Capiz lifts 50-yr mining ban;

groups condemn ordinance

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By: Nestor P. Burgos Jr.
@inquirerdotnet
Inquirer Visayas
01:43 AM July 25th, 2016
ILOILO CITY—Environmental groups and residents of Capiz province have condemned the passage of a provincial ordinance
lifting a landmark 50-year ban on large-scale mining in the province.

The Capiz Environmental Protection Alliance (Cepa) said the passage of Provincial Ordinance No. 9 “is an act of treachery” by
the provincial board against the position of of Capiceños who fought against the operation of large-scale mining in the late
1990s.

The previous provincial board passed the ordinance on May 11, two days after the national and local elections. The decision,
however, was made public only last week.

Capiz Gov. Antonio del Rosario said he was against the ordinance and he would ask the provincial board to repeal the lifting of
the moratorium once he receives a formal opposition from Capiz residents.

“I only learned about it from the media. I am against it because Capiz is dependent on agriculture and its aquatic and marine
resources. I will not implement an ordinance that is detrimental to the interest of the people,”• Del Rosario told the Inquirer on
Sunday.

Capiz is a top producer of rice and seafood. Its capital, Roxas City, has been dubbed the “seafood capital of the Philippines.”

The provincial board, in the ordinance, said it was lifting the moratorium in response to appeals of officials of Maayon town
who wanted to allow the operation of the Australian-owned Teresa Marble Corp.

Maayon officials had cited economic benefits for the community, including creation of jobs, business opportunities and other
social benefits.

“This honorable body has come realize that it is of the best interest of the community of the province of Capiz that it is about
time to fulfill the economic and social benefits of the mining project …,” the ordinance said.

Cepa said the ordinance was passed “suspiciously” and without public consultation.

“[The mining moratorium] was a product of almost half a decade of advocacy, lobbying and social mobilizations for the
preservation and protection of the environment in Capiz. The moratorium for mining activities in a province was a people’s
victory in the fight against commercial mining,”• said Darlene Surriga, Cepa advocacy officer.

On Aug. 27, 1999 the provincial board passed an ordinance declaring a 15-year moratorium on all large-scale mining activities
and the acceptance and processing of all application for mineral agreements.
Three years later, on Feb. 15, 2002, the board amended the ordinance extending the moratorium to 50 years.

Environmental advocates have hailed the 1999 and 2002 ordinances as landmark pieces of legislation passed by a local
government. Several provinces, including Guimaras, have also passed similar ordinances.

The basis for the lifting is the resolution of support from officials of Maayon, especially Canapian village, for the “general conduct of
mining operation by the legally permitted mining company, the Teresa Marble Corp. (TMC) and/or Capmin Enterprise (Capmin) service
contractor, it's partner and service provider of said barangay.”
Another basis in lifting the ordinance is the implementing rules and regulation of Republic Act No. 7942 (The Philippine Mining Act of
1995) which mandates social acceptance of proposed mining projects and activities.
The moratorium ordinance took effect February 8, 2008 for 15 years but it was amended and extended to 50 years.
Category: For Local News

City Council protests lifting of mining ban

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July 28, 2016 01:18 AM

By: Jomarie A Billones
ROXAS CITY, Capiz – The Sanggunian Panlungsod (SP) of Roxas City on July 26, 2016 passed a resolution protesting the lifting of the
moratorium on large scale mining and exploration activities in Capiz by the Sangguniang Panlalawigan through Provincial Ordinance
No. 009, series of 2016.
The resolution authored by City Councilor Powell del Rosario also appealed to the provincial board to reconsider the lifting of the ban.
Capiz Gov. Antonio del Rosario last week asked provincial engineer Edgar Agana not to allow mining in Capiz.
Agana told the Daily Guardian the lifting of the moratorium did not undergo public consultation with affected residents in Maayon town.
He said his office was never informed of the move of the local government of Maayon to allow mining and the provincial board.
Del Rosario said he will not allow any mining activity in Capiz despite the recent lifting of the 50-year mining moratorium ordinance.
He said that Capiz is an agricultural province, thus it is not good to allow mining operations.

Capiz reminded of Duterte’s stand on mining

by Tara Yap
July 25, 2016

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Iloilo City — The Department of Environment and Natural Resources (DENR-6) has reminded the Capiz provincial government that the Duterte
administration is determined to curb mining activities in the country.
image: http://www.mb.com.ph/wp-content/uploads/2016/07/map-capiz.jpg

Capiz ( Map courtesy of Google maps)

DENR-6 Regional Director Jim Sampulna issued the reminder after the Capiz Provincial Board lifted the 50-year ban on mining in the province.
Sampulna said DENR Secretary Gina Lopez has been vocal against granting permits for new mining activities.

The Capiz Provincial Board lifted the ban through a resolution it approved on May 11. The resolution’s approval was only publicly disclosed this
month.

The decision to lift the mining moratorium was made on the request of the government of Maayon town, which claimed there are potential minerals
in Canapian village.

While the moratorium has been lifted in Capiz, Sampulna pointed out that a mining contract will go through an arduous process before it is approved
by DENR.

Sampulna said the mining proponent must first submit a feasibility study and apply for an exploration permit from the Mines and Geosciences
Bureau (MGB), an attached agency of DENR.

“This can take years,” Sampulna said.

Read more at http://www.mb.com.ph/capiz-reminded-of-dutertes-stand-on-mining/#ZZZD48VoFlMsRBRl.99

Tony wants ordinance lifting ban repealed

‘Unite vs mining’
Tony wants ordinance lifting ban repealed
REGION August 1, 2016, 0 Comment

Capiz Environmental Protection Alliance convener Darlene Surriga tries to fit her body in a tunnel created to mine gold ore in an upland
village in Maayon, Capiz. PHOTO COURTESY OF CEPA

BY JOHN HEREDIA

ROXAS City – Capisnons were called to rally against mining and scrap the ordinance that lifted the suspension of large-scale mining in
Capiz.

The Capiz Environmental Protection Alliance (CEPA) and the Madia-as Ecological Movement (MEM) were gathering their members
and planning to take to the streets here to dramatize their opposition to mining.

CEPA and MEM condemned the passage of Provincial Ordinance (PO) No. 9 series of 2016, which lifted the 50-year large-scale mining
moratorium imposed by the landmark POs No. 6 series of 1999 and No. 1 series of 2002.

Sangguniang Panlalawigan members unanimously passed PO No. 9 on May 11, or just two days after the elections.

Former Provincial Board member Emmanuel Billones Jr., son of now Rep. Emmanuel Billones Sr. (1st District), authored the ordinance.

In a radio interview, former Board member Aldwin Cruz-Am said PO No. 9 was passed in light of an appeal from local government
officials in Maayon town to allow Teresa Marble Corp. to mine in their area.
“We saw economic benefits for Maayon, like jobs and business opportunities. It’s a great help to the community,” said Cruz-Am.

A portion of PO No. 9 stated, “This honorable body has come realize that it is of the best interest of the community of the province of
Capiz that it is about time to fulfill the economic and social benefits of the mining project [sic] …”

In a separate interview, Gov. Antonio del Rosario opposed mining in the province. He said he will ask the Board members to repeal PO
No. 9.

“Capiz is an agricultural province. Our economy is based on farming and fisheries. That is why we are called the ‘Seafood Capital of the
Philippines,’” he said. “I will not allow mining activities here. It will destroy our economy.”

CEPA said passing PO No. 9 was “an act of treachery” by the Board members against Capisnons who fought to block mining
applications by Mount Aisa Menera, an Australian company, and Teresa Marble Corp.

“[PO] No. 9 was passed suspiciously and without any public consultation,” said CEPA convener Darlene Surriga. “The 50-year mining
moratorium was a people’s victory in our struggle against commercial mining here.”

PO No. 6 series of 1999 imposed a 15-year mining moratorium in Capiz. It was authored by then Board members and environmental
activists Cesar Talabucon, Anden Reyes and Antonio Arciga.

PO No. 1 was passed on Feb. 15, 2002, amending PO No. 6 series of 1999 to extend the moratorium to 50 years.

Environmental advocates and activists hailed these ordinances as landmark local legislations reportedly copied by several other
provinces./PN

