Cancel Lafayette permit-solon

By Jodeal Cadacio

Reporter

http://www.businessmirror.com.ph/2006/0209/09%20frontpage%20cancel.php

A PARTY-LIST legislator on Wednesday pressed for the immediate cancellation of the mining permit issued to Lafayette Philippines Inc. (LPI), owner of the controversial mining operation in Rapu-Rapu, Albay, in light of the admission by its top executive that the firm is wholly foreign-owned.

This cropped up at a public hearing of the House Committee on Natural Resources, which is investigating the mine-tailing accidents that had caused massive environmental pollution in areas surrounding the mining site.

Rep. Rafael Mariano of Anakpawis called for a total shutdown of Lafayette's mining operations in light of the admission by Carlos Dominguez, the newly elected president, chairman and chief executive officer of Lafayette, that the firm is 100-percent owned by foreigners.

Dominguez made the admission after House minority leader Francis Joseph Escudero inquired about the mining firm's shareholders.

Dominguez said Lafayette Mining Limited of Australia owns 74 percent of Lafayette Philippines ; and Philco, a Malaysian firm, owns the remaining 26 percent.

Mariano said this is clearly a violation of the constitutional provision that limits the maximum foreign equity ownership to 40 percent.

"This is a direct violation of the Constitution and the country's national patrimony," Mariano said. "Dominguez's admission is a strong basis for the immediate cancellation of Lafayette 's mining permit and total closure."

Dominguez also admitted that he and other Filipino executives in the company were hired as "management professionals, and that they have no substantial equity shareholdings in the company."

Asked how much is his share in Lafayette , Dominguez said that he owns "one share" in the company.

This led House deputy minority leader Edcel Lagman, who hails from Albay, to say that Dominguez's assumption to the top management of the company was "artificial" and meant to stave off a crisis that had plagued the mining company.

Lagman noted that Dominguez was elected as Lafayette's top executive only last January 20, at the height of a massive public outcry over the environmental disaster caused by at least two mine-tailing accidents last year in the Rapu-Rapu mining site. The toxic pollution had affected several towns in Albay, Camarines Sur and Sorsogon.

"There is the impression that this [Dominguez's entry into Lafayette ] is artificial," Lagman said.

Escudero questioned the ownership setup in Lafayette in the context of the constitutional prohibition against foreign domination of local businesses.

But Bayani Agabin, counsel for Lafayette , said there is no violation of the Charter and other laws as far as the company's operation in the country is concerned.

Agabin said that Lafayette Philippines only serves as the parent company, and that as far as the mining operations in Rapu-Rapu are concerned, the company owns only 40 percent of it.

He said the Rapu-Rapu mines is covered by a mineral production sharing agreement, the majority of which-at 60 percent-is owned by Filipinos through the Unggay-Malibago and Rapu-Rapu Minerals Inc.

Agabin clarified that under this setup, the Filipino firms owns the substantial 60 percent, with Lafayette owning the maximum 40 percent in compliance with the constitutional provision on foreign equity ownership.

Dominguez said Lafayette has invested more than $50 million for its mining operations in Albay.

He told the committee that under new management, Lafayette has embarked on reorganizing its mining operations, starting off with the dismissal of key staff involved in the mine-tailing incidents. He said the firm also conducted dialogues with concerned sectors, and instituted safeguards to prevent future spillage.

"Given these reassuring developments and the great challenges in the weeks and months ahead, we call on everyone to keep their minds open, to refrain from issuing public statements or taking actions that would tend to undermine the credibility and integrity of our common and good faith efforts to find the truth," Dominguez said.

"We understand the concerns and complaints from various sectors on the mining operations of Lafayette , some of whom have asked for the closure of the mines. The regrettable incidents of the mining industry in the past must serve as our invaluable lesson to blaze a new trail for an environmentally sustainable and responsible mining."