Hot alphabet soup for mining

Marvin A. Tort

Posted on July 07, 2016

Mining is once again in the limelight -- or in the doldrums? -- as President Duterte threatened to take on the industry for environmental destruction. In addition to strong words against irresponsible miners shortly before taking his oath of office, the President also nominated a known anti-mining activist to the Department of Environment and Natural Resources (DENR).

These actions now beg the following questions: Is President Duterte against all mining? I don’t think so. Is he totally against destructive mining? Yes, I believe so, as any government official should be. Will the order for a new audit of all mining operations nationwide result in intolerable delays in the approval of new mining applications? Maybe.

I am pro-environment, but I am not anti-mining. I cannot be. I believe only a hypocrite will declare himself 100% anti-mining and yet continue to live on the products of the industry. Most everything in the “built” world -- cement, sand, iron and steel, glass, semiconductors, electronics, as well as coal, oil, and gas -- are all products of extraction, including mining.

But I do believe that mining should be responsible, and should be less about profits and supplying a demand for products, and more about preserving the environment and improving people’s lives. There should be a balance, but it should be skewed in favor of environmental protection, economic upliftment, and social protection.

In striving for the ideal, I offer hot alphabet soup. The government and the mining industry, in my opinion, should take to mind and heart the following acronyms: IRMA, ISO, and EITI. By looking into these letters, they will find themselves more or less on the path of “responsible” mining, or the middle ground between extraction and preservation.

IRMA is the global Initiative for Responsible Mining Assurance. It is a private sector-led multi-stakeholder, consultative initiative that advocates responsible mining worldwide. It is currently working to establish “a multi-stakeholder and independently verifiable responsible mining assurance system that improves social and environmental performance.”

On its Web site, IRMA explains that it was founded in 2006 by a coalition of nongovernment organizations, businesses purchasing minerals and metals for resale in other products, affected communities, mining companies, and trade unions. Note that miners are included in the initiative, and that is it not exclusive to anti-mining groups.

This coalition is presently “developing standards for environmental and social issues related to mining, including labor rights, human rights, indigenous peoples and cultural heritage, conflict response, pollution control and site closure.” After all, who best to determine the global standards for responsible mining that mining’s stakeholders themselves.

And by developing the “standard,” IRMA targets to put in place “a system of independent, third-party verification to enable mine sites to credibly demonstrate that they are operating in a manner that is consistent with healthy communities and environments, and that leaves positive long-term legacies.” This, obviously, aims to produce universal results acceptable to all.

It just so happens that it was only in April that IRMA made public for review comments the second draft of its proposed “Standard for Responsible Mining.” The first draft was made public in July 2014, but various stakeholders requested for an extension to review it. This was after the global stakeholder public comment period that ran from July to November in 2014.

So, the Duterte government’s timing in calling for a new review is somewhat fortuitous. I just hope, however, that in conducting its new audit of mines, the DENR will also consider developments abroad, particularly the IRMA initiative and how it can help us locally. If we want global best practices here, we need to have a credible source of data and information.

IRMA’s proposed “standard” will outline “a set of best-practice requirements that were developed and are being revised through multi-stakeholder processes.” And then, mining companies’ adherence to these responsible mining practices can be independently verified through the “responsible mining assurance system” that IRMA will implement.

This, I believe, is key to this entire mining brouhaha and the hairsplitting as to how responsible mining is defined. IRMA also reportedly plans to “beta test its certification system” in 2017, which is just a year from now, and “mine sites participating in the beta test phase of IRMA’s development will be eligible for certification.”

I believe local mining companies as well as DENR should take this opportunity to be involved or to participate in this beta phase, if only to show their good faith in locally adopting mining’s global best practices -- which would be based on standards set by global stakeholders after exhaustive consultation and comprehensive study.

In short, why reinvent the wheel and waste time replicating locally the “audit” and consultation process now happening worldwide, only to later on adopt global best practices, anyway. The global audit is ongoing through IRMA, and the consultation is about to end after years of review for the first and second drafts of the “standards.”

If local miners are certified by IRMA -- during the beta phase starting in 2017 or six months from now -- as compliant with the new global, multi-stakeholder standards, then what more will the government want? IRMA will be the end all and be all of standards, and DENR’s job will simply to make sure that IRMA certifications are updated and mines are monitored strictly for compliance.

Meantime, or at least until the IRMA standards go beyond the beta phase certification, I believe the ISO 14001 standard should be deemed as substantial compliance. This is in the absence of other globally accepted or universal standard of compliance with best practices. After all, ISO or the International Organization for Standardization, is an independent, non-governmental international organization with a membership of 163 countries.

On its Web site, ISO says it gives “world-class specifications for products, services and systems, to ensure quality, safety and efficiency. They are instrumental in facilitating international trade.” I see ISO’s value, particularly for mining, as a third-party, independent audit of mining operations while IRMA is still in its infancy.

Perhaps in the future, say three years from now, the IRMA standard can take the place of the ISO standards for mining, particularly in terms of environmental management. I believe the IRMA standard will eventually become the globally acceptable standard. Minus that, ISO is the next best thing to ensuring that local miners implement environmental managements systems that adopt locally the best practices of similar industries worldwide.

ISO has reportedly published more than 21,000 International Standards and related documents, covering almost every industry, from technology, to food safety, to agriculture and health care. And yet, locally, particularly in mining, only four out of hundreds of mining companies are reportedly updated in the ISO certification of their environmental management systems.

ISO certification is a good start, I believe, as the DENR itself has cited it in the past as perhaps a reasonable and acceptable measure of compliance with respect to environmental protection standards. It is unbiased and empirical, and requires periodic monitoring. It can be withdrawn anytime in case of breach, thus noncompliance has repercussions.

Sans any other globally acceptable standard, and barring the imposition of new local requirements, using the updated ISO certification as the initial basis for quick audit can result in the least amount of downtime for ongoing mining operations, or the least delay in the approval of new mining applications. And considering that only four mining companies reportedly meet this requirement to date, then more emphasis should be given to it.

Another effort that requires greater local support is EITI or the Extractive Industries Transparency Initiative. EITI is another global standard, but this time to promote the open and accountable management of natural resources. On its Web site, EITI claims to address the key governance issues of the oil, gas and mining sectors.

“The EITI Standard covers themes or key issues from the extraction of the resource from the ground to how it affects the citizens of the country. This includes how licenses and contracts are allocated and registered, who are the beneficial owners of those operations, what are the fiscal and legal arrangements, how much is produced, how much is paid, where are those revenues allocated, and what is the contribution to the economy, including employment,” the EITI Web site notes.

I am uncertain as to how many local companies are now part of IRMA, but I do believe the Philippines started participating in EITI in 2013. EITI provides a platform to systematically report on, review, and assess what is being paid by companies in fees and taxes and received by governments through a system of bilateral disclosures.

Admittedly, EITI is more for the public sector, as “the government benefits from following an internationally-recognized transparency standard that demonstrates commitment to reform and anti-corruption, leading to improvements to the tax collection process, and enhanced trust and stability in a volatile sector.”

However, by taking part in EITI, the private sector, particularly extractive industries like oil and gas as well as mineral mining, become more transparent in their dealing with government. At the same time, they can be held more accountable for their actions and what they pay -- or not pay -- to the government. At the same time, the government becomes more accountable as to how it spends what it earns from extractive industries like mineral mining.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council