There is a need for transparency both from the local government and the communities where there is mining.
This was the focus of the two-day “Natural Resource Governance: Making Transparency Matter” forum- workshop organized by the Philippine Extractive Industries Transparency Initiative (PH-EITI) on July 22 and 23 at Fersal Hotel, Puerto Princesa City, Palawan.
“The PH-EITI is one of the initiative to good governance of the current administration. It is a product of teamwork among the private sector, national government, and civil society organizations. This is what good governance is all about. Because of the local autonomy bestowed to us, the role of the local government units is pivotal in the success of this initiative. The purpose of this LGU roadshow is not just to inform you of the first country report, but to address the gaps that arise from its implementation, not just to improve the second country report but to have actual discourse in the national and local policy formulation”, remarked Hon. Alfonso Umali, Jr., Governor of Oriental Mindoro and President, Union of Local Authorities of the Philippines.
Palawan Governor Jose Alvarez expressed his commitment to the initiative. “The transparency that PH-EITI requires is very timely. We are for transparency for the mines operating in the province”, said Gov. Alvarez.
“For LGUs, EITI report is a good input for development planning with the projections of income”, commented Ms. Jennifer Galorport, DILG Central Office representative.
The two-day roadshow provided an opportunity for the local government and the community to have a better understanding of the EITI standards, processes and implementation.
There was a special track session organized in the afternoon. Members from the national multi-stakeholder group (MSG) served as resource speaker.
Among the topics discussed during the confab are Local Government Transparency Framework, Environmental Governance, Social Development and Management Programs and Social Expenditures
The Extractive Industries Transparency Initiative (EITI) is a global coalition of governments, companies and civil society working together to improve openness and management of revenues from natural resources.
Countries implement the EITI Standard to ensure full disclosure of taxes and other payments made by oil, gas and mining companies to governments.
The establishment of Philippine EITI (PH-EITI) is pursuant to Executive Order No. 79, “Institutionalizing and Implementing Reforms in the mining sector providing policies and guidelines to ensure environmental protection and responsible mining in the utilization of mineral resources” by Philippine President Benigno S. Aquino III.
Executive Order No. 147 formally established the Philippine EITI Multi-Stakeholder Group (MSG) and laid down the operational requirements for the initiative.
The Philippine MSG is composed of representatives from the government, the extractive industries, and the civil society.
The Philippines submitted its first country report to the EITI International Board on December 29, 2014.
The PH-EITI report contains financial disclosures of 30 large-scale metallic mining companies and six (6) oil and gas companies for the year 2012, covering a total of PhP52.7 billion in revenue.
Eighteen (18) material benefit streams are in scope, including taxes, royalties, transportation fees, customs duties, mandatory social expenditures and environmental fees, government shares, and payments to local government units.
The report also includes information on the shares of 33 Local Government Units (LGUs) from national wealth coming from extractive industries within their localities.
Eight mining, oil and gas companies operating in Palawan participated in the first country report.
MIMAROPA reported a total of Php 16 million direct LGU collections from taxes and fees paid by the companies.
Aside from these data, industries also disclosed payments made to indigenous communities affected by the extraction activities, environmental funds allocated for environmental protection, and social development funds allotted for social programs for the host communities.
While the EITI process is not expected to provide solutions to all issues related to the extractives, it can provide a platform for discussion of such issues. Local governments can take advantage of the transparency measures used by EITI in local budget processes and revenue management as it provides a mechanism for tracking payments of companies and shares of LGUs from national wealth.
It also aims to educate local leaders to appreciate the complexities of extractive operations and finance, and how mandated social expenditures can be used to complement local development plans.