Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

House Bill No.___94

Introduced by REP. KAKA BAG-AO_

EXPLANATORY NOTE

The Philippines is endowed with vast natural resources, including minerals, which form part
of our nation’s wealth and patrimony. Such wealth should serve the national economy for
the benefit of the people and be shared equitably. The regulated and rational use,
development and exploitation of minerals are consistent with sustainable development
principles and geared towards genuine industrialization and development of agriculture.

The country’s mining industry was supposed to have significantly contributed to national
development, Instead, it created a massive social divide and detrimental environmental
impacts.

The present mining law (Republic Act No. 7942) has clearly failed to address such impacts
and even failed to enhance national growth in a way that effectively safeguards the
environment and protects the rights of affected communities. The industry under the
present framework of the law is essentially extractive which has resulted to the continuing
depletion of the country’s nonrenewable resources, without giving back an equitable share
of benefits.

In the last three years alone, at least four major disasters related to mining occurred
irreparably damaged various ecosystems.

In June 2012, fish kill in Lake Bito, a rich fishing ground in Leyte, was traced to mine wastes
from Nicua Mining Corp. which was then operating in another village in MacArthur,
Leyte. The bureau suspended Nicua operations following the fish kill.

On August 1, 2012 Philex Gold and Copper Mine in Padcal, Benguet leaked spilling waste
into the nearby Balog creek, which flows into the Agno River and the San Roque dam. On
November 25, 2012, Citinickel Mines and Development Corporation was issued a notice of
violation by the Department of Environment and Natural Resources after silt-laden water
spilled from its silt pond No. 2 at its Toronto Mining Area in Barangay San Isidro, Narra, in
Palawan. On February 13, 2013, Semirara Coal Mine’s section of a wall in Panian, Caluya,
Antique collapsed killing a number of people while others are missing, This is not to count
the previous major mining disasters starting with the notorious Marcopper tragedy that left
the government still begging for remunerations.



Mining sites likewise continue to invite conflict, violence and human rights. violations:
families massacred, objecting community leaders killed or intimidated, sacred grounds
bulldozed, process of Free Prior and Informed Consent (FPIC) of indigenous peoples
undermined or vitiated, houses illegally demolished, communities forcibly resettled.

Timuay Lucenio Manda of Bayog, Zamboanga del Sur survived an ambush that killed his son
in September 2012,

In October 2012, Juvy Capion and her children Jordan and John were killed when their hut
was strafed with gunfire while they slept in their hut in Kiblawan, Davao del Sur. Another
daughter, 4-year old Vicky, was wounded and managed to escape. This killing happened
during a military manhunt for Daguil Capion, Juvy’s husband and one of the Bllaan leaders
who resisted the encroachment of a mining company into their ancestral domains.

On December 7, 2012 Cheryl Ananayo, a member of the Didipio Earthsavers’ Multipurpose
Association (DESAMA), and her cousin-in-law Randy Nabayay, were shot and killed while
headed to Didipio town. On the same day, Rolando Quijano, a farmer and active member of
the Alliance of Farmers Union in Zamboanga Del Sur (AFUZS) was shot to death at around
12:00 noon at Purok 4, Ocapan, San Miguel in the province of Zamboanga Del Sur.

On January 29, 2013 Kitari Capion, the brother of Daguil, was also killed, along with two
companions, at Barangay Bong Mal in Davao del Sur. The killing was allegedly led by a
Captain of the Philippine Army.

All these are either key leaders or are related to leaders organizing the opposition against
mining projects adversely affecting their communities.

The mining industry also failed to contribute significantly to the Philippine economy.
According to the Mines and Geosciences Bureau in 2012, mining contributed a measly 0.7%
to our Gross Domestic Product (GDP) and employed an insignificant 0.7% of the total labor
force. In the first quarter of 2013, when the Philippine GDP recorded an impressive 7.8%
growth, the mining industry contracted. In 2015, mining contributed to only 0.6% to our
GDP and employed only 0.6% of the total labor force.

Indeed the industry and its governing law failed to ensure the constitutionally guaranteed
rights of the people to a balanced and healthful ecology, to social justice in all phases of
national development, to a self-reliant and independent economy effectively controlled by
Filipinos, and other important rights.

If mining is to be pursued, the current mining policy framework should be overhauled in
such a way that social and environmental safeguards are clearly established to meet the
needs of our people now and in the future. Priorities should be towards sustainable
development and food security, where the benefits from mining are clearly established even
before considering exposing our land and our people to the risks and hazards of mineral
extraction.

This bill is therefore proposed to take the place of the current mining law. It is the product
of years of consultation with mining-affected indigenous peoples, communities and
‘stakeholders, as well as experts, whose invaluable thoughts need to be considered in
crafting a law that is truly responsive to the aspirations and welfare of the Filipino people.
The bill posits that it is impossible and unwise to separate mining from issues of resource


use, water, food security, environment, human rights, indigenous People’s rights and rights-
based economic development.

This bill seeks to guarantee that the exploration, development and utilization of mineral
resources will primarily benefit the Filipino people; prioritizes sustainable livelihood choices
for communities; gives utmost importance to food security and livable conditions for the
People; ensures that the gains from the mining industry would be maximized. while
preventing or mitigating Its adverse effects; recognizes that the issue of environment and
sustainable development is local and thus prioritizes local participation in decisions
Surrounding mining; ensures the protection of human rights of communities and individuals;
and imposes harsh penalties for the violation of its provisions.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

AO

Loné District, Dinagat Islands


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

54

House Bill No.

Introduced by REP. KAKA BAG-AO

AN ACT
TO REGULATE THE RATIONAL EXPLORATION, DEVELOPMENT AND UTILIZATION OF
MINERAL RESOURCES, AND TO ENSURE THE EQUITABLE SHARING OF BENEFITS
FOR THE STATE, INDIGENOUS PEOPLES AND LOCAL COMMUNITIES, AND FOR
OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

CHAPTER I
DECLARATION OF POLICIES

SECTION 1. Short Title, — This Act shall be known as the “Philippine Mineral Resources Act of
2016."

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to:

a, Maintain peace and order, protect life, liberty and property and promote the general
welfare;

b. Advance the medium- and long-term needs of the Philippines;

. Encourage the advancement of the industry's technology with emphasis on existing
indigenous knowledge, research and development;

d. Protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature;

e. Value the dignity of every human person and guarantees full respect for human rights;

f, Promote social justice in all phases of national development;

g. Recognize and promote the rights of indigenous cultural communities within the
framework of national unity and development and protect the right to self-determination
of the indigenous and Moro peoples;

h. Protect and promote the right to health of the people and instill health consciousness
among them;


i, Pursue an independent foreign policy. In its relations with other states the paramount
consideration shall be national sovereignty, territorial integrity, national interest, and the
right to self-determination;

J. Develop a self-reliant and independent national economy effectively controlled by
Filipinos;

k. Ensure the autonomy of local governments;

Give highest priority to the enactment of measures that protect and enhance the right of

all the people to human dignity, reduce social, economic, and political inequalities, and

remove cultural inequities by equitably diffusing wealth and political power for the
common good;

m. Encourage non-governmental, community-based, or sectoral organizations that promote
the welfare of the nation; and

n. Adopt and accept the generally accepted principles as embodied in the International
Covenant on Givil and Political Rights, International Covenant on Economic, Social,
Cultural Rights, UN Declaration on the Rights of Indigenous Peoples, UN Convention on
Biodiversity and other international accords on human rights, labor rights, the rights of
women and children, and the protection and preservation of the environment, of which
the State is a party.

SEC. 3. ~ The State shall formulate a National Industrialization Program pursuant to the
principles of agricultural modernization, development of industrial and manufacturing industries,
and rational, sustainable, and equitable development of the national economy. The State shall,
therefore, promote the development of mineral processing to maximize the benefits or value-
added from mining. Towards this end, it shall encourage the establishment and development of
manufacturing plants that will utilize locally processed mineral products as well as mining firms
that will process mineral ores first for domestic purposes and before exporting them to other
countries.

Pursuant to the foregoing, the State shall implement a Mineral Management Plan that provides
the framework for the utilization and management of the country's mineral resources, which will
address the needs of the domestic economy and uphold the rights of industry workers,
indigenous peoples and local communities.

SEC. 4, — The judicious stewardship of our mineral resources, as well as its exploration,
development and utilization shall comply with the following principles:

a. The current export-orientation of mining is hereby reversed and a domestic needs-based
development of the industry shall be pursued by the State as a step towards achieving
genuine economic development;

b. The mining industry shall be geared towards national industrialization and shall be built
for the production of raw materials such as base metals, basic chemicals and
petrochemicals needed by the basic, medium and heavy industries to produce as much
consumer, intermediate and capital goods with the country’s stock of finite mineral and
non-mineral industrial raw materials and in the process provide jobs to the country’s
vast human resources;


The community shall actively participate in the stewardship of mineral resources,
Community-based initiatives shall be encouraged and supported;

The State and its members shall develop its human resources and encourage the
evolution of its own appropriate technologies. The State shall provide the appropriate
support and protection to Filipino corporations to further develop and increase their
Participation in the industry. All mining industry investments shall be mutually-beneficial
and help achieve the specific target and goals of the National Industrialization Program.
To come up with the large capital requirement for mining, the State must use local
sources such as but not limited to the granting of incentives and financial aid to local
private sector investors, re-channeling of government budget allocations for foreign debt
payments and military expenditures, and the proceeds from the government shares of
the Malampaya Natural Gas Project;

The State shall allow, in exceptional cases, foreign corporations to invest in the mineral
industry. Based on the National Industrialization Program and the country's capability
and capacity, the government must identify the mineral areas where foreigners can help
and invest subject to rigorous screening and strict regulations as provided in this Act
and related laws. The participation of foreign companies in the critical stages of minerals
extraction and processing shall be in accordance with a mandatory program or
agreement for technology transfer and equity shares that do not exceed 40 percent of
the full capital requirements;

Provided, That capital accumulation and reinvestment within the country shall be
primarily encouraged over profit repatriation by the foreign companies and that foreign
mining corporations, their principals, local firms and conduits that have a bad track
record in the Philippines are banned from investing in the country;

In land and water use, the production of sufficient food free from pollution towards food
security shall always be the priority;

Long-term mining development shall be programmed by the State in accordance with
the country’s availability of resources, capability and well being of the people,
technological capacity and people's acceptability. The right of Muslim Filipinos and
indigenous peoples to self-determination and ancestral domain shall be recognized and
their collective property rights are guaranteed by this Act;

Job security, adequate wages, benefits, and safe working conditions for mine workers
shall be ensured in state and privately owned mining corporations, Their right to
organize and form their own associations, to collective bargaining and to strike shall be
upheld. The state will strictly prohibit forced and child labor in the industry;

Small-scale mining operations shall be supported and regulated by the state. The state
will encourage the formation of cooperatives among small-scale miners and provide
financial and technical support to develop the labor-intensive and upgrade the backward
technologies into a more efficient and less environmentally destructive mining process.
Whenever small- scale mining are stopped, alternative and sustainable livelihood shall
be provided to the small-scale miners.


