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PRESIDENTIAL DECREE NO. 1385
PRESIDENTIAL DECREE NO. 1385 -
AMENDING CERTAIN SectionS OR PRESIDENTIAL DECREE NO. 463, OTHERWISE
KNOWN AS THE "MINERAL RESOURCES DEVELOPMENT DECREE OF 1974"
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chanroblesvirtualawlibrary
WHEREAS,
the speedy exploration, development and exploitation of our mineral
resources is a matter of national concern;chanroblesvirtualawlibrary
WHEREAS, in the implementation of Presidential Decree No. 463, the
implementing agencies concerned have noted that certain provisions
thereof are not in keeping with the objectives for which the said
Decree was promulgated; and
WHEREAS, there is a need to amend the said provisions to attain optimum
development of the mineral resources and minimize the impact of mineral
resources development to the national economy.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree the amendment of Presidential Decree No. 463, as
follows:cralaw:red
Section 1. Section 2 of Presidential Decree No. 463
is hereby amended by amending paragraphs (f) and (o) thereof and by
adding a new paragraphs (g) after paragraph (p) thereof, to read as
follows:cralaw:red
"Sec. 2. Definition of Terms. — As used in and for
in the purpose of this Decree, the following terms, whether in the
singular or plural, unless the context indicates otherwise, shall have
the following meanings: chanroblesvirtualawlibrary
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xxx
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"(f) Minerals" means all naturally occurring
inorganic substances in solid, liquid, or any intermediate state. Soil
which supports organic life, sand and gravel guano, coal, petroleum,
geothermal energy and natural gas are included in this term but are
governed by special laws or by regulations promulgated by the Secretary.
"(o) "Lessee" means a qualified person issued a
mining lease contract by the Secretary.
"(g) "Claimowner" means a qualified person who has
registered mining claims under previous mining laws or under the
Decree. "
Section 2. Section 6 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 6. Establishment and Reversion of Mineral
Reservations. — Upon the recommendation of the Secretary, based on the
report submitted by the Director, the President may set aside and
establish an area of the public domain as a mineral reservation and
prescribe the terms and condition for its disposition and operation, or
may alter or modify the boundaries thereof from time to time or revert
any mineral reservation to the public domain without prejudice to any
prior subsisting rights.
"When lands within reservations which have been established for
purposes other than mining are found more valuable for their mineral
contents, they may, upon recommendation of the Secretary, by withdrawn
from such reservation by the President and established as a mineral
reservation." chanroblesvirtualawlibrary
Section 3. Section 8 of the same Decree is hereby
needed to read as follows:cralaw:red
"Sec. 8. Prospecting, Exploration and Exploitation
of Minerals in Reserved Lands. — Prospecting, exploration, and
exploitation of minerals in reserved lands other than mineral
reservation may be undertaken by the proper Government agencies. In the
event of the said agencies cannot undertake the prospecting,
exploration and exploitation of minerals in reserved lands, qualified
persons may be permitted to undertake such prospecting, exploration and
exploitation in accordance with the rules and regulations promulgated
by the Secretary. The right to exploit 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 prospecting, exploration and exploitation
of said area shall be given priority.
"Notwithstanding the provisions of the preceding paragraph, a special
permit may be issued by the Director to the exploration permittee to
extract, remove and dispose of minerals in limited quantities as
verified by the Bureau of Mines."
Section 4. Section 9 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 9. Exploration and Exploitation of Minerals in
Mineral Reservations. — The management of mineral reservations
established under Section 6 hereof and the manner of the disposition of
the minerals found therein shall be under the jurisdiction of the
Mineral Reservations Development Board. Mineral reservations are closed
to mining location from the time of their establishment."
Section 5. Section 11 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 11. Location in Public and Private Lands. — A
qualified person may locate mining claims within public and private
lands. However, a person may locate and register mining claims for
another: Provided, That the former is first authorized by the latter by
means of a public instrument duly registered with the Mines Regional
Officer concerned before the registration of such mining claims."
Section 6. Section 12 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 12. Entry into Public and Private Lands. —
Subject to the provisions of Presidential Decree No. 512, a qualified
person and/or his authorized representative shall not be prevented from
entry into private lands by surface owners and/or occupants thereof
prospecting, exploring and exploiting for minerals therein. No
prospecting, exploration and exploitation of mineral resources inside a
forest concession shall be allowed unless proper notice has been served
upon the licensee thereof."
