RECEIVED
pare, 18 JUL 2018

TINE: o
BY:

Republic of the Philippines
HOUSE OF REPRESENT ATIVES|
Quezon City

REEISTPATON UNIT

SEVENTEENTH CONGRESS
Sostan BILLS AND iKuLX Si RVICE

First Regular Session

HOUSE BILL NO. 1665

Introduced by HON. RONALD M. COSALAN

EXPLANATORY NOTE

It is undeniable that the mining industry has potentials for the country’s
development, given our rich natural and mineral resources,

However, mining has become the bane of the environment, considering its effects
on the forests and mountains and the calamities ascribed to have been caused by it.
Further, the promised economic advantage, especially for the indigenous peoples and
small scale miners, is still yet to be realized despite passage of considerable time.

Hence, there is an overwhelming need for a review of current local mining laws.
in order to formulate a framework that would focus on prudent use of natural
resources, protection of the environment and the people to be affected like indigenous
peoples, multi-party participation for sustainable development and poverty reduction
Ivis this goal that this bill seeks to provide, It is the hope that the experiences from the
past has resulted to lessons that would lead to a more responsible, participative and
transparent exploration, development and utilization of mineral resources. Protection,
mitigation and rehabilitation of the environment should also be top of mind, while
prioritizing protection of communities and individuals.

This bill seeks to improve regulation and rationalize the industry which is called
for by the times. Support for this bill is earnestly sought.

|. RONALD M, COSALAIN

: District, Benguet



Vow RUNS

om

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL Nos

1665

Introduced by HON. RONALD M, COSALAN

AN ACT
TO REVITALIZE THE MINERAL RESOURCE EXTRACTIVE INDUSTRY,
REGULATE THE RATIONAL EXPLORATION, DEVELOPMENT AND
UTILIZATION OF MINERAL RESOURCES, 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 |
DECLARATION OF POLICIES.
Section 1. Short Title. This Act shall be known as the “Philippine Mineral Resources
Extractive Industry Revitalization Act of 2013”.

Section 2. Declaration of Policies. All mineral resources in public and private lands
within the territory and exclusive economic zone of the Republic of the Philippines are owned by
the State, It shall be the responsibility of the State to promote their rational exploration,
development, utilization and conservation, as well as ensure an equitable sharing of benefits for
the state, indigenous peoples and local communities, through the combined efforts of the
Government and private sector in order to enhance national growth in a way that effectively

safeguards the environment and protects the rights of aflected communities.

In so doing, Government shall adhere to the principle of sustainable development which

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aims to meet the needs of the present without compromising the ability of the furure
generations to meet their own needs, with the view of improving the total quality of life, both now

and in the future, Consequently:

a, Mineral resource exploration, development, utilization and conservation
imust lead to sustainable wealth creation and an improved quality of life for impacted communities
under the following terms:

i. Mining is @ temporary land use which, when done responsibly, leads to alternative

land uses in the pos

mining stage, through progressive and engineered mine
rehabilitation work done in cycle with mining operations;

ii, Mining activities. must always be guided by current best practices in
environmental management committed to reducing the impacts of mining and
effectively and efficiently protecting the environment;

iii, ‘The wealth accruing to the Government and communities as a result of mining
should also lead to other wealth- generating opportunities for people and to other
environment-responsible endeavors;

iv. Mining activities shall be undertaken with due and equal emphasis on economic
and environmental considerations, as well as for health, safety, social and cultural
concerns; and

V. Conservation of minerals is effected not only through recycling of mineral-based
products to effectively lengthen the usable life of mineral commodities but also
through the technological efficiency of mining operations.

be Investments in commercial mining activities ftom both domestic and
international sources shall be promoted in accordance with State policies and the principles and

objectives herein stated,

c. The granting of mining rights shall harmonize existing activities, policies and
programs of the Government that promote self-reliance, development and tesource management.
Activities, policies and programs that promote community-based and community-oriented

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development

shall be encouraged, consistent with the principles of people empowerment and

grassroots development,

Section 3, Objectives. These rules and regulations are promulgated toward the

attainment of’ the following objectives:

a

To promote the rational exploration, development, utilization and conservation of

mineral resources under the full control and supervision of the State;

‘To enhance the contribution of mineral resources to economic recovery and
national development, with due regard to the protection of the environment and
the affected communities, as well as the development of local science and technical

resources;

‘To encourage investments in exploration and commercial mining activities to
assure a steady supply of minerals and metals for material needs of both present and
future society and to generate wealth in terms of taxes, employment generation,
foreign exchange earnings and regional development:

‘To promote equitable access to economically efficient development and fair sharing
of benefits and costs derived from the exploration, development and utilization of

mineral resources; and

‘To enable the Government and the investor to recover their share in the production,
utilization and processing of minerals to attain sustainable development with due
regard to the environment, social equity and fair return of investment.

Section 4, Resource Extraction in Line with a National Industrialization Program.

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. 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


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the domestic economy and uphold the rights of industry workers, indigenous peoples and local

communities.

Section 5, Definition of terms. As used in and for ihe purposes of this Act, the following

terms, whether used in singular or in plural form, shall mean:

a “et refers to R.A, No, 7942 otherwise known as the "Philippine Mining Act of
1995,"

b. “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
ICC¥/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 Lunds” refer to all lands exclusively and actually possessed, occupied

or utilized by Indigenous Cultural Communities by themselves or through their
ancestors in accordance with their customs and traditions since time immemorial, and as

may be defined and delineated by law.

d. “Annual Environmental Protection and Enhancement Program (AEPEP)” refers
to a yearly environmental management work plan based on the approved environmental
protection and enhancement strategy,


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“Annual Social Development and Management Program” refers toa yearly
community development programs! projects! activities based on the approved five-year
Social Development and Management Program.

3 “Archipelagic Sea” refers to all waters within the baseline of an archipelago

except internal waters such as roadsteads, lakes and rivers.

& “Beneficiation” ~ a process wherein a large fraction of the waste material is

removed from the mineral ore;

h.
Jatitude and one-half (1/2) minute of longitude, containing approximately eighty-one (81)

“Block or Meridional Block” means an area, bounded by one-half (1/2) minute of

hectares.

i, “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;

i. “Built-up Areas" refer to portions of land within the municipality or barangay
actually occupied as residential, commercial or industrial areas as embodied in a duly approved
land use plan by the appropriate Sanggunian.

k, “Bureau” means the Central Office of the Mines and Geosciences Bureau under
the Department of Environment and Natural Resourc

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

m. “Certificate of Ancestral Domains Title (CADT) " —title formally recognizing the
tights of possession and ownership of ICCs/IPs over theit ancestral domains identified and
delineated in accordance with law;

n “Certificate of Ancestral Lands Title (CALT)” —a title formally recognizing. the

tights of ICCs/IPs over their ancestral lands;


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©. “City tefers to an independent component city as classified under the Local

Government Code.

p “Commercial Production" refers to the production of sufficient quantity of
minerals to sustain economic viability of mining operations reckoned from the date of
commercial operation as declared by the Contractor or as stated in the feasibility study,

whichever comes first,

4. “Community Relations Record” refers to the applicant's proof of its community

relations which may consist, but is not limited to, sociocultural sensitivity, the character of its

past relations with local communities, cultural appropriateness and social acceptability of its
resource management strategies: Provided, That this shall not be required in cases where the
applicant has to previous community- relations experientce in resource use” ventures,

locally or internationally.

r “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.

s.  “Corisent” — the free, prior and informed assent of the relevant person/s,
ICCs/IPs, burangay assemblies, landowner or occupant or possessor, given aller 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;

L “Conservation” means the wise use and optimum utilization of mineral resources.

uw “Contiguous Zone” refers to water, sea bottom and substratum measured twenty-

four (24) nautical miles seaward from the baseline of the Philippine Archipelago.

v. “Contract Area” means the land or body of water delineated under a Mineral
‘Agreement or FTAA subject to the relinquishment obligations of the Contractor and properly
defined by longitude and latitude.


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w. “Contractor” means a Qualified Person acting alone or in consortium who is a

party to'a Mineral Agreement or FTAA.

x. “Critical 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:

y. “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 need immediate rehabilitation and protection to
minimize soil erosion, improve water yield and prevent possible flooding,

hm “Cultural ‘those that bear a 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;

aa “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;

bb. “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;

cc. “DENR Project Areq” refers to specific portions of land covered by an existing
project of the Department such as, but not limited to, Industrial Forest Management Agreement
(IFMA), Community Forest Management Agreement (CFMA), Community Forestry Program
(CEP), Forest Land Management Agreement (FLMA) and Integrated Social Forestry Program
(SFP),


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dd. “Department” means the Department of Environment and Natural Resources of
the Republic of the Philippines.

ce. “Development Stage” as used exclusively for FTAAS means the period to prepare
an explored ore body or mineral deposit for mining including the construction of necessary
infrastructure and related facilities.

18. “Development” means the work undertaken to explore and prepare an ore body or
a mineral deposit for mining, including the construction of necessary infrastructure and related

facilities.

ge. “Direct Milling Costs” refer to expenditures and expenses directly incurred in
the mechanical and physical processing and/or chemical separation of the ore from the waste
ty produce marketable mineral products: Provided, That, for cement plant operations, direct
milling costs ate limited to expenditures and expenses directly incurred from raw
materials crushing and grinding up to ground raw meal homogenizing, prior to clinker

manufacturing.

hh,  “Direer Mining Costs" refer to expenditures and expenses directly incurred in all
activities preparatory to and in the actual extraction of the ore from the earth and transporting, it
to the mill plant for mineral processing.

ii “Director” means the Director of the Bureau.

ji, “Downstream industries” ~ are activities that cover minerals processing, refining,

and manufacturing that result into finished intermediate and capital goods.

kk. “Ecological Profile or Eco-Profile” refers to geographic-based instruments for
planners and decision-makers, which presents a description of the environmental setting
including the state of environmental quality and evaluation of the assimilative capacity of an

area,

ll, “Bffluent” means any wastewater, partially or completely treated, or any waste

liquid flowing out of mining operations, wastewater treatment plants or tailings disposal system.


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mm. “Environment” refers to the physical factors of the total surroundings of
human beings, including the land, water, atmosphere, climate, sound, odors, tastes, the
biological factors of animals and plants and the social factors of aesthetics. In a broad sense, it
shall include the total environment of human beings such as economic, social, cultural, political
and historical factors.

nn. “Environmental Audit” vefers to a systematic, documented verification
process of objectively obtaining and evaluating audit evidence (verifiable information, records or
statements of facts) to determine whether or not specified environmental activities, events,
conditions, management systems or information about these matters conform with audit criteria
(policies, practices, procedures or requirements against which the auditor compares collected
audit evidence about the subject matter) and communicating the results of this process to the
concerned stakeholders,

00. “Environmental Compliance Certificate (ECC)" refers to the document
issued by the Secretary or the Regional Executive Director certifying that based on the
representations of the proponent and the preparers (the proponent's technical staff or the
competent professional group commissioned by the proponent to prepare the EIS and other
related documents), as reviewed and validated by the Environmental Impact Assessment Review
Committee (EIARC), the proposed project or undertaking will not cause a significant negative
environmental impact; that the proponent has complied with all the requirements of the
Environmental Impact Assessment System; and that the proponent is committed to implement its
approved Environmental Management Plan in the Environmental Impact Statement or mitigation

measures in the Initial Environmental Examination

pp. vironmental Impacts” refer to the probable effects or consequences
of proposed projects of undertakings on the physical, biological and socioeconomic environment

thai can be direct or indirect, cumulative and positive or negative.

qq. “Environmental Impact Assessment (E1A}" refers to the process of predicting the
likely environmental consequences of implementing projects or undertakings and designing
appropriate preventive, mitigating and enhancement measures.