j. Mining operations shall not in any way create or exacerbate conflicts, In no instance
shall the Armed Forces of the Philippines (AFP), the Philippine National Police (PNP) and
private security and paramilitary groups be used to coerce or force the entry and
protection of mining operations;

k. Mining industry research and development shall focus on harnessing more economically-
efficient and less environmentally-destructive methods. The advanced technologies from
other countries that are proven to be appropriate locally shall be adopted in the
industry;

|. All mining operations shall be strictly regulated to ensure the domestic processing of
mineral ores up to the secondary and tertiary stages of industrial production to develop
our own basic and medium industries. Recycling programs and substitution in the use of
minerals shall be incorporated in the overall plan of mining development to reduce mine
waste and pollution, and mining rehabilitation techniques. Indigenous technologies that
are relevant and appropriate, particularly with respect to the domestic processing of
minerals shall be promoted, harnessed, expanded and upgraded;

m. The State and its members shall share in the burden of satisfying the need for mineral
resources primarily through reusing and recycling existing mineral products. Ecologically-
sound practices at all stages of mining shall be promoted. Mining technologies such as
open-pit mining and submarine mine tailing disposal methods that are banned abroad
and/or proven inappropriate in countries like the Philippines must all be banned.
Environmental standards shall be set to ensure the protection and efficient utilization of
the country's mineral resource base. Ecological considerations in mining development
shall be given due emphasis and attention to substantially eliminate destructive effects
that certain mining industrial processes might have on the people's health and the
environment. Monitoring mechanisms with strong participation from the local
communities will be instituted;

n, Mining in environmentally-critical areas such as small island ecosystems, primary and
secondary forests and watersheds shall be banned. Dumping of mine wastes and tailings
to rivers, lakes and seas are prohibited; The integrity of the environment shall not be
compromised; and

©. Areas affected by mining shall be rehabilitated, including abandoned mines. Violators
shall be strictly punished and made to pay heavy compensation to the State and the
affected communities;

SEC. 5, - The exploration, development and utilization of natural resources must comply with
the principles of intergenerational responsibilty.

SEC. 6, — For purposes of, or in relation to expropriation, it is hereby declared that mining is
not for a public purpose.

SEC. 7, - Mining agreements shall not be considered as vested rights, but, are mere privilege
that the State can grant or revoke anytime for a legitimate purpose.


CHAPTER II
‘SCOPE AND GENERAL PRINCIPLES

SEC. 8. Scope. — This Act shall govern the ownership, management and governance of both
metallic and non-metallic ore minerals onshore and offshore, as well as quarry resources, sand
and gravel, guano, and gemstones, and the conservation, exploration, development, utilization,
Processing and transportation thereof. The ownership, management and governance of
Petroleum, natural gas and coal shall be governed by special laws. Offshore mining shall also be
governed by special laws.

This Act shall cover onshore and offshore, large-scale and small-scale mining operations in the
country, including mining projects in ancestral domains in accordance to the existing national
and international policies on our indigenous peoples.

SEC. 9. — Ore minerals form part of the country’s irreplaceable and non-renewable natural
wealth and capital. The conservation of our mineral wealth is a paramount public interest and
mineral resources shall be utilized only in a rational manner for national and local development
as specified by law and the National Industrialization Program and the Mineral Management
Plan. The economic benefits derived from mining shall be equitably distributed by, among
others, prioritizing development for local communities and all other stakeholders directly
affected by mining operations.

SEC. 10. - The State shall have primary role, responsibility and concern in the management,
Conservation, utilization, and development of the mining industry and shall ensure the peoples
Participation in policy making and implementation of the same at all levels of government. The
Management of mineral resources shall be a shared concern and responsibility among the
national government, corporations, all levels of local government, and the communities affected
by the exploration, development, and utilization of mineral resources.

SEC. 11. - The State shall accord support to communities dependent on small-scale mining
whose operations shall strictly adhere to the provisions of this law.

SEC. 12. — Subject to their right to self-determination, indigenous cultural communities/
indigenous peoples (ICCs/IPs) own and have the responsibility to manage the mineral resources
in their respective ancestral domains, free from external manipulation, interference, force
threat, intimidation, coercion and other analogous acts. The State shall ‘support indigenous
cultural communities in developing capacities to effectively exercise their right and
responsibility.

SEC. 13. — Mining shall be limited in scale in accordance with this Act.

SEC. 14. — Mineral resources development, utilization and processing shall be reserved for
Filipino citizens and for Filipino corporations. Exploration shall be undertaken directly by the
‘State for the benefit of the nation.

SEC, 15. ~ Remining and recycling of mineral resources shall be prioritized over the opening of
new mines to maximize and recover the remaining minerals resources from the rejects or
wastes of previous mines and mining operations.


SEC. 16. ~ The State shall prioritize the rehabilitation of the abandoned mines in the country.
The State shall ensure the fullest compliance of all government and corporate entities in and on
the closure of mines, the rehabilitation/restoration of the immediate environs or each mining
project/activity in the country as provided by law.

SEC. 17. ~ The State shall encourage and support Filipino private corporations and mining
cooperatives to participate and invest in the mining industry on mutually-beneficial grounds that
will push forward the National Industrialization Program in both small-scale and large-scale
projects.

SEC, 18. - Mineral resource extraction shall be allowed based on the Philippine Government's
National Industrial Plan. The sharing of profits from mining activities, including the anticipated
environmental and social costs on the affected local communities of each mining project, should
far outweigh ecological and social benefits and costs from other land uses. The anticipated cost
of environmental and social impacts on the affected local communities, which shall at all times
be prevented and/or mitigated through the allocation of sufficient funds for this purpose. In
mining projects with foreign participation, a just return of investment scheme for the foreign
entrants into the industry shall be prescribed by law.

SEC. 19. - The State shall prioritize the development of mineral resources needed for national
development and the creation of domestic processing capacity for industrial metals, the
integration of agricultural modernization and other labor-intensive downstream industries. Mine
planning shall be conducted to meet this principle.

The National Industial Plan shall support national development based on the principles of
sustainable development and modernization of its economic base. This framework will define
minerals to be extracted, volume to be extracted and when to be extracted, This shall be
matched with the approved mining areas as identified by the Councils. These matched areas
are eligible for mining operations.

CHAPTER IIT
DEFINITION OF TERMS

SEC. 20. Definition of Terms. — As used in and for the purposes of this Act, the following
terms, whether used in singular or in plural form, shall mean:

a, Abandonment - the act of the contractor leaving a mine without rehabilitating the
affected areas or completing such rehabilitation despite the legal obligation to do
the same;

b. Acid mine drainage — the dissolution, mobilization and transportation of toxic metals

from rocks resulting from the chemical reaction of the acid-generating minerals in
rock and waste materials having high permeability to both air and rainfall and other
water inflows when land is opened up for mining and initiates the chemical reaction,
resulting to a perpetual machine of acid generation;


Ancestral domains - all areas generally belonging to indigenous cultural
‘communities/indigenous peoples (ICCs/IPs) comprising lands, inland waters,
coastal areas, and natural resources therein, held under a claim of ownership,
occupied or possessed by ICCs/IPs, by themselves or through their ancestors,
communally or individually since time immemorial, continuously to the present
except when interrupted by war, force majeure or displacement by force, deceit,
stealth or as a consequence of government projects or any other voluntary dealings
entered into by government and private individuals/corporations, and which are
necessary to ensure their economic, social and cultural welfare. It shall include
ancestral lands, forests, pasture, residential, agricultural, and other lands
individually owned whether alienable and disposable or otherwise, hunting grounds,
burial grounds, areas of worship , bodies of water, mineral and other natural
resources, and lands which may no longer be exclusively occupied by ICCs/IPs but
from which they traditionally and historically had access to for their subsistence and
traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators

Ancestral lands — lands occupied, possessed and utilized by individuals, families and
clans who are members of the ICCs/IPs by themselves or through their
predecessors-in-interest, under claims of individual or traditional group ownership,
continuously, to the present except when interrupted by war, force majeure or
displacement by force, deceit, stealth, or as a consequence of government
development aggression projects and other voluntary dealings entered into by
government and private individuals/corporations including, but not limited to,
residential lots, rice terraces or paddies, private forests, swidden farms and tree
lots;

Beneficiation ~ a process wherein a large fraction of the waste material is removed
from the mineral ore;

Buffer Zones — identified areas outside the boundaries of and immediately adjacent
to designated protected areas designated by law that need special development
control in order to avoid or minimize harm to the protected area;

Bureau ~ the Mines and Geosciences Bureau (MGB) under the Department of
Environment and Natural Resources (DENR);

Carrying capacity - the capacity of natural and human environments to
accommodate and absorb change without experiencing conditions of ecological
instability and attendant degradation;

Certificate of Ancestral Domains Title (CADT) - title formally recognizing the rights
of possession and ownership of ICCs/IPs over their ancestral domains identified and
delineated in accordance with law;

Certificate of Ancestral Lands Title (CALT) — a title formally recognizing the rights of
ICCs/IPs over their ancestral lands;


Closure of mines — permanent cessation of operations at a mine or mine processing
site after completion of the decommissioning process;

Consensus — the decision communally reached after appropriate participatory
consultation and discussion, free from any external manipulation, interference and
coercion, and other analogous cases and obtained after fully disclosing the intent
and scope, including the positive and negative impacts of the activity, in a language
and process understandable to the community or group.

Consent ~ the free, prior and informed assent of the relevant person/s, ICCs/IPs,
barangay assemblies, landowner or occupant or possessor, given after fully
disclosing the intent and scope, including the positive and negative impacts of the
activity, in a language and process understandable to said persons or communities
or assemblies;

Contract area — the area delineated as specifically provided by a mineral agreement
for the development or utilization of mineral resources found therein;

Critical watershed — refers to a drainage area of a river system, lake or water
reservoir supporting existing and proposed hydroelectric power, domestic water
supply, geothermal power and irrigation works, which needs immediate
rehabilitation and protection to minimize soil erosion, improve water yield and
prevent possible flooding. The term shall also include areas which are traditional
human settlements, land-uses, or sea-uses which are representative of a
culture/cultures, or human interaction with the environment especially when it has
become vulnerable under the impact of irreversible change;

Gritical habitats - place or environment where species or subspecies naturally occur
or has naturally established its population that are crucial to the survival of a
species and essential for its conservation;

Cultural sites - those that bear 2 unique or at least exceptional testimony to a
cultural tradition or to a civilization which is living or which has disappeared or,
directly or tangibly associated with events or living traditions, with ideas, or with
beliefs, with artistic and literary works of outstanding universal significance;

Customary laws ~ body of written and/or unwritten rules, usages, customs and
practices traditionally recognized, accepted and observed by respective ICCs/IPs
and local communities;

Decommissioning — the activity or process that begins after cessation of prospecting
activities or mineral production (including metallurgical plant production). It
involves, among others, the removal of unwanted infrastructure, making
excavations and waste repositories safe and stable and surface rehabilitation with a
view to negate or minimize any adverse environmental impacts remaining after
cessation of mineral production. It includes the after-care or maintenance that may
be needed;


aa.

