Digging for profits: Who owns PH mines?
QUICK FACTS
Name of mining firm: Wellex Mining Corp.
Location: Libjo and Tubajon, Dinagat Islands
Mining area: 3,696 hectares
Metals extracted/mine products: Nickel
Nickel production: None reported for 2020 and 2019
Mining permit period: 1994-2019
Total manpower complement: Not indicated
OWNERSHIP
Incorporation date: Jan. 10, 2008
Stockholders:
The Wellex Group, Inc.
Gatchalian, Kenneth T.
Lim, Joson T.
Mercado, Lamberto Jr. B.
Torres, Ruben D.
Ricardo, Richard L.
Chairperson of the Board: Gatchalian, Kenneth T.
MINING REVENUE
Current assets: P7.38 million (2019)
Current liabilities: P5.32 million (2019)
Revenue from sale of mining products: None indicated (2019)
Net income: -P24.66 million (2019)
MINE AUDIT FINDINGS (2016/2017)
According to the 2016 Mine Audit Report, below is a summary of the violations for both Wellex I and Wellex II mining projects:
Wellex I Mining Project
Violation of the applicable rules of DAO 2000-98 or the Mine Safety and Health Standards, and provisions of DAO 2010-21
1. Preparation and implementation of an approved Annual Safety and Health Program for CY 2015 and CY 2016;
2. Provision of Safety and Health Policy Statement signed by the highest official onsite that (are) put in strategically located workplaces;
3. Provision for Safety and Health Office;
4. As a Class B mine, there was no full-time safety engineer duly registered with MGB Regional Office 13. It has only one full-time safety inspector who was not yet registered;
5. Wellex Mining Corp. failed to perform its duties and responsibilities as follows:
a. No Central Safety and Health Committee (CSHC) established;
b. Conduct of departmental meetings;
c. Conduct of pep talk or tool box meetings;
d. Provision of Safety and Health Incentive System/Program;
e. Conduct of medical examination for all employees;
f. No Safety and Health Protocol and Guidelines; and
g. Accomplishment of target planned inspections.
6. Provision of medical and dental services and facilities for employees;
7. No Emergency Response and Preparedness Program (ERPP);
8. No emergency drills;
9. No Safety and Health Awards/ Recognition/OHSAS 18001 Certification; and
10. No installation of sufficient safety warning signs at strategic places within the mine site and wharf/causeway as well as in the field office compound.
No tree-cutting permit
1. Failure to secure a Tree-Cutting Permit from the DENR prior to the development stage of mining operation (vegetation clearing and overburden stripping activities).
Violation of the terms and conditions of the MPSA
1. Contractor did not conform to laws and regulations regarding, among others, safety and health standards; and
2. The Contractor had failed to conduct progressive rehabilitation of disturbed and mined-out areas within the contract area.
Violation of existing laws, policies, and rules and regulations under DAO 2010-21
1. Failure to rehabilitate disturbed areas progressively during the development/construction stage and operating period as provided for in Section167 of DAO 2010-21
Violation of the terms and conditions of the issuance of ECC under Section 9 of PD 1586
Issuance of notice of violation for non-compliance of ECC Conditions 4, 6, 8, 16(d), 17 & 19
1. Failure to ensure that no creeks, streams, rivers and/or springs and/or portions of it will be excavated, re-routed, diverted and/or be part of the mining operation area as what happened to the excavation activity at the downstream of Madanlog creek;
2. Failure to conform with the provisions of RA 6969 (Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990) and RA 9275 (Clean Water Act of 2004) as required under Condition 6 of the ECC;
3. Failure to secure ECC for the excavation and installation of settling pond along the downstream of Madanlog creek as required under ECC Condition 8;
4. Failure to designate qualified MEPEO and failure of the MEPEO to conduct monitoring on the actual project impacts vis-a-vis the predicted impacts and management measures identified in the EIS as required under ECC Condition l6(d); and
5. Failure to ensure that its contractors and subcontractors properly comply with the relevant conditions of the Certificate as required under Condition 17 of the ECC.