« Pr

Ex-board member defends lifting of mining moratorium

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July 25, 2016 01:37 AM

By: Jomarie A Billones
ROXAS CITY, Capiz – A former provincial board member of Capiz denied allegations that the lifting of a 50-year moratorium on mining
by the Sangguniang Panlalawigan (SP) was done in haste.
Ex-board member Aldwin Cruz-Am said the lifting underwent a six-month study at the committee level.
Cruz-Am said it was in November 2015 that the resolutions of Canapian barangay council and municipal council of Maayon calling for
the lifting of the mining ban reached the SP.
The resolutions were then assigned to the Committee on Environment and Natural Resources under Board Member Ricky Martin but it
was not acted upon because of the latter’s health woes and the upcoming elections.
In May 2016, the municipal government of Maayon called the attention of the provincial board regarding their first request.
The request was passed and approved by the provincial board on May 11, 2016.
Cruz-am conformed that there was no committee report on the discussion but a pre-conference was held wherein SP members agreed
to pass SP Ordinance No. 009-2016.
He added that they have reason to lift the moratorium because of the Executive Order No. 79 issued by then Pres. Benigno Aquino III in
November 2012.
Based on Sec. 12 of the executive order, local ordinance should conform to national laws on mining.
The lifting was also strengthened by an administrative order from the Department of Local and Interior Government (DILG).
Cruz-Am clarified that the ordinance merely recalled the existing moratorium but will not allow mining companies to operate in Capiz.
"The national government will give permission for mining companies to conduct mining activities in the province," he said, adding that
he does not believe that mining is dangerous.
Earlier, Capiz Gov. Antonio del Rosario warned provincial engineer Edgar Agana not to entertain mining after the SP lifted the 50-year
mining moratorium ordinance.
Agana told The Daily Guardian that the lifting of the moratorium did not undergo consultation with affected residents in Maayon town.
Agana also said that he was not informed of the moves of the local government of Maayon and the provincial board.
Del Rosario earlier said he will not allow any mining activity in Capiz despite the lifting of the moratorium.
He said Capiz is an agricultural province, thus, it is not good to allow mining operations.
Former governor Victor Tanco said in a radio interview that he has not received the final draft of the ordinance which lifted the 50-year
moratorium.
Had he received the ordinance, Tanco said would have vetoed it, stressing that he is against any mining activity in the province.
Rex Talabucon said he was dismayed by the lifting of the moratorium ordinance which his father, the late board member Cezar
Talabucon, authored.
"My father was the one that made the said ordinance expressing his strong opposition to mining exploration. But all the sudden, it was
lifted because maybe of personal interest", he added.
During the regular session of the provincial board last May 11, 2016, or two days after the election, Board Member Emmanuel Billones
Jr. authored a resolution lifting the 50-year moratorium on large scale mining.
The basis for the lifting is the resolution of support from officials of Maayon, especially Canapian village, for the “general conduct of
mining operation by the legally permitted mining company, the Teresa Marble Corp. (TMC) and/or Capmin Enterprise (Capmin) service
contractor, it's partner and service provider of said barangay.”
Another basis in lifting the ordinance is the implementing rules and regulation of Republic Act No. 7942 (The Philippine Mining Act of
1995) which mandates social acceptance of proposed mining projects and activities.
The moratorium ordinance took effect February 8, 2008 for 15 years but it was amended and extended to 50 years.
Category: For Local News

PHILIPPINE ENVIRONMENT LAWS - REPUBLIC ACT NO. 7942 - AN ACT

INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,
DEVELOPMENT, UTILIZATION, AND CONSERVATION - CHAN ROBLES VIRTUAL
LAW LIBRARY

PHILIPPINE ENVIRONMENT LAWS

chan roble svirtualawl ibra ry

This web page contains the full text of

Republic Act No. 7942

[AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,

DEVELOPMENT, UTILIZATION, AND CONSERVATION]

 REPUBLIC ACT NO. 7942

[AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,

DEVELOPMENT, UTILIZATION, AND CONSERVATION]

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

assembled: chanroblesvirtuallawlibr ary

CHAPTER I

INTRODUCTORY PROVISIONS

Section 1

Title

This Act shall be known as the "Philippine Mining Act of 1995."

Section 2

Declaration of Policy

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
through the combined efforts of government and the private sector in order to enhance
national growth in a way that effectively safeguards the environment and protect the rights of
affected communities.

Section 3

Definition of Terms

As used in and for purposes of this Act, the following terms, whether in singular or plural, shall
mean: chanrobles virtuallawlibr ary

a. 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.

b. 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.).
c. Bureau means the Mines and Geosciences Bureau under the Department of Environment and
Natural Resources.

d. Carrying capacity refers to the capacity of natural and human environments to

accommodate and absorb change without experiencing conditions of instability and attendant
degradation.

e. Contiguous zone refers to water, sea bottom and substratum measured twenty-four nautical
miles (24 n.m.) seaward from the base line of the Philippine archipelago.

f. Contract area means land or body of water delineated for purposes of exploration,
development, or utilization of the minerals found therein.

g. 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.

h. Co-production agreement (CA) means an agreement entered into between the Government
and one or more contractors in accordance with Section 26(b) hereof.

i. Department means the Department of Environment and Natural Resources.

j. 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.

k. Director means the Director of the Mines and Geosciences Bureau.

l. 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.

m. Environmental 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.

n. 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.

o. 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.

p. 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.
q. 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.

r. Financial or technical assistance agreement means a contract involving financial or technical

assistance for large-scale exploration, development, and utilization of mineral resources.

s. Force majeure means acts or circumstances beyond the reasonable control of contractor
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 that herein describe over which the affected party has no
reasonable control.

t. 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.

u. Government means the government of the Republic of the Philippines.

v. Gross output means the actual market value of minerals or mineral products from its mining
area as defined in the National Internal Revenue Code.

w. 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.

x. Joint venture agreement (JVA) means an agreement entered into between the Government
and one or more contractors in accordance with Section 26(c) hereof.

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

z. Mine wastes and tailings shall mean soil and rock materials from surface or underground
mining and milling operations with no economic value to the generator of the same.

aa. 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.

ab. Mineral agreement means a contract between the government and a contractor, involving
mineral production-sharing agreement, co-production agreement, or joint-venture agreement.

ac. Mineral land means any area where mineral resources are found.
ad. Mineral resource means any concentration of minerals/rocks with potential economic
value.

ae. 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.

af. Mining operation means mining activities involving exploration, feasibility, development,
utilization, and processing.

ag. Non-governmental organization (NGO) includes nonstock, nonprofit organizations involved

in activities dealing with resource and environmental conservation, management and
protection.

ah. Net assets refers to the property, plant and equipment as reflected in the audited financial
statement of the contractor net of depreciation, as computed for tax purposes, excluding
appraisal increase and construction in progress.

ai. 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.

aj. Onshore means the landward side from the mean tide elevation, including submerged lands
in lakes, rivers and creeks.

ak. Ore means a naturally occurring substance or material from which a mineral or element
can be mined and/or processed for profit.

al. Permittee means the holder of an exploration permit.

am. 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 byproducts and gases
emitted from any facility utilized in mining operations for their disposal.

an. President means the President of the Republic of the Philippines.

ao. 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.

ap. Public land refers to lands of the public domain which have been classified as agricultural
lands and subject to management and disposition or concession under existing laws.

aq. 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 miring, with technical and financial capability to undertake mineral resources
development and duly registered in accordance with law at least sixtyper centum (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.

ar. Quarrying means the process of extracting, removing and disposing quarry resources found
on or underneath the surface of private or public land.

as. Quarry permit means a document granted to a qualified person for the extraction and
utilization of quarry resources on public or private lands.

at. 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, 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 economically workable quantities, shall not be
classified under the category of quarry resources.

au. Regional director means the regional director of any mines regional office under the
Department of Environment and Natural Resources.

av. Regional office means any of the mines regional offices of the Department of Environment
and Natural Resources.

aw. Secretary means the Secretary of the Department of Environment and Natural Resources.

ax. Special allowance refers to payment to the claim-owners or surface right-owners

particularly during the transition period from Presidential Decree No. 463 and Executive Order
No. 279, series of 1987.

ay. State means the Republic of the Philippines.

az. Utilization means the extraction or disposition of minerals.

CHAPTER II

GOVERNMENT MANAGEMENT

Section 4
 Ownership of Mineral Resources

Mineral resources are owned by the State and the exploration, development, utilization, and
processing thereof shall be under its full control and supervision. The State may directly
undertake such activities or it may enter into mineral agreements with contractors.

The State shall recognize and protect the rights of the indigenous cultural
communities to their ancestral lands as provided for by the Constitution.

Section 5

Mineral Reservations

When the national interest so requires, such as when there is a need to preserve strategic raw
materials for industries critical to national development, or certain minerals for scientific,
cultural or ecological value, the President may establish mineral reservations upon the
recommendation of the Director through the Secretary. Mining operations in existing mineral
reservations and such other reservations as may thereafter be established, shall be undertaken
by the Department or through a contractor: Provided, That a small scale-mining cooperative
covered by Republic Act No. 7076 shall be given preferential right to apply for a small-scale
mining agreement for a maximum aggregate area of twenty-five percent (25%) of such
mineral reservation, subject to valid existing mining/quarrying rights as provided under
Section 112 Chapter XX hereof. All submerged lands within the contiguous zone and in the
exclusive economic zone of the Philippines are hereby declared to be mineral reservations.

A ten per centum (10%) share of all royalties and revenues to be derived by the
government from the development and utilization of the mineral resources within
mineral reservations as provided under this Act shall accrue to the Mines and
Geosciences Bureau to be allotted for special projects and other administrative
expenses related to the exploration and development of other mineral reservations
mentioned in Section 6 hereof.

Section 6

Other Reservations

Mining operations in reserved lands other than mineral reservations may be undertaken by the
Department, subject to limitations as herein provided. In the event that the Department cannot
undertake such activities, they may be undertaken by a qualified person in accordance with the
rules and regulations promulgated by the Secretary. The right to 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, That the party who
undertook the exploration of said reservation shall be given priority. The mineral land so
awarded shall be automatically excluded from the reservation during the term of the
agreement: Provided, further, That the right of the lessee of a valid mining contract existing
within the reservation at the time of its establishment shall not be prejudiced or impaired.
 Section 7

Periodic Review of Existing Mineral Reservations

The Secretary shall periodically review existing mineral reservations for the purpose of
determining whether their continued existence is consistent with the national interest, and
upon his 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.

Section 8

Authority of the Department

The Department shall be 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 Secretary shall have the
authority to enter into mineral agreements on behalf of the Government upon the
recommendation of the Director, promulgate such rules and regulations as may be necessary to
implement the intent and provisions of this Act.

Section 9

Authority of the Bureau

The Bureau shall have direct charge in the administration and disposition of mineral lands and
mineral resources and shall undertake geological, mining, metallurgical, chemical, and other
researches as well as geological and mineral exploration surveys. The Director shall
recommend to the Secretary the granting of mineral agreements to duly qualified persons and
shall monitor the compliance by the contractor of the terms and conditions of the mineral
agreements. The Bureau may confiscate surety, performance and guaranty bonds posted
through an order to be promulgated by the Director. The Director may deputize, when
necessary, any member or unit of the Philippine National Police, barangay, duly registered non-
governmental organization (NGO) or any qualified person to police all mining activities.

