Probe urges revocation Lafayette permit

Mining probe body urges Lafayette license revoked
By Christian V. Esguerra, Christine Gaylican
Philippine Daily Inquirer May 20, 2006
http://news.inq7.net/archive_article/index.php?ver=0&index=1&story_id=76408

SAYING it wanted to send a strong message to investors that the Philippines was “not a nation of prostitutes,” a Malacañang-formed commission yesterday urged the government to review a mining law that allows foreigners 100 percent ownership of local mines, and to stop the operations of Australia’s Lafayette Mining Ltd. on Rapu-Rapu island, Albay.

The Rapu-Rapu fact-finding commission headed by Sorsogon Bishop Arturo Bastes called on the government to cancel the environmental compliance certificate issued to two companies of the Lafayette Group, and for a moratorium on mining on the island.

It also asked the government to “review the Philippine mining act, specifically the provision on the ownership and management of mining firms and operations,” Reuters news agency said, quoting from what it said was an advance copy of the report.

Over-reaction
Lafayette company president and chief executive officer Carlos Dominguez said the panel’s recommendation was an “over-reaction” to the environment incidents on Rapu-Rapu.

“With respect to their findings, it is in my belief that it has been exceedingly harsh and unforgiving considering that the incidents have been minor,” Dominguez told the Inquirer.

Dominguez asked what would happen to the 1,000 employees of the mines and to the economic benefits for the local community on the island if the Department of Environment and Natural Resources followed the commission’s recommendation.

“We hope the DENR would also consider the opinion of the Sangguniang Barangay, the municipal and provincial governments there,” he added.
Dissenting view

Commission vice chair Charles Avila said in a press conference: “This country is not a nation of prostitutes—that’s the message that we want to get to investors.”

“The mining industry is very promising if we do it properly by not sacrificing the environment and the people’s health.”

One of the nine members of the commission refused to sign the 169-page final report, saying he disagreed with some of its conclusions.
“I am unable to affix my signature to the final report of the commission as I disagree with a number of its findings and recommendations,” commissioner Gregorio Tabuena wrote Bastes. “I also feel that the commission has gone beyond its mandate.”

Mining output
In its report, the commission asked the Bureau of Internal Revenue to investigate the Lafayette Group “for underreporting of ore/processed ore production and violations of tax laws.”

It asked the government to order the company to “pay back all back taxes equivalent to those waived because of incentives/privileges for the whole duration of their mining operations.”

The commission found supposed discrepancies between the amount of gold ore the Rapu-Rapu Minerals Inc. (RRMI) reported to the DENR’s Mines and Geosciences Bureau Region 5 (67,693 metric tons) and the amount the company reported to the commission (136,180 metric tons).

Lafayette’s side
“The excise tax paid by the RRMI is probably only half of what it ought to pay the national government,” the commission said.

The commission also noted an alleged forgery of a town council’s signature in a resolution endorsing Rapu-Rapu as an ecozone.
Answering the commission’s claim about discrepancies in the firm’s gold ore reports, RRMI’s legal counsel Bayani Agabin said what the company reported to the MGB was “consistent” with what it reported to the commission.

On the alleged tax deficiencies, Agabin said the “wrong formula” must have been used in computing the amount of gold ore that had been mined.

Present proof
Agabin said the firm was aware of allegations about forgery in the ecozone certification resolution “but that is an allegation that has yet to be proven.”

“You cannot simply cancel a permit based on a simple allegation. That is why we have the courts,” Agabin said. “Somebody accuses someone of rape. That is just an accusation. You still have to go to court to prove it.”

He said the company had admitted there had been lapses in operations “but these were minor and all the remedial measures had been completed.”

DENR scored
Mining operations on Rapu-Rapu drew headlines following two tailings spills in October last year which reportedly led to fishkills and affected the fishing industry.

“The discharged tailings and effluents do not only carry cyanide but other toxic heavy metals as shown in subsequent studies made,” the commission said.

The commission scored the DENR for allowing the company to resume operations six days after the first incident.

“Lafayette had no emergency mechanism to stop or mitigate this kind of incident,” it said.

The commission said: “It was also negligent of the MGB officials who were coincidentally in the area on the day of the tailings incident and who conducted an on-the-spot investigation when they failed to impose immediate remediation measures on the mining company.”

Reyes will have last say
Dominguez said Lafayette would immediately meet with the Pollution Abjudication Board and show proof that the company should be allowed a test run.

“The burden of deciding whether we should be allowed to run will solely rest on (Environment) Secretary (Angelo) Reyes,” he said.

He said that the company had paid dearly enough when it was fined more than P10 million and that more than P400 million had been spent to put up necessary remedial measures in the area to prevent any environmental disasters in the future.

The mine is the first in the Philippines to be developed by a foreign company in almost four decades and has so far yielded 2,500 ounces of gold.

The Chamber of Mines of the Philippines said it believed that the government would be fair and consider the best scenario for the Rapu-Rapu Polymetallic Mines of Lafayette.

Respect findings but ...
“We respect their findings but it is just one opinion. We have presented a separate independent study that the DENR and Malacañang should also consider in making their final verdict for the Rapu-Rapu project,” Chamber of Mines president Benjamin Philip G. Romualdez said.He noted that the Bastes report did not tackle any issue on ownership and the industry had remained steadfast in its stand that any review that would strengthen the Philippine Mining Law was a welcome development for the industry.