Benefits Of Mining.docx

Benefits of Mining Activities: 1. To the country The Philippines houses several metallic minerals such as gold, nickel, copper, aluminum, and chromite. According to Department of Environment and Natural Resources – Mines and Geosciences Bureau, an estimated 9 million hectares of land areas is identified as having high mineral potential. While, 30 million hectares of land is believed to be rich in minerals. In 2017, the mining industry’s contribution to the country’s GDP is at 0.6% or P102.5 Billion1. The following are the notable benefits of the mining industry: a. Mineral Exports The Philippines has exported minerals amounting to US$ 4,052 Billion, as of 2017. Gold and nickel are the country’s top mineral exports. Japan, Australia, Canada and China are the major countries of destination. b. Employment Mining companies has provided job opportunities in the most remote areas of the country. As of first quarter of 2018, a total of 215,000 workers were employed in the minerals industry. c. Tax Payment The country has generated P25,539.2 Million of national and local taxes, fees and royalties that that contributed to the Philippine economy in 2017.2

2. To the LGU Pursuant to the Local Government Code, LGUs have key responsibilities devolved from the national government, including some in infrastructure, health services, environmental management, agriculture and fisheries, tourism, and artisanal and small-scale mining. The LGU is a member of the Provincial or City Mining and Regulatory Board that determines small-scale mining areas and administers artisanal and small-scale mining. This board also receives applications for quarry permits. All mining projects require consultation with the concerned LGUs and approval from the appropriate Sanggunian (local legislative body). The Internal Revenue Allotment for all LGUs is 40% of national taxes. This is further allocated among the different units based on population and land area. At least 20% of this allocation is intended for development plans approved by local development councils. With respect to mineral development, LGUs receive 40% of the gross collections from mining taxes, royalties from mineral reservations, and other fees generated through mining agreements. This is remitted to LGUs based on where mining operations are situated and is intended to fund local 1 2

https://medium.com/@futilityfunc/mining-and-the-philippine-economy-some-facts-and-figures-afe80f66d1b3 DENR-MGB Mining Industry Statistics released on 14 August 2018

development and livelihood projects. In addition, LGUs collect business taxes, real property taxes, community taxes, occupation fees on onshore mining operations, and regulatory fees to enforce environmental and other requirements.3

3. To the community in the affected area a. Mining in Indigenous Communities Royalties may be released through a Trustee Bank or directly to the account of a private, non-profit, voluntary indigenous peoples’ organization authorized by the community and accredited by the NCIP. Fund disbursement requires the concurrence of the appropriate NCIP Commissioner and the NCIP Chair. The Community Royalty Development Plan requires confirmation by the NCIP Commission en banc. It must include allocations for livelihood and social development projects, education and training, capitalization for cooperative development, credit facilities, payments for professional services, and emergency concerns. In a Memorandum of Agreement between the Subanes Council of Elders and TVI Resource Development, the TVI Resource Development was obliged to pay royalties to Subanean, give priority to Subaneans in its employment program, and provide vocational and school buildings.4 TVI have made serious efforts to ensure environmental protection and provide meaningful community benefits. Testing of the nearby creeks and streams for toxic wastes or byproducts is continuous and rigorous. The company has spent over US$1 million to construct a state-of-theart tailings dam. TVI has constructed many new housing units, and clearly improved educational opportunities and health care services in Canatuan.5 b. Mining in Non- indigenous Communities Under the Mining Act, companies must allocate 1.5% of their operating costs for Social Development Management Programs (SDMP), or for Community Development Programs in cases of exploration. Seventy-five percent of this shall be for the development of host and neighboring communities, 10% for the development of mining technology and geosciences, and 15% for information, education, and communication programs.

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Dalupan, Community Agreements and Mining: A New Frontier for Social Impact Investments (2005) TVIRD Memorandum of Agreement with SSAI 5 Stark et al., Environmental Safeguards and Community Benefits in Mining: Recent Lessons from the Philippines (2006) 4

Articles Cited: 1. Dalupan, Community Agreements and Mining: A New Frontier for Social Impact Investments (2005) The study was conducted to explore the role that an impact investment fund may have in the negotiation of mining-related community agreements. Key insights were discussed, arising from a review of relevant literature in select jurisdictions, with specific focus on the Philippines, where the free, prior, and informed consent of indigenous communities to mining is legally required, as are community agreements with companies. 2. Stark et al., Environmental Safeguards and Community Benefits in Mining: Recent Lessons from the Philippines (2006) The study was conducted to identify risks to nations and regions that arise as a result of the confluence of environmental and political, economic, and societal factors, and to evaluate the implications of these risks. The study discussed the background of mining in the Philippines, the 195 Mining Act, and three cases of mining in the Philippines.