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Altered audit caused mining firm’s suspension – DENR exec

The affidavit dated April 6, 2017 and executed by the audit team leader sheds new light on the process implemented by the DENR in coming out with its suspension orders on mining companies. File

MANILA, Philippines - A ranking official of the Department of Environment and Natural Resources (DENR) has attested in an affidavit submitted to the Office of the Ombudsman that former environment undersecretary Leo Jasareno instructed him to change last year’s audit findings on Lepanto Consolidated Mining Co. to make it appear that it committed major violations.

The affidavit dated April 6, 2017 and executed by the audit team leader sheds new light on the process implemented by the DENR in coming out with its suspension orders on mining companies.

The STAR obtained a copy of the four-page affidavit, but the head of the audit team requested that his name be withheld for security reasons.

“(Jasareno) instructed our team to change the result of our mine audit for Lepanto by insisting that ‘major violations’ rather than minor lapses (as we found in our audit) were supposedly committed by Lepanto and that the team ‘should recommend the suspension of its mining operations,’” the audit team leader said in his signed affidavit.

The team leader was referring to the events that took place last year before Jasareno announced in a televised interview on Sept. 27, 2016 that Lepanto was among the mining companies suspended by the DENR.

“I immediately consulted with members of my team by phone regarding (Jasareno’s) instruction. My team decided that we will not change our audit report and should maintain our findings that Lepanto had substantially complied with the environment and mining laws and no penalty is recommended,” the affidavit also stated.

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He said he was “disturbed by the instructions of Jasareno,” and as such, he conferred with the leaders of the other audit teams who said that they were also given similar instructions to change their audit reports and recommend either the suspension or closure of the mining operations they audited.

“On Sept. 13, 2016, Jasareno called me to his office again. With his guidance on the wordings, he directed me to draft another memorandum that will contain a recommendation that ‘Lepanto should be ordered to show cause why its operation should not be stopped,’” he further narrated in his affidavit.

In response, he said he had no choice but to sign the draft memorandum dated Sept. 13, 2016.

Environment Secretary Gina Lopez, however, did not sign the draft memorandum because the report cited only several lapses and not major violations.

“It came as a shock to me and to members of my team when Jasareno announced on live television in the morning of Sept. 27, 2016 that Lepanto is one of the additional 20 companies recommended for suspension when that pronouncement was contrary to our findings and conclusion in our audit report,” the team leader said in his affidavit.

In a short message sent to The STAR, Jasareno denied the allegation hurled at him, saying the audit alteration is not true.

“Nothing can kill the truth,” Jasareno said, but refused to elaborate.

On Oct. 13, 2016, Lepanto filed a complaint-affidavit against Jasareno before the Office of the Ombudsman for violations of the Anti-Graft and Corrupt Practices Act.

In response, Jasareno argued that he was only performing his official duties when he made the public announcement.

He also said that he merely relied on a Sept. 13, 2016 Memorandum, stating that, “Lepanto should be ordered to show cause why its operation should be stopped.”

Lepanto is a listed mining company incorporated in 1936 and operated on enargite copper mine in Benguet until 1997, then shifted to gold bullion production. It continues to produce gold.

The company has appealed the matter to Malacañang, aside from filing a case before the Office of the Ombudsman.

Furthermore, last April 25, 2017, Lepanto submitted to Malacañang the affidavit executed by the team leader to support its stance that Jasareno’s televised announcement on Sept. 27, 2016, was in contrast to the findings and recommendations of the audit team.

Jasareno headed the overall Audit Committee of the DENR, with several team leaders under his watch.

In October last year, President Duterte replaced him amid allegations that he granted special favors to some mining companies.

Duterte appointed Wilfredo Moncano, who has been regional director of the Mines and Geosciences Bureau - Davao Region since 2015, as Jasareno’s replacement.

Jasareno is now a consultant of Lopez.

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