Section 7. Section 13 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 13. Areas Closed to Mining Location. — No
prospecting and exploration shall be allowed:cralaw:red
"(a) In Military or other Government reservations
except when authorized by the proper Government agency concerned;chanroblesvirtualawlibrary
"(b) In mineral reservations;chanroblesvirtualawlibrary
"(c) In lands covered by valid and subsisting mining
claims located, and leases acquired, under previous mining laws and in
accordance with the provisions of this Decree; and
"(d) Near or under buildings, cemeteries, bridges,
highways, waterways, railroads, reservoirs, dams or any other public or
private works unless otherwise authorized by the agencies concerned.
"The Secretary shall, upon recommendation of the Director, prescribe in
detail the regulations implementing the various restrictions under this
Section. chanroblesvirtualawlibrary
xxx
xxx
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Section 8. Section 15 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 15. Declaration of Location of a Mining Claim.
— The declaration of location covering the meridional block or fraction
thereof constituting the mining claim shall be filed with the Mining
Regional Officer concerned in a form prescribed for the purposes."
Section 9. Section 16 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 16. Recording of Declaration of Location
Ministerial. — Upon payment of the prescribed fees and compliance with
the requirements under existing rules and regulations on the matter,
recording of a duly accomplished and notarized declaration of location
of a mining claim shall be ministerial on the part of the Mining
Recorder concerned."
Section 10. Section 21 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 21. Voluntary Abandonment of a Mining Claim. —
A claimowner may, before the grant of the mining lease contract,
totally or partially abandon his mining claim by filing with the Mines
Regional Officer an affidavit of abandonment. From the date of the
recording of such affidavit, all his rights and interests in such claim
or to the portion thereof abandoned shall be deemed to have ceased;
Provided, That in case of partial abandonment in any one claim, the
area so retained shall be contiguous and the same shall be duly
surveyed and the survey returns submitted within one (1) year from date
of abandonment: Provided, Further, That the original locator or his
successors or assigns shall not be allowed to relocate directly or
indirectly the abandoned area."
Section 11. Section 22 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 22. Creation of Positions of Mines Regional
Recorders. — The Mines Regional Officer shall be responsible for the
proper recording of mining instruments and documents, and to ensure
effective and proper recording of the same the positions or mines
regional recorders are hereby created in every mining region."
Section 12. Section 23 of the same Decree is hereby
amended to read as follows: chanroblesvirtualawlibrary
"Sec. 23. Mining Regions. — The existing mining
regions with offices at Baguio City, Metro Manila, Daet, Cebu City, and
Surigao City shall be retained. Upon the recommendation of the Director
, the Secretary shall establish other mining regions as the need from
them arises, the boundaries of which shall so far as practicable
coincide with the boundaries of the corresponding provisions: Provided,
However, That mineral districts may be established by the Secretary in
existing mining regions subject to such rules and regulations as he may
promulgate."
Section 13. Section 24 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 24. Expenditures Required. — A
claimowner/lessee under this Decree and under the Mining Act
(Commonwealth Act No. 137), as amended, shall perform annual work
obligations on his mining claim, the value of which shall not be less
than the following amounts:cralaw:red
"Before the lease contract is granted,
per hectare per calendar year P20.00
"After the lease contract is granted,
per hectare per calendar year P100.00
"The annual work obligations for each mining claim registered under
this Decree shall start from the date of recording thereof.
"Holders of mining claims required to file lease application under
Presidential Decree No. 1214 shall perform annual work obligations (the
value of which is as stated above) on the mining claims from the date
of filing of said applications." chanroblesvirtualawlibrary
xxx
xxx
xxx
Section 14. Section 25 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 25. Group Development. — The
claimowners/lessee may concentrate all the annual work obligations on
any one or more of several contiguous or geologically related mining
claims in one province if it can be shown to the Director that such
concentration of work will be most advantageous and beneficial in the
development and operation of said mining claims: Provided, That any
expenditure in any calendar year in excess of the minimum amount
required for work obligations per hectare may be carried forward and
credited to the work obligations of the group claims for the succeeding
years of years: Provided, Further, That if the expenditure incurred for
any claim is less than that required in any year, the difference shall
be paid and accrue to the Bureau of Mines to be used exclusively for
the purpose mentioned in Section 95 of the Decree.
xxx
xxx
xxx
Section 15. Section 27 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 27. Proof of Annual Work Obligations. — The
claimowner/lessee shall submit proof of compliance with the annual work
obligations by filing an affidavit therefor and the statement of
expenditures and technical report in the prescribe form in support
thereof with the Mines Regional Officer within sixty (60) days from the
end of the year in which the work obligation is required: Provided,
That failure of the claimowner to comply therewith for two (2)
consecutive years shall constitute automatic abandonment of the mining
claims: Provided, Further, That, if it is found upon field verification
that no such work was actually done on the mining claims, the
claimowner/lessee shall likewise lose all his rights thereto
notwithstanding submission of the aforesaid documents."
