Some Japanese investors raise concern over DENR decisions

February 15, 2017

Some Japanese mining investors have raised concern over the recent decisions of the Department of Environment and Natural Resources to order closure and suspension of some mining firms and cancellation of 75 mining agreements, an official of the Chamber of Mines of the Philippines said on Wednesday.

Nelia Halcon, chamber executive vice president told a  in a forum in Quezon City several foreign mining investors, such as from Japan, United States and United Kingdom, have asked them regarding the orders of Environment Secretary Gina Lopez.

"There is uncertainty prevailing in the industry and Japanese companies are concerned considering the country's commitment to invest in the Philippines," she said.

Halcon admitted they sent a letter to the Commission on Appointments opposing the nomination of Lopez to DENR.

Lopez has said she sought for the deferment of her appointment hearing to early next month so she could prepare for and go first to those areas, which would be affected by her closure order.

Halcon said Lopez was apparently "buying her time," adding that this is first time in the chamber’s history that they are opposing the appointment of a DENR secretary.

Meanwhile, Malacanang defended the order of Environment Secretary Gina Lopez to cancel 75 mining agreements.

In a statement, Presidential Spokesperon Ernesto Abella said the cancellation of 75 mineral production sharing agreements by Lopez "is consistent with Republic Act 7942 that mining applications are closed to proclaimed watershed forest reserves."

"However, as agreed upon in the last Cabinet meeting, the Department of Environment and Natural Resources (DENR) is to establish that it has gone through due process before enforcing the applicable laws, rules, or regulations," he added.

Abella confirmed the DENR will issue a show cause order for concerned mining companies and they will be given seven days to reply

Asked of the action to be taken by the mining companies, which were affected by the latest DENR orders, Halcon said some of those ordered to be closed have written to the Office of the President.

"But if there are foreign companies that will be affected, maybe they could go to ICSID (International Centre for Settlement of Investment Disputes)," she said.

Halcon said it would be better to resolve first the issue in the Philippines by questioning also the decisions of the DENR before the court.

Dante Bravo, president of Global Ferronickel Holdings, one of the 23 companies Lopez ordered closed, warned of huge repercussion the government could face with the order of closure to several companies and cancellation of 75 mineral production sharing agreements.

He said if the orders of the DENR would materialize, the government would have to pay "just compensation" for "non-honor of contracts."

He said mining contracts are covered by government "investment guarantee."

"This (order) has a larger implication," Bravo said, noting this could also impact the local banks, which have provided credits to the mining companies.

Lawyer Deo Contreras, a mining consultant, warned that closure of legitimate mining companies could lead to a spread of illegal small-scale mining.

He said there are around 300,000 to 500,000 small scale mining activities nationwide and they produce about 28 tons of gold last year or about P56 billion.

He said since they are operating illegally, it means that the government lost huge revenues.

Contreras wondered why these small scale mining activities continue to proliferate.

"These are before the very eyes of the local government units, (the) national government. Why do you think they are still proliferating?," he said. Celerina Monte/DMS