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1, “Environmental Impaet Statement (EIS)” refers to the document(s) of studies on
the environmental impacts of a project including the discussions on direct and indirect
consequences upon human welfare and ecological and environmental integrity. The EIS may
vary from project to project but shall contain in every case all relevant information and details
about the proposed project or undertaking, including the environmental impacts of the project
and the appropriate mitigating and enhancement measures.

ss. “Environmental Management Record” refers to an applicant's high regard for the
environment in its past resource use ventures and proof of its present technical and financial
capability to undertake resource protection, restoration and/or rehabilitation of degraded areas
and similar activities: Provided, That this shall not be required in cases where the applicant has

no previous experience in resource use ventures, locally or internationally.

tt. “Environmental Protection and Enhancement Program (EPEP)" reters to the
comprehensive and strategic environmental management plan for the life of the mining
project on which AEPEPs are based and implemented to achieve the environmental management
objectives, criteria and commitments including protection and rehabilitation of the disturbed

environment.

uu, “Environmental Work Program (EWP)”* refers (o the comprehensive and strategic
environmental management plan (0 achieve the enyitonmental management objectives, criteria
and commitments including protection and rehabilitation of the disturbed environment during the
exploration period.

w. “Exclusive Economie Zone” refers to the water, sea bottom and subsurface
measured from the baseline of the Philippine Archipelago up to two hundred (200)

nautical miles offshore.

www. “Exploration” means searching or prospecting for mineral resources by
geological, geochemical and/or geophysical surveys, remote sensing, test pitting, trenching,
drilling, shaft sinking, tunnelling or any other means for the purpose of determining their
existence, extent, quality and quantity and the feasibility of mining them for profit.

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XX, “Financial or Technical Assistance Agreement (FTAA)" means a contract
involving financial or technical assistance for large-scale exploration, development and

utilization of mineral resources.

yy. “Force Majeure” means acts ot circumstances beyond the reasonable control
of Contractor/Permit Holder/Permittee/Lessee including, but not limited to, war, rebellion,
insurrection, riots, civil disturbance, blockade, sabotage, embargo, strike, lockout, any dispute
with surface owners and other labor disputes, epidemic, earthquake, storm, flood or other
adverse weather conditions, explosion, fire, adverse action by Government or by
any instrumentality or subdivision thereof, act of God or any public enemy and any cause as
herein described over which the affected party has no reasonable control.

“Foreign-owned Corporation” means any corporation, partnership, association ot

cooperative duly registered in accordance with law in which less than fifty percent (50%) of the
capital is owned by Filipino citizens.

aaa. “Forest Reservations” refer to forest lands which have been reserved by the

President for any specific purpose or purposes pursttant to P.1D, No. 705, or by an appropriate

law.

bhb. “Forest Reserves or Permanent Forests” refer to those lands of the public domain
which have been the subject of the present system of classification and determined to be needed
for forest purposes pursuant to P.D, No. 708.

cee. “Free, prior and informed consem (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 filly disclosing the intent and scope, including the positive and negative impacts, of all the

in a language and process understandable and acceptable to the community:

ddd, “Government Reservations” refer to all proclaimed reserved lands for specific
purposes other than Mineral Reservations.

eee. “Government” means the Government of the Republic of the Philippines.

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Af. “Gross Output" means the actual market value of minerals or mineral

products from each mine or mineral land operated as a separate entity, without any deduction for

mining, processing, refining, transporting, handling, marketing or any other expenses: Provided,
‘That if the minerals or mineral products are sold or consigned abroad by the Contractor under
CLE. terms, the actual cost of ocean freight and insurance shall be deducted: Provided, further,
‘That in the ease of mineral concentrates which are not traded in commodity exchanges in the
Philippines or abroad, such as copper concentrates, the actual market value shall be the world
price quotations of the refined mineral products content thereof prevailing in the said commodity
exchanges, after deducting the smelting, refining, treatment, insurance, transportation and other
charges incurred in the process of converting mineral concentrates into refined metal traded in

those commodity exchanges.

gga. “Ground Expenditures” mean the field and laboratory expenditures incurred for
searching and delineating new or extension of ore bodies in an approved FTAA area, including
expenditures for social preparation, pre-feasibility studies and reasonable administrative
expenses incurred for the FTAA project. Such expenses include those for geological,
geophysical, geochemical and air-bome geophysical surveys, borehole drillings, tunnelling, test
pitting, trenching and shaft sinking. Contributions to the community and environment-related
expenses during the exploration period shall form part of the ground expenditures.

hhh, “Host and Neighboring Communities” Host community refers to the people
living at the barangay(s) outside the mine camp, where the mining project is located, and
neighboring communities refer to the people living at the barangay(s), which are adjacent to the
host community; areas covered by the mining tenement of the project; areas where mining
facilities are located; and, immediate areas which will be affected by the mining operations,

iii, “Indigenous Cultural Community (ICC) means a group or wibe of indigenous
Filipinos who have continuously lived as communities on communally-bounded and defined
lund since time immemorial and have succeeded in preserving, maintaining and sharing common
bonds of languages, customs, traditions and other distinetive cultural traits, arid as may be
defined and delineated by law.

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jij. “Initial Environmental Examination (IKE)” refers to the document required of
proponents describing the environmental impact of, and mitigation and enhancement measures
for projects or undertakings located in an Environmentally Critical Area (ECA) as listed under
Presidential Proclamation No. 2146, Series of 1981, as well as other areas which the President

may proclaim as environmentally critical in accordance with Section 4 of P.D. No, 1586.

kkk, "Voiné venture agreement" — an agreement wherein the goverment and a
qualified person organize a joint-venture company, with both parties having equity shares, to
develop and manage mineral resources. Aside from earings 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 hoth parties.

= are sites of established global biodiversity
conservation significance. They are defined by standardized criteria and thresholds to guide

M. “Key biodiversity area:

conservation interventions such as the establishment of protected areas;

mmm, “L

yee" means a person or entity with a valid and existing mining lease contract,

nnn, “Metallic Mineral" means a mineral having a brilliant appearance, quite opaque
fo light, usually giving a black or very dark streak, and from which a metallic
element/component can be extracted/utilized for profit.

00. “Mill Tailings” means materials whether solid, liquid or both segregated from the
ores during concentration/milling operations which have no present economic value to. the
generator of the same.

ppp. “Mine Camp” refers to the portion of the mining/permit/contract area where
housing/residential, recreational and other support facilities are built solely for use by the
Contractor/Permit Holder/Lessee. including its employees and dependents,

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

mt. “Mine Rehabilitation” refers to the process used to repair the impacts of mining

on the environment, The long-term objectives of rehabilitation can vary ftom simply converting

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an area to a safe and stable condition to restoring the pre-mining conditions as closely as possible
with all the area's environmental values intact and establishing a land use capability that is

functional and proximate to the land use prior to the disturbance of the mine area,

sss. “Mine Waste" means soil and/or rock materials from surface or underground

mining operations with no present economic value to the generator of the same.

tt, “Mineral Agreement” means a contract between the Govemment and a
Contractor, involving Mineral Production Sharing Agreement, Co-Production Agreement or
Joint Venture Agreement.

uuu. “Mineral Land” means any area where mineral resources, as herein defined, are
found.

wv. "Mineral Processing Permit” refers to the permit granted to a Qualified Person

for mineral processing.

www. “Mineral Processing” means the milling, beneficiation, leaching, smelting,
cyanidation, calcination or upgrading of ores, minerals, rocks, mill tailings, mine waste and/or
other metallurgical by- products or by similar means to convert the same into marketable

products,

xxx, “Mineral Products" mean materials derived from ores, minerals and/or rocks and

prepared into a marketable state by mineral processing,

yyy. “Mineral Reservations” refer to areas established and proclaimed as such by the
President upon the recommendation of the Director through the Secretary, including all
submerged lands within the contiguous zone and Exclusive Economic Zone,

zez. “Mineral Resources” mean any concentration of ores, minerals and/or rocks with

proven or potential economic value.

anaa, “Minerals” refer to all naturally occurring inorganic substances in solid, liquid,
gas or any intermediate state excluding energy materials such as coal, petroleum, natural gas,

radioactive materials and geothermal energy.

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bbbb. “Mining Application” means any application for mining permit, Mineral
‘Agreement or FTAA.

cece, “Mining Area” means a portion of the contract area identified by the Contractor
as defined and delineated in a Survey Plan duly approved by the Director/Regional Director
concerned for purposes of development and/or utilization, and sites for support facilities

dddd. “Mining Operations” mean mining activities involving exploration, feasibility

study, development and utilization.

cece. “Mining Permits” include Exploration, Quarry, Sand and Gravel (Commercial.
Industrial and Exclusive), Gratuitous (Government or Private), Guano, Gemstone Gathering and
Small-Scale Mining Permits.

fii “Mining Right’” means a right to explore, develop or utilize mineral resources.

geee. “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 agricultural production and produce both
consumer and producer goods and manufactures;

hhhh. “National Park"
. or historic in character which has been withdrawn from settlement, occupancy, or any

an area of the public domain essentially natural wilderness,

sceni

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;

iifi. “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:

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ji. “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;

kkkk. “Net Income" means gross income from operations less allowable deductions
Which are necessary or related {0 mining operations.

nite “Won-Governmental Organization (NGO) includes non-stock, non-profit
organizations with qualifications, expertise and objectivity in activities dealing with resource and

environmental conservation, management and protection,

mmmm. “Non-metallic Mineral” refers to a mineral usually having a dull luster,
generally light-colored, transmits light, usually giving either colorless or light colored streak
from which a non-metallic clement/component can be extracted/utilized for a profit.

nnn, “Offshore” means the water, sea bottom and subsurface from the shore or
coastline reckoned from the mean low tide level up to the two hundred (200) nautical miles of
the Exclusive Economic Zone,

0000, “Onshore” means the landward side from the mean low tide level, including
submerged lands in lakes, rivers and creeks.

pppp. “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 opett-cast

mining and open-cut mining:

qqqq. “Ore Transport Permit” refers to the permit that may be granted to a Contractor,
accredited dealer, retailer, processor and other Permit Holders to transport minetals/mineral
products.

mrt. “Ore” means naturally occurring substance or material from which a mineral or

an element can be mined and/or processed for profit.

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ssss. “People's Organization (PO)” refers to a group of people which may be an
association, cooperative, federation or other legal entity established by the community to
undertake collective action to address community concerns and need and mutually share the
benefits from the endeavor.

tit, “Permit Area” refers to area subject of mining permits.

uuu, “Permit Holder” means a holder of any mining permit or of Mineral Processing
Permit issued under these implementing rules and regulations except permits that authorize
exploration activities only.

vv. “Permittee” means the holder of an Exploration Permit. The Permittee referred
to in previous administrative orders shall mean holders of permits subject of such orders.

www. “Pollution Control Devices and Facilities" refer to infrastructure,
machinery, equipment and/or improvements used for impounding, treating or neutralizing,
precipitating, filtering, conveying and cleansing mine industrial waste and tailings, as well as
eliminating or reducing hazardous effects of solid particles, chemicals. liquids or other harmful
by-products and gases emitted from any facility utilized in mining operations for their disposal.

xxxx. Pollution” refers to any alteration off the physical, chemical and/or biological
properties of any water, air and/or Jand resources of the Philippines; or any discharge thereto of
any liquid, gaseous or solid wastes; or any production of unnecessary noise or any emission of
objectionable odor, as will or is likely to create or to render such water, air and land resources
harmfal, detrimental or injurious to public health, safety or welfare, or which will adversely
affect their utilization for domestic, commercial, industrial, agricultural, recreational or other

legitimate purposes.

yyy. “Pre-Operating Expenses” refer to all exploration expenses, special allowance,
administrative costs related to the project, feasibility and environmental studies and all costs of
mine construction and development incurred prior to commercial production,

zzzz. “President” refers to the President of the Republic of the Philippines.

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aaaaa. “Private Land” refers to land belonging to any private person or entity which
includes alienable and disposable land being claimed by @ holder, claimant or occupant who has
already acquired a vested right thereto under the law, including those whose corresponding
certificate or evidence of title or patent has not been actually issued.

bbbbb, “Processing” — includes all treatment an ore receives after its extraction and
beneficiation, which inyolves changes in the chemical nature of the mined minerals;

cecee, “Progressive Rehabilitation” — rehabilitation which involves the staged treatment

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

ddddd. “Protected Are
their unique physical and biological significance. managed to enhance biological diversity and

~ identified portions of land and water set aside by reason of

protected against destructive human exploitation:

cesee. “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;

fffff. “Public Land” refers to land of the public domain which has been classified as
agricultural land, mineral land, forest or timber land subject to management and disposition or

concession under existing laws.

ggggg, “Qualified Person" means any Filipino citizen of legal age and with capacity to
contract: or a corporation, partnership, association or cooperative organized or authorized for the
purpose of engaging in mining, with technical and financial capability to undertake mineral
resources development and duly registered in accordance with law, at least sixty percent (60%)
of the capital of which is owned by Filipino citizens: Provided, That a legally organized foreign-
owned corporation shall be deemed a Qualified Person for purposes of granting an Exploration
Permit, FTAA or Mineral Processing Permit only.

hhhhh. “Quarry Permit” refers to the permit granted to a Qualified Person for the
extraction and utilization of quarry resources on public or private land.

