MGB cool to congressional franchise for mining operations

By on August 31, 2017

The Mines and Geosciences Bureau (MGB) is against a bill in Congress that may require mining firms to obtain a legislative franchise before they begin operations.

“MGB is not keen to support it. Mining is not a public utility that requires a legislative franchise. It requires the amendment of the Constitution,” MGB director Wilfredo Moncano told The STAR.

Speaker Pantaleon Alvarez recently filed House Bill 6259 that proposes amendments to the Mining Act of 1995, including the addition of a provision requiring all mining operators to seek a legislative franchise.

While MGB said it is still reviewing the bill, the agency maintained that it is not in favor of the new proposal.

“Personally, my take is that it will make it more difficult for an applicant to secure the issuance of an MPSA (mineral production sharing agreement) or FTAA (financial or technical assistance agreement) because a mining company will be lobbying and dealing with congressmen and senators,” Moncano said.

The bill also seeks to prohibit all mining activities in watershed areas, shorten the duration of mineral agreements from 25 years to 10 years, and require operators to rehabilitate mined areas within 10 years of the expiration of their permit.

It also states that all minerals to be extracted shall be processed in the country, particularly in the province they were mined which means that unprocessed ores will not be allowed to be shipped out.

“However, in the event that indeed the Constitution is amended, we will follow. MGB is an obedient entity,” Moncano said.

Under the proposal, all private contractors must first secure a legislative franchise as a prerequisite before they can apply for an exploration permit, an MPSA or an FTAA.

“We are reviewing the proposed bill and we will come up with the position paper for consideration of the Secretary (Cimatu) before submitting to Congress,” MGB assistant director Danilo Uykieng said.

Alvarez argued that government should ensure the proceeds of the mining industry translate into sustainable development, environmental protection, and greater transparency and accountability in the industry.

The industry continues to contribute a measly 0.7 percent to the national economy.

Apart from Alvarez, the bill is coauthored by majority leader Rodolfo Fariñas, minority leader Danilo Suarez, and San Juan City Rep. Ronaldo Zamora.

Leave a Reply

Your email address will not be published. Required fields are marked *