Section 10

Regional Offices

There shall be as many regional offices in the country as may be established by the Secretary,
upon the recommendation of the Director.
 Section 11

Processing of Applications

The system of processing applications for mining rights shall be prescribed in the rules and
regulations of this Act.

Section 12

Survey, Charting and Delineation of Mining Areas

A sketch plan or map of the contract or mining area prepared by a deputized geodetic engineer
suitable for publication purposes shall be required during the filing of a mineral agreement or
financial or technical assistance agreement application. Thereafter, the contract or mining area
shall be surveyed and monumented by a deputized geodetic engineer or bureau geodetic
engineer and the survey plan shall be approved by the Director before the approval of the
mining feasibility.

Section 13

Meridional Blocks

For purposes of the delineation of the contract or mining areas under this Act, the Philippine
territory and its exclusive economic zone shall be divided into meridional blocks of one-half
(1/2) minute of latitude and one-half (1/2) minute of longitude.

Section 14

Recording System

There shall be established a national and regional filing and recording system. A mineral
resource database system shall be set up in the Bureau which shall include, among others, a
mineral rights management system. The Bureau shall publish at least annually, a mineral
gazette of nationwide circulation containing among others, a current list of mineral rights, their
location in the map, mining rules and regulations, other official acts affecting mining, and other
information relevant to mineral resources development. A system and publication fund shall be
included in the regular budget of the Bureau.

CHAPTER III

SCOPE OF APPLICATION

Section 15

Scope of Application
This Act shall govern the exploration, development, utilization and processing of all mineral
resources.

Section 16

Opening of Ancestral Lands for Mining Operations

No ancestral land shall be opened for mining-operations without prior consent of the
indigenous cultural community concerned.

Section 17

Royalty Payments

for Indigenous Cultural Communities

In the event of an agreement with an indigenous cultural community pursuant to the preceding
section, the royalty payment, upon utilization of the minerals shall be agreed upon by the
parties. The said royalty shall form part of a trust fund for the socioeconomic well-being of the
indigenous cultural community.

Section 18

Areas Open to Mining Operations

Subject to any existing rights or reservations and prior agreements of all parties, all mineral
resources in public or private lands, including timber or forestlands as defined in existing laws,
shall be open to mineral agreements or financial or technical assistance agreement
applications. Any conflict that may arise under this provision shall be heard and resolved by the
panel of arbitrators.

Section 19

Areas Closed to Mining Applications

Mineral agreement or financial or technical assistance agreement applications shall not be

allowed: chanrobles virtuallawlibr ary

a. In military and other government reservations, except upon prior written clearance by the
government agency concerned;

b. Near or under public or private buildings, cemeteries, archeological and historic sites,
bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects,
public or private works including plantations or valuable crops, except upon written consent of
the government agency or private entity concerned;

c. In areas covered by valid and existing mining rights;

d. In areas expressedly prohibited by law;

e. In areas covered by small-scale miners as defined by law unless with prior consent of the
small-scale miners, in which case a royalty payment upon the utilization of minerals shall be
agreed upon by the parties, said royalty forming a trust fund for the socioeconomic
development of the community concerned; and

f. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas,
mangrove forests, mossy forests, national parks provincial/municipal forests, parks,
greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly
prohibited under the National Integrated Protected Areas System (NIPAS) under Republic Act
No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

CHAPTER IV

EXPLORATION PERMIT

Section 20

Exploration Permit

An exploration permit grants the right to conduct exploration for all minerals in specified areas.
The Bureau shall have the authority to grant an exploration Permit to a qualified person.

Section 21

Terms and Conditions of the Exploration Permit

An exploration permit shall be for a period of two (2) years, subject to annual review and
relinquishment or renewal upon the recommendation of the Director.

Section 22

Maximum Areas for Exploration Permit

The maximum area that a qualified person may hold at any one time shall be: chanroblesvirtuallawlibrar y

a. Onshore, in any one province

1. for individuals, twenty (20) blocks: and

b. for partnerships, corporations, cooperatives, or associations, two hundred (200) blocks.

 b. Onshore, in the entire Philippines

1. for individuals, forty (40) blocks; and

2. for partnerships, corporations, cooperatives, or associations, four hundred (400)

blocks.

c. Offshore, beyond five hundred meters (500m) from the mean low tide level: chanroblesvirtuallawlibrar y

1. for individuals, one hundred (100) blocks; and

2. for partnerships, corporations, cooperatives, or associations, one thousand (1,000)

blocks.

Section 23

Rights and Obligations of the Permittee

An exploration permit shall grant to the permittee, his heirs or successors-in-interest, the right
to enter, occupy and explore the area: Provided, That 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.
Any expenditure in excess of the yearly budget of the approved work program may be
carried forward and credited to the succeeding years covering the duration of the
permit. The Secretary, through the Director, shall promulgate rules and regulations
governing the terms and conditions of the permit.
The permittee may apply for a mineral production sharing agreement, joint venture
agreement, co-production 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:
Provided, That the exploration period covered by the exploration permit shall be
included as part of the exploration period of the mineral agreement or financial or
technical assistance agreement.

Section 24

Declaration of Mining Project Feasibility

A holder of an exploration permit who determines the commercial viability of a project covering
a mining area may, within the term of the permit, file with the Bureau a declaration of mining
project feasibility accompanied by a work program for development. The approval of the
mining project feasibility and compliance with other requirements provided in this Act shall
entitle the holder to an exclusive right to a mineral production sharing agreement or other
mineral agreements or financial or technical assistance agreement.

Section 25

Transfer or Assignment

An exploration permit may be transferred or assigned to a qualified person subject to the

approval of the Secretary upon the recommendation of the Director.

CHAPTER V

MINERAL AGREEMENTS

Section 26

Modes of Mineral Agreement

For purposes of mining operations, a mineral agreement may take the following forms as
herein defined: chanroblesvirtu allawlibrar y

a. Mineral production sharing agreement is an agreement where the Government grants to the
contractor the exclusive right to conduct mining operations within a contract area and shares
in the gross output. The contractor shall provide the financing, technology, management and
personnel necessary for the implementation of this agreement.

b. Co-production agreement is an agreement between the Government and the contractor

wherein the Government shall provide inputs to the mining operations other than the mineral
resource.

c. 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 Government shall be entitled to a share in the gross output.

A mineral agreement shall grant to the contractor the exclusive right to conduct mining
operations and to extract all mineral resources found in the contract area. In addition, the
contractor may be allowed to convert his agreement into any of the modes of mineral
agreements or financial or technical assistance agreement covering the remaining period of the
original agreement subject to the approval of the Secretary.

Section 27

Eligibility

A qualified person may enter into any of the three (3) modes of mineral agreement with the
government for the exploration, development and utilization of mineral resources: Provided,
That in case the applicant has been in the mining industry for any length of time, he should
possess a satisfactory environmental track record as determined by the Mines and Geosciences
Bureau and in consultation with the Environmental Management Bureau of the Department.

Section 28

Maximum Areas for Mineral Agreement

The maximum area that a qualified person may hold at any time under a mineral agreement
shall be: chanroblesvirtuallawlibrar y

a. Onshore, in any one province

1. for individuals, ten (10) blocks; and

2. for partnerships, cooperatives, associations, or corporations, one hundred (100) blocks.

b. Onshore, in the entire Philippines

1. for individuals, twenty (20) blocks; and

2. for partnerships, cooperatives, associations, or corporations, two hundred (200) blocks.

c. Offshore, in the entire Philippines

1. for individuals fifty (50) blocks;

2. for partnerships, cooperatives, associations, or corporations, five hundred (500) blocks;

and

3. for the exclusive economic zone, a larger area to be determined by the Secretary.

The maximum areas mentioned above that a contractor may hold under a mineral agreement
shall not include mining/quarry areas under operating agreements between the contractor and
a claimowner/lessee/permittee/licensee entered into under Presidential Decree No. 463.

Section 29

Filing and Approval of Mineral Agreements

All proposed mineral agreements shall be filed in the region where the areas of interest are
located, except in mineral reservations which shall be filed with the Bureau.

The filing of a proposal for a mineral agreement shall give the proponent the prior
right to areas covered by the same. The proposed mineral agreement will be
approved by the Secretary and copies thereof shall be submitted to the President.
Thereafter, the President shall provide a list to Congress of every approved mineral
agreement within thirty (30) days from its approval by the Secretary.

Section 30

Assignment/Transfer

Any assignment or transfer of rights and obligations under any mineral agreement except a
financial or technical assistance agreement shall be subject to the prior approval of the
Secretary. Such assignment or transfer shall be deemed automatically approved if not acted
upon by the Secretary within thirty (30) working days from official receipt thereof, unless
patently unconstitutional or illegal.

Section 31

Withdrawal from Mineral Agreements

The contractor may, by giving due notice at any time during the term of the agreement, apply
for the cancellation of the mineral agreement due to causes which, in the opinion of the
contractor, make continued mining operations no longer feasible or viable. The Secretary shall
consider the notice and issue its decision within a period of thirty (30) days: Provided, That the
contractor has met all its financial, fiscal and legal obligations.

Section 32

Terms

Mineral agreements shall have a term not exceeding twenty-five (25) years to start 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 mutually
agreed upon by the parties. After the renewal period, the operation of the mine may be
undertaken by the Government or through a contractor. The contract for the operation of a
mine shall be awarded to the highest bidder in a public bidding after due publication of the
notice thereof: Provided, That the contractor shall have the right to equal the highest bid upon
reimbursement of all reasonable expenses of the highest bidder.

CHAPTER VI

FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT

Section 33

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 directly with the Government through the
Department.