Section 16. Section 32 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 32. Period for Submittal of Lease Survey
Returns. — A geodetic engineer ordered to survey mining claims shall
submit the survey returns thereof to the Director within one (1) year
from receipt of the survey order. Failure to submit the same within
said period shall cause the automatic forfeiture of the surveyor's
surety bond and the cancellation of the survey order. No extension of
the period within which to submit the survey returns shall be allowed
unless for reasons of force majeure."
Section 17. Section 33 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 33. Mines Temporary Permit. — Pending the
issuance of a mining lease contract, a claimowner may, upon proper
application duly filed with the Mines Regional Officer concerned, be
issued a mines temporary permit by the Director upon compliance with
all the obligations due on the mining claims subject thereof and the
posting of the surety bond in an amount to be approved by the Director.
The Mines temporary permit shall be for a period of one (1) year,
renewable once only for a like period.
"A special permit may be issued by the Director for the removal,
extraction and disposal of minerals found to exist in limited
quantities. Subject to the approval of the Secretary, the Director
shall issue rules and regulations to ensure proper removal, extraction
and disposition of such minerals." chanroblesvirtualawlibrary
Section 18. Section 40 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 40. Issuance of Mining Lease Contract. —
Except protests pending at the time of publication, it shall be
conclusively presumed that no adverse claim exists if no such adverse
claim is filed within fifteen (15) days after the first date of
publication of the notice of the application and thereafter, no
objection from third parties to the grant of the lease shall be heard.
Adverse claims based on the mining claims registered on or after the
first publication of the notice of application shall not be
entertained. After the mining claim has been verified as to its mineral
contents and it actual location on the ground as determined through
reports submitted to the Director, the Secretary shall approve and
issue the corresponding mining lease contract, which shall be for a
period not exceeding twenty-five (25) years, renewable upon the
expiration thereof for another period not exceeding twenty-five (25)
years under such terms and conditions as provided by law. After the
expiry of the renewal period, the operation of the mine may be
undertaken by the Government through one of its agencies or through a
qualified independent contractor. The contract for the operation of the
mine by an independent contractor shall be awarded to the highest
bidder in a public bidding held after due publication on the notice
thereof; Provided, That, the lessee shall have the right to equal the
highest big upon reimbursement of all reasonable expenses of the
highest bidder.
xxx
xxx
xxx
Section 19. Section 42 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 42. Mining Lease on Private Lands. — A Mining
lease may be granted on mining claims located on private lands subject
to the submittal of proof of compliance with Section 2 of Presidential
Decree No. 512."
Section 20. Section 44 of the same Decree is hereby
amended to read as follows: chanroblesvirtualawlibrary
Sec. 44. Mining Lease Rights. — A mining lease
contract shall grant to the lessee, his heirs, successors and assigns,
the right to extract all mineral deposits found on or underneath the
surface of his mining claims covered by the lease, continued vertically
downward; to remove, process and otherwise utilize the mineral deposits
for his own benefit and to use the lands covered by the lease for the
purpose or purposes specified therein; Provided, That the Secretary
shall reserve the right to grant and use easements in, over, through or
upon the said claims as may be needed by other lessee for right-of-way
to enable them to have access to and/or facilitate the operation of
their mining claims: Provided, further, That in no case of conflict of
interest between the lessees for this purpose, the Director is hereby
authorize to mediate: Provided, Furthermore, That in granting any lease
under this Decree, the Government reserves the right to lease or
otherwise dispose of the surface of the lands embraced within such
lease which is not needed by the lessee in extracting and removing the
mineral deposits from his mining claims or in the beneficiation of the
ores extracted therefrom: Provided, Finally, That a lessee may on his
own or through the Government, enter into a service contract with a
qualified domestic and/or foreign contractor for the exploration,
development and exploitation of his claims and the processing and
marketing of the products thereof, subject to such rules and
regulations that shall be promulgated by the Director with the approval
of the Secretary.
