Transparency and Accountability Issues in The Rehabilitation of Abandoned Mines in The Philippines

Transparency and Accountability
Issues in the Rehabilitation of

Abandoned Mines in the
Philippines
NOVEMBER 2018
This publication was produced for review by the United States Agency for International Development. It was
prepared by the advisor(s) supporting USAID’s Facilitating Public Investment project. The author’s views
expressed in this publication do not necessarily reflect the views of USAID or the United States Government.
FACILITATING PUBLIC
INVESTMENT (FPI)
Transparency and Accountability Issues in the Rehabilitation of Abandoned
Mines in the Philippines
Program Title: Facilitating Public Investment
Sponsoring USAID Office: USAID/Philippines
Contract Number: AID-492-C-13-00014
Contractor: DAI
The authors’ views expressed in this publication do not necessarily reflect the views of the United States
Agency for International Development or the United States Government.
Date of Publication: November 2018
Author: Carlos O. Tulali,. FPI Grants Coordinator
CONTENTS
I. EXECUTIVE SUMMARY
Introduction ………………………..………………………………………………………………………………………………………
Background and Rationale………………………..………………………………………………………………………………
Objectives of the Study………………………..…………………………………………………………………………………
II. CONCEPTUAL FRAMEWORK

Concept of Mine Closure………………………..…………………………………………………………………………………
Diverse Nature of Mine Closure Issues………………………………………………………………………….

Government’s Role and Policy in Mine Closure…………………………………………………………….
Policy and Regulatory Framework…………………………………………………………………………………………………
Environmental Plans and Programs on Mining……………………………………………………………….
Mine Closure Policies………………………………………………………………………………………………………
Impacts of Mining……………………………………………………………………………………………………………………….
Environmental Impacts………………………………………………………………………………………………….
Social and Economic Impacts………………………………………………………………………………………….
Impact on Indigenous Peoples………………………………………………………………………………………
III. RESULTS AND FINDINGS

State of Abandoned Mines in the Philippines …………………………..…………………………………….
Rehabilitation of Bagacay Mine ……………………………………………….…………………………………….
Rapu-Rapu Mine Rehabilitation ……………………………………………………………………………………
Abandoned Mine of Zambales Base Metals…………………………………………………………………..
Other Rehabilitation Projects ……………………………………………………………………………………….
Mine Rehabilitation Fund………………………………………………………………………………………………
People’s Small Scale Mining Act of 1991……………………………………………………………………….
Role of Local Governments………………………………………………..………………………………………….
Province of Benguet……………………………………………………………………………………………………..
Province of Camarines Norte…………………………………………………………………………………………
Poverty Incidence in the Mining Sector………………………………………………………………………
Policy on Mine Closure under the Duterte Administration………………………………………………
Suspension of Small-Scale Mining in Abandoned Mine Sites………………………………………
IV. TRANSPARENCY AND ACCOUNTABILITY IN THE EXTRACTIVE SECTOR

Right to Information………………………………………………………………………………………………………..
Role of EITI…………………………………………………………………………………………………………………......
V. RECOMMENDATIONS
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CONCLUSION
REFERENCES
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EXECUTIVE SUMMARY
The Philippines’ natural resources are owned by the state, and the large-scale development of mineral
resources is principally governed by the Philippine Mining Act of 1995. Other laws and government
agencies are also relevant, particularly when dealing with revenue sharing, environmental issues, and
community concerns. There are three laws governing mining in the Philippines:
a. Republic Act No. 7042, otherwise known as the Philippine Mining Act of 1995 (‘the Mining Act’) and
its Implementing Rules and Regulations embodied in Department of Environment and Natural
Resources (‘DENR’) Administrative Order (‘AO’) No. 2010-21 (‘the Mining Act IRR’);
b. Republic Act No. 7076 or the People’s Small-Scale Mining Act of 1991 (‘the Small-Scale Mining Act’);
and
c. 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 (‘the Mining Policy’) and its Implementing
Rules and Regulations embodied in DENR Administrative Order No. 2012-07 (‘the Mining Policy
IRR’).
The Mines and Geosciences Bureau (MGB) under DENR is principally responsible for implementing the
Mining Act and its regulations. The DENR’s Environmental Management Bureau (EMB) administers the
Philippine Environmental Impact Statement System (PEISS), under which mining projects are required to
undergo an EIA and secure an environmental compliance certificate as a condition for project
commencement. The Board of Investments (BOI) administers the granting of incentives for mining
investors, while the Philippine Ports Authority regulates the transport of mining-related equipment and
ore. The National Commission on Indigenous Peoples (NCIP) is tasked with implementing the Indigenous
Peoples Rights Act (IPRA) while local government units (LGUs) exercise local autonomy, under the
general supervision of the president, over provinces, municipalities, cities, and barangay.
Under the Mining Act, the contractor or permit holder is required to formulate a final mine
rehabilitation or decommissioning plan (FMR/DP) or a mine closure plan, which will be integrated to its
environmental protection and enhancement program. The FMR/DP will consider all possible mine
closure scenarios and contain cost estimates for the implementation of each, taking into consideration
expected inflation, technological advances and the unique circumstances faced by the mining operation.
The estimates shall cover the full extent of work necessary to achieve the objectives of mine closure,
such as decommissioning, rehabilitation, maintenance and monitoring, and employee and other social
costs, including residual care, if necessary, over a 10-year period. A Final Mine Rehabilitation and
Decommissioning Fund is required to be established by each operating contractor or permit holder and
must be deposited as a trust fund in a government depository bank and be used solely for the
implementation of the approved FMR/DP. MGB data show mining companies have committed, as of
December 2016, almost PHP25 billion for environmental protection and rehabilitation. The firms have
also committed as of July 2017 around PHP14 billion for social development and management in their
respective host communities and neighboring areas. The mine's contribution to community
development is managed through a Social Development and Management Program (SDMP) which
5
should be used to provide sustainable livelihood opportunities for the employees and their dependents
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and the adjoining communities, to minimize the social impacts of mine closure.
Due to the unplanned nature of their closure, primarily because of depressed commodity prices, these
mines were abandoned by their operators and left unrehabilitated. Unfortunately, government
regulators at the time lacked the tools to enforce remediation measures. These regulations came only in
1996, when guidelines on mine rehabilitation and decommissioning were incorporated in the
implementing rules and regulations of the Mining Act of 1995, which required mine operators to provide
for a Mine Rehabilitation Fund deposited as trust fund to be used exclusively for physical and social
rehabilitation. Moreover, the mining companies are required to submit final mine rehabilitation and
decommissioning plans, as well as Social Development and Management programs for the affected
communities.
A study conducted by Tetra Tech EM Inc. in 2009 lists 22 priority abandoned and/or inactive mining
companies in the country. Only one, Bagacay mine, among these is currently undergoing total
rehabilitation. Today, many of the abandoned mines, like Bagacay, are under the control of the
Privatization and Management Office (PMO), taken over when the private contractor defaulted and the
banks called on the government’s guarantee. While the PMO has plans to reopen the mines under its
control, progress has been slow, to the detriment of the government and the impacted communities.
The Extractive Industries Transparency Initiative (EITI) is a coalition of governments, companies, civil
society organizations (CSOs), investors and international organizations that support improved
governance in resource endowed countries through the verification and full publication of company
payments and government revenues from oil, gas and mining industries. The EITI platform strengthens
natural resource management capability, improves credibility at the international level, and enhances
revenue transparency through multi- stakeholder and governance processes. The corporate sector
would be induced to invest and conduct business in a business environment that is characterized by
good practices in governance. Transparency in revenue management processes fosters a more level
playing field, and could lead to energy stability between supplier and importing countries. 1
Local governments can implement their own subnational EITI, like the sub-national EITI in Compostela
Valley. In implementing the subnational EITI, local stakeholders can include provisions on tracking how
local governments are spending the revenues from the extractive industry. Community-based
organizations and people’s organizations in communities hosting mining operations can influence how
money from extractive activities in their communities are actually spent by their local governments.
Local CSOs do not expect EITI to resolve all issues related to the industry, but EITI will be a platform in
strengthening peoples’ rights to be part of the decision-making process in utilizing natural resources. In
implementing EITI at the subnational level, it can serve as a venue to strengthen the process of acquiring
the free prior and informed consent (FPIC) of indigenous peoples (IPS).
It has been frequently noted that a failure to engage stakeholders in a transparent process constitutes a
primary failure of mine closure processes. It is also important to start stakeholder engagement,
consultation and empowerment in the earliest stages of the mine closure planning process, if not the
earliest project planning phases. EITI can provide the opportunity for residents of mining communities to
strengthen their rights to participate in the decision-making process of mining activities in their
communities, to monitor and assess the practices of the company they are hosting and to evaluate
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1
https://eiti.org/
whether they are getting their fair share of the natural resources extracted in their area. EITI can
guarantee access to information to enable the communities to exercise these rights.
The decentralization of environmental and fiscal policy provides an opportunity for local governments to
influence extractive sector related policy. A general welfare clause in the Local Government Code, allows
local governments at all levels to create legislation that can bar certain mining practices within their
jurisdiction. In addition, any project that will have environmental impact must undergo a local
consultation process culminating in a decision from the local legislative body, the Sanggunian, on
whether to approve the project or not. Both local and national governments have the power to monitor
whether companies are acting in compliance with environmental obligations. A local resolution or
ordinance is a rule that can only be applied within the jurisdiction of the granting local government
body.
Small-scale mining needs to be strictly regulated as well. However, regulation is much more complicated
compared with the large mines and would require organization/cooperation among the miners
themselves and the strong coordination between DENR and the local government units. They will need
significant government resources and intervention much like abandoned mined-out sites scattered all
over the country which remain as grim reminders of what had gone wrong in the manner we have
managed mining in the past.
At the subnational level, sustainable development is about meeting locally defined social,
environmental, and economic goals over the long term. Local communities are dealing with the
challenges of balancing mineral extraction with environmental values and the needs of different
stakeholders. Given the complexity of these issues, governance that is democratic and empowered
means that stakeholders, especially communities, must have the ability to effectively convey their
concerns and evaluate the costs and benefits of a project. Whatever post rehabilitation scenarios may
be deemed feasible and desirable, the consent and active participation of the local communities as well
as local governments must be secured.
I. INTRODUCTION
Background and Rationale
Mine rehabilitation is an essential part of the mine life-cycle. Nevertheless, due to the inadequate
legislative framework and the lack of appropriate financial instruments in the past, abandoned mined
land is present in almost all resource rich regions of the country with a mining history. There is a growing
awareness to the environmental threats posed by the abandoned mines that are scattered in the
Philippines today. As most of these mines were developed long before the enactment of the Philippine
Mining Act of 1995 and current environmental legislations, casual efforts were only initiated, if any, by
the operators before they totally abandoned the area. Without appropriate management interventions,
these mines were left to pollute vital waterways, such as heavy metals released from underground and
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surface mines, and siltation due to exposed mine-out areas, among other environmental problems.
Page
Unrestricted access to degraded mine structures nearing collapse and neglected tailings ponds also
remain constant risk to nearby communities.
The abandoned mines of the past, brought about by inadequate legislation before the passage of the
Mining Act of 1995, pose environmental, health, safety and socio-economic problems for impacted
communities that have no choice but to deal with the problem. Left unrehabilitated, abandoned mine
sites may degrade to form hazards to human and animal life in the form of accessible adits, shafts and
pits, as well as associated pollution, such as acid drainage, from old workings and stockpiles. Visual
degradation is an issue in some areas, even if the site is not actively eroding. In some places, ongoing
erosion can affect land stability, as well as impact revegetation efforts and groundwater quality.
Due to the unplanned nature of their closure, primarily because of depressed commodity prices, these
mines were effectively abandoned by their operators and left unrehabilitated. Unfortunately,
government regulators at the time lacked the tools to enforce remediation measures. These regulations
came only in 1996, when guidelines on mine rehabilitation and decommissioning were incorporated in
the implementing rules and regulations of the Mining Act of 1995.
Over 800 mines in the Philippines have not been properly shut down or have been abandoned without
proper rehabilitation2. An economist likened them to “zombies” who are dead but are still moving
around trying to eat people. The owners of these mines can no longer be found or are financially
incapable or unwilling to rehabilitate their former mine sites. 3
According to the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural
Resources (DENR), abandoned mines are those with no valid and existing mining tenement and for
which no or incomplete rehabilitation was done. Inactive mines are those which have ceased operations
but are under either a valid or pending (for renewal) mining tenement. Although technically not
abandoned, the lack of maintenance or rehabilitation of inactive mines cause similar concerns as
abandoned mines.
There is also growing concern on the significant number of abandoned mining sites in the country due to
the associated negative effects to host and neighboring communities and the environment. Associated
damages include acid mine drainage, water contamination, issues on safety and aesthetic issues of
abandoned infrastructures and pit voids, among others. Consequently, health problems and other
welfare concerns are also observed in these areas especially where toxic substances from the mining
activities were dumped. For instance, health concerns abound in the communities surrounding the
former Palawan Quicksilver mines in Puerto Princesa due to the mercury leachate in the old mining site.
The unregulated informal mining activities in abandoned mining areas also post a number of social,
economic and ecological threats detrimental to local communities. Often, if not always, it is the host
communities that are left to pay and suffer for the failure of proponent companies to undertake proper
mine rehabilitation and/or maintenance procedures.
Objectives of the Study

