Philippine Mining Act of 1995 - Report Consolidated

Philippine Mining Act of 1995 (Republic Act No.
7942)
AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION, DEVELOPMENT, UTILIZATION, AND CONSERVATION
Submitted by: Lyndon Cena Nicole Bondad Mary Ruth Datario 8/27/2013
Philippine Mining Act of 1995 (Republic Act No. 7942)
EVOLUTION OF PERTINENT MINING LAWS
1. ROYAL DECREE OF MAY 14, 1867 OR THE SPANISH MINING LAW

As provided by the Civil Code of Spain (Art. 339), mines and mineral lands could be susceptible of private appropriation by means of grants from the State. Such being the case, the Regalian Doctrine was followed. Regalian Doctrine provides that minerals belong to the State wherever they may be found, whether in public lands or in private lands. For the reason of prospecting on private property, the permission of the owner was necessary. In case of refusal by the owner, the government might be called upon to intervene.
2. ACT OF CONGRESS OF JULY 1, 1902 OR PHILIPPINE BILL OF 1902

It contained provisions for the open and free exploration, occupation and purchase of mineral deposits and the land where they may be found. It declared all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed to be free and open to exploration, occupation, and purchase, and the land in which they are found to occupation and purchase by citizens of the United States, or of Philippine Islands. The holder of the mineral claims so located is entitled to all the minerals which may lie within his claim, but he may not mine outside the boundary lines of his claims. One of the continuing requirements for the subsistence of the mining claim is performance of not less than one hundred dollars worth of labour or undertaking of improvements of the same value every year. The locators failure to comply with which shall operate to open the claim or mine to relocation in the same manner as if no location of the same had even been made.
3. ACT 624
The Regalian Doctrine was still recognized. The disposition of minerals of the public domain was reserved to the State. They were not open to exploration, occupation, and exploitation except only to citizens of the United States and of the Philippines. It prescribed regulations to govern the location and the manner of recording mining claims and the amount of work necessary to hold possession thereof. Such regulations reinforced the annual work or labour requirement of not less than one hundred dollars worth.
4. COMMONWEALTH CONSTITUTION
It declared all natural resources of the Philippines, including mineral lands and minerals, to be property belonging to the State.
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However, not really all of the Philippines natural resources were considered part of the public dom ain.
5. CA No. 137 or Mining Act

It expressly adopted the Regalian Doctrine following the provisions of the 1935 Constitution. It granted only lease rights to mining claimants who are proscribed from purchasing the mining claim itself. The said provisions of Mining Act were expressly inapplicable to mining claimants who had located and recorded their claims under the Philippine Bill of 1902.
6. EO 141
It established the status of such unpatented mining claims which have not complied with the annual work requirement, as having been abandoned and open for relocation, their declarations of location being accordingly cancelled.
7. PD 463
It declared that all mineral deposits in public or private lands belong to the State, inalienable and imprescriptively. It recognized whatever rights or reservations had already been existing with respect to certain mining lands, apparently alluding to the rights of mining claim holders under the Philippine Bill of 1902. The possessory rights of mining claim holders under the Philippine Bill of 1902 remained effective for as long as said holders complied with the actual work requirement.
8. PD 1214
It required all the holders of unpatented mining claims to secure mining lease contracts under PD 463. Holders of subsisting and valid patentable mining claims located under the Philippine Bill of 1902 were to file mining lease applications therefor within one year from the effectivity of the said decree. The filing of such mining lease applications was considered a waiver of the holders rights to the issuance of mining patents for their claims. Non-filing of applications for mining lease by the holders thereof within one-year period would cause the 1 forfeiture of all their rights to their claims.
REPUBLIC ACT No. 7942 OR THE PHILIPPINE MINING ACT OF 1995

It was enacted instituting a new system for the exploration, development, utilization and conservation of the natural resources of the country. It defines the modes of agreements for mining operations, outlines the procedure for the filing and approval, assignment or transfer and withdrawal and fixes their terms.
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Atok Big-Wedge Mining Co. v. Intermediate Appellate Court, G.R. No. 63528,Sept. 9, 1996,261 SCRA 528
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DENR ADMINISTRATIVE ORDER 96-40

Revised Implementing Rules and Regulations of Republic Act No. 7942 Otherwise Known as the Philippine Mining Act of 2 1995
Declaration of Policy
All minerals are owned by the State
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To promote rational exploration, development, utilization and conservation Role of government and private sector To enhance national growth that effectively safeguards the environment and protect the rights of affected 4 communities
Governing principle per DAO 96-40

Sustainable development Improving the total quality of life Principle of sustainable mining Pro-environment and pro-people mining Mining is temporary land use Optimum land use Progressive and engineered mine rehabilitation Current best practices Wealth-generating opportunities Environment-responsible endeavours Mining activities must be in accord with state policies.
IMPORTANT CONCEPTS
ANCESTRAL LANDS refers to all lands, exclusively and actually possessed, occupied, or utilized by indigenous cultural communities by themselves or through their ancestors in accordance with their customs and traditions since time immemorial, and as may be defined and delineated by law. BLOCK OR MERIDIONAL BLOCK means an area bounded by one-half (1/2) minute of latitude and one-half (1/2) minute of longitude, containing approximately eighty-one hectares (81 has.).
2 La Bugal-Blaan Tribal Association, Inc. v. Ramos, GR No. 127882, Jan. 27,2004, 421 SCRA 148, per J. Carpio-Morales 3 Sec. 2, RA No. 7942.
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Sec. 1, Chapter 1, Title XIV, EO No. 292
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CARRYING CAPACITY refers to the capacity of natural and human environments to accommodate and absorb change without experiencing conditions of instability and attendant degradation. CONTIGUOUS ZONE refers to water, sea bottom and substratum measured twenty-four nautical miles (24 n.m.) seaward from base line of the Philippine archipelago. CONTRACT AREA means land or body of water delineated for purposes of exploration, development, or utilization of the minerals found therein. CONTRACTOR means a qualified person acting alone or in consortium who is a party to a mineral agreement or to a financial or technical assistance agreement. CO-PRODUCTION AGREEMENT (CA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(b) hereof. ECOLOGICAL PROFILE OR ECO-PROFILE refers to geographic-based instruments for planners and decision-makers which presents an evaluation of the environmental quality and carrying capacity of an area. ENVIROMENTAL COMPLIANCE CERTIFICATE (ECC) refers to the document issued by the government agency concerned certifying that the project under consideration will not bring about an unacceptable environmental impact and that the proponent has complied with the requirements of the environmental impact statement system. ENVIRONMENTAL IMPACT STATEMENT (EIS) is the document which aims to identify, predict, interpret, and communicate information regarding changes in environmental quality associated with a proposed project and which examines the range of alternatives for the objectives of the proposal and their impact on the environment. EXCLUSIVE ECONOMIC ZONE means the water, sea bottom and subsurface measured from the baseline of the Philippine archipelago up to two hundred nautical miles (200 n.m.) offshore. EXISTING MINING/QUARRYING RIGHT means a valid and subsisting mining claim or permit or quarry permit or any mining lease contract or agreement covering a mineralized area granted/issued under pertinent mining laws. EXPLORATION means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extent, quantity and quality thereof and the feasibility of mining them for profit. FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT means a contract involving financial or technical assistance for largescale exploration, development, and utilization of mineral resources. FOREIGN-OWNED CORPORATION means any corporation, partnership, association, or cooperative duly registered in accordance with law in which less than fifty per centum (50%) of the capital is owned by Filipino citizens. GROSS OUTPUT means the actual market value of minerals or mineral products from its mining area as defined in the National Internal Revenue Code. INDIGENOUS CULTURAL COMMUNITY means a group or tribe of indigenous Filipinos who have continuously lived as communities on communally-bounded and defined land since time immemorial and have succeeded in preserving, maintaining, and sharing common bonds of languages, customs, traditions, and other distinctive cultural traits, and as may be defined and delineated by law.
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JOINT VENTURE AGREEMENT (JVA) means an agreement entered into between the Government and one or more contractors in accordance with Section 26(c) hereof. MINERALS refers to all naturally occurring inorganic substance in solid, gas, liquid, or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials, and geothermal energy. MINERAL AGREEMENT means a contract between the government and a contractor, involving mineral production-sharing agreement, co-production agreement, or joint-venture agreement. MINERAL LAND means any area where mineral resources are found. MINERAL RESOURCE means any concentration of minerals/rocks with potential economic value. MINING AREA means a portion of the contract area identified by the contractor for purposes of development, mining, utilization, and sites for support facilities or in the immediate vicinity of the mining operations. MINING OPERATION means mining activities involving exploration, feasibility, development, utilization, and processing. OFFSHORE means the water, sea bottom, and subsurface from the shore or coastline reckoned from the mean low tide level up to the two hundred nautical miles (200 n.m.) exclusive economic zone including the archipelagic sea and contiguous zone. ONSHORE means the landward side from the mean tide elevation, including submerged lands in lakes, rivers and creeks. PERMITTEE means the holder of an exploration permit. POLLUTION CONTROL AND INFRASTRUCTURE DEVICES refers to infrastructure, machinery, equipment and/or improvements used for impounding, treating or neutralizing, precipitating, filtering, conveying and cleansing mine industrial waste and tailings as well as eliminating or reducing hazardous effects of solid particles, chemicals, liquids or other harmful by products and gases emitted from any facility utilized in mining operations for their disposal. PRIVATE LAND refers to any land belonging to any private person which includes alienable and disposable land being claimed by a holder, claimant, or occupant who has already acquired a vested right thereto under the law, although the corresponding certificate or evidence of title or patent has not been actually issued. QUALIFIED PERSON means any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or authorized for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law at least sixty per cent (60%) of the capital of which is owned by citizens of the Philippines: Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or technical assistance agreement or mineral processing permit. QUARRYING means the process of extracting, removing and disposing quarry resources found on or underneath the surface of private or public land. QUARRY PERMIT means a document granted to a qualified person for the extraction and utilization of quarry resources on public or private lands. QUARRY RESOURCES refers to any common rock or other mineral substances as the Director of Mines and Geosciences Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand,
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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, bullquartz, quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious stones, and other non-metallic minerals that may later be discovered and which the Director declares the same to be of 5 economically workable quantities, shall not be classified under the category of quarry resources.
IMPORTANT FEATURES
1. non-impairment of existing mining / quarrying rights 2. recognition of valid and existing mining claims and lease / quarry applications
I.
Organisational Structure a) Primary Agency