Downstream industries — are mining activities that cover minerals processing,
refining, manufacturing of intermediate and capital goods and marketing of such;

Ecological profile or eco-profile ~ geographic-based instruments for planners and
decision-makers which present an evaluation of the environmental quality and
carrying capacity of an area and measures the specific interactions that will be
affected by any and all mining operations;

Exploration ~ covers the methods of searching or prospecting for mineral resources
by non-invasive means for the purpose of determining the existence, extent,
quantity and quality thereof, which may include but not limited to seismic, gravity,
magnetic, electromeganetic, radar, induced polarization, radio-wave and
electrogeochemical;

Extraction - ore-removal activities that take place at the mine site itself;

Free, prior, and informed consent (FPIC) - the consensus of all members of the
ICCs/IPs to be determined in accordance with their respective customary laws and
Practices, free from any external manipulation, interference, coercion, and other
analogous acts and obtained after fully disclosing the intent and scope, including
the positive and negative impacts, of all the activities, in a language and process
understandable and acceptable to the community;

Indigenous peoples/Indigenous cultural communities (IP/ICC) - refer to @ group of
people or homogenous societies identified by self-ascription and ascription by
others, who have continuously lived as organized community on communally
bounded and defined territory, and who have, under claims of ownership since time
immemorial, occupied, possessed and utilized such territories, sharing common
bonds of language, customs, traditions and other distinctive cultural traits, or who
have, through resistance to political, social and cultural inroads of colonization, non-
indigenous religions and cultures, became historically differentiated from the
majority of Filipinos. ICCs/IPs shall likewise include peoples who are regarded as
indigenous on account of their descent from the populations which inhabited the
country, at the time of conquest or colonization, or at the time of inroads of non-
indigenous religions and cultures, or the establishment of present state boundaries,
who retain some or all of their own social, economic, cultural and political
institutions, but who may have been displaced from their traditional domains or
who may have resettled outside their ancestral domains. They are peoples who
have a spiritual relationship with the land;

Indigenous political structure — refers to organizational and cultural leadership
systems, institutions, relationships, patterns and processes for decision-making and
participation, identified by ICCs/IPs such as, but not limited to, Council of Elders,
Council of Timuays, Bodong Holders, and any other tribunal or body of similar
nature;

Joint venture agreement - an agreement wherein the government and a qualified
person organize a joint-venture company, with both parties having equity shares, to


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develop and manage mineral resources. Aside from earnings on the equity, the
Government shall be entitled to a share in the output computed at a certain
percentage mutually agreed upon by and beneficial to both parties.

Key biodiversity areas — are sites of global biodiversity conservation significance.
They are defined by standardized criteria and thresholds to guide conservation
interventions such as the establishment of protected areas;

Large-scale mining ~ mining in areas with more than twenty (20) hectares, using
mechanized tools and equipment, requiring considerable capital and having large-
scale environmental, social, cultural and economic impacts with regard to resource
use and/or consumption;

Mineral agreement ~ a contract entered into by the government, in behalf of the
State, and a private Filipino person, granting such person/s the privilege to mine a
specific contract area;

Mineral resource — any concentration of minerals/rocks with potential economic
value;

Mineral processing — the milling, beneficiation or upgrading of ores or minerals and
rocks or by similar means to convert the same into marketable products;

Minerals ~ 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 eneray;

Mine development — preparing the mine site for production by shaft sinking or pit
excavation building of access roads, and constructing of surface facilities;

Mine wastes and tailings rock materials from surface or underground mining and
milling operations with little or no economic value to the generator of the same;

Mining activity — any or all of the following activities: exploration, extraction,
utilization, processing, transportation and other activities conducted for the same;

Mining area — a portion of the contract area which has been identified by the
contractor wherein actual mining operations are conducted;

Mining operations — either all ot any of the mining activities involving exploration,
feasibility, development, utilization, and processing;

National industrialization — in the mining industry, this shall denote the primacy of
mineral production, processing and distribution for the primary benefit of the
domestic economy. This includes creating favorable conditions for Filipino
entrepreneurs to engage in mining through various state-private agreements that
shall ensure that mining shall help spur more domestic investments, increase

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agricultural production and produce both consumer and producer goods and
manufactures;

National park — an area of the public domain essentially natural wilderness, scenic,
or historic in character which has been withdrawn from settlement, occupancy, or
any form of exploitation except in conformity with an approved management plan
and set aside exclusively to conserve the area or preserve the scenery, the natural
and historic objects, wild animals, and plants therein mainly for the purpose of
biodiversity conservation and/or human enjoyment;

Natural forest ~ forests composed of indigenous trees, not planted by man, whose
structure, functions, and dynamics have been largely the result of natural
succession processes;

Natural parks ~ is a relatively large area not materially altered by human activity
where extractive resource uses are not allowed. These parks are maintained to
protect outstanding natural and scenic areas of national or international significance
for scientific, educational and recreational use;

Open-pit mining — Extracting metal ores and minerals that lie near the surface by
removing the overlying material and breaking and loading the ore. Also known as
‘open-cast mining and open-cut mining;

Ore — a material that contains minerals in such quantities that it can be mined and
worked commercially to extract that mineral. The mineral is usually contained in
chemical combination with some other element in addition to various impurities;

Pollution control and infrastructure devices — 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 by-products and gases emitted from any facility utilized in mining
operations for their disposal;

Private land — 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;

Processing ~ includes all treatment an ore receives after its extraction and
beneficiation, which involves changes in the chemical nature of the mined minerals;

Progressive rehabilitation — rehabilitation which involves the staged treatment of

disturbed areas during exploration, construction/development and mining
operations;

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Protected areas ~ identified portions of land and water set aside by reason of their
unique physical and biological significance, managed to enhance biological diversity
and protected against destructive human exploitation;

Protected landscapes, seascapes, marine sanctuaries — areas of national
significance which are characterized by the harmonious interaction of man and the
environs while providing opportunities for public enjoyment through recreation and
tourism within the bounds of the normal lifestyle and economic activity of these
areas;

Quarry resources — any common rock or other mineral substances as the Director of
the Mines and Geosciences 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 clay 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;

Quarrying ~ process of extracting, removing and disposing quarry resources found
on or underneath the surface of private or public land;

Regional Director - the regional director of any mines regional office;
Regional Office - any of the mines regional offices;

Recycling ~ shall refer to the treating of used or waste materials through a process
of making them suitable for beneficial use and for other purposes, and includes any
process by which solid waste materials are transformed into new products in such a
manner that the original products may lose their identity, and which may be used
‘as raw materials for the production of ather goods or services: Provided, That the
collection, segregation and re-use of previously used packaging material shall be
deemed recycling under the Act;

Rehabilitation ~ the process by which the land will be returned to a form and
productivity in conformity with a prior land use plan including a stable ecological
state that does not contribute substantially to environmental deterioration and is
consistent with surrounding aesthetic values;

Remediation — removal of pollution or contaminants from environmental media for
the general protection of the area and the people;

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‘Remining ~ maximizing and recovering the remaining minerals from the rejects or
wastes of previous mines and mining operations;

Restoration — where the intent is to recreate an ecosystem as close as possible to
the original which existed at the site, with most of the structure and productivity
matching that of the original ecosystem, and most of the original biodiversity: in
time ecological processes and functions will match those of the original forest;

Self-determination ~ refers to the right of a people to determine its own political
destiny as defined by existing Philippine laws. The right to self-determination has
includes the right of ICCs/IPs to choose their form of government within existing
national borders to achieve a greater degree of autonomy to help preserve their
culture, ancestral domain, and way of life;

Small-scale mining ~ mining activities which rely heavily on manual labor using
simple implements and methods and do not use explosives or any heavy mining
equipment, primarily engaged in for sustainable living. Impacts from small-scale
mining shall not be large-scale, otherwise, the mining activity shall be defined as
large-scale mining;

‘Small-scale mining permit— permit issued for small-scale mining;

Strategic minerals ~ minerals needed for national industrialization, including rural
development;

Tailings Disposal System or Tailings Placement — the method wherein the waste
from mining operations are dumped, placed, or disposed;

Traditional smali-scale mining — small-scale mining using traditional means and
without the use of chemical or mechanized extraction and separation means,
methods, implements, and/or equipment;

Watershed continuum — shall refer to an area consisting of the watershed and its
divide including its connection from the headwaters to the reef or a land area
drained by a stream or a fixed body of water and with tributaries having a common
outlet for surface runoff. It is the system by which the mining-affected communities
shall be determined following the drainage of a stream or fixed body of water with
tributaries having a common outlet for surface runoff;

Wildlife — undomesticated forms and varieties of flora and fauna.

CHAPTER IV
OWNERSHIP AND GOVERNANCE

SEC. 21. Authority of the Bureau, ~ The Mines and Geosciences Bureau shall be a scientific
research institution under the Department of Environment and Natural Resources (DENR)
primarily conducting and developing research of mineral resources and mining technologies and
training of local communities, local government units and indigenous peoples. It shall also

13


regulate the operations of persons involved in mining activities. It shall also work with the Multi-
Sectoral Mineral Council in the monitoring of mining activities.

SEC. 22. Regional offices. — The Bureau shall have as many regional offices in the country as
may be established by the Secretary, upon the recommendation of the Director.

SEC. 23. Bureau as repository of information. — The Bureau shall be the central repository
of information regarding mineral lands, resources, permits, studies and other information
relevant to the operation of a mine, including the necessary requirements which a contractor is
obliged to submit. All other governmental offices and other bodies created under this Act shall
copy furnish the Bureau of all other information related to mining.

SEC. 24. 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.

SEC. 25. Publication. - The Bureau shall publish at least annually a mineral gazette of
nationwide circulation containing among others, a current list of mineral rights, their locations
specified in the appropriate map, mining rules and regulations, other official acts affecting
mining, and other information relevant to mineral resources development. A system of
publication fund shall be included in the regular budget of the Bureau,

SEC. 26. Bureau to conduct exploration activities. — Exploration of mineral resources shall
be exclusively and directly undertaken by the State through the Bureau. In no case shall this
function be delegated or contracted out to private corporations or persons.

SEC. 27. Non-invasive exploration. — Exploration activities shall only be non-invasive such
as seismic, gravity, magnetic, electromagnetic, radar, induced polarization, radio-wave and
electro-geachemical.

SEC. 28. Consent. - The Bureau shall not conduct any exploration activity without the free,
prior and informed written consent of relevant and owner, possessor and/or occupant; the
affected communities; and/or of the ICC/IP. Neither shall the Bureau enter into any part of the
ancestral domains/lands of ICCs/IPs without their free and prior informed consent. Further, the
Bureau shall not enter into any distributed land under the Comprehensive Agrarian Reform
Program within the 10 years prohibited period of the said program.

SEC. 29. Ownership of ICCs/IPs. - The mineral resources within ancestral
domains/ancestral lands are the collective private property of the indigenous cultural
communities/indigenous peoples (ICCs/IPs) as provided by law. The management of such
mineral resources shall build on the indigenous knowledge systems and practices of the
ICCs/IPs,

SEC. 30. Free, prior, and informed consent. — No mining activity shall be conducted within

the ancestral domains/lands of ICCs/IPs without their free, prior, and informed consent (FPIC),
in addition to the conditions set forth under the succeeding sections of this Act.

