PHL govt rejects Philex plea vs. paying P1B for Padcal disaster

By ROUCHELLE R. DINGLASAN and VICTOR D. SOLLORANO, GMA News

Published January 16, 2013 12:44pm

(Updated 2:49 p.m.) The government on Wednesday has rejected the appeal of Philex Mining Corp. not to pay P1.034 billion in damages for the Padcal Mine disaster that spilled 20.6 million metric tons of mine waste in Itogon, Benguet in August last year. “We rejected the motion for reconsideration filed by Philex,” Leo Jasareno, Mines and Geosciences Bureau director, told GMA News Online.

Jasareno said they gave Philex until Feb. 19 to pay the P1.034-billion penalty, the largest in Philippine history imposed by the Mines Bureau against a mining company According to Jasareno, Philex was asked to remit the penalty to the National Treasury. The money will accrue to the Mine Wastes and Tailings Reserve Fund for mining disaster-related claims administered by the government.

The Mines Bureau chief noted that the latest government position was contained in “a Letter Decision, dated January 15... It was addressed to (Philex) president” Eulalio Austin Jr.

“After thorough evaluation, we have determined that there is nothing in the Motion for Reconsideration that would warrant a change in the decision of this Office,” Jasareno said in the letter e-mailed to reporters.

“As to the penalty of P1,034,358,971.00… please make the payment of the aforesaid amount, either in cash or Manager’s/Cashier’s Check… on or before February 19, 2013,” the letter read. 'We will pay for what is due'

In a separate interview with GMA News Online, Philex vice president for Corporate Affairs Michael Toledo said the company “will pay for what is due... We will pay the fee... Whatever the law says will be remitted..."

"We have the funds to address the law,” he added, saying, “Now it's just a matter of having the work plan of the rehabilitation... We will make good on the payment on or before February 19.”

Philex expects to complete the tailings pond and the Balog Creek rehabilitation this April, according to the mining executive.

“From the very beginning we have been transparent... We closed the operations when it happened. We informed the public, the government and our investors,” Toledo noted.

“We will work closely with the MGB on this, as we welcome its decision that the amount to be paid would be used for remediation and rehabilitation of the affected areas,” Philex noted in a statement Wednesday, citing Toledo. 'Force majeure'

At first Philex Mining refused to pay the penalty, arguing that the breach in the tailings pond was due to heavy rainfall – an “act of god or force majeure.”

The company also claimed that paying the fine would be an admission of negligence on its part.

However, the government, particularly the Mines Bureau and its mother agency the Department of Environment and Natural Resources, stood pat on its decision. It cited the culpability of Philex for not taking the necessary steps in securing its mine waste system considering that the mining operation is in the Philippines – a country notorious for extreme weather conditions. Compromise deal

Philex later asked the government for a “compromise deal” in the sense that it will use the money to pay for its own cleanup and rehabilitation of the waterways contaminated by the mine waste that escaped from the Padcal mine.

Philex also disclosed that it may seek administrative and judicial remedies to spare the company the financial cost imposed by the government.

Two months after the disaster was reported in early August, Philex claimed to have plugged the breach and said the destroyed portion of the tailings dam was plugged with boulders and cement.

An environmental investigative mission last October, which studied the effects of the mine spill on Balog Creek, revealed that the water body was “biologically dead.”

There are no signs of frogs, dragonflies, aquatic plants, or moss along the creek. The water itself is a brownish gray color, too murky to observe any fish.

The communities that live along and depend on the waterway have neither caught fish nor panned some gold after the mine spill, losing their principal source of income. To cope with the situation, the residents turned into ‘bakal boys’ or scavengers of scrap metal. The metal scraps carried by the flow of the were the offshoot of earlier attempts by Philex to plug the tailings pond. — VVP, GMA News

Tags: mining, companies, philex, padcal, minesbureau