The Department of Natural Resources (DENR) shall be the primary agency responsible for the observation, management, development, and proper use of the States mineral resources including those in reservations, watershed areas, and lands of public dominion. The Secretary of the DENR shall have the authority to enter in mineral agreements on behalf of the government upon the recommendation of the Director of the Mines and Geosciences Bureau (MGB), and promulgate such rules and regulations in order to implement the intent and provisions of RA 7942. The Secretary of the DENR has rule-making authority pursuant to RA 7942. Such rule-making power was sustained by the Supreme Court in the Miners Association of the Philippi nes v. Factoran (G.R. No. 98332, January 16, 1995, 240 SCRA 100). In the said case, the Supreme Court held that DENR Administrative Order No. 57 (DAO No. 57) applies to all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution. The exploration, development and utilisation of the countys natural resources are vital to the public interest and general welfare of the people. Hence, it is subject to alterations by the State in the exercise of its police powers. Thus, the constitutional restriction on non-impairment of contracts and obligations cannot preclude the State from altering, modifying, or amending mining leases or agreements.
b) Authority of the Mines and Geosciences Bureau (MGB)

The MGB shall advise the Secretary of the DENR on matters pertaining to geology and mineral resources 6 exploration, development, utilisation and conservation. Hence, the MGB shall have the following authority, among others: a. b. 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 MGB can undertake studies for purposes of research and development; To confiscate, after due process, surety, performance and guaranty bonds after notice of violation;
c.
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Sec. 3, RA No. 7942 Section 16, Chapter 3, Title XIV, EO No. 292
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d.
To recommend to the Secretary of the DENR the granting of Mineral Agreements or to endorse to the Secretary of the DENR for action by the President to grant FTAAs and to monitor its compliance by the contractor; To cancel or to recommend cancellation, after due process, mining rights, mining applications and mining claims, for non-compliance with pertinent laws, rules and regulations; To deputise, when necessary, any member or unit of the Philippine National Police (PNP) and barangay, duly registered and DENR accredited NGO, or any qualified person to police mining activities; To assist the Environmental Management Bureau (EMB) under the DENR in the conduct of environmental impact assessment in mining projects; and To exercise such other authority vested by RA 7942 and its IRR.
e.
f.
g.
h.
The Director of the MGB may delegate such authority and other powers and functions to the Regional Director. There shall be as much regional offices in the Philippines as may be established by the Secretary of the DENR, upon recommendation of the Director of the MGB. The MGB shall establish a mineral resource database system which will include mineral rights management system, among others. Also, the MGB shall publish a mineral gazette at least once a year containing a current list of mineral rights, locations, and other mining information relevant to mineral resources development.
c) Quasi-Judicial Powers of the Mines and Geosciences Bureau (MGB)

The MGB as provided for by PD 2181 has exclusive and original jurisdiction to hear and decide cases involving the cancellation and/or enforcement of mining contracts due to refusal of the claimowner/operator to abide by the terms and conditions thereof. The adjudication of mining cases is a purely administrative matter. The courts do not have the competence to decide matters concerning activities relative to the exploration, exploitation, development and extraction of mineral resources. Hence, with respect to purely administrative matters, the courts cannot interfere. However, the determination of whether or not a contract is void or voidable is a judicial question and decisions on administrative matters falling under executive jurisdiction can be set aside by the courts if there is proof of grave abuse of discretion, fraud or error of law.
d) Role of the Local Government

The local government shall have the following roles in mining projects within their respective jurisdictions which are subject to RA 7942, pursuant to the Local Government Code and other pertinent laws: a. b. c. d. e. Ensure public consultation and participation; Approve applications for small-scale mining in coordination with Bureau/Regional Office(s); Receive shares from the wealth generated by mineral resources; Facilitate community decision-making on social acceptability of the project; Participate as a member of the Multipartite Monitoring Team;
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f. g.
Participate as a member of the Mine Rehabilitation Fund (MRF) Committee; Receive social infrastructure and community development projects for the host and neighboring communities; Mediate between Indigenous Cultural Centers and Contractor(s) as may be requested; Coordinate with the Department and Bureau in implementing the Act and IRR, except that in areas covered by the Southern Philippines Council for Peace and Development, Autonomous Region of Muslim Mindanao and future similar units, their appropriate offices shall coordinate with the Department and Bureau; and Perform other powers and functions under applicable laws, rules, and regulations.
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h. i.
j.
II.
Scope of Application a) Areas Open to Mining

Subject to any mining rights or reservations and prior agreements of all parties, all mineral resources in public or private lands shall be open to mineral agreements or financial or technical assistance agreement applications. Any conflict that may arise shall be heard and resolved by the panel of arbitrators.
b) Areas Closed to Mining