Section 34

Maximum Contract Area

The maximum contract area that may be granted per qualified person, subject to
relinquishment shall be: chanroblesvirtuallawlibr ary

a. 1,000 meridional blocks onshore;

b. 4,000 meridional blocks offshore; or

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

Section 35

Terms and Conditions

The following terms, conditions, and warranties shall be incorporated in the financial or
technical assistance agreement, to wit: chanrobles virtuallawlibr ary

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;

b. 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;

c. 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
operation;

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

e. 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 obligations;

f. Representations 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;

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

h. Work programs and minimum expenditures commitments;

i. Preferential use of local goods and services to the maximum extent practicable;

j. 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;

k. Requiring the proponent 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;

l. 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;

m. Requiring the proponent to dispose of the minerals and byproducts 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;

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

o. Such other terms and conditions consistent with the Constitution and with this Act as the
Secretary may deem to be for the best interest of the State and the welfare of the Filipino
people.

Section 36

Negotiations

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 37

Filing and Evaluation of Financial or Technical Assistance Agreement Proposals

All financial or technical assistance agreement proposals shall be filed with the Bureau after
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 38

Term of Financial

or Technical Assistance Agreement

A financial or technical assistance agreement shall have a term not exceeding twenty-five (25)
years to start from the execution thereof, renewable for not more than twenty-five (25) years
under such terms and conditions as may be provided by law.

Section 39

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, after
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.

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 40

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 or
converted in accordance with this provision within thirty (30) days from the date of the
approval thereof.

Section 41

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 VII

SMALL-SCALE MINING

Section 42

Small-scale Mining

Small-scale mining shall continue to be governed by Republic Act No. 7076 and other pertinent
laws.

CHAPTER VIII

QUARRY RESOURCES

Section 43

Quarry Permit

Any qualified person may apply to the provincial/city mining regulatory board for a quarry
permit on privately-owned lands and/or public lands for building and construction materials
such as marble, basalt, andesite, conglomerate, tuff, adobe, granite, gabbro, serpentine, inset
filling materials, clay for ceramic tiles and building bricks, pumice, perlite and other similar
materials that are extracted by quarrying from the ground. The provincial governor shall grant
the permit after the applicant has complied with all the requirements as prescribed by the rules
and regulations.

The maximum area which a qualified person may hold at any one time shall be five
hectares (5 has.): Provided, That in large-scale quarry operations involving cement
raw materials, marble, granite, sand and gravel and construction aggregates, a
qualified person and the government may enter into a mineral agreement as defined
herein.
A quarry permit shall have a term of five (5) years, renewable for like periods but not
to exceed a total term of twenty-five (25) years. No quarry permit shall be issued or
granted on any area covered by a mineral agreement or financial or technical
assistance agreement.

Section 44

Quarry Fee and Taxes

A permittee shall, during the term of his permit, 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 45

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 46

Commercial Sand and Gravel Permit

Any qualified person may be granted a permit by the provincial governor to extract and remove
sand and gravel or other loose or unconsolidated materials 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.

Section 47

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 that necessitate the
use of mechanical processing covering an area of more than five hectares (5 has.) at any one
time. The permit shall have a term of five (5) years, renewable for a like period but not to
exceed a total term of twenty-five (25) years.

Section 48

Exclusive Sand and Gravel Permit

Any qualified person may be granted an exclusive sand and gravel permit by the provincial
governor to quarry and utilize sand and gravel or other loose or unconsolidated materials from
public lands for his own use, provided that there will be no commercial disposition thereof.

A mineral agreement or a financial technical assistance agreement contractor shall,

however, have the right to extract and remove sand and gravel and other loose
unconsolidated materials without need of a permit within the area covered by the
mining agreement for the exclusive use in the mining operations: Provided, That
monthly reports of the quantity of materials extracted therefrom shall be submitted
to the mines regional office concerned: Provided, further, That said right shall be
coterminous with the expiration of the agreement.
Holders of existing mining leases shall likewise have the same rights as that of a
contractor: Provided, That said right shall be coterminous with the expiry dates of the
lease.

Section 49

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 needed in the
construction of building and/or infrastructure for public use or other purposes over an area of
not more than two hectares (2 has.) for a period coterminous with said construction.

Section 50

Private Gratuitous Permit

Any owner of land may be granted a private gratuitous permit by the provincial governor.

Section 51

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 has established domicile. 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.

Section 52

Gemstone Gathering Permit

Any qualified person 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.

CHAPTER IX

TRANSPORT, SALE AND PROCESSING OF MINERALS

Section 53

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 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.

Section 54

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 55

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 like periods but not to exceed a total term of twenty-five (25) years. In
the case of mineral ores or minerals produced by the small-scale miners, the processing
thereof as well as the licensing of their custom mills, or processing plants shall continue to be
governed by the provisions of Republic Act No. 7076.

Section 56

Eligibility of Foreign-owned/-controlled Corporation

A foreign-owned/-controlled corporation may be granted a mineral processing permit.

 CHAPTER X

DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY

Section 57

Expenditure for Community Development

and Science and Mining Technology

A contractor shall assist in the development of its mining community, the promotion of the
general welfare of its inhabitants, and the development of science and mining technology.

Section 58

Credited Activities

Activities that may be credited as expenditures for development of mining communities, and
science and mining technology are the following: chanroblesvirtu allawlibrar y

a. Any activity or expenditure intended to enhance the development of the mining and
neighboring communities of a mining operation other than those required or provided for under
existing laws, or collective bargaining agreements, and the like; and

b. Any activity or expenditure directed towards the development of geosciences and mining
technology such as, but not limited to, institutional and manpower development, and basic and
applied researches. Appropriate supervision and control mechanisms shall be prescribed in the
implementing rules and regulations of this Act.

Section 59

Training and Development

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. For
highly-technical and specialized mining operations, the contractor may, subject to the
necessary government clearances, employ qualified foreigners.

Section 60

Use of Indigenous Goods, Services and Technologies

A contractor shall give preference to the use of local goods, services and scientific and
technical resources in the mining operations, where the same are of equivalent quality, and are
available on equivalent terms as their imported counterparts.
 Section 61

Donations/Turn Over of Facilities

Prior to cessation of mining operations occasioned by abandonment or withdrawal of

operations, on public lands by the contractor, the latter shall have a period of one (1) year
therefrom within which to remove his improvements; otherwise, all the social infrastructure
and facilities shall be turned over or donated tax-free to the proper government authorities,
national or local, to ensure that said infrastructure and facilities are continuously maintained
and utilized by the host and neighboring communities.

Section 62

Employment of Filipinos

A contractor shall give preference to Filipino citizens in all types of mining employment within
the country insofar as such citizens are qualified to perform the corresponding work with
reasonable efficiency and without hazard to the safety of the operations. The contractor,
however, shall not be hindered from hiring employees of his own selection, subject to the
provisions of Commonwealth Act No. 613, as amended, for technical and specialized work
which, in his judgment and with the approval of the Director, requires highly-specialized
training or long experience in exploration, development or utilization of mineral resources:
Provided, That in no case shall each employment exceed five (5) years or the payback period as
represented in original project study, whichever is longer: Provided, further, That each
foreigner employed as mine manager, vice-president for operations or in an equivalent
managerial position in charge of mining, milling, quarrying or drilling operation shall: chanroblesvirtu allawlibrar y

a. Present evidence of his qualification and work experience; or

b. Shall pass the appropriate government licensure examination; or

c. In special cases, may be permitted to work by the Director for a period not exceeding one
(1) year: Provided, however, That if reciprocal privileges are extended to Filipino nationals in
the country of domicile, the Director may grant waivers or exemptions.

CHAPTER XI

SAFETY AND ENVIRONMENTAL PROTECTION

Section 63

Mines Safety and Environmental Protection

All contractors and permittees shall strictly comply with all the mines safety rules and
regulations as may be promulgated by the Secretary concerning the safe and sanitary upkeep
of the mining operations and achieve waste-free and efficient mine development. Personnel of
the Department involved in the implementation of mines safety, health and environmental
rules and regulations shall be covered under Republic Act No. 7305.

Section 64

Mine Labor

No person under sixteen (16) years of age shall be employed in any phase of mining operations
and no person under eighteen (18) years of age shall be employed underground in a mine.

Section 65

Mine Supervision

All mining and quarrying operations that employ more than fifty (50) workers shall have at
least one (1) licensed mining engineer with at least five (5) years of experience in mining
operations, and one (1) registered foreman.

Section 66

Mine Inspection

The regional director shall have exclusive jurisdiction over the safety inspection of all
installations, surface or underground, in mining operations at reasonable hours of the 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.

Section 67

Power to Issue Orders

The mines regional director shall, in consultation with the Environmental Management Bureau,
forthwith or within such time as specified in his order, require 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. In case of imminent danger to life or property, the
mines regional director may summarily suspend the mining or quarrying operations until the
danger is removed, or appropriate measures are taken by the contractor or permittee.

Section 68

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

Section 69

Environmental Protection

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. The work
program shall include not only plans relative to mining operations but also to 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.

Section 70

Environmental Impact Assessment (EIA)

Except during the exploration period of a mineral agreement or financial or technical assistance
agreement or an exploration permit, an environmental clearance certificate shall be required
based on an environmental impact assessment and procedures under the Philippine
Environmental Impact Assessment System including Sections 26 and 27 of the Local
Government Code of 1991 which require national government agencies to maintain ecological
balance, and prior consultation with the local government units, non-governmental and
people’s organizations and other concerned sectors of the community: Provided, That a
completed ecological profile of the proposed mining area shall also constitute part of the
environmental impact assessment. People’s organizations and non-governmental organizations
shall be allowed and encouraged to participate in ensuring that contractors/permittees shall
observe all the requirements of environmental protection.