8
2
Doyle, Mining in the Philippines Concerns and conflicts Report of a Fact-Finding Trip to the Philippines, July-August 2006, Launched in the
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House of Commons, United Kingdom, January 25, 2007

3
http://newsinfo.inquirer.net/848139/govt-bonds-eyed-to-fund-closure-of-zombie-mines#ixzz5Ey2Rk17b
The study aims to contribute to the improvement of extractive sector governance by pursuing the
following objectives:
1. Gather government official data on poverty incidence, employment and livelihood, public
health, nutrition, agriculture and economy, revenues/taxes received by the local government,
state of natural resources and environment and other relevant indicators that will provide a
clearer picture of the conditions of local communities with abandoned mines;
2. Identify relevant national and sub-national laws and programs on the extractive sector, as they
apply to the rehabilitation of abandoned mines, specifically in the Municipality of Itogon,
Benguet and the Municipalities of Paracale, Jose Panganiban and Labo, Camarines Norte;
3. Identify operational issues, bottlenecks and barriers in government mandate that hamper the
rehabilitation of abandoned mines; and
4. Explore opportunities for sub-national EITI multi-stakeholder group’s (MSG) participation in
promoting transparency and accountability in areas where there are abandoned mines.
II. CONCEPTUAL FRAMEWORK
Concept of Mine Closure
The concepts, definitions and issues surrounding mine closure vary from “....the rehabilitation of
disturbed lands to a safe, stable and productive post-mining landform, which is suitable and/or
acceptable to the community...”4, as “.... site rehabilitation and restoration to ensure that the closure of
a mine will not compromise environmental quality in the future and will limit the extent of any
prospective liabilities for both the operator, the government and the community” 5 and as “.... returning
mine sites and affected areas to viable and, wherever practicable, self-sustaining ecosystems that are
compatible with a healthy environment and with human activity 6. The common theme in all of the
above definition is that of the reclamation and rehabilitation of the area impacted by mining to a state
that precludes further environmental damage and allows for alternative use. In essence, mine closure is
largely regarded by industry and, until recently by most governments, as primarily an environmental
issue.
From the perspective of governments, mine closure presents a complex mixture of environmental,
social, economic and development issues that the government must have ensured that (a) industry has
adequately recognized and prepared for over the life of the mining enterprise and (b) that the closure
plan is carried out to the satisfaction of the communities involved, other major stakeholders and
government at all levels. Governments are now coming to realize that they have the most direct
responsibility for defining and ensuring comprehensive mine closure within the broader context of the
issues of “social/economic equality” and “sustainable development”. This recognition of a broader
context of mine closure has greatly expanded the scope of government responsibilities and needed
actions.
4
Allen, J. and Briggs, B. (1999). Development of a National Mine Closure Strategy.
9
5
Sasson, M. (1996). Closure or Abandonment, Mining Magazine, August.
Page
6
Mining Association of Canada (1994). Whitehorse Mining Initiative, in Leadership Council Accord Final Report, Mining Association of
Canada, Toronto Canada, 57 p.
Diverse Nature of Mine Closure Issues
The issue of the types of mine closure is itself diverse and it is necessary to recognize that mine closure
takes many forms. The most obvious types of mine closures, and those most discussed, are
abandonment and terminal closure; the latter occurring when an ore body is mined out and a company,
following reclamation and rehabilitation, permanently ceases operations. In reality, however, it is
common that many mines are “temporarily” closed because of political, economic, market, technical,
environmental or social reasons with the intention (not usually realized) that they will be reopened at a
later date. Many such temporary closures result ultimately in such properties becoming abandoned
mines. Also common, particularly in the transitional economies 7 (Clark and others, 1998), is that mine
closure, resulting from rehabilitation, rationalization and/or privatization, often results in some form of
partial closure, i.e. restricted to specific workings within or adjacent to a major mine, by which some
level of mining continues in the rest of the mine or area. Each of these types of mine closure presents
their own special problems for both government and industry.
Government’s Role and Policy in Mine Closure

In most countries, the role of government in comprehensive mine closure is expanding rather than
contracting largely because government’s role remains primarily that of enacting and implementing
appropriate policy and legislation.
At the broadest levels government mine closure policy may be in part dictated by its own national
constitution that mandates a healthy environment for its citizens or by requirements of international
treaties and agreements.8 At the national level individual national sectoral policies and legislation (other
than those for environment and mining), various Executive Orders and specific Local Government
Agreements (often with industry) all must be provided for as part of an overall national program for
acceptable mine closure. These are in addition to specific instruments under Environmental and Mining
legislation that require putting in place policy and legislation for Environmental Impact Assessments,
Social Impact Assessments, Mining Plans, Standard Mining Agreements, bonding procedures and
providing for Inter-Ministerial Agreements to achieve comprehensive mine closure and sustainable
development.
In the document, “National Minerals Policy: Promoting Sustainability Through Responsible Mining” 9
released by the Mines and Geosciences Bureau (MGB), the Philippine government affirms its
commitment to mine closure and in the management of abandoned or inactive mines. The major
objectives of mine closure under this framework are:
• To return the land to a physically and chemically stable state and self-sustaining ecosystem
based on a final land use agreed with the host communities and local government, and
• To ensure sustainable livelihood opportunities for the host and neighboring communities.
Policy and Regulatory Framework

10
7
Clark, A.L., Clark, J.C. and Naito, K., 1998. Emerging mineral policy and legislation in the economic development of the Central Asian
Republics, Resources Policy, Vol. 24, No. 2, pp. 115-123.
Page
8
United Nations Convention on the Law of the Sea, Basel Convention
9
International Business Publications (2013). Philippines Mining Laws and Regulations Handbook. International Business Publications, USA.
Environmental Plans and Programs on Mining
Article XII, Section 2 of the 1987 Constitution states that all lands of the public domain, minerals, coal,
and other natural resources are owned by the State. Commonly termed the “Regalian doctrine”, this
rule extends not only to land but also to “all natural wealth that may be found in the bowels of the
earth”.10 The 1987 Philippine Constitution dictates that the exploration, development and utilization of
natural resources can be undertaken directly by the state or through co-production, joint venture or
production-sharing arrangements with Filipinos or corporations in which Filipinos own at least 60
percent.11 The only exception is for financial or technical assistance agreements (FTAA) with foreign-
owned corporations for large-scale exploration, development and utilization of minerals. 12
The Philippines’ natural resources are owned by the state, and the large-scale development of mineral
resources is principally governed by the Philippine Mining Act of 1995 (Republic Act No. 7942). Other
laws and government agencies are also relevant, particularly when dealing with revenue sharing,
environmental issues, and community concerns.
Republic Act No. 7492 or the Philippine Mining Act of 1995 was designed to revive the mining industry
and attract more foreign investment by defining the agreements for mineral exploitation, and provide
the requirements for acquiring mining rights. At the same time, rigid safeguards were put in place to
ensure that mining contractors comply with the requirements of the law, more particularly on mitigating
environmental effects, and notably for the first time, imposed requirements and processes for mine
closure.
On January 28, 2010, the Secretary of the Department of Environment and Natural Resources (DENR)
issued Administrative Order (DAO) No. 2010-21, “Providing for a Consolidated Department of
Environment and Natural Resources Administrative Order for the Implementing Rules and Regulations of
Republic Act No. 7942, otherwise known as the “Philippine Mining Act of 1995.” This effectively
amended all previous DAO’s on the matter. As a function of its powers of control and supervision, the
State is also authorized to administer and regulate the “conservation, management, development, and
proper use of the State’s mineral resources,” which it carries out through DAO 2010-21 and Section 6 of
the Implementing Rules and Regulations (IRR) of the Mining Act likewise echo this statutory mandate. In
this regard, the Mines and Geosciences Bureau (MGB) under the Department of Environment and
Natural Resources (DENR) directly undertakes administration and disposition of mineral lands and
mineral resources.13
The MGB is principally responsible for implementing the Mining Act and its regulations. The DENR’s
Environmental Management Bureau (EMB) administers the Philippine Environmental Impact Statement
System (PEISS), under which mining projects are required to undergo an EIA and secure an
environmental compliance certificate as a condition for project commencement. The Board of
Investments (BOI) administers the granting of incentives for mining investors, while the Philippine Ports
Authority regulates the transport of mining-related equipment and ore.
10
Republic v. Court of Appeals, G.R. No. L-43938, 15 Apr. 1988, 160 SCRA 228 as cited in La Bugal-B’laan Tribal Association, Inc. v. Ramos,
11
G.R. No. 127882, 27 Jan. 2004, 421 SCRA 148.

11
1987 Philippine Constitution, Art. XII, section 2.
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12
Ibid.
13
IRR of the Mining Act, Sec. 7.
Apart from being the primary government agency tasked with the conservation, management,
development, and use of the country’s environment and natural resources, the DENR is also in charge of
the licensing and regulation of all natural resources. The DENR Secretary promulgates relevant rules,
regulations, and other issuances to carry out its mandate. 14 Among its bureaus, the MGB advises the
DENR Secretary on all matters pertaining to mineral resources exploration, development, and
conservation.15 With the passage of the Mining Act in 1995, MGB became a line bureau, effectively
giving it the power to directly implement mining-related programs of the DENR. The MGB Director now
exercises direct supervision and control over all units, including the regional offices of the Bureau,
establishes policies and standards for its operations, and promulgates rules and regulations needed to
carry out its functions.16
With respect to oil and gas, the Department of Energy (DOE) takes charge of all programs and projects
relative to the exploration, development, utilization, distribution, and conservation of all forms of
energy products and resources. Specifically, it regulates private sector activities in all energy projects
and formulates such rules and regulations to implement the provisions of the law. 17
The National Commission on Indigenous Peoples (NCIP) is tasked with implementing the Indigenous
Peoples Rights Act (IPRA) while local government units (LGUs) exercise local autonomy, under the
general supervision of the president, over provinces, municipalities, cities, and barangay.
Mine Closure Policies

