Businessmirror september 17, 2017

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Can mining industry weather the policy storm? O

By Jonathan L. Mayuga

ver the past several years, the mining industry has experienced a policy storm—from the imposition of a moratorium on new mining permits and designation of “mining no-go zones” with the signing of Executive Order (EO) 79 under the Aquino administration, to a stricter mine-audit process that led to closure or suspension orders affecting more than two dozen mining operations, cancellation of 75 mineral production sharing agreements (MPSAs) and the ban on open-pit mining method all over the country within the first year of the Duterte administration.

President Duterte expressed his dismay several times over the environmental destruction caused by irresponsible miners, which, he said, are making huge profits but are not taking care of the environment and the affected mining communities. Under a new leadership, the Chamber of Mines of the Philippines (COMP), an organization composed of the mining industry’s big players, is seeking to reverse these policies, hoping for a better policy environment that will see the industry grow and achieve its full potential. Interviewed by the BusinessMirror, Gerard H. Brimo, president and CEO of Nickel Asia Corp. and a member of the Audit, Risk and Remuneration (Compensation) Committees of the Board, as the newly elected chairman of COMP, speaks his mind about the challenges faced by the industry as a whole and how the group plans to weather the policy storm.

Here is the transcript of the interview: What is your perception of the challenges faced by the mining industry? First of all, the extractive industry—and mining is extractive—is controversial all over the world because you are taking out a resource that cannot be replenished. The problems that we have here in our country on mining, in particular, are really no different than problems that you will find in other big countries. And it is really the nature of the extractive industry. In countries where mining has taken place over many years, like in the Philippines, another problem is the so-called legacy mines, because years ago, before we all became environmentally conscious, there were not many prescriptions regarding mine rehabilitation, tailings dams, and so forth. If you go back to before the 1970s, and the laws in our coun-

try and many parts of the world, there were no requirements for tailings dams. So tailings go into the river and nature will take care of it after over so many years. Certainly, there’s no requirement for rehabilitation. You mine, you finish mining, and you leave. That is the way it was done years ago. That has all changed as the world, in general, becomes more environmentally conscious; the laws have changed. So today, you are required to rehabilitate, you are required to have tailings dams, and you are required to have social expenditures, and so forth. But, of course, if you want to criticize mining because there are mines that have remained unrehabilitated from years ago because there were no requirements, it is very easy to say: “Look what they have done? This mine has not been rehabilitated! That mine has not been rehabilitated!” We keep looking at the past when the laws are

different. Legacy mines is another issue that has always been put at the forefront by those who are not sympathetic to the industry. Of course, there are examples of mines that don’t do a good job. But there are examples of responsible mining that are actually world class. They follow worldclass standards. But because we don’t sell products in the market, we don’t advertise. We don’t communicate. We are very poor at communicating. That has to change. What are the COMP’s weaknesses as an organization and what will be its strengths under the new leadership? One weakness really is that we don’t represent the entire universe of large-scale mines in our country. There is also the Philippine Nickel Association. Most nickel mines are actually not members of the chamber but are members of the Philippine Nickel Association. There are Continued on A2

Cautious optimism: Survey reveals CEOs’ top concerns

W

By Roderick L. Abad | Contributor

HILE top executives in the Philippines are “cautiously optimistic” about the country’s growth prospects due to the reforms and initiatives taken by the Duterte administration, most of them remain upbeat about their business and respective industries, as they commit to continue establishing partnerships and alliances here and in the region, revealed PwC Philippines (PwC). PESO exchange rates n US 51.1430

In the Management Association of the Philippines (MAP)-PwC CEO Survey 2017 Report, the company found that the majority of the 120 CEOs surveyed are as bullish as the government on the economy, with 68 percent of them believing that meeting the 2017 GDP target is attainable. Sixty-three percent of them, likewise, believe that 2018 goals will be met. Given the strong macroeconomic fundamentals and positive indices to date, the prevailing business climate for them is conducive enough for revenue growth by 2020, as 57 percent have expressed high confidence in the prospects of their companies. Also, 54 percent of CEOs were very positive about the opportuni-

ties that abound in their industries over the next three years. “They are more confident in their own company because they can control what’s happening in the company,” PwC Philippines Assurance Partner Aldie P. Garcia told reporters during the company’s announcement of the survey results during a news briefing held recently in Makati City. Industry-wide, 55 percent of CEOs and business leaders are very confident about their respective sectors’ revenue growth prospects over the next 12 months, while 54 percent shared the same sentiment for the next three years. “While this number is only slightly higher compared to prior years, this cautious optimism is

shared by global CEOs,” he said, while citing that the confidence level of business leaders in the country is actually consistent with that of their counterparts overseas, as shown in PwC’s separate survey covering 1,300 CEOs across 81 different countries.

Top business concerns

A LOT of cautiousness in the business community could be attributed to several issues domestically and internationally, according to PwC Philippines Managing Partner for Deals and Corporate Finance Mary Jade T. Roxas-Divinagracia. “So apart from the external factors like the uncertainty of what’s happening in the Korean Peninsula, some of the overprotec-

nickelasia.com | Uzunov/Dreamstime.com

COMP CHAIRMAN GERARD H. BRIMO SPEAKS HIS MIND

tionism policies of other countries [could be considered],” she said. “Internally, some of the threats are terrorism. Also, we’re still in the stage of catching up when it comes to basic infrastructure. So these are the things that, while they are positive, somehow dampen that optimism that they have. But I think 55 percent is still a very positive number,” she added. From the business standpoint, CEOs view bribery and corruption, technological changes including cybersecurity, and the ability to respond to crisis as the main risks that may hinder growth. Increased emphasis on implementing cybersecurity has been prompted by persistent attacks Continued on A2

n japan 0.4640 n UK 68.5265 n HK 6.5459 n CHINA 7.8033 n singapore 37.9794 n australia 40.9400 n EU 60.9625 n SAUDI arabia 13.6374

Source: BSP (15 September 2017 )


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