14


SEC. 31. When ancestral domain is not formally recognized. — When ancestral domain
is not covered by a Certificate of Ancestral Domain Title/Certificate of Ancestral Land Title
(CADT/CALT), or is covered by a different title issued in favor of members of the ICCs/IPs,
mineral resources shall nevertheless be managed by the ICCs/IPs concerned when it can be
presumed that the area is part of ancestral domain. An area is presumed to be part of
ancestral domain by virtue of historic rights and self-delineation by the ICCs/IPs.

SEC. 32. When ICCs/IPs displaced from ancestral domain, and when ancestral
domain is already covered by other titles emanating from the State other than
CADT/CALT. — IP/ICC rights over ancestral domain subsists notwithstanding the fact that the
ICCs/IPs who hold such rights have been displaced therefrom or that such ancestral domains
have been occupied by other persons or corporations under another claim of title emanating
from the State. In such cases, ICCs/IPs shall continue to own such mineral resources.

SEC. 33. Questions on the validity of FPIC. - In instances that there are questions on the
legality or validity of the issued free, prior, and informed consent, mining operations shall not
be allowed to be conducted in the ancestral domains or lands of the ICCs/IPs without the final
resolution of such question on the legality or validity of the FPIC.

SEC. 34. Ownership of the State. - The mineral resources found outside ancestral
domains/lands shall be owned by the State. The State shall ensure that the management of
mineral resources shall be primarily for the benefit of the local communities in whose territory
the same shall be found, Any minerals extracted shall be solely used for local industries
consistent with the Minerals Management Plan. The State may directly undertake development,
utilization and processing of mineral resources or it may enter into mineral agreements with
eligible parties pursuant to the provisions of this Act.

SEC. 35. Inventory of mineral resources. —- The Bureau shall identify and provide an
inventory of the available mineral resources, including the mine tailings and wastes within the
country. It shall submit to the DENR a report which shall contain the following information:

the classification of minerals;

the quality and grade of the ore;

the potential mine life;

the geological description of the area;

the economic viability of mine tailings;

whether the area is a key biodiversity area or if itis a critical habitat; and
all other relevant information necessary for potential mineral investments.

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The process for mineral exploration and/or approval for a mining permit shall not commence
without the said inventory.

SEC. 36. Identification of strategic minerals. ~ The Bureau shall conduct researches and
studies prior to any mining operations to identify strategic mineral resources. Only mineral
resources that shall be needed for local industries, agricultural modernization and rural
development shall be opened to mining subject to the implementing rules and regulations of
this Act.

15


SEC. 37. Demarcation of mineral areas. - The Bureau shall demarcate the boundaries of all
areas identified as containing commercial quantities of mineral resources on the ground.

‘SEC. 38. Baseline information on watershed continuums. - The baseline information on
all watersheds in the country shall be required and made available to the public, online as much
as possible. No mining permit shall be issued without this baseline information,

SEC. 39. Affected local community and local government unit. - For the purposes of
this Act, the affected local community and the affected local government unit are defined in
relation to the watershed continuum which is potentially negatively impacted by mining
operation in the demarcated area. The local communities and the local government units
therefore are those who are dependent on the watershed eco-system and its resources,

SEC. 40. Establishment of Multi-Sectoral Mineral Councils. — A Multi-Sectoral Mineral
Council shall be established for the purposes of this Act. There shall be as many Multi-Sectoral
Mineral Councils are there are watershed continuums with demarcated mineral areas.

SEC. 41. Powers of the Council. - The Council shall have the following powers, among
others:

To determine whether or not mining operations shall be allowed;
To deliberate on proposals for mineral agreements;
To approve the proposal for mineral agreemen
To monitor the conduct of mining operations; and

To establish its internal rules of procedure which are not contradictory to this Act.

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SEC. 42. Composition of the Multi-Sectoral Mineral Council, — The Multi-Sectoral Mineral
Council shall be composed of representatives from the Bureau, one representative from each of
the affected provincial governments/independent component cities/highly urbanized cities,
representatives from peoples/community/sectoral/non-governmental organizations as many as
the representatives of local government units, and the affected ICCs/IPs within the watershed
continuum. The Bureau shall be the convenor of the Council.

No mining operations shall be allowed without the Council having been properly convened.

SEC. 43. Areas open to mining. ~ The Council shall have the power to determine whether or
not the land where mineral resources are found shall be opened to mining. Areas may only be
opened to mining upon the vote of two-thirds of all the members of the Council pursuant to the
guidelines provided by this Act. In determining whether or not such area shall be opened, the
following shall be required:

Report of the Bureau on the conducted exploration;
Existence of downstream industries for the mineral resources;

Potential environmental impacts;

Potential cultural impacts;

Conflict and risk assessment;

Potential health impacts;

Potential economic benefits of the development and utilization of the minerals;

Oonpanse

16


h. Carrying capacity and the ecological profile of the area;
i. Existing and alternative land uses of the area; and
4. Local government land use plan.

No mining application shall be allowed unless an environmental economic audit or resource
valuation of the proposed mining area has been conducted or prepared applying acceptable
valuation standards. This audit or resource valuation shall be conducted in coordination with
multisectoral group of experts and community stakeholders. It shall include determination of
the expected economic returns and the potential negative impacts from mining on the
enjoyment and exercise of human rights, cultural rights, and on peace and security. A detailed
study must mention the flora, fauna and environment present in the mining claim and the
impact of mining operations on the environment, the possible environmental degradation and
the attendant loss of subsistence resources cause. There must be mention of existence of
sacred areas or areas otherwise of cultural significance and address the impacts of resource
exploitation on indigenous peoples and local communities.

This information shall be accessible to the public at all times. Provided That in no case shall the
Council open the following areas to mining:

a, Areas declared by Local Government Units as No-Mining Zones as specified by local
ordinances, and other issuances;

Densely populated areas, especially residential areas;

Head waters of watershed areas;

‘Areas with potential for acid mine drainage;

Critical watersheds;

Critical habitats;

Climate disaster-prone areas;

Geohazard areas;

‘Small island ecosystems;

Cultural sites, which may include, but not limited to, sacred sites and burial grounds;

Traditional swidden farms and hunting grounds;

Lands covered by the Comprehensive Agrarian Reform Law or Republic Act No. 6657,

as amended;

m. Prime agricultural lands, irrigable and irrigated lands as defined by Republic Act No.

9700;

n. Cultural property enumerated under the National Cultural Heritage Act of 2009 or

Republic act No. 10066;

Community sites;

Key biodiversity areas;

High conflict areas;

The Province of Palawan pursuant to Republic Act No. 7611 and other areas covered

by local ordinances;

In military and other government reservations, except upon prior written clearance by

the government agency/agencies concerned;

t. Near or under public or private buildings, cemeteries, archaeological 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/agencies or private entity concerned;

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7


u. In areas expressly prohibited by law or ordinances;

v. 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

w. Old growth, natural or primary and secondary forests, watershed forest reserves,
wilderness areas, mangrove forests, mossy forests, national parks, protection forests,
provincial/municipal forests, parks, greenbelts, game refuges and bird sanctuaries and
their respective buffer zones prohibited under the National Integrated Protected Area
System (NIPAS) under Republic Act No. 7586, Department Administrative Order No,
25, series of 1992 and other laws and ordinances and those expressly prohibited by
other laws.

‘The determination whether or not the same are absolutely closed to mining shall not only be
limited to the existence of a law or ordinance declaring it as protected areas, but also to the
actual use of said area,

SEC. 44. Process of determination for opening an area to mining. — After the
submission of the exploration report and the resource valuation report, the Bureau shall
convene the Council. The Council shall thereafter convene their respective constituents to
determine whether or not their respective territories shall be opened for mining.

Sections 26 and 27 of the Local Government Code on consultation and consent shall be strictly
adhered to. Local government units at all levels shall conduct mandatory public hearings with
the affected local communities, to be carried out within their respective territories and
presenting those enumerated under Section 41.

The decision of the respective Sanggunians of all the local government units in the watershed
continuum shall be made in accordance to the sentiment of the peoples of the local government
unit as a result of the consultations conducted.

Provided, That each Sangguniang Barangay within the watershed continuum shall convene their
respective barangay assemblies for the purpose of this section. Local government units shall
ensure that the Bureau shall comprehensively explain the goals and objectives of the project or
program, its negative and positive impact upon the people and the community in terms of
environmental or ecological balance, and the measures that will be undertaken to prevent or
minimize the adverse effects thereof. The free prior and informed consent of all barangay
assemblies within the watershed continuum shall be a condition precedent for any mining
activity,

Provided further, That no mining activity shall be approved by the council without the free and
prior informed consent of all indigenous peoples within the watershed continuum.

For the purposes of declaring that an area is open for mining, the Council shall ensure that all
the requisites under Section 41 and 42 have been complied with.

Provided finally, That any member of the community may file a protest with the Council during
the period of consultations and deliberations for the Council's consideration.

18


SEC. 45. Violation of Section 54. — Local government officials who are administratively
found to violate the preceding section and Section 54 of this Act vis-a-vis the pertinent sections
of the Local Government Code shall be removed from office and perpetually disqualified from
holding any elective or appointive position in government, its divisions, subsidiaries and any
government owned and controlled corporations.

SEC. 46. Pool of consultants. - There shall be a pool of independent consultants that may
assist the local government units, local communities or ICCs/IPs with regard to the technical
aspects of mining.

Section 47. Publication, posting and radio announcement requirements. The decision
of the Council shall be published by the Bureau in the local newspaper in the local language,
shall be announced on the local radio programs for not less than six (6) weeks and notices shall
be distributed widely in communities. The notice containing relevant information shall likewise
be posted in conspicuous places for the information of the general public and shall be
announced during the local market day.

CHAPTER V
MINERAL AGREEMENTS

SEC. 48. Modes of mineral agreement. - A mineral agreement may only 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; and

©. 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 State shall be entitled to a share in the
gross output.

In no case shall Financial or Technical Assistance Agreements, or any other similar agreements,
contracts, and/or executive issuances granting license or permission to explore, develop and/or
utilize mineral resources be awarded to foreign entities or persons.

SEC. 49, Eligibility. - Only Filipino citizens or corporations sixty percent (60%) of whose

equity is owned or controlled by such citizens shall be allowed to conduct development,
utilization and processing of mineral resources within the country.

19


SEC. 50. Identification of mining projects. - With the vote of two-thirds of all the
members of the Council, to open areas for mining operations, the Bureau shall prepare the
necessary information sheets on the said area for potential investments. The Bureau shall call
for proposals to develop the mining area based on the Mineral Management Plan.

SEC, 51. Pre-screening of mining proposals. - Mining proposals shall be pre-screened by
‘the Bureau according to the National Industrialization Program and Mineral Management Plan
upon the submission of interested parties of the following:

a. demonstration of financial capability;

b. proven social and environmental track record, including those of its officers and

directors;

clear corporate structure and ownership;

proof of physical office and operations of the proponent within the Philippines;

identification of potential investors;

mining project feasibility;

mining operation work plan;

|. proposed operation, mitigation and prevention methods and/or equipment;
capacity to process minerals;

j._ intent to develop downstream industries;

k. intent to contribute to local community development; and

|. Submission of the Environmental and Social Impact Assessment and Mitigation Plan

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The Council shall fix the minimum capitalization that any bidder must satisfy based on its
determination of the expected economic returns and the potential negative impacts from
mining, upon reference to an independent study proposing such minimum capitalization.