Mineral agreement or Financial or Technical Assistance Agreement Applications (FTAA) that shall not be allowed: i. In military and other government reservations, except upon prior written clearance by the government agency concerned; Near or under public or private buildings, commentaries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, private or public works including plantations or valuable crops, except upon written consent of the government agency or private entity concerned and upon validation of the MGB;
ii.
iii. In areas covered by valid and existing mining rights; iv. In areas expressly provided for by law; v. In areas covered by small-scale mining as defined by law unless prior consent of the small-scale miners, in which case a royalty payment upon utilisation of minerals shall be agreed upon by the parties, and said royalty forming a trust fund for the socioeconomic development of the community concerned;
vi. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness area, mangrove forests, mossy forests, national parks, provincial/municipal forests, parks, greenbelts, game refuge and bird
Section 8, DAO No. 96-40
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sanctuaries as defined by law and in areas expressly prohibited under the National Integrated Protected Area System (NIPAS). The following areas may be opened for mining applications, the approval of which is subject to certain conditions which are as follows: i. Areas covered by FTAA which shall be opened for quarry resources mining applications pursuant to RA 8 7942, Section 53 upon 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, or alluvial gold and that the Director of the MGB shall formulate necessary guidelines to govern aforementioned provision; DENR Project Areas upon prior consent from the concerned agency ; and
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ii.
iii. No ancestral land shall be opened for mining operations without prior consent of the indigenous cultural community concerned.
III.
Concept of Exploration a) Exploration Permit

As exploration permit grants the right to conduct exploration for all minerals in specified areas. The MGB 10 shall have the authority to grant an exploration permit to a qualified person. Exploration activities may be directly undertaken by the DENR or by a qualified person in specified areas as determined by the Secretary of the DENR. However, the conduct of mineral exploration by a qualified person in all areas open to mining shall be initially undertaken through an exploration permit, subject to the provisions on the FTAA. In case an immediate technical study of an area is necessary, the DENR or any of its authorised agencies/instrumentalities, and exploration permit applicant may enter into a memorandum of agreement to jointly undertake the study.
b) Section 3(aq) of RA No. 7942 is not Unconstitutional

An exploration permit merely grants a qualified person the right to conduct exploration for all minerals in specified areas. As such, the permit does not amount to an authorisation to extract and carry off the mineral resources that may be discovered. Thus, the State risks nothing and loses nothing by granting the exploration
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A permit specifying the origin and quantity of non-processed mineral ores or minerals shall be required for their transport. Transport permits shall be issued by the mines regional director who has jurisdiction over the area where the ores were extracted. In the case of mineral ores or minerals being transported from the small-scale mining areas to the custom mills or processing plants, the Provincial Mining Regulatory Board (PMRB) concerned shall formulate their own policies to govern such transport of ores produced by small-scale miners. The absence of a permit shall be considered as prima facie evidence of illegal mining and shall be sufficient cause for the Government to confiscate the ores or minerals being transported, the tools and equipment utilized, and the vehicle containing the same. Ore samples not exceeding two metric tons (2 m.t.) to be used exclusively for assay or pilot test purposes shall be exempted from such requirement. 9 Section 15, Consolidated Implementing Rules and Regulations of RA No. 7942 (CIRR)
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Section 20, RA No.7942
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permits to local or foreign firms. In fact, the State stands to gain from the data gathered in the exploration activities. In La Bugal-Blaan Tribal Association v. Ramos , the Supreme Coured held that while the Constitution mandates the State to exercise full control and supervision over the exploitation of mineral resources, nowhere does it require the government to hold all exploration permits and similar authorisations. In fact, there is no prohibition at all against foreign or local corporations or contractors to hold exploration permits.
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c) Persons Qualified to Apply for a Exploration Permit

The qualifications are as follows: i. ii. Any Filipino citizen of legal age and with capacity to contract; A Filipino-owned Corporation, Partnership, Association or Cooperative, at least sixty percent (60%) of the capital is owned by Filipino citizens, 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 the law; or
iii. A foreign-owned Corporation, Partnership, Association or Cooperative duly registered in accordance with law and in which less than fifty percent (50%) of the capital is owned by Filipino citizens.
d) Term of Exploration Permit

The term of an exploration permit shall be for two (2) years from date of issuance, renewable for like periods but not exceeding a total term of four (4) years for non-metallic mineral exploration or six (6) years for metallic mineral exploration, provided that the permitee has complied with the terms and conditions of the exploration permit and that the permitee has not been found guilty of violating the provisions of RA 7942 including its CIRR. Furthermore, 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.
e) Transfer of Exploration Permit

The exploration permit may to transferred or assigned to another person or entity who is qualified but subject to the approval of the Secretary of the DENR as provided for in Section 25, RA No.7942. Said provision is a safeguard from the permit from being transferred to another person or entity that might not be qualified and as such prevents the circumvention of the law.
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GR No. 127882, December 1, 2004, 445 SCRA 1
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f)
Maximum Area
The maximum area that a qualified person or entity may hold at any time shall be:
g) Rights and Obligations of the Permitee

The permittee, his heirs or successors-in-interest shall have the right to enter, occupy and explore the permit area. If private or other parties are affected, the permittee shall first discuss with the said parties the extent, necessity, and manner of his entry, occupation and exploration and in case of disagreement, a panel of arbitrators shall resolve the conflict or disagreement. The permittee shall undertake an exploration work on the area as specified by its permit based on an approved work program. The permittee may apply for a mineral production sharing agreement, joint venture agreement, coproduction agreement or financial or technical assistance agreement over the permit area, which application shall be granted if the permittee meets the necessary qualifications and the terms and conditions of any such agreement. However the exploration period covered by the exploration permit shall be included as part of the 12 exploration period of the mineral agreement or financial or technical assistance agreement.
h) Terms and Conditions of Exploration Permit

An exploration permit shall contain the following terms and conditions: i. The right to explore shall be subject to valid, prior and existing rights of any party(ies) within the subject area; ii. The Permit shall be for the exclusive use and benefit of the permittee or its duly authorized representative and, shall under no circumstances, be used by the permittee for purposes other than exploration; iii. The term of the Permit shall be for a period of two (2) years from date of issuance thereof, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals exploration or eight (8) years for metallic minerals 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: Provided, further, that in cases where further
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Section 23, RA 7942
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iv.
v.
vi.
vii. viii.
ix.
x.
xi.
exploration is warranted and on condition that the permittee has substantially implemented the Exploration and Environmental Work Programs as verified by the Bureau/concerned Regional Office, the Secretary may further grant renewal of the Exploration Permit: Provided, furthermore, that the permittee shall be required to set up a performance surety equivalent to the expenditure requirement of the Exploration and Environmental Work Programs: Provided, finally, That the conduct of feasibility studies shall be included during the term of the Exploration Permit; The permittee shall submit to the Bureau/concerned Regional Office within thirty (30) calendar days after the end of each semester a report under oath of the Exploration Work Program implementation and expenditures showing discrepancies/deviations including the results of the survey, labouratory reports, geological reports/maps subject to semi-annual inspection and verification by the Bureau/concerned Regional Office at the expense of the permittee: Provided, That any expenditure in excess of the yearly budget of the approved Exploration Work Program may be carried forward and credited to the succeeding years covering the duration of the Permit; The permittee shall submit to the Bureau/concerned Regional Office within thirty (30) calendar days from the end of six (6) months after the approval of the Environmental Work Program (EWP) and every six (6) months thereafter a status report on its compliance with the said EWP; The permittee shall annually relinquish at least 20% of the permit area during the first two (2) years of exploration and at least 10% of the remaining permit area annually 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. A separate report of relinquishment shall be submitted to the Bureau/concerned Regional Office with a detailed geologic report of the relinquished area accompanied by maps at a scale of 1:50,000 and results of analyses and corresponding expenditures, among others. The minimum exploration expenditures for the remaining area after relinquishment shall be based on the approved Exploration Work Program; The Secretary of the DENR or his/her duly authorized representative shall annually review the performance of the permittee; The permittee shall submit to the Bureau/concerned Regional Office a final report upon the expiration or relinquishment of the Permit or its conversion into Mineral Agreement or FTAA in a form and substance comparable to published reports of respected international organizations 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; In case of diamond drilling, the permittee shall, upon request of the Director/concerned Regional Director, submit to the Bureau/concerned Regional Office a quarter of the core samples which shall be deposited in the Bureau/concerned Regional Office Core Library for reference and safekeeping; Offshore exploration activities shall be carried out in accordance with the United Nations Convention on the Law of the Sea (UNCLOS) and in a manner that will not adversely affect the safety of navigation at sea and will ensure accommodation with other marine activities such as fishing, aquaculture, transportation, etc.; Onshore exploration activities shall be carried out in a manner that will, at all times, safeguard the environment;
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xii. If the permittee applies for a Mineral Agreement or FTAA over the permit area, the exploration period covered by the Exploration Permit shall be considered as the exploration period of the Mineral Agreement or FTAA; xiii. The permittee shall comply with pertinent provisions of the Act and these implementing rules and regulations; and xiv. Other terms and conditions which the Bureau/concerned Regional Office may deem 13 appropriate.
i)
Registration of Exploration Permit

