Is the Philippine Mining Industry Ready to Adapt to Climate Change?

Is
the
Philippine
Mining
Industry
Ready
to
Adapt
to
Climate
Change?

Located
along
the
Pacific
Ring
of
Fire
and
the
Western
Pacific
typhoon
belt,
the

Philippines
is
one
of
the
most
natural
hazard-‐prone
countries.
Tropical
storms

and
typhoons
bringing
with
them
destructive
winds,
torrential
rains
and

landslides
cause
loss
of
lives
and
destruction
of
infrastructure
and
properties.
In

addition,
the
country
is
also
exposed
to
intense
volcanic
activities,
tsunamis,

earthquakes,
and
prolonged
dry
spells
causing
drought
and
forest
fires.
Climate

change
has
a
huge
impact
on
the
Philippines
making
it
vulnerable
to
sea
level

rise,
rising
temperatures
and
extreme
rainfall.

In
2013,
the
country
ranked
first
in
the
list
of
countries
most
affected
by
natural

disasters.
The
government
estimated
the
annual
cost
of
disasters
to
the
economy

to
be
between
0.7
and
1%
of
gross
domestic
product
and
an
average
of
P15bn

per
year
in
direct
damages.
There
are
also
substantial
social
and
environmental

impacts
arising
from
disasters
hindering
the
government’s
efforts
to
reduce
the

incidence
of
poverty.

Global
Climate
Risk
Index
2015:
10
Most
Affected
Countries

Endowed
with
vast
coastlines
and
a
tropical
climate,
the
Philippines
is
one
of
the

hotspots
of
terrestrial
and
marine
diversity
ranking
25th
worldwide
in
the
total

number
of
animal
and
plant
species.
The
country
is
also
located
within
the
“Coral

Triangle”,
a
six
million
sq.
m.
area
considered
as
the
most
biologically
diverse

marine
region
on
Earth.
While
predominantly
agricultural,
Philippines
is
also

highly
mineralized
and
replete
with
energy
sources
particularly
renewables.

Greenhouse
Gases
and
Climate
Change

The
Philippines
is
not
a
major
emitter
of
greenhouse
gases
(GHG),
as
it
accounts

for
only
0.4%
of
global
emissions.
However,
the
Asian
Development
Bank

reported
that
the
Southeast
Asia
region
registered
the
fastest
growth
in
carbon

dioxide
emissions
between
1990
and
2010
and
is
becoming
a
major
contributor

to
global
GHG
emissions.
Increasing
reliance
on
fossil
fuels
for
energy
demand,

deforestation
and
land
degradation
have
been
driving
most
of
the
emissions.

Given
the
region’s
vulnerability
to
climate
change,
curtailing
global
emissions

growth
should
be
a
priority
consideration.
It
is
in
the
economic
interest
of
the

region
that
a
global
climate
arrangement
that
keeps
mean
warming
below
2°C
is

followed.
(Southeast
Asia
and
the
Economics
of
Global
Climate
Stabilization,
2015)

According
to
the
report
“Climate
Change
in
the
Philippines”
(February
2011)
the

climate
trends
were
analyzed
using
available
observed
data
from
1951
to
2009

with
the
average
period
of
1971-‐2000
as
the
reference
value.

The
key
findings

are
summarized
as
follows:

• There
has
been
an
increase
in
annual
mean
temperature
by
0.57°C;
and
• In
terms
of
maximum
and
minimum
temperatures,
the
increases
have

been
0.35°C
and
0.94°C;

Under
a
high
emissions
scenario,
mean
annual
temperature
is
projected
to
rise

by
about
3.7°C
on
average
from
1990
to
2100.
If
emissions
decrease
rapidly,
the

temperature
rise
is
limited
to
about
1°C.
The
stated
long-‐term
goal
of
the
2015

Paris
Agreement
on
climate
change
is
to
limit
global
warming
to
'well
below'
2°C,

or
1.5°C
if
possible.
The
Paris
Agreement
seeks
to
limit
the
increase
in
global

average
temperatures
to
“well
below
2°C
above
pre-‐industrial
levels”
–
the
level

beyond
which
scientists
say
we
will
see
the
worst
extremes
of
global
warming.
It

also
aims
to
“pursue
efforts
to
limit
the
temperature
increase
to
1.5
°C
above
pre-‐
industrial
levels,
“recognizing
that
this
would
significantly
reduce
the
risks
and

impacts
of
climate
change”.