SEC. 52. Environmental and Social Impact Assessment and Mitigation Plan. - The
contractor shall submit an Environmental and Social Impact Assessment and Mitigation Plan
(ESIAMP) containing the means, methods, processes and schedule by which the contractor shall
conduct its operations and mitigate negative environmental and social impacts. Social impact
shall include possible impacts on the enjoyment and exercise of human rights, cultural rights.
The ESIAMP shall include plans relative to mining operations; the rehabilitation, regeneration
and restoration of mineral areas; slope stabilization of mined out and tailings covered areas;
aquaculture, watershed development and water conservation; the relocation and return of
displaced population; and provisions for alternative livelihood and socioeconamic development.

The ESIAMP shall also contain a Social Development Plan which shall likewise contain the plans
of the proponent for the development of the community through the establishment of
infrastructures and programs that shall be sustainable even after the closure of the mine.

SEC. 53. Pre-qualification. - The Bureau shall thereafter Identify the top three (3) proposals
and shall recommend the same to the Council for deliberation,

SEC. 54. Deliberation of the proposals. ~ Pre-conditions provided in Section 45 on the free,
prior and informed consent of persons, landowners, possessors or occupants, communities or
barangay assemblies, IPs/ICCs, and/or local Sanggunians shall likewise be required under this
Section.

20


SEC. 55. Posting and publication requirement. ~ After notice, the Bureau shall notify the
proponent of the accepted proposal and cause the publication and posting of the accepted
proposal.

Provided, That any member of the community may contest the decision of the Council within six
(6) weeks upon the posting and publication of notice of the acceptance of the proposal in the
manner provided in Section 44. No mining operations shall be allowed to be conducted pending
any action questioning the legality or validity of the proposal.

SEC. 56. Issuance of the permit. ~ After six (6) weeks from the date of the posting and
Publication, if no contest is filed, the Bureau shall issue a permit in accordance with the decision
of the Council on the winning proposal.

SEC. 57. Environmental and Social Impact Compliance Certificate. — The mining
proponent shall be issued an Environmental and Social Impact Compliance Certificate by the
Bureau with the approval of the Council.

Provided, That no amendments to the conditions of the Certificate shall be allowed, unless such
proposed amendment shall work for the benefit of the communities, and in which case, the
Council and the Bureau shall be notified of any amendments to the ESIAMP and that the former
should give their consent to the same, after the proponent explaining in detail the reason for
such amendment and the possible impacts and consequences of these amendments.

Provided further, That any violation of the ESIAMP shall cause the cancellation of the
Certificate.

SEC. 58. Maximum areas for mineral agreements. — The maximum area under mineral
agreements that a person can hold at any one time shall be determined by the Council.
Provided, That the contract area per agreement shall not exceed five hundred (500) hectares;

Provided further, That no person shall be awarded in excess of the total contract area of seven
hundred-fifty (750) hectares in any given watershed area. For the purposes of this Act, the
prohibition on the maximum area shall also include corporations that shall have common
directors or significant shareholders.

SEC. 59. Term of mineral agreement. - The term of the mineral agreement shall be
equivalent to the mine life plus an additional five (5) years for the rehabilitation of the mining
area, Provided, That in no case shall a Mineral Agreement have a term beyond fifteen (15)
years. Provided further, That the contractor shall already include rehabilitation/remediation of
the mining area within the ten-year term.

In no case shall a Mineral Agreement be extended without just cause to be determined by the
Council, Provided, That the extension shall not cause the term of the agreement to exceed the
fifteen (15) year term mentioned in the preceding section. Provided further, That for the
purposes of this Act, just cause shall mean acts or events resulting from war, force majeure or
those beyond the control of the mining proponent not attributable to the same.

24


Provided finally, That in no case shall mineral agreements be renewed after the expiration of
the fifteen-year period.

SEC. 60. Prohibition on open-pit mining method and submarine tailings disposal. ~
Open-pit mining method for the extraction of mineral ores and the submarine tailings disposal
method shall be prohibited,

SEC. 61. Failure to initiate mining operations. - Failure to commence the development
stage of the mining operations in accordance with the work program within two (2) years from
the award of the mineral agreement shall cause the cancellation of the mineral agreement. The
contractor thereafter forfeits the value of the improvements made upon the land, The
contractor and other corporations who are also run by the same directors and officers are
thereafter banned from bidding to conduct mining operations for ten (10) years after failure to
commence the development stage of the mining operations in accordance with the work
program.

SEC. 62. Mandatory consultations in each mining phase. ~ Mandatory consultations with
affected persons and communities shall be undertaken in each phase of mining operation:
exploration, extraction, processing, and mine closure to ensure that the peoples shall be
informed of the proposed plans and methods that are proposed to be conducted.

SEC. 63. FPIC on each stage of mining operation. — The free and prior informed consent
of the ICCs/IPs, the barangay assemblies, and private landowners, possessors, occupants shall
be required at each and every stage of the mining operations.

‘As to ICCs/IPs, their free and prior informed consent shall be secured in accordance with their
laws, practices and processes. Violation of any of the conditions imposed by the ICCs/IPs on
the contractor shall cause the cancellation of the mineral agreement. Included in this process is
the explanation of the rights of ICCs/IPs of ownership and self-determination.

SEC. 64, Multi-partite monitoring. — The Council shall form a multi-partite monitoring team
to monitor compliance by the contractor of the terms and conditions of the mineral agreement.
It may conduct ocular inspections of the contract area at any time of the day and night. It shall
also inspect all the books of contractors and refer the same to independent auditors. The Multi-
partite monitoring team and/or the Bureau may confiscate surety, performance and guaranty
bonds posted through an order to be promulgated by the Director. The Council, the Director or
the local government authorities may deputize, when necessary, any member or unit of the
Philippine National Police, barangay, duly registered nongovernment organization (NGO) or any
qualified person to police any and all mining activities.

SEC. 65. Withdrawal from the mineral agreement. ~ The contractor may withdraw from
the mineral agreement at any time for justifiable cause with one (1) month’s notice to the
Bureau, the Council and/or the ICCs/IPs, and other government agencies as may be provided
by law. The Council, in cooperation with other concerned government agencies, shall issue a
clearance for withdrawal upon certifying that the contractor has complied with all its legal
obligations, including the appropriate measures for mine closure and rehabilitation. Funds and
bonds which have been put up by the contractor in accordance with this Act shall be forfeited.

2


SEC. 66. Non-transferability of mineral agreements, - In no case shall mining rights
under this Act be transferrable. The contractor shall also immediately notify the Council and the
Bureau of any substantial change in the ownership and/or control of the corporation. Violation
of this provision shall cause the cancellation of the agreement and forfeiture of assets and
equipment of the contractor in favor of the State,

SEC. 67. Access to information. — All contractors for mineral permits and agreements shall
provide information to affected indigenous peoples, local communities, and local governments.
The following information, among others, shall be required:

The full disclosure of methods and processes of mining;
The full disclosure of environmental and social risks;
The full disclosure of ownership structure; and

The full disclosure of financial sources.

pose

All information and documents related to proposals, mineral agreements, permits and mining
operations shall not be considered confidential. Refusal to grant access to this information shall
be cause for the disqualification of prospective proponents or cancellation of mineral
agreements and permits.

The Bureau, being the repository of all relevant information under this Act is mandated to grant
access to the public of any information in its custody. Refusal or unnecessary delay by the
officers of the Bureau to give information shall be punishable by a fine of fifty thousand pesos
(PhP 50,000.00) for every instance of refusal or unnecessary delay. Information requested by
indigents or marginalized sectors shall be given to them for free.

(CHAPTER VI
SMALL-SCALE MINING

SEC. 68. Applicability of RA 7076. — Small-scale mining shall continue to be governed by
the provisions of Republic Act No. 7076 or the People’s Small-Scale Mining Act of 1991,
Provided, That the Provincial/City Mining Regulatory Board shall be composed of the Governor
or City Mayor, as chairperson, as the case may be, a representative from the DENR as co-
chairperson, one (1) small-scale mining representative, one (1) large-scale mining
representative, one representative from a nongovernment organization who shall come from an
environmental group, one representative from a people's organization (PO) coming from the
marginalized sector, and at least one (1) representative from the indigenous communities,
whenever applicable, as members. The representatives from the private sector, non-
government organization and indigenous communities shall be selected by their respective
organizations and/or communities, and appointed by the PMRB or CMRB: Provided further, That
the conduct of small-scale mining shall also comply with the prohibitions and regulations
established herein for large-scale mining. Only qualified individuals and cooperatives may apply
for a small-scale mining permit.

SEC. 69. Maximum term of small-scale mining permits. - The term for small-scale
mining permits shall be three (3) years, extendable to a maximum of fifteen (15) years.

23


SEC. 70. Traditional small-scale mining within ancestral domains. - The Council shall
conduct regular monitoring activities within its jurisdiction to determine if the provisions of
relevant laws are complied with in traditional small-scale mining by ICCs/IPs within their
respective ancestral domains.

SEC. 71. FPIC in small-scale mining. — Small-scale mining activities within any ancestral
domain by any person shall also require the free, prior, and informed consent of ICCs/IPs.

SEC. 72. Requirement for an Environmental and Social Impact Compliance
Certificate. — Small-scale mining shall likewise require an Environmental and Social Impact
Compliance Certificate. All small-scale mining applicants or proponents must show proof of
compliance with the terms and conditions of its Environmental and Social Impact Compliance
Certificate (ESICC) prior to the issuance of a small scale mining permit. Failure to submit this
requirement will result in the non-issuance of the small-scale mining permit (SSMP).

SEC. 73. Environmental measures in small-scale mining. ~ The State shall immediately
address the environmental and health hazards and problems in small-scale mining, including the
use of hazardous chemicals, such as mercury, cyanide and other chemicals, in the
amalgamation of gold by small-scale miners.

SEC. 74. Prohibition on the use of mercury. ~ Mercury use in small-scale mining shall be
prohibited. The Bureau shall research, develop and actively promote appropriate technologies in
small-scale mining including labor-intensive methods, environmental protection and physical
techniques of gold extraction among small-scale miners.

SEC. 75. Multisectoral monitoring team. — A multisectoral monitoring team shall be
organized to monitor the SSMP permittee’s compliance with the terms and conditions of its
SSMP and ECC. The MMT shall conduct ocular inspections of the SSMP area at any time of the
day and night and shall have visitorial powers.

SEC. 76. Alternative livelihood support. — The state shall support the improvement of the
livelihood of small-scale-miners by extending the services for access to other more viable and
sustainable forms of livelihood, and, if the same is not possible, the following support services:

a. —_access to minerals markets and to financing;

b. facilitating partnership with mining companies or contractors by, among others,
requiring mining companies to buy tailings from small-scale mining operations for
further processing or recycling;

c. facilitating partnership among small-scale mining cooperatives; and

d. other incentives to attract informal small-scale miners to formalize their status.

SEC. 77. Buying stations. - The Bangko Sentral ng Pilipinas shall ensure that buying stations

acquire gold from small-scale traders at prevailing international gold market prices and the
prevailing exchange rate set by the BSP Treasury Department on a daily basis.

