Environment

Principal applicable environmental laws

What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The Philippine Mining Act and its implementing rules and regulations require contractors to institute an environmental protection and enhancement programme (EPEP) prior to the commencement of mining operations and to submit final mine rehabilitation or decommissioning plans (FMRDP) to ensure environmental protection beyond the life of the mine. Other pertinent environmental laws include:

The Department of Environment and Natural Resources (DENR) and the agencies under it, including the Mines and Geosciences Bureau (MGB) and the Environmental Management Bureau (EMB), administer these environmental laws.

In the 19th Congress, House Bill No. 484 was filed before the House of Representatives on 30 June 2022, which seeks to codify the social and environmental obligations of all mining companies. The bill is currently pending before the Committee on Natural Resources.

House Bill No. 259, which seeks to reorient the Philippine mining industry toward the sustainable development and judicious use of mineral resources, was also filed in the 19th Congress. At present, it is still pending before the House Committee on Natural Resources.

Environmental review and permitting process

What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?

An environmental compliance certificate (ECC) is required for mining projects. To secure an ECC, a proponent must submit an environmental impact statement, which includes baseline environmental conditions, impact assessments and proof of consultation with stakeholders.

The environmental impact assessment (EIA) process involves four steps:

  • scoping;
  • the conducting of an EIA study and report preparation;
  • the reviewing and evaluation of the EIA report; and
  • decision-making.

An application for an ECC with the EMB may now be filed online. Upon submission of the required documents, it will take 20 working days for the application to be approved.

In September 2023, the DENR pilot-tested a new process called Negotiated Security and Resilience Agreement (NSRA) for mining companies, which was targeted for implementation in 2024 as an add-on to the ECC process. The NSRA is intended as an opportunity for the DENR and the applicant mining company to identify and negotiate shared goals, rather than as an additional regulation.

Sustainability

Do government agencies or other institutions in your jurisdiction provide incentives or publish environmental and social governance (ESG) guidelines for green projects?

To evaluate and mitigate economic, environmental and social impacts, the Philippine Securities and Exchange Commission requires publicly-listed companies to submit sustainability reports disclosing material information gathered after undergoing a materiality assessment process. The material information may constitute data relating to:

  • economic impacts, such as employee wages and benefits, community investments and procurement practices;
  • environmental impacts, such as energy and water consumption, materials used, operational sites near protected areas and areas of high biodiversity value outside protected areas, air emissions, and solid and hazardous wastes; and
  • social impacts, such as employee benefits, equal opportunities at the workplace, customer privacy and data security.

The Philippine Mining Act allows exemption from real property tax and other taxes or assessments of pollution control devices.

Furthermore, under the Philippine Green Jobs Act, businesses generating green jobs or jobs that contribute to preserving or restoring the quality of the environment may avail a income tax deduction of 50 per cent of the total expenses for skills training and research development expenses, which is above the allowable ordinary and necessary business deductions.

Under the Corporate Recovery and Tax Incentives for Enterprises Act of 2021, tax incentives may also be given to registered activities or projects under the Strategic Investments Priority Plan (SIPP), which includes sustainable energy projects.

Under the 2022 SIPP, activities relating to green ecosystems may enjoy an income tax holiday (ITH) of up to seven years followed by the enjoyment of certain enhanced deductions (ED) for up to five years. For exporter activities, qualified firms have the option to avail of a special corporate income tax (SCIT) rate of 5 per cent for up to 10 years.

For other environment or climate change-related projects, firms may enjoy a five-year ITH followed by a five-year entitlement to certain ED. Exporter activities may avail of the ED or SCIT for up to 10 years.

In December 2023, the Monetary Board of the Central Bank of the Philippines approved temporary measures to incentivise banks to extend loans or finance investments for green or sustainable projects or activities. These measures include the gradual reduction of the reserve requirement rate from 3 per cent to zero per cent against new and outstanding green, social, sustainability or other sustainable bonds issued by banks.

Closure and remediation process

What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?

The implementing rules and regulations of the Philippine Mining Act require that a final mine rehabilitation and decommissioning plan (FMRDP) or mine closure plan be integrated into the environmental protection and enhancement programme (EPEP) submitted by contractors to the Mine Rehabilitation Fund Committee for the rehabilitation of excavated, mined-out, and disturbed areas.

The government has established an environmental guarantee fund mechanism known collectively as the Contingent Liability and Rehabilitation Fund, which comprises the Mine Rehabilitation Fund (MRF), mine waste and tailings fees and the final mine rehabilitation and decommissioning fund (FMRDF). The MRF must be established and maintained by each operating contractor and permit holder to ensure the availability of funds for the EPEP. Failure to establish an MRF and FMRDF is sufficient grounds to suspend or cancel the mining operations in the areas under contract.

Restrictions on building tailings or waste dams

What are the restrictions for building tailings or waste dams?

Mining permittees must first secure clearance from the MGB, without prejudice to other required permits from other agencies of the DENR, before constructing and operating buildings, tailings or waste dams. Permittees are required to conduct risk assessments and establish contingency and emergency preparedness plans to deal with significant events, which are assessed by the MGB prior to issuing a clearance.