Philippine Mining: Open for Business, Sold to the Highest Bidder

Philippine Mining: Open for Business, Sold to the Highest Bidder

Legal Rights and Natural Resources Centre Inc. - Kasama Sa Kalikasan / Friends of the Earth Philippines (LRC-KsK) Press Statement

02 February 2005

In an order dated 01 February 2005, the Supreme Court denied with finality the Motion for Reconsideration filed by the petitioners in the case of La Bugal – B’laan Tribal Association, et al. versus Ramos, et. al., thus upholding the constitutionality of Republic Act No. 7642 or the Mining Act of 1995.

In a span of twelve days, without even asking the mining companies and the DENR to respond, the Supreme Court En Banc immediately struck down the motion for reconsideration filed by the B’laan petitioners for allegedly being a rehash of arguments already resolved in the 01 December 2004 Decision of the Court and for allegedly not raising any new issues that would warrant a reconsideration of the decision.

On the contrary, however, the 41-page motion for reconsideration did raise new issues in order for the Court to declare the Mining Act as unconstitutional.

The Supreme Court refused to see the new issues. It has not passed upon all the issues that the petitioners raised. The petitioners were not given a chance.

The assumption in the decision that Filipino-owned corporations cannot put up the capital and that foreign-owned corporations are not willing to provide large amounts of financial assistance are belied by the very facts of the case.

Sagittarius Mines, Inc. (SMI), the transferee of the Financial and Technical Assistance Agreement (FTAA) that is the subject of this case, from Western Mining Corporation Philippines (WMCP), has a paid-up capital of only Php 16-M. Yet, it was able to secure loans amounting to almost Php 621-M from Western Mining Corporation Australia and Indophil Resources NL, both Australian mining companies.

The generous financial arrangement that these transnational mining corporations have with a small Filipino corporation indicates what the industry is really willing to do in order to participate in the exploration, development, and utilization of our natural resources. It is not true, therefore, that Filipinos need to put up huge amounts of financial capital nor that reputable international mining corporations require that they fully own the mining operations. It is possible to organize a majority Filipino-owned corporation, put up a small capital, and reasonably expect reputable international mining corporations and investors to participate only through financial assistance.

The Court, in interpreting the constitution, said that only foreign-owned corporations could engage in large-scale mining through an FTAA. However, a reading of the constitutional provision in its clear and ordinary meaning would show that even Filipino-owned corporations under a joint venture, co-production, or mineral sharing agreement can engage in large-scale mining operations. Large-scale mining is not limited or reserved only for foreign-owned corporations, contrary to what has been said in the Decision.

In the meantime, however, WMCP (now Tampakan Mineral Resources Corporation or TMRC) has a pending Motion for Correction, Clarification, and Partial Reconsideration that has yet to be passed upon by the Supreme Court, inspite of the Court having declared its Decision of 01 December 2004 as final and executory.

But the legal aspect of the mining campaign isn’t over yet. It is far from over.

LRC-KSK looks forward to further challenging the FTAA regime in the lower court on even entirely different issues and it will be filing cases that seek to emphasize those compelling issues. To date, there is still another case pending before the Supreme Court, questioning the constitutionality of the Mining Act and of the FTAA regime that this law created.

For details please contact:

Lodel D. Magbanua
Tel. No. (02) 928 1372;
Mobile: 0919 247 20 65
Email: lodel@philonline.com