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contains the full text of
Republic
Act No. 7942
[AN ACT INSTITUTING A NEW SYSTEM
OF
MINERAL RESOURCES EXPLORATION,
DEVELOPMENT, UTILIZATION, AND
CONSERVATION]
REPUBLIC
ACT NO. 7942
[AN
ACT
INSTITUTING
A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT,
UTILIZATION,
AND CONSERVATION]
Be it enacted by the Senate
and House of Representatives of the Philippines in Congress assembled:
CHAPTER
I
INTRODUCTORY
PROVISIONS
Section 1
Title
This Act shall be known
as the "Philippine Mining Act of 1995."
Section 2
Declaration
of
Policy
All mineral resources
in
public and private lands within the territory and exclusive economic
zone
of the Republic of the Philippines are owned by the State. It shall be
the responsibility of the State to promote their rational exploration,
development, utilization and conservation through the combined efforts
of government and the private sector in order to enhance national
growth
in a way that effectively safeguards the environment and protect the
rights
of affected communities.
Section 3
Definition
of Terms
As used in and for
purposes
of this Act, the following terms, whether in singular or plural, shall
mean:
a.
Ancestral lands
refers to all lands exclusively and actually possessed, occupied, or
utilized
by indigenous cultural communities by themselves or through their
ancestors
in accordance with their customs and traditions since time immemorial,
and as may be defined and delineated by law.
b. Block or
meridional
block means an area bounded by one-half (1/2) minute of latitude and
one-half
(1/2) minute of longitude, containing approximately eighty-one hectares
(81 has.).
c. Bureau means
the
Mines and Geosciences Bureau under the Department of Environment and
Natural
Resources.
d. Carrying
capacity
refers to the capacity of natural and human environments to accommodate
and absorb change without experiencing conditions of instability and
attendant
degradation.
e. Contiguous
zone
refers to water, sea bottom and substratum measured twenty-four
nautical
miles (24 n.m.) seaward from the base line of the Philippine
archipelago.
f. Contract
area
means
land or body of water delineated for purposes of exploration,
development,
or utilization of the minerals found therein.
g. Contractor
means
a qualified person acting alone or in consortium who is a party to a
mineral
agreement or to a financial or technical assistance agreement.
h.
Co-production
agreement
(CA) means an agreement entered into between the Government and one or
more contractors in accordance with Section 26(b) hereof.
i. Department
means
the Department of Environment and Natural Resources.
j. Development
means
the work undertaken to explore and prepare an ore body or a mineral
deposit
for mining, including the construction of necessary infrastructure and
related facilities.
k. Director
means
the Director of the Mines and Geosciences Bureau.
l. Ecological
profile
or eco-profile refers to geographic-based instruments for planners and
decision-makers which presents an evaluation of the environmental
quality
and carrying capacity of an area.
m.
Environmental
compliance
certificate (ECC) refers to the document issued by the government
agency
concerned certifying that the project under consideration will not
bring
about an unacceptable environmental impact and that the proponent has
complied
with the requirements of the environmental impact statement system.
n.
Environmental
impact
statement (EIS) is the document which aims to identify, predict,
interpret,
and communicate information regarding changes in environmental quality
associated with a proposed project and which examines the range of
alternatives
for the objectives of the proposal and their impact on the environment.
o. Exclusive
economic
zone means the water, sea bottom and subsurface measured from the
baseline
of the Philippine archipelago up to two hundred nautical miles (200
n.m.)
offshore.
p. Existing
mining/quarrying
right means a valid and subsisting mining claim or permit or quarry
permit
or any mining lease contract or agreement covering a mineralized area
granted/issued
under pertinent mining laws.
q. Exploration
means
the searching or prospecting for mineral resources by geological,
geochemical
or geophysical surveys, remote sensing, test pitting, trenching,
drilling,
shaft sinking, tunneling or any other means for the purpose of
determining
the existence, extent, quantity and quality thereof and the feasibility
of mining them for profit.
r. Financial or
technical
assistance agreement means a contract involving financial or technical
assistance for large-scale exploration, development, and utilization of
mineral resources.
s. Force
majeure
means
acts or circumstances beyond the reasonable control of contractor
including,
but not limited to, war, rebellion, insurrection, riots, civil
disturbance,
blockade, sabotage, embargo, strike, lockout, any dispute with surface
owners and other labor disputes, epidemic, earthquake, storm, flood or
other adverse weather conditions, explosion, fire, adverse action by
government
or by any instrumentality or subdivision thereof, act of God or any
public
enemy and any cause that herein describe over which the affected party
has no reasonable control.
t.
Foreign-owned
corporation
means any corporation, partnership, association, or cooperative duly
registered
in accordance with law in which less than fifty per centum
(50%)
of the capital is owned by Filipino citizens.
u. Government
means
the government of the Republic of the Philippines.
v. Gross output
means
the actual market value of minerals or mineral products from its mining
area as defined in the National Internal Revenue Code.
w. Indigenous
cultural
community means a group or tribe of indigenous Filipinos who have
continuously
lived as communities on communally-bounded and defined land since time
immemorial and have succeeded in preserving, maintaining, and sharing
common
bonds of languages, customs, traditions, and other distinctive cultural
traits, and as may be defined and delineated by law.
x. Joint
venture
agreement
(JVA) means an agreement entered into between the Government and one or
more contractors in accordance with Section 26(c) hereof.
y. Mineral
processing
means the milling, beneficiation or upgrading of ores or minerals and
rocks
or by similar means to convert the same into marketable products.
z. Mine wastes
and
tailings shall mean soil and rock materials from surface or underground
mining and milling operations with no economic value to the generator
of
the same.
aa. Minerals
refers
to all naturally occurring inorganic substance in solid, gas, liquid,
or
any intermediate state excluding energy materials such as coal,
petroleum,
natural gas, radioactive materials, and geothermal energy.
ab. Mineral
agreement
means a contract between the government and a contractor, involving
mineral
production-sharing agreement, co-production agreement, or joint-venture
agreement.
ac. Mineral
land
means
any area where mineral resources are found.
ad. Mineral
resource
means any concentration of minerals/rocks with potential economic value.
ae. Mining area
means
a portion of the contract area identified by the contractor for
purposes
of development, mining, utilization, and sites for support facilities
or
in the immediate vicinity of the mining operations.
af. Mining operation
means
mining activities involving exploration, feasibility, development,
utilization,
and processing.
ag.
