Philex won't pay fine for Padcal disaster, says rehab cost exceeds P1-B

(Updated 4:28 p.m.) Philex Mining Corp. on Monday said it is standing pat on its position not to pay the P1.034-billion fine imposed on it by the government for a waste leak at its Padcal Mine that dumped more than 20.6 million metric tons of mine tailings into the environment.   Michael Toledo, Philex senior vice-president for corporate affairs, urged the Mines and Geosciences Bureau (MGB) and its mother unit the Department of Environment and Natural Resources to “decide as soon as possible” on the company’s appeal to spare the company from paying the fine.   “We are allowed to appeal, under the law…We are given a wider latitude by law to appeal this case,” Toledo told GMA News Online. Philex can only pay for, and have already invested more than the amount of the fine in, cleaning up and rehabilitating the busted tailings pond, said the company official.   At this point, the company “will try to exhaust all administrative remedies… Otherwise, we will let the court decide on this matter,” he added. "They are certainly free to do that," MGB Director Leo Jasareno told GMA News Online in a separate interview. "They can avail of any administrative remedies provided."   In disclosures to the Philippine Stock Exchange, the company claimed the DENR and the MGB absolved Philex Mining personnel of responsibility for the disaster, a position Toledo reiterated on Monday.     Toledo said they cannot be obliged to pay the penalty since the MGB itself has reported that “the company’s personnel were not remiss in the maintenance and operation of Tailings Pond No. 3, and may not be held liable for the incident.” The mine spill started at the height of enhanced monsoon rains in early August that broke the tailings pond used in the Padcal mining operations.   According to the Philex official, there is "nothing in the Mining Act and its Implementing Rules and Guidelines" or in civil law that says “Philex Mining or any other mining company for that matter should be held liable if it were force majeure"—an event that cannot be controlled or anticipated.   Even the mineral production sharing agreement between Philex Mining and the government "is quite clear on the issue of force majeure in which the contracting parties cannot be held liable…” Toledo noted. “I still believe that the principle of the law prevails in this country." However, Jasareno said the MGB found that Philex was negligent for "failing to provide contingency measures to prevent such an accident, and that is why we are imposing the penalty."   The Mines Bureau has yet to approve Philex’s rehabilitation and remediation plan for the mine and the environment and communities affected by the waste spill which, said Toledo, would "address any environmental effect of the TSF3 incident… to pave the way for the resumption of the Padcal Mine operations." Jasareno said that the DENR is still in the process of evaluating the report, but would probably issue a response within the week.   The company earlier said that two independent international firms will validate and review its construction of a spillway for TSF3. Philex expects the waste pond’s rehabilitation to be completed in April 2013. — With Edgardo Tugade/GMA News