Mining firms pressed for more transparency

    A view of nickel-ore mine SR Metals in Tubay, Agusan del Sur. (Reuters photo)
    A view of nickel-ore mine SR Metals in Tubay, Agusan del Sur. (Reuters photo)

    The Philippine Extractive Industries Transparency Initiative (PH-EITI), the government’s transparency initiative for the extractive sector, has required the reporting of beneficial owners of mining and oil and gas companies, in line with an international campaign to counter or prevent the use of anonymous shell companies to hide or launder money and conceal potential conflicts of interest within the extractive sector.

    According to a Department of Finance (DOF) statement yesterday, on July 26, 2019, the Securities and Exchange Commission (SEC) issued Memorandum Circular No. 15, s. 2019 (MC 15) that revised the General Information Sheet (GIS) to include a beneficial ownership declaration form, requiring all registered stock and nonstock domestic corporations to disclose their beneficial owners.

    The SEC issuance defines beneficial owners as “the natural persons who ultimately own or control or exercise ultimate effective control over a corporation.”

    It was approved as a policy measure to assist in the anti-money laundering efforts of government, the DOF said.

    Ma. Teresa Habitan, DOF assistant secretary, related how challenging yet important the exercise was.

    “Beneficial ownership disclosure in the country is an enormous task, but we appreciate its value in curbing illicit financial activities. We are glad that the SEC is with us in this undertaking,” she said.

    The revised GIS under SEC MC 15 mandates corporations to fill out a beneficial information declaration form that asks for nine categories of beneficial owners and their information, including complete name, residential address, nationality, tax identification number, and percentage of ownership or voting rights.

    The DOF said more than 40 companies from the mining and oil and gas sectors participated in a workshop on beneficial ownership organized by the Chamber of Mines of the Philippines (COMP) and conducted by the DOF-PH-EITI on October 18 in Makati City.

    COMP, an active member of PH-EITI, recognizes the merits of transparency in beneficial ownership specially for the extractives sector, the DOF said.

    The activity centered on the new requirement for corporations to declare their beneficial owners as part of the GIS that all domestic corporations are mandated to file annually with the SEC.

    “There is a global shift towards increased disclosure of beneficial owners, and COMP is committed to taking a lead role in this direction through the PH-EITI.

    We see the benefits of increased transparency in beneficial ownership – It enhances confidence in our local companies, thereby helping improve the investment climate,” Ronald Recidoro, COMP executive director, said in the DOF statement.

    “More importantly, it can help prevent corruption and illicit financial flows, and can increase trust and accountability in the mining sector,” he added.