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CHAPTER VII
QUARRY RESOURCES

SEC, 78. Quarry resources within ancestral domains. ~ Gathering of quarry resources,
sand and gravel, guano and other organic fertilizer materials, and gemstones within ancestral
domains shall likewise be subject to the free prior informed consent of ICCs/IPs. ICCs/IPs and
the government shall be entitled to at least ten per cent (10%) of royalties depending on
whether the resources are found inside or outside ancestral domains. Permits shall be limited
to a maximum term of five (5) years, renewable for like periods but not exceeding a total term
of twenty five (25) years, and a maximum area of five (5) hectares,

SEC. 79. Quarry Permit. — Any qualified Filipino may apply for a quarry permit on privately-
‘owned lands except ancestral domains 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 at the provincial/city
mining regulatory board. The provincial governor shall grant the permit after the applicant has
complied with all the requirements as prescribed by the rules and regulations set forth by this
Act. Provided, That gathering/extraction of sand for its metallic contents such as magnetite
from the country's rivers and shorelines shall be require a mineral agreement in lieu of a quarry
permit.

The maximum area which a qualified person may hold at any one time shall be limited to a
surface area of 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.

SEC. 80. Quarry Fee and Taxes. — A permittee shall 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.

SEC. 81. 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
Fegulations 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.

SEC. 82. 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 outside ancestral domains 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.

25


SEC. 83. 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 outside ancestral domains that necessitate the use of
mechanical processing covering an area of not 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.

SEC. 84. 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.

SEC. 85. 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 outside ancestral domains 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.

SEC. 86. Private Gratuitous Permit. — Any owner of land may be granted a private
gratuitous permit by the provincial governor to extract sand and gravel, quarry or loose
unconsolidated materials within his property.

SEC. 87. 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/she has an established domicile outside
ancestral domains. 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,
Provided, That extraction does not violate and is consistent with the provisions in the Cave
Conservation Act and the Wildlife Act,

SEC. 88. Gemstone Gathering Permit. — Any qualified Filipino 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 outside ancestral domains.

SEC. 89. Council recommendation for approval. — A\l permits under Chapter VII of this Act
shall require the recommendation of the Multi-Sectoral Mineral Council prior to approval by the
provincial government unit. The absence of a recommendation from the Council prohibits the
approval of any permit in this Chapter.

CHAPTER VIII
TRANSPORT, SALE AND PROCESSING OF MINERALS

SEC. 90. 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 Bureau. The absence of a permit shall be considered as prima facie evidence
of illegal mining and shall be sufficient cause for the confiscation of the ores or minerals being
transported, the tools and equipment utilized, and the vehicle containing the same.

26


SEC. 91. 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.

SEC. 92. Track record. - Only mining companies with demonstrated capacity and good
environmental track record in mineral processing shall be given mineral processing permit. The
Council shall encourage contractors to put up processing plants within the community with the
end in view of generating employment and developing other downstream industries.

SEC. 93. Mineral processing permit. ~ No individual, partnership, partnership, cooperative,
corporation or other entity shall engage in the Secretary of the Department. Of Environment
and Natural Resources (DENR).

In the case of small-scale miners, the processing of mineral ores they produce, 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.

In the case of individuals, corporations, partnerships, cooperatives or other entities who are
parties to a Mineral Agreement or a Financial or Technical Assistance Agreement, holders of
quarry and industrial sand and gravel permits, the approved work program for the production
period shall be sufficient requirement for them to process minerals in lieu of a mineral
processing permit.

‘A mineral processing permit shall be for a period of ten (10) years, renewable for like periods:
Provided, That renewal shall not be allowed unless the permit holder has complied with all the
terms and conditions of the permit and has not been found guilty of violation of any provision of
this Act and its implementing rules and regulations.

After due process, a mineral processing permit may be suspended, revoked or cancelled by the
DENR for violation of its terms and conditions, or of pertinent laws, rules and regulations.

Mineral processing shail be included in the Investment Priority plan to be prepared by the Board
of Investment in accordance with Executive Order No. 226, as amended, otherwise known as
the Omnibus Investment Code of 1987 and shall always be listed as a preferred area of
investment.

CHAPTER IX
DEVELOPMENT OF COMMUNITIES, SCIENCE, AND TECHNOLOGY

SEC. 94. Expenditure for community development. — A contractor shall assist in the
development of the community, and the promotion of the general welfare of its inhabitants
towards sustainable development. Community development projects shall in no way decrease
the obligation of the corporation with regard to royalties and fees due to communities or local
government units. Community development projects should be consistent with the
Comprehensive Land Use Plans (CLUP), Ancestral Domains Sustainable Development and
Protection Plan (ADSDPP) and annual investment plans of the local governments, CADT/CALT
holders and the like.

ea


SEC. 95. Employment of Filipinos and training of members of the local community. ~
A contractor and/or permittee shall give preference to Filipino citizens in all types of mining
employment within the country. Members of the local community shall be trained in all aspects
of the mining operations, including remining, recycling, rehabilitation, and the management
thereof.

SEC. 96. Use of indigenous goods, services and technologies. — A contractor shall give
preference to the use of local goods, services, and the scientific and technical resources in all
stages of mining operations, where the same are of equivalent quality and are available on
equivalent terms as their imported counterparts.

SEC. 97. Donation/turnover of facilities. — Prior to the 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 improvements;
otherwise all the infrastructure, facilities and equipment shall be turned over or donated tax-
free to the proper government authorities, national or local, to ensure that said infrastructure
faclities and equipment are continuously maintained and utilized by the host and neighboring
communities, A fine of one hundred thousand pesos (PhP100,000,00) shall be imposed for
every day of delay.

CHAPTER X
BENEFIT SHARING, TAXES AND FEES

SEC. 98. Taxes and fees. ~ The contractor shall pay all taxes and fees as required by law,
including, but not limited to:

contractor's income tax;

customs, duties and fees on imported capital equipment;
value-added tax on imported goods and services;
withholding tax on interest payments on foreign loans;
withholding tax an dividends to foreign stockholders;
documentary stamps taxes;

capital gains tax;

excise tax on minerals;

local business tax;

real property tax;

community tax;

|. occupation fees;

m, registration, accreditation, and permit fees; and

n, water usage fees.

vrserpaoge

SEC. 99. Government share. — Aside from the taxes and fees referred to in the preceding
section, Government shall have at least a share equivalent to ten per cent (10%) of the gross
revenues from the development and utilization of mineral resources that are owned by it to be
set aside for the general fund of the government to be used, among others, for special projects
such as energy development and generation and the management and conservation of
protected areas in areas within the vicinity or adjacent to mining operations.

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SEC. 100. Indigenous cultural communities’ royalty. — In case of mineral operations
within ancestral domains, the contractor shall pay at least ten percent (10%) of the gross
revenues as royalty to the ICCs/IPs. Community development programs shail not be considered
as royalty payment. The payment of the royalties shall directly be given to the commurities in a
process that bulld on the ICCs/IPs' traditional and customary laws: Provided, That the royalty
established in this Act shall be a minimum royalty payment and may still be subject to other
conditions to be agreed by the parties, free from any external manipulation, interference,
coercion, and other analogous acts, and obtained after fully disclosing the intent and scope,
including the positive and negative impacts of the activity, in a language and process
understandable and acceptable to them.

SEC. 101. Scientific research and development fund. ~ A Scientific Research and
Development Fund shall be set aside to be devoted to research and development of clean
mining technologies, improvement of mining processes, mine rehabilitation, mitigating
technologies, setting up and maintenance of an independent pool of experts, and operational
expenses of the Bureau.

SEC. 102. Legal support services fund. — A \egal support fund shall be set aside for the
use of the communities and local government units for cases that they may file against mining
permittees or cases that may be filed against them by mining companies in trying to do their
esponsibility of protecting the rights of the marginalized groups, the environment and
sustainable development in general.

SEC. 103. Local Government Unit share. — Local Government Units shall be entitled to a
share of the net revenues from mining operations which shall be paid directly to the
provincial/independent component city/highly urbanized city treasurer/s for distribution to other
local government units. To determine the government share, the following variables shall be
considered:

a. Classification of local government;
b. Vulnerability; and
¢. Human development index.

A percentage of this amount shall be set aside by the respective local government units for
Disaster Risk Management. This fund shall likewise benefit ICCs/IPs within the territory of the
local government unit. Provided, That the administrative and operational expenses of the
Council shall also be taken from this share.

SEC. 104. Mine wastes and tailings fees. — & semi-annual fee to be known as mine wastes
and tailings fee is hereby imposed on all operating mining companies in accordance with the
implementing rules and regulations, The mine wastes and tailings fee shall accrue to a fund to
be used as support funds for monitoring activities of the Council. The Secretary is authorized to
increase mine wastes and tailings fees, when public interest so requires.

SEC. 105. Incentives. ~ Incentives that shall be given to the contractors shall only be limited
to pollution control or mitigation devices.

29


SEC. 106. Deposit of capital and profits requirement. - As part of their demonstrated
financial capacity, all large-scale mining companies/contractors are required to deposit their
capital investment and profits in banks or financial institutions that are owned, managed and
operated by the Philippine government.

SEC. 107. General rule on profit repatriation. - Contractors with foreign financial
assistance shall be allowed to repatriate their profits from mining projects that should not
exceed fifty percent (50 %) of the total posted at the end of every fiscal year. Full disclosure of
profits is required. The full repatriation of profits shall be allowed one year after the cessation of
mining activities and the progressive rehabilitation of a mining area as specified in the mineral
agreement of each contractor.

‘The guidelines for Sections 106 and 107 shall be issued by the Bangko Sentral ng Pilipinas and
shall be furnished to the Department, Bureau, Council and all respective contractors in the
industry.

CHAPTER XI
SAFETY AND ENVIRONMENTAL PROTECTION

A. SAFETY

SEC. 108. Mines safety. — All contractors and permittees shall strictly comply with all the
mines and safety rules and regulations concerning the safe and sanitary upkeep of the mines
and mining development. Government personnel involved in the implementation of mines
safety, occupational health and environmental rules and regulations shall be covered under
Republic Act No. 7305 or the Magna Carta of Public Health Workers.

SEC. 109. Mine labor. — No person under sixteen (16) years of age shall be employed in any
place of mining operations and no person under eighteen (18) years of age shall be employed
ina mine.

SEC. 110. Mine supervision. — All mining and quarrying operations shall have at least one
(1) licensed mining engineer for every fifty (50) employees. Such engineer/s shall have at least
five (5) years of experience in mining operations, and one (1) registered foreman.

SEC. 111. Safety of workers. - All mining companies shall provide safeguards to the health
and well-being of workers. The Regional Office of the Department of Labor and Employment
shall inspect all mining sites within their areas of jurisdiction to determine the conditions of
workers. Denial of entry shall be punishable under this Act. Representatives of labor unions
shall also have visitorial rights.

SEC. 112. Mine inspection. - The mines regional directors and the Council shall have
jurisdiction over the safety inspection of all installations, surface or underground, in mining
operations at reasonable hours of 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. Monitoring reports and
recommendations of the Bureau shall be submitted to the Council.

