Albay gov seeks termination of Lafayette's mining permit

By Danny O. Calleja

Correspondent

LEGAZPI CITY. Albay Gov. Joey Salceda has urged the Department of Environment and Natural Resources (DENR) to terminate the mining permit of Lafayette Mining Ltd. (LML) on Rapu-Rapu island in Albay province following the Australian firm�s declaration of financial difficulties. "LML's present financial status is tantamount to bankruptcy and I implore now the DENR to immediately suspend all its permits related to mining operations so that the environmental standards that we are duty-bound to uphold is not compromised," Salceda said over the weekend. The Albay governor�s statement came in the wake of an announcement by LML that it was filing a petition with the court to secure a protection from its creditors through voluntary administration. Carlos Dominguez, chairman and president of Lafayette Philippines Inc. (LPI) that oversees the Rapu-Rapu Polymetallic Project (RPP), in a press statement late last week said that when the petition is granted, payments for existing debts would be suspended considering the fact that it could not continue to meet its obligations as and when they fall due. LML would also file in court a petition for rehabilitation as it tries to find ways to lighten the company�s debt burden through sale, restructuring of bank loans, raising new capital or looking for other investors, Dominguez said. With LML�s declaration of voluntary administration, RPP, the first foreign-owned mining project under the Arroyo administration, has been placed under the control of Lafayette Mining Ltd of Australia and its businesses, properties and affairs on Rapu-Rapu island taken away from the local group. For lawyer Bayani Agabin, LML�s legal counsel, however, the petition for rehabilitation does not mean bankruptcy. Rehabilitation means operations will continue and people would remain employed, Agabin said. Bankruptcy, on the other hand, means operations would stop, people would be laid off and the remaining assets sold, Agabin said in reaction to Salceda�s claims that LML was bankrupt. Agabin said RPP is viable but only needs breathing space as far as paying its obligations is concerned. "It is not closing down. It is definitely not bankrupt and simply needs time to get back on its feet by being allowed to suspend payment of its present obligations," Agabin said. While payment to creditors and suppliers will be suspended, they will also be required to continue providing services and supplies and would be paid on a cash basis, he added. But for Salceda, a noted financial analyst, the most appropriate remedy is the closure of RPP as the firm�s financial distress is an absolute proof of bad management that very likely would sacrifice the environment. "When they [LML management] bullied in writing President Gloria Macapagal-Arroyo into obtaining a PEZA (Philippine Economic Zone Authority) favor, I knew something was not right with these people from the very start," he said. The environmental issues to be addressed in this case are: who would maintain the mine tailings pond that contain toxic waste once the mining firms ceases to operate and who will pay the people of Rapu-Rapu the P16-million arrears in social development program of LPI as mandated under its environmental compliance certificate (ECC), Salceda said. For this reason, Salceda said, the DENR should take the responsibility in ensuring the integrity of the mine toxic waste handling facilities to prevent any mishap, especially if some mining chemicals are misplaced. Over two years ago, the operations of RPP was temporarily closed due to a series of tailings dam spillage that resulted in massive fish kill at the fishing ground down the mining site. It was allowed by the DENR to reopen early this year but the incident was reportedly repeated last September. Salceda also warned environment authorities that permits are not automatically restored to its creditors or eventual new interest while waiting for the court to appoint a receiver. Given the poor track record of LPI, Salceda also asked the DENR's Environmental Management Bureau (EMB) to conduct compliance audit on all environmental concerns within the area covered by its ECC. DENR regional executive director Reynulfo Juan said his agency would look into the request for the suspension of LPI's mining permits but before any decision could be reached, a technical conference where the mining firm would be asked to submit a mining rehabilitation plan should take place. Juan said closing the mining operation would give a bad signal to other probable investors. Lafayette mining had been operational for a year and a half now, he added. On the other hand, the descent into bankruptcy for LPI was a step toward victory for the residents of Rapu-Rapu and environmentalists that fought so hard for the mine's closure since 2001, according to Fr. Lino Bugaoisan, the former parish priest on the island who spearheaded the moves for these people to be heard.