Mine closure legislation and policies which regulates the implementation of sustainable mine
decommissioning and closure practices adopted and implemented by mining companies are clearly
stipulated and embedded in the Final Mine Rehabilitation/Decommissioning Plan (FMR/DP). Such plan is
in accordance with Republic Act No. 7942 otherwise known as the "Philippine Mining Act of 1995." This
Act emphasizes that all mineral resources in public and private lands within the territory and exclusive
economic zone of the Republic of the Philippines are owned by the State. It shall be the responsibility of
the State to promote their rational exploration, development, utilization and conservation through the
combined efforts of government and the private sector in order to enhance national growth in a way
that effectively safeguards the environment and protect the rights of affected communities.
Section 71 of the Mining Act requires the technical and biological rehabilitation of all excavated, mined-
out, tailings-covered, and disturbed areas to an environmentally-safe condition. For this purpose, the
Environmental Protection and Enhancement Program (EPEP) 18 must integrate the FMR/DP, which
addresses all mine closure scenarios such as decommissioning, rehabilitation, maintenance, and
monitoring; and employee and other social costs, over a ten-year period, and provides cost estimates
14
Philippines, Exec. Order No. 192 (1987), Sec. 4 and Sec. 7 (c).
15
Id., Sec. 15.
12
16
Philippine Mining Act of 1995, and Executive Order No. 192 (1987).
17
Ibid., Sec. 4-5.
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18
Mineral agreement or FTAA contractors and other permit holders are required to undertake an Environmental Protection and Enhancement
Program (EPEP) throughout the development and operation of their mine or quarry.
for its implementation.19 Its submission and approval are a mandatory part of the ECC. 20 The Plan is
subject to review and/or revision two (2) years from its approval and every two (2) years thereafter, or
whenever it is warranted by changes in mining activities. The review and/or revision may be done “on
the Contractor’s/Permit Holder’s initiative or at the request of the Director/Regional Director
concerned”.21
The EPEP shall be submitted within thirty (30) days upon the contractor’s receipt of the ECC, subject to
approval of the Mine Rehabilitation Fund (MRF) and Contingent Liability and Rehabilitation Fund (CLRF)
Steering Committees.22 A copy of the approved program must then be provided the concerned LGU at
least thirty days prior to the intended commencement date of operation. 23
Lastly, the contractor or permit holder must submit an Annual Environmental Protection and
Enhancement Program (AEPEP) to the Bureau or concerned Regional Office at least thirty days before
the start of every calendar year. It shall be based on the approved EPEP and implemented during the
incoming year. It shall include provisions on exploration, development, utilization, rehabilitation,
regeneration, re-vegetation, reforestation, and slope stabilization of mineralized, mined-out, waste
dumps, or tailings-covered areas; aquaculture, watershed development, and water conservation; and
socioeconomic development.24
A Multipartite Monitoring Team (MMT) shall monitor compliance with the EPEP and AEPEP, and check
the environmental performance of contractors or permittees on at least a quarterly basis. 25 The MMT is
deputized by the MRF Committee, discussed below, and is composed of a representative from the MGB
Regional Office, who shall head the MMT; and as members, representatives from the Department
Regional Office, the EMB Regional Office, of the Contractor/Permit Holder, affected communities,
affected ICCs, if any, and an environmental NGO. The MMT may seek technical assistance from the MRF
Committee, to whom the MMT shall submit a report on the status or results of its monitoring activities
at least five (5) working days from the Committee’s regular meetings. The Contingent Liability and
Rehabilitation Fund (CLRF) Steering Committee shall be furnished a copy of the report. 26
At the end of the life of the mine and during the implementation of the FMR/DP, the contractor or
permit holder must submit a progress report of its rehabilitation activities, if applicable to its operation.
The report is subject to review and evaluation by the MRF Committee. 27 Once the objectives of mine
closure are achieved in accordance with the FMR/DP based on the contractor or permit holder’s
assessment, it shall prepare and submit a Final Rehabilitation Report with third party Environmental
Audit (FRR with EA) to be pre-evaluated by the MRF Committee. If the CLRF Steering Committee
approves the FRR with EA, it shall issue a Certificate of Final Relinquishment to signify approval and free
19
DENR Administrative Order No. 2010-21, Sec. 187.
20
Id., Sec. 187-A.
21
Ibid., Sec. 187-E.
22
Ibid., Sec. 169.
23
Ibid., Sec. 170.
13
24
Mining Act, Sec. 69; DENR Administrative Order No. 2010-21, Sec. 171.
25
Page
26
Ibid., Sec. 185.
27
Ibid., Sec. 187-D.
the contractor or permit holder from further obligations related to the rehabilitated mine areas.
However, if residual care is needed based on the Committees’ review and evaluation, the contractor or
permit holder shall submit a corresponding Site Management Plan to cover the areas that still need
rehabilitation. Remaining amounts from the Final Mine Rehabilitation and Decommissioning Fund and
Mining Waste and Tailings Fee payments, discussed below, shall be returned. However, the contractor
or permit holder shall remain liable for any budgetary shortfall to achieve mine closure objectives and to
implement the Site Management Plan. 28
Post-mine closure monitoring requirements

The Mine Rehabilitation Fund (MRF) Committee, through the Multipartite Monitoring Team (MMT), the
Contingent Liability and Rehabilitation Fund (CLRF) Steering Committee and the MGB shall monitor
and/or audit the implementation of the FMR/DP. 29 The FMR/DP is also reviewed by the MRF Committee
and/or revised at a date not exceeding two years after its approval and every two years thereafter.
Liability period for water contamination and restoration of mined areas after a mine has closed
Under mining regulations, a mining company will remain liable only for as long as the Certificate of Final
Relinquishment has not been issued by the CLRF Steering Committee. Once the Certificate of Final
Relinquishment has been issued, the mining company is freed from any further obligations insofar as the
rehabilitated area is concerned.
The Certificate will only be issued after the approval of the Final Rehabilitation Report with third party
Environmental Audit submitted by the mining company. The MRF Committee and/or CLRF Steering
Committee may conduct field validation, recommend revisions, and/or require additional rehabilitation
works to be undertaken prior to approval.
However, the Clean Water Act provides that any person who causes pollution in or pollutes water
bodies in excess of the applicable and prevailing standards shall be responsible to contain, remove and
clean-up any pollution incident at his own expense to the extent that the same water bodies have been
rendered unfit for utilization and beneficial use. Action to enforce the liability herein does not seem to
be foreclosed by the issuance of a Certificate of Final Relinquishment as discussed above.
Section 47 of PD 705 of the Revised Forestry Code of the Philippines also requires mining companies to
restore mined areas as near as possible to their former natural state after mining operations end. 30
Reporting requirements in relation to a mine’s preparation for post-closure

The mining company is required to submit progress reports, containing details of fully, partially and on-
going rehabilitation activities relative to the implementation of the FMRDP. The report shall be
submitted to the MRF Committee for review and evaluation within 30 days from the end of the term of
the preceding work and financial plan, if applicable. 31
Mine Rehabilitation Fund

14
28
Ibid., Sec. 187-F.
29
DENR Administrative Order No. 2005-27
Page
30
Philippines, Presidential Decree No. 705, s. 1975, otherwise known as the "Revised Forestry Code of the Philippines."
31
DENR Administrative Order No. 2010-21.
The Mining Act requires the creation of a mine rehabilitation fund (MRF), based on a mining contractor's
approved work program. But the MRF is limited to a maximum of only Php5 million. The FMR/DP
provisions which require setting aside a limited amount of money during the life of the mine are
inadequate if the mine operator in the Philippines become insolvent and abruptly abandons the mine
before the scheduled contributions have been completed. In this scenario there will be an unfunded
environmental liability for the Philippine government and taxpayers.
MGB data show mining companies have committed, as of December 2016, almost Php25 billion for
environmental protection and rehabilitation. The firms have also committed as of July 2017 around
Php14 billion for social development and management in their respective host communities and
neighboring areas.32
Social Development and Management Program

Under the Mining Act, companies must allocate 1.5% of their operating costs for Social Development
and Management Program (SDMP), or for Community Development Programs in cases of exploration.
Seventy-five percent (75%) of this shall be for the development of host and neighboring communities,
10% for the development of mining technology and geosciences, and 15% for information, education,
and communication programs. The law describes who should benefit out of the community
development fund, and this are the people in the local community who directly host the project.
However, it is relevant to explain that SDMP fund is not exchanged directly but channeled to plans,
projects, and programs which the mining company and the host community agreed to undertake as part
of their collective SDMP. Government acts as a third party but only as far as compliance to the intent
and framework of the SDMP.
To develop the SDMP, the companies shall carry out a Social Impact Assessment and Participatory Rapid
Appraisal to identify project impacts and evaluate community needs. Following this assessment, an
SDMP is prepared in consultation with host and neighboring communities and other stakeholders. This is
submitted to the MGB Regional Office for approval every five years.
The company is required to enter into a memorandum of agreement (MOA) with the host and
neighboring communities within 30 days of the approval of the SDMP. The communities shall be
represented by the appropriate barangays or municipalities. Activities for the development of host and
neighboring communities include enterprise development, infrastructure development and support
services, educational programs, and health services. These social expenditures may not be included in or
charged against royalty payments for indigenous communities. Unspent amounts are carried forward to
the following year.
The company’s Community Relations Officer oversees implementation of the SDMP. The Community
Relations Officer and authorized community representatives are responsible for regularly monitoring
implementation of the SDMP. Failure by the company to implement its SDMP may be penalized by a fine
of PHP5,000.00 (about USD100) for the first offense, and its mining and milling operations may be
suspended for a subsequent offense.
15
Page
32
Teves, C. (2018). “DENR raises urgency for mine rehabilitation,” Philippine News Agency, 10 February. (available at:
http://www.pna.gov.ph/articles/1024785)
Impacts of Mining
Environmental Impacts
Abandoned mine sites are common in the Philippines. They have long-term damaging impacts on rivers
and their surrounding fields. Old mines need to be managed to prevent the build up of acidic mine
water. Problems can emerge years after mine closure, and years after the company responsible has
dissolved, and can continue for centuries. Natural resource economist Germelino Bautista has identified
potential resource and environmental damage that can result from each stage of mining operations. 33
Mining exploration, operation, & ore extraction:

 Disruption, if not loss of, natural habitats
 Forest land conversion/loss
 Decline in carbon sequestration capacity
 Erosion, sedimentation
 Reduced slope stability or higher risk of landslides
 Diversion of surface or groundwater
 Reduced or erratic stream flows
 Clogged stream channels
 Potential acid rock generation
 Contamination of surface waterways
Mineral production:
 Threat to particular species or biodiversity loss
 Diversion of surface or groundwater
 Reduced stream flow or groundwater depletion
 Acid rock drainage and contamination of soil and water
 Surface, groundwater pollution
 Reduced fish spawning area
 Damage to aquatic life
 Air pollution (increased dust, PM, metal gases, sulphuric acid)
Mine waste and tailings management / Mine rehabilitation, closure or abandonment:

 Contamination of streams, rivers, other water bodies from tailings release
 Destruction of habitats (rivers, mangroves, sea grass, coral reefs)
 Fish kills
 Groundwater contamination from tailings dam seepages
 Air pollution from dried tailings
 Loss of particular species
Social and Economic Impacts

16
Page
33
Bautista, G. (2010). Economics of Philippine Mining: Rents, Price Cycles, Externalities, and Uncompensated Damages, Ateneo School of
Government, 40-41. (available at: https://www.scribd.com/document/236155289/Economics-of-Philippine-Mining)
The social dimensions of mining also present a major challenge for the extractive industries. These
dimensions include social and economic impacts, human rights, gender considerations, cultural heritage
and human development, among others. These challenges and risks are particularly acute towards the
end of the project life-cycle. Mine closures can, therefore, have significant adverse effects on local
economies, contribute to impoverishment, trigger the loss of key services, and lead to out-migration.
A 2008 study on the social aspects of mine closure in the Philippines highlighted that ‘mine closure is
more than a managerial-technical-engineering aspect within the life-cycle of a mine. It is a social episode
in the lives of individuals, households, families, communities and local governments’. 34 When a mine
closes, the impact is often more dramatic than it would be for other kinds of industrial plants, as mines
frequently constitute a larger proportion of the local economy. The remoteness of many mining
operations often means that there are few or no alternative employment opportunities. 35
Impact on Indigenous Peoples

