TSM in the Philippines:

The Chamber of Mines of the Philippines’ (COMP) journey Towards Sustainable Mining began two years before the association signed up for this initiative.  In 2015, under the Aquino administration, all large-scale mining companies were required to obtain ISO-14001 certification.

In 2016, shortly after he assumed office, President Rodrigo Duterte said he will support mining as it can contribute to the country’s economic growth – so long as it follows stringent global standards – particularly that of Canada and Australia, two of the leading mining jurisdictions in the world.

One of COMP’s member-firms, Philex Mining Corporation, came across TSM in 2017 and recommended its adoption by the Chamber of Mines.  The Chamber reached out to the Mining Association of Canada (MAC) later that year.

COMP members know that TSM is but yet another imposition on miners in the Philippines. The country already has among the strictest mining laws, rules and regulations in the world that impose on exploration and mining companies many social, economic, and environmental limitations and conditions. Moreover, the government has, in the last decade, done a thorough review of the regulatory framework of the mining industry and has put in place additional rules and regulations to enhance the industry’s productivity while increasing the protection for the environment and the benefits to host communities. 

Despite these, COMP members, aware of the increasing expectations of society as regards the industry’s social, environmental, and governance performance or ESG, and of the fact that there is increasing pressure from our stakeholders and, in recent years, the capital and financial markets to hold miners accountable, decided to adopt TSM.

According to the Canadian Ambassador to the Philippines Peter McArthur, TSM has, over the last 15 years, helped to transform how mines in Canada manage the environmental and social aspects of their operations.  For example, in areas related to how mines work with local and indigenous communities, when TSM undertook its first third-party verifications in 2006, only about 50% could meet or exceed the good practice level of performance (Level A). Today over 90% of mines using TSM have met or exceeded the minimal required level. 

Investors are increasingly looking at how to measure the environmental and social performance of miners and are turning to standards like TSM.  Sustainalytics, a major environmental and social ratings agency, recently developed a new tailings indicator that leans heavily on TSM.  The only way a miner can receive the top level of performance in the Sustainalytics indicator is through TSM.

On December 19, 2017, the Chamber of Mines of the Philippines forged a Mutual Cooperation and Licensing Agreement with the Mining Association of Canada to adopt TSM.  The ceremony was attended by the Canadian Ambassador, former Environment Sec. Roy Cimatu, as well as by top officials of the Mining Association of Canada and COMP, as well as heads of Chamber member-companies.

The ‘Filipinization’ of TSM

To ensure that TSM and its components are responsive to conditions in the Philippines, COMP deliberately conducted a repetitive review and revisions process with the active participation of functional experts from member companies.  These experts led the exhaustive “Filipinization” exercise such that most TSM Protocols underwent at least four reviews for over one-and-a-half years – from 2018 to mid-2020.  In fact, revisions for one of the Protocols was concluded only in September 2021.

The process was also purposely participative.  COMP members were encouraged to weigh in and contribute to TSM’s development, with the end in view of promoting ownership and buy in.  Consequently, the Filipinized TSM Protocols and Indicators contain inputs from our members and, subsequently, the COI Panel.

The Philippines is the only country in the world that requires its mining industry to allocate a certain portion of its operating costs to a fund called Social Development and Management Program or SDMP.  The Program is a comprehensive 5-year plan towards the sustained improvement in the living standards of the host and neighboring communities by creating responsible, self-reliant, and resource-based communities.  While COMP didn’t have to, the review and revisions team decided to include the SDMP in one of the Protocols – the IP and Community Engagement Protocol.

Inputs from the COI Panel

Confident with the result of the exhaustive review process, the COMP Review Leaders presented the “Filipinized” TSM to the COI Panel in February 2020 – shortly before the pandemic lockdown.  Some of the panelists noted, however, that TSM appears to be heavily process oriented.  They recommended that, where applicable, outcomes or results of the process should be included in the performance measurement.

COMP consulted the Mining Association of Canada on this, and they pointed out that outcomes or outputs are not something that can be compared between mines and between companies.  How much tailings or water the mine discharges or how many community projects or agreements are in place varies from mine to mine and the context around the local situation is critical in understanding whether those outputs are appropriate or not.  What is comparable and easy to subject to a benchmark such as TSM is whether process meet certain established levels of quality, so that it where our focus is.