Non-governmental
organization (NGO) includes nonstock, nonprofit organizations involved
in activities dealing with resource and environmental conservation,
management
and protection.
ah. Net assets
refers
to the property, plant and equipment as reflected in the audited
financial
statement of the contractor net of depreciation, as computed for tax
purposes,
excluding appraisal increase and construction in progress.
ai. Offshore
means
the water, sea bottom and subsurface from the shore or coastline
reckoned
from the mean low tide level up to the two hundred nautical miles (200
n.m.) exclusive economic zone including the archipelagic sea and
contiguous
zone.
aj. Onshore
means
the landward side from the mean tide elevation, including submerged
lands
in lakes, rivers and creeks.
ak. Ore means a
naturally
occurring substance or material from which a mineral or element can be
mined and/or processed for profit.
al. Permittee
means
the holder of an exploration permit.
am. Pollution
control
and infrastructure devices refers to infrastructure, machinery,
equipment
and/or improvements used for impounding, treating or neutralizing,
precipitating,
filtering, conveying and cleansing mine industrial waste and tailings
as
well as eliminating or reducing hazardous effects of solid particles,
chemicals,
liquids or other harmful byproducts and gases emitted from any facility
utilized in mining operations for their disposal.
an. President
means
the President of the Republic of the Philippines.
ao. Private
land
refers
to any land belonging to any private person which includes alienable
and
disposable land being claimed by a holder, claimant, or occupant who
has
already acquired a vested right thereto under the law, although the
corresponding
certificate or evidence of title or patent has not been actually issued.
ap. Public land
refers
to lands of the public domain which have been classified as
agricultural
lands and subject to management and disposition or concession under
existing
laws.
aq. Qualified
person
means any citizen of the Philippines with capacity to contract, or a
corporation,
partnership, association, or cooperative organized or authorized for
the
purpose of engaging in miring, with technical and financial capability
to undertake mineral resources development and duly registered in
accordance
with law at least sixty per centum (60%) of the capital of
which
is owned by citizens of the Philippines: Provided, That a legally
organized
foreign-owned corporation shall be deemed a qualified person for
purposes
of granting an exploration permit, financial or technical assistance
agreement
or mineral processing permit.
ar. Quarrying
means
the process of extracting, removing and disposing quarry resources
found
on or underneath the surface of private or public land.
as. Quarry permit
means
a document granted to a qualified person for the extraction and
utilization
of quarry resources on public or private lands.
at. Quarry
resources
refers to any common rock or other mineral substances as the Director
of
Mines and Geosciences Bureau may declare to be quarry resources such
as,
but not limited to, andesite, basalt, conglomerate, coral sand,
diatomaceous
earth, diorite, decorative stones, gabbro, granite, limestone, marble,
marl, red burning clays for potteries and bricks, rhyolite, rock
phosphate,
sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic
glass:
Provided, That such quarry resources do not contain metals or metallic
constituents and/or other valuable minerals in economically workable
quantities:
Provided, further, That non-metallic minerals such as kaolin, feldspar,
bull quartz, quartz or silica, sand and pebbles, bentonite, talc,
asbestos,
barite, gypsum, bauxite, magnesite, dolomite, mica, precious and
semi-precious
stones, and other non-metallic minerals that may later be discovered
and
which the: Director declares the same to be of economically workable
quantities,
shall not be classified under the category of quarry resources.
au. Regional
director
means the regional director of any mines regional office under the
Department
of Environment and Natural Resources.
av. Regional
office
means any of the mines regional offices of the Department of
Environment
and Natural Resources.
aw. Secretary
means
the Secretary of the Department of Environment and Natural Resources.
ax. Special
allowance
refers to payment to the claim-owners or surface right-owners
particularly
during the transition period from Presidential Decree No. 463 and
Executive
Order No. 279, series of 1987.
ay. State means
the
Republic of the Philippines.
az. Utilization
means
the extraction or disposition of minerals.
CHAPTER
II
GOVERNMENT
MANAGEMENT
Section 4
Ownership
of
Mineral
Resources
Mineral resources are
owned
by the State and the exploration, development, utilization, and
processing
thereof shall be under its full control and supervision. The State may
directly undertake such activities or it may enter into mineral
agreements
with contractors.
The State shall recognize
and protect the rights of the indigenous cultural communities to their
ancestral lands as provided for by the Constitution.
Section 5
Mineral
Reservations
When the national
interest
so requires, such as when there is a need to preserve strategic raw
materials
for industries critical to national development, or certain minerals
for
scientific, cultural or ecological value, the President may establish
mineral
reservations upon the recommendation of the Director through the
Secretary.
Mining operations in existing mineral reservations and such other
reservations
as may thereafter be established, shall be undertaken by the Department
or through a contractor: Provided, That a small scale-mining
cooperative
covered by Republic Act No. 7076 shall be given preferential right to
apply
for a small-scale mining agreement for a maximum aggregate area of
twenty-five
percent (25%) of such mineral reservation, subject to valid existing
mining/quarrying
rights as provided under Section 112 Chapter XX hereof. All submerged
lands
within the contiguous zone and in the exclusive economic zone of the
Philippines
are hereby declared to be mineral reservations.
A ten per centum (10%)
share of all royalties and revenues to be derived by the government
from
the development and utilization of the mineral resources within mineral
reservations as provided under this Act shall accrue to the Mines and
Geosciences
Bureau to be allotted for special projects and other administrative
expenses
related to the exploration and development of other mineral
reservations
mentioned in Section 6 hereof.
