Philex Mining could face more penalties, but refuses to pay

Philippines-based Philex Mining Corp. (PX:PM), the country's biggest miner, may have to pay fines for violations of the Clean Water Act and the company’s own Environmental Compliance Certificate (ECC), the Mines and Geosciences Bureau (MGB) said Thursday.

Aside from the fines for the tailings discharged from its Padcal mine site in Benguet province, which the miner is allegedly refusing to pay, the copper and gold company would now be liable for possible violations of various other environmental laws, told Business World the Environment Undersecretary, Demetrio L. Ignacio.

Philex responded by saying it would dispute the penalties imposed as the MGB had found that the breach of its Padcal tailings dam was not the result of negligence on the part of the mining company, but “force majeure.”

“It is grossly unfair to penalize Philex and impose a huge fine on it when the government agency imposing the fine itself has confirmed that Philex is just a victim of force majeure event or an act of nature over which it had no control,” said Mike Toledo, Philex senior vice president for corporate affairs, in a statement published by Manila Standard Today.

The MGB replied through the media it is ready to face Philex in court.

Analyst Jack Caldwell points out on his blog that adverse publicity surrounding the failings of Philex’s tailings damns attest more to the shortcomings of its corporate legal team than shoddy operating practices in developing countries.

“The point of all this is that their lawyers f***d up and let all this news get out. The real and only difference between this company and other mining companies is that their lawyers are incompetent,” says Caldwell.

“Most modern mining companies have lawyers who are able to stop new reports of this type from getting out and being blogged about. I have three in my back pocket that I cannot write about because skilled and vicious lawyers succeed in what they are paid plenty to do,” he adds.

Philex’s shares fell 18 centavos or 1.21% to P14.70 at the end of trading on Thursday.

Philex Mining is partly owned by Hong Kong-based First Pacific Co. Ltd., which also has a stake in Philippine Long Distance Telephone Co (PLDT).

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