Mining often leads to a direct assault upon the culture of indigenous people. Although on paper
Philippine law protects the land rights of indigenous peoples as well or better than many other
countries, in reality their land is still under threat, as many mineral deposits are in indigenous territory
and the pressure to allow mining is great. 36 The country’s legal framework incorporates socioeconomic
and environmental safeguards, including the requirement that mining companies obtain the free prior
and informed consent (FPIC) of concerned indigenous peoples (IPs) and, if obtained, the payment of
royalties. Indigenous rights of ownership include the community’s priority right to develop their natural
resources. In this case, the community shall issue a resolution to that effect during an assembly. The
community may engage a partner subject to their FPIC 37 and execute a Memorandum of Agreement
(MOA) to set forth the terms of their partnership. Mining companies are also required to enter into
agreements with host and neighboring communities relating to social programs such as enterprise
development, education, and health services.
The Philippine Mining Act mandates mining companies to spend a minimum of 1.5 percent of their
annual operating budget for social development projects, while IPs get a minimum of 1 percent of the
annual gross revenue as their share of royalties. This may be done by the mining firms but it is highly
unlikely for the indigenous communities to actually verify the mining firm’s true annual gross revenues,
when accounting records are subject to manipulation by the company’s accountants in order to reduce
tax liabilities.
34
Chaloping-March, M. (2008(. Business Expediency, Contingency and Socio-political realities – a case of unplanned mine closure. In (eds)
A.B. Fourie, M. Tibbett, I.M Weiersbye and P.J. Dye, Mine Closure 2008 Proceedings of the Third International Conference on Mine Closure.
Australian Centre for Geomechanics, Perth, pp 863-872.
35
Ibid.
17
36
Tujan, A. and R.B. Guzman (n.d.). Globalizing Philippine Mining. Ibon Books, pp 165-169.
37
The IPRA defines FPIC as the consensus of all of the members to be determined in accordance with their customary practices, free from any
Page
external interference, obtained after fully disclosing the intent and scope of an activity, in a language and process understandable to the
community. Customary laws refer to the rules and practices continually observed by the community. Indigenous peoples have the right to use
their customary laws within their communities as may be compatible with the national legal system and internationally recognized human rights.
III. RESULTS AND FINDINGS
State of Abandoned Mines in the Philippines
Environmental and anti-mining groups lament the destruction caused by large-scale mines, particularly
the ones that use the open-pit mining method, threatening the country’s rich natural resources and
undermining food and water security, issues that the big players in the mining industry continue to
debunk with claims of spurring economic activities in areas not covered or reached by government
services, including the unaccounted costs of infrastructure projects like roads, bridges, schools and
health-care centers; and various projects and programs under individual corporate social responsibility
initiatives and the mandated social development management program (SDMP), like scholarship
programs and livelihood projects. However, according to experts, erosion, pollution, as well as habitat
and biodiversity loss are among mining's environmental impacts that can persist long after the mines'
closure. They said rehabilitating mine areas is a precaution against further environmental degradation, a
threat to people's health and productivity.
Republic Act 7942 or the Philippine Mining Act of 1995 states that "contractors and permittees shall
technically and biologically rehabilitate the excavated, mined-out tailings covered, and disturbed areas
to the condition of environmental safety, as may be provided in the implementing rules and regulations
of this Act". Thus, mine rehabilitation is the process of restoring a mining area to almost its pre-mining
state, preparing this site for productive uses.
MGB data show mining companies have committed, as of December 2016, almost PHP25 billion for
environmental protection and rehabilitation. The firms have also committed as of July 2017 around
PHP14 billion for social development and management in their respective host communities and
neighboring areas.38 A study conducted by Tetra Tech EM Inc. in 2009 39 lists 22 priority abandoned
and/or inactive mining companies in the country. Only one among these is currently undergoing total
rehabilitation.
Table 1. Priority Abandoned Mines in the country, 2009

Company Mineral Extracted Location
1. Acoje Mining Company, Inc. (AMCI) Metallurgical Sta. Cruz, Zambales
Chromite
2. Barlo Mining Corporation (BMC) Copper Mabini, Pangasinan
3. Batong Buhay Gold Mines, Inc. Gold Pasil, Kalinga
4. Benguet Corp. – Antamok Mines (BC-BAGO) Gold Itogon, Benguet
5. Benguet Consolidated Mining Corp. (BCMC) Gold Itogon, Benguet
18
38
Teves, C. (2018). DENR raises urgency for mine rehabilitation. Philippine News Agency, 10 February. (available at:
Page
http://www.pna.gov.ph/articles/1024785)
39
MGB Commissioned Study by Tetra Tech EM, Inc., A Preliminary Assessment. (available at: http://pcij.org/blog/wp-
docs/Tetra_Tech_Assessment_of_20_Abandoned_mines.pdf
6. Benguet Corporation – Dizon Copper/Gold Mines (BCD) Copper San Marcelino, Zambales
7. Masinloc Chromite Mines – Benguet Corporation (MCM-BC) Refractory Chromite Masinloc, Zambales
8. Benguet Exploration Mine (BEM) Gold Tuba, Benguet
9. Black Mountain Inc. (BMI) Gold Tuba, Benguet
10. Filminera Resources Corporation (FRC) formerly Banahaw Gold Rosario and Bunawan,
Mining and Development Corp. Agusan del Sur
11. CDCP-Basay Mine (CDCP-Basay) Copper Basay, Negros
12. Ino and Capayang Mines (ICM) Copper Mogpog, Marinduque
13. Heritage Mining Corp. Alamag Processing Group Chemical Chromite Llorente, Eastern Samar
14. Hixbar Gold Mining (HIXBAR) Gold Rapu-Rapu Island, Albay
15. Romblon Marble Mining (RMM) Marble Romblon
16. Palawan Quicksilver Mines (PQM) Mercury Palawan
17. Philippine Iron Mines (PIM) Iron Jose Panganiban,
Camarines Norte
18. Philippine Pyrite Corporation (PPC) Pyrite Bagacay, Samar
19. Silica Sand Mine (SSM) Silica Palawan
20. Surigao Consolidated Mining Co., Inc. (SURICON) Gold Siana and Mapawa,
Surigao del Norte
21. United Paragon Mining Corporation (UPMC) Gold Paracale, Camarines
Norte
22. Vulcan Mining Corporation (VMC) Gold Cordon, Isabela
Source: Tetra Tech EM Inc., 2009
Today, many of the abandoned mines in the country, are under the control of the Privatization and
Management Office (PMO) 40, taken over when the private contractor defaulted and the banks called on
the government’s guarantee. While the PMO has plans to reopen the mines under its control, progress
has been slow, to the detriment of the government and the impacted communities. 41
Rehabilitation of Bagacay Mine

Bagacay Mine used to be operated by Marinduque Mine Industrial Corporation (MMIC) from 1956 to
1985 and by the Philippine Pyrite Corporation from 1986 to 1992. It ranked first in the general risk
ranking among the inactive mines in the Philippines. MGB rehabilitation works at the Bagacay Mines site
in Samar island, abandoned in 1992, include reforestation, mitigation of acid drainage, soil stabilization,
construction of laboratory buildings, and erosion control. Marinduque Mining and Industrial Corp.
(MMIC) operated the mine from 1956 to 1985, primarily for copper minerals. In 1986, MMIC entered
into an Agreement with the Philippine Phosphate Fertilizer Corp., which, with Philippine Pyrite
Corporation (PPC), operated the mine from 1986 to 1992 for pyrite concentrates. PPC ceased operation
in 1992 due to rising operating costs.
The joint project of Ecosystems Research and Development Bureau (ERDB) and the Mines and
Geosciences Bureau (MGB) of the Department of the Department of Environment and Natural
40
On December 6, 2000, then President Joseph E. Estrada issued Executive Order No. 323, creating the Privatization Council (PrC) and the
Privatization and Management Office (PMO). The PrC is responsible for formulating policies and general guidelines on privatization issues,
identifying disposable assets, monitoring the progress of privatization activities and approving the sale or divestment of assets with respect to
19
price and buyer. The marketing of the assets or companies is handled by various disposition entities with PMO at the forefront. The arrangement
between the PrC as the policy-making body and various disposition entities handling the marketing of assets serves as the check and balance. (see
Page
http://www.pmo.gov.ph)
41
The Standard (2014). Reviving abandoned mines. Manila Standard, 2 April. (available at: http://manilastandard.net/news/-
provinces/144260/reviving-abandoned-mines.html)
Resources (DENR) called “An Integrated Science-Based approach in the rehabilitation of mined-out and
waste dump areas at Bagacay, Hinabangan, Samar” started in 2009 in the mined-out area of Bagacay, a
2,672 hectare former copper and pyrite area. 42
In November 2016, a 42-hectare portion the abandoned, heavily-polluted Bagacay Mine in Western
Samar has been declared “successfully replanted,” after a six-year project by the Ecosystems Research
and Development Bureau (ERDB) and the Mines and Geosciences Bureau (MGB) of the Department of
the Department of Environment and Natural Resources (DENR). The reforestation of Bagacay Mine used
phytoremediation (the use of living plants to remove contaminants in soil, sludge, sediment, surface,
and ground water), a type of bioremediation.
The study revealed that with the inherent bioremediation (metal and pollutant absorption) capacity of
selected tree species, along with the fertilization technique, an observable increase in the height of
mangium and Agoho del Monte was observed in the former mine. Biomass (dried leaves and branches)
produced by narra was noted to provide nutrients to the soil, which prompted the growth of grasses and
other shrub species. The research also revealed that organic fertilizer treatment could work well in areas
like the Bagacay mine.43
Rapu-Rapu Mine Rehabilitation

The Rapu Rapu Gold Copper and Zinc Mining Project, on Rapu Rapu Island in the Albay province in the
Bicol region, Philippines has been plagued with controversy since its conception. In the late 1990s
Australia’s Lafayette Mining Ltd. acquired claims over mining areas on Rapu-Rapu Island that contained
not one or two but four minerals. There was gold, but also silver, zinc, and copper beneath the hills of
the island-municipality off the province of Albay. Lafayette’s mining leases covered 80% of the fragile
island ecosystem which is home to agricultural and fishing communities reliant upon the natural
resources for livelihood.44 The Lafayette mine in Rapu-Rapu was one of the first large-scale mining
projects to start commercial operations after the Supreme Court upheld the controversial 1995 mining
law in December 2004. The national government has held up the Rapu-Rapu Polymetallic Mining Project
as an example of responsible and sustainable mining in accordance with strict guidelines laid down by
the new mining law.45
However, in October 2005, waste water containing cyanide and other toxic substances from Lafayette’s
mineral processing facilities spilled into nearby creeks on two separate occasions, killing fish and
crustaceans along the waterways that flow into the Albay Gulf. It caused massive fish kills that affects
the livelihood of coastal communities in Albay and Sorsogon to this day. 46 The government immediately
42
Kritz, B. (2016). WSamar mine successfully replanted. The Manila Times, 3 November. (available at: https://www.manilatimes.net/wsamar-
mine-successfully-replanted/294498/)
43
BusinessMirror (2016). “ERDB replants 42 hectares of polluted Bagacay Mine in Western Samar.” BusinessMirror, 25 October. (available at:
https://businessmirror.com.ph/erdb-replants-42-hectares-of-polluted-bagacay-mine-in-western-samar/)
44
20
Sarmiento, P. (2012). “Defaulting on Nature.” Rappler, 16 November. (available at: https://www.rappler.com/business/special-

report/whymining/whymining-latest-stories/16261-defaulting-on-nature)
45
Ibid.
Page
46
Barcia, R.B. (2018). “Slow progress in Rapu-Rapu mine rehabilitation.” Rappler, 8 May. (available at:
https://www.rappler.com/nation/features/201918-rapu-rapu-mine-rehabilitation-controversy-progress)
shut down the company’s mining operations, which were allowed to resume only in February 2007 after
it put in place remedial measures and paid a Php10 million fine to the Pollution Adjudication Board. 47
Then, in March 2008, talks with new Malaysian investors who were to inject badly needed fresh capital
to the company fell through. Shortly after, the cash-strapped Australian parent firm and its Philippine
unit suspended payments on some USD374 million in debt and sought judicial help for financial
rehabilitation.48
The rehabilitation work of the Rapu-Rapu mine had been put on hold for the last two years, pending
revisions in the plan. About 30% of the work in the original plan had been completed, based on a
monitoring report in 2016. Before the rehabilitation project was halted two years ago, the running tab
was at P178 million, according to a 2015 audit report. The rehabilitation work would remain suspended
until the government completes its assessment on how the company revised the rehabilitation plan and
how it spent the funds for the plan. 49 Lafayette’s close brush with bankruptcy underscores the risks that
financially troubled mining companies pose not just to their owners, lenders, and employees but also to
host communities and nature as money dries up for social and environmental programs.
Abandoned Mine of Zambales Base Metals

