HEADWINDS now buffeting the country’s miners should not impact the wider investment climate unless those affected are denied due process, business leaders said in separate interviews, with caution last week turning to alarm for some after the Environment department yesterday put more mining projects on the chopping block.
Besides 23 of the country’s 41 metal mines whose permits now face cancellation and five others up for suspension, the Environment department yesterday said it was cancelling contracts for 75 other projects -- still not in production stage -- for being located in watersheds.
“This is extremely disturbing,” Wallace Business Forum, Inc. founder Peter L. Wallace, director of the Australian-New Zealand Chamber of Commerce (Philippines), Inc., said in a mobile phone message yesterday, even as he said the impact should be confined to the mining industry for now.
“It’s hard to believe so very many applications could not have met the stringent requirements of the law. I would like to know on what basis the cancellations were made,” Mr. Wallace said.
“Unless the cancellations can be fully explained and justified with good reason -- and quickly -- it sends a very negative signal on doing business in mining in the Philippines.”
Guenter Taus, president of European Chamber of Commerce of the Philippines, said via text that “[s]anctity of contracts has long been an issue and will probably surface here again,” while John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, Inc. said separately: “We do not understand why these permits -- which are only to explore but not to produce -- are harming watersheds.”
George T. Barcelon, president of the Philippine Chamber of Commerce and Industry (PCCI), said by phone last weekend that the country’s biggest business organization held a press conference last Friday in order “to help out those aggrieved... to say their piece,” referring to owners of 23 metal mines that were identified for closure last Feb. 2 and five others that were then tagged for suspension.
“[W]e haven’t come across an issue as concerning the mining [crackdown],” Mr. Barcelon said.
“We just want to make sure that government agencies... play by the rules... when it comes to... either suspending or... having companies pay fines or what not.”
At the same time, Mr. Barcelon is concerned that similar controversies may hit other industries.
“We hope that there will be less of this because we are now promoting the country for foreign investment, and this is something that any foreign investor will be worried if he sees something like that,” the PCCI chief explained.
“So we hope that this issue can be clarified and in the future there will be no issues like this that will occur.”
Heeding miners’ plea for intervention, Finance Secretary Carlos G. Dominguez III last Thursday convened the Mining Industry Coordination Council, which he co-chairs with Environment Sec. Regina Paz L. Lopez and which resolved to ensure due process is observed in reviewing affected mining companies’ appeals against sanctions, launch “a multi-stakeholder review” of each case and meet regularly from now on -- “maybe once in two months” -- to monitor the process.
After the Environment department yesterday announced the cancellation of agreements of even more projects, however, PCCI’s Mr. Barcelon said in a telephone interview that the situation “looks serious that it warrants the President to take immediate action”.
Jesus L. Arranza, chairman of the Federation of Philippine Industries, shared this sentiment, saying in a separate phone interview: “Why was it (agreements) given by the previous administrations if there is a law that prohibits their permits?”
“In a way, it is... showing... urong-sulong (regulatory vacillation),” Mr. Arranza noted.
“What protection will investors have if that will be the system?” he asked.
“[I]nvestors are after stability in decisions; eh kung hindi stable ang decisions (if decisions are not stable), who will still believe in us, have faith in us and trust us?” he warned.
“If we allow actions of irregularity, there will be no stability in the country.”
“Due process,” Guillermo M. Luz, National Competitiveness Council’s private sector co-chairman, said in a mobile phone message on Monday, will dictate whether concerns will spill over to the wider business community.
“[I] [d]on’t think this will affect (the Philippines’ global competitiveness) rankings as long as we stick to due process,” Mr. Luz said.
The Philippines climbed to 99th place out of 190 economies in the World Bank-International Finance Corp. Doing Business 2017 report that was published in October last year from 103rd out of 189 countries and territories previously.
Among the 10 indicators tracked for this annual competitiveness index, the Philippines fared poorly in “enforcing contracts”, rising in rank to 136th from 140th previously even as it retained a score of 49.24 on a scale of 0-100, where 100 marks the best performance.