Upon evaluation that all the terms and conditions and all pertinent requirements are in order and that the subject area has been cleared from any conflict, the Director shall approve and issue the Exploration Permit, and the permittee shall cause the registration of the same to the Bureau/Regional Office concerned within fifteen (15) working days from receipt of the written notice and upon payment of the required fees provided, that if all the mandatory and other requirements have been complied with and the Exploration Permit application is still awaiting approval five (5) months after its date of filing, the said Exploration Permit application, upon submission of an affidavit by the applicant attesting to the full compliance with all the pertinent requirements, shall be deemed approved and the Director of the MGB shall issue the Exploration Permit within five (5) working days from receipt of said affidavit, for registration and release. This is without prejudice to the DENR undertaking the necessary investigation to determine any liability as to the non-issuance of the Exploration Permit within the prescribed period. Furthermore, the permittee shall comply with the required consultation with the Sanggunian concerned pursuant to the pertinent provisions of RA No. 7160, The Local Government Code, prior to the 14 implementation of the Exploration Work Program.
j)
Exploration Permit Revokable

The exploration, development and utilization of the countrys natural mineral resources are matters impressed with great public interest. Like timber permits, mining exploration permits do not vest in the grantee any permanent or irrevocable right within the purview of the non-impairment of contract and due process clauses of the Constitution, since the State, under its all-encompassing police power, may alter, modify or amend the same, 15 in accordance with the demands of the general welfare. A mining license, being a mere privilege, does not vest absolute rights in the holder. Thus, without offending the due process and the non-impairment clauses of the Constitution, it can be revoked by the State in the public interest.16
MINERAL AGREEMENT What is a Mineral Agreement?

A Mineral Agreement is an agreement between a Contractor and the Government wherein the Government grants to the Contractor the exclusive right to conduct mining operations within, but not title over, the contract area. Mining
13 14 15 16
Section 22, CIRR, as amended by Section 4, DAO No. 99-57, Section 3, DAO No. 2003-46 and further by Sections 5 and 6, DAO No. 2005-15 Section 23, CIRR, as amended by Section 7, DAO No. 2005--15 Southeast Mindanao Gold Mining Corporation v. Balite Portal Mining Cooperative, G.R. No. 135190, April 3, 2002, 380 SCRA 145 Republic of the Philippines v. Rosemoor Mining and Development Corporation, G.R. No. 149927, March 30, 2004, 426 SCRA 517
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operations that are allowed under Mineral Agreements include development/construction and utilization of mineral resources including the continuance of exploration works during the conduct of development/construction/utilization activities. Mineral Agreements are classified into: 1) Mineral Production Sharing Agreement (MPSA) - a mineral agreement wherein Government shares in the production of the Contractor, whether in kind or in value, as owner of the minerals. In return, the Contractor shall provide the necessary financing, technology, management and personnel for the mining project. 2) Co-Production Agreement (CA) - a mineral agreement wherein the Government provides inputs to the mining operations other than the mineral resources; and 3) Joint Venture Agreement (JVA) - a mineral agreement wherein the Government and the Contractor organize a joint venture company with both parties having equity shares. For its share, the Government is entitled to a share in the gross output of the mining project aside from its earnings in the equity of the company.
Who is qualified to apply for a Mineral Agreement?

The following Qualified Person may apply for a Mineral Agreement: (1) Individual - a Filipino citizen of legal age and with capacity to contract; or (2) Corporation, Partnership, Association or Cooperative - 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.
How much area is granted for a Mineral Agreement?

Each Qualified Person is limited to the following maximum size of area to apply for or hold at any one time under a Mineral Agreement: I. Onshore 2. For metallic minerals 3. Individual - Eight Hundred Ten (810) hectares Corporation/ Partnership/ Association/Cooperative - Five Thousand (5,000) hectares
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For non-metallic minerals except for those in item nos. 3, 4, and 5 Individual - Eight Hundred Ten (810) hectares Corporation/ Partnership/ Association/Cooperative - Two Thousand (2,000) hectares
4.
For sand and gravel Individual - Twenty (20) hectares Corporation/ Partnership/ Association/Cooperative - Fifty (50) hectares
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Section 28, Chapter V, RA 7942
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4.
For marble, granite and construction aggregates Individual - Fifty (50) hectares Corporation/ Partnership/ Association/Cooperative - One Hundred (100) hectares
5.
For cement raw materials such as limestone, shale and limestone Individual - Five Hundred (500) hectares Corporation/ Partnership/ Association/Cooperative - One Thousand (1000) hectares
II. Offshore 1. 2. For metallic minerals - Five Thousand (5,000) hectares For non-metallic minerals - Two Thousand (2,000) hectares
What is the term of a Mineral Agreement?

A Mineral Agreement shall have a term not exceeding twenty-five (25) years from the date of its execution, and renewable for another term not exceeding twenty-five (25) years under the same terms and conditions, without prejudice to changes mutually agreed upon by the Government and the Contractor. After the 50 year term of the Mineral Agreement, the operation of the mine may be undertaken by the Government or through a Contractor. The contract for the operation of a mine will be awarded to the highest bidder in a public bidding after due publication of the notice thereof. However, the original Contractor shall have the right to equal the 18 highest bid upon reimbursement of all reasonable expenses of the highest bidder .
What are the mandatory requirements19 in the acceptance of an MPSA application?

