Senator Loren Legarda's manifestation on Senate Bill No. 2826 under Committee Report No. 329, or An Act Enhancing the Fiscal Regime for the Large-Scale Metallic Mining Industry
January 21, 2025
Senator Loren Legarda's manifestation on Senate Bill No. 2826 under Committee Report No. 329, or An Act Enhancing the Fiscal Regime for the Large-Scale Metallic Mining Industry
21 January 2025
Mr. President, yesterday, I introduced an amendment to Senate Bill No. 2826 or the Enhanced Fiscal Regime for Large-Scale Metallic Mining bill. Prior to amendments, Section 12 of the bill imposed a 2% cap or ceiling on royalties due upon Indigenous Peoples (IPs) and Indigenous Cultural Communities (ICCs) from mining operations within ancestral domains, to wit:
"Section 12. Royalty due to Indigenous Cultural Communities from Mining Operations Within Ancestral Domains.
- The royalty due to Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) under Republic Act No. 7942 or the Philippine Mining Act of 1995 is based on the right of the ICCs/IPs to benefit from the utilization, extraction, and development of lands and natural resources within their ancestral domains, done with their free and prior informed consent, and shall be agreed upon by the parties concerned: Provided, that the ICC/IP shall be paid not more than two percent (2%) of the gross output of minerals produced from the ancestral domain. Provided further, that parties concerned shall be free to negotiate on its components, both monetary and non-financial, such as employment, social, development, and environmental management of the ancestral domain."
Thus, this representation's proposed amendment was to make 2% the minimum threshold that the ICCs and IPs can receive, and not the ceiling. The proposed amendment was rejected by the good sponsor, Senator JV, on the ground that the provision being amended will be deleted as it is being considered a rider to the bill. The deleted provision pertains to royalties, a subject matter that is different from taxation.
Nevertheless, while the discussion was set aside due to the deletion of the subject provision, we wish to highlight some key findings from our review. I wish to bring to the attention of this august chamber that we found no legal basis for imposing a cap on the share of benefits that ICCs/IPs are entitled to receive from the use of natural resources within their ancestral lands under existing laws.
Republic Act No. 8371, or the Indigenous Peoples' Rights Act of 1997, grants Indigenous Cultural Communities (ICCs)/Indigenous Peoples (IPs) the right to benefit from and negotiate terms for resource exploration within their ancestral domains. Notably, this law does not impose a cap on royalties that ICCs/IPs may negotiate for the use of resources.
Similarly, Republic Act No. 7942, the Philippine Mining Act of 1995, mandates that royalties from mineral utilization within ancestral domains must be mutually agreed upon and allocated to a trust fund for the ICCs/IPs' socioeconomic well-being. However, it also does not set a specific cap for these royalties.
Despite this statutory framework, the Implementing Rules and Regulations (IRR) of Republic Act No. 7942 specify that royalties to ICCs/IPs must not be less than 1% of the gross output, with community development expenses chargeable against this royalty. While this provision aims to secure ICCs/IPs a minimum share, it has effectively constrained their bargaining power by institutionalizing 1% as a baseline standard. Furthermore, tying community development expenses to the royalty share diminishes the financial benefits available to ICCs/IPs, further limiting their capacity to negotiate equitable terms.
We view this as a diminution of the rights afforded to ICCs/IPs under the law. Since no ceiling was prescribed by the law, none should exist, and the 1% minimum share should not have been misconstrued as a baseline for negotiations by those seeking to utilize resources within ancestral domains.
For the record, we emphasize the need to revisit the laws and regulations governing royalty shares for ICCs/IPs to ensure they are placed in the strongest possible negotiating position, in alignment with their right to self-determination and the overarching goal of advancing the development of their communities.
Furthermore, strengthening the NCIP's guidelines on Free and Prior Informed Consent (FPIC) ensures that ICCs/IPs are empowered to negotiate fair agreements aligned with their cultural values and long-term welfare. The incorporation of frameworks like the Philippine Ecosystem and Natural Capital Accounting System (PENCAS) under Republic Act No. 11995 ensures royalty payments are calibrated to reflect the ecological and cultural impacts of mining operations.
Additionally, provisions prohibiting unreasonable representation fees safeguard ICCs/IPs from financial exploitation and undue influence, further reinforcing their autonomy and protecting their rights during negotiations.
Mr. President, with these findings, this representation sees the need to ensure equitable royalty arrangements and empower ICCs/IPs to negotiate on fair terms. This is not only a matter of justice but also a crucial step toward preserving their cultural heritage, promoting sustainable development, and upholding the principles of self-determination enshrined in our laws.
This is our sacred duty to protect the rights of Indigenous People as the stewards of our nation's ancestral lands for generations.
Thank you, Mr. President.
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