Philippine
Development
Plan
and
Climate
Change

Natural
hazards
are
beyond
the
control
of
anyone
and
it
is
therefor
important
to

assess
the
country’s
current
capacity
to
reduce
and
manage
disaster
risk;
and

identify
options
for
more
effective
management
of
that
risk.
The
vulnerability
to

disasters
is
also
influenced
by
the
effectiveness
and
efficiency
of
disaster
risk

management
(DRM),
disaster
risk
reduction
(DRR),
and
climate
change

adaptation
(CCA)
measures.

The
Philippine
Development
Plan
2011-‐2016
(PDP)
identifies
enhanced
resilience

of
natural
systems
and
improved
adaptive
capacities
of
human
communities
to

cope
with
environmental
hazards
including
climate
change-‐related
risks
as
a

priority
goal.
The
PDP,
drawing
on
the
National
Framework
Strategy
on
Climate

Change
2010–2022
treats
mitigation
as
a
function
of
adaptation.
While
mitigation

measures
are
being
implemented
by
the
Philippines,
they
are
not
carried
out
as
a

commitment
but
rather
as
a
result
of
developmental
growth.
Major
climate

change
and
disaster
risk
reduction/management
sttategies
in
the
PDP
includes:

• Strengthening
institutional
capacities
of
national
and
local
governments
for

CCA
and
DRR;

• Improving
adaptive
capacities
of
communities
to
the
impact
of
climate

change;

• Building
resilience
of
the
natural
ecosystems;

• Promotion
of
environment
friendly
technologies
for
industry
and

transportation

sectors;
and

• Promotion
of
clean
and
renewable
energy.

The
Philippine
Legal
Framework
on
Climate
Change

Legal
Framework
on
Climate
Change

1991 Administrative Order Creating an Inter-Agency
Committee on Climate Change
1992 Signatory to the United Nations Framework
Convention on Climate Change
2003 Ratification of the Kyoto Protocol
2009 Climate Change Act
2010 Disaster Risk Reduction and Management Act
2010 National Framework Strategy on Climate Change
2010-2022
2011 National Climate Change Adaptation Plan
2012 People’s Survival Plan Law

The
Climate
Change
Act
of
2009
envisions
the
Philippines
to
be
a
climate
risk-‐
resilient
country
that
proactively
implements
cost-‐effective
and
nationally

approved
mitigation
actions.
The
Act
provides
overarching
policy
direction
to

national
and
local
actions
on
climate
change
and
includes
provisions
for

attracting
foreign
funds
for
climate
change
adaptation
and
disaster
risk

reduction
projects.

The
passage
of
the
Disaster
Risk
Reduction
Management
(DDRM)
Act
of
2010
in

conjunction
with
the
Climate
Change
Act
was
intended
to
strengthen
the

institutional
foundation
for
disaster
risk
management
and
climate
change

adaptation.
The
DRRM
Act
emphasizes
the
need
for
a
coherent,
comprehensive,

integrated,
and
proactive
approach
to
DRRM
across
levels
and
sectors
of

government,
and
among
vulnerable
communities.
It
shifts
the
focus
from
a

purely
reactive
approach
to
include
risk
management
and
preparedness
and

establishes
links
to
CCA.

The
National
Framework
Strategy
on
Climate
Change
was
signed
in
April
2010,

providing
a
basis
for
the
national
program
on
climate
change
headed
by
the

Department
of
Environment
and
Natural
Resources.
The
National
Framework

Strategy
for
Climate
Change
recognizes
and
adopts
disaster
risk
reduction
calling

for
a
review
of
existing
policies,
plans,
and
projects
of
the
different
sectors
to

ensure
alignment
with
the
National
Disaster
Risk
Reduction
and
Management

Framework.

The
National
Climate
Change
Adaptation
Plan
on
the
other
hand
is
expected
to

give
direction
on
the
implementation
of
climate
change
adaptation
measures
in
a

cross-‐sectoral
manner
to
be
reflected
in
and
implemented
through
local
plans.

The
Climate
Change
Act
was
amended
in
August
2012
by
the
People’s
Survival

Fund
Law,
which
establishes
long-‐term
finance
streams
to
enable
the

government
to
effectively
address
the
problem
of
climate
change.
The
law

provides
the
fund
with
an
initial
P1
billion
for
the
financing
of
adaptation

programs
and
projects
based
on
the
National
Framework
Strategy
and
Program

on
Climate
Change.
Other
sources
such
as
donations,
endowments,
grants
and

contributions
can
be
used
to
augment
the
Fund.