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i “Quarry Resources” refer to any common rock or other mineral substances as the

ii.

Director may declare to be quatry resources such as, but not limited to, andesite, basalt,
conglomerate, coral sand, diatomaceous earth, diorite, decorative stones, gabbro, granite,
limestone, marble, marl, red burning clays for potteries and bricks. rhyolite, rock phosphate,
sandstone, serpentine, shale, tuff, volcanic cinders and volcanic glass: Provided, That such
quarry resources do not contain metals or metallic constituents and/or other valuable minerals in
economically workable quantities: Provided, further, That non-metallic minerals such as kaolin,
feldspar, bull quartz, quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum,
bauxite, magnesite, dolomite, mica, precious and semiprecious stones and other non-metallic
minerals that may later be discovered and which the Director declares to be of economically
workable quantities, shall not be classified under the category of "Quarry Resources”.

iii). “Quarrying” means the process of extracting, removing and disposing quarry
resources found on or underneath the surface af public or private land.

kkkkk. “Regional Director” means the Regional Director of any Regional Office.
Ill. “Regional Office * refers to the Regional Office of the Bureau,

mmmmn. “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;

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

00000. “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;

ppppp. “Secretary” means the Secretary of the Department.

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qaqa. “Service Contractor” means a person or entity who enters into an agreement to
undertake a specific work related to mining or quarrying operations of a Contractor/Permit
Holder/Permittee/ Lessee,

rm, “Small-scale mining” ~ mining activities which rely beavily 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 Jarge-scale, otherwise, the mining activity shall be defined as large-scale mining;

$8885, “Small-scale mining permit’” — permit issued for small-scale mining;

ttttt. “Social Development and Management Program (SDMP)” refers to the
comprehensive five-year plan of the Contractor, Permit Holder, or Lessee authorized to
conduct actual mining and milling operations towards the sustained improvement in the living
standards of the host and neighboring communities by creating responsible, self-reliant and
resource-based communities capable of developing, implementing and managing
community development programs, projects, and activities in a manner consistent with the
principle of people empowerment.

uunuu. “Special Allowance " refers to payment to the claim owner or surface right owners

particularly during the transition period from P.D, No. 463 and Executive Order No. 279, Series
of 1987,

vw. “Stakeholders” refer to persons or entities who may be significantly
affected by the project or undertaking, such as but not limited to, the Contractor, Permit Holder,
Permittee, ot Lessce, members of the local community industry, LGUs, Nongovernmental
Organizations (NGOs) and People's Organizations (POs).

wwwww. “State” means the Republic of the Philippines.

XXxxxx. “Strategic minerals” —minerals needed for national security and industrialization,

including rural development:

yyyyy. “Tailings Disposal System refers to a combination of methods, equipment and
manpower used in handling, transporting, disposing and/or impounding mill tailings.

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zzzzz. “Utilization” means the extraction, mineral processing and/or disposition of

minerals.

anaaaa. “Waste Dump” refers to a designated place where the mine waste is accumulated
or collected,

bbbbbb. “Wildlife” — undomesticated forms and varieties of flora and fauna;

CHAPTER I
GOVERNMENT MANAGEMENT
Section 6, Authority of the Department. The Department is the primary Government
agency responsible for the conservation, management, development and proper use of the State's
mineral resources including those in reservations, watershed areas and lands of the public domain.
‘The Department shalll have the following authority, among others:
a, To promulgate rules and regulations as may be necessary to implement the
intent and provisions of the Act;
b, To enter into Mineral Agreements on behalf of the Government, or recommend
FTAA to the President upon endorsement of the Director;
© To enforce applicable related laws such as Administrative Code, Civil Code. ete.:
and
d To exercise such other authority vested by the Act and as provided for in these
implementing rules and regulations.

‘The Secretary may delegate such authority and other powers and functions to the
Director,

Section 7, Organization and Authority of the Bureau. The Mines and Geosciences
Bureau shall be a line bureau primarily responsible for the implementation of this Act. It shall be
comprised of a Central Office and the necessary regional, district and such other offices as may be
established in pertinent administrative orders issued by the Secretary, The staff Bureau created
under Department Administrative Order No. 1, Series of 1988, shall become the Central Office of

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the Mines and Geosciences Bureau while the Mines and Geosciences Development Services created.

pursuant to Department Administrative Order No, 41. Series of 1990, shall become the Regional

Offices,

‘The Bureau shall have the following authority, among others:

a

To have direct charge in the administration and disposition of mineral lands
and mineral resources;

‘To undertake geological, mining, metallurgical, chemical and other researches, as
well as mineral exploration surveys: Provided, That for areas closed to mining
applications, the Bureau can undertake exploration surveys for purposes of
research and development;

To 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.

To confiscate, after due process, surety, performance ancl guaranty bonds
after notice of violation;

To recommend to the Sectetary the granting of Mineral Agreements or
to endorse to the Secretary for action by the President the grant of FTAAs, in favor
of Qualified Persons and to monitor compliance by the Contractor with the
terms and conditions of the Mineral Agreements and FTAAS, For this purpose, an
efficient and effective monitoring system shall be established to ascertain
periodically whether or not these objectives are realized:

To cancel or to recommend cancellation, afler due process, mining rights, mining
applications and mining claims for noncompliance with pertinent laws, rules and
regulations;

To deputize, when necessary, any member or unit of the Philippine National Police
(PNP) and barangay, duly ~— registered and. Department-aceredited
Nongovernmental Organization (NGO) or atiy Qualified Person to police all mining
activities:

To ussist the Environmental Management Bureau (EMB) under the Department
and/or the Department Regional Office in the processing or conduct of

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Environmental Impact Assessment in mining projects; and
To exercise such other authority vested by the Act and as provided for in these
implementing rules and regulations.

‘The Director may delegate such authority and other powers and functions to the Regional

Director,

Section 8. Role of Local Government, Local government units shall have the following

roles in mining projects within their respective jurisdictions:

a,

To ensure that relevant laws on public notice, public consultation and public
participation are complied with;

In coordination with the Bureaw/Regional Office(s) and subject to valid and
existing mining tights, to approve applications for small-scale mining, sand and
gravel, quarry, guano, gemstone gathering and gratuitous permits and for industrial
sand and gravel permits not exceeding five (5) hectares:

To receive their share as provided for by law in the wealth generated from
the utilization of mineral resources and thus enhance economic progress and national

development;

‘To facilitate the process by which the community shall reach an informed
decision on the social acceptability of a mining project as a requirement for securing
an BCC:

To participate in the monitoring of any mining activity as a member of the
Multipartite Monitoring Team referred to in Section 185 hereof:

To participate as a member of the Mine Rehabilitation Fund (MRF) Committee;

To be the recipient of social infrastructure and community development
projects for the utilization of the host and neighboring communities in accordance
with Chapter XIV hereof!

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h. ‘To act as mediator between the ICCs and the Contractor(s) as may be requested;

i. To coordinate with the Department and Bureau in the implementation
of the Act and these implementing rules and regulations in their respective
jurisdictions, In areas covered by the Southern Philippines Council for
Peace and Development, Autonomous Region of Muslim Mindanao and future
similar units, the appropriate offices of said units shall coordinate with the
Department and Bureau in the implementation of the Act and these implementing
rules and regulations; and

i. To perform such other powers and functions as may be provided for by applicable
laws, rules and regulations,

Section 9, Recording systemt. There shall be established a national und 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.

Section 10. 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.

Section 11, 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:

a. the classification of minerals;

b. the quality and grade of the ore;
the potential mine fife;

ae

the geological description of the area;
the economic viability of mine tailings;
whether the area is a key biodiversity area or if it is a critical habitat;

Pome

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.

Section 12, Identification of strategic minerals. The Bureau shall conduct researches
and studies prior to any mining operations to identify strategic mineral resources. Mineral
resources needed for local industries, agricultural modernization and rural development shall be
prioritized for mining subject to the implementing rules and regulations of this Act,

Section 13. 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.

Section 14, Affected local community and local government unit. For 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
demareated area. The local communities and the local government units therefore are those who

are dependent on the watershed eco-system and its resources.

CHAPTER I
MINERAL RESERVATIONS AND
GOVERNMENT RESERVATIONS,

Section 15. Establishment, Disestablishment or Modification of Boundary of a
Mineral Reservation, ‘The Director shall conduct public hearings allowing all concemed sectors
and communities, interested non-governmental and people's organizations, as well as local
government units, to air their views regarding the establishment, disestablishment, or modification
of any Mineral Reservation. The public shall be notified by publication in a newspaper of general
circulation in the province, as well as by posting in all affected municipalities and barangays, at
least thirty (30) days before said hearings are conducted.

‘The recommendation of the Director shall be in writing stating therein the grounds for the
establishment, disestablishment or modification of any specific Mineral Reservation and shall
likewise be published after submission to the Secretary.

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No recommendation of the Director shall be acted upon by the Secretary unless the
preceding paragraph bas been strictly complied with.

Upon the recommendation of the Director through the Secretary, the President may, subject
to valid and existing rights, set aside and establish an area as a Mineral Reservation when the
national interest so requires, such as when there is a need to preserve strategic raw materials for
industries critical 10 national development or certain minerals for scientific, cultural or ecological
value, ‘The Secretary shall cause the periodic review of existing Mineral Reservations by detailed
geological, mineral and ecological evaluation for the purpose of determining whether or not their
continued existence is consistent with the national interest and upon his/her recommendation, the
President may, by proclamation, alter or modify the boundaries thereof or revert the same to the

public domain without prejudice to prior existing rights.

Tn the proclamation of such Mineral Reservations, all valid and existing mining rights shall
be respected.

Section 16. Government Reservations. For Government Reservations, the Department
may directly undertake exploration, development and utilization of mineral resources, In the
event that the Department cannot undertake such activities, these may be undertaken by a Qualified
Person: Provided, That the right to explore, develop and utilize the minerals found therein shall be
awarded by the President. under such terms and conditions as recommended by the Director and
approved by the Secretary: Provided, further, That such right shall be granted only after exploration
reveals the presence of economically potential deposits: Provided, finally, That the Permittee who
undertook the exploration of said Reservation shall be given priority.

Section 17. Mining Operations within Mineral and Government Reservations. Mining
operations in Mineral Reservations shall be undertaken by the Department or through a
Qualified Person under any of the following modes:

a, Exploration Permit;

b. Mineral Agreement;

©. FTAA:

d. Small-Scale Mining Permit; and

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Quarry Permit,

In cases where the mining, operations shall be directly imdertaken by the Department, a
Memorandum of Agreement may be entered into by and between the Department and a qualified
government corporation/ entity authorizing the latter to explore, develop and/or utilize the mineral

resources found therein.

Mining operations in Government Reservations shall be first undertaken through an
Exploration Permit, subject to limitations prescribed therein, before the same is opened for Mineral
Agreemen/FTAA application or other mining applications.

Applications for Exploration Permit/Mineral A greemen/FTAA. within Mineral Reservations
shall be filed in the Regional Office concemed for its initial evaluation and endorsement to the
Bureau for final evaluation. In the event that the applied area covers both a Mineral Reservation and
 non-Mineral Reservation, the mining applicant may file separate applications covering the
Mineral Reservation area and the non-Mineral Reservation area, or file a single application
covering the whole area, in the Regional Office concemed.

Section 18. Small-Scale Mining Operations within Mineral Reservations, Small-scale
mining operations within Mineral Reservations shall be governed by the pertinent miles and
regulations provided for in. the Mineral Reservations Development Board (MRDB)
Administrative Order No. 3, Series of 1984, and MRDB Administrative Order No. 3-A, Series of
1987, as amended, and as may be applicable, Small-Scale Mining Cooperatives shall be given
preferential right to apply for a small-seale mining contract for a maximum agereyate area of
twenty- five percent (25%) of a Mineral Reservation subject to valid and existing mining rights.

Section 19, Payment of Royalty of Minerals/Mineral Products Extracted from
Mineral Reservations, The Conttactors/Permit Holders/Lessees shall pay to the Burean a royalty
which shall not be less than five percent (5%) of the market value of the gross output of the
mineraly’mineral products extracted or produced from the Mineral Reservations exclusive of all
other taxes. A ten percent (10%) share of said royalty and ten percent (10%) of other revenues such
as administrative, clearance, exploration and other related fees to be derived by the Government
from the exploration, development and utilization of the mineral resources within Mineral

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Reservations shall accrue to the Bureau as a Trust Fund and shall be deposited in a Goyemment
depository bank to be allotted for special projects and other administrative expenses related to the
exploration, development and environmental management of minerals in Government Reservations.