In 2007, the Mines and Geosciences Bureau (MGB) Region IX Office conducted an initial risk assessment
of the abandoned Zambales Base Metals (ZBM) mine situated at Upper Baluno, Zamboanga City, using
an adopted checklist rating the risks on 6 impact categories:
 assessment for acid mine drainage;
 assessment of safety hazard;
 assessment for impact on vegetation;
 assessment of erosional hazard;
 assessment of visual intrusion; and
 assessment of heritage value.
The risk assessment report was forwarded to MGB Central office for inclusion on the possible list for
mine rehabilitation. In 2017, ZBM was selected by the MGB for rehabilitation. On September 2017,
technical personnel from the MGB Central Office together with the Region IX counterparts revisited the
old ZBM mining project to conduct the reconnaissance survey as an initial step to the objective of
rehabilitating the mine-affected areas. The sites visited were the old tailings pond, mine derelict
structures, ruins of the copper processing plant, and underground mine workings. The findings of the
assessment shall be the basis of the recommendation to include ZBM in the priority list of abandoned
mines to be rehabilitated in the country. 50
The next step would be the second phase of the risk assessment of the old mining project, supposedly to
be done in 2018. This activity aims to quantity the levels of risks of the abandoned structures using
47
Sarmiento, op.cit.
48
Ibid.
21
49
Barcia, op.cit..
Page
50
Alforte , R. (2017). “Proposed mine rehabilitation of the abandoned mine of Zambales Base Metals situated at Upper Baluno, Zamboanga
City”. Mines and Geosciences Bureau, DENR, 07 November. (available at: http://region9.mgb.gov.ph/index.php/services/49-proposed-mine-
rehabilitation-of-the-abandoned-mine-of-zambales-base-metals-situated-at-upper-baluno-zamboanga-city)
accepted methodologies, assessing the likelihood and consequences of such incidents, and managing
risks by the development of a sound mine rehabilitation plan.
Other rehabilitation projects

Other mine rehabilitation projects that have recently been approved by the DENR include those of
Surigao nickel miner Marcventures Mining and Development Corporation (MMDC) and Zambales’
Benguetcorp Nickel Mines, Inc. (BNMI), which is currently suspended from mining operations due to
environmental concerns.51 Both mines are rehabilitating 50-hectare plots using a soil amendment
technology called Activated Biochar. Biochar is charcoal produced from plant material, which is
incorporated into the soil to help remove carbon dioxide from the air, and has some metal-absorbing
properties.
MMDC and BNMI are working with the Philippine Biochar Association (PBiA) to develop effective biochar
material. MMDC and BNMI will each put up 50-hectare pilot farms in Surigao and Zambales,
respectively, for the immediate implementation of the project. Both provinces have a lot of organic
materials such as rice husks, which is a key component in biochar. Since the residents of host
communities will produce the biochar themselves, PBiA estimates that each 50-hectare area will
generate about P8 million in revenues for the communities. 52 The initiative was also projected to result
in renewable and continuing income-generating cash crops.
Poverty Incidence in the Mining Sector
Mineral extraction and production often incur significant social and environmental costs which in fact
fall disproportionately on the poor because mining activities are usually located in rural and
mountainous areas and can affect farmlands, rivers and shorelines, where the poorest of the poor are
located, namely, the farmers, indigenous peoples and fisherfolk.
Mainstream mining operations in the country are largely dispersed in the different regions of the
country with the biggest mines found in Benguet and Compostella Valley. Ideally, the natural resources
in these provinces should help increase the output of these regions and improve the economic condition
of its residents. How come the share of mining and quarrying (MAQ) in Cordillera’s economy is so low,
when Benguet was, for the longest time, the epicenter of Philippine mining activity? Consider that the
Benguet Corporation, the Philippine’s first and oldest mining company (gold, copper, and chromite), has
been operating in the area (specifically Itogon) since 1903.
Apparently, mining operations have contributed very little to the alleviation of poverty in mining
dependent provinces. In Masbate (35.5%), Camarines Norte (29.3%) and Agusan del Sur (37%), where
the country’s bigger gold and copper mines are situated, poverty levels are one of the highest in the
country.53 While it is true that poverty levels are determined by many other economic and social
22
51
Mayuga, op cit.
52
Philstar Global (2016). Biochar technology for mine rehab. The Philippine Star, 30 August. (available at:
Page
https://www.philstar.com/business/2016/08/30/1618467/biochar-technology-mine-rehab)
53
Philippine Statistics Authority (2016). 2015 Full Year Official Poverty Statistics of the Philippines, 27 October.
variables, the contribution of mining in alleviating poverty levels in mining dependent provinces is not
obvious.
Based on a study by IBON Foundation, mining industry statistics indicate that most of Philippine mineral
production goes to exports. Total production value in mining in 2015, for instance, was at Php179.7
billion. Meanwhile, the amount of total exports of minerals and mineral products was at Php131 billion
in the same year, or 73% of total production value. 54 The study recommended that for allowing the
extraction and export of most of the country’s mineral wealth while poverty remains stark in regions
with mining activities, the Philippine Mining Act of 1995 should be repealed.
According to the study, among the biggest mining operations in the country are the Taganito Mining
Corp in Surigao; Nickel Asia in Eastern Samar; Sagittarius Mines Incorporated in South Cotabato,
Filminera Resources Corp. in Masbate and TVI Pacific Inc in Zamboanga del Sur. Yet, IBON Foundation
noted that official 2015 poverty statistics show that regions hosting these mining activities are the
poorest, next only to the Autonomous Region of Muslim Mindanao (ARMM). Poverty incidence among
individuals in Caraga (Region XIII) is the second highest in the country at 39.1 percent. The Eastern
Visayas (Region VIII) posted the third highest poverty incidence at 38.7% followed by Soccsksargen
(Region XII) at 37.3%, Bicol (Region V) at 36.0% and Zamboanga Peninsula (Region IX) at 33.9 percent.
Role of Local Governments
The Philippine Constitution declares the national government as owner of all lands and natural
resources. The national government is also responsible for issuing all large-scale mining licenses,
outlining basic environmental and safety requirements, and developing the bulk of fiscal regime
provisions. The national government is required to share 40 percent of the excise taxes and royalty fees
that it collects from extraction activities with the local governments. Local governments are also
entitled to a 40 percent share of the national internal revenue taxes.
jurisdiction. In addition, any project that will have environmental impact must undergo a local
whether companies are acting in compliance with environmental obligations.
Local Policies on Mining

Declaring ordinances that ban certain types or all mining activities in a number of provinces and towns
inconsistent with national laws will pose problems for local government units (LGUs) opposed to mining.
Executive Order No. 79 (Institutionalizing and Implementing Reforms in the Philippine Mining Sector,
23
Providing Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the
Utilization of Mineral Resources) is a reiteration of the Philippine Mining Act of 1995. Its provisions are
Page
54
IBON Foundation Inc. (2017). Regions with biggest mining activities among the poorest–IBON. IBON, 23 February. (available at:
http://ibon.org/2017/02/regions-with-biggest-mining-activities-among-the-poorest-ibon/)
aimed to facilitate mining exploration and operations through certain institutional arrangements. It
compels LGUs to conform to the national mining policy, by not issuing mining moratoriums such as has
been done by several provinces. EO 79 directs the Department of the Interior and Local Government
(DILG) to ensure that governors and mayors conform to national regulations and policies. Under the
provision of EO 79, LGUs can point out the limitations of a mining activity within a municipality, but not
necessarily decide the fate of a project. If there’s a pending ordinance against mining, that will stay
unless it’s declared illegal by a court or withdrawn by the LGU. If the national government thinks that
the ordinance is contrary to national law, it will follow a process so that the matter can be rectified.
Table 2. Local Government Units with Anti-Mining Resolutions

Luzon Visayas Mindanao
Oriental Mindoro Leyte Cagayan de Oro City
Occidental Mindoro Aklan Zamboanga Sibugay
Romblon Antique North Cotabato
Marinduque Bohol Zamboanga del Norte
La Union Samar Sultan Kudarat
Iloilo South Cotabato
Capiz Bukidnon
Guimaras Davao City
Parts of the provinces of Palawan, Abra, Mountain Province, Nueva Vizcaya, Cagayan, Batangas, Sorsogon,
Bicol, Cebu, Leyte, Eastern Samar, Davao del Sur, Surigao del Sur, Agusan Provinces and Bohol
Source: DENR
Province of Benguet
Benguet Province lies in the southernmost in the Cordillera Administrative Region (CAR). It is
geographically located between 16’33” north latitude and 120’34” to 120’52” east longitude. On the
north, it is bounded by Mountain Province, on the south by Pangasinan, on the east by Ifugao and Nueva
Viscaya and on the west by La Union and llocos Sur. The province is located 256 kilomteres north of
Metro Manila.55 Of the province's total land area of 2,616.48 square kilometers, forest land comprises
1,747.40 sq. km. (66.78%) while alienable and disposable lands make up 869.08 sq. km. (33.22%).
Classified forest land is distributed as follows: forest/watershed reservation is 657.43 sq. km.,
timberland is 233.61 sq. km., national parks is 698.67 sq. km., military reservation is 5.54 sq. km. and
civil reservation is 152.15 sq. km.56
Benguet is mainly an agriculture-based province producing 80% of the national domestic consumption
requirements for temperate vegetables. Other distinctive agricultural products include, cutflowers
strawberries, Benguet coffee, tiger grass brooms, livestock and poultry products, fisheries, mineral
production and tourism57. Benguet’s fertile land along the rivers and gold ore in the mountains saw the
emergence of distinct villages engaged in various economic activities. Gold mining communities rose in
the gold-rich areas in Itogon, while gold-trading villages were established along strategic mountain
passes and trails. Rice-growing villages emerged in the river valleys. Swidden farming combined with
gold panning in the streams and rivers.
24
55
Benguet Socio-Economic Profile 2012
Page
56
http://www.dilgcar.com/index.php/2015-07-10-07-24-09/province-of-benguet
57
Benguet Provincial Disaster Risk Reduction and Management Plan (PDRRMP) 2013-2016
Corporate mining in Benguet started during the Spanish colonial period when Spanish businessmen
secured a mining concession from the Igorots in Mancayan and launched the operations of the Sociedad
Minero-Metalurgica Cantabro-Filipina de Mancayan in 1856. This mine eventually closed down. When
the Americans arrived in the 1900s, they entered into contracts with local families to file legal claims to
mineral-bearing land. These claims were later used by American prospectors to create the mining
companies that would dominate the mining industry in Benguet. 58
Large-scale corporate mining has been going on in Benguet since 1905. Corporate underground and
open pit mining has been going on for more than a century of mining by Benguet Corporation, Itogon
Suyoc Mines, Atok Big Wedge, Sto Niño Mines, Black Mountain, Benguet Exploration, Philex Mining
Corporation, Lepanto Consolidated Mining Company, Gold Fields Resources, Royalco, and other
companies. These mines were a major factor in the development trends of Benguet Province. The mines
served as a magnet for the influx of migrant settlers from all over the Cordillera Administrative Region
(CSR) and other parts of the country and were a push factor in the development of Baguio as a
commercial, government and educational center of the CAR. 59
Province of Camarines Norte

The Department of Environment and Natural Resources (DENR) has long identified the towns of Labo,
Paracale and Jose Panganiban in Camarines Norte as vulnerable to soil liquefaction and that extreme
weather conditions may cause an environmental disaster there due to SSM. Extensive mining operations
over the years in these areas have produced sinkholes, and the problem is compounded by crisscrossing
tunnels and abandoned mine pits. Environmental authorities are now mulling an inventory of the
tunnels, which are 100 meters long and 25 meters deep. 60
Municipality of Paracale
Paracale is a third class municipality in the province of Camarines Norte in Bicol region. According to the
2015 census, it has a population of 59,149 people. 61 The town’s name was derived from para cale,
meaning “canal digger.” Small gold mining operations persist in this old gold mining center and locals
still pan for gold. Paracale is believed to be sitting on a pot of gold with its 23 million metric tons of gold
ore deposit. The large deposits of gold ore can be found throughout the town’s riverbeds, flood plains,
and even sink holes. About 90% of the local residents’ livelihood is mining. Miners from other provinces
also flock to the small scale mining (SSM) sites to mine.
There were four large scale mining companies in Paracale:

 United Paragon Mining Corporation (not operational)
58
APIT Tako. Mining in Philippine History
59
Philippine Task Force for Indigenous Peoples Rights (2013). Philippines: Position Paper On Mining And Environmental Governance In
Baguio City And Benguet. A contribution to the Policy Dialogues on Environmental Governance for CAR, University of the Philippines-Baguio,
25
Baguio City, 28 January.