Besides
the
Climate
Change
Act
of
2009
and
the
National
Framework
Strategy
on

Climate
Change
in
2010,
various
laws
such
as
the
Agriculture
and
Fisheries

Modernization
Act
(1997),
Philippine
Clean
Air
Act
(1999),
Ecological
Solid
Waste

Management
Act
(2000),
Philippine
Clean
Water
Act
(2004),
Biofuels
Act
(2006),

and
Renewable
Energy
Act
(2008)
direct
appropriate
agencies
to
consider

climate
change.

Climate
Change
Adaptation
in
the
Context
of
the
Philippine
Mining
Industry

Stakeholders
in
the
industry
should
take
a
proactive
approach
to
climate
change

adaptation
as
more
frequent
and
extreme
weather
conditions
will
have
complex

impacts
on
the
sector.

Climactic
conditions
will
affect
the
stability
and

effectiveness
of
infrastructure
and
equipment,
environmental
protection
and
site

closure
practices,
and
the
availability
of
transportation
routes.
Climate
change

may
also
impact
the
stability
and
cost
of
water
and
energy
supplies.

(BSR,

Adapting
to
Climate
Change:
A
Guide
for
the
Mining
Industry)

On
the
part
of
government,
it
has
issued
Executive
Order
No.
79,
which

designated
the
Climate
Change
Adaptation
and
Mitigation
and
Economic

Development
Cabinet
Clusters
as
constituting
the
interagency
forum
to
be

known
as
the
Mining
Industry
Coordinating
Council.

In
its
implementation
of
Executive
Order
No.
79,
the
government
reported
that
it

has
completed
the
No-‐Go
Zones
map,
clearly
delineating
areas
that
are
off-‐limits

to
mining
in
an
apparent
attempt
to
shield
prime
agricultural
lands
and
agri-‐
fishery
development
zones,
tourism
development
areas
and
island
ecosystems

from
potential
mining
hazards.

It
has
also
mandated
mining
contractors
to

secure
ISO
14001
Certification.
The
Philippine
Environmental
Impact
Statement

(EIS)
System
is
also
one
of
the
entry
points
identified
to
mainstream
climate
risk

reduction
into
national
and
local
development
plans
and
regulatory
processes.

The
DENR
reported
that
it
has
harmonized
the
implementation
of
the
EIS
system

and
the
Philippine
Mining
Act
of
1995
in
relation
to
mining
projects
and,
in
the

process,
improve
the
implementation
of
the
environmental
laws.

Environmental Compliance Under the Philippine Mining Act of 1995
• Certificate of Environmental Management & Community Relations

Record (CEMCRR)
• Environmental Work Program for Exploration (EWP)
• Environmental Protection and Enhancement Program (EPEP)
• Annual Environmental Protection and Enhancement Program (AEPEP)
• Final Mine Rehabilitation/Decommissioning Plan (FMR/DP)
• Mine Waste and Tailings Fee Semiannual Report
• Incorporation of a Mine Environmental Protection and Enhancement
Office (MEPEO)
Environmental Documents
Ø Final Mine Rehabilitation and Decommissioning Plan
Financial Mechanisms for the Implementation of Environmental Programs
Ø Contingent Liability and Rehabilitation Fund (CLRF)
• CLRF is an environmental guarantee fund mechanism institutionalized
to ensure just and timely compensation for damages and progressive
and sustainable rehabilitation for any adverse effect a mining operation
or activity may cause.
• There are two (2) forms of CLRF namely the Mine Rehabilitation Fund
(MRF) and the Mine Waste and Tailings Fees Reserve Fund.
• The MRF is composed of the Rehabilitation Cash Fund (RCF) and the
Monitoring Trust Fund (MTF).
Ø Mine Rehabilitation Fund (MRF)
• Established and maintained by each operating mine as a reasonable
environmental deposit to ensure the availability of funds for the
satisfactory compliance with the commitments and performance of the
activities stipulated in the EPEP/AEPEP.
• This shall be deposited in a Government depository bank and used for
the physical and social rehabilitation of areas affected by mining
activities and for research on the social, technical and
• Two (2) Forms of MRF
1. Monitoring Trust Fund (MTF) – this fund is in cash deposited in a
mutually acceptable government depository bank and covers the
maintenance and other operating budget for the transportation and
travel expenses, cost of laboratory analysis, supplies and materials,
communication services, consultancy work and other reasonable
expenses incurred by the multi-partite monitoring team in the amount
of PhP150,000.00 replenishable every quarter
2. Rehabilitation Cash Fund – this is established to unsure compliance
with the approved rehabilitation activities and schedules for specific
mining phase including research as defined in the EPEP/AEPEP in the
amount equivalent to ten per cent (10%) of the total amount needed to
implement the EPEP of PhP5 Million, whichever is lower.
Ø Mine Waste and Tailings Fee Reserve Fund (MWTFRF)
• These are fees collected semi-annually from each operating mining