Section 6
Other
Reservations
Mining operations in
reserved
lands other than mineral reservations may be undertaken by the
Department,
subject to limitations as herein provided. In the event that the
Department
cannot undertake such activities, they may be undertaken by a qualified
person in accordance with the rules and regulations promulgated by the
Secretary. The right to develop and utilize the minerals found therein
shall be awarded by the President under such terms and conditions as
recommended
by the Director and approved by the Secretary: Provided, That the party
who undertook the exploration of said reservation shall be given
priority.
The mineral land so awarded shall be automatically excluded from the
reservation
during the term of the agreement: Provided, further, That the right of
the lessee of a valid mining contract existing within the reservation
at
the time of its establishment shall not be prejudiced or impaired.
Section 7
Periodic
Review of
Existing
Mineral Reservations
The Secretary shall
periodically
review existing mineral reservations for the purpose of determining
whether
their continued existence is consistent with the national interest, and
upon his recommendation, the President may, by proclamation, alter or
modify
the boundaries thereof or revert the same to the public domain without
prejudice to prior existing rights.
Section 8
Authority
of the
Department
The Department shall be
the primary government agency responsible for the conservation,
management,
development, and proper use of the State’s mineral resources including
those in reservations, watershed areas, and lands of the public domain.
The Secretary shall have the authority to enter into mineral agreements
on behalf of the Government upon the recommendation of the Director,
promulgate
such rules and regulations as may be necessary to implement the intent
and provisions of this Act.
Section 9
Authority
of the
Bureau
The Bureau shall have
direct
charge in the administration and disposition of mineral lands and
mineral
resources and shall undertake geological, mining, metallurgical,
chemical,
and other researches as well as geological and mineral exploration
surveys.
The Director shall recommend to the Secretary the granting of mineral
agreements
to duly qualified persons and shall monitor the compliance by the
contractor
of the terms and conditions of the mineral agreements. The Bureau may
confiscate
surety, performance and guaranty bonds posted through an order to be
promulgated
by the Director. The Director may deputize, when necessary, any member
or unit of the Philippine National Police, barangay, duly registered
non-governmental
organization (NGO) or any qualified person to police all mining
activities.
Section
10
Regional
Offices
There shall be as many
regional
offices in the country as may be established by the Secretary, upon the
recommendation of the Director.
Section
11
Processing
of
Applications
The system of
processing
applications for mining rights shall be prescribed in the rules and
regulations
of this Act.
Section
12
Survey,
Charting
and
Delineation of Mining Areas
A sketch plan or map of
the contract or mining area prepared by a deputized geodetic engineer
suitable
for publication purposes shall be required during the filing of a
mineral
agreement or financial or technical assistance agreement application.
Thereafter,
the contract or mining area shall be surveyed and monumented by a
deputized
geodetic engineer or bureau geodetic engineer and the survey plan shall
be approved by the Director before the approval of the mining
feasibility.
Section
13
Meridional
Blocks
For purposes of the
delineation
of the contract or mining areas under this Act, the Philippine
territory
and its exclusive economic zone shall be divided into meridional blocks
of one-half (1/2) minute of latitude and one-half (1/2) minute of
longitude.
Section
14
Recording
System
There shall be
established
a national and regional filing and recording system. A mineral resource
database system shall be set up in the Bureau which shall include,
among
others, a mineral rights management system. The Bureau shall publish at
least annually, a mineral gazette of nationwide circulation containing
among others, a current list of mineral rights, their location in the
map,
mining rules and regulations, other official acts affecting mining, and
other information relevant to mineral resources development. A system
and
publication fund shall be included in the regular budget of the Bureau.
CHAPTER
III
SCOPE
OF
APPLICATION
Section
15
Scope of
Application
This Act shall govern
the
exploration, development, utilization and processing of all mineral
resources.
Section
16
Opening
of
Ancestral
Lands for Mining Operations
No ancestral land shall
be opened for mining-operations without prior consent of the indigenous
cultural community concerned.
Section
17
Royalty
Payments
for
Indigenous
Cultural
Communities
In the event of an
agreement
with an indigenous cultural community pursuant to the preceding
section,
the royalty payment, upon utilization of the minerals shall be agreed
upon
by the parties. The said royalty shall form part of a trust fund for
the
socioeconomic well-being of the indigenous cultural community.
Section
18
Areas
Open to
Mining
Operations
Subject to any existing
rights or reservations and prior agreements of all parties, all mineral
resources in public or private lands, including timber or forestlands
as
defined in existing laws, shall be open to mineral agreements or
financial
or technical assistance agreement applications. Any conflict that may
arise
under this provision shall be heard and resolved by the panel of
arbitrators.
Section
19
Areas
Closed to
Mining
Applications
Mineral agreement or
financial
or technical assistance agreement applications shall not be allowed:
a. In
military and
other government reservations, except upon prior written clearance by
the
government agency concerned;
b. Near or
under
public
or private buildings, cemeteries, archeological and historic sites,
bridges,
highways, waterways, railroads, reservoirs, dams or other
infrastructure
projects, public or private works including plantations or valuable
crops,
except upon written consent of the government agency or private entity
concerned;
c. In areas
covered
by valid and existing mining rights;
d. In areas
expressedly
prohibited by law;
e. In areas
covered
by small-scale miners as defined by law unless with prior consent of
the
small-scale miners, in which case a royalty payment upon the
utilization
of minerals shall be agreed upon by the parties, said royalty forming a
trust fund for the socioeconomic development of the community
concerned;
and
f. Old growth
or
virgin
forests, proclaimed watershed forest reserves, wilderness areas,
mangrove
forests, mossy forests, national parks provincial/municipal forests,
parks,
greenbelts, game refuge and bird sanctuaries as defined by law and in
areas
expressly prohibited under the National Integrated Protected Areas
System
(NIPAS) under Republic Act No. 7586, Department Administrative Order
No.
25, series of 1992 and other laws.