Section 71

Rehabilitation

Contractors and permittees shall technically and biologically rehabilitate the excavated, mined-
out, tailings covered and disturbed areas to the condition of environmental safety, as may be
provided in the implementing rules and regulations of this Act. A mine rehabilitation fund shall
be created, based on the contractor’s approved work program, and shall be deposited as a trust
fund in a government depository bank and used for physical and social rehabilitation of areas
and communities affected by mining activities and for research on the social, technical and
preventive aspects of rehabilitation. Failure to fulfill the above obligation shall mean immediate
suspension or closure of the mining activities of the contractor/permittee concerned.

CHAPTER XII

AUXILIARY MINING RIGHTS

Section 72

Timber Rights

Any provision of law to the contrary notwithstanding, 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: Provided, That if the land covered by the mining
area is already covered by existing timber concessions, the volume of timber needed and the
manner of cutting and removal thereof shall be determined by the mines regional director,
upon consultation with the contractor, the timber concessionaire/permittee and the Forest
Management Bureau of the Department: Provided, further, That in case of disagreement
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 within
his mining area in accordance with forestry laws, rules and regulations.

Section 73

Water Rights

A contractor shall have water rights for mining operations upon approval of application with
the appropriate government agency in accordance with existing water laws, rules and
regulations promulgated thereunder: Provided, That water rights already granted or vested
through long use, recognized and acknowledged by local customs, laws, and decisions of courts
shall not thereby be impaired: Provided, further, That the Government reserves the right to
regulate water rights and the reasonable and equitable distribution of water supply so as to
prevent the monopoly of the use thereof.

Section 74

Right to Possess Explosives

A contractor/exploration permittee shall have the right to possess and use explosives within
his contract/permit area as may be necessary for his mining operations upon approval of
application with the appropriate government agency in accordance with existing laws, rules
and regulations promulgated thereunder: Provided, That the Government reserves the right to
regulate and control the explosive accessories to ensure safe mining operations.

Section 75
 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 areas or lands owned, occupied or leased
by other persons, such infrastructure as roads, railroads, mills, waste dump sites, tailings
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 enter
and occupy said mining areas or lands.

Section 76

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, occupants, or concessionaires when
conducting mining operations therein: Provided, That 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:
Provided, further, That 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 or sureties satisfactory to the regional director.

CHAPTER XIII

SETTLEMENT OF CONFLICTS

Section 77

Panel of Arbitrators

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

a. Disputes involving rights to mining areas;

b. Disputes involving mineral agreements or permits;

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.

Section 78

Appellate Jurisdiction

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 79

Mines Adjudication Board

The Mines Adjudication Board shall be composed of three (3) members. The Secretary shall be
the chairman 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: chanroblesvirtuall awlibrar y

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 matter under investigation, and to testify in any investigation or hearing
conducted in pursuance of this Act;

c. 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: chanroblesvirtuallawlibrary

1. To hold any person in contempt, directly or indirectly, and impose appropriate penalties
therefor; and
 2. To enjoin any or all acts involving or arising from any case pending before it which, if
not restrained forthwith, may cause grave or irreparable damage to any of the parties to
the case or seriously affect social and economic stability.

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

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

GOVERNMENT SHARE

Section 80

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.

Section 81

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: chanrobles virtuallawlibr ary

a. capital investment of the project;

b. risks involved;

c. contribution of the project to the economy; and

d. 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 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 stockholders, in
case of a foreign national, and all such other taxes, duties and fees as provided for under
existing laws.

The Government share 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
national 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 pre-operating expenses, exploration, and development
expenditures, inclusive.

Section 82

Allocation of Government Share

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 and 292 of the said Code.

CHAPTER XV

TAXES AND FEES

Section 83

Income Taxes

After the lapse of the income tax holiday as provided for in the Omnibus Investments Code, the
contractor shall be liable to pay income tax as provided in the National Internal Revenue Code,
as amended.

Section 84

Excise Tax on Mineral Products

The contractor shall be liable to pay the excise tax on mineral products as provided for under
Section 151 of the National Internal Revenue Code: Provided, however, That with respect to a
mineral production sharing agreement, the excise tax on mineral products shall be the
government share under said agreement.

Section 85
 Mine Wastes and Tailings Fees

A semi-annual fee to be known as mine wastes and tailings fee is hereby imposed on all
operating mining companies in accordance with the implementing rules and regulations. The
mine wastes and tailings fee shall accrue to a reserve fund to be used exclusively for payment
for damages to: chanroblesvirtuall awlibrar y

a. Lives and personal safety;

b. Lands, agricultural crops and forest products, marine life and aquatic resources, cultural
resources; and

c. Infrastructure and the revegetation and rehabilitation of silted farm lands and other areas
devoted to agriculture and fishing caused by mining pollution.

This is in addition to the suspension or closure of the activities of the contractor at any time
and the penal sanctions imposed upon the same.

The Secretary is authorized to increase mine wastes and tailings fees, when public
interest so requires, upon the recommendation of the Director.

Section 86

Occupation Fees

There shall be collected from any holder of a mineral agreement, financial or technical
assistance agreement or exploration permit on public or private lands, an annual occupation
fee in accordance with the following schedule: chanrobles virtuallawlibrar y

a. For exploration permit — Five pesos (P5.00) per hectare or fraction thereof per annum;

b. For mineral agreements and financial or technical assistance agreements — Fifty pesos
(P50.00) per hectare or fraction thereof per annum; and

c. For mineral reservation — One hundred pesos (P100.00) per hectare or fraction thereof per
annum.

The Secretary is authorized to increase the occupation fees provided herein when the public
interest so requires, upon recommendation of the Bureau Director.

Section 87

Manner of Payment of Fees

The fees shall be paid on the date the mining agreement is registered with the appropriate
office and on the same date every year thereafter. It shall be paid to the treasurer of the
municipality or city where the onshore mining areas are located, or to the Director in case of
offshore mining areas. For this purpose, the appropriate officer shall submit to the treasurer of
the municipality or city where the onshore mining area is located, a complete list of all onshore
mining rights registered with his office, indicating therein the names of the holders, area in
hectares, location, and date registered. If the fee is not paid on the date specified, it shall be
increased by twenty-five per centum (25%).

Section 88

Allocation of Occupation Fees

Thirty per centum (30%) of all occupational fees collected from holders of mining rights in
onshore mining areas shall accrue to the province and seventy per centum (70%) to the
municipality in which the onshore mining areas are located. In a chartered city, the full amount
shall accrue to the city concerned.

Section 89

Filing Fees and Other Charges

The Secretary is authorized to charge reasonable filing fees and other charges as he may
prescribe in accordance with the implementing rules and regulations.

CHAPTER XVI

INCENTIVES

Section 90

Incentives

The contractors in mineral agreements, and financial or technical assistance agreements 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.

Section 91

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.

Section 92

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 loss. The entire amount of the loss shall be
carried over to 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 93

Income Tax-Accelerated Depreciation

Fixed assets may be depreciated as follows: chanroblesvirtuallawlibr ary

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 less; 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 may, at
his option, deduct exploration and development expenditures accumulated at cost as of 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-fiveper centum (25%) of the net income from mining
operations. The actual exploration and development expenditures minus the twenty-five per
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 of
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.

Section 94
 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 as enumerated hereunder: chanroblesvirtu allawlibrary

a. 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.

b. 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.

c. 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.

d. 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.

e. Requisition of investment. The right to be free from requisition of the property represented
by the investment or of the property of the enterprises except in case of war or national
emergency and only for the duration thereof. Just compensation shall be determined and paid
either at the time or immediately after cessation of the state of war or national emergency.
Payments received as compensation for the requisitioned property may be remitted in the
currency in which the investments were originally made and at the exchange rate prevailing at
the time of remittance.

f. 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.

CHAPTER XVII

GROUND FOR CANCELLATION, REVOCATION, AND TERMINATION

Section 95

Late or Non-filing of Requirements

Failure of the permittee or contractor to comply with any of the requirements provided in this
Act or in its implementing rules and regulations, without a valid reason, shall be sufficient
ground for the suspension of any permit or agreement provided under this Act.
 Section 96

Violation of the Terms and Conditions

of Permits or Agreements

Violation of the terms and conditions of the permits or agreements shall be a sufficient ground
for cancellation of the same.

Section 97

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.

Section 98

Suspension or Cancellation

of Tar Incentives and Credits

Failure to abide by the terms and conditions of tax incentive and credits shall cause the
suspension or cancellation of said incentives and credits.

Section 99

Falsehood or Omission of Facts in the Statement

All statements made in the exploration permit, mining agreement and financial or technical
assistance agreement 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.

CHAPTER XVIII

ORGANIZATIONAL AND INSTITUTIONAL ARRANGEMENTS

Section 100

From Staff Bureau to Line Bureau

The Mines and Geosciences Bureau is hereby transformed into a line bureau consistent with
Section 9 of this Act: Provided, That under the Mines and Geosciences Bureau shall be the
necessary mines regional, district and other pertinent offices — the number and specific
functions of which shall be provided in the implementing rules and regulations of this Act.

CHAPTER XIX

PENAL PROVISIONS

Section 101

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 (P10,000.00).

Section 102

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 (P50,000.00).

Section 103

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 (P10,000.00) to Twenty thousand pesos (P20,000.00) 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 104

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.

Section 105

Mines Arson

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

Section 106

Willful 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.

Section 107

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 (P5,000.00) or
imprisonment not exceeding one (1) year, or both, at the discretion of the court.

Section 108

Violation of the 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 (P50,000.00) to Two hundred
thousand pesos (P200,000.00), or both, at the discretion of the court.

Section 109
 Illegal Obstruction to 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 (P5,000.00) or by imprisonment not
exceeding one (1) year, or both, at the discretion of the court.

Section 110

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 (P5,000.00).

Section 111

Fines

The Secretary is authorized to charge fines for late or non-submission of reports in accordance
with the implementing rules and regulations of this Act.