60
Amo, C. and C.S. Felipe (2012). “Small-scale mining pose risks to 3 Camarines towns.” The Philippine Star, 26 November. (available at:
Page
https://www.philstar.com/nation/2012/11/26/873433/small-scale-mining-pose-risks-3-camarines-towns)
61
Census of Population (2015). "Region V (Bicol Region)". Total Population by Province, City, Municipality and Barangay. Philippine Statistics
Authority.
 Unidragon Mining and Development Corporation (not operational due to cease and desist order
by MGB)
 Baotong Mining Corporation (not operational due to cease and desist order by MGB)
 Konka Fulim Mining and Development Corp. (not operational)
In the village of Malaguit, a mountainside mining site in Paracale, formerly the area of operation of
United Paragon Mining Corporation (UPM), mine pits of 20 to 40 feet deep are within close proximity of
one another. Since Paragon suspended all of its mining operations in 2003, small-scale miners and
operators have tried their luck to find gold in Malaguit, leaving behind an undetermined number of
abandoned pits and networks of underground tunnels. 62 In August 20, 2018, DENR’s Mines and
Geosciences Bureau (MGB) issued UPM an exploration permit for its Camarines Norte property. UPM
now has exclusive rights to operate on Camarines Minerals, Inc.’s 395-hectare property in Longos,
Paracale through an operating agreement. 63
Mining is also blamed for the destruction of Pulang Daga Point, perhaps the only tourist attraction in
Paracale. Three Chinese mining firms, Uni-Dragon Mining and Development Corporation, Baotong
Mining Corporation, and Liaoning Fenghua Group Philippine Mining Co. Inc., are blamed for the wanton
destruction of marine life in Pulang Daga. Fishermen in the area complained how their income has
dropped considerably after pollutants slowly killed the coral reefs in the area. The operations of these
three mining firms have been suspended. However, chemicals used for processing gold ores, including
mercury, cyanide, nitric acid, and carbon, still end up in coastal waters. Some 40 hectares of corals reefs
and mangrove forests are reportedly also damaged. 64
Municipality of Jose Panganiban

Jose Panganiban is a second class municipality in the province of Camarines Norte, Philippines.
According to the 2015 census, it has a population of 59,639 people. 65 The municipality was formerly
known as Mambulao, a word taken from “mambulawan,” meaning bountiful in gold. It was renamed to
honor Jose Maria Panganiban on December 1, 1934.
Even before the colonizers came, Mambulao was already a flourishing mining town. It was the
Spaniards, drawn by the rumor of immense gold deposits in the Mambulao-Paracale district, who
mastered in exploring the gold mining potentials of these towns. From 1900 until the early twenties,
Mambulao was a sleepy town, isolated from the other towns of Camarines Norte. One of the most
notable mining company to operate in this municipality is the Philippine Iron Mines, then the largest
iron mine in Asia.
Mining companies that operated in Jose Panganiban include:

 Philippine Iron Mines (defunct) - 1925 to 1975, then biggest iron mine in Asia
 San Mauricio Mining Company (defunct) - 1933
 Benguet Gold Mining Corporation (defunct)
62
Moya, G.P. (2014). “Gold rush”. Rappler, 25 October. (available at https://www.rappler.com/nation/73060-death-destruction-paracale-gold-
26
mines
63
Mogato, A.G.A. (2018).
Page
64
Moya, op.cit.
65
Census of Population (2015). "Region V (Bicol Region)". Total Population by Province, City, Municipality and Barangay.
 Motherlode Mining Company (defunct)
 J. G. Realty and Mining Company (defunct) - 1987-1997
 Johson Gold Mining Corporation
 Investwell Mining (mining arm of Isabelo Fonacier Mining)
 Ferro Management and Consultancy Group Inc. - 2008
Table 3. Summary of Mining Municipal Government of Jose Panganiban,

Camarines Norte Province, Bicol Region, Philippines
Resolution/ Title of Resolution/ Ordinance
Ordinance No.
Ordinance 004- An ordinance totally banning use of compressor in mining activity at Jose Panganiban,
2004 Camarines Norte, providing penalties for violators thereof
Ordinance 91- An ordinance imposing business tax of one hundred pesos for every trip of truck with ores
2014 and tailings taken within Jose Panganiban, Camarines Norte
Resolution 682- A resolution advancing the claims of the LGU of the municipality of Jose Panganiban,
2012 Camarines Norte in its capacity as agent of the state over the abandoned iron stockpiles
from the defunct PIM located in barangays of Larap, Nakalaya and Sta. Elena, this
municipality, subject to Executive Order 79 and its implementing rules and guidelines
Resolution 295- A resolution strongly appealing to the DENR thru Sec. Ramon Jesus Paje to revoke/ cancel
2011 MPSA 308-2009-V covering an approximate area of 153.7478 hectares situated in Sitio
Dawahan, Barangay Nakalaya, Jose Panganiban, Camarines Norte
Ordinance 007- An ordinance adopting requirements, regulations and imposing fees and charges on the
2004 issuance of Sangguniang Bayan endorsement for mining, extraction of mineral resources
and other related activities within the jurisdiction of this municipality
Resolution 590- A resolution endorsing the request of land-owners for validation and consideration for the
2014 declaration of Minahang Bayan in Jose Panganiban, Camarines Norte
Resolution 786- A resolution enjoining the land-owners, financiers, and/or operators to submit a
2015 photocopy of the CTC of all the workers in their operations and submit CTC to their
respective PB on or before May 30, 2015 for the database of small-scale gold mining in Jose
Panganiban, Camarines Norte
Resolution 787- A resolution enjoining the land-owners, financiers, and/or operators to submit a
2015 photocopy of the CTC of all the workers in their operations and submit CTC to
their respective PB on or before June 15, 2015 for the database of small-scale
gold mining in Jose Panganiban, Camarines Norte
Resolution 134- A resolution favorably endorsing the Integrated Gold-Copper Mineral Processing Pilot Plant
2016 Field-Testing in the Bicol Region from the Department of Science and Technology, and
University of the Philippines
Resolution 463- A resolution approving an ordinance authorizing artisanal and small-scale gold mining
2014 (ASGM) miner’s registration, mercury-free method awareness accreditation, formation of
mining cooperatives, and facilitation for the declaration of Minahang Bayan in Jose
Panganiban, Camarines Norte
Resolution 111- A Resolution Appealing to Small-Scale Mining Operators to reduce or eliminate the use of
2012 mercury (Hg) within the jurisdiction of the Municipality of Jose Panganiban, Camarines
Norte
Source: Sangguniang Bayan, Municipality of Jose Panganiban, Camarines Norte
27
Page
Policy on Mine Closure under the Duterte Administration
In consonance with the directives of President Rodrigo R. Duterte to regulate mining operations towards
sustainable development, DENR Secretary Roy A. Cimatu issued DENR Administrative Order (DAO) No.
2018-19, re: Guidelines for Additional Environmental Measures for Operating Surface Metallic Mines. 66
DAO No. 2018-19, signed on August 17, 2018, aims to provide new environmental policies that will
ensure sustainable environmental conditions at every stage of mining operation, and minimize the
disturbed area of a mining project at any given time. 67
The Order covers all Mineral Agreements (MAs), Financial or Technical Assistance Agreements (FTAAs),
and other similar mining tenements having surface metallic mines under development, construction or
operating stage. Among the additional environmental measures that shall be incorporated in the work
program of the MAs/FTAAs and other mining tenements include the following: (1) topsoil and subsoil
management; (2) buffer zone management; (3) pier stockyard as temporary stockpile area for ore
shipment; and (4) maximum disturbed area for nickel mines.
The Order also provides a maximum area of extraction of ore at any given time depending on the scale
of mining operations, as follows (Table 4).
Table 4. Maximum area of extraction of ore based on scale of mining operations

Scale of Mining Operation (Wet Metric Tons/Year) Maximum Disturbed Area
1 Million or less 50 hectares
More than 1 Million but less than 3 Million 60 hectares
3 Million but less than 5 Million 70 hectares
9 Million and up 100 hectares
Source: MGB
However, areas utilized for ancillary facilities, such as settling ponds, stock yards, sumps, motorpools,
administrative offices, and other similar facilities, shall not be included in the above maximum disturbed
area limit. Furthermore, temporary revegetation or progressive rehabilitation shall be implemented
immediately on the disturbed areas exceeding the maximum disturbed area limit.
During the course of operation, should the Contractor or holder of other mining tenements intend to
open an additional area beyond the maximum disturbed area limit, an equivalent area should undergo
temporary revegetation or progressive rehabilitation to ensure that the maximum disturbed area limit is
strictly observed.
The areas for development/utilization and temporary revegetation or progressive rehabilitation should
clearly be defined in the pertinent Three-Year Development/Utilization Work Program and
28
Page
66
DENR Administrative Order No. 2018-19. (available at: https://server2.denr.gov.ph/uploads/rmdd/dao-2018-19.pdf)
67
Ibid.
Environmental Protection and Enhancement Program (EPEP)/Annual EPEP. The areas for temporary
revegetation not utilized for mining operations for a period of three years shall immediately be subject
to progressive rehabilitation.
All Contractors or holders of other mining tenements covered by this Order shall post an annual
performance bond of five million pesos in a duly licensed bonding company to guarantee compliance
and implementation of the temporary revegetation and/or progressive rehabilitation of the disturbed
areas beyond the maximum disturbed area limit.
Suspension of Small Scale Mining in Abandoned Mine Sites