CHAPTER
IV
EXPLORATION
PERMIT
Section
20
Exploration
Permit
An exploration permit
grants
the right to conduct exploration for all minerals in specified areas.
The
Bureau shall have the authority to grant an exploration Permit to a
qualified
person.
Section
21
Terms
and
Conditions
of the Exploration Permit
An exploration permit
shall
be for a period of two (2) years, subject to annual review and
relinquishment
or renewal upon the recommendation of the Director.
Section
22
Maximum
Areas for
Exploration
Permit
The maximum area that a
qualified person may hold at any one time shall be:
a.
Onshore, in any
one province
1.
for
individuals,
twenty (20) blocks: and
b. for
partnerships,
corporations,
cooperatives, or associations, two hundred (200) blocks.
b. Onshore, in
the
entire Philippines
1. for
individuals,
forty (40) blocks; and
2. for
partnerships,
corporations, cooperatives, or associations, four hundred (400) blocks.
c. Offshore,
beyond
five hundred meters (500m) from the mean low tide level:
1.
for
individuals,
one hundred (100) blocks; and
2. for
partnerships,
corporations, cooperatives, or associations, one thousand (1,000)
blocks.
Section
23
Rights
and
Obligations
of the Permittee
An exploration permit
shall
grant to the permittee, his heirs or successors-in-interest, the right
to enter, occupy and explore the area: Provided, That if private or
other
parties are affected, the permittee shall first discuss with the said
parties
the extent, necessity, and manner of his entry, occupation and
exploration
and in case of disagreement, a panel of arbitrators shall resolve the
conflict
or disagreement.
The permittee shall undertake
an exploration work on the area as specified by its permit based on an
approved work program.
Any expenditure in excess
of the yearly budget of the approved work program may be carried
forward
and credited to the succeeding years covering the duration of the
permit.
The Secretary, through the Director, shall promulgate rules and
regulations
governing the terms and conditions of the permit.
The permittee may apply for
a mineral production sharing agreement, joint venture agreement,
co-production
agreement or financial or technical assistance agreement over the
permit
area, which application shall be granted if the permittee meets the
necessary
qualifications and the terms and conditions of any such agreement:
Provided,
That the exploration period covered by the exploration permit shall be
included as part of the exploration period of the mineral agreement or
financial or technical assistance agreement.
Section
24
Declaration
of
Mining
Project Feasibility
A holder of an
exploration
permit who determines the commercial viability of a project covering a
mining area may, within the term of the permit, file with the Bureau a
declaration of mining project feasibility accompanied by a work program
for development. The approval of the mining project feasibility and
compliance
with other requirements provided in this Act shall entitle the holder
to
an exclusive right to a mineral production sharing agreement or other
mineral
agreements or financial or technical assistance agreement.
Section
25
Transfer
or
Assignment
An exploration permit
may
be transferred or assigned to a qualified person subject to the
approval
of the Secretary upon the recommendation of the Director.
CHAPTER
V
MINERAL
AGREEMENTS
Section
26
Modes of
Mineral
Agreement
For purposes of mining
operations,
a mineral agreement may take the following forms as herein defined:
a.
Mineral
production
sharing agreement is an agreement where the Government grants to the
contractor
the exclusive right to conduct mining operations within a contract area
and shares in the gross output. The contractor shall provide the
financing,
technology, management and personnel necessary for the implementation
of
this agreement.
b.
Co-production
agreement
is an agreement between the Government and the contractor wherein the
Government
shall provide inputs to the mining operations other than the mineral
resource.
c. Joint
venture
agreement
is an agreement where a joint-venture company is organized by the
Government
and the contractor with both parties having equity shares. Aside from
earnings
in equity, the Government shall be entitled to a share in the gross
output.
A mineral agreement shall grant
to the contractor the exclusive right to conduct mining operations and
to extract all mineral resources found in the contract area. In
addition,
the contractor may be allowed to convert his agreement into any of the
modes of mineral agreements or financial or technical assistance
agreement
covering the remaining period of the original agreement subject to the
approval of the Secretary.
Section
27
Eligibility
A qualified person may
enter
into any of the three (3) modes of mineral agreement with the
government
for the exploration, development and utilization of mineral resources:
Provided, That in case the applicant has been in the mining industry
for
any length of time, he should possess a satisfactory environmental
track
record as determined by the Mines and Geosciences Bureau and in
consultation
with the Environmental Management Bureau of the Department.
Section
28
Maximum
Areas for
Mineral
Agreement
The maximum area that a
qualified person may hold at any time under a mineral agreement shall
be:
a.
Onshore, in any
one province
1.
for
individuals,
ten (10) blocks; and
2. for
partnerships,
cooperatives, associations, or corporations, one hundred (100) blocks.
b. Onshore, in
the
entire Philippines
1. for
individuals,
twenty (20) blocks; and
2. for
partnerships,
cooperatives, associations, or corporations, two hundred (200) blocks.
c. Offshore, in
the
entire Philippines
1. for
individuals
fifty (50) blocks;
2. for
partnerships,
cooperatives, associations, or corporations, five hundred (500) blocks;
and
3. for the
exclusive
economic zone, a larger area to be determined by the Secretary.
The maximum areas mentioned
above that a contractor may hold under a mineral agreement shall not
include
mining/quarry areas under operating agreements between the contractor
and
a claimowner/lessee/permittee/licensee entered into under Presidential
Decree No. 463.
Section
29
Filing
and
Approval
of Mineral Agreements
All proposed mineral
agreements
shall be filed in the region where the areas of interest are located,
except
in mineral reservations which shall be filed with the Bureau.
The filing of a proposal
for a mineral agreement shall give the proponent the prior right to
areas
covered by the same. The proposed mineral agreement will be approved by
the Secretary and copies thereof shall be submitted to the President.
Thereafter,
the President shall provide a list to Congress of every approved
mineral
agreement within thirty (30) days from its approval by the Secretary.
