Philex faces more penalties

Aside from being penalized for the tailings discharged from its Padcal mine site in Benguet province, Philex Mining Corp. will be liable to pay other fines for violations of the Clean Water Act and the company’s own Environmental Compliance Certificate (ECC), the Mines and Geosciences Bureau (MGB) said.

Philex on Thursday said it would dispute the penalties being imposed on it as the MGB had found that the breach of its Pacdal tailings dam was not the result of negligence on the part of the mining company.

“It is grossly unfair to penalize Philex and impose a huge fine on it when the government agency imposing the fine itself has confirmed that Philex is just a victim of force majeure event or an act of nature over which it had no control,” said Mike Toledo, Philex senior vice president for corporate affairs, in a statement.

As for additional fines and penalties, Toledo said in a phone interview that Philex management would review any such announcement that the MGB would make before commenting.

In a Sept. 26 letter, the MGB informed Philex president Eulalio Austin Jr. the tailings fee due as of Sept. 6 was P1,034,358,971, “without prejudice to [a] final survey after the leak has been totally contained.”

The amount does not include yet the P200,000 penalty per day under the Clean Water Act, said MGB director Leo L. Jasareno in a text message Thursday.

There is also the P50,000 penalty per violation committed under the terms of the company’s ECC, he said.

‘Force majeure’

Jasareno also said there is no provision in the Mining Act of 1995 qualifying that the penalties for sediments discharge could be waived in case of “force majeure,” or an act of nature. Philex, which blames the breach in its tailings dam on the unprecedented rains spawned by two typhoons, earlier said it cannot be held liable for an accident that was arose from natural causes.

Jasareno also noted that Philex was being fined only for the spill of waste sediments into the surrounding environment.

Under the Mining Act, mining companies are required to fully contain within the tailings pond all mine wastes and sediments. “It must be 100 percent contained. From a technical point of view, Philex was not able to comply, so they must pay,” Jasareno said.

According to a DENR administrative order, a fee of P50 is to be imposed per metric ton of solid fraction of tailings to contractors found to have discharged tailings to areas other than the approved tailings disposal area.

The more than P1 billion in penalties for sediments discharge was based on the 20.66 million metric tons of sediments discharged from Padcal’s tailings pond No. 3. Jasareno said state investigators were able to compute the total volume of the sediments using Philex’s own software.

Philex voluntarily stopped operations at the Padcal mine at about 12:00 midnight of Aug. 1 after finding out that its tailings dam had been breached, allowing sediments to leak into the Balog Creek.

Philex said it received late Wednesday the letter from the MGB imposing the P1-billion fine, as well as a copy of the “Report on Investigation Re: Mill Tailings Fee and Liabilities of Philex Mining Corporation of the Multi-Disciplinary Team” that was tasked to determine the mill tailings fee that may be imposed and to investigate any liabilities in connection with the incident.

Aware of SOPs, SJPs

In the disclosure to the Philippine Stock Exchange, Renato N. Migrino, Philex senior vice president for finance, said the company will contest the imposition of the tailings fee.

“PMC (Philex Mining Corp.) personnel have not been remiss in carrying out the guidelines (guidelines on emergency preparedness), SOPs (standard operating procedures), and SJPs (standard job procedures) and thus, may not be held liable for the incident,” Philex said in its disclosure.

The MGB gave Philex seven calendar days from receipt of the letter to submit its comments on the report.