company based on the amount of mine waste and tailings it generated
for the said period to be used for payment of compensation for
damages caused by any mining operations.
• This shall be deposited in a Government depository bank and shall
accrue to a Mine Waste and Tailings Reserve Fund.
• PhP0.05/MT of mine waste produced
• PhP0.10/MT of mill tailings generated
Ø Environmental Trust Fund (ETF)
• This is contained in the Memorandum of Agreement (MOA) entered
into by and among the stakeholders to pay for mining-related
compensable damages other than those caused by mine waste and
tailings.
• Then ETF is pegged at a minimum of PhP50,000.00

Mining
company
disclosures
on
climate
change
risks
and
adaptation
strategies

must
become
the
standard
norm
in
risk
mitigation.

As
part
of
the
Philippines’

participation
in
the
Extractive
Industries
Transparency
Initiative
(PH-‐EITI)
to

enhance
transparency
and
accountability
in
the
mining
industry,
the
PH-‐EITI

reported
that
Memorandum
of
Agreements
between
the
indigenous
peoples

groups
and
participating
mining
companies
were
also
disclosed
and
reviews
of

EIS
undertaken.
The
multi-‐stakeholders
group
also
committed
to
make
the

information
on
the
auxiliary
rights,
including
timber
and
water
rights,
granted
to

companies
available
quarterly
mining
monitoring
reports
which
reflects
the
level

of
compliance
of
companies
to
environmental
regulations.

Recognition
of
the
Precautionary
Principle
and
Writ
of
Kalikasan

The
Rules
of
Procedure
for
Environmental
Cases
have
afforded
environmental

litigants
easier
access
to
judicial
remedies
to
stop
mining
operations.

The

evidentiary
challenge
using
the
precautionary
principle
is
showing
the
casual

relationship
between
an
act
and
the
resulting
environmental
harm,
especially

when
the
harm
concerns
human
health
since
judges
and
justices
are
more

accustomed
to
applying
strict
evidentiary
rules
in
courts.

(Mohan
and
Morel,

Business
and
Human
Rights
in
Southeast
Asia:
Risk
and
the
Regulatory
Turn)

The
precautionary
principle
was
made
public
policy
under
the
Climate
Change

Act
of
2009,
and
was
enunciated
by
the
Supreme
Court
in
issuing
the
Writ
of

Kalikasan.
The
Writ
of
Kalikasan
is
a
legal
remedy
available
to
any
natural
or

juridical
person,
entity
authorized
by
law,
people’s
organization,
non-‐
government
organization,
or
any
public
interest
group
accredited
by
or

registered
with
any
government
agency,
on
behalf
of
persons
whose

constitutional
right
to
a
balance
and
healthful
ecology
is
violated,
or
threatened

with
violation
by
an
unlawful
act
or
omission
of
a
public
official
or
employee,
or

private
individual
or
entity,
involving
environmental
damage
of
such
magnitude

as
to
prejudice
the
life,
health
or
property
of
inhabitants
in
two
or
more
cities
or

provinces.
The
Supreme
Court
expressed
the
precautionary
principle
in
Part
V,

Rule
20
of
the
Rules
of
Procedure:

Sec.
1.

When
there
is
a
lack
of
full
scientific
certainty
in
establishing
a

causal
link
between
human
activity
and
environmental
effect,
the

court
shall
apply
the
precautionary
principle
in
resolving
the

case
before
it.

Sec.
2.

In
applying
the
precautionary
principle,
the
following
factors,

among
others,
may
be
considered:
(1)
threats
to
human
life
or

health;
(2)
inequity
to
present
or
future
generations;
(3)

prejudice
to
the
environment
without
legal
consideration
of
the

environmental
rights
of
those
affected.