30


SEC. 113. Power to issue orders. - The mines regional director, in consultation with the
Environmental Management Bureau, forthwith or within such time as specified in the order,
require the contractor to remedy any practice connected with mining, which is not in
accordance with safety and anti-pollution laws and regulations. In case of imminent danger to
life or property, the Director may summarily suspend the mining operation until the danger is
removed, or appropriate measures are taken by the contractor. Unreasonable delay to remove
the danger or introduce the necessary improvements by the contractor shall be a cause for the
cancellation of the mineral agreement.

SEC. 114. 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 cause for the imposition of administrative
sanctions prescribed in the rules and regulations implementing this Act.

B. ENVIRONMENTAL PROTECTION

SEC. 115. Environmental Insurance. ~ Contractors and mineral processing permit holders
shall be obliged to execute an insurance contract as an environmental assurance for each and
every source of pollution or disaster, relative to the “worst case scenario” costs, following
accepted actuarial standards, Provided, That in no way shall this provision be construed to
Temove or reduce the liability of the contractors and/or permit holders to compensate any
damage caused by their operations. Provided further, That the insurer shall be an accredited
international company in good standing.

Prior to the approval of the insurance contract by the DENR, the DENR shall seek and consider
the opinion of an independent expert as to the financial credibility of the insurer.

SEC. 116. Calamity and Human Rights Protection Fund. - Persons issued a mineral
agreement shall deposit five million pesos (PhP 5,000,000.00) semi-annually in an interest-
bearing account a common fund maintained by the national government which shall be used for
responding to, or ameliorating the effects of calamities, natural disasters and human rights
violations including militarization, displacement, and forcible evacuation in any part of the
country in relation to mining activities, Provided, That in no way shall this provision be
construed to remove or reduce the liability of the contractors and/or permit holders to
compensate any damage caused by their operations.

SEC. 117. Performance Bond. — The contractor shall put up a bond in an amount equivalent
to fifty per cent (50%) of the projected cost of rehabilitation as validated by independent
studies. This amount shall be deposited in an interest-bearing account. The bond shall be
forfeited in the event that the contractor shall fail or default in the rehabilitation or remediation
of the mining area as included in the work plan of the contractor or abandons the mine at any
time of its operations.

SEC. 118. 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

31


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.

Mining firms are hereby mandated to reforest 100 hectares of land for every one hectare of
land they utilize in the course of their mining operations. Mining firms are also mandated to
immediately restore and replant areas that they have already finished excavating as they move
on to other development sites: Provided, That if mining firms cannot do the reforestation in
their immediate area they could do the reforestation in other areas provided they comply with
100:1 hectare ratio. Any mining firm found to have violated or have not complied with the
foregoing mandatory provisions shall be held liable with the penalty of revocation of their
mining permits and payment of a fine of not less than One Million Pesos (PhP 1,000,000).

The owners, officers and management employee of said mining firms shall also be held liable
and be subject to imprisonment of not less than one (1) year nor more than three (3) years.

SEC. 119. Progressive rehabilitation. — Contractors shall also conduct progressive
rehabilitation activities.

SEC. 120. Adoption of Precautionary Principle. — When an activity related to mining raises
threats of harm to human health or the environment, precautionary measures shall be taken
proactively even if some cause and effect relationship are not fully established scientifically. The
mining proponent and the Bureau shall also be obliged to disclose whether or not the cause and
effect have not yet been scientifically established.

SEC. 121. Adoption of Polluter Pays Principle. — Polluters shall pay for the damage they
cause to the environment. The amount of damages shall be determined by accredited
independent consultants, to be chosen from a list and agreed upon by both the mining
proponent and by the Council.

SEC. 122. Tailings impoundment. - Tailings impoundments shall be built away from critical
watershed drainage areas. Furthermore, it shall be ensured that impoundments will not
endanger critical watershed areas or low lying valleys in the event of accidents under abnormal
conditions. Tailing impoundments and dams shall meet the international standards for large
dams.

SEC. 123. Dumping of waste. - Dumping of waste or tailings in any body of water shall be
prohibited. Provisions on the Clean Water Act and Clean Air Act shall be strictly implemented.

SEC. 124. Use of toxic chemicals and methods. — At all times, mining contractors shall use
chemicals or reagents which would result to the least environmental and social destruction. The
use of mercury and cyanide for the extraction of gold, silver and other minerals shall be
prohibited. The use of blow torching to separate gold from amalgam shall likewise be
prohibited.

32


SEC. 125. Preservation of topsoil. — The removed topsoil, or the more productive horizons
of the soil shall be preserved for other uses.

SEC. 126. Priority use for water. — The National Water Resources Board shall investigate
any existing use of water resources in the area whether or not covered by any existing water
permit or registration, Upon determination of any existing use, the applicant shall procure the
consent of all water users and/or the free prior and informed consent of ICCs/IPs with or
without water permits within the same groundwater network or any downstream users of water
resources. In all instances, priority shall be given to use of water for domestic, municipal, and
agricultural purposes. If potential negative impact on other water users is identified, the water
permit shall not be granted. For water resources within the ancestral domain of indigenous
peoples, no water permit shall be granted by the National Water Resources Board without the
free and prior informed consent of indigenous peoples.

SEC. 127. Recyling of water resources. — Water used in mining operations shall be
recycled. Mining contractors shall be required to provide for the methods or equipment for the
recycling or reuse of water. Released contaminated water shall be treated accordingly to meet
national standards. Released water must at least be equivalent in quality to the baseline water
quality.

‘SEC. 128. Water user fee. — A water user fee that reflects the value of water to the country
and community shall be imposed by the Council for water used in mining operations.
Contractors shall pay the fee to the National Water Resources Board which shall use the same
for monitoring and improvement of the affected waterways and systems and the mitigation of
negative impacts thereon to ensure that communities shall have access to clean water,

C. ACID MINE DRAINAGE

SEC. 129. Prohibition from using acid-generating waste rock to build roads or dams.
= To prevent or mitigate acid mine drainage, there shall be a prohibition against using acid-
generating waste rock to build roads or dams or other infrastructures. The use of such materials
shall only be used after treatment to neutralize the effect of acid mine drainage.

SEC. 130. Establishment of a prediction and monitoring system. ~ The Bureau shall
establish a prediction and monitoring system to identify potential acid-producing materials and
monitor their production of acid waste.

SEC. 131. Avoidance of waterways. - Open pits, waste rock piles and. tailings
impoundments shall not be built near or on waterways to prevent contact and subsequent acid
production and groundwater contamination.

SEC, 132, Remining. — Remining shall be prioritized over the opening of new mines to
maximize and recover the remaining minerals from the rejects or wastes of previous mines and
mining operations, Provided, That remining operations shall follow the processes, standards,
parameters and guidelines set for mining operations in this Act.

SEC. 133. Suits after the termination of contracts or projects. — Recognizing that the
effects of mining may be seen or felt, actions relating to the health of affected communities or

33


peoples, environmental degradation and other similar effects may be maintained against the
project proponent and/or persons even after the mineral agreement or mining project has
terminated.

CHAPTER XII
RESOLUTION OF CONFLICTS

SEC, 134. Panel of arbitrators. - There shall be a panel of arbitrators in the regional office
of the Department composed of three (3) members, two (2) of whom must be members of the
Philippine Bar in good standing and one a licensed mining engineer or a professional in a
related field, and duly designated by the Secretary as recommended by the Mines and
Geosciences Bureau Director. Those designated as members of the panel shall serve as such in
addition to their work in the Department without receiving any additional compensation As
much as practicable, said members shall come from the different bureaus of the Department in
the region. The presiding officer thereof shall be selected by the drawing of lots. His tenure as
presiding officer shall be on a yearly basis. The members of the panel shall perform their duties
and obligations in hearing and deciding cases until their designation is withdrawn or revoked by
the Secretary. Within thirty (30) working days, after the submission of the case by the parties
for decision, the panel shall have exclusive and original jurisdiction to hear and decide on the
following:

a. Questions involving compliance with the established technical guidelines and
standards herein established, or those to be established by the implementing
rules and regulations of this Act;

b. Questions involving the compliance with technical procedures herein established,
or those to be established by the implementing rules and regulations; and,

¢. _ Other similar instances wherein the technological and technical expertise of the
Department shall be needed.

Disputes involving real rights, contractual obligations and the other causes of action that are
outside the technological and technical expertise of the Panel of Arbitrators shall be under the
jurisdiction of the regular courts or as otherwise provided by other special laws.

Provided, That disputes pending before the Bureau and the Department at the date of the
effectivity of this Act shall undergo an immediate review within sixty (60) working days upon
the passage of this Act to determine the cause of action. Those which are outside the technical
expertise of the Department or Bureau shall be refiled with the appropriate court, without costs
to the complainant or petitioner.

SEC. 135. Appeal, - The decision or order of the panel of arbitrators may be appealed by the
party not satisfied thereto to the Mines Adjudication Board within fifteen (15) days from receipt
thereof which must decide the case within thirty (30) days from submission thereof for decision.

SEC. 136. Mines Adjudication Board (MAB). — The Mines Adjudication Board shall be
composed of three (3) members. The Secretary of the DENR shall be the Chairperson with the

34


Director of the Mines and Geosciences Bureau and the Undersecretary for Operations of the
Department as members thereof. The Board shall have the following powers and functions:

a

To promulgate rules and regulations governing the hearing and disposition of
cases before it, as well as those pertaining to its internal functions, and such
rules and regulations as may be necessary to carry out its functions;

To administer oaths, summon the parties to a controversy, issue subpoenas
requiring the attendance and testimony of witnesses or the production of such
books, papers, contracts, records, statement of accounts, agreements, and other
documents as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in
pursuance of this Act;

To conduct hearings on all matters within its jurisdiction, proceed to hear and
determine the disputes in the absence of any party thereto who has been
summoned or served with notice to appear, conduct its proceedings or any part
thereof in public or in private, adjourn its hearings at any time and place, refer
technical matters or accounts to an expert and to accept his report as evidence
after hearing of the parties upon due notice, direct parties to be joined in or
excluded from the proceedings, correct, amend, or waive any error, defect or
irregularity, whether in substance or in form, give all such directions as it may
deem necessary or expedient in the determination of the dispute before it, and
dismiss the mining dispute as part thereof, where it is trivial or where further
proceedings by the Board are not necessary or desirable:

To hold any person in contempt, directly or indirectly, and impose appropriate
penalties therefor; and

To enjoin any or all acts involving or arising from any case pending before it
which, if not restrained forthwith, may cause grave or irreparable damage to any
of the parties to the case or seriously affect social and economic stability.

In any proceeding before the Board, the rules of evidence prevailing in courts of law or equity
shall not be controlling and it is the spirit and intention of this Act that shall govern. The Board
shall use every and all reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure, all in the interest of due
process and social justice. In any proceeding before the Board, the parties may be represented
by legal counsel. The findings of fact of the Board shall be conclusive and binding on the parties
and its decision or order shall be final and executory.

A petition for review by certiorari and question of law may be filed by the aggrieved party with
the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.

35


CHAPTER XIII
ACCESS TO JUSTICE

SEC. 137. Obligation to respect human rights. — Corporations shall respect, protect and
Promote the human rights of communities affected by mining, including the right to life, liberty
and property, freedom of movement, right of public participation and the right to self-
determination of indigenous cultural communities.