Many of the standards, however, have reporting or performance indicators associated with them that require the mines to establish objectives and targets and undertake public reporting.  This is included to ensure that there are outcomes or outputs associated with each protocol.  For example, in biodiversity, one of the indicators instructs the site to establish targets and or objectives for significant aspects of biodiversity and then another indicator asks the mine to publicly report on biodiversity performance.

The Philippines’ TSM COI Panel

The TSM program requires the formation of a Community of Interest (COI) Advisory Panel to advise on the implementation of TSM, to provide a mechanism for two-way dialogue between COMP and COI members, to periodically review results of the program, and to participate in audits.

The COI Panel will assist COMP and its member companies to achieve excellence in sustainable performance through the implementation of the TSM guiding principles, leading to a strong positive contribution of the industry to economic and social development particularly in areas that host mining operations.

In May 2019, COMP finalized the Terms of Reference (ToR) for the Philippines’ TSM COI Panel.  The ToR seeks to ensure the Panel will be relevant, dynamic, and place for rich dialogue between the industry and its communities of interest.  Moreover, the ToR outlines the Panel’s role of not just being the overseer of TSM, but also of all emerging issues or concerns of relevance to the mining sector.

Composition

The Panel comprises 12 high-level, respected individuals from various sectors external to, but with some knowledge of, the mining industry (sectoral representatives), and three COMP Directors on an ex-officio basis (industry representatives). To provide additional technical expertise in the discussions, one sectoral member would have a technical background and would have been associated with the industry either directly or through a regulatory agency.

Panel members bring their expertise and knowledge as well as their own perspective and that of their respective sectors to the Panel; they have the necessary respect and credibility to be an authoritative voice; and will actively contribute to discussions and debates in the Panel.

Panel members need not be formally associated with organizations within their respective sectors.

The industry representatives in the Panel, who would participate on an ex-officio basis, would not normally take part in the decisions of the Panel on specific advice to COMP, except on procedural or administrative matters.

When necessary to discuss issue-specific matters, the Panel can invite resource persons, regulators and additional representatives from the industry.

The COI Panel Members

In July 2019, the prospective list of COI Panel members was presented and approved by the COMP Board of Trustees and, in August, these members were handed their Letter of Appointment.

TSM Rollouts

With the Filipinized version of TSM approved by the COI Panel, COMP rolled out the Program via Zoom to member companies in Mindanao on August 26, 2020, and in Luzon and the Visayas on September 16, 2020.

The Rollouts were participated in by the Canadian Ambassador to the Philippines, H.E. Peter MacArthur, Environment and Natural Resources Asst. Sec. Nonita Caguioa, MGB Director Wilfredo Moncano, 14 MGB Regional Directors who all expressed full support for the Program.  Over 200 officers and TSM Initiative Leaders of COMP member-firms also attended the Rollouts, which were hosted by the Canadian Embassy Trade Mission.

MGB Approves DMTG Allocation for TSM

TSM presents a huge opportunity for COMP members to develop mining technology in the Philippines.  Mining has evolved in the last several decades: it is no longer purely confined to science and engineering.  Apart from technical considerations, mining simply cannot be done without taking into account its social and environmental impacts.  TSM will enable COMP to improve not only the technical aspects of mining but, equally important, environmental and social performance as well.  Moreover, TSM will provide a reliable, tested, and measurable platform that would allow miners to meet, even exceed, society’s expectations of the industry – all under a multi-stakeholder group oversight.

Given the above reasons and the fact that the implementation of TSM would require funding for administrative and logistical expenses, COMP requested the Mines and Geosciences Bureau (MGB) to allow its members to allocate a percentage of their Development of Mining Technology and Geosciences (DMTG) Fund to TSM.

On December 11, 2020, then MGB Director Wilfredo G. Moncano granted COMP’s request.  Each operating member is allowed to allocate the equivalent to 5% of DMTG for TSM.

Modified TSM Cycle

Considering the constraints posed by the COVID-19 pandemic, COMP decided to implement TSM on a gradual basis, transitioning from a 4-year Modified Cycle from 2021 to 2024, to TSM’s Regular 3-year cycle beginning 2024 and 2025.