CHAPTER IV
SCOPE OF MINING APPLICATION

Section 20. Areas Open to Mining Applications. The following areas are open to mining
applications:
a. Public or private lands not covered by valid and existing mining rights and mining,

applications;

b. Lands covered by expired/abandoned/cancelled mining/quarrying rights:
c. Mineral Reservations; and

d. Timber or forest lands as defined in existing Jaws,

Section 21. Areas Closed to Mining Applications. Pursuant (0 the Act and in consonance
with State policies and existing laws, areas may be either closed to mining applications or
conditionally opened therefor,

a. The following areas are closed to mining applications:

ca Areas covered by valid and existing mining rights and mining

applications subject to Subsection (3) herein;

ii. Old growth or virgin forests, proclaimed watershed forest reserves,
Wildemess areas, mangrove forests, mossy forests, national parks,
provincial/municipal forests, tree parks, greenbelts, game refuge, bird
sanctuaries and areas proclaimed us marine reserves/marine parks and tourist
zones as defined by law and identified initial components of the National
Integrated Protected Areas System (NIPAS) pursuant to R.A. No. 7586 and
such areas expressly prohibited thereunder, as well as under Department
Administrative Order No. 25, Series of 1992, and other laws:

iii, ‘Areas which the Secretary may exclude based, inter alia, on proper

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a assessment of their environmental impacts and implications on sustainable

2 land uses, such as built-up areas and critical, «== watersheds with
3 appropriate barangay/municipal/city/ provincial Sanggunian ordinance
4 specifying therein the location and specific boundary of the concemed area;
5
6 iv. Offshore areas within five hundred (500) meters from the mean low tide
7 level and onshore areas within two hundred (200) meters from the mean low
8 tide level along the coast;
é “ In case of seabed/marine aggregate quarrying, offshore areas less than
u 1,500 meters from the mean low tide level of land or island{s) and where
12 the seabed depth is less than 30 meters measured at mean sea level; and
B
14 vi Areas expressly prohibited by law.
15
16 Mining applications which have been made over the foregoing areas shall be reviewed
17 and, after due process, such areas may be excluded from said applications.
18
49 b. The following areas may be opened for mining applications, the approvals of
20 — which are subject to the following conditions:
2
2 i, In Military and other Government Reservations, upon prior written
23 clearance by the Government agency having jurisdicti
24 Reservations;
2s
26 ii, Tn areas near or under public or private buildings, cemeteries, archacological
27 and historic sites, bridges, highways, waterways, railroads,
28 reservoirs, dams or _other infrastructure projects. public or private
29 works, including plantations or valuable crops. upon written consent of the
30 concerned Government agency or private entity subject to technical
31 evaluation and validation by the Bureau;
32
33 ji, Im areas covered by FTAA applications which shall be opened for quarry

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resources mining applications pursuant to Section 53 hereof, upon the
written consent of the FTAA applicants: Provided, That sand and gravel
permit applications shall not require consent from the FTAA, Exploration
Permit or Mineral Agreement applicant, except for Mineral Agreement or
Exploration Permit applications covering sand, gravel and/or alluvial gold:
Provided, further, That the Director shall formulate the necessary guidelines
w govern this provision;

iv, Inareas covered by small-scale mining contracts, upon prior consent of
the small-scale miners, in which ease a royalty payment, upon the
utilization of minerals, shall be agreed upon by the concerned parties and
shall form a Trust Fund for the socioeconomic development of the
concemed community; and

v. In DENR Project Areas, upon prior consent from the concerned agency.

‘The Bureau shall cause the periodic review of areas closed to mining applications for the
purpose of determining whether or not their continued closure is consistent with the national interest
and render its recommendations, if any, to the Secretary for appropriate action,

Section 22. Ancestral Lands, In no case shall Mineral Agreements, PTAAS or mining
permits be granted in areas subject of Certificates of Ancestral Domains/Ancestral Land Claims
(CADC/CALC) or in areas verified by the Department Regional Office and/or other office or
agency of the Government anthorized by law for such purpose as actually occupied by ICCs under a
claim of time immemorial possession, except with their prior consent.

Priot consent refers to prior informed consent obtained, as far as practicable, in accordance
with the customary laws of the ICC concemed. Prior informed consent should meet the
minimum requirements of public notice through various media such as, but not limited 10,
newspaper. radio or television advertisements, fully disclosing the activity to be undertaken and/or
sector consultation wherein the Contractor, Permit Holder, or Permittee should arrange for
community assembly, notice of which should be announced or posted in a conspicuous place in the
area for at least a month before the assembly: Provided. ‘That the process of arriving at an informed

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consent should be free from fraud, external influence and manipulations.

In the event that prior informed consént is secured in accordance with the preceding
paragraph, the concemed parties shall agree on the royalty payment for the concemed ICC which
may not be less than one percent (1%) of the gross output, Expenses for community development
may be credited to or charged against said royalty. Representatives from the Bureau or Regional
Office(s) concerned, Department offices concerned, LGUs concemed, relevant NGOs/POs and the
‘National Commission on Indigenous Peoples (NCIP) may be requested to act as mediators between
the ICCs concemed and the Contractor, Permit Holder, or Permittee in the negotiation for the

royalty payment.

In case of disagreement conceming the royalty due the ICCs concemed, the Department
shall resolve the same within three (3) months, Said royalty shall form part of a Trust Fund for the
socioeconomic well-being of the ICCs in accordance with the management plan formulated by the
same in the ancestral land or domain area: Provided That the royalty payment shall be managed and
utilized by the ICs concerned.

The implementation of this Section shall be in accordance with Republic Act No.
8371, otherwise known as “The Indigenous Peoples Rights Aci of 1997" and other
pertinent laws.

CHAPTER V
EXPLORATION PERMIT
Section 23. Exploration Permit as the Initial Mode of Entry in Mineral Exploration,
Exploration activities may be directly undertaken by the Department or, in the event that the
Department cannot tindertake such exploration activities, by a Qualified Person in specified areas as
determined by the Secretary: Provided, that the conduct of mineral exploration by a Qualified
Person in all areas open to mining shall be initially undertaken through an Exploration Permit.

Incase an immediate technical study of an area is necessary, the Department or any of its
authorized agencies or instrumentalities and the Exploration Permit applicant may enter into a
Memorandum of Agreement to jointly undertake such study.

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Section 24. Term/Maximum Areas Allowed under an Exploration Permit. The term of
an Exploration Permit shall be for a period of two (2) years from date of issuance thereof,
rentewable for like periods but not to exceed a total term of four (4) years for non-metallic mineral
exploration or six (6) years for metallic mineral exploration: Provided, That no renewal of Permit
shall be allowed unless the Permittee has complied with all the terms and conditions thereof, and
has not been found guilty of violation of any provision of the Act and these implementing rules
and regulations: Provided, further, That the conduct of a feasibility study and filing of the
declaration of mining project feasibility shall be undertaken during the term of the Exploration
Permit, subject to the provisions of Section 30 hereof.

‘The maximum area that a Qualified Person may apply for or hold at any one time under an
Exploration Permit shall be as follows:

a. Onshore, in any one province ~
1, For individuals - twenty (20) blocks or approximately One Thousand Six
Hundred Twenty (1,620) hectares and
2. Por corporations, partnerships, associations ot cooperatives - Two
Hundred (200) blocks or approximately Sixteen Thousand ‘Two Hundred
(16,200) hectares.

b, Onshore, in the entire Philippines -
1, For individuals - forty (40) blocks or approximately “Three Thousand
‘Two Hundred Forty (3,240) hectares and,

2. For corporations, partnerships, associations or cooperatives. - Four
Hundred (400) blocks or approximately Thinty-Two Thousand Four
Hundred (32,400) hectares.

© Offshore, in the entire Philippines, beyond, Five Hundred Meters (500 m) from
the mean low tide level -
|. For individuals - one hundred (100) blocks or approximately Eight
‘Thousand One Hundred (8,100) hectares and
2, For corporations, partnerships, associations or cooperatives - One Thousand

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(1,000) blocks or approximately Eighty-One Thousand (81,000) hectares,

The permit area is subject to relinquishment as provided for in Section 22(f) hereof.

Section 25. Application for Exploration Permit/Mandatory Requirements. Any

Qualified Person may apply for an Exploration Permit (MGB Form No. 5-1) with the Regional
Office concemed, through payment of the required fees. and submission of five (5) sets of the
following mandatory requirements:

a.

A location map/sketch plan of the proposed permit area showing its geographic
coordinates! meridional block(s) and boundaries in relation to major environmental
features and other projects;

‘A two-year Exploration Work Program duly prepared, signed and sealed by a

licensed Mining Engineer or Geologist;
Proof of technical competence of the technical personnel who shall undertake the

activities in ac

cordance with the submitted Exploration Work Program;
Proof of financial capability to undertake the Exploration Work Program;

‘The Articles of Incorporation, Partnership or Association By- Laws and Certificate
of Registration, duly certified by the Securities and Exchange Commission (SEC);
and

A Certificate of Non-Overlap for areas without indigenous cultural communities,
or a Certification Precondition from the NCIP for areas with ICOS/IPs, as the case
may be.

For offshore Exploration Permit applications, the following additional requirements
shal] be submitted:

a

The name, port of registry, tonnage, type and class of survey
vessel(s)/platform(s);,

A certification from the Coast and Geodetic Survey Department of the NAMRIA
that the proposed Exploration Work Program was duly registered to provide
update in the publication of "Notice to Matiners" together with a list of safety
measures to be regilarly undertaken to ensure the safety of navigation at sea and

prevent accident;

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©. Am agreement to properly identify: alll installations, vessels and other crafts
involved in exploration recognizable to all vessels within reasonable distance, notily
the Bureau thirty (30) calendar days prior to the intention (o remove all seientific
installations or equipment and apparatus; and allow the Bureau's authorized
personnel, Philippine Coast Guard and other authorized persons during reasonable
hours to board the vessel(s) while within the Exclusive Economic Zone.

The Regional Office shall regularly provide the Bureau with a list, consolidated map and
status report of the Exploration Permit applications filed in its jurisdiction.

Section 26. Transfer or Assignment of Exploration Permit Application. ‘Transfer or
assignment of Exploration Permit applications shall be allowed subject to the approval of the
Regional Director concerned taking into account the national interest and public welfare:
Provided, That such transfer or assignment shall be subject to eligibility requirements and shall

not be allowed in cases involving speculation.

Section 27. Area Status and Clearance. Within fifteen (15) working days from receipt of
the Exploration Permit application, the Regional Office concerned shall check in the control maps if
the area is open for mining applications. Upon notification of the applicant by the Regional
Office as to the transmittal of said document to the Department sector(s) concemed and/or
Government ageney(ies) concerned, it shall be the responsibility of the same applicant to secure'the
necessary area status consent or clearance from said Department sector and/or Government agency:
Provided, That the Department sector(s) concerned cannot unreasonably deny area
clearance/consent without legal and/or technical basis.

If the proposed permit area is open for mining applications, the Regional Office(s)
concemed shall give written notice to the applicant to pay the corresponding clearance fee:
Providled, That if « portion of the area applied for is not open for mining applications, the Regional
Office concemed shall exclude the same from the coverage of Exploration Permit application.

Section 28. Publication of an Exploration Permit Application. Within fiye (5)
working days from receipt of the necessary area clearances, the Regional Office(s) concemed shall

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issue the Notice of Application for Exploration Permit to the applicant for publication and radio
announcement, and to the Offices concemed for posting. The Notice must contain, among others.
the name and complete address of the applicant, duration of the permit applied for, extent of
exploration activities to be undertaken, area location, geographical coordinates/meridional block(s)
of the proposed permit area and location map/sketch plan with index map relative to major
environmental features and projects and to the nearest municipalities.

Within five (5) working days from receipt of the Notice, the Exploration Permit applicant
shall cause the publication thereof once in two (2) newspapers: one of general circulation published
in Metro Manila and another published in the municipality or province where the proposed permit
area is located, The Regional Office concemed shall cause the posting of the Notice on its
bulletin board for one (1) week, copy furmished the Bureau and the barangay(s) where the proposed
permit area is located.