An MPSA application shall be filed in the Mines and Geosciences Bureau (MGB) Regional Office (RO) concerned, for mineral and non-mineral reservation areas, using the prescribed form (MGB Form No. 06-1) through payment of the filing fee and submission of five (5) sets of the following mandatory requirements: a. For an individual Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s) and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer; Three-year Development/Utilization Work Program (MGB Form No. 6-2) duly prepared, signed and sealed by a licensed Mining Engineer or Geologist; Proof of technical competence, including, among others, curricula vitae and track records in mining operations and environmental management of the technical personnel who shall undertake the activities in accordance with the submitted Development/Utilization Work Program;
18 19
Section 32, Chapter V, RA 7942 Primer on Application for Mineral Agreements (http://www.mgb.gov.ph)
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Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program, such as a copy of the income tax return for the preceding year and proof of bank deposit or credit line in the amount of at least Two Million Five Hundred Thousand Pesos (PhP2,500,000.00); Mining Project Feasibility Study (MGB Form No. 5-3); and Complete and final exploration report pertaining to the area.
b) For a corporation, partnership, association or cooperative Duly certified Certificate of Registration, Articles of Incorporation/Partnership/Association and By-Laws issued by the Securities and Exchange Commission or authorized Government agency concerned, or Certification from the Bureau/Regional Office concerned that the said documents are duly registered in that Office; Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s) and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer; Three-year Development/Utilization Work Program (MGB Form No. 6-2) duly prepared, signed and sealed by a licensed Mining Engineer or Geologist; Proof of technical competence, including, among others, curricula vitae and track records in mining operations and environmental management of the technical personnel who shall undertake the activities in accordance with the submitted Development/Utilization Work Program; Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program, such as latest audited financial statement and, where applicable, Annual Report for the preceding year, credit line(s), bank guarantee(s) and/or similar negotiable instruments; Affidavit of Undertaking for corporation, partnership, association or cooperatives (Annex A of DENR Memorandum Order No. 99-10) declaring: 5. The list of applications filed and the Mining Permit(s)/Contract(s) granted to the applicants, including the corresponding hectarage and location of the areas, disaggregated on a per province basis; and The list of other Applicant(s)/Contractor(s)/Permittee(s) in which more than seventy percent (70%) of the authorized capital stock is held by stockholders of the applicant, including the corresponding hectarage, disaggregated on a per province basis.
6.
c.
Mining Project Feasibility Study (MGB Form No. 5-3); and Complete and final exploration report pertaining to the area.
For holders of valid and existing mining lease contracts, operating agreements, Quarry Permits/licenses or unperfected mining/quarry claims, the following are additional requirements to the above requirements, whenever applicable: Certification from the Regional Office concerned that the mining/quarry claims are valid and subsisting; Appropriate environmental report on the rehabilitation of mined-out and/or mine waste/tailings-covered areas and anti-pollution measures undertaken during the mining operations; Environmental Compliance Certificate (ECC) for any new phase outside of the originally approved operation under the mining project;
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Mining Project Feasibility Study (MGB Form No. 5-3): Provided, That a Mineral Agreement applicant with existing mining operation may submit, in lieu of the Mining Project Feasibility Study, a Project Description and a detailed financial statement of its operations incorporating therein the social and environmental expenditures, taxes and fees paid (MGB Form No. 5-3A); and Approved survey plan of the mining area.
Please note that any application with incomplete mandatory requirements shall not be accepted.
What are the other additional requirements after an MPSA application is filed?
The following additional requirements shall be submitted after the acceptance of the application but prior to the issuance of the Mineral Agreement: Environmental Compliance Certificate (ECC); Environmental Protection and Enhancement Program(MGB Form No. 16-2); Certificate of Environmental Management and Community Relations Record (CEMCRR)/Certificate of Exemption and Approved survey plan; Certification Precondition from the National Commission on Indigenous Peoples attesting that a. The proposed permit area does not overlap any ancestral land/domain claim in case of nonIndigenous People (IP) area; or The Free and Prior Informed Consent (FPIC) has been issued by the Indigenous Cultural Community (ICC)/IP concerned.
b.
For OFFSHORE applications, the following additional requirements shall be submitted: Name, port of registry, tonnage, type and class of survey vessel(s) or platform(s). If a foreign vessel is to be used, the expected date of first entry or appearance and final departure of the survey vessel shall be provided and the necessary clearances obtained A certification from the Coast and Geodetic Survey Department of NAMRIA that the proposed Exploration Work Program was duly registered to provide update in the publication of Notice to Mariners together with a list of safety measures to be regularly undertaken to ensure the safety of navigation at sea and prevent accident An agreement to: 1. Properly identify all installations, vessels and other crafts involved in exploration recognizable to all vessels within reasonable distance; Notify the Bureau 30 calendar days prior to the intention to remove all scientific installations or equipment and apparatus; and Allow the Bureaus authorized personnel, the Philippine Coast Guard and other authorized persons during reasonable hours to board the vessel(s) while within the Exclusive Economic Zone.
2.
3.
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Other supporting documents that may be required by the Mines and Geosciences Bureau.
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MINERAL AGREEMENT PROCESS FLOWCHART
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FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT (FTAA) What is a financial or technical assistance agreement (FTAA)?
A Financial or Technical Assistance Agreement may be entered into between a Contractor and the Government for the large-scale exploration, development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals except for cement raw materials, marble, granite, sand and gravel and construction aggregates.
Who is qualified to apply for an FTAA?

The following Qualified Person may apply for an FTAA: (a) Any Filipino citizen of legal age and with capacity to contract; (b) A Filipino-owned Corporation, Partnership, Association or Cooperative, at least sixty percent (60%) of the capital is owned by Filipino citizens, 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 the law; or (c) A Foreign-owned Corporation, Partnership, Association or Cooperative duly registered in accordance with law and in which less than fifty percent (50%) of the capital is owned by Filipino citizens.
How much area is granted for an FTAA?

The maximum FTAA contract areas that may be applied for or granted per Qualified Person in the entire Philippines are the following: a. b. One thousand (1,000) meridional blocks or approximately eighty-one thousand (81,000) hectares onshore, Four thousand (4,000) meridional blocks or approximately three hundred twenty-four thousand (324,000) hectares offshore or Combination of one thousand (1,000) meridional blocks onshore and four thousand (4,000) meridional blocks offshore.
20
c.
What is the term of an FTAA?

An FTAA has a term of twenty-five (25) years from the date of its issuance, and renewable for another term not exceeding twenty-five (25) years. The following are the phase of mining operations of an FTAA: a. b. c. Exploration - up to two (2) years from date of FTAA execution, extendible for another two (2) years; Pre-feasibility study, if warranted - up to two (2) years from expiration of the exploration period; Feasibility study - up to two (2) years from the expiration of the exploration/prefeasibility study period or from declaration of mining project feasibility; and Development, construction and utilization - remaining years of FTAA.
d.
20
Section 34, Chapter 6, RA 7942
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What are the mandatory requirements21 in the acceptance of an FTAA application?