SEC. 138. Violations of human rights. — extrajudicial killing, torture, involuntary
disappearance, forcible displacement of populations, setting up of checkpoints, and imposition
Of toll fees which impede the freedom of movement within mineral areas, deprivation of food
and water sources, vote-buying and bribery for the purpose of securing consent or
endorsement for the mining project, and other analogous acts are violations of human rights,
Violations of human rights by contractors shall cause the immediate cancellation of mineral
agreements. The offending contractor, as well as corporations having the same directors and/or
officers as of the offending contractor shall be perpetually disqualified from being granted a
mineral agreement. All equipment and assets of the corporation or person shall be confiscated
in favor of the government.

SEC. 139. Use of paramilitary and military forces. — All mining companies are strictly
prohibited from employing paramilitary groups. Use of private and military forces shall result in
the automatic cancellation of the mineral agreement and the filing of appropriate civil, criminal
and/or administrative charges.

SEC. 140. Strategic Legal Action Against Public Participation (SLAPP). - SLAPPs shall
be strictly prohibited. SLAPP is any legal action, whether civil, criminal or administrative, filed to
harass, vex, exert legal action or stifle legal recourses of community members complaining
against violations of this Act or enforcing the provisions of the Act, or exercising their freedom
of assembly or right of public participation. The investigating prosecutor or court shall
immediately determine within a period of thirty (30) days from filing thereof whether a legal
action is a SLAPP and accordingly dismiss the same.

SEC. 141. Indigents’ suit. — Indigents shall be exempt from payment of any administrative ot
court fees, including docket fees for the filing of a case. Lawyers shall be provided by the Public
Attorney's Office to pauper litigants in case they could not afford legal services.

SEC. 142. Application of the customary laws of ICCs/IPs. — The contractor shall respect
the customary laws of the ICCs/IPs and shall submit to the Processes of their customary laws,
Provided, That these laws are not contraty to the provisions of the Constitution.

SEC. 143. Strict liability. - Mining corporations are strictly liable for all damages that the
mining operations might cause. In case of any actual damage, the burden of proof shall lie with
the corporations,

SEC. 144, Piercing the corporate veil. - When the separate personality of the corporation

from its shareholders is being invoked as defense in order to perpetuate a crime, fraud or other
machinations, or evade liability, the separate personality of the corporation shall be set aside.

36


Civil, criminal and administrative actions may thus be filed directly against the members of the
Board of Directors, officers and/or individual stockholders.

SEC. 145. Citizen suits. - For the purpose of enforcing the provisions of this Act or its
implementing rules and regulations, any citizen may file appropriate civil, criminal and
administrative suits against any of the following:

a. Any person who violates or fails to comply with the provisions of this Act or its
implementing rules and regulations;

b, Any public officer with respect to orders, rules and regulations inconsistent with
this Act; or

. Any public officer who willfully or grossly neglects the performance of an act

specifically enjoined as a duty by this Act or its rules and regulations; or abuses
the authority in the performance of a duty or duties under this Act or its
implementing rules and regulations.

The court shall exempt such action from the Payment of filing fees, except fees for actions not
capable of pecuniary estimation, and shall likewise, upon prima facie showing of non-
enforcement or violation complained ‘of, exempt the plaintiff from filing an injunction bond for
the issuance of a preliminary injunction.

The court shall determine whether or not the complaint is malicious or baseless and shall
accordingly dismiss the petition within thirty (30) days upon the filing of the case.

CHAPTER XIV
PENAL PROVISIONS

SEC, 146, Grounds for the cancellation of mineral agreements and, permits. —

a. Violation of any provision of this Act;
b. Human rights violations perpetrated by the contractor or any agent of the

contractor;

c. _Non-payment of taxes;

d. Bribery, use of force, intimidation, threat, coercion of public officials and
communities;

©. Any act that shall create or contribute to conflicts; and

f. Other analogous acts.
Provided, That, violations of environmental provisions shall cause the immediate cancellation of
mining permits, and the contractor shall be required to pay for the rehabilitation, restoration or
clean up of the impacts of such violations.

Corporations, corporate directors and/or officers found guilty of the above enumeration may be
subjected to a perpetual ban in the mining industry in the Philippines.

7


SEC. 147. False statements. - Any person who knowingly presents any false application,
declaration, or evidence to the Government or publishes or causes to be published any
prospectus or other information containing any false statement relating to mines, mining
operations or mineral agreements and permits shall, upon conviction, be penalized by a fine of
not exceeding One Hundred Thousand pesos (PhP100,000.00)..

‘SEC. 148. Illegal exploration. - Any person undertaking exploration work without the
necessary exploration permit shall, upon conviction, be penalized by a fine of not exceeding
Five Million pesos (P5,000,000.00)..

SEC. 149. Theft of minerals. - Any person extracting minerals and disposing the same
without a mining agreement, lease, permit, license, or steals minerals or ores or the products
thereof from mines or mills or processing plants shall, upon conviction, be imprisoned from six
(6) months to six (6) years or pay a fine from One Hundred thousand pesos (P100,000.00) to
One Million pesos (PhP1,000,000.00) or both, at the discretion of the appropriate court. In
addition, he shall be liable to pay damages and compensation for the minerals removed,
extracted, and disposed of. In the case of associations, partnerships, or corporations, the
president and each of the directors thereof shall be responsible for the acts committed by such
association, corporation, or partnership.

SEC. 150. Unauthorized dealing, selling, and/or buying of gold. - Any person,
partnership or corporation who shall sell, buy or in any manner deal gold from any miner or
person without being duly authorized by the Bangko Sentral ng Pilipinas shall be punished as
unauthorized dealing and shall be penalized in accordance with the provisions in this Act.

SEC. 151. Destruction of mining structures. — Any person who willfully destroys or
damages structures in or on the mining area or on the mill sites shall, upon conviction, be
imprisoned for a period not to exceed five (5) years and shall, in addition, pay compensation for
the damages which may have been caused thereby.

SEC. 152. Mines arson. - Any person who willfully sets fire to any mineral stockpile, mine or
workings, fittings or a mine, shall be guilty of arson and shall be punished, upon conviction, by
the appropriate court in accordance with the provisions of the Revised Penal Code and shall, in
addition, pay compensation for the damages caused hereby.

SEC. 153. Willful damage to a mine. — Any person who willfully damages a mine, unlawfully
causes water to run into a mine, obstructs any shaft or passage to a mine, renders useless,
damages or destroys any machine, appliance, apparatus, rope, chain, tackle, or any other
things used in a mine, shall be punished, upon conviction, by the appropriate court, by
imprisonment not exceeding a period of five (5) years and shall, in addition, pay compensation
for the damages caused thereby.

SEC. 154. Illegal obstruction to permittees or contractors. ~ Any person who, without
justifiable cause, prevents or obstructs the holder of any permit, agreement or lease from
undertaking his mining operations shall be punished, upon conviction by the appropriate court,
by a fine not exceeding Five thousand pesos (PhP 5,000.00).

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SEC. 155. Vitiation of FPIC. - Any person found to have vitiated the consent of the ICCs/IPs
through bribery, threat, force, and/or intimidation, or any other similar means, shall suffer the
penalty of six (6) years and one (1) day to ten (10) years in prison, and a fine of at least two
million pesos (PhP 2,000,000.00). If the perpetrator is a government official, the penalty shall
be eight (8) years and one (1) day to twelve (12) years imprisonment, and a fine of at least
four (4) million pesos (PhP 4,000,000.00). He/she shall be perpetually prohibited from
assuming public office, and shall be disqualified from receiving other benefits by virtue of
his/her position in government.

SEC. 156. Penalty for human rights violations. ~ Contractors or other persons who have
Violated the human rights of communities in connection with the mining operations shall be
penalized with ten (10) years to fourteen (14) years imprisonment and a fine of at least five
million pesos (PhP 5,000.000,00) and shall indemnify the victims.

SEC. 157. Amendment to Section 27 of Republic Act No. 7076 or the Small-scale
Mining Act. - Violations of the provisions of RA 7076 or of the rules and regulations issued
pursuant hereto shall be penalized with imprisonment of six (6) years and 1 day to twelve (12)
years. The State shall confiscate and seize equipment, tools and instruments; effect immediate
suspension or closure of the mining activities of the permittee concerned, and revoke the
permit.

SEC. 158. Abandonment, - Contractors and/or permittees who shall abandon mines shall be
perpetually banned or disqualified from conducting mining operations, directly or indirectly. The
ban and/or disqualification shall include the officers and directors of corporations that have
abandoned mines

SEC. 159. Confiscation of equipment and property. ~ The equipment and property of
contractors and permit holders violating this Act shall be forfeited in favor of the government.

SEC. 160. Non-application of the corporate veil. — Any person violating the provisions of
Commonwealth Act No. 108, or the Anti-Dummy Law of the Philippines as amended, or is found
to have used the corporate structure to defeat the provisions of this Act shall suffer the penalty
of five million pesos (PhP 5,000,000.00) and perpetual ban in the mining industry.

SEC. 161. Reinstatement of revoked permits, — After notice and hearing, revoked permits
that have undergone due process may be reinstated, Provided, That it may only be reinstated
once.

CHAPTER XV
TRANSITORY PROVISIONS

SEC. 162. — There shall be a moratorium on all mining activities until all the systems are in
place for the proper implementation of the law.

SEC. 163. — All existing mining permits, licenses and agreements are hereby deemed
cancelled. Those mine workers and their families that may be displaced during the transition
period shall receive livelihood support and job placements to be facilitated by the appropriate
agencies of the State.

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‘SEC. 164, — The classification of public lands as mineral reservations pursuant to pre-existing
laws shall hereby cease. All such lands shall be closed to mining unless opened thereto in
accordance with the provisions of this Act. The President's power to declare mineral
reservations shall henceforth cease to exist. A review of the current mineral land classification
shall be conducted to determine the best livelihood and economic option for the said area.

SEC. 165. — The members of the panels of arbitrators and the provincial or city mining
regulatory boards established under Republic Act No. 7942 shall hold-over their positions until
replaced in accordance with provisions of this Act.

CHAPTER XVI
FINAL PROVISIONS

SEC. 166. Separability Clause. — The provisions of this Act are hereby declared to be
separable and, in the event of any such provisions are declared unconstitutional, the other
provisions which are not affected thereby shall remain in force and effect.

SEC. 167. Repealing Clause. — Republic Act No. 7942, Presidential Decree 463, Presidential
Decree 512, and other related mining laws are hereby repealed. All provisions in laws, decrees,
issuances and other regulations inconsistent with this present law shall be deemed amended or
repealed if the inconsistency is irreconcilable.

SEC. 168. Funds. - The amount of One Hundred Billion Pesos (PhP 100,000,000,000.00) is
hereby appropriated for the proper functioning of the Bureau, the Council, and other bodies
established under this Act of which half of the said amount shall be allotted for the baseline
mineral exploration activities of the Bureau.

SEC. 169. Implementing Rules and Regulations. - The implementing rules and
regulations of this Act shall be the product of joint collaboration by the Department, and
representatives from the local government units, peoples’ organizations, sectoral organizations
and non-governmental organizations, and shall be drawn up after appropriate and exhaustive
public consultations at all levels nationwide,

SEC. 170. Effectivity. - This Act shall take effect within fifteen (15) days following its
publication in two (2) national newspapers of general circulation in the Philippines.

Approved,