Within five (5) working days from the last date of posting and radio announcement, the
authorized officer(s) of the office(s) concemed shall issue a certification(s) that the
posting/radio announcement have been complied with, Any adverse claim, protest or opposition
shall be filed directly, within ten (10) days from the date of publication or from the last date of
posting/radio. announcement, with the Regional Office concemed or through any PENRO or
CENRO concemed for filing in the Regional Office concerned for purposes of its resolution by the
Panel of Arbitrators pursuant to the provisions of the Act and these implementing niles. and
regulations. However, previously published valid and existing mining claims are exempted from the
publication/posting/radio announcement requited under this Section.

Section 29. Terms and Conditions of an Exploration Permit. The term of the Permit
shall be for a period of two (2) years trom date of issuance thereof, renewable for like periods but
not to exceed a total term of four (4) years for non-metallic mineral exploration or six (6) years for
metallic mineral exploration: Provided, That no renewal of Permit shall be allowed unless the
Permittee has complied with the terms and conditions of the Permit and has not been found guilty
of violation of any provision of the Act and these implementing rules and regulations.

‘The Permittee shall annually relinquish at Jeast 20% of the permit area during the first two

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(2) years of exploration and at least 10% of the remaining permit area antually during the extended
exploration period. However, if the permit area is less than five thousand (5,000) hectares.
the Permittee need not relinquish any part thereof. The Secretary or hissher duly
authorized representative shall annually review the performance of the Permittee;

‘The Permittee shall submit to the Bureau or Regional Office concerned a final
report upon the expiration or relinquishment. of the Permit or its conversion into Mineral
‘Agreement or FTAA and shall incorporate all the findings in the permit area, including locations of
samples, assays, chemical analyses and assessment of the mineral potential, Such report shall
include complete detailed expenditures incurred during the exploration;

Onshore exploration activities shall be carried out in a manner that will, at all times,

safeguard the environments

Section 30. Conversion of Exploration Permit to Mineral Agreement or
Financial or Technical Assistance Agreement. A Permittee tay, at its option, convert totally or
partially its Exploration Permit to a Mineral Agreement or PTAA for the purpose of undertaking
detailed exploration, if the exploration activities indicate a resource discovery; Provided, That the
term of the Exploration Permit shall be deducted from the terms of the Exploration/Pre-Feasibility
Study/Feasibility Study Period of the Mineral Agreement or FTAA.

Section 31, Rights and Obligations of the Permittee, The Permittee, its heirs or
successors-in-interest shall have the right to enter, occupy and explore the permit area, all other
rights provided for in the Act arid these implementing rules and regulations; and the obligation to
fully comply with the terms and conditions of the Exploration Permit.

Section 32. Transfer or Assignment of Exploration Permit. An Exploration Permit
may be transferred or assigned to another Qualified Person(s) subject to the approval of the

Director.

Section 33. Relinquishment of Areas Covered by Exploration Permit. 'The Permittee
may, at any time, relinquish the whole or any portion of the total permit area by filing a notice of
relinguishment with the Bureaw/Regional Office concemed.

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Section 34. Renewal of Exploration Permit. Prior to the expiration of an Exploration
Permit, the Permittee may submit to the Bureau, copy furnished the Regional Office concerned. an
application to renew the said Exploration Permit accompanied by the following mandatory
requirements:

a. Audited financial statements covering the term of the Exploration Permit; and
b. Two (2)-year Exploration Work Program (MGB Form No. 5-4) duly
prepared, signed and sealed by a licensed Mining Engineer or Geologist.

‘The Secretary, through the Director, may grant the renewal after field verification by the
Bureau, which shall be undertaken at the expense of the Permittee, and compliance with all
pertinent requirements, including payment of all required fees and reporting requirements.

Section 3, Cancellation of an Exploration Permit. The Secretary or the Director may
cancel the Exploration Permit for violation(s) by the Permittee of the terms and
conditions thereof, including the failure to secure the required proof of consultation with/project
presentation to the Sanggunian concerned pursuant to the pertinent provisions of RA No. 7160,
The Local Government Code of 1991, within one (1) year from issuance of the Exploration

Permit.

Upon issuance of the Order declaring with finality the cancellation of the Permit covering
areas within Government Reservations, the said areas shall automatically be reverted back to its
original status.

Section 36. Effect of Relinquishment or Cancellation of Exploration Permit. ‘The
foregoing provisions notwithstanding, relinquishment or cancellation shall not release the Permittee
from any and all obligations it may have, particularly with regard to ecological management, at the

time of relinquishment or cancellation.

Section 37. Declaration of Mining Project Feasibility. If results of exploration reveal
the presence of mineral deposits economically and tectmically feasible for mining operations, the
Permittee shall, within the term of the Exploration Permit, file a declaration of mining project

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feasibility. The approval of the declaration of mining project feasibility by the Director shall grant
the Permittee the exclusive right to a Mineral Agreement or FTAA over the permit area: Provided,
That fuilure of the Permittee to apply for Mineral Agreement or FTAA within a period of one (1)
year from the date of approval of the declaration of mining, project feasibility shall mean automatic
cancellation of the said declaration.

CHAPTER V
MINERAL AGREEMENTS

Section 38. 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 revenue. 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
contractot wherein the Government shall provide inputs to the mining operations other than the

mineral resource; and

G 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.

Section 39. El
Agreement:

. The following are Qualified Persons eligible to apply for a Mineral

a. __In-case of an individual - must be a Filipino citizen of legal age and with capacity (0
contract; or

b. Tn case of a corporation, partnership, association or cooperative -~ must be
organized or authorized for the purpose of engaging in mining. duly registered in
accordance with law, at least sixty percent (60%) of the capital of which is owned

by Filipino citizens.

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Section 40. Maximum Areas Allowed under a Mineral Agreement. The maximum area
that a Qualified Person may apply for or hold at any one time under a Mineral Agreement shall be as

follows:

a Onshore, in any one province -

1,

vp

For individuals ~ fen (10) blocks or approximately cight inmdred ten
(810) hectares and

For corporations, partnerships, associations or cooperatives ~ five thousand
(5,000) hectares for metallic minerals and two thousand (2,000) hectares for
non-metallic minerals per final mining area subject to the pertinent
provisions of Section 69 hereof.

b. Onshore, in the entire Philippines —

For in
hundred twenty (1,620) hectares and
For corporations, partnerships, associations or cooperatives — five thousand

iduals = twenty (20) blocks or approximately one thousand six

(5,000) hectares per final mining area subject to the pertinent provisions of
Section 69 hereof.

c Offshore, in the entire Philippines, beyond five hundred metets (500 m) from

the mean low tide ‘level -

For individuals - fifty (50) blocks or approximately four thousand fifty
(4,050) hectares,

For corporations, partnerships, associations ot cooperatives ~ five hundred
(500) blocks or approximately forty thousand five hundred (40,500) hectares,
and

For the Exclasive Economic Zone - a larger area to be determined by
the Secretary upon the recommendation of the Director.

The above-mentioned maximum areas that a Contractor may apply for or hold under a
Mineral Agreement shall not include mining/quarry areas under operating agreements between the
Contractor and a claim owner/Lessee/Permittee/licensee entered into under P.D. No. 463.

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Section 41. Term of a Mineral Agreement. A Mineral Agreement shall have @ term not
exceeding twenty-five (25) years from the date of execution thereof, and renewable for another term
not exceeding twenty-five (25) years under the same terms and conditions thereof, without prejudice
to changes that may be mutually agreed upon by the Government and the Contractor.

‘After the renewal period, the operation of the mine may be undertaken by the Government
or through a Contractor, ‘The contract for the opetation of a mine shall be awarded to the highest
bidder in a public bidding afler due publication of the notice thereof: Provided, That the original
Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable
expenses of the highest bidder.

Section 42. Pre-screening of Mining Applications, Mining applications shall be
reviewed by the Bureau upon the submission of the following:
a. Proof of financial eapability:

b. Social and environmental track record, including those of its officers and
directors:
e Corporate structure and ownership;

d. Mining project feasibility;

e. Mining operation work plan;
{Proposed operation, mitigation and prevention methods and/or equipment:
& Commitment to contribute to local community development.

Applicants of MPSAs, Co-produetion, and Joint Venture Agreements shall be required {0
have a minimum authorized capital of at least One Hundred Million Pesos (Php100,000,000,00),
with a minimum paid-up capital of at least Six Million Two Hundred Fifty Thousand Pesos
(Php6.250,000.00)..

Section 43, Environmental and Social Impact Assessment and igation 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,

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‘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 socioeconomic 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.

Section 44, Posting and publication requirement. Within five (5) working days from
receipt of the necessary area clearances, the Bureau or Regional Office(s) concemed shall issue the
Notice of Application for Mining Agreement to the applicant for publication and radio
announcement, and to the Offices concemed for posting. ‘The Notice must contain, among others.
the name and complete address of the applicant, the nature and duration of the agreement applied
for, extent of mining activities to be undertaken, area location, geographical coordinates/meridional
block(s) of the proposed permit area and location map/sketch plan with index map relative to major
environmental features and projects and to the nearest municipalities.

Within five (5) working days from receipt of the Notice, the applicant shall cause the
publication thereof once in two (2) newspapers: one of general circulation published in Metro
Manila and another published in the municipality or province where the proposed mining area is
located. The Regional Office concerned shall cause the posting of the Notice on. its bulletin
board for one (1) Week, copy fumished the Bureau and the barangay(s) where the proposed mining
area is located.

Within five (5) working days from the last date of posting and radio announcement, the
authorized officer(s) of the office(s) concerned shall issue a certification(s) that the
posting/radio announcement fiave been complied with. Any adverse claim, protest or opposition
shall be filed directly, within ten (10) days from the date of publication or fiom the last date of
posting/radio announcement, with the Regional Office concemed or through any PENRO or
CENRO concemed for filing in the Regional Office concemed for purposes of its resolution by the
Panel of Arbitrators pursuant to the provisions of the Act and these implementing rules and

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regulations, However, previously published Valid and existing mining elaims are exempted from the
publication/posting/radio announcement required under this Section.

Section 45, 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 mining agreement in accordance with

the decision of the Council on the winning proposal.

Section 46. 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 Couneil. 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.

Section 47. Failure to initiate mining operations. Pailure 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, without due cause, shall result in the cancellation
of the mineral agreement, The contractor thereafier forfeits the value of the improvements made
upon the land. The contractor shall thereafter be banned fiom 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.

Section 48. Multi-partite monitoring. The Bureau shall form a Multi-Partite Monitoring,
Team (MMT) 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 MMT and/or the Bureau may confiscate surety, performance and guaranty bonds posted
through an order to be promulgated by the Director. The Director or the local government
auth

ities may deputize, when necessary. any member or unit of the Philippine National Police,

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barangay, duly registered nongoyernment organization (NGO) ot any qualified person to police
any and all mining activities,

Section 49, 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, as may be provided by law. The Bureau shall issue a clearance for withdrawal upon

ing 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.

Section 50. Access to information, All contractors for mineral permits and agreements
shall provide information to affected indigenous peoples, local communities, and local
governments of their methods and processes of mining, the environmental and social risks
involved, their ownership structure and financial sources.

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

Section 51. People's Small-scale Mining Program. — There is hereby established a
People's Small-Scale Mining Program (“Minahang Bayan") to be implemented by the Secretary.

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in coordination with other concemed government agencies, to achieve an orderly, systematic and

rational scheme for the small-scale development and extraction of gold, silver, and chromite

deposits in certain mineral areas in order to address the social, economic, technical, and

environmental connected with small-scale mining activities.

The Minahang Bayan Program shall include the following features:

a.

ees

The identification, segregation and reservation of certain mineral lands as
Minahang Bayan Areas: Provided, that small-scale mining shall only be
applicable for gold, silver, and chromite: as provided for in RA No. 7076;

‘The recognition of prior existing rights and productivity;
The encouragement of the formation of cooperatives;

The extension of technical and financial assistance, and other social services:

The extension of assistance in processing and marketing:

The generation of ancillary livelihood activities;

The regulation of the small-scale mining industry with the view to encourage
growth and productivity; and

‘The efficient collection of government revenue,

Section 52. Establishment of Minahang Bayan Councils. A Minahang Bayan

Council is hereby created in each province or city where gold, silver, and chromite deposits have

been identified or known to exist, which shall be the implementing agency of the Department to

monitor and regulate Small-scale Mining Activities, and shall exercise the following powers and

functions, subject to review by the Secretary:

Declare and segrepate Minahang Bayan areas for Small-Scale Mining within the
Province or City:

Reserve future gold, silver, and chromite deposits other Minahang Bayan areas
for Small-Scale Mining:

To deliberate and act on applications for Small-scale Mining Contracts;

Formulate and implement rules and regulations related to Minahang Bayan:

‘Yo monitor the conduct of Small-Scale Mining operations in declared Minahang
Bayan areas:

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£ Settle disputes, conflicts or litigations over conflicting claims within a Minahang
Bayan area: and
g. Perform such other functions as may be necessary to achieve the goals and

objectives of this Act.