In 1994, the Philippine Congress passed Republic Act 7076, otherwise known as People’s Small Scale
Mining Act of 1991 (Minahang Bayan Law). Minahang Bayan was created by the government to curb
illegal mining and mitigate the adverse environmental impacts of indiscriminate mining operations in
the country. A Minahang Bayan centralizes the processing of minerals within a zone where the
government can better monitor gold production by small-scale miners. There are 300,000 to 400,000
small-scale miners operating in 40 mineral-rich provinces nationwide, the majority of which operates
outside the Minahang Bayan.68 About 28 tons of gold or 80 percent of the country’s annual gold
production were produced by this sector in the past decade 69. Small-scale mining contributes around 70
percent of the country’s total gold output before the noticeable drop in gold purchases of the Bangko
Sentral ng Pilipinas (BSP).70
Small-scale mining (SSM) needs to be strictly regulated as well. However, regulation is much more
complicated compared with the large mines and would require organization/cooperation among the
miners themselves and the strong coordination between DENR and the local government units (LGUs).
They will need significant government resources and intervention much like the 37 abandoned mined-
out sites scattered all over the country which remain as grim reminders of what had gone wrong in the
manner we have managed mining in the past.
SSM is also a huge industry in Benguet. It employs over 100,000 pocket miners, most of them operate in
Itogon and other Benguet towns of Mankayan and Tuba. An average of 50 kilograms of gold is sold
weekly to black market dealers in Baguio City. A gram of high quality gold sells for P1,500 while a gram
of inferior quality sells for P900, according to a local dealer. This translates to at least P2-billion gold
sales annually.71 But not one association operates a Minahang Bayan. So far, only 12 groups have been
granted temporary SSM permits or contracts by the provincial mining and regulatory board (PMRB) of
Benguet. The rest mine tunnels openly despite the absence of documents.
Itogon is host to two of the country’s oldest gold mining companies: Benguet Corporation (founded in
1903) and Philex Mining Corporation (founded in 1955). While Benguet Corporation officially stopped
operations in 1997, it still maintained ownership over its vast claims. Philex, meanwhile, has mining
68
Galvez, J.K. (2016). “DENR asks all small-scale miners to stop operating”, The Manila Times, August 8. (available at:
http://www.manilatimes.net/denr-asks-all-small-scale-miners-to-stop-operating/278702/)
69
29
Featuredesk (2016). “PH Government Halts Small-Scale Mining Operations”, PageOne.ph, August 8. (available at: http://pageone.ph/ph-
government-halts-small-scale-mining-operations/)
70
Ibid.
Page
71
Lapniten, K. (2018). Benguet gold plant draws few miners despite green tag, Inquirer.net, 6 July. (available at:
https://newsinfo.inquirer.net/1007539/benguet-gold-plant-draws-few-miners-despite-green-tag)
claims over portions of Barangay Ampucao. All of Itogon’s nine villages also have SSM operations, but
most of the 12,000 pocket miners are concentrated at Barangay Ampucao, Ucab, Virac, Tuding, Loacan
and Gumatdang. A huge portion of the 50 kilograms of gold sold to both licensed and black-market
dealers in Baguio City each week comes from Itogon tunnels. Gold traders buy a gram of high quality
gold for Php1,500, while low purity gold can be sold for P900. Annually, these transactions could sum up
to at least Php2 billion.72 The Itogon “gold fever” has lured people from neighboring towns and
provinces. Some work seasonally while others have made Itogon their new home.
When Typhoon “Ompong” (international name: Mangkhut) barreled through Benguet on Sept. 15, 2018,
small-scale miners took shelter in several shanties and a bunkhouse at the side of a mountain. Strong
rains dragged down tons of earth from a mountainside, which buried these houses and killed more than
60 people. The national government’s immediate reaction was to close down all SSM operations in the
Cordillera Administrative Region (CAR). On September 17, 2018 DENR Secretary Roy A. Cimatu issued a
Cease and Desist Order (CDO) against SSM activities in the Cordillera Autonomous Region (CAR)
following the landslide in an abandoned mine site in Barangay Ucab, Itogon, Benguet brought about by
the Typhoon Ompong. 73 It orders the small-scale miners to stop all their current activities until the
approval and proclamation of the other existing applications are in place. However, Itogon Mayor
Victorio Palangdan appealed to Secretary Cimatu not to stop all the SSM operations since not all areas
are as dangerous as the Benguet Corporation (BC) area. He stressed that the area is not covered by any
SSM permit because and that the BC mining tunnel there is "abandoned." 74
IV. TRANSPARENCY AND ACCOUNTABILITY IN THE EXTRACTIVE SECTOR

Right to Information
The right to information and access to official records is a constitutionally recognized right. 75 The
absence of a clear transparency mechanism limits access to information on mining. Individual income
tax returns are likewise confidential under Philippine law, but transparency in revenue payments per
sector can be accessed through the Bureau of Internal Revenue (BIR), which is in charge of assessment
and collection of all national internal revenue taxes. Transparency in revenue payments can also be
accessed through individual companies.
In its Action Plan for the Open Government Partnership (OGP), the Philippine government committed to
institutionalizing transparency, accountability and public participation in governance. 76
Concerns about environmental degradation caused by the extraction of non-renewable resources have
prompted a need for more sustainable alternatives. Unless a substitute to mining and non-renewable
72
___________. (2018). ‘El Dorado’ no more, but Itogon miners digging in, Inquirer.net, 23 September. (available at:
https://newsinfo.inquirer.net/1035196/el-dorado-no-more-but-itogon-miners-digging-in#ixzz5RtlFjIH9)
73
DENR (2018). “DENR bans small-scale mining in CAR.” (available at http://www.mgb.gov.ph/2015-05-13-02-02-11/mgb-news/706-denr-
bans-small-scale-mining-in-car)
30
74
Ranada, P (2018). Cimatu orders stop to Cordillera small-scale mining after Ompong landslides. Rappler, 17 September. (available at:
https://www.rappler.com/nation/212161-cimatu-stop-small-scale-mining-itogon-ompong-landslides)
Page
75
1987 Philippine Constitution, Art. III, section 7; Art. II, section 28; Art. XII, section 21; Art. XI, section 17; Art. VI, sections16 (4) and 20.
76
https://www.opengovpartnership.org/countries/philippines
resources emerges, the only solution is to minimize the environmental and social impacts of mining, and
of extractive industries in general. On the other hand, mine closure can create new opportunities, and
when the process is adequately resourced and managed in an integrated way from an early stage, it has
the potential to create the foundations for long-term development.
One of the most important ways to make this possible is through good mining policies, which
incorporate effective public involvement through consultation, dialogue, or hearing. Mining policies
should provide space for public involvement where all stakeholders, i.e. mining companies, national and
local government, civil society, and especially the communities living in proposed mining areas whose
lives are immediately affected by extractive activities, can discuss and deliberate the decisions involving
the mine processes. These public consultations should be spaces where everyone’s concerns, ideas and
opinions are heard and considered at all stages, including planning, implementation and assessment.
Equal participation also includes ensuring transparency and enabling all stakeholders to make informed
decisions.
Role of EITI
The Extractive Industries Transparency Initiative (EITI) is a global standard ensuring transparency of
revenues from natural resources. It is a multi-stakeholder initiative led by the government, industry and
civil society representatives. EITI is a global standard for transparency in the extractives sector that
involves the reconciliation of company payments with government receipts by an independent
administrator and disclosure of that information to the public. 77 The objective of the EITI is to ensure
that accurate figures about revenues are publicly available, to identify any potential discrepancies
between payments and receipts and to investigate and address the underlying causes. EITI provides a
platform to systematically report on, review, and assess what is being paid by companies and received
by governments through a system of bilateral disclosures.
Philippine EITI
The main objective of the Philippine EITI (PH-EITI) is to improve transparency and increased
accountability in the extractive industry to improve governance of the extractive sector. Specifically, the
five main objectives for EITI implementation in the Philippines are as follows: 78
 Show direct and indirect contribution of extractives to the economy (through EITI process);
 Improve public understanding of the management of natural resources and availability of data;
 Strengthen national resource management / strengthen government systems;
 Create opportunities for dialogue and constructive engagement in natural resource
management in order to build trust and reduce conflict among stakeholders; and
 Strengthen business environment and increase investments.
A multi-stakeholder group composed of civil society, business, and government was formed to
implement EITI in the Philippines. Through an annual report published by PH-EITI, revenues collected by
government and paid by companies are compared and reconciled to see if they tally. The annual EITI
31
Page
77
https://eiti.org/
78
https://www.opengovpartnership.org/commitment/04-extractive-industries-transparency
report informs the public on how much the extractive industry contributes to the economy, and how the
government spends such revenues for the welfare of citizens. In the process, gaps are identified by the
report, and recommendations are formulated by stakeholders to address such gaps. Beyond producing a
report and promoting fiscal transparency, PH-EITI aims to improve governance of the extractive sector
by making information accessible and enabling stakeholders to have an evidence-based approach to
policy making. The EITI promotes access to information, transparency and accountability in the
extractive sector through disclosure and publication of payments made by mining, oil, gas and other
extractive companies.79
EITI certification is intended to alleviate public distrust of the government and mining companies, which
often struggle with negative perceptions arising from past incidences of pollution from mines and oil
fields. It will also open up the government’s books to allow the collection and distribution of revenues
derived from extractive industries to be traced. The transparency afforded by the process will facilitate
more consistent benchmarking, fostering a more accurate and objective picture of the sector’s actual
operations, in addition to taxes paid and government revenue streams.
PH-EITI Multi-stakeholder Group

EITI’s multi stakeholder approach also provides a platform for discussion of issues relevant to the
governance of the extractive sector, thereby increasing civic participation. When the Philippines officially
became an EITI candidate country in May 2013, former Philippine President Benigno S. Aquino III,
through Executive Order No. 147, created the Philippine Extractive Industries Transparency Initiative
Multi-Stakeholder Group (PH-EITI MSG). In accordance with the EITI International Guidelines, the PH-EITI
shall be implemented and operationalized through a multi-stakeholder group (MSG) and decision
making body (hereinafter referred to as PH-EITI-MSG). It shall be headed by the Secretary of the DOF as
the Chairperson who will be responsible for convening the group. 80 It shall specifically consist of the
following members:
 five (5) government representatives chosen by the Mining Industry Coordinating Council (MICC),
created pursuant to Section 9 of EO No. 79, which will include senior officials, duly deputized to
represent their respective Secretaries; provided that, local government units shall be
represented by the Union of Local Authorities of the Philippines (ULAP);
 five (5) business group representatives; and
 five (5) civil society organization (CSO) Representatives.
The PH-EITI-MSG shall have the following mandates: 81

 ensure sustained political commitment for the initiative and mobilize resources to sustain its
activities and goals;
 set the strategic direction required for effectively implementing the initiative in the Philippines;
 assess and seek the removal of barriers to its implementation;
 set the scope of the EITI process; and
 ensure that the initiative is effectively integrated in the reform process outlined under EO No. 79
and any other related government reform agenda.
32
79
Ibid.
Page
80
https://www.officialgazette.gov.ph/2013/11/26/executive-order-no-147-s-2013/
81
Ibid.
Other government agencies are likewise involved in regulating the activities of the extractive industry.
Table 5 describes the specific mandate and role of the DENR-MGB, DOE, and other regulatory agencies
as these may relate to EITI.
Table 5. Mandate of Philippine Regulatory Agencies on Collection, Payment, Reporting of Revenue, and
other Matters Relevant to the PH-EITI Report
Agency Mandate
DENR-MGB Promulgate rules and regulations pertaining to mineral resources exploration, development, and
utilization.
Department of Supervise and control all government activities relative to energy projects; regulate private sector
Energy (DOE) activities in all energy projects; formulate rules and regulations necessary to implement the law
Department of Manage the financial resources of the government
Finance (DOF)
DOF-Bureau of Assess and collect all national internal revenue taxes, fees, and charges; enforce all related forfeitures,
Internal Revenue penalties, and fines, including execution of judgments in cases decided in its favor by the Court of Tax
Appeals and ordinary courts.
DOF-Bureau of Collect customs duties, taxes, and corresponding fees, charges, and penalties, account for all customs
Customs revenues collected, exercise police authority for the enforcement of tariff and customs laws, prevent and
suppress smuggling, pilferage and all other economic frauds within all ports of entry, among others.
DTI-Board of Regulate and promote investments in the country
Investments
National Formulate and implement policies, plans, and programs to promote and protect the rights and well-being
Commission on of the indigenous peoples and indigenous cultural communities (IPs/ICCs), including recognition of their
Indigenous ancestral domain and rights thereto.
Peoples (NCIP)
Local Exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subject to
Government the Local Government Code, consistent with the basic policy of local autonomy.
Units (LGUs) Exercise its right to receive a just share in the national taxes and an equitable share in the proceeds of
the utilization and development of the national wealth within their respective areas, and to share the
same with their inhabitants by way of direct benefits.
Promoting Transparency in the Extractive Sector at the Subnational Level

The law mandates mining contractors the establishment of a functional post-disturbance land use
capability. Mine site decommissioning and rehabilitation shall aim to establish a land use capability that
is functional and proximate to the land use prior to the disturbance of the mine area, unless other more
beneficial land uses are predetermined and agreed in partnership with local communities and LGUs. 82
Due to the local footprint of oil, gas, and mining operations and their proximity to the community, active
local demand for more information represents a major challenge for local governments, as well as for
mining companies.
Creation of Subnational EITI multi-stakeholder groups