Section
30
Assignment/Transfer
Any assignment or
transfer
of rights and obligations under any mineral agreement except a
financial
or technical assistance agreement shall be subject to the prior
approval
of the Secretary. Such assignment or transfer shall be deemed
automatically
approved if not acted upon by the Secretary within thirty (30) working
days from official receipt thereof, unless patently unconstitutional or
illegal.
Section
31
Withdrawal
from
Mineral
Agreements
The contractor may, by
giving
due notice at any time during the term of the agreement, apply for the
cancellation of the mineral agreement due to causes which, in the
opinion
of the contractor, make continued mining operations no longer feasible
or viable. The Secretary shall consider the notice and issue its
decision
within a period of thirty (30) days: Provided, That the contractor has
met all its financial, fiscal and legal obligations.
Section
32
Terms
Mineral agreements
shall
have a term not exceeding twenty-five (25) years to start from the date
of execution thereof, and renewable for another term not exceeding
twenty-five
(25) years under the same terms and conditions thereof, without
prejudice
to changes mutually agreed upon by the parties. After the renewal
period,
the operation of the mine may be undertaken by the Government or
through
a contractor. The contract for the operation of a mine shall be awarded
to the highest bidder in a public bidding after due publication of the
notice thereof: Provided, That the contractor shall have the right to
equal
the highest bid upon reimbursement of all reasonable expenses of the
highest
bidder.
CHAPTER
VI
FINANCIAL
OR
TECHNICAL
ASSISTANCE AGREEMENT
Section
33
Eligibility
Any qualified person
with
technical and financial capability to undertake large-scale
exploration,
development, and utilization of mineral resources in the Philippines
may
enter into a financial or technical assistance agreement directly with
the Government through the Department.
Section
34
Maximum
Contract
Area
The maximum contract
area
that may be granted per qualified person, subject to relinquishment
shall
be:
a.
1,000
meridional
blocks onshore;
b. 4,000
meridional
blocks offshore; or
c. Combinations
of
a and b provided that it shall not exceed the maximum limits for
onshore
and offshore areas.
Section
35
Terms
and
Conditions
The following terms,
conditions,
and warranties shall be incorporated in the financial or technical
assistance
agreement, to wit:
a. A
firm
commitment
in the form of a sworn statement, of an amount corresponding to the
expenditure
obligation that will be invested in the contract area: Provided, That
such
amount shall be subject to changes as may be provided for in the rules
and regulations of this Act;
b. A financial
guarantee
bond shall be posted in favor of the Government in an amount equivalent
to the expenditure obligation of the applicant for any year;
c. Submission
of
proof
of technical competence, such as, but not limited to, its track record
in mineral resource exploration, development, and utilization; details
of technology to be employed in the proposed operation; and details of
technical personnel to undertake the operation;
d.
Representations
and warranties that the applicant has all the qualifications and none
of
the disqualifications for entering into the agreement;
e.
Representations
and warranties that the contractor has or has access to all the
financing,
managerial and technical expertise and, if circumstances demand, the
technology
required to promptly and effectively carry out the objectives of the
agreement
with the understanding to timely deploy these resources under its
supervision
pursuant to the periodic work programs and related budgets, when
proper,
providing an exploration period up to two (2) years, extendible for
another
two (2) years but subject to annual review by the Secretary in
accordance
with the implementing rules and regulations of this Act, and further,
subject
to the relinquishment obligations;
f.
Representations
and warranties that, except for payments for dispositions for its
equity,
foreign investments in local enterprises which are qualified for
repatriation,
and local supplier’s credits and such other generally accepted and
permissible
financial schemes for raising funds for valid business purposes, the
contractor
shall not raise any form of financing from domestic sources of funds,
whether
in Philippine or foreign currency, for conducting its mining operations
for and in the contract area;
g. The mining
operations
shall be conducted in accordance with the provisions of this Act and
its
implementing rules and regulations;
h. Work
programs
and
minimum expenditures commitments;
i. Preferential
use
of local goods and services to the maximum extent practicable;
j. A
stipulation
that
the contractors are obligated to give preference to Filipinos in all
types
of mining employment for which they are qualified and that technology
shall
be transferred to the same;
k. Requiring
the
proponent
to effectively use appropriate anti-pollution technology and facilities
to protect the environment and to restore or rehabilitate mined out
areas
and other areas affected by mine tailings and other forms of pollution
or destruction;
l. The
contractors
shall furnish the Government records of geologic, accounting, and other
relevant data for its mining operations, and that book of accounts and
records shall be open for inspection by the government;
m. Requiring
the
proponent
to dispose of the minerals and byproducts produced under a financial or
technical assistance agreement at the highest price and more
advantageous
terms and conditions as provided for under the rules and regulations of
this Act;
n. Provide for
consultation
and arbitration with respect to the interpretation and implementation
of
the terms and conditions of the agreements; and
o. Such other
terms
and conditions consistent with the Constitution and with this Act as
the
Secretary may deem to be for the best interest of the State and the
welfare
of the Filipino people.
Section
36
Negotiations
A financial or
technical
assistance agreement shall be negotiated by the Department and executed
and approved by the President. The President shall notify Congress of
all
financial or technical assistance agreements within thirty (30) days
from
execution and approval thereof.
Section
37
Filing
and
Evaluation
of Financial or Technical Assistance Agreement Proposals
All financial or
technical
assistance agreement proposals shall be filed with the Bureau after
payment
of the required processing fees. If the proposal is found to be
sufficient
and meritorious in form and substance after evaluation, it shall be
recorded
with the appropriate government agency to give the proponent the prior
right to the area covered by such proposal: Provided, That existing
mineral
agreements, financial or technical assistance agreements and other
mining
rights are not impaired or prejudiced thereby. The Secretary shall
recommend
its approval to the President.
Section
38
Term of
Financial
or
Technical
Assistance
Agreement
A financial or
technical
assistance agreement shall have a term not exceeding twenty-five (25)
years
to start from the execution thereof, renewable for not more than
twenty-five
(25) years under such terms and conditions as may be provided by law.