An FTAA application shall be filed in the Mines and Geosciences Bureau (MGB) Regional Office (RO) concerned, for mineral and non-mineral reservation areas, using the prescribed form (MGB Form No. 07-1) through payment of the filing fee and submission of eight (8) sets of the FTAA proposal and five (5) sets of the following: a. Upon filing of the application, the following mandatory requirements Duly certified Certificate of Registration, Articles of Incorporation and By-Laws issued by the Securities and Exchange Commission or authorized Government agency(ies) concerned, or Certification from the Bureau/Regional Office concerned that the said documents are duly registered in that Office; Location map/sketch plan of the proposed contract area showing its geographic coordinates/meridional block(s) and boundaries in relation to major environmental features and other projects using a NAMRIA topographic map in a scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic Engineer; Two-year Exploration Work Program (MGB Form No. 5-4) duly prepared, signed and sealed by a licensed Mining Engineer or Geologist; Proof of technical competence, including, among others, curricula vitae and track records in mining operations and environmental management of the technical personnel who shall undertake the activities in accordance with the submitted Exploration Work Program; Proof of financial capability to undertake the activities pursuant to the Exploration Work Program, such as latest audited financial statement and, where applicable, Annual Report for the preceding year, credit line(s), bank guarantee(s) and/or similar negotiable instruments; and Affidavit of Undertaking pursuant to DMO No. 99-10, as amended, declaring: 1. The list of applications he/she/it has filed and the Mining Permit(s)/Contract(s) granted to him/her/it including the corresponding hectarage and location of the areas, disaggregated on a per province basis; and The list of other Applicant(s)/Contractor(s)/Permittee(s) in which more than seventy percent (70%) of the authorized capital stock is held by stockholders of the applicant, including the corresponding hectarage, disaggregated on a per province basis. Note: Any application with incomplete mandatory requirements shall not be accepted. b. After the acceptance of the application but prior to the approval of the FTAA: Posting of financial guarantee/performance bond and letter of credit or other forms of negotiable instruments from any Government-accredited bonding company or financial institution, in favor of the Government upon notification by the Secretary, which shall be in any foreign currency negotiable with the Bangko Sentral ng Pilipinas or in Philippine Peso in such amount equivalent to the expenditure obligations of the applicant for any year; Certificate of Environmental Management and Community Relations Record (CEMCRR)/Certificate of Exemption;
2.
21
Primer on Application for Financial and Technical Assistance Agreement (http://www.mgb.gov.ph)
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Environmental Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A); Approved survey plan; Environmental Compliance Certificate (ECC); Environmental Protection and Enhancement Program(MGB Form No. 16-2); Social Development and Management Program;
For OFFSHORE applications, the following additional requirements shall be submitted: Name, port of registry, tonnage, type and class of survey vessel(s) or platform(s) . If a foreign vessel is to be used, the expected date of first entry or appearance and final departure of the survey vessel shall be provided and the necessary clearances obtained; A certification from the Coast and Geodetic Survey Department of NAMRIA that the proposed Exploration Work Program was duly registered to provide update in the publication of Notice to Mariners together with a list of safety measures to regularly undertaken to ensure the safety of navigation at sea and prevent accident; An agreement to: 1. Properly identify all installations, vessels and other crafts involved in exploration recognizable to all vessels within reasonable distance; Notify the Bureau 30 calendar days prior to the intention to remove all scientific installations or equipment and apparatus; and Allow the Bureaus authorized personnel, the Philippine Coast Guard and other authorized persons during reasonable hours to board the vessel(s) while within the Exclusive Economic Zone.
2.
3.
Certification Precondition from the National Commission on Indigenous Peoples attesting that a. The proposed permit area does not overlap any ancestral land/domain claim in case of nonIndigenous People (IP) area; or The Free and Prior Informed Consent (FPIC) has been issued by the Indigenous Cultural Community (ICC)/IP concerned.
b. c.
Other supporting documents that may be required by the Mines and Geosciences Bureau.
After the approval of the FTAA but prior to registration - An authorized capital of at least Four Million U.S. Dollars (US$4,000,000.00) or its Philippine Peso equivalent; and In support of the application for approval of the declaration of mining project feasibility Mining Project Feasibility Study; Three (3)-Year Development/Utilization Work Program;
d.
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Proof of technical competence, including, among others, curricula vitae and track records in mining operations and environmental management of the technical personnel who shall undertake the activities in accordance with the submitted Development/Utilization Work Program; and; Proof of financial capability to undertake the activities pursuant to the Development/Utilization Work Program, such as latest audited financial statement and where applicable, Annual Report for the preceding year, credit line(s), bank guarantee(s) and/or similar negotiable instruments.
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FTAA PROCESS FLOWCHART
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QUARRYING RESOURCES What are quarrying resources?

Quarrying resources are any common rock or other mineral substances as the Director of Mines and Geosciences Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand, diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone, marble, marl, red burning clays for potteries and bricks, rhyolite, rock phosphate, sandstone, serpentine, shale, tuff, volcanic cinders, and volcanic glass: Provided, that such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically workable quantities: Provided, further, That non-metallic minerals such as kaolin, feldspar, bull quartz, quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious stones, and other non-metallic minerals that may later be discovered and which the Director declares the same to be of 22 economically workable quantities, shall not be classified under the category of quarry resources . What is a Quarrying Permit? A quarry permit is a document granted to a qualified person for the extraction and utilization of quarry resources 23 on public or private lands .
Who is qualified to apply for a Quarrying Permit?

Any qualified person may apply.
22 23
Section 3(at) Chapter 1, RA 7942 Section 3(as) Chapter 1, RA 7942
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How much area is granted for a Quarrying Permit?

The maximum area which a qualified person may hold at any one time shall be five hectares (5 has). A large-scale quarry operation, including a sand and gravel operation, during the development/construction/operating period under the mineral agreement, shall involve a mechanized operation and a final mining area not exceeding the following: a. For sand and gravel b. Individual Twenty (20) hectares Corporation/ Partnership/ Association/Cooperative Fifty (50) hectares
For marble, granite, and/or construction aggregates Individual Eighty-one (81) hectares Corporation/ Partnership/ Association/Cooperative Two-hundred forty-three (243) hectares
c.
For cement raw materials such as limestone, shale and silica Individual Four-hundred eighty-six (486) hectares Corporation/ Partnership/ Association/Cooperative One thousand four hundred fifty-eight (1,458) hectares
What is the term of a Quarrying Permit?

A quarry permit shall have a term of five (5) years, renewable for like periods but not to exceed a total term of twenty-five (25) years. * No quarry permit shall be issued or granted on any area covered by a mineral agreement, or financial or technical assistance agreement.
TRANSPORT, SALE, AND PROCESSING OF MINERALS ORE TRANSPORT PERMIT

A permit specifying the origin and quantity of non-processed mineral ores or minerals shall be required for their transport. The mines regional director, who has jurisdiction over the area where the ores were extracted, has the authority to issue transport permits. The Provincial Mining Regulatory Board concerned shall formulate their own policies to govern such transport of ores produced by small-scale miners, in the case of mineral ores or minerals being transported from the small-scale mining acres to the custom mills or processing plants.
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The absence of a permit shall be a prima facie evidence of illegal mining and shall be sufficient cause for the government to confiscate the ores or minerals being transported, the tools, and equipment utilized, and the vehicle containing the same. Ore samples not exceeding two metric tons to be used exclusively for assay or pilot test purposes shall be 24 exempted from such requirement.
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 25 Bureau.
MINERALS PROCESSING PERMIT

No person shall engage in the processing of minerals without first securing a minerals processing permit from the Secretary, Minerals processing permit shall be for a period of five (5) years renewable for same periods but not to exceed a total term of twenty-five (25) years. A foreign-owned or controlled corporation may be granted a mineral processing permit.
26
SAFETY AND ENVIRONMENTAL PROTECTION

All contractors and permittees shall strictly comply with all the mines safety rules and regulations concerning the 9 safe and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development Mine Labour: No person under 16 years of age shall be employed in any phase of mining operations and no person 27 under 18 years of age shall be employed underground in a mine Powers of the Regional Director: 4. 5. Conduct mines inspection Issue orders requiring the contractor to remedy any practice connected with mining or quarrying operations which is not in accordance with safety and anti-pollution laws and regulations Power to summarily suspend the mining or quarrying operations in case of imminent 28 danger to life or property
6.
24 25 26 27 28
Sec. 53, RA No. 7942 Sec. 54, RA No. 7942 Sec. 55, RA No. 7942 Sec. 64, RA No. 7942 Sec. 67, RA No. 7942
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Every contractor shall undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit. Such environmental program shall be incorporated in the work program which the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement or permit. Contents of the Work Program 3. plans relative to mining operations 4. rehabilitation, regeneration, revegetation and reforestation of mineralized areas slope stabilization of mined-out and tailings covered areas, aquaculture, watershed development and water conservation; and, socioeconomic development
5.
6.
Need to procure an ECC, after submission of an EIA, except during the exploration period of a mineral agreement or FTAA Requirement of rehabilitation. AUXILIARY MINING RIGHTS the grant of auxiliary mining rights is merely incidental or necessary for the mining operation of a contractor. It is, however, subject to forestry and water laws, rules and regulations. Under RA 7942 such auxiliary mining rights are timber and water rights.
Timber rights A contractor may be granted a right to cut trees or timber within his mining area as may be necessary for his mining operations subject to forestry laws, rules and regulations. The mines regional director has the authority to determine the volume of the timber needed and the manner of cutting and removal thereof if in an instance where the land covered by the mining area is already covered by existing timber concessions. Such authority vested with the mines regional director should be coupled with consultation with the contractor, the timber concessionaire/permittee and the Forest Management of the Bureau of the Department. Furthermore, when disagreement arises between the contractor and the timber concessionaire, the matter shall be submitted to the Secretary whose decision shall be final. The contractor shall perform reforestation work 29 within his mining area in accordance with forestry laws, rules and regulations.
Water rights A contractor shall be granted water rights for mining operations upon approval of the application thereof with the appropriate government agency in accordance with existing water laws, rules, and regulations. Those water rights which were already granted or vested through long use, recognized and acknowledge by local customs, laws, and decisions f courts shall not be impaired. The Government reserves the right to regulate
29
Sec. 72, RA No. 7942
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water rights and the reasonable and equitable distribution of water supply so as to prevent the monopoly of 30 the use thereof. Right to possess explosives A contractor or exploration permittee shall have the right to possess and use explosives within his contract or permit area as maybe necessary for his mining operations upon approval of the application thereof with the appropriate government agency. The Government reserves the right to regulate and control the explosive 31 accessories to ensure safe mining operations.
Easement rights When mining areas are so situated that for purposes of more convenient mining operations it is necessary to build, construct or install on the mining area or lands owned, occupied or leased by other persons, such as infrastructure as roads, railroads, mills, waste dump sites, tailing ponds, warehouses, staging or storage areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and their normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the contractor upon payment of just compensation shall be entitled to 32 enter and occupy said mining areas or lands.
Entry into Private Lands and Concession Areas Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupant, or concessionaires when conducting mining operations therein. Any damage done to the property of the surface owner, occupant, or concessionaire as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations. In order to guarantee such compensation, the person authorized to conduct mining operation shall, prior thereto, post a bond with the regional director based on the type of properties, the prevailing prices in and around the area where the mining operations are to be conducted, with surety satisfactory to the regional 33 directors.
I.
Government Share a. Government Share in Mineral Production Sharing Agreement

