NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE 
S. B. NO. 577
of t!)c
72 JUL14 A10 52
RECEIVfcD BY;
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
PROVIDING FOR THE CREATION OF THE PHILIPPINE 
EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE 
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The extractive industries have the capacity to contribute to the national 
growth and development, especially in resource-rich countries like the 
Philippines. They have the potential to provide livelihood opportunities, create 
jobs, and channel additional government resources to host communities. The 
gains from the oil, gas, and mineral resources, nevertheless, do not always 
translate to benefits for the general public. Across the globe, extractive 
industries are marred with various issues on environmental degradation, fiscal 
misconduct, poverty, and corruption.
In response to these issues, the Extractive Industries Transparency 
Initiative (EITI) was launched to allow for full disclosure of, and public access 
to, information regarding the extractive industry. The EITI is an internationally 
recognized framework and practice that monitors revenue and public benefit 
from mining and other extractive resources. Composed of representatives from 
the government, extractive industry players, and civil society organizations, 
EITI provides a platform for regular and systematic reporting, review, and 
assessment of information concerning the industry. It also strengthens multi­
sectoral participation in crafting and implementing regulatory policies governing 
the extractive industry.


In the Philippines, the EITI was established on November 26, 2013, 
pursuant to Executive Order No. 147 entitled “Creating the Philippine Extractive 
Industries Transparency Initiative.” Since its inception, the Philippine EITI (PH- 
EIT!) served as an effective platform for public disclosure of information on fees, 
taxes and other payments made by mining companies. The later expansion of 
PH-EITI enabled the coverage of oil and gas industries. Furthermore, regular 
reports published by the PH-EITI also later expanded to include publicly 
disclosed information on social and environmental impact of the extractive 
industries.
Among the impacts of this initiative, the PH-EITI strengthened the 
capacity of local government units (LGUs) - as well as other stakeholders such 
as community groups, civil society organizations, and indigenous people - in 
monitoring the mining activities in their respective areas through regular 
disclosure of the share of LGUs in the revenues from extractive industries. 
Over the years since its inception, PH-EITI data collection and reporting 
provided different stakeholders the instrument and proper platform to formulate 
real governance reforms on the ground.
To ensure the continuation of the reforms introduced and established by 
the said initiative, this bill seeks to institutionalize the creation of the Philippine 
EITI. Institutionalizing the PH-EITI will enable the multi-sectoral initiative not 
only to continue its efforts, but also to pursue other reforms that will allow the 
country to further maximize the benefits from the extractive industry.
The immediate passage of this bill is earnestly sought.
SENATOR JOEL VILLANUEVA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
Senate
of tviliuy
72 JUL14 A10 52
RHCEIVrOBV:
S. B. NO.
r:77
Introduced by SENATOR JOEL VILLANUEVA
AN ACT
PROVIDING FOR THE CREATION OF THE PHILIPPINE 
EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE 
AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines In 
Congress assembled:
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CHAPTER I
GENERAL PROVISIONS
SECTION 1. Title. - This Act shall be known as the ''Philippine Extractive 
Industries Transparency Initiative Act."
SEC. 2. Declaration of Principles. - All natural resources are owned 
by Filipinos represented by the State. It shall be the responsibility of the State 
to ensure that the present and future generations benefit from these finite 
resources. The State must then establish a mechanism by which the Filipino 
people are fully aware of how proceeds from their finite resources are being 
utilized.
SEC. 3. Definition of Terms. -
a) Agreement means a contract between the Government and a 
Contractor, involving financial or technical matters;
b) Contractor means a qualified person acting alone or in consortium 
who is a party to a mineral agreement or to a financial or technical 
assistance agreement.
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c) Extractive Industries refer to the mining, oil, gas and coal sectors, 
and all other sectors that require the extraction of non-renewable 
natural resources for commercial use;
d) Financial or Technical Assistance Agreement (FTAA) means a 
contract involving financial or technical assistance for large-scale 
exploration, development and utilization of mineral resources;
e) Independent Firm refers to an accounting or auditing firm that has 
no existing relationship with either the Government or any of the 
companies that are part of the Philippine Extractive Industries 
Transparency Initiative (PH-EITI);
f) 
Mineral Production Sharing Agreement (MPSA) means 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 provides the 
financing, technology, management and personnel necessary for 
the implementation of the agreement;
g) Multi-stakeholder Group (MSG) shall have the meaning given to it 
under Section 14 of this Act; and
h) State refers to the Republic of the Philippines.
CHAPTER II
ESTABLISHMENT OF THE PHILIPPINE 
EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATITVE
SEC. 4. Creation of PH-EITI. - There is hereby created the Philippine 
Extractive Industries Transparency Initiative (PH-EITI).
SEC. 5. Composition. - The PH-EITI shall be composed of a broad 
coalition of stakeholders, including representatives from the government, the 
private sector, the indigenous community, and non-governmental 
organizations. The PH-EITI shall be governed by a multi-stakeholder body (PH- 
EITI MSG), which shall be constituted in accordance with the provisions of 
Chapter V of this Act.
CHAPTER III
OBJECTIVES OF THE PH-EITI
SEC. 6. General Objectives. - The general objective of the PH-EITI is 
to improve governance and management of the natural resources in the country 
and ensure that all of what is due to the Filipino people and the Government on 
account of the exploitation and/or extraction of the country’s mineral, oil, gas 
and other natural resources are (a) verifiably paid; (b) duly accounted for; and 
(c) judiciously utilized for the benefits of all Filipinos and on the basis of 
intergenerational equity and sustainability.