Section 53. Composition of Minahang Bayan Councils, — The Council shall be
composed of the Department of Environment and Natural Resources representative as Chairman;
the governor or city mayor, or his representative, as the case may be, as Vice Chairman, one (1)
small seale mining representative, one (1) large-scale mining representative, and one (1)
representative from a non-government organization, who shall come from un environmental

group, as members,

‘The representatives from the private sector shaill be nominated by their respective
organizations and appointed by the Department regional director, The Department shall provide
‘the staff support to the Board.

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

convened.

Section 54, Administrative Supervision over the Minahang Bayan Program, — The
Secretary, through his representative, shall exercise direct supervision and control over the
program and activities of the small-scale miners within the Minahang Bayan area.

Section 55, Declaration of Minahang Bayan Areas. — ‘The Minahang Bayan Council is

hereby authorized to declare and set aside Minahang Bayan areas in sites onshore suitable for
small-scale mining, subject to review by the Secretary, immediately giving priority to areas
already occupied and actively mined by small-scale miners before August 1, 1987: Provided,
‘That such areas are not considered as active mining areas: Provided, further, That the minerals
found therein are technically and commercially suitable for small-scale mining activities:
Provided, finally, That the areas are not covered by existing forest rights or reservations and have
not been declared as tourist or marine reserved, parks and wildlife reservations, unless their

status as such is withdrawn by competent authority,

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Areas may only be declared and set aside as Minahang Bayan 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 declared a Minahang Bayan, the following shall be required:

a Report of the Bureau on any conducted exploration;
b, Potential environmental impacts;

oe Potential cultural impacts;

d. Conflict and risk assessment;

Potential health impacts;
Potential economic benefits of the development and utilization of the minerals:
Carrying capacity and the ecological profile of the areas

trim es

Existing and alternative land uses of the area;

Local government land use plan.

No Small-Scale Mining Contract 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 a multi-sectoral 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.

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.

Section 56. Future People's Small-scale Mining Areas, — The following lands, when
suitable for small-scale mining, may be declared by the Council as Minahang Bayan areas:
a. Public lands not subject to any existing right;

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b. Public lands covered by existing mining rights which are not active mining areas:
and

c. Private lands, subject to certain rights and conditions, except those with
substantial improvements or in bona fide and tegular use as a yard, stockyard,
garden, plant nursery, plantation, cemetery or burial site, or land situated within
one hundred meters (100 m.) from such cemetery or burial site, water reservoir or
‘a separate parcel of land with an area of ten thousand square meters (10,000 sq.

m.) or less.

Section 57, Ancestral Lands. — No ancestral Jand may be declared as a Minahang
Bayan area without the prior consent of the indigenous cultural communities concemed:
Provided that, if ancestral lands are declared as Minahang Bayan areas, the members of the
indigenous cultural communities therein shall be given priority in the awarding of Small-Scale

Mining Contracts.

Section 58, Registration of Small-Scale Miners. — All persons undertaking small-scale
mining activities shall organize themselves into cooperatives and register as miners with the
Council in order to qualify for the awarding of a Small-Scale Mining Contract.

Section 59. Award of Small-scale Mining Contraets. — A Small-Scale Mining
Contract may be awarded by the Council to Small-Scale Mining Cooperatives who have
voluntarily organized and have duly registered with the appropriate government agency as @
cooperative; provided, that only one (1) Small-Scale Mining Contract may be awarded at any
one time to a Small-Scale Mining Cooperative within one (1) year from the date of award.

Section 60, Extent of Contract Area. — The Council shall determine the reasonable
size and shape of the Small-Scale Mining Contract Area following the meridional block system
established under Presidential Decree No. 463, as amended, otherwise known as the Mineral
Resources Development Decree of 1974, but in no case shall the area exceed twenty hectares (20
has.) per contractor and the depth or length of the tunnel or audit not exceeding that
recommended by the director taking into account the following circumstances:

a. Size of membership and capitalization of the cooperative;

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b. Size of mineralized area;

©. Quantity of mineral deposits;

d, Safety of miners;

Environmental impact and other considerations; and

Other related circumstances,

Section 61. Easement Rights. — Upon the declaration of a Minahang Bayan area, the
Council, in consultation with the operator, claim owner, landowner of lessor of an affected area,
shall determine the right of the small scale miners to existing facilities such as mining and
logging roads, private roads, port and communication facilities, processing plants which are
necessary for the effective implementation of the Minahang Bayan Program, subject to payment

of reasonable fees to the operator, claim owner, landowner or lessor.

Section 62. Rights under a Small-Scale Mining Contract. — A Small-Scale Mining
Contract entitles the Small-Scale Mining Cooperative to the right to mine, extract and dispose of
mineral ores within the contract area for commercial purposes. In no case shall a Small-Scale

Mining Contract be subcontracted, assigned or otherwise transferred,

Section 63. Terms and Conditions of the Contract. — A contract shall have a term of
two (2) years, renewable for like petiods, but not to exceed a maximum of fifteen (15) years, and
for as long as the Small-Scale Mining Cooperative complies with the provisions set forth in this
‘Act, and: Provided, That the holder of a Small-Scale Mining Contract shall have the following

duties and obligations:

a. Undertake small-scale mining. activities only in accordance with a mining plan
duly approved by the Council;

b. Abide by the Mines and Geosciences Bureau and the Small-Scale Mining Safety
Rules and Regulations;

Comply with his obligations to the holder of an existing mining right;

d. Pay all taxes, royalties or government production share as are now or may

hereafter be provided by law:

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Comply with pertinent rules and regulations on environmental protection and
conservation, particularly those on tree-cutting mineral-processing and pollution
control;

File under oath at the end of each month a detailed production and financial report
to the Couneil; and

‘Assume responsibility for the safety of persons working in the mines.

Section 64, Rights of Claim owners. — In case a site declared and set aside as a

Minahang Bayan area is covered by an existing mining right, the claim owner and the small-

scale miners therein are encouraged to enter into a voluntary and acceptable contractual

agreement with respect to the small-scale utilization of the mineral values from the area under

claim, In case of disagreement, the claim owner shall be entitled to the following rights and

privileges:

Exemption from the performance of annual work obligations and payment of
occupation fees, rental, and real property taxes;

Subject to the approval of the Board, free access to the contract area to conduct
metallurgical tests, explorations and other activities, provided such activities do
not unduly interfere with the operations of the small-scale miners; and

Royalty equivalent to one and one half percent (1. 1/2%) of the gross value of the
metallic mineral output or one percent (1%) of the gross value of the non-metallic
mineral output to be paid to the claim owner: Provided, That such rights and
privileges shall be available only if he is not delinquent and other performance of
his annual work obligations and other requirements for the last two (2) years prior
to the effectivity of this Act.

Section 65. Rights of Private Landowners. — The private landowner or lawful

possessor shall be notified of any plan or petition to declare his land as a Minahang Bayan area.

Said landowner may oppose such plan or petition in an appropriate proceeding and hearing

conducted before the Council.

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If a private land is declared as a Minahang Bayan area, the owner and the small-scale
mining contractors are encouraged to enter into a voluntary and acceptable contractual agreement
for the small-scale utilization of the mineral values from the private land: Provided, That the
owner shall in all cases be entitled to the payment of actual damages which he may suffer as a
result of such declaration: Provided, further, That royalties paid to the owner shall in no case
exceed one percent (1%) of the gross value of the minerals recovered as royalty.

Section 66, Ownership of Mill Tailings. — The Small-Scale Mining Cooperative shall
be the owner of all mill tailings produced from the contract area, The cooperative may sell the
tailings or have them processed in any custom mill in the area: Provided, that, if the Small-Scale
Mining Cooperative decides to sell its mill tailings, the claim owner shall have a pre-emptive

right to purchase said mill tailings at the prevailing market price.

Section 67. Sale of Gold. — All gold produced by small-scale miners in any mineral area
shall be sold to the Bangko Sentral ng Pilipinas, or its duly authorized representatives, which
shall buy it at prices competitive with those prevailing in the world market regardless of volume

‘or weight.

The Bangko Sentral ng Pilipinas shall establish as many buying stations in gold-rush
areas as possible to fully service the requirements of the small-scale minerals thereat,

Section 68. Custom Mills, — The establishment and operation of safe and efficient
customs mills to process minerals or ore-bearing materials shall be limited to mineral processing
zones duly designated by the local government unit concemed upon recommendation of the

Council.

Tn mining areas where the private sector is unable to establish custom mills, the
Government shall construct such custom mills upon the recommendation of the Council based on
the viability of the project.

The Board shall issue licenses for the operation of custom mills and other processing
plants subject to pollution control and safety standards.

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‘The Department shall establish assay laboratories to cross-check the integrity of custom

mills and to render metallurgical and laboratory services to mines.

Custom mills shall be constituted as withholding agents for the royalties, production.
share or other taxes due the Government.

Section 69. Government Share and Allotment. — The revenue to be derived by the
Government from the operation of the mining program herein established shall be subject to the
sharing provided in the Local Government Code,

Section 70. Minahang Bayan Protection Fund, — ‘There is hereby created a Minahang
Bayan Protection Fund which shall be fifteen percent (15%) of the national government's share
due the Government which shall be used primarily for information dissemination und training of
small-scale miners on safety, health and environmental protection, and the establishment of mine
rescue and recovery teams including the procurement of rescue equipment necessary in cases of

emergencies such as landslides, tunnel collapse, or the like.

The fund shall be administered by the Bureau and shall also be made available to address
the needs of the small-scale miners brought about by accidents and/or fortuitous events.

Section 71. Rescission of Contracts and Administrative Fines. — The non-compliance
With the terms and conditions of the contract or violation of the rules and regulations issued by
the Secretary pursuant to this Act, as well as the abandonment of the mining site by the
contractor, shall constitute a ground for the cancellation of the Small-Scale Mining Contract and
the ejectment from the Minahang Bayan area of the contractor, In addition, the Secretary may
impose fines against the violator in an amount of not less than Twenty Thousand Pesos
(20,000.00) and not more than One Hundred Thousand Pesos (P100,000.00). Non-payment of
the fine imposed shall render the small-scale mining contractot ineligible for other small-scale

mining contracts.

Scetion 72. Reyersion of People's Small-scale Mining Areas) — The Secretary. upon
recommendation of the director, shall withdraw the status of the Minahang Bayan area when it

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can no longer feasibly operated on a small-scale mining basis or when the safety, health and
environmental conditions watrant that the same shall revert to the State for proper disposition.

See, 73. Actual Occupation by Small-scale Miners. — Small-scale miners who have
been in actual operation of mineral lands on or before August 1, 1987 as determined by the
Board shall not be dispossessed, ejected or removed from said areas; Provided, that they comply
with the provisions of this Act.

‘The Secretary shall within ninety (90) days from the effectivity of this Act promulgate
rules and regulations to effectively implement the provisions of the same, Priority shall be given
to such rules and regulations that will ensure the least disruption in the operations of the small-
scale miners,

Section 74. 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.

Section 75, FPIC in small-scale mining. Small-scale mining activities within any
ancestral domain by any person shall also require the free, prior informed consent of ICCs/IPs.

Section 76. 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, Contract. Failure to submit
this requirement will result in the non-issuance of the small-scale mining permit (SSMP).

Section 77. 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.


Section 78. 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.