Violation of Section 27, Paragraph (a) and (c) of RA 9275 and its IRR
1. For putting up a settling pond along the downstream of Madanlog creek, which may cause water pollution during heavy rains and impede the natural flow of the said creek;
2. Operating facility (oil/water separator) without valid Wastewater Discharge Permit
Violation of Section 13 of RA 6969 and Section 41, Paragraphs 5, 6, and 8 of DAO 1992-29 and DAO 2013-22 of the IRR
1. Failure or refusal to provide proper labeling as provided for under Section 29 of DAO 1992-29 regarding hazardous waste storage and labelling; and
2. Failure to train staff and personnel on hazardous waste management and emergency contingency plan.
Wellex II Mining Project
Violation of the applicable rules of DAO 2000-98 or the Mine Safety and Health Standards, and provisions of DAO 2010-21
1. Preparation and implementation of an approved Annual Safety and Health Program for CY 2015 and CY 2016;
2. Provision of Safety and Health Policy Statement signed by the highest official onsite that (are) put in strategically located workplaces;
3. Provision for Safety and Health Office;
4. As a Class B mine, there was no full-time safety engineer duly registered with MGB Regional Office 13. It has only one full-time safety inspector only who was not yet registered;
5. Wellex Mining Corp. failed to perform its duties and responsibilities as follows:
a. No Central Safety and Health Committee (CSHC) established;
b. Conduct of departmental meetings;
c. Conduct of pep talk or tool box meetings;
d. Provision of Safety and Health Incentive System/Program;
e. Conduct of medical examination for all employees;
f. No Safety and Health Protocol and Guidelines; and
g. Accomplishment of target planned inspections.
6. Provision of medical and dental services and facilities for employees;
7. No Emergency Response and Preparedness Program (ERPP);
8. No emergency drills;
9. No Safety and Health Awards/Recognition/OHSAS 18001 Certification; and
10. No installation of sufficient safety warning signs at strategic places within the mine site and wharf/causeway as well as in the field office compound.
No tree-cutting permit
1. Failure to secure a Tree-Cutting Permit from the DENR prior to the development stage of mining operation (vegetation clearing and overburden stripping activities).
Violation of the terms and conditions of the MPSA
1. Contractor did not conform to laws and regulations regarding, among others, safety and health standards; and
2. The Contractor had failed to perform mining operations with minimum damage to the environment and to subject mined-out areas to progressive rehabilitation.
Violation of existing laws, policies, and rules and regulations under DAO 2010-21
1. Failure to rehabilitate disturbed areas progressively during the development/construction stage and operating period as provided for in Section 167 of DAO 2010-21
Violation of the terms and conditions of the issuance of ECC under Section 9 of PD 1586
1. Issuance of notice of violation for non-compliance of ECC Conditions 1, 2, 4, 6, 16(d), 17 & 19
2. For insufficient implementation of appropriate vegetative practices, sound soil management, and proper waste management throughout the Project implementation;
3. For failure to establish a reforestation and carbon sink program;
4. Failure to ensure that the supply of surface water will not be diminished as what happened to the source of potable water for Barangay Malinao;
5. Failure to conform with the provisions of RA 6969 (Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990) and RA 9275 (Clean Water Act of 2004) as required under Condition 6 of the ECC;
6. Failure to designate qualified MEPEO and failure of the MEPEO to conduct monitoring on the actual project impacts vis-a-vis the predicted impacts and management measures identified in the EIS as required under ECC Condition No l6(d); and
7. Failure to ensure that its contractors and subcontractors properly comply with the relevant conditions of the certificate as required under Condition 17 of the ECC.