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SEC. 7. Specific Objectives. - The specific objectives of the PH-EITI 
shall include, but not be limited, to the following;
a) 
Ensure sustained political commitment for the initiative and mobilize 
resources to sustain its activities and goals;
b) 
Require all companies engaged in the extraction of natural resources to 
participate in such initiative;
c) 
Promote genuine participation of civil society in the design, 
implementation, evaluation, and modification of policies and actions of 
the Government associated with resource governance in the 
Philippines;
d) 
Implement and ensure compliance to the standards and policies of the 
global initiative;
e) 
Ensure that the initiative is effectively integrated in other related 
government reform agenda; and
f) 
Promote better understanding of the public on the nature of extractive 
industries and the benefits of transparent and accountable governance 
of our natural resources.
CHAPTER IV
SCOPE AND FOCUS OF THE PH-EITI
SEC. 8. Applicability. - This Act shall apply to all extractive industries, 
government agencies at the national and local level in the country. National and 
local governments shall be mandatorily required to participate in reporting 
relevant data pursuant to this Act.
SEC. 9. Scope. - The scope of the PH-EITI shall include:
a) 
Revenue transparency, which means the timely disclosure, 
reconciliation or audit and publication of all data of material national and 
local payments and revenues sourced from the extractive activities 
covered by the scope of the PH-EITI;
b) 
Contract transparency, which means public accessibility of all 
concessions, contracts/licenses, agreements and joint ventures that the 
Government enters into related to the extractive sectors within the 
scope of the PH-EITI including related documents and attachments to 
the contracts; and
c) 
Accessibility of data, information and reports on the extractive 
industries, which means public release of data, documents, and 
information in a format that allows the public to freely use, re-use and 
redistribute them, for any purpose, without restrictions.


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SEC. 10. Sectors Covered. - For the purpose of this Act, the following 
sectors shall be covered by and within the scope of the PH-EITI: (a) the mining 
sector; (b) the oil and gas sector; (c) the coal sector; and (d) such other sectors 
as the multi-stakeholder group may subsequently determine and deem 
necessary. The covered sectors shall submit relevant data, including, but not 
limited, to the cost of their operations, amount of minerals sold, which shall be 
disaggregated per transaction, and include such information as the name of the 
buyer/s, country of destination, among others, and other related costs, which 
shall also be disaggregated.
SEC. 11. Annual Report. - The PH-EITI shall submit an annual report 
to the President and Congress, in any case not later than April 30 of each year.
The annual report to be prepared, submitted, and published by the PH-EITI 
shall comply with the international standards of EITI and include additional 
reporting requirements as agreed upon by the PH-EITI MSG.
SEC. 12. Monitoring of Payments. - The payment and utilization of 
taxes, fees, surcharges, and similar charges made by extractive companies 
and/or contractors shall be closely monitored by the PH-EITI. All fiscal 
payments and mandatory expenditures by contractors shall be disclosed to the 
PH-EITI MSG for the production of the annual EITI report. National and local 
governments shall also submit a report on how the proceeds from the extraction 
of resources were utilized.
CHAPTER V
CREATION OF MULTI-STAKEHOLDER GROUP
SEC. 13. Composition. - In accordance with the EITI International 
Standards and with due regard to the Philippine context, there shall be created 
a multi-stakeholder group (MSG) that will be in charge of PH-EITI.
The PH-EITI MSG shall be headed by Chairperson, to be appointed by 
the President of the Philippines, who must be either; (1) a Cabinet secretary,
(2) the head of the interagency coordinating council on the extractive sector, or
(3) a presidential adviser. The functions of the Chairperson shall include 
convening the group and organizing a secretariat.
The PH-EITI MSG shall likewise consist of representatives from the 
following sectors:
a) Government Representatives. The government representatives shall be 
composed of (1) senior officials from concerned agencies appointed by 
the President of the Philippines, (2) representatives from local 
government units, which shall be the president of the leagues of various 
local government units; and (3) representatives from the Congress, to 
ensure that the findings of the EITI will be used for more effective and 
more responsive policies;


