MAC: Mines and Communities

Alvarez Named 'minerals Czar' Under Arroyo

Published by MAC on 2007-07-28
Source: Inquirer

Alvarez named 'minerals czar' under Arroyo

Michael Lim Ubac & TJ Burgonio, Inquirer,

28th July 2007

MANILA, Philippines—Former environment secretary Heherson Alvarez may now be called the "minerals czar," having been appointed chair of the government-owned and -controlled Philippine Mining Development Corp. (PMDC).

Alvarez yesterday welcomed his appointment and said he was looking forward to "creating wealth for our people from the bosom of the earth, but with due respect for the environment."

President Macapagal-Arroyo signed Alvarez's appointment papers on July 17, a day before Executive Secretary Eduardo Ermita announced that former Manila Mayor Lito Atienza had been named environment secretary in place of Angelo Reyes, who took over the energy portfolio from the reportedly resigned Raphael Lotilla.

Also on July 18, the President signed Executive Order No. 636 "transferring" PMDC from the Department of Environment and Natural Resources to the Office of the President, citing the need to "closely monitor and oversee the efficient and effective implementation of the utilization and development of [the country's] mineral resources."

PMDC is the environment department's corporate arm tasked with exploring, developing, mining, smelting and producing, among others, all kinds of mineral deposits and resources.

"We will push for sustainable development in the mining sector while adhering to the principles of responsible mining, strict enforcement of environmental and mining laws, protection for indigenous peoples, and sharing of benefits for all stakeholders," Alvarez, who was environment secretary in 2001-2002, told the Inquirer.

Benjamin Philip G. Romualdez, president of the Chamber of Mines of the Philippines (CMP), welcomed Alvarez's appointment, saying industry players expected him to do a good job.

"[Alvarez] has started many processes and efforts related to PMDC. His getting a job such as PMDC chair is no surprise," Romualdez said.

DENR 'still in charge'

Horacio Ramos, director of the DENR's Mines and Geosciences Bureau (MGB), said that even with the transfer of PMDC to the Office of the President, the environment department would continue to manage the bulk of mineral-rich areas and regulate mining.

"Our interpretation is that [PMDC] would only manage projects assigned [to it]," Ramos told reporters.

Ramos said PMDC would continue to handle "special projects" and the MGB would manage the rest of the mining projects.

He said the MGB would also continue to perform its functions of regulating companies (including those managed by PMDC), issuing permits, and conducting geo-hazard surveys, among others.

"We're still in charge of the safety of all mines, including those managed by PMDC," Ramos said.

Alvarez also said as much, explaining that the issuance of environmental clearance certificates—a prerequisite for the issuance of mining permits—remained with the DENR through the MGB.

"All regulatory powers are still with the DENR," he said, but quickly pointed out that the issuance of mining permits was now under PMDC.

"I'm the chairman of PMDC, which is in charge of minerals and non-minerals and all mining concerns. PMDC is under the Office of the President," Alvarez said, adding:

"She transferred the authority under her office because she wants efficient management of this wealth for purposes of addressing poverty."

'Much clearer' functions

Alvarez said there would be no duplication of functions.

The functions are "much clearer" now, he said, explaining that prior to the issuance of EO 636, the DENR was in an awkward position because it issued mining permits to private and public companies and at the same time checked compliance with environmental laws.

"There's conflict of interest because [the DENR] has regulatory powers ... on environmental concerns," he said.

Ramos said the MGB welcomed the transfer of PMDC to the Office of the President because it would get more funding for the exploration and development of mining projects.

"I think that's the main reason it was transferred, and we welcome it because with a P500-million annual budget, we can hardly fund its activities," he said.

Prior to its transfer, PMDC was part of the Natural Resources Development Corp., another government-owned and -controlled corporation chaired by the environment secretary and created mainly to focus on developing the mining industry.

It managed special mining projects foreclosed by the government, projects held by the Assets Privatization Trust, and projects with canceled mineral production sharing agreements.

All other projects not under PMDC are managed by the MGB.

"They can't supervise, for instance, Philex Mining because under the law, that's under the MGB," Ramos said.

The mining areas covered by PMDC constituted an estimated 40,000 hectares, which is small compared with the estimated 20 million hectares covered by the MGB, according to a DENR official who asked not to be named for lack of authority to speak publicly on the matter.

Engine for growth

In taking a direct hand in the development of the mining sector, the President wants to turn the country into a world mining leader by 2010 "in line with [her] vision for the Philippines to become a First World country in 20 years," Alvarez said.

He recalled that at the 7th Asia-Pacific Mining Conference and Exhibition last month, Ms Arroyo said the mining industry would "serve as a leading engine for Philippine economic growth, becoming a source of revenue and wealth to allow the government to seriously bring down the level of poverty in the country."

According to Alvarez, PMDC will take charge of opening to serious investors some 65 non-performing mining tenements that were previously canceled, covering a total of 68,000 hectares.

He projected the income from mining to reach $2 billion by yearend, rising to $10 billion annually if the expected mining boom occurs.

The Philippines is the world's 5th richest country in terms of mineral resources. This year alone, investments in mining have reached more than $500 million.


According to Press Secretary Ignacio Bunye, the Inquirer report yesterday on the transfer of PMDC is "misleading in that it gives the impression that all mining concerns have been transferred from the DENR to the Office of the President."

"The text of EO 636 clearly states that it is the [PMDC], a government-owned and -controlled corporation, that is being transferred to the Office of the President. There has been no change in the DENR's mandate on mining matters," Bunye said.

But the activist group Alyansa Tigil Mina (ATM) warned that such a transfer would open the floodgates to the destruction of the environment and of communities by mining firms.

"We all know that [Ms Arroyo] has listed mining as one of her priority investment areas in her 10-Point Agenda. We fear that with the mining industry under her watch, regulations will become loose, in pursuit of more foreign investments," ATM coordinator Roy Calfoforo said in a statement.

Calfoforo said the closure orders against S.R. Metals Inc., San R Construction Corp. and Galeo Equipment Corp. in Tubay, Agusan del Norte, were a triumph of environmental regulation.

"But with [Ms Arroyo] usurping authority from the DENR and [transferring] industry regulation directly under her authority, will she exhibit the political will to go after bigger mining operations with better, more sophisticated connections?" he said.


The DENR official who had sought anonymity said he believed the transfer was meant to facilitate coordination between the Office of the President on one hand, and the local government units and the National Commission on Indigenous Peoples (NCIP) on the other, in the grant of mining permits.

LGUs can impose a moratorium on mining while the NCIP issues a certificate of precondition—a requirement for the issuance of permits to small- or large-scale mining firms, the official said.

Diwalwal model

"With the President coordinating, the process of getting the endorsement of the LGU and NCIP precondition certificate will be much easier," he said.

In a statement, Alvarez said that as environment secretary in 2001, he addressed the 19-year-old problem on Mt. Diwalwal in Davao which, he noted, had been described as "a festering social wound of greed, power and violence in the conflict between small and huge interests, the lowly and the mighty."

At least 6,000 people have been killed in Diwalwal, including a judge and a town mayor, since gold was discovered there in 1983.

Alvarez said that on his suggestion, Ms Arroyo signed Proclamation No. 297 declaring Diwalwal a mineral reservation under DENR management. With a report from Ronnel W. Domingo

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