Section 79, Multi-sectoral Monitoring Team, A multi-sectoral monitoring team shall be
organized to monitor the Small-Scale Mining Cooperative's compliance with the terms and
conditions of its Contract and ECC. The MMT shall conduct ocular inspections of the Minahang
Bayan area at any time of the day and night and shall have visitorial powers,

Section 80, 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

4. access to minerals markets and to financings

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:

© facilitating partnership among small-scale mining cooperatives; and

4d. other incentives to attract informal small-scale miners to formalize their status,

CHAPTER VIE
FINANCIAL OR TECHNICAL ASSISTANCE AGREEME

Section 81. Eligibility, Any Qualified Person with technical and financial capability to
undertake large-scale exploration, development, and utilization of mineral resources in the
Philippines may enter into a Financial or Technical Assistance Agreement (FTAA) directly with
the Government through the Department. Provided, that applicants for FTAAS shall be required
to have a minimum paid-up capital of Five Hundred Million Pesos (Php500,000,000.00) upon
the grant of the FTAA by the President and prior to its registration with the Bureau,

Section 82, Maximum Contract Area. The maximum contract area that may be granted
per qualified person. subject to relinquishment shall be:

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1,000 meridional blocks onshore;

4,000 meridional blocks offshore; or

Combinations of (a) and (b) provided that it shall not exceed the maximum limits
for onshore and offshore areas

Seetion 83. Terms and Conditions. The following terms, conditions, and warranties

shall be incorporated in the financial or technical assistance agreement, to wit

a

A firm commitment in the form of a sworn statement, of an amount corresponding
to the expenditure obligation that will be invested in the contract area: Provided,
‘That such amount shall be subject to changes as may be provided for in the rules

and regulations of this act;

A financial guarantee bond shall be posted in favor of the Government in an
amount equivalent to the expenditure obligation of the applicant for any year.

Submission of proof of technical competence, such as. but not limited to, its track
record in mineral resource exploration, development, and utilization; details of
technology to be employed in the proposed operation; and details of technical
personnel to undertake the operations;

Representations and warranties that the applicant has all the qualifications and
none of the disqualifications for entering into the agreement;

Representations and warranties that the contractor has or has access to all the
financing, managerial and technical expertise and, if circumstances demand, the
technology required to promptly and effectively carry out the objectives of the
agreement with the understanding to timely deploy these resources under its
supervision pursuant to the periodic work programs and related budgets, when
proper, providing an exploration period up to two (2) years, extendible for another
two (2) years but subject to.annual review by the Secretary in accordance with the
implementing rules ‘and regulations of this Act, and further, subject to the

relinquishment obligatio

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Represeniations and warranties that, except for payments for dispositions for its
equity, foreign investments in local enterprises which are qualified for
repatriation, and local supplier's credits and such other generally accepted and
permissible financial schemes for raising funds for valid business purposes, the
contractor shall not raise any form of financing from domestic sources of funds,
whether in Philippine or foreign currency, for conducting its mining operations
for and in the contract area;

“The mining operations shall be conducted in accordance with the provisions of
this Act and its implementing rules and regulations;

Work programs and minimum expenditures commitments:
Preferential use of local goods and services to the maximum extent practicable;

A stipulation that the contractors are obligated to give preference to Filipinos in
all types of mining employment for which they are qualified and that technology
shall be transferred to the same;

Requiring the propronent to effectively use appropriate anti-pollution technology
and facilities to protect the environment and to restore or rehabilitate mined out
areas and other areas affected by mine tailings and other forms of pollution or

destruction;

‘The contractors shall furnish the Government records of geologic, accounting, and
other relevant data for its mining operations, and that book of accounts and
records shall be open for inspection by the government;

Requiring the proponent to dispose of the minerals and by products produced
under a financial or technical assistance agreement at the highest price and more
advantageous terms and conditions as provided for under the rules and regulations

of this Act;

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n. Provide for consultation and arbitration with respect to the interpretation and
implementation of the terms and conditions of the agreements; and

a Such other terms and conditions consistent with the Constitution and with this Act
as (he Secretary may deem to be for the best interest of the State and the welfare

of the Filipino people,

Section 84. Negotiations. The terms of a Financial or ‘Technical Assistance Agreement
shall be negotiated by the Department and executed and approved by the President. The
President shall notify Congress of all Financial or Technical Assistance Agreements within thirty

(30) days from execution and approval thereof.

Section 85, Filing and Evaluation of Financial or Technical Assistance Agreement
Proposals. All financial or technical assistance agreement. proposals shall be filed with the
Bureau aller payment of the required processing fees. If the proposal is found to be sufficient and
meritorious in form and substance after evaluation, it shall be recorded with the appropriate
government agency to give the proponent the prior right to the area covered by such proposal:
Provided that existing mineral agreements, financial or technical assistance agreements and other
mining rights are not impaired or prejudiced thereby. The Secretary shall recommend its
approval to the President.

Section 86. Terms of Financial or Technical Assistance Agreement. A financial or
technical assistance agreement shall have a {erm not exceeding twenty-five (25) years to start
fiom the execution thereof, renewable for not more than twenty-five (25) years under such terms
and conditions as may be provided by law.

Section 87. Option to Convert into a Mineral Agreement, The contractor has the
option to convert the financial or technical assistance agreement to a mineral agreement at any
time during the term of the agreement, if the economic viability of the contract area is found to
be inadequate to justify large-scale mining operations, aller proper notice to the Secretary as
provided for under the implementing rules and regulations: Provided, That the mineral
agreement shall only be for the remaining period of the original agreement,

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In the case of a foreign contractor, it shall reduce its equity to forty percent (40%) in the
corporation, partnership, association, or cooperative. Upon compliance with this requirement by
the contractor, the Secretary shall approve the conversion and execute the mineral production-

sharing agreement.

Section 88, Assignment/Transfer, A financial or technical assistance agreement may be
assigned or transferred, in whole or in part, to a qualified person subject to the prior approval of
the President: Provided, That the President shall notify Congress of every financial or technical
assistance agreement assigned ot converted in accordance with this provision within thirty (30)
days from the date of the approval thereof.

Section 89. Withdrawal from Financial or Technical Assistance Agreement. The
contractor shall manifest in writing to the Secretary his intention to withdraw from the
agreement, if in his judgment the mining project is no longer economically feasible, even after he
has exerted reasonable diligence to remedy the cause or the situation. The Secretary may accept
the withdrawal: Provided that the contractor has complied or satisfied all his financial, fiscal or
legal obligations.

CHAPTER Vill
QUARRY RESOURCES

Section 90. Quarry resources within ancestral domains, Gathering of quary
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/TPs 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.

Section 91, 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,

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gabbro, serpentine, inset filling materials, clay for ceramic tiles and building bricks, pumice,
perlite and other similar materials that are extracted by quarrying ftom 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. Pravided, that gathering/extraction of sand for its metallic contents such as
magnetite from the country’s rivers and shorelines shall be required 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 (S 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.

Section 92. 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.

Section 93. Cancellation of Quarry Permit, A quarry permit may be cancelled by the
provincial governor for violations of the provisions of this Act or its implementing rules and
regulations or the terms and conditions of said permit: Provided that before the cancellation of
such permit, the holder thereof shall be given the opportunity to be heard in an investigation
conducted for the purpose.

Section 94. 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
ot 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.

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Section 95, 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 mote than five hectares (5 has,) at any one time.
The permit shall have a term of five (5) years, renewable for a like period but not to exceed a
total term of twenty-five (25) years.

Section 96. Exclusive Sand and Grayel Permit, Any qualified person may be granted
an exclusive sand and gravel permit by the provincial governor to quarry and utilize sand and
gravel ot other loose or unconsolidated materials from public lands for his own use, provided,

that there will be no commercial disposition thereof.

Section 97. 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.) fora period coterminous with said construction.

Section 98. 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.

Section 99, 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.

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Section 100. 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,

CHAPTER IX
TRANSPORT, SALE AND
PROCESSING OF MINERALS

Section 101. Ore transport permit, A permit specifying the origin and quantity of non-
processed mineral ores or minerals shall be required for their transport, Transport permits shall
be issued by the mines regional director who has jurisdiction over the area where the ores were
extracted, In the case of mineral ores or minerals being transported from the Minahang Bayan
areas to the custom mills or processing plants, the Minahang Bayan Council concerned shall
formulate their own policies to govern such transport of ores produced by small-scale mining
cooperatives. 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,

Section 102. Track record, Only mining companies with demonstrated capacity and
good environmental track record in mining and mineral processing shall be allowed to extract
and process minerals. ‘The Bureau shall encourage contractors to put up processing plants within
the community with the end in view of generating employment and developing other

downstream industries.

Section 103. Mineral trading registration. No person shall engage in the trading of
mineral products, either locally or internationally, unless registered with the Department of Trade
and Industry and accredited by the Department, with a copy of said registration submitted to the

Bureau.

Section 104. Mineral processing permit, No person shall engage in the processing of
minerals without first securing a miinerals processing permit from the Bureau. Mineral
processing permits shall be for a period of five (5) years, renewable for like periods but not to
exceed a total term of twenty-five (25) years.

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Section 105. Eligibility of Foreign-owned/-controlled Corporation. A foreign-owned/-
controlled corporation may be granted 4 mineral processing permit.

CHAPTER X

DEVELOPMENT OF COMMUNITIES,
SCIENCE AND TECHNOLOGY

Section 106. 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.

Section 107. Social Development and Management Program and Community
Development Program. All Contractors, Permit Holders, or Lessees shall prepare a
Social Development Management Program (SDMP), in consultation and in partnership with
the host and neighboring communities. To meet the changing needs and demands of the
communities, the Contractor, Permit Holder, or Lessee engaged in mining operations shall
submit an SDMP every five (5) years to the Regional Office for approval,

In the case of a holder of an Exploration Permit or a Mineral Agreement or FTAA in the
Exploration Stage, the Permitice/Contractor shall develop and implement a Community
Development Program (CDP) which implementation shall be supported by a fund equivalent to a
minimum of ten percent (10.0%) of the budget of the approved two (2)-year Exploration Work
Program: Provided, That the CDP shall be developed in consultation and in partnership with
the host communities within the area subject of active exploration activities: Provided, further,
‘That the CDP shall be submitied to the Regional Office concerned, for approval, within six (6)
months upon registration of the approved Exploration Permit, Mineral Agreement or FTAA.

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Section 108. Employment of Filipinos and training of members of the focal
community. A contractor shall maintain an effective program of manpower training and
development throughout the term of the mineral agreement and shall encourage and train
Filipinos to participate in all aspects of the mining operations, including the management thereof,
A contractor and/or permittee shall give preference to Filipino citizens in all types of mining
employment within the country: Provided, that for highly-technical and specialized mining
‘operations, the contractor may, subject to the necessary government clearances, employ qualified

foreigners.

Section 109. 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.

Section 110, Donation/turnover of facilities, Prior to the cessation of mining operations
occasioned by abandonment ot withdrawal of operations, on public lands by the contractor, the
latter shall have a period of one (1) year therefrom within which 10 remove improvements;
otherwise all the infrastructure, facilities and equipment shall be turned over or donated tax-free
to the proper government authorities, national o local, to ensure that said infrastructure facilities
and equipment are continuously maintained and utilized by the host and neighboring

communities.

CHAPTER XI
BENEFIT SHARING, TAXES AND FEES

Section 111. Taxes and fees. The contractor shall pay all taxes and fees as required by

Jaw, including, but not limited to:

a. contractor’s income tax;

b. customs, duties and fees on imported capital equipment;
c, value-added tax on imported goods and services:

d. withholding tax on interest payments on foreign loans;

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e withholding tax on dividends to foreign stockholders;
r documentary stamps taxes;

capital gains tax;

excise tax on minerals;

i, local business tax;

real property tax;

community tax;

1 occupation fees;

™. registration, accreditation, and permit fees;
n Water usage fees.

Section 112, Government Share in Mineral Agreements and FTAAs, The Contractor shall
pay the government ten percent (10%) of Gross Revenue, in lieu of all national and local taxes, including
royalty payments for indigenous cultural communities, duties and fees, and mayor's and/or business
permits from the host local government units: Provided, that the Contractor shall still pay real property
tax, dividend tax, withholding taxes, donor’s tax, environmental protection and enhancement fees,

Securities and Exchange Commission fee, and administrative and judicial costs and penalties,

The list of exceptions shall be reviewed annually, or as often as may be necessary; provided

however. that none of the exceptions indicated herein shall be delisted,

‘The Government Share shall be remitted and paid quarterly by the Contractor to the Government,
which shall be recorded by the Bureau of Internal Revenue (BIR) as revenue arising from payments of

Corporate Income Tax.

Section 113, Additional Government Share. An additional government share shall be
remitted and paid by the Contractor to the Government in the event that the Contractor is deemed
to have realized extra profits due to increase in the price of mineral produet.