Section
39
Option
to Convert
into
a Mineral Agreement
The contractor has the
option
to convert the financial or technical assistance agreement to a mineral
agreement at any time during the term of the agreement, if the economic
viability of the contract area is found to be inadequate to justify
large-scale
mining operations, after proper notice to the Secretary as provided for
under the implementing rules and regulations: Provided, That the
mineral
agreement shall only be for the remaining period of the original
agreement.
In the case of a foreign
contractor, it shall reduce its equity to forty percent (40%) in the
corporation,
partnership, association, or cooperative. Upon compliance with this
requirement
by the contractor, the Secretary shall approve the conversion and
execute
the mineral production-sharing agreement.
Section
40
Assignment/Transfer
A financial or
technical
assistance agreement may be assigned or transferred, in whole or in
part,
to a qualified person subject to the prior approval of the President:
Provided,
That the President shall notify Congress of every financial or
technical
assistance agreement assigned or converted in accordance with this
provision
within thirty (30) days from the date of the approval thereof.
Section
41
Withdrawal
from
Financial
or
Technical
Assistance
Agreement
The contractor shall
manifest
in writing to the Secretary his intention to withdraw from the
agreement,
if in his judgment the mining project is no longer economically
feasible,
even after he has exerted reasonable diligence to remedy the cause or
the
situation. The Secretary may accept the withdrawal: Provided, That the
contractor has complied or satisfied all his financial, fiscal or legal
obligations.
CHAPTER
VII
SMALL-SCALE
MINING
Section
42
Small-scale
Mining
Small-scale mining
shall
continue to be governed by Republic Act No. 7076 and other pertinent
laws.
CHAPTER
VIII
QUARRY
RESOURCES
Section
43
Quarry
Permit
Any qualified person
may
apply to the provincial/city mining regulatory board for a quarry
permit
on privately-owned lands and/or public lands for building and
construction
materials such as marble, basalt, andesite, conglomerate, tuff, adobe,
granite, gabbro, serpentine, inset filling materials, clay for ceramic
tiles and building bricks, pumice, perlite and other similar materials
that are extracted by quarrying from the ground. The provincial
governor
shall grant the permit after the applicant has complied with all the
requirements
as prescribed by the rules and regulations.
The maximum area which a
qualified person may hold at any one time shall be five hectares (5
has.):
Provided, That in large-scale quarry operations involving cement raw
materials,
marble, granite, sand and gravel and construction aggregates, a
qualified
person and the government may enter into a mineral agreement as defined
herein.
A quarry permit shall have
a term of five (5) years, renewable for like periods but not to exceed
a total term of twenty-five (25) years. No quarry permit shall be
issued
or granted on any area covered by a mineral agreement or financial or
technical
assistance agreement.
Section
44
Quarry
Fee and
Taxes
A permittee shall,
during
the term of his permit, pay a quarry fee as provided for under the
implementing
rules and regulations. The permittee shall also pay the excise tax as
provided
by pertinent laws.
Section
45
Cancellation
of
Quarry
Permit
A quarry permit may be
cancelled
by the provincial governor for violations of the provisions of this Act
or its implementing rules and regulations or the terms and conditions
of
said permit: Provided, That before the cancellation of such permit, the
holder thereof shall be given the opportunity to be heard in an
investigation
conducted for the purpose.
Section
46
Commercial
Sand
and
Gravel Permit
Any qualified person
may
be granted a permit by the provincial governor to extract and remove
sand
and gravel or other loose or unconsolidated materials which are used in
their natural state, without undergoing processing from an area of not
more than five hectares (5 has.) and in such quantities as may be
specified
in the permit.
Section
47
Industrial
Sand
and
Gravel Permit
Any qualified person
may
be granted an industrial sand and gravel permit by the Bureau for the
extraction
of sand and gravel and other loose or unconsolidated materials that
necessitate
the use of mechanical processing covering an area of more than five
hectares
(5 has.) at any one time. The permit shall have a term of five (5)
years,
renewable for a like period but not to exceed a total term of
twenty-five
(25) years.
Section
48
Exclusive
Sand and
Gravel
Permit
Any qualified person
may
be granted an exclusive sand and gravel permit by the provincial
governor
to quarry and utilize sand and gravel or other loose or unconsolidated
materials from public lands for his own use, provided that there will
be
no commercial disposition thereof.
A mineral agreement or a
financial technical assistance agreement contractor shall, however,
have
the right to extract and remove sand and gravel and other loose
unconsolidated
materials without need of a permit within the area covered by the
mining
agreement for the exclusive use in the mining operations: Provided,
That
monthly reports of the quantity of materials extracted therefrom shall
be submitted to the mines regional office concerned: Provided, further,
That said right shall be coterminous with the expiration of the
agreement.
Holders of existing mining
leases shall likewise have the same rights as that of a contractor:
Provided,
That said right shall be coterminous with the expiry dates of the lease.
Section
49
Government
Gratuitous
Permit
Any government entity
or
instrumentality may be granted a gratuitous permit by the provincial
governor
to extract sand and gravel, quarry or loose unconsolidated materials
needed
in the construction of building and/or infrastructure for public use or
other purposes over an area of not more than two hectares (2 has.) for
a period coterminous with said construction.
Section
50
Private
Gratuitous
Permit
Any owner of land may
be
granted a private gratuitous permit by the provincial governor.
Section
51
Guano
Permit
Any qualified person
may
be granted a guano permit by the provincial governor to extract and
utilize
loose unconsolidated guano and other organic fertilizer materials in
any
portion of a municipality where he has established domicile. The permit
shall be for specific caves and/or for confined sites with locations
verified
by the Department’s field officer in accordance with existing rules and
regulations.
Section
52
Gemstone
Gathering
Permit
Any qualified person
may
be granted a non-exclusive gemstone gathering permit by the provincial
governor to gather loose stones useful as gemstones in rivers and other
locations.