Environmental
litigants
may
also
use
the
writ
in
order
to
compel
the
disclosure

of
information
necessary
for
the
support
of
their
case
e.g.
discovery
measures

available
include
ocular
inspection
and
production
or
inspection
of
documents
or

materials
when
necessary
to
establish
the
magnitude
of
the
violation
or
the

threat.
(Rule
7,
Sec.
12)

Anti-‐mining
advocates
have
also
sought
to
pursue
international
remedies
and

mechanisms
to
stop
industrial
mining
e.g.
if
there
are
indigenous
people

involved,
use
the
Human
Rights
Committee
[International
Convention
on
Civil
and

Political
Rights]
mechanism
under
Art.
27
(Right
to
Culture)
and
UN
Committee

on
the
Elimination
of
All
Forms
of
Racial
Discrimination;
invoke
jurisdiction
of
the

Rome
Statute
over
crimes
against
humanity
such
as
the
forcible
dislocation
of

indigenous
people
and
the
destruction
of
their
means
of
subsistence
which
can

be
considered
genocide;
and
push
for
universal
jurisdiction
to
enforce
criminal

negligence,
tort,
malfeasance,
etc.
committed
by
transnational
mining
companies.

(International
People’s
Conference
on
Mining,
Legal
Aspects
of
Globalized
Mining,

2015)

Recommendations

Disaster
management
systems
in
the
mining
industry
must
veer
away
from
a

reactive
approach
and
evolve
to
a
more
effective
proactive
approach
in
which

disasters
are
avoided
by
appropriate
land-‐use
planning
and
measures
to
avoid

the
creation
of
disaster-‐prone
conditions.
To
evolve
to
this
more
proactive
role,

it
is
important
that
the
stakeholders
conduct
a
national
assessment
of
climate

change
impacts,
vulnerability
and
adaptation
for
the
mining
industry.
In

coordination
with
the
government,
the
industry
should
also
implement
activities

to
increase
climate
resilience
of
existing
mining
infrastructure
and
assets.

A

national
framework
for
comprehensive
mining
disaster
risk
management
must

be
prepared
and
implemented
with
political
leadership
and
policy
support
at
the

highest
levels,
while
facilitating
the
active
engagement
and
implementation
of
all

relevant
stakeholders.
The
government
must
also
seek
development
assistance

for
the
provision
of
technical
and
lending
support
for
disaster
risk
management

e.g.
to
strengthen
the
Environmental
Management
Bureau
monitoring
process

with
respect
to
such
issues
as
mining
tailings,
waste
rocks,
and
acid
rock

drainage.
While
entailing
an
additional
cost
to
companies,
the
government
may

also
require
sufficient
trust
funds
from
and
increase
the
premiums
and

contributions
required
of
mining
companies
to
ensure
environmental
safeguards

and
community
benefits,
and
compensate
for
improper
mining
operations
or

unforeseen
mining
accidents.
Despite
the
high
hazard
risk
in
the
Philippines,

there
is
a
limited
risk-‐bearing
capacity
of
the
domestic
insurance
market
and

over-‐dependence
on
international
reinsurers
for
claims
paying
capacity.
Climate-‐
related
damage
will
certainly
raise
premiums
or
sometimes
even
make
insurers

unwilling
to
provide
insurance
or
re-‐insurance.

Mining
disasters
hurt
the

bottom-‐line
and
investors,
lenders
and
insurers
are
expected
to
conduct
a

strenuous
due
diligence
on
climate
risks
and
company
performance
thereto
in

terms
of
mitigation
and
adaptation.

Conclusion

While
the
Philippines
has
created
many
legislative
and
institutional
structures
to

address
disaster
risk
management
and
climate
change
adaptation,
there
is
a
need

to
strengthen
institutions
in
mainstreaming
these
issues
into
the
mineral

industry.
The
industry
is
likely
to
sustain
larger
economic
losses
from
climate

change.
Losses
on
productivity,
health
and
safety,
environmental
damage
to

agriculture
and
ecosystems,
and
loss
of
social
license
to
operate
in
the
host

communities
may
be
larger
than
previously
estimated.
Litigation
often
involves

considerable
time
and
expense
to
the
adverse
parties
especially
on
the
part
of

mining
companies,
which
though
successful
in
their
defense
will
bear
the
brunt

of
damaged
reputation.
Benefits
from
avoided
mine
disasters
and
natural

hazards
resulting
from
climate
change
strongly
outweigh
prevention
costs.

Through
best
practice,
mining
companies
should
become
catalysts
for
climate

change
adaptation
in
the
community
where
they
operate.

Fernando “Ronnie” Penarroyo is the Managing Partner of Puno and Penarroyo Law
Offices (www.punopenalaw.com). He specializes in Energy and Resources Law,
Project Finance and Business Development.

Is the Philippine Mining Industry Ready to Adapt to Climate Change?

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