The total government share in a mineral production sharing agreement shall be the excise tax on mineral products as provided in Republic Act No. 7729, amending Section 151(a) of the National Internal Revenue Code, as amended.
b. Government Share in Other Mineral Agreements

The share of the government in co-production and joint-venture agreements shall be negotiated by the government and the contractor taking into consideration the following:
30 31 32 33
Sec. 73, RA No. 7942 Sec. 74, RA No. 7942 Sec. 75, RA No. 7942 Sec. 76, RA No. 7942
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i. ii.
Capital investment of the project; Risks involved;
iii. Contribution of the project to the economy; and iv. Other factors that will provide for a fair and equitable sharing between the government and the contractor. The government shall also be entitled to compensations for its other contributions which shall be agreed upon by the parties, and shall consist, among other things, the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national, and all such other taxes, duties and fees as provided for under existing laws. The Government shares in financial or technical assistance agreement shall consist of, among other things, the contractor's corporate income tax, excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign nation al and all such other taxes, duties and fees as provided for under existing laws. The collection of Government share in financial or technical assistance agreement shall commence after the financial or technical assistance agreement contractor has fully recovered its preoperating expenses, exploration, and development expenditures, inclusive.
II.
Incentives a. Fiscal and Non-Fiscal Incentives

The contractors 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.
b. Incentives for Pollution Control Devices

Pollution control devices 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.
c. Investment Guarantees
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The contractor shall be entitled to the basic rights and guarantees provided in the Constitution and such other rights recognised by the government as enumerated hereunder: i. Repatriation of investments - The right to repatriate the entire proceeds of the liquidation of the foreign investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of repatriation. Remittance of earnings - The right to remit earnings from the investment in the currency in which the foreign investment was originally made and at the exchange rate prevailing at the time of remittance.
ii.
iii. Foreign loans and contracts - The right to remit at the exchange rate prevailing at the time of remittance such sums as may be necessary to meet the payments of interest and principal on foreign loans and foreign obligations arising from financial or technical assistance contracts. iv. Freedom from expropriation - The right to be free from expropriation by the Government of the property represented by investments or loans, or of the property of the enterprise except for public use or in the interest of national welfare or defense and upon payment of just compensation. In such cases, foreign investors or enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance. v. Confidentiality - Any confidential information supplied by the contractor pursuant to this Act and its implementing rules and regulations shall be treated as such by the Department and the Government, and during the term of the project to which it relates.
III.
Grounds for Cancellation, Revocation and Termination a. Late or non-filing of requirements

Failure of the permittee or contractor to comply with any of the requirements provided in this RA 7941 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 RA 7942.
b. Violation of the terms and conditions of permits or agreements

Violations of the terms and conditions of the permits or agreements shall be a sufficient ground for cancellation of the same.
c. Non-payment of taxes and fees

Failure 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.
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d. Suspension or Cancellation of Tax Incentives and Credits

Failure to abide by the terms and conditions of tax incentives and credits shall cause the suspension or cancellation of said incentives and credits.
e. Falsehood or Omission of Facts in the Statement

All statements made in the exploration permit, mining agreement and financial or technical assistance shall be considered as conditions and essential parts thereof and any falsehood in said statements or omission of facts therein which may alter, change or affect substantially the facts set forth in said statements may cause the revocation and termination of the exploration permit, mining agreement and financial or technical assistance agreement.
IV.
Settlement of Conflicts a. Panel of Arbitrators

There shall be a panel of arbitrators in the regional office of the DENR 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 of the DENR as recommended by the MGB Director. Those designated as members of the panel shall serve as such in addition to their work in the DENR without receiving any additional compensation. As much as practicable, said members shall come from the different bureaus of the DENR in the region. The presiding officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on a yearly basis. The members of the panel shall perform their duties and obligations in hearing and deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty (30) working days, after the submission of the case by the parties for decision, the panel shall have exclusive and original jurisdiction to hear and decide on the following: i. ii. Disputes involving rights to mining areas; Disputes involving mineral agreements or permits;
iii. Disputes involving surface owners, occupants and claimholders/concessionaires; and iv. Disputes pending before the MAB and the DENR at the date of the effectivity of RA 7942.
1. Mining Dispute
The settlement of conflicts referred in the provisions in RA 7942 involves rights to mining areas, mineral agreements, FTAAs, or permits, and those involving surface owners, occupants and claim-holders/concessionaires. The panel of arbitrators has exclusive and original jurisdiction to hear and decide on aforementioned disputes. However, the panels jurisdiction is limited only to mining disputes which raise a question of fact or matters requiring the application of technological knowledge and experience.
2. Appellate Jurisdiction
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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.
b. Mines Adjudication Board (MAB)

The MAB shall be composed of three (3) members. The Secretary of the DENR shall be the chairman with the Director of MGB and the Undersecretary for Operations of the DENR as members thereof. The Board shall have the following powers and functions: i. 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; ii. To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statement of accounts, agreements, and other documents as may be material to a just determination of the matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this RA 7942; iii. To conduct hearings on all matters within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings at any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss the mining dispute as part thereof, where it is trivial or where further proceedings by the Board are not necessary or desirable: 1. To hold any person in contempt, directly or indirectly, and impose appropriate penalties therefor; and To enjoin any or all acts involving or arising from any case pending before it which, if not restrained forthwith, may cause grave or irreparable damage to any of the parties to the case or seriously affect social and economic stability.
2.
In any proceeding before the Board, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Act that shall govern. The MAB shall use 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. In any proceeding before the MAB, the parties may be represented by legal counsel. The findings of fact of the MAB shall be conclusive and binding on the parties and its decision or order shall be final and executory. A petition for review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.
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1. Adjudication of Mining Cases an Administrative Matter