CHAPTER XX

TRANSITORY AND MISCELLANEOUS PROVISIONS

Section 112

Non-Impairment

of Existing Mining/Quarrying Rights

All valid and existing mining lease contracts, permits/licenses, leases pending renewal, mineral
production-sharing agreements granted under Executive Order No. 279, at the date of
effectivity of this Act, shall remain valid, shall not be impaired, and shall be recognized by the
Government: Provided, That the provisions of Chapter XIV on government share in mineral
production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately
govern and apply to a mining lessee or contractor unless the mining lessee or contractor
indicates his intention to the secretary, in writing, not to avail of said provisions: Provided,
further, That no renewal of mining lease contracts shall be made after the expiration of its
term: Provided, finally, That such leases, production-sharing agreements, financial or technical
assistance agreements shall comply with the applicable provisions of this Act and its
implementing rules and regulations.

Section 113
 Recognition of Valid and Existing Mining Claims and Lease/Quarry Applications

Holders of valid and existing mining claims, lease/quarry applications shall be given
preferential rights to enter into any mode of mineral agreement with the government within
two (2) years from the promulgation of the rules and regulations implementing this Act.

Section 114

Separability Clause

If any of the provision of this Act is held or declared to be unconstitutional or invalid by a

competent court, the other provisions hereof shall continue to be in force as if the provision so
annulled or voided had never been incorporated in this Act.

Section 115

Repealing and Amending Clause

All laws, executive orders, presidential decrees, rules and regulations or parts thereof which
are inconsistent with any of the provisions of this Act are hereby repealed or amended
accordingly.

Section 116

Effectivity Clause

This Act shall take effect thirty (30) days following its complete publication in two (2)
newspapers of general circulation in the Philippines.

Approved: March 3, 1995

Gina Lopez: Philippine

Mining Act an 'unfair' law
'We have to change that,' the environment secretary says of the Mining Act of 1995. She says
the law is 'skewed towards the mining sector, and not towards our people.'
Jee Y. Geronimo
@jeegeronimo

MANILA, Philippines – Environment Secretary Gina Lopez believes it's time to change
the Philippine Mining Act since she said it's an "unfair" law that is "skewed towards the mining
sector, and not towards our people."

"We have to change that.... Sabi [ng mining companies] they're giving to economy. What? Out
of P35 billion net, P29 billion pumupunta sa mining company, only P6 billion goes to the
country, and out of that P6 billion, kaunting-kaunti [ang] pumupunta sa komunidad, like almost
nothing," Lopez said in a DZMM interview on Tuesday morning, July 12.

(We have to change that. Mining companies say they're giving to the economy. What? Out of
P35 billion net, P29 billion goes to the mining company, only P6 billion goes to the country,
and out of that P6 billion, a very small amount goes to the community, like almost nothing.)

Environmental groups have also called on policymakers to repeal the Mining Act of
1995. They want a law that would protect the rights of Filipino mining workers, local
communities, and state interests. (READ: TIMELINE: Philippine mining laws and policies)

Lopez, a known anti-mining advocate before her appointment as head of the Department of
Environment and Natural Resources (DENR), again reiterated on Tuesday that she is not
against the mining industry, but she's against the suffering of people in mining communities.

"You cannot build an economy, a company based on suffering. I will not allow it to happen in
DENR," she said, as she again warned mining companies to get their act together.
(READ: Lopez to DENR officials: 'Be proactive, inspire people')

Lopez immediately ordered an audit of all existing mines in the country on her first day as
environment secretary.

A week after the audit, at least 4 mining companies have been suspended for violating
environmental standards: BenguetCorp Nickel Mines Incorporated, Eramen Minerals
Incorporated, LNL Archipelago Minerals Incorporated, and Zambales Diversified Metals
Corporation.

The Supreme Court in June issued a Writ of Kalikasan against these mining companies,
ordering them to defend themselves before the appellate court.
A Writ of Kalikasan protects the constitutional right to a healthy environment, as provided in
Section 16, Article II of the Constitution, which states: "The state shall protect and advance
the right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature."

'Audit will be fair'

On Tuesday, Lopez said these companies are not adhering to progressive rehabilitation,
leaving people in Zambales to suffer "big time."

"There was a Writ of Kalikasan from the Supreme Court that recognizes that place is really
environmentally vulnerable. And then we saw it really suffered. One, they cut 20,000 trees
without a permit and then the community health was suffering, and if you see the pictures, the
fish ponds dried up because of too much nickel going there," she said in a mix of English and
Filipino.

"And the river was full of nickel, even the sea, I could see nickel there, and the rice fields
[have] nickel. You can't do business while doing that."

Responsible mining, she reiterated, does not impede on the well-being of present and future
generations.

Lopez said the ongoing audit is not just technical but also social and environmental, since the
audit team also consists of agriculturists, fishery experts, water experts, and those involved in
community development.

"The audit will be fair. I commit to the truth," she said, warning companies that violate the law
that they will "face the consequences."

During the interview, Lopez revealed that President Rodrigo Duterte also does not likeblack
sand mining. As for planned mining activities in Lobo town in Batangas, she said she will
"never allow it, ever."

"That's the center of marine biodiversity sa buong planeta (in the whole planet). My God, how
can you do mining there? Just this year, they found 138 new marine species. I will never,
ever, ever allow mining there. Kailangan alagaan 'yan, jewel 'yan ng Pilipinas(We have to
take care of that, that's a jewel of the Philippines)," she added. –Rappler.com

OVERVIEW OF THE MINING INDUSTRY

According to the data from the Mines and Geosciences Bureau show that from 1970-2010, the Philippines only

produced P878.4 billion out of P73.47 trillion supply of metallic and non-metallic mineral production in terms

of value.
The economic impact of the mining industry in the country cannot be ignored. The Chamber of Mines of the

Philippines estimated that the country lost around P10.4 billion worth of foreign direct investments in the

mining sector last year due to uncertainties over the government’s policy direction on the mining sector as well

as the delayed issuance of mining permits.

For the years 1960 to 2008, the gross value added (GVA) in mining and quarrying at prices in 2011 rose

annually by 17.31 percent on average. For the same period at constant prices, meanwhile, GVA increased yearly

by 5.39 percent on average. 1 The total mineral exports of the Philippines and their percentage share to total

exports of the country increased annually on average. 2 Likewise, employment in mining and quarrying

increased from 141,000 to 166,000 for the period 2006 to 2009. 3

The mining industry has been a source of conflict for the government, non-governmental organizations

(“NGOs”) and the private sector. The positive economic performance of the mining industry has always been

countered by the negative effects mining operations have on the environment. But the issues confronting the

mining industry is not only limited to its detrimental effects on the environment. While our mining laws seek to

address the environmental concerns surrounding the mining industry, enforcement of the law is another.

According to Fraser Institute Annual Survey of Mining Companies 2010-2011, the Philippines ranked 66 out of

79 in the policy attractiveness survey. The policy potential index of the Philippines is poor in terms of

infrastructure, timely and efficient administration of legal processes, and transparent and non-corrupt

governance.

To address the mining issues on economic, environmental and lack in enforcement, President Benigno Aquino

III issued Executive Order No. 79 (“EO 79”).

HISTORY OF MINING LAWS IN THE PHILIPPINES

The 1987 Constitution is the supreme law governing the Philippine mining industry. Article XII on National

Economy and Patrimony provides:

“Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces

of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned

by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The

exploration, development, and utilization of natural resources shall be under the full control and supervision of

the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or

production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of

whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years,

renewable for not more than twenty-five years, and under such terms and conditions as may provided by law. In

cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of

waterpower, beneficial use may be the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive

economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as

cooperative fish farming, with priority to subsistence fishermen and fish workers in rivers, lakes, bays, and

lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or

financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other

mineral oils according to the general terms and conditions provided by law, based on real contributions to the

economic growth and general welfare of the country. In such agreements, the State shall promote the

development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision, within

thirty days from its execution.”

During the 1980s and early 1990s, there was, however, a decline in the state of the mining sector that led to the

enactment in 1995 of Republic Act No. 7942, otherwise known as the Philippine Mining Act (“Mining Act”), as
a means to boost the industry. This law became a subject of controversy and eventually was challenged before

the Supreme Court for being unconstitutional. The Supreme Court in the case of La Bugal-B’Laan Tribal

Association Inc. vs. Ramos 4 finally resolved the issue on the legality of the Mining Act including those relating

to financial and technical agreements ruling that:

“All mineral resources are owned by the State. Their exploration, development and utilization (EDU) must

always be subject to the full control and supervision of the State. More specifically, given the inadequacy of

Filipino capital and technology in large-scale EDU activities, the State may secure the help of foreign

companies in all relevant matters — especially financial and technical assistance — provided that, at all times,

the State maintains its right of full control. The foreign assistor or contractor assumes all financial, technical

and entrepreneurial risks in the EDU activities; hence, it may be given reasonable management, operational,

marketing, audit and other prerogatives to protect its investments and to enable the business to succeed.”

When the Supreme Court upheld the Constitutionality of the Mining Act, this resulted in faster growth in

mineral exports, percentage share to total exports, employment in the mining sector and in the total paid-up

investments in mining. 5

The Philippine mining sector throughout the years has been regulated by the Department of Environment and

Natural Resources (“DENR”) together with its attached agency Mines and Geosciences Bureau (“MGB”). On

the other hand, quarrying is within the jurisdiction of local government units in accordance with the Republic

Act 7160 otherwise known as the Local Government Code of 1991.

