Transparency and accountability are indispensable components of responsible mining towards inclusive, responsive, and effective governance of the natural resources of the Philippines.
Philippines, one of the world’s richest countries in terms of mineral resources makes mining one of the potential contributors to its national development, however, the mining industry here has a troubled history due to conflicting data on the sector’s contribution to the economy and its social and environmental impacts. Mining companies even feel that their contributions to the country’s economy are often understated.
The necessary intervention, therefore, is to be transparent in the Social Development and Management Program (SDMP) fund and taxes that the mining industries provide to mining communities and pay to the government, respectively; and for the government to publish the taxes and SDMP fund that it monitors and collects from these industries respectively. Along this line, Extractive Industries Transparency Initiative (EITI) comes as a timely rescue beneficial to all stakeholders of the industry.
The EITI is a global standard of transparency that requires the extractive industries such as mining, oil/gas and coal to disclose what they pay to the government and the government to publish what they collect from the industries. These are mainly through an annual financial report system where these data are being reconciled. EITI also requires disclosure of the information about the sector, including the companies’ social development programs.
The immediate past administration in the Philippines implemented EITI through the issuance of EO no. 147, s.2013 creating the Philippine Extractive Industries Transparency Initiative (PH-EITI) to ensure transparency and accountability in the extractive industries and further reiterated in DENR-DOF-DBM-DILG Joint Memorandum Circular nos. 2009-1 and 2010-1 entitled “Updated guidelines and procedures on the release of the share of Local Government Units from Collections derived by the National Government from Mining Taxes” and “Revised guidelines and procedures on the release of the share of Local Government Units derived by the National Government from Mineral Reservations”, respectively.
PH-EITI aims to show direct and indirect contribution of extractives to the economy; to increase public understanding of the management of natural resources and public accessibility of data; to strengthen national resource management/strengthen government systems; to create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders; and to pursue and strengthen the contribution of the extractive industries to sustainable development.
Consistent with the Order, the Mines and Geosciences Bureau (MGB), as one of the active government agencies implementing the PH-EITI, performs the following roles and responsibilities as provided for in Joint Memo Circular nos. 2009-1 and 2010-1:
- Furnish the Bureau of Internal Revenue (BIR) the estimated annual volumes and values of metallic mineral production of mining companies for the current year;
- Furnish the BIR the actual volumes and values, on a per project basis, of metallic minerals produced during the immediately preceding year;
- Furnish the BIR the actual volumes and values of production of non-metallic minerals, on a per permittee/project basis, during the immediately preceding year;
- Provide the BIR the list of new metallic permittee, actual volumes and values of their respective production and extraction sites;
- Submit to the Department of Budget and Management (DBM) for budget preparation purpose the estimated or projected royalty income to be collected for the current year and the estimated/projected royalty income to be collected for the current year and the corresponding 40% share of the LGUs;
- Prepare a Joint Certification for budget execution purposes of the actual collections from royalty income each calendar year. The said certification shall be transmitted to the Bureau of Treasury (BTr) for validation and approval purposes;
- Inform LGUs of their share from the proceeds of the royalty income from Mineral Reservation of the preceding year within 30 days after receipts of the copy of the validated and approved Joint Certification submitted by the BTr to the DBM.
Pursuant to the Order and JMC nos. 2009-1 and 2010-1, MGB Regional Office No. V (MGB RO-V) has been compliant with its mandated roles and responsibilities; namely: 1. Submission of annual financial reports from the mining companies addressed to MGB Central Offices; 2. Open disclosure and open access to updated mining data thru MGB RO-V website with the following information: a. Mining Tenement Applications; b. Exploration Permit Holders; c. Mining Production Sharing Agreement Contractors; d. Financial or Technical Assistance Agreement Contractors; e. Annual Mining Fees and Charges Collected; and f. Annual Mining Taxes and Royalties paid by Large Scale Operating Companies.
MGB RO-V performance in this aspect is quiet impressive as can be gleaned from written and verbal feedbacks from stakeholders in the Region.