Local governments can implement their own subnational EITI, like the sub-national EITI in Compostela
Valley. In implementing the subnational EITI, local stakeholders can include provisions on tracking how
local governments are spending the revenues from the extractive industry. Community-based
organizations and people’s organizations in communities hosting mining operations can influence how
33
money from extractive activities in their communities are actually spent by their local governments.
Local CSOs do not expect EITI to resolve all issues related to the industry, but EITI will be a platform in
Page
82
strengthening peoples’ rights to be part of the decision-making process in utilizing natural resources. In
implementing EITI at the subnational level, it can serve as a venue to strengthen the process of acquiring
the free prior and informed consent (FPIC) of indigenous peoples (IPS).
Local resolution or ordinance on EITI

jurisdiction. 83 In addition, any project that will have environmental impact must undergo a local
whether companies are acting in compliance with environmental obligations. A local resolution or
ordinance is a rule that can only be applied within the jurisdiction of the granting local government
body. For example, the Sangguniang Panlalawigan (provincial legislative council) in the province of
Compostela Valley considered and approved an ordinance to increase transparency of the revenues and
payments of large and small-scale mines (SSM) in their province. 84 This ordinance does not have any
power to compel miners in other provinces to disclose the same information.
Stakeholder engagement through transparent and effective communication

It has been frequently noted that a failure to engage stakeholders in a transparent process constitutes a
primary failure of mine closure processes. It is also important to start stakeholder engagement,
consultation and empowerment in the earliest stages of the mine closure planning process, if not the
earliest project planning phases. EITI can provide the opportunity for residents of mining communities to
strengthen their rights to participate in the decision-making process of mining activities in their
communities, to monitor and assess the practices of the company they are hosting and to evaluate
whether they are getting their fair share of the natural resources extracted in their area. EITI can
guarantee access to information to enable the communities to exercise these rights.
V. RECOMMENDATIONS
An assessment by the MGB of 21 abandoned mines in the country indicated that all 21 pose significant
environmental and health risks in varying degrees. Unless mitigation and corrective measures are
undertaken, the surrounding communities and environment will be continuously exposed to chemical
and physical hazards. For those sites deemed subject to high physical risks, engineering measures like
structural enhancement of tailings ponds to prevent collapse and ensure containment of waste rock to
prevent acid mine damage need to be installed as soon as possible.
The mined-out sites can be converted to grazing land, naturally reforested or planted with fast-growing
wood species, bamboo and industrial crops like coconut, oil palm, rubber, coffee, cacao and abaca.
34
83
Philippines, Local Government. Code of 1991. (available at: http://www.officialgazette.gov.ph/downloads/1991/10oct/19911010-RA-7160-
Page
CCA.pdf)
84
Bantay Kita (2016). Extractive Industry Transparency Report: Transparency Initiative Report in Compostela Valley Province. (available at:
http://bit.ly/2ezvEAB)
Provided sulfide-and heavy metal-containing materials are safely reburied and contained, the restored
sites can be planted to annual food crops.
The mined-out sites can also be converted into recreation and eco-tourism sites complete with small
ponds or lakes for recreational fishing, boating and hiking trails. With road networks, energy and water
systems and port facilities in place, some can be candidate new town sites, industrial estates and export
processing zones.
Where abandoned mines still have viable ore deposits, prior mining rights should be cancelled and the
mines opened for bidding to new mine operators. The immediate and complete rehabilitation of
disturbed areas should be part of the conditions. Sadly, MGB-DENR which is tasked with looking after
these mined-out sites does not have enough resources in its annual appropriations to accomplish the
task.
A study that assessed the status of the Rapu-Rapu Minerals, Incorporated (RRMI) and the Filminera
Resources Corporation (FRC) in the Bicol Region regarding their mine closure and decommissioning
procedures in relation to the impact communities that they engaged recommended that the following
mining policies to achieve a sustainable decommissioning and closure be made:
1. The development programs as an output of the consultations and legal processes implemented to
establish the SDMP of the impact barangays should be integrated as a development roadmap
subject of the LGUs for regular review, monitoring and evaluation;
2. Mine closure planning must be integrated within the overall mine operations plan, and should be
integral to the operational life cycle of a mine to include: (a) Mine Closure Planning at the feasibility
phase of mine operations, which allows mining operations to identify future constraints and costs of
mine closure; (b) Financial pro-visions and assurances; (c) stakeholder engagement and community
consultation needs to be integrated within the overall mine operations and closure processes; (d)
clear and measurable indicators are needed to track compliance;
3. The organizational transformation of the DENR, specifically the MGB and the Environmental
Management Bureau (EMB) of the DENR, where a regulatory structure should be rationalized. 85
The research strongly recommends for the creation of another government agency like the
Environmental Protection Agency (EPA), where the function of which should focus on the Regulatory,
Monitoring and Evaluation of mining and other industries’ operations and activities, and for which
the EMB should be a part. A specialized Bureau, like a Mining Regulatory Authority, that will
regulate mining practices, policies and procedures compliant to the Mining Act of 1995 and other
legislative policies and protocols.
At the local level, sustainable development is about meeting locally defined social, environmental, and
economic goals over the long term. Local communities are dealing with the challenges of balancing
mineral extraction with environmental values and the needs of different stakeholders. Given the
complexity of these issues, governance that is democratic and empowered means that stakeholders,
especially communities, must have the ability to effectively convey their concerns and evaluate the costs
35
and benefits of a project. Whatever post rehabilitation scenarios may be deemed feasible and desirable,
Page
85
Gonzales, A. B. (2018). Sustainable decommissioning and integrated closure planning of selected mine sites in the Bicol Region, Philippines,
European Journal of Environmental Sciences, Vol. 8, No. 1, pp. 76–82. (available at: http://www.ejes.cz/index.php/ejes/article/view/350/297)
the consent and active participation of the local communities as well as local governments must be
secured.
CONCLUSION
communities that have no choice but to deal with the problem. If the former mine operator or
developer do not pay, the Philippine Government and ultimately the taxpayer will end up paying for the
reclamation of abandoned mine sites. Inadequate security for reclamation is a problem as the number
of major mines increases without security to ensure that reclamation is completed. If one mine
operator defaults, there will be inadequate funds in place to clean up the abandoned mine. Mine
reclamation costs then will have to be obtained from general tax revenue.
Left unrehabilitated, abandoned mine sites may degrade to form hazards to human and animal life in
the form of accessible adits, shafts and pits, as well as associated pollution, such as acid drainage, from
old workings and stockpiles. Visual degradation is an issue in some areas, even if the site is not actively
eroding. In some places, ongoing erosion can affect land stability, as well as impact revegetation efforts
and groundwater quality.
While mining companies are now guided and regulated from the preparation phase to the closure
phase, including rehabilitation, by virtue of Republic Act 7942 or the Philippine Mining Act of 1995,
much remains to be desired. For instance, aside from the required community development plans for
the host and neighboring communities, mining companies are now being required to develop,
implement and monitor a ‘Mine Rehabilitation Plan’ covering the first year of closure up to five (5) years
thereafter. For the implementation of the said plan, a ‘Mine Rehabilitation Fund’ is also required to be
maintained. The law also recognizes and enforces that the mine rehabilitation process should cover both
the physical features of the mining site and the socio-economic aspects for the surrounding
communities. However, full implementation of the law and its related requirements, especially in the
rehabilitation of mining sites, is yet to be achieved.
In conclusion, a strategy for mine closure needs to be an integral part of mine development and
operational planning. It will need to be revised throughout the life of the mine to reflect, among other
things, changes in community expectations, economic activities, and the increasing capacity and
changing responsibilities of certain actors. Planning for closure will be particularly difficult at the
beginning of a mine’s life, but at a minimum consideration needs to be given to ensuring that the
mechanisms, institutions, and processes created to distribute benefits will be sustainable in the long
term.
36
communities that have no choice but to deal with the problem. If the former mine operator or
Page
developer do not pay, the Philippine Government and ultimately the taxpayer will end up paying for the
reclamation of abandoned mine sites. If only the Mining Act required the project proponent to post a
bond that would provide adequate funds for mine reclamation at the beginning of the project, the risk
of unfunded environmental liability for the Philippine government and taxpayers, could be avoided.
There is no reclamation fund in the Philippines like the U.S. Superfund 86 to address unfunded
environmental liabilities arising from abandoned mines.
Small-scale mining needs to be strictly regulated as well. However, regulation is much more complicated
compared with the large mines and would require organization/cooperation among the miners
themselves and the strong coordination between DENR and the local government units (LGUs). They will
need significant government resources and intervention much like the abandoned mined-out sites
scattered all over the country which remain as grim reminders of what had gone wrong in the manner
we have managed mining in the past.
Mining is a temporary land use activity and dependent on finite resources, making closure of mining
operations inevitable. Mine closures is a complex issue that requires a proactive management and a
comprehensive and integrated approach. If not managed well, closures can incur significant liabilities to
Government and pose safety, environmental, social and economic risks. A comprehensive and
integrated just transition approach will help mitigate the adverse impacts and maximize beneficial
outcomes for all stakeholders.
REFERENCES
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Page
86
In the United States, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) 42 U.S.C. 103 created a pool
of funds (referred to as the ‘Superfund’) for the rectification of unfunded environmental liabilities.

Transparency and Accountability Issues in The Rehabilitation of Abandoned Mines in The Philippines

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Transparency and Accountability Issues in The Rehabilitation of Abandoned Mines in The Philippines

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Transparency and Accountability

Issues in the Rehabilitation of

Program Title: Facilitating Public Investment

Sponsoring USAID Office: USAID/Philippines

Contract Number: AID-492-C-13-00014

Author: Carlos O. Tulali,. FPI Grants Coordinator

Objectives of the Study………………………..…………………………………………………………………………………

II. CONCEPTUAL FRAMEWORK

Diverse Nature of Mine Closure Issues………………………………………………………………………….

III. RESULTS AND FINDINGS

IV. TRANSPARENCY AND ACCOUNTABILITY IN THE EXTRACTIVE SECTOR

Background and Rationale

Objectives of the Study

House of Commons, United Kingdom, January 25, 2007

II. CONCEPTUAL FRAMEWORK

Concept of Mine Closure

Government’s Role and Policy in Mine Closure

Policy and Regulatory Framework

G.R. No. 127882, 27 Jan. 2004, 421 SCRA 148.

Mine Closure Policies

Post-mine closure monitoring requirements

Reporting requirements in relation to a mine’s preparation for post-closure

Mine Rehabilitation Fund

Social Development and Management Program

Mining exploration, operation, & ore extraction:

Mine waste and tailings management / Mine rehabilitation, closure or abandonment:

Social and Economic Impacts

Impact on Indigenous Peoples

State of Abandoned Mines in the Philippines

Table 1. Priority Abandoned Mines in the country, 2009

Rehabilitation of Bagacay Mine

Rapu-Rapu Mine Rehabilitation

Sarmiento, P. (2012). “Defaulting on Nature.” Rappler, 16 November. (available at: https://www.rappler.com/business/special-

Abandoned Mine of Zambales Base Metals

Other rehabilitation projects

Poverty Incidence in the Mining Sector

Role of Local Governments

Local Policies on Mining

Table 2. Local Government Units with Anti-Mining Resolutions

Province of Camarines Norte

There were four large scale mining companies in Paracale:

Baguio City, 28 January.

Municipality of Jose Panganiban

Mining companies that operated in Jose Panganiban include:

Table 3. Summary of Mining Municipal Government of Jose Panganiban,

Policy on Mine Closure under the Duterte Administration

Table 4. Maximum area of extraction of ore based on scale of mining operations

Suspension of Small Scale Mining in Abandoned Mine Sites

IV. TRANSPARENCY AND ACCOUNTABILITY IN THE EXTRACTIVE SECTOR

PH-EITI Multi-stakeholder Group

The PH-EITI-MSG shall have the following mandates: 81

Promoting Transparency in the Extractive Sector at the Subnational Level

Creation of Subnational EITI multi-stakeholder groups

Local resolution or ordinance on EITI

Stakeholder engagement through transparent and effective communication

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