HIGHLIGHTS OF THE MINING ACT

The core principle of the Mining Act is its strict adherence to sustainable development. The declared policy of

the law is to promote the rational exploration, development, utilization and conservation of mineral resources

through combined efforts of government and the private sector in order to enhance national growth in a way that

effectively safeguards the environment and protect the rights of affected communities.
Economic aspect

According to Section 5 of the Mining Act, the government shall get a ten percent (10%) share in all royalties

and revenues to be derived by the government from the development and utilization of the mineral resources

within mineral reservations which shall accrue to the MGB to be allotted for special projects and other

administrative expenses related to the exploration and development of other mineral reservations.

Under the Local Government Code, local government units (“LGUs”) were given authority to impose taxes on

sand, gravel and other quarry resources under Section 138 thereof. In addition, the Mining Act provides that

LGUs have a share of forty percent (40%) of the gross collection derived by the National Government from

mining taxes, royalties and other such taxes, fees or charges from mining operations in addition to the

occupational fees (30% to the Province and 70% to the Municipalities concerned) in consonance with the Local

Government Code.

Environmental aspect

In ensuring that the government protects the right of the people to a balanced and healthful ecology, the Mining

Act has provided limitations on how the mineral resources of the country can be utilized.

It established area limitations, maximum years for mining operations, assignment of mining rights, compliance

with rules and regulations promulgated by the DENR concerning the sanitary upkeep of mining operations.

Section 69 of the Mining Law also required every contractor to undertake an environmental protection and

enhancement program covering the period of the mineral agreement or permit which shall be incorporated in the

work program which the contractor or permitted shall submit as an accompanying document to the application

for a mineral agreement or permit.

To further ensure the protection of our environment, an environment clearance certificate is required based on

an environmental impact assessment pursuant to Section 70 of the Mining Act. Details of environmental

protection have been outlined in Chapter XVI of Administrative Order No. 2010-21 or the implementing rules

and regulations promulgated of the Mining Act. Under Section 167-A of the Administrative Order, a Certificate
of Environmental Management and Community Relations Record (CEMCRR) is required in the approval of

Mineral Agreements, FTAA, Quarry or Commercial/Industrial Sand and Gravel Permit and Mineral Processing

Permits.

The Mining Act and its Implementing Rules and Regulations also gave premium to environmental protection.

Measures were put in place to ensure that mining contractors/operators comply with internationally accepted

standards of environment management.

Mining contractors/operators are mandated to allocate approximately ten percent (10%) of the initial capital

expenditures of the mining project for environment-related activities. A mandatory annual allocation of three to

five percent (3%-5%) of the direct mining and milling costs to implement an Annual Environment Protection

and Enhancement Program (“EPEP”).

There is also a mandatory establishment of a Mine Rehabilitation Fund (“MRF”) to be composed of the

following:

a. a Monitoring Trust Fund of Php50,000.00 which is replenishable; and

b. a Rehabilitation Cash Fund of Php 5,000,000.00 or ten percent (10%) of the EPEP cost,
whichever is lower.

Such funds are to be deposited as a trust account in a government depository bank to be managed by the MRF

Committee composed of the MGB Regional Director, DENR Regional Executive Director, representatives from

the LGU and an NGO, and the contractor.

Conduct of Environmental Work Program during the exploration stage and an Environmental Protection and

Enhancement Program during the development and operations stage is also required under the Mining Act.

As an incentive to mining companies, the Mining Act mandates the institutionalization of an incentive

mechanism to mining companies utilizing engineered and well-maintained mine waste and tailings disposal

systems with zero-discharge of materials/effluents and/or with wastewater treatments plants.

To ensure compliance with the mining laws, a Multipartite Monitoring Team composed of representatives from

the MGB, DENR Regional Office, affected communities, Indigenous Cultural Communities, an environmental

NGO, and the Contract/Permit Holder shall undertake the monitoring of mining operations. On the other hand,

the Mine Environmental and Protection and Enhancement Office in each mining/contract area will set the level

of priorities and marshal the resources needed to implement environmental management system.

The MGB Regional Director shall also have the power to summarily suspend mining/quarrying operations in

case of imminent danger to human safety or the environment.

ISSUES FACED BY THE GOVERNMENT

With the advent of Climate Change or Global Warming, people have shifted their focus from utilization to

preservation. The environmental community has been clamoring for the government to push for stringent

environmental protection.

Moreover, according to the 10-year review of the mining industry published by International Institute for

Environment and Development, despite the emergence of global rules for best practices in the mining industry,

more often than not, there is lack of implementation, independent verification, public reporting, or

consequences of non-compliance.

The government is also not getting its “fair share” in the mining industry as espoused by President Benigno

Aquino III. Mining contractors of Mineral Production Sharing Agreement and Financial or Technical

Assistance Agreements can avail of fiscal and non-fiscal incentives granted under the Omnibus Investment

Code of 1987, as amended. In addition to these incentives, the Mining Act also granted incentives for pollution

control devises, for income tax carry forward of losses, for income tax accelerated depreciation on fixed assets,

and investment guarantees, such as investment repatriation, earning remittance, freedom from expropriation,

and requisition of investment, and confidentiality of information.

For FTAA contractors, an additional incentive, in the form of a tax holiday on national taxes is granted from the

start of the construction and development period up to the end of the cost recovery period, but not to exceed five

years from the start of commercial operation.

These issues led the Aquino administration to review the existing mining laws and policies of the country which

resulted in the execution of Executive Order No. 79 aimed at addressing the deficiencies in the current laws and

rules and regulations with respect to environmental protection and income derived by the government from the

mining industry.

HIGHLIGHTS OF E.O. 79 – NEW MINING REGULATION

The thrust of Executive Order 79 is to improve environmental mining standards and increase revenues to

promote sustainable economic development and social growth, both at the national and local levels.

Pursuant to these objectives, the order focused on enhancing coordination among stakeholders to ensure strict

compliance by mining operators to the existing mining laws and regulations.

A careful look at the Mining Act and Executive Order No. 79 will show the different path the government is

now taking with respect to the mining industry.

Changes introduced by EO 79 on the environment aspect

In addition to the areas closed to mining applications as provided under Section 19 of the Mining Act has been

expanded by EO 79 to include the following:

a. Protected areas categorized and established under the National Integrated Protected Areas
System (“NIPAS”) under Republic Act No. 7586;
b. Prime agricultural lands, in addition to lands covered by Republic Act No. 6657, including
plantations and areas devoted to valuable crops, and strategic agriculture and fisheries
development zones and fish refuge and sanctuaries declared as such by the Secretary of the
Department of Agriculture;
c. Tourism development areas, as identified in the National Tourism Development Plan; and
 d. Other critical areas, island ecosystems, and impact areas of mining as determined by current
and existing mapping technologies, that the DENR may hereafter identify pursuant to existing
laws, rules, and regulations and the terms and conditions of the grant thereof.

Implementation of ensuring environmental compliance is now not solely the responsibility of the National

Government. Enforcement will now be done in coordination with LGUs. The LGUs shall, however, confine

themselves only to the imposition of reasonable limitations on mining activities conducted within their

respective territorial jurisdictions that are consistent with national laws and regulations.

Existing mining operations will now be placed under review by a multi-stakeholder team led by the

DENR. Likewise, the use of mercury in small-scale mining is strictly prohibited and small-scale mining shall

be confined only to declared People’s Small-Scale Mining Areas or Minahang Bayan.

Changes introduced by EO 79 on the economic aspect

A new feature has been introduced by EO 79 when it comes to granting new mineral agreements is the necessity

of a public bidding. Under the Mining Act, the rule is a first come first serve policy. Whoever reserves first and

is qualified to undertake the mining operation can be granted the permit, subject to limitations imposed by the

laws and rules and regulations. EO 79 has completely changed the way mining agreements will now be granted

by undergoing a public bidding.

As provided in Section 6 of EO 79:

“Section 6 The grant of mining rights and mining tenements with known and verified mineral resources and

reserves, including those owned by the Government and all expired tenements, shall be undertaken through

competitive public bidding. While all other mining rights and tenements applications shall be processed and

approved through existing procedures.”

A moratorium has also been placed on the grant of new mineral agreements until a legislation rationalizing

existing revenue sharing schemes and mechanisms shall have taken effect. Likewise, existing mining contracts
and agreements will also be reviewed by the DENR for possible renegotiation of terms and conditions, which,

shall in all cases be mutually acceptable to the government and the mining contractor.

In addition, Section 7 of EO 79 provides that:

“All valuable metals in abandoned ores and mine wastes and/or mill tailings generated by previous and now

defunct mining operations belong to the State and shall be developed and utilized through competitive public

bidding. Likewise, upon expiration of the pertinent mining contracts, the said metals shall belong to the State

and will be developed and utilized through public bidding.”

Changes introduced by EO 79 on the enforcement aspect

A new council called the Mining Industry Coordinating Council (“MICC”) has also been created under Section

9 of the said executive order. The MICC’s powers and functions can be categorized into two purposes:

coordination with stakeholders and enforcement of mining laws.

The following are the powers and functions of the MICC as to coordination:

1. Ensure continuing dialogue and coordination among all stakeholders in the industry
2. Conduct and facilitate the necessary capacity and institutional building programs for all
concerned government agencies and instrumentalities;
3. Conduct an assessment and review of all mining-related laws, rules and regulations,
issuances, and agreements with the view to formulating recommendations to enhance
coordination between the National Government and LGUs to ensure implementation of mining
laws and regulations, and to properly regulate small-scale mining participants and ensure that
they are accountable to the same environmental and social obligations as large-scale mining
companies;
4. Serve as the Oversight Committee over the operations of Provincial/City Mining Regulatory
Boards (P/CMRBs);

The following are the powers and functions of the MICC as to enforcement:

1. As may be directed by the President, constitute and create a Task Force Against Illegal Mining
and seek the assistance of all law enforcement agencies, such as, but not limited, to the
 Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) to ensure
strict compliance with relevant laws, rules and regulations;
2. Request the assistance of any government agency or instrumentality, including government-
owned and controlled corporations and local government units (LGUs), in the implementation
of this Order

Other powers and functions:

1. Submit a work plan to implement the EO and implement other reforms related to the mining
industry;
2. Conduct an assessment and review of all mining-related laws, rules and regulations,
issuances, and agreements with the view to formulating recommendations to improve the
allocation of revenues and risk between the government and the mining sector;
3. Submit periodic reports to the President on the status of the implementation of this Order; and,
4. Perform such other functions and acts as may be necessary, proper or incidental to the
attainment of its mandates and objectives, or as may be directed by the President.