Violation of Section 27, Paragraph (c) of RA 9275 and its IRR
1. Operating facility (oil/water separator) without valid Wastewater Discharge Permit
Violation of Section 13 of RA 6969 and Section 41, Paragraph 5, 6, and 8 of DAO 1992-29 and DAO 2013-22 of the IRR
1. Transport of hazardous wastes without transport registration;
2. Transporting hazardous wastes without permit to transport;
3. Failure to submit a completed copy of the hazardous waste manifest form to the DENR;
4. Conveys or transports hazardous wastes without the proper manifest forms;
5. Failure or refusal to provide proper labeling as provided for under Section 29 of DAO 1992-29 regarding hazardous waste storage and labelling; and
6. Failure to train staff and personnel on hazardous waste management and emergency contingency plan.
The full report and/or copy of the DENR order may be viewed here.
STATUS OF RECOMMENDATIONS / COMPANY RESPONSE (AS OF MARCH 2022)
PCIJ sent a letter to the company on Feb. 21, 2022 and made follow-ups on March 2, 2022 and March 24, 2022. We have not received a response as of this writing.
STATUS OF OPERATIONS
Wellex Mining Corp.’s mineral production sharing agreement (MPSA) is suspended, according to the Mines and Geosciences Bureau’s list of MPSAs as of Feb. 28, 2021.
In February 2017, the company received an order from the Department of Environment and Natural Resources (DENR) cancelling its MPSA. On Nov. 12, 2018, the department issued a resolution (1) partially granting Wellex’s motion for reconsideration on the 2017 cancellation order; (2) suspending the operation of the firm; and (3) directing it to do the following:
1. correct all violations and deficiencies and conduct replacement planting in accordance with DENR Memorandum Order No. 2012-02 prescribing a uniform replacement ratio for cut or relocated trees; and
2. pay all fines and penalties immediately upon receipt of the resolution.
COMMUNITY PROFILE
Municipality class of mining location: Libjo, Dinagat Islands (5th class)
Population: 17,760 (2015)
Poverty incidence rate: 43.56% (2015)
Human Development Index: No data available
Municipality class of mining location: Tubajon, Dinagat Islands (5th class)
Population: 8,276 (2015)
Poverty incidence rate: 41.97% (2015)
Human Development Index: No data available
IN THE NEWS
DENR announces closure of 23 mining operations
Mine closures, suspensions affirmed
Sources:
General Information Sheet, 2020
Financial Statement, 2019
List of existing Mineral Production Sharing Agreements, Mining and Geosciences Bureau
Philippine Metallic Mineral Production, Mines and Geosciences Bureau
Poverty and socioeconomic indicators, Philippines Statistics Authority
Copy of full Mine Audit Reports by company, 2016
Copy of Notices of Issuance of an Order, 2017
Copy of Orders of Cancellation and/or Suspension, 2017
Acronyms used:
RA (Republic Act)
IRR (Implementing Rules and Regulations)
PD (Presidential Decree)
DAO (Department Administrative Order)
MPSA (Mineral Production Sharing Agreement)
SDMP (Social Development and Management Plan)
Disclaimer: The mine audit was conducted in 2016 after Regina “Gina” Paz Lopez assumed the post of environment secretary. The findings in the reports, which authorities sent to the mining firms in 2016, were likely addressed in the succeeding years following a review conducted by the Mining Industry Coordinating Council after the audit led by Lopez, who died in 2019. PCIJ has verified the reports and reached out to each company for comment. We suggest you also confirm findings included in the reports as some information may have changed over time.
The reports come from files that PCIJ has received in connection with various environmental investigations. We are releasing them in full, recognizing the public value of the files to mining communities, miners, policymakers, civil society, and researchers.
Note: The Human Development Index is a measure of how well a country has performed, not only in terms of real income growth, but also in terms of social indicators that measure people's ability to lead a long and healthy life, acquire knowledge and skills, and have access to the resources needed to afford a decent standard of living. An HDI value below 0.550 is considered low and below 0.399 is very low. The national average for the Philippines is 0.718 as of 2020.
This article was produced with the support of Internews' Earth Journalism Network.
— PCIJ, March 2021