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b) Industry Representatives. The industry representatives shall be 
composed of officials from the extractive industries included in the ElTl;
c) Civil Society Organizations (CSOs) Representatives. The civil society 
shall independently select their representatives in the EITI; and
d) Indigenous Peoples (IPs) Representatives. The IP representative shall 
be selected by a caucus of IP organizations affected by mining 
operations.
The Chairperson and the members shall designate a permanent and 
alternate representative to PH-EITI MSG. Each organization, upon the decision 
of its members and through its independent process, can replace their 
representatives in the MSG any time following their own governance 
mechanism.
SEC. 14. Regular Meeting of PH-EITI MSG.
meet once a quarter, or as often as necessary.
The PH-EITl MSG shall
For urgent matters where decision is needed, necessary information 
shall be circulated through email so that decisions can be made electronically 
by consensus.
Fifty percent ('50%) of the members, with at least one representative from 
the government, CSOs, IPs, and business sector shall constitute a quorum for 
the transaction of business of PFI-EITI MSG. The MSG, shall, in good faith, 
make decisions by consensus.
SEC. 15. Annual Meeting of PH-EITI MSG Members. - The members 
of PFI-EITI MSG shall hold their annual meeting on the month of April of each 
year. The agenda of the meeting shall include, but not be limited to, the approval 
of the activities, reports, accounts and the activity plan of the PH-EITI, and any 
other acts or matters which may be brought to the attention of the PH-EITI in 
the pursuit of its mandate as provided under this Act and relevant regulations.
SEC. 16. Notice of Meetings. - The Chairperson shall call and preside 
over the meetings. Notices shall be sent out by the PH-EITI secretariat at least 
one week before the date of the meeting. The secretariat shall handle the 
documentation and preparations of the minutes of the meeting.
SEC. 17. Review of the MSG. - The composition and number of 
representatives shall be subject to regular review by the PH-EITI MSG. Other 
agencies may form part of the MSG, subject to the evolving needs and scope 
of the EITI implementation; Provided, That ail sectors should be adequately 
represented in the MSG at all times; Provided further, That the existing PH-EITI 
created under Executive Order No. 147, s. 2013 shall be henceforth constituted 
under the provisions of this Act.
CHAPTER VI
SECRETARIAT OFFICE AND FUNDING


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SEC. 18. PH-EITI Office. - There is hereby created the PH-EITI Office 
under the Office of the President, to be headed by a National Coordinator 
selected by the PH-EITI MSG.
The staffing pattern, including the duties, qualifications, responsibilities 
and functions, and compensation scheme of the personnel of the PH-EITI 
Office shall be determined by the MSG, upon the recommendation by the 
National Coordinator. For this purpose, the creation of the corresponding 
plantilla positions is hereby authorized.
SEC. 19. Funding. - The Congress shall allocate adequate funding for 
the implementation of PH-EITI in the Genera! Appropriations Act; Provided, 
That the said amount shall not be less than the amount equivalent to one 
percent to two percent (1% to 2%) of the gross proceeds of the sectors covered 
by and within the scope of the PH-EITI, as defined in Section 10 of this Act.
The PH-EITI Office shall have the authority to receive, disburse, and 
manage financial aid or grants from foreign and domestic entities to be utilized 
for the implementation of the objectives of PH-EITI, subject to the usual 
accounting and auditing rules and regulations of the government.
CHAPTER VII
EXEMPTION FROM CONFIDENTIALITY CLAUSES
SEC. 20. Exemption from Confidentiality Clauses. — Confidentiality 
provisions stated under applicable laws, including, but not limited, to the 
provisions of Section 270 of the National Internal Revenue Code, Article 81 of 
the Omnibus Investments Code, among others, shall not be applicable to 
extractive companies insofar as their participation in the PH-EITI process is 
concerned.
CHAPTER VIII
PENALTIES
SEC. 21. Penalties. - Failure to participate in PH-EITI shall be a ground 
for suspension of the contractor’s permit to operate and blacklisting for future 
projects. A contractor that, without justifiable cause, unreasonably delays or 
causes the delay of submission of the reporting template within the deadline 
set by PH-EITI shall be imposed a fine of One Million Pesos (Phpl ,000,000.00). 
Sanctions provided under this Act shall be imposed by the responsible 
regulatory agency, as the case may be, pursuant to the concerned agency’s 
internal rules and regulations.
CHAPTER IX
TRANSITORY AND MISCELLANEOUS PROVISIONS
SEC. 22. Implementing Rules and Regulations. - Within sixty (60) 
days from the effectivity of this Act, the Secretaries of Finance, Budget and 
Management, Environment and Natural Resources, Interior and Local


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Government, and Energy, in consultation with relevant stakeholders, shall 
promulgate the necessary rules and regulations for the effective 
implementation of this Act.
SEC. 23. Separability Clause. - If any provision of this Act is declared 
unconstitutional or invalid, other parts or provisions hereof not affected thereby 
shall continue to be in full force and effect.
SEC. 24. Repealing Clause.-AW laws, decrees, executive orders, rules 
and regulations or parts thereof which are contrary to or inconsistent with this 
Act are hereby repealed, amended or modified accordingly: provided, that 
nothing in this Act shall be construed as a diminution of local autonomy or in 
derogation of ancestral domain rights under the Indigenous Peoples’ Right Act 
of 1997.
SEC. 25. Effectivity. - This Act shall take effect fifteen (15) days after 
its publication in this Official Gazette or in any two newspapers of general 
circulation.
Approved,