"Service contracts entered into pursuant to this Section shall contain,
among others, the following salient features, to wit:cralaw:red
"a) A stipulation that the foreign service
contractor shall not be entitled to any other fee except a service fee
which shall in no case exceed forty percent (40%) of the net proceeds
of the operations, and in case the foreign service contractor or
another foreign company holds an equity in the local mining corporation
involved in a service contract the equity participation including the
service fee shall in no case exceed forty percent (40%) of the net
proceeds of the operations;chanroblesvirtualawlibrary
"b) The financing, technical, management and other
services committed to be rendered under the service contract,
specifying a minimum amount of expenditures, which should be over and
above the minimum work obligations of the lease and acceptable to the
Secretary of Natural Resources as recommended by the Director of Mines;chanroblesvirtualawlibrary
"c) Scheme for the repayment of service fees and
repayment of advances which may be include the following:cralaw:red
"i) Foreign exchange payments duly approved by the
Central bank;chanroblesvirtualawlibrary
"ii) Except for repayment of preproduction expenses
which shall adhere as closely as possible to international practice, a
provision that the interest charged on the fair value of the services
rendered and actual funds advanced by the foreign entity shall not be
more than the prevailing international interest rates charged for
similar types of transaction and
"iii) A stipulation allowing payment of service fees
in cash or in allotment of production which may be exported subject to
domestic requirements of the country, or in equity which shall not
exceed the constitutional limits; Provided, That such stipulation shall
not defeat the citizenship requirement of the Constitution in the
exploration, development, exploitation and utilization of the natural
resources;chanroblesvirtualawlibrary
"d) A stipulation that the foreign entity shall not
acquire any title or interest in the lease area;chanroblesvirtualawlibrary
"e) A commitment by the service contractor to pay the
Government the amount which should have been spent, but was not, in
direct prosecution of the approved work program;chanroblesvirtualawlibrary
"f) A stipulation that the service contract shall be
cancelled for repeated failure to comply with the terms and conditions
thereof.
"g) A preference for Filipinos in employment in all
phases of operations for which they are qualified.
"h) A stipulation that alien employees shall be
limited to technologists and executives highly specialized training and
long experience, and whose employment shall be subject to the required
approval under existing decrees, laws and regulations on the matter; and
"i) In every case where foreign technologists and
executives are employed, an effective program of training of
understudies.
"Service contracts shall be approved by the Secretary upon
recommendation of the Director."
Section 21. Section 47 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 47. Removal of Improvements. — The lessee shall
within one (1) year from the abandonment, termination or cancellation
of the lease, remove all improvements on the mining premises found on
public lands, except roads and bridges otherwise, said improvements
shall become the property of the government." chanroblesvirtualawlibrary
Section 22. Section 50 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 50. Appeals. — Any party not satisfied with the
decision or order of the Director, may, within five (5) days from
receipt thereof, appeal to the Secretary. Decisions of the Secretary
are likewise appealable within five (5) days from receipt thereof by
the affected party to the President whose decision shall be final and
executory.
"In all cases, the decision or order of the Director and the Secretary
shall be immediately executory notwithstanding the appeal, unless the
President of the Philippines directs otherwise, and the prevailing
party has the right to immediately take possession, exploration and
exploitation of the mining claims: Provided, However, that the
provisions of Section 3 of Presidential Decree No. 1000, pertaining to
the deposit in escrow of the prescribed percentage of the proceeds of
the gross sales of the mines produced, shall be complied with for the
protection of the interest of the party to whom the mining claims are
ultimately and finally awarded."
Section 23. Section 78 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 78. Theft of Minerals. — Any person who,
without a mining lease or a temporary permit or any other permit
granted by the Secretary or the Director under existing mining decrees,
laws, and regulations to mine, shall extract, remove and/or dispose of
minerals belonging to the Government or from a mining claim or claims
leased, held or owned by other persons, shall be deemed to have stolen
the ores or the products thereof from the mines or mills. He shall upon
the conviction, be imprisoned from six (6) months to six (6) years or
pay a fine from one hundred pesos (P100.00) to ten thousand pesos
(P10,000.00) or both, in the discretion of the court, besides paying
compensation for the minerals removed, extracted and disposed of, the
royalty and the damage caused thereby."
Section 24. Section 94 of the same Decree is hereby
amended to read as follows:cralaw:red
"Sec. 94. Mine Evaluation. — The appraisal or
reappraisal, evaluation or re-evaluation of any mine, mining claim or
claims with improvements thereon whether patented, leased or otherwise,
for the purpose of raising capital for the formation or organization of
a partnership or corporation on for determining the present net value
of the mines shall be made by the Director or his duly authorized
representative. No mine, mining claim or claims without improvements
thereon, whether patented, leased or otherwise, shall be accepted as
asset or basis of any asset in any formation or organization of a
partnership or corporation without the value thereof having been first
appraised or determined by the Director as herein provided."
Section 25. Repealing Clause. — The provision of
law, decrees, orders, rules and regulations or parts thereof which are
inconsistent with the provisions of this Decree are hereby repealed or
modified accordingly.
Section 26. Effectivity Clause. — This Decree shall
take effect immediately.
Done in the City of Manila,
this 25th day of May, in the year of Our Lord, nineteen hundred and
seventy-eight.
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