples Small Scale Mining Act.

j.

2.

3. 4. 5. 6. 7. j.

Administrative provisions 1. Government will join Extractive Industries Transparency Initiative (EITI) 2. Creation of Centralized Database for Mining Industry. 3. Creation of Integrated Map System to include Mining Related Maps. 4. Use of Programmatic Environmental Impact Assessment.