Philex ordered to pay P1-B fine for Padcal tailings breach

Philex Mining Corp., the country’s biggest gold producer,  has been slapped with a P1-billion fine for the leaks from its tailings pond in Benguet province, the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR) said on Wednesday.

In a letter to the mining firm, MGB Director Leo Jasareno asked Philex to pay some P1.034 billion in penalties for over 20 million metric tons of mine tailings that spilled from its Padcal mine straddling the towns of Itogon and Tuba following days of heavy rains spawned by typhoons “Ferdie” and “Gener”  in August.

In a phone interview, Jasareno told the Philippine Daily Inquirer this was the “final amount” and already included the P325 million the agency earlier computed. Under the Mining Act of 1995, each ton of waste spilled shall correspond to a P50 fine.

However, the amount does not cover other liabilities Philex may still be facing under the Clean Water Act, which imposes a maximum of P200,000 fine every day that a sediment spill is taking place. “That is not yet part of the computation,” he said.

Jasareno said Philex has seven days to respond to the letter imposing the fine “as part of due process.”

Asked for his reaction to Philex’s earlier statement that the company should not be fined because the incident was “force majeure,” Jasareno said this was under consideration.

As of press time yesterday, Michael Toledo, Philex vice president for corporate affairs,  said they have not received an official copy of the letter from the DENR.

But Philex on Wednesday insisted that the breach in the tailings dam at its Padcal mine site was due to natural causes, and is ready to challenge any charges that the DENR may bring as a result of the accident.

In a statement, Philex said that it is “prepared to review any decision on penalties that the DENR will release” regarding the tailings dam breach at the Padcal mine and “contest” it at a proper forum.

Diligent in their duties

It said company officials were always on top of the situation, “acting accordingly and providing timely notices to regulators.”

Philex said the MGB had confirmed there was a system in place for the maintenance and monitoring of its tailings pond and secondary facilities during the Padcal accident, and that Philex personnel were diligent in the performance of their duties.

“The findings came as no surprise because the company’s environmental management system, including the operation and maintenance of Tailings Pond No. 3, has long been ISO-compliant and -certified,” said Toledo, noting the company’s ISO-14001 certification for years 2002, 2006 and 2008, and the latest certification issued on May 10, 2011.

Toledo stressed that “historically unprecedented heavy rains” brought by Typhoon Gener reached 331.80 millimeters (mm), exceeding only by 88.30 mm Padcal’s 50-year rainfall record of 234.50 mm.

Force majeure

He said Philex was prepared to refute whatever penalties the government might impose on it in connection with the Padcal accident.

“We shouldn’t be held liable for something that was caused by force majeure. But we are willing and, in fact, we have said repeatedly that we have the resources and capabilities to deal with all the remediation activities needed to address the Padcal accident,” he said.