The Supreme Court has recognised a distinction between the primary powers granted by pertinent provisions of law of an executive or administrative nature, such as granting of license, permits, lease, or approving, rejecting, reinstating or cancelling applications, or deciding conflicting applications and controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by courts of justice. Hence, findings of fact by the MAB, which exercises appellate jurisdiction over decisions or orders of the panel of arbitrators, shall be conclusive and binding on parties, and its decision or order shall be final and executor. However, resort to the appropriate court, through a petition for review by certiorari, involving questions of law may be made within thirty (30) days from receipt of the order or decision of the MAB.
2. MAB has no Jurisdiction Over Pollution Cases

The scope of the authority of the panel of arbitrators and the MAB conferred by RA No. 7942 clearly excludes adjudicative responsibility over pollution cases. They have no authority to adjudicate cases involving violations of pollution laws and regulations in general.
3. MAB Decisions are Appealable to the Court of Appeals

MAB, being a quasi-judicial body, its decisions should be appealed before the Court of Appeals under Rule 43 of the Rules of Court notwithstanding the provision in Section 79 of RA 7942 that petition for review can be brought directly to the Supreme Court. The hierarchy of courts must be followed.
4. DENR is Devoid of Jurisdiction to Determine the Validity of Mining Contracts or Disputes

A mining dispute is within the jurisdiction of the DENR, and authority to exercise its technical knowledge or expertise over any mining operations dispute. However, it is devoid of jurisdiction where the issue involves the validity of mining contracts as such is a judicial question.. a judicial question is raised when determination of the question involves exercise of a judicial function. The question involves the determination of what law and what legal rights of the parties are applicable in relation to the controversy.
V.
Penal Provisions a. False Statements

Any person who knowingly presents any false application, declaration, or evidence to the Government or publishes or causes to be published any prospectus or other information containing any false statement relating to mines, mining operations or mineral agreements, financial or technical assistance agreements and permits shall, upon conviction, be penalized by a fine of not exceeding Ten Thousand Pesos (10,000.00).
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b. Illegal Exploration Any person undertaking exploration work without the necessary exploration permit shall, upon conviction, be penalized by a fine of not exceeding Fifty thousand pesos (50,000.00). c. Theft of Minerals
Any person extracting minerals and disposing the same without a mining agreement, lease, permit, license, or steals minerals or ores or the products thereof from mines or mills or processing plants shall, upon conviction, be imprisoned from six (6) months to six (6) years or pay a fine from Ten thousand pesos (10,000.00) to Twenty thousand pesos (20,000.00), 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. The elements of the offense, therefore, are that: (1) the accused extracted, removed and/or disposed of minerals; (2) these minerals belong to the Government or have been taken from a mining claim or claims leased, held or owned by other persons; and (3) the accused did not possess a mining lease or a temporary permit or any other permit to mine granted by the Secretary or the Director under existing mining decrees, laws and regulations.
d. Destruction of Mining Structures

Any person who willfully destroys or damages structures in or on the mining area or on the mill sites shall, upon conviction, be imprisoned for a period not to exceed five (5) years and shall, in addition, pay compensation for the damages which may have been caused thereby.
e. Mines Arson
Any person who willfully sets fire to any mineral stockpile, mine or workings, fittings or a mine, shall be guilty of arson and shall be punished, upon conviction, by the appropriate court in accordance with the provisions of the Revised Penal Code and shall, in addition, pay compensation for the damages caused thereby.
f.
Wilful Damage to a Mine

Any person who willfully damages a mine, unlawfully causes water to run into a mine, or obstructs any shaft or passage to a mine, or 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.
g. Illegal Obstruction to Permitees 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
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appropriate court, by a fine not exceeding Five thousand pesos (5,000.00) or imprisonment not exceeding one (1) year, or both, at the discretion of the court.
h. Violation of Terms and Conditions of the Environmental Compliance Certificate

Any person who willfully violates or grossly neglects to abide by the terms and conditions of the environmental compliance certificate issued to said person and which causes environmental damage through pollution shall suffer the penalty of imprisonment of six (6) months to six (6) years or a fine of Fifty thousand pesos (50,000.00) to Two Hundred Thousand Pesos (200,000.00), or both at the discretion of the court.
i.
Obstruction of Government Officials

Any person who illegally prevents or obstructs the Secretary, the Director or any of their representatives in the performance of their duties under the provisions of this Act and of the regulations promulgated hereunder shall be punished, upon conviction, by the appropriate court, by a fine not exceeding Five thousand pesos (5,000.00) or by imprisonment not exceeding one (1) year, or both, at the discretion of the court.
j.
Other Violations
Any other violation of this Act and its implementing rules and regulations shall constitute an offense punishable with a fine not exceeding five thousand pesos ( 5,000.00).
k. Fines
The Secretary of the DENR is authorized to charge fines for late or non-submission of reports in accordance with the implementing rules and regulations of this RA 7942.
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Philippine Mining Act of 1995 - Report Consolidated

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Philippine Mining Act of 1995 - Report Consolidated

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Philippine Mining Act of 1995 (Republic Act No.

Philippine Mining Act of 1995 (Republic Act No. 7942)

EVOLUTION OF PERTINENT MINING LAWS

1. ROYAL DECREE OF MAY 14, 1867 OR THE SPANISH MINING LAW

2. ACT OF CONGRESS OF JULY 1, 1902 OR PHILIPPINE BILL OF 1902

Philippine Mining Act of 1995 (Republic Act No. 7942)

5. CA No. 137 or Mining Act

REPUBLIC ACT No. 7942 OR THE PHILIPPINE MINING ACT OF 1995

Philippine Mining Act of 1995 (Republic Act No. 7942)

DENR ADMINISTRATIVE ORDER 96-40

Governing principle per DAO 96-40

Sec. 1, Chapter 1, Title XIV, EO No. 292

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

Organisational Structure a) Primary Agency

b) Authority of the Mines and Geosciences Bureau (MGB)

Philippine Mining Act of 1995 (Republic Act No. 7942)

c) Quasi-Judicial Powers of the Mines and Geosciences Bureau (MGB)

d) Role of the Local Government

Philippine Mining Act of 1995 (Republic Act No. 7942)

Scope of Application a) Areas Open to Mining

b) Areas Closed to Mining

Section 8, DAO No. 96-40

Philippine Mining Act of 1995 (Republic Act No. 7942)

Concept of Exploration a) Exploration Permit

b) Section 3(aq) of RA No. 7942 is not Unconstitutional

Section 20, RA No.7942

Philippine Mining Act of 1995 (Republic Act No. 7942)

c) Persons Qualified to Apply for a Exploration Permit

d) Term of Exploration Permit

e) Transfer of Exploration Permit

GR No. 127882, December 1, 2004, 445 SCRA 1

Philippine Mining Act of 1995 (Republic Act No. 7942)

g) Rights and Obligations of the Permitee

h) Terms and Conditions of Exploration Permit

Section 23, RA 7942

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

Registration of Exploration Permit

Exploration Permit Revokable

MINERAL AGREEMENT What is a Mineral Agreement?

Philippine Mining Act of 1995 (Republic Act No. 7942)

Who is qualified to apply for a Mineral Agreement?

How much area is granted for a Mineral Agreement?

Section 28, Chapter V, RA 7942

Philippine Mining Act of 1995 (Republic Act No. 7942)

What is the term of a Mineral Agreement?

What are the mandatory requirements19 in the acceptance of an MPSA application?

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

Philippine Mining Act of 1995 (Republic Act No. 7942)

MINERAL AGREEMENT PROCESS FLOWCHART

Philippine Mining Act of 1995 (Republic Act No. 7942)

Who is qualified to apply for an FTAA?

How much area is granted for an FTAA?

What is the term of an FTAA?

Section 34, Chapter 6, RA 7942

Philippine Mining Act of 1995 (Republic Act No. 7942)

What are the mandatory requirements21 in the acceptance of an FTAA application?

Primer on Application for Financial and Technical Assistance Agreement (http://www.mgb.gov.ph)