CHAPTER
IX
TRANSPORT,
SALE
AND
PROCESSING OF MINERALS
Section
53
Ore
Transport
Permit
A permit specifying the
origin and quantity of non-processed mineral ores or minerals shall be
required for their transport. Transport permits shall be issued by the
mines regional director who has jurisdiction over the area where the
ores
were extracted. In the case of mineral ores or minerals being
transported
from the small-scale mining areas to the custom mills or processing
plants,
the Provincial Mining Regulatory Board (PMRB) concerned shall formulate
their own policies to govern such transport of ores produced by
small-scale
miners. The absence of a permit shall be considered as prima facie
evidence of illegal mining and shall be sufficient cause for the
Government
to confiscate the ores or minerals being transported, the tools and
equipment
utilized, and the vehicle containing the same. Ore samples not
exceeding
two metric tons (2 m.t.) to be used exclusively for assay or pilot test
purposes shall be exempted from such requirement.
Section
54
Mineral
Trading
Registration
No person shall engage
in
the trading of mineral products, either locally or internationally,
unless
registered with the Department of Trade and Industry and accredited by
the Department, with a copy of said registration submitted to the
Bureau.
Section
55
Minerals
Processing
Permit
No person shall engage
in
the processing of minerals without first securing a minerals processing
permit from the Secretary. Minerals processing permit shall be for a
period
of five (5) years renewable for like periods but not to exceed a total
term of twenty-five (25) years. In the case of mineral ores or minerals
produced by the small-scale miners, the processing thereof as well as
the
licensing of their custom mills, or processing plants shall continue to
be governed by the provisions of Republic Act No. 7076.
Section
56
Eligibility
of
Foreign-owned/-controlled
Corporation
A
foreign-owned/-controlled
corporation may be granted a mineral processing permit.
CHAPTER
X
DEVELOPMENT
OF
MINING
COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
Section
57
Expenditure
for
Community
Development
and
Science and
Mining
Technology
A contractor shall
assist
in the development of its mining community, the promotion of the
general
welfare of its inhabitants, and the development of science and mining
technology.
Section
58
Credited
Activities
Activities that may be
credited
as expenditures for development of mining communities, and science and
mining technology are the following:
a. Any
activity or
expenditure intended to enhance the development of the mining and
neighboring
communities of a mining operation other than those required or provided
for under existing laws, or collective bargaining agreements, and the
like;
and
b. Any activity
or
expenditure directed towards the development of geosciences and mining
technology such as, but not limited to, institutional and manpower
development,
and basic and applied researches. Appropriate supervision and control
mechanisms
shall be prescribed in the implementing rules and regulations of this
Act.
Section
59
Training
and
Development
A contractor shall
maintain
an effective program of manpower training and development throughout
the
term of the mineral agreement and shall encourage and train Filipinos
to
participate in all aspects of the mining operations, including the
management
thereof. For highly-technical and specialized mining operations, the
contractor
may, subject to the necessary government clearances, employ qualified
foreigners.
Section
60
Use of
Indigenous
Goods,
Services and Technologies
A contractor shall give
preference to the use of local goods, services and scientific and
technical
resources in the mining operations, where the same are of equivalent
quality,
and are available on equivalent terms as their imported counterparts.
Section
61
Donations/Turn
Over
of Facilities
Prior to cessation of
mining
operations occasioned by abandonment or withdrawal of operations, on
public
lands by the contractor, the latter shall have a period of one (1) year
therefrom within which to remove his improvements; otherwise, all the
social
infrastructure and facilities shall be turned over or donated tax-free
to the proper government authorities, national or local, to ensure that
said infrastructure and facilities are continuously maintained and
utilized
by the host and neighboring communities.
Section
62
Employment
of
Filipinos
A contractor shall give
preference to Filipino citizens in all types of mining employment
within
the country insofar as such citizens are qualified to perform the
corresponding
work with reasonable efficiency and without hazard to the safety of the
operations. The contractor, however, shall not be hindered from hiring
employees of his own selection, subject to the provisions of
Commonwealth
Act No. 613, as amended, for technical and specialized work which, in
his
judgment and with the approval of the Director, requires
highly-specialized
training or long experience in exploration, development or utilization
of mineral resources: Provided, That in no case shall each employment
exceed
five (5) years or the payback period as represented in original project
study, whichever is longer: Provided, further, That each foreigner
employed
as mine manager, vice-president for operations or in an equivalent
managerial
position in charge of mining, milling, quarrying or drilling operation
shall:
a.
Present
evidence
of his qualification and work experience; or
b. Shall pass
the
appropriate government licensure examination; or
c. In special
cases,
may be permitted to work by the Director for a period not exceeding one
(1) year: Provided, however, That if reciprocal privileges are extended
to Filipino nationals in the country of domicile, the Director may
grant
waivers or exemptions.
CHAPTER
XI
SAFETY
AND
ENVIRONMENTAL
PROTECTION
Section
63
Mines
Safety and
Environmental
Protection
All contractors and
permittees
shall strictly comply with all the mines safety rules and regulations
as
may be promulgated by the Secretary concerning the safe and sanitary
upkeep
of the mining operations and achieve waste-free and efficient mine
development.
Personnel of the Department involved in the implementation of mines
safety,
health and environmental rules and regulations shall be covered under
Republic
Act No. 7305.
Section
64
Mine
Labor
No person under sixteen
(16) years of age shall be employed in any phase of mining operations
and
no person under eighteen (18) years of age shall be employed
underground
in a mine.
Section
65
Mine
Supervision
All mining and
quarrying
operations that employ more than fifty (50) workers shall have at least
one (1) licensed mining engineer with at least five (5) years of
experience
in mining operations, and one (1) registered foreman.
Section
66
Mine
Inspection
The regional director
shall
have exclusive jurisdiction over the safety inspection of all
installations,
surface or underground, in mining operations at reasonable hours of the
day or night and as much as possible in a manner that will not impede
or
obstruct work in progress of a contractor or permittee.
