Absence minded

The environment chief, the one and only Secretary Ramon Paje, was a no-show at a lecture he was supposed to give during the prestigious 8th annual Asia Mining Congress held two weeks ago in Singapore.

Big guns in government, banking and mining from all over Asia gathered for the three-day conference. It is a high-powered exchange of views on the prospects of the mining industry in what they termed as the most promising economic area in the world these days.

To be invited as speaker in the congress should be an enviable accomplishment. And our lone Cabinet member invited to the conference did not show up?

From what I gathered, Paje was listed as the government speaker in the Philippine portion of the conference, which was all of two hours on the first day.

Surprise: Giving the Philippine government address, titled “Developing the Philippines as a key Asian mining destination,” was Leo Jasareno, director of Mines and Geosciences Bureau (MGB), which is under the Department of Environment and Natural Resources.

Not that anybody minded Jasareno taking the place of the DENR boss. It was just that the absence of Paje was rather conspicuous, because, in the same mining congress in 2011, the speaker for the Philippine government was none other than Paje himself.

I gathered that, in his talk last year, he said that the Philippine government would go all out for the $6-billion gold-copper project called “Tampakan,” even daring to volunteer that the government wanted the proponent, a local firm called SMI (or Saguittarius Mines), to advance its operation from the original target date of 2016 to 2013. That was last year, and those were just empty words.

It turned out that, less than a year after Paje gave such a rousing evaluation of the Tampakan project, he single-handedly sabotaged the Tampakan project.

Early this year, upon Paje’s direct order, the DENR office called EMB (Environment Management Bureau) rejected SMI’s application for an ECC [environment clearance certificate] required by the government for all major business ventures such as the Tampakan mine.

In rejecting the ECC, the DENR cited what the mining industry later came to call a “flimsy reason”—the ordinance passed by the South Cotabato provincial board banning open-pit mining in the province, which SMI proposed to do from the start.

The last time I checked, for any business, the highly technical ECC—screened by experts in the EMB—is the first step in the tedious process of getting government permits for doing business here. Guess what is the last step—LGU permits!

“Flimsy” to me even sounded diplomatic. By citing the provincial ordinance as a reason, the DENR in effect disregarded the Mining Act of 1995, which allowed open-pit mining. As a rule, the law passed by Congress should trash provincial ordinances all the time. Paje simply did not follow the law. It was his duty to uphold the Mining Act.

Anyway, the whole thing may become scarier when you look at the circumstances behind the DENR rejection of the ECC. It seems that Paje wrote a memo to EMB director Juan Miguel Cuna, ordering his underling to reject SMI’s ECC application.

In the EMB decision, in fact, Cuna simply quoted word for word the order of Paje, which I thought was a clever move by Cuna, considering the legal implications of the decision.

Questions thus arose. For example, was the provincial ban his real reason for sabotaging SMI in the Tampakan project? Were there other groups interested in the proven rich mineral deposits there?

* * *

The Asia Mining Congress attracts droves of investment bankers from all over the world, apparently for a glimpse into prospects of multibillion-dollar mining projects in Asia.

From what I gathered, the Philippine portion of the Congress was unusually crowded. At the top of their curiosity list was the much talked about “executive order” of the Aquino (Part II) administration on its mining policy.

Word has it that the supposed EO was already on its fifth draft, with the four earlier ones thrown out the window by our leader Benigno Simeon—aka, BS. It seems that the participants in the mining congress could not bear the suspense anymore. The Philippine panel unfortunately had nothing to deliver before the congress on the administration’s much-publicized new policy on mining.

During the congress, the question whispered in private was, why should the government come up with new rules? Was not the Mining Act of 1995 a comprehensive law, spelling out the rules and all that, in effect a legislated policy statement? It even passed the scrutiny of the Supreme Court.

But to the Aquino (Part II) administration, this country still needed another policy EO.

Perhaps some people want this country, where more than 40 million people are poor, to just leave its mineral wealth under the ground from where none of those poor people will benefit.

* * *

Personally, I have misgivings too on the kind of foreign investors that we attract to the mining industry. To me the acid test on any foreign investor here, particularly one that has the potential to upset our resources, should be this: Without their Philippine operations, how do they fare?

In other words, do they need this country more than we need them? In the past, foreigners with empty pockets come here to strike it big in mining. These are the “investors” that worry the guys down here in my barangay.

The job of screening those investors belongs to our government. And maybe, just maybe, such low quality investors are the kind that we attract because we just cannot put our act together. The big boys are scared to come here.

Except one—the super-major international mining company called Xstrata Copper—a subsidiary of Xstrata Plc. of Australia, which is the fourth-largest copper mining firm in the world, with operations in Australia, Chile and Asia. Xstrata happens to be the foreign investor in the Tampakan prospect. Its reputation is untarnished in the global corporate governance scene, particularly in terms of its policy on bribery, fraud and corruption.

Really, the group shuns those things. Corruption, in particular!

Check this one out: Xstrata was the leader of the mining sector in the Dow Jones Sustainability Index (DJSI) for five consecutive years, which is a reference worldwide for business practices, particularly social and environment performance. If you throw plastic bottles into the sea, you fail the DJSI text. The trend in financial markets is to reject companies that do not follow environmental standards.

I thought Xstrata was the kind of investor we want. If it messes up in Tampakan, the price of its shares abroad will collapse. It has standards to keep.