Section 114. Government Share in Co-production and Joint Venture Agreements.
The share of the Government in Co-production and Joint Venture Agreements shall be
negotiated by the Government and the Contractor as prescribed in Section 81 of Republic Act
No. 7942, otherwise known as’ the Philippine Mining Act of 1995: provided, that the

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Government Share shall not be less than the share for mineral agreements and FTAAs as
preseribed in Section 111 of this Act,

Section 115, Mining Contract. The revenue sharing arrangement provided herein and
the applicable terms and conditions provided under existing Jaws shall be embodied in the
mineral agreements and F'TAAs prepared by the MGB.

Section 116. 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,

Section 117. Legal support services fund, A legal 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 responsibility of protecting the rights of the marginalized groups, the environment and

sustainable development in general.

Section 118. Allocation of Government Share and Transparency. The Government
share as referred to in the preceding sections shall be shared and allocated in accordance with
Sections 290 and 292 of Republic Act No. 7160 otherwise known as the Local Government Code
of 1991,

In case the development and utilization of mineral resources is undertaken by a
government-owned or -controlled corporation, the sharing and allocation shall be in accordance
with Sections 291 und 292 of the said Code. Provided, however, that any person, natural or
juridical, including government agencies or government-owned or -controlled corporations
engaged in the utilization and development of the national wealth, shall directly remit to the
provincial, city, municipal or barangay treasurer of the host Jocal government unit concerned its
Forty Percent (40%) share derived from national wealth taxes under section 290 of the Local
Government Code, and the remaining sixty percent (60%) to the national government.

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A percentage of U
for Disaster Risk Management. ‘This lund shall likewise benefit ICCs/IPs within the territory of

amount shall be set aside hy the respective local government uni

the local government unit, Provided, that the administrative and operational expenses of the

Council shall also be taken from this sha

All taxes, royalties, fees paid or remitted to the national government or to the host local
government unit, or the funds set aside for the community/ies concerned shall be published by

the Contractor. In the same manner, the government agency or the local government unit shall

publish all the taxes, royalties, fees paid or remitted to it by the Contractor.
The publication requirement and all other related transparency measures shall be
governed by the rules, guidelines, or standards set by the Philippine Extractive Industries

{111 MSG). Local MSGs shall likewise be

Lransparency Initiative Multi-stakeholder Group (PHL

created for this purpose.

Seetion 119. Mine waste and tailings fees. A semi-annual fee to be known as mine
waste and tailings fee is hereby imposed on all operating mining companies based on the
amounts of mine waste and mill tailings it generated for the said period. ‘the amount of fees
collected shall accrue (0 a Mine Waste and Tailings Reserve Furd (MWTRF) and shall be
deposited in a Government depository bank to be used for payment of compensation for damages
caused by any mining operations, The MWT Reserve Fund shall also be utilized for the

rehabilitation and remediation of abandoned mines, upon identification by the Bureau.

Section 120. Incentives. The contractor in mineral agreements, and FTAAs shall be
entitled to the applicable fiscal and non-fiscal incentives as provided for under Executive Order
No. 226, otherwise known as the Omnibus Investments Code of 1987: Provided, That holders of

exploration permits may register with the Board of Investments and be entitled to the fiscal

incentives granted under the said Code for the duration of the permits or extensions thereof:
Provided. further, That mining activities shall always be included in the investment priorities

plan.

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Section 121. Incentives for Pollution Control Devices. Pollution contro! device
acquired, constructed or installed by contractors shall not be considered as improvements on the
land or building where they are placed, and shall not be subject to real property and other taxes
or assessments; Provided, however, that payment of mine wastes and tailings fees is not

exempted.

Section 122, Income Tax-Carry Forward of Losses. A net operating loss without the
benefit of incentives incurred in any of the first ten (10) years of operations may be carried over
as a deduction from taxable income for the next five (5) years immediately following the year of
such oss. The entire amount of the loss shall be carried over fo the first of the five (5) taxable
years following the loss, and any portion of such loss which exceeds the taxable income of such
first year shall be deducted in like manner from the taxable income of the next remaining four (4)

years,

Section 123. Income Tax-Accelerated Depreciation. Fixed assets may be depreciated

as follows:
a. To the extent of not more than twice as fast as the normal rate of depreciation or
depreciated at normal rate of depreciation if the expected life is ten (10) years or

Jess; or

b Depreciated over any number of years between five (5) years and the expected
life if the latter is more than ten (10) years, and the depreciation thereon allowed
as deduction from taxable income: Provided, That the contractor notifies the
Bureau of Internal Revenue at the beginning of the depreciation period which
depreciation rate allowed by this section will be used.

In computing for taxable income, unless otherwise provided in this Act, the contractor
as of

may, at his option, deduct exploration and development expenditures accumulated at c
the date of the prospecting or exploration and development expenditures paid or incurred during
the taxable year: Provided, ‘That the total amount deductible for exploration and development
expenditures shall not exceed twenty-five per centum (25%) of the net income from mining
operations, The actual exploration and development expenditures minus the twenty-five per

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centum (25%) net income from mining shall be carried forward to the succeeding years until
fully deducted.

Net income from mining operation is defined as gross income from operations less
allowable deductions which are necessary or related to mining operations, Allowable deductions
shall include mining, milling and marketing expenses, depreciation or properties directly used in
the mining operations, This paragraph shall not apply to expenditures for the acquisition or
improvement of property of a character which is subject to the allowances for depreciation.

Sec, 124. Investment Guarantees. The contractor shall be entitled to the basic rights and
guarantees provided in the Constitution and such other rights recognized by the government,
including, but not limited to repatriation of investments and remittance of earings in the
currency in which the investment was originally made and at the exchange rate prevailing at the
time of repatriation, and freedom from expropriation or requisition of investment.

Section 125, Deposit of capital and profits requirement, As part of their demonstrated
financial capacity, all 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,

Section 126. 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.

CHAPTER XIE
SAFETY AND ENVIRONMENTAL PROTECTION

A. Safety

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Section 127. 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
hall be covered under

safety, occupational health and environmental rules and regulations
Republic Act No. 7305 or the Magna Carta of Public Health Workers.

Section 128. 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

inamine.

Section 129. 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

Jeast five (5) years of experience in mining operations, and one (1) registered foreman.

Section 130, 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,

Section 131, Mine inspection. The mines regional directors 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 regional directors shall be submitted to the Bureau.

Section 132, 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,

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or appropriate measures are taken by the contractor. Unreasonable delay to remoye the danger or
introduce the necessary improvements by the contractor shall be a cause for the cancellation of

the mineral agreement,

Scetion 133. 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

Section 134, 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
remove 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.

Section 135. Final Mine Rehal
permittees shall technically and biologically rehabilitate the excavated, mined-out tailings

itation and Decommissioning Fund. Contractors and

covered and disturbed areas to the condition of environmental safety, in accordance with its
approved Final Mine Rehabilitation and Decommissioning Plan (FMRDP). A Final Mine
Rehabilitation and Decommissioning Fund (FMRDF) shall be established by each operating
Contractor or Permit Holder to ensure that the full cost of the approved Final Mine
Rehabilitation and Decommissioning Plan (FMRDP) is accrued before the end of the operating
life of the mine. The EMRDF shall be deposited as a trust fund in a Government depository bank
and shall be used solely for the implementation of the approved FMR/DP.

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Annual cash provisions shall be made by Contractors/Permit Holders to a PMRDP

based on the formula:

Annual Provision ~ Cost of Implementing the Approved FMR/DP x Percentage
Required Per Table |

Based on the expected mine life, the initial annual cash provision shall be made to the
MRF Committee within sixty (60) days from the date of the FMR/DP’s. approval and every
anniversary date thereafler: Provided, Thal, on application by the Contractor/Permit Holder, the
MRF Committee may allow a later date for the payment of the first annual provision. Failure to
fulfil 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.

Section 136. Progressive rehabilitation. Contractors shall also. conduct progressive

rehabilitation activities.

Section 137. 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.

Section 138, 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.

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Section 139. 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 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.

Section 140, Preservation of topsoil. ‘The removed topsoil, or the more productive
hotizons of the soil shall be preserved for other uses.

Section 141. 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
ree and prior informed consent of indigenous peoples.

Section 142. Recycling 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.

C, Acid Mine Drainage

Section 143. 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,

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Section 144. Estal
establish a prediction and monitoring system to identify potential acid-producing materials and

ment of a prediction and monitoring system. ‘he Bureau shall

monitor their production of acid waste.

Section 145, 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,

Section 146. 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.

CHAPTER XII
RESOLUTION OF CONFLICTS

Section 147. 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, afier 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:
ae Disputes involving rights to mining areas;
b, Disputes involving mineral agreements or permits;

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c. Disputes involving surface owners. occupants and claimholders/concessionaires:
and

d. Disputes pending before the Bureau and the Department at the date of the
effectivity of this Act

Disputes involving 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.

Section 148, 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.

Section 149. 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
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;

b. 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 matier under

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investigation, and to testify in any investigation or hearing conducted in

pursuance of this Act;

es 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 of 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;

4. To hold any person in contempt, directly or indirectly, and impose appropriate

penalties therefor; and

fe. 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 imention 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.

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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 trom receipt of the order or decision of the
Board.

CHAPTER XIV
ACCESS TO JUSTICE

Section 150, 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.

Section 151. 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,

Section 152. 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.

Section 153, 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

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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
Jegal action isa SLAPP and accordingly dismiss the same.

Section 154, Indigents’ suit, Indigents shall be exempt from payment of any
administrative or 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.

Section 155. 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 contrary (o the provisions of the Constitution.

Section 156. 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. Civil, criminal and administrative actions may thus be filed directly against the
members of the Board of Directors, officers and/or individual stockholders.

Section 157. 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 followin;

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;

Any publie officer who wilfully 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/ies under this Act of its implementing

rules and regulations,

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The court shall exempt such action from the payment of filing fees, except {ees for
actions not capable of pecuniary estimation, and shall likewise, upon prima facie showing of
non-enforeement or violation complained of, exempt the plaintiff from filing an injunetion 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 XV
PENAL PROVISIONS

Section 158, Grounds for the cancellation of mineral agreements and permits;

a Late or Non-compliance with Requirements provided in this Act or in its
implementing rules and regulations, without a valid reason, shall be sufficient
ground from the suspension of any permit or agreement provided under this Act.

b. Violation of the Terms and Conditions of Permits or Agreements: 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; Provided, however, that
the failure to abide by the terms and conditions of tax incentives and credits shall

only cause the suspension or cancellation of said incentives and credits.

%, Human rights violations perpetrated by the contractor or any agent of the
contractor;
d. _Bailure to pay the taxes and fees due the Government for two (2) consecutive

years shall cause the cancellation of the exploration permit, mineral agreement,
financial or technical assistance agreement and other agreements and the re-

opening of the area subject thereof to new applicants.

Any falsehood made in the exploration permit, mining agreement and financial or

technical assistance which may alter, change or affect substantially the facts set

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forth in said statements may cause the revocation and termination of the
exploration permit, mining agreement and financial or technical assistance
agreement. 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). Corporations, corporate directors/officers found guilty of the
aboye enumeration may be subjected to a perpetual ban in the mining industry in
the Philippines.

Section 159. 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).

Section 160. Theft of minerals. Avy 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.

Section 161. 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.

Section 162. Destruction of mining structures, Any person who wilfully destroys or

damages structures in or on the mining area or on the mill sites shall, upon convietion, be

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imprisoned for a period not to exceed five (5) years and shall, in addition, pay compensation for
the damiages which may have been caused thereby.

Section 163. Mines arson. Any person who wilfully sets fire to any mineral stockpile,
mine or workings, fittings or a mine, shall be guilty of arson and shall be punished, upon
convietion, 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.

Section 164. Wilful damage to a mine, Any person who wilfully 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.

Section 165, 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).

Section 166. Vitiation of FPIC. Any person found to have yitiated 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,

Section 167, 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

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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.

Section 168. 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 shal] confiscate and seize equipment, tools and instruments; effect immediate

suspension or closure of the mining activities of the permittee concerned, and revoke the permit.

Section 169. 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

Section 170. 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.

Section 171, 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

Section 172. 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,

Section 172. Repealing clause. Republic Act 7942, Presidential Dectee 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.

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Section 173. Funds. The amount of One Hundred Billion Pesos (PhP
100,000,000,000.00) is hereby appropriated for the proper fimctioning of the Bureau, the
Couneil, 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.

Section 174. 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.

Section 175. Effectivity clause, This Act shall take effect within fifteen (15) days
following its publication in two national newspapers of general circulation in the Philippines.

Approve,

BL