PH-CSO Agenda Extractive Industry Transparency Initiative (EITI)

Bantay Kita Bantay Kita is a coalition of organizations advocating for transparency and accountability in the extractive industry. –Coalition focuses on economic reforms, research and governance –Board of trustees based on field of expertise – Economics, governance, subnational, environment, IPs, research

Why EITI? Lack of information regarding extractive industry. Accountability for environmental damages and the absence of development from these projects. Fair share from the utilization of these resources.

Why EITI? The EITI mechanism contributes to good governance by –reducing the risk of corruption –promoting corporate social responsibility –holding companies and governments accountable through the disclosure of taxes, fees and royalties paid to the government. –facilitating access to information regarding the extractive industry

Why EITI? Bantay Kita sees EITI as an opportunity to engage the government and other stakeholders of the extractive industry. It is a venue to push for Bantay Kita’s broader advocacy for transparency and accountability as well as other policy reforms advocated by its member organizations.

Issues and concerns of CSOs Minimum compliance to EITIvwill have an insignificant effect in reforming the extractive industry in the Philippines. EITI = “responsible mining.” EITI is "an invitation for mining companies to come to the Philippines." This will then have a negative effect on their struggle to stop mining in their communities. The communities see the concept of governance reform (transparency and accountability) in the extractive industry as a new paradigm in approaching the issues of resource extraction.

Issues and concerns of CSOs How community-based organizations can directly participate and benefit from EITI= subnational EITI The lack of mechanisms within EITI to penalize companies which fail to comply with the reporting requirements of EITI. What penalties will be imposed on companies that violate Philippine laws.

Issues and concerns of CSOs How effective will the EITI be in ensuring access to information about mining operations in the country? The participants urged the passage of Freedom of Information bill. Sustainability of the EITI initiative in the Philippines. The participants suggested that a law be enacted to institutionalize and expand the scope of EITI in the Philippines.

EITI reports should be disaggregated per company per operation/site. EITI reports should include all forms of payment to government (national and local) and communities (royalties and payment and contribution for social development). The EITI reports should include transfers from government to companies. These include incentives given by the government to companies. Disclosure on the actual volume of ore extracted from site and on the type of minerals that are extracted per site including associated minerals and the related price. Disclosure of production data and mineral reserves. PH-EITI Reporting

Information on the total economic contribution of the extractive industry in the country, including employment contribution to be disaggregated by type of employment, by age, gender and nationality. Information on the wage of their workers to show if there are income disparities between local and expats, if any. Inventory and total economic valuation of the contribution of the operation to the local economy. Background on the owners of the company should be included in the report. PH-EITI Reporting

Disclose the contract of companies to the government and the Memorandum of Agreement with communities. The EITI exercise should eventually result in the review of these contracts. Individual site report should also include payment to subcontractors. Disclosure of company “good will,” “donation” and “political contributions.” EITI reports should include the Environmental Compliance Certificate (ECC) of the operating company and the state of compliance of the company. Data in the report should be available and accessible in the EITI- Philippines website in excel format.

Individual site report should include the impact of the operation on flora, fauna, water quality, air, timber and land. Information on human rights issues associated with the extractive operation in the site. EITI audit reports should cover at least the past 5/10 years of the company operation. PH-EITI Reporting

Information on mineral resources Updated information on the current inventory/total mineral resources of the country. Comprehensive maps of these mineral resources.

Industry background Background information on funds flow (flow of payments from companies to agencies). Background information on process flow (flow of ore from site to processing). Background on pricing of ore. Background on the destination of minerals exported from the Philippines and an audit on the quantity and value of exported minerals. Total social and economic contribution of the industry (aggregated and disaggregated data).

Industry scope of EITI The first Philippine EITI report should include the 33 large-scale operating metallic mining sites and key mining operations particularly Tampakan, Oceana Gold and TVI. It should also include oil and gas operations in the country. The implementation of EITI at the national level should be complemented by the preparation and capacity building of regions/provinces to implement sub-national EITI. Sub-national EITI will include discussions on large-scale mining, small- scale mining, and quarrying (e.g. cement production in Cebu, magnetite quarrying).

Industry scope of EITI EITI reporting should eventually include: – the exploration stage of extractive industries –offshore mining – non-metallic mines –cement industries –midstream and downstream mining industries –geothermal and hydro-energy –extraction of water resources –forestry/logging –large plantations (e.g. bananas, pineapple, and palm oil) –biofuel

EITI scope with respect to the industry value chain Eventually, it is envisioned that EITI be a venue to: –review the validity of the free prior and informed consent (FPIC) process, IP contracts with mining companies and royalties. –conduct independent comprehensive cost and benefit assessments (social impact assessments) of sites that will be open for exploration. –review compliance of companies with contracts. –track the expenditure of proceeds/revenues from extractive industries.

Decision-making in EITI Consensus building be the only mechanism for decision- making in the multi-stakeholder group of the EITI Philippines.

Institutionalization of EITI A law should be passed to ensure the institutionalization of EITI. The national government should commit to support and promote the implementation of EITI at the sub-national level. The passage of the Freedom of Information bill is at the heart of making EITI successful in the Philippines.

Where we are in PH-EITI Disclosure of all contracts between government and companies Disclosure of community development agreements between IP communities and companies Disclosure of payments to governments per site per company Disclosure/Free access of the documents in the Securities and Exchange Commission Disclosure of transfer to local governments Disclosure of social payments of companies Partial disclosure of employment information

Where we are in PH-EITI Disclosure of the costs related to the Free Prior and Informed Consent Disclosure of the auxiliary rights given to mining companies (forest rights, water rights, land rights) Disclosure of mining monitoring reports Disclosure of beneficial ownership of companies

Thank you! Bantay Kita-PWYP Philippines