Section
67
Power to
Issue
Orders
The mines regional
director
shall, in consultation with the Environmental Management Bureau,
forthwith
or within such time as specified in his order, require the contractor
to
remedy any practice connected with mining or quarrying operations,
which
is not in accordance with safety and anti-pollution laws and
regulations.
In case of imminent danger to life or property, the mines regional
director
may summarily suspend the mining or quarrying operations until the
danger
is removed, or appropriate measures are taken by the contractor or
permittee.
Section
68
Report
of Accidents
In case of any incident
or accident, causing or creating the danger of loss of life or serious
physical injuries, the person in charge of operations shall immediately
report the same to the regional office where the operations are
situated.
Failure to report the same without justifiable reason shall be a cause
for the imposition of administrative sanctions prescribed in the rules
and regulations implementing this Act.
Section
69
Environmental
Protection
Every contractor shall
undertake
an environmental protection and enhancement program covering the period
of the mineral agreement or permit. Such environmental program shall be
incorporated in the work program which the contractor or permittee
shall
submit as an accompanying document to the application for a mineral
agreement
or permit. The work program shall include not only plans relative to
mining
operations but also to rehabilitation, regeneration, revegetation and
reforestation
of mineralized areas, slope stabilization of mined-out and tailings
covered
areas, aquaculture, watershed development and water conservation; and
socioeconomic
development.
Section
70
Environmental
Impact
Assessment (EIA)
Except during the
exploration
period of a mineral agreement or financial or technical assistance
agreement
or an exploration permit, an environmental clearance certificate shall
be required based on an environmental impact assessment and procedures
under the Philippine Environmental Impact Assessment System including
Sections
26 and 27 of the Local Government Code of 1991 which require national
government
agencies to maintain ecological balance, and prior consultation with
the
local government units, non-governmental and people’s organizations and
other concerned sectors of the community: Provided, That a completed
ecological
profile of the proposed mining area shall also constitute part of the
environmental
impact assessment. People’s organizations and non-governmental
organizations
shall be allowed and encouraged to participate in ensuring that
contractors/permittees
shall observe all the requirements of environmental protection.
Section
71
Rehabilitation
Contractors and
permittees
shall technically and biologically rehabilitate the excavated,
mined-out,
tailings covered and disturbed areas to the condition of environmental
safety, as may be provided in the implementing rules and regulations of
this Act. A mine rehabilitation fund shall be created, based on the
contractor’s
approved work program, and shall be deposited as a trust fund in a
government
depository bank and used for physical and social rehabilitation of
areas
and communities affected by mining activities and for research on the
social,
technical and preventive aspects of rehabilitation. Failure to fulfill
the above obligation shall mean immediate suspension or closure of the
mining activities of the contractor/permittee concerned.
CHAPTER
XII
AUXILIARY
MINING
RIGHTS
Section
72
Timber
Rights
Any provision of law to
the contrary notwithstanding, a contractor may be granted a right to
cut
trees or timber within his mining area as may be necessary for his
mining
operations subject to forestry laws, rules and regulations: Provided,
That
if the land covered by the mining area is already covered by existing
timber
concessions, the volume of timber needed and the manner of cutting and
removal thereof shall be determined by the mines regional director,
upon
consultation with the contractor, the timber concessionaire/permittee
and
the Forest Management Bureau of the Department: Provided, further, That
in case of disagreement between the contractor and the timber
concessionaire,
the matter shall be submitted to the Secretary whose decision shall be
final. The contractor shall perform reforestation work within his
mining
area in accordance with forestry laws, rules and regulations.
Section
73
Water
Rights
A contractor shall have
water rights for mining operations upon approval of application with
the
appropriate government agency in accordance with existing water laws,
rules
and regulations promulgated thereunder: Provided, That water rights
already
granted or vested through long use, recognized and acknowledged by
local
customs, laws, and decisions of courts shall not thereby be impaired:
Provided,
further, That the Government reserves the right to regulate water
rights
and the reasonable and equitable distribution of water supply so as to
prevent the monopoly of the use thereof.
Section
74
Right to
Possess
Explosives
A
contractor/exploration
permittee shall have the right to possess and use explosives within his
contract/permit area as may be necessary for his mining operations upon
approval of application with the appropriate government agency in
accordance
with existing laws, rules and regulations promulgated thereunder:
Provided,
That the Government reserves the right to regulate and control the
explosive
accessories to ensure safe mining operations.
Section
75
Easement
Rights
When mining areas are
so
situated that for purposes of more convenient mining operations it is
necessary
to build, construct or install on the mining areas or lands owned,
occupied
or leased by other persons, such infrastructure as roads, railroads,
mills,
waste dump sites, tailings ponds, warehouses, staging or storage areas
and port facilities, tramways, runways, airports, electric
transmission,
telephone or telegraph lines, dams and their normal flood and catchment
areas, sites for water wells, ditches, canals, new river beds,
pipelines,
flumes, cuts, shafts, tunnels, or mills, the contractor, upon payment
of
just compensation, shall be entitled to enter and occupy said mining
areas
or lands.
Section
76
Entry
into Private
Lands
and Concession Areas
Subject to prior
notification,
holders of mining rights shall not be prevented from entry into private
lands and concession areas by surface owners, occupants, or
concessionaires
when conducting mining operations therein: Provided, That any damage
done
to the property of the surface owner, occupant, or concessionaire as a
consequence of such operations shall be properly compensated as may be
provided for in the implementing rules and regulations: Provided,
further,
That to guarantee such compensation, the person authorized to conduct
mining
operation shall, prior thereto, post a bond with the regional director
based on the type of properties, the prevailing prices in and around
the
area where the mining operations are to be conducted, with surety or
sureties
satisfactory to the regional director.
CHAPTER
XIII
SETTLEMENT
OF
CONFLICTS
Section
77
Panel of
Arbitrators
There shall be a panel
of
arbitra