As a means of improving regulation in the processing of mining application, Section 13 of EO 79 sought the

creation of an inter-agency one-stop shop for all mining related applications and processes. The DENR will

issue authority to verify mineral deposits only for areas open to mining as defined in Section 9 of EO 79.

Securing free and informed prior consent of the concerned indigenous peoples and compliance with the social

acceptability requirement of the communities affected before a Mineral Production Sharing Agreement,

Financial and Technical Assistance Agreement, Joint Venture Agreement or Co-Production Agreement can be

approved has also been mandated by EO 79.

The changes introduced by EO 79 basically focused on three areas: economic, environmental, and enforcement.

Aiming for a more equitable distribution of opportunities, income, and wealth while protecting the right of the

Filipino people to a balanced and healthful ecology are the core principles of EO 79. These goals will only be

achieved through stricter enforcement of our mining laws and policies with the help of all the stakeholders in

the mining industry.

 1 “Value addition: the way of the future for Philippine mining” by Danilo C. Israel of Philippine
Institute for Development Studies October 2011.
  2 Id.
 3 Philippine Development Plan 2011-2016.

 4 G.R. No. 127882, 1 December 2004.

 5 “Value addition: the way of the future for Philippine mining” by Danilo C. Israel of Philippine

Institute for Development Studies October 2011.

Incoming DENR chief is expected to

implement mining law
Published June 22, 2016 11:09pm
Updated June 23, 2016 12:58am

It would be business as usual for a major player in the mining industry as President-elect Rodrigo
Duterte's choice to lead the Department of Environment and Natural Resources (DENR) is
expected to implement laws on mining.

Businessman Manny Pangilinan, chairman of Philex Mining Corp., said share prices of oil and
mining plunged following the appointment of Gina Lopez to head DENR, according to a report by
GMA’s Ivan Mayrina on “24 Oras.”

The 17-stock Mining and Oil index declined 837.14 points or 7.31 percent to 10,614.70 on
Wednesday.

“If he (President-elect Rodrigo Duterte) has nominated or asked Gina Lopez to be DENR secretary
so be it. We respect that decision if in his own wisdom, he felt she's the right person for that post
then we respect that,” Pangilinan said.

“What’s our attitude? It’s business as usual. We have a mining business, an operating mine up there
in Baguio,” he added.

It can be recalled, that Lopez and Pangilinan had a heated exchange during a mining conference in
2012 about the negative effects of mining.

“It's not nice and maybe there could have been mining there. But when you make a statement that
all the areas where there's gonna be mining are ugly anyway, that's the point,” Lopez told
Pangilinan.

In response, Pangilinan said, “I did not say that. Now, you’re lying!”
Based on data from the government, the mining industry provides at least 234,000 jobs and the
contribution to the country's Gross Domestic Product is more than P80 billion.

The Chamber of Mines of the Philippines (COMP), meanwhile, voiced hope that the incoming
DENR chief will set aside her personal position against mining, the report said.

“We already have the mining law, we have the Mining Act, we have to implement it properly.
We're hoping that Miss Lopez will follow that directive given that she is the secretary who will be
tasked to implement the Mining Act,” said Ronald Recidoro, VP for Legal and Policy of COMP.

Lopez supported the Save Palawan Movement, which raised 10 million signatures to stop mining in
several areas of Palawan. She is also active in the rehabilitation of Pasig River as the chairperson of
Pasig River Rehabilitation Commission. She also headed Bantay Kalikasan in 1987.

In the consultative meeting with the business sector on Tuesday, the president-elect that all mining
claims and concessions issued will be reviewed.

“Learn how to mine the precious metals from the bowels of the earth and do it, because if you are
spoiling the land I will cancel it, without hesitation,” Duterte said.

“It is not that I do not want mining, there is a law...you have to allow it because the law allows it.
But in making money out of the precious metals of the earth that belongs to the Filipino people,
you have to do it right. If you cannot do it right, then get out of mining,” he added.

Lopez's appointment as DENR secretary is supported by 28 environmental groups comprising the

Scrap Mining Act Alliance. However, the network will remain vigilant.

“Dapat panindigan niya yung pagiging DENR secretary at isailalim niya yung interes ng kanyang
angkan o pamilya...kung saan nakikita namin dito marami silang proyekto sa usapin ng eco turismo
na nagiging dahilan din ng paglikas ng mga katutubo, tulad ng katutubong Mamanwa sa Surigao,”
said Kakay Tolentino of the Scrap Mining Act Alliance.

GMA News requested for an interview with Lopez to get her reaction to the issues. A comment has
not yet been issued as of posting. — John Ted Cordero, BAP, GMA News

- See more at: http://www.gmanetwork.com/news/story/570976/news/nation/incoming-denr-chief-is-expected-to-implement-

mining-law#sthash.c7hw4kYM.dpuf
Taxation and regulations in Philippine
mining industry

87 16 Google +1 4

Posted on September 22, 2015

ALMOST ALL the modern things that we enjoy now, from mobile phones to computers, TVs,
refrigerators, cars, buses, trucks, tractors, planes, buildings, airports, etc., come from mining.
It is not possible to have modern life, to live more productively, wealthier and healthier,
without using the products of mining.

Many people take this for granted. That is why many people hate mining, especially big corporate mining and wish
that there will be “No Mining” policy in the whole country soon.

The contribution of mining in the Philippine economy looks small. Just 1% of gross domestic product (GDP) and only
0.6% of total employment. And so the temptation to “Close all mining” calls continue. (See Table 1)

But read the first paragraph again. People only see the stones, rocks, and soil being removed from a particular
province, the mud and tailings that flow during heavy rains while ignoring the fact their gadgets, appliances, vehicles,
buildings, electrical cables, and wires come from those rocks and soil extracted somewhere else.

Between “No to Mining” and “Allow Mining” is the philosophy of “Over-tax, over-regulate Mining”, and this is what we
have now.

First, the Philippines has the highest value added tax (VAT) or gross sales tax rate in the Association of Southeast
Asian Nations. And second highest in corporate income tax (CIT) at 32%, next to Myanmar’s 35%; it is almost twice
the CIT in Singapore of only 17%.

Second, the number of taxes, royalties, regulatory fees, contributions and mandatory community expenditures that a
mining company must pay is rising through time. (See Table 2)

Thus, after paying those taxes and fees to government, supposedly to finance public education, public health, public
housing, public roads, various livelihood trainings and seminars, a mining firm must spend extra to build its own
school and training center, own hospital and clinic, own housing, own roads, drainage and street lighting, conduct
livelihood trainings, and so on via social development and management program (hundreds of millions a year),
environmental protection and management program, environmental work program, etc.

It is obvious that the over-taxation and over-regulation of mining is driven by envy and political opportunism. Mining
and extractive companies are next to evil so governments and the communities that host them should extract as
much social and economic rent from them.

There are proposed revisions to current mining tax and the most dominant proposal coming from the Mining Industry
Coordinating Council (MICC) is proposing an even higher taxation and government share.

House Bill 5367, the MICC version, proposes that government as “owner” of the minerals should get 10% of a miner’s
gross revenues for the year, or 55% of “adjusted net mining revenues (ANMR)” (ANMR: gross revenue less production
and other deductible costs but not to exceed 10% of direct mining, milling and processing costs), whichever is higher;
and 60% of any windfall profit (in case the “ANMR margin” -- ANMR divided by gross revenue -- exceeds 50%, the
government gets 55% of that threshold of 50% of gross revenue plus 60% of the excess).
The consolation is that those high taxes will replace the CIT, royalty to indigenous communities, duties on imported
specialized capital mining equipment, mayor’s business permits and other fees and charges imposed by host local
government units (LGUs).

The non-consolation is that other existing taxes and fees will still be paid,like the VAT, capital gains tax, stock
transaction tax, documentary stamp tax, withholding taxes, environmental fee, real property tax, Securities and
Exchange Commission fee and soon.

It is not good to create public policies, in taxation and mandatory fees and contributions in particular, based on envy.
People benefit from mining, directly or indirectly, even if taxes are just 10% or zero. It is the fear of “environmental
destruction” that is paramount in the hearts of many people. So long as the company institutes measures and spend
huge money to control or minimize such danger, the politics of envy should be curtailed.

Imposing very high taxes and complicated requirements will drive away the legal, large, responsible mining
companies that want to remain honest. Or it will force them to become corrupt just to stay in business. “Small-scale”
and illegal mining that are hardly taxed and regulated will flourish.

Tax hike proposals should be compensated with streamlining and abolition of other taxes, charges, and over-bearing
requirements.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, Inc. and a Fellow of the South East Asia
Network for Development (SEANET).
Philippines clamps down
on illegal miners, gold
smugglers
The Philippines is tightening oversight of the roughly 300,000
small-scale miners in the country as it looks to curb illegal
mining and gold smuggling, as well as to protect the
environment, a government official said on Monday.
The Philippines is sitting on mineral reserves worth $1.4 trillion,
among the world's biggest, but mining accounts for less than 1
percent of total GDP, as policy bottlenecks and a strong anti-
mining lobby led by the Roman Catholic Church hamper
development.
Illegal gold shipments from the Southeast Asian country, which
its government says holds the world's second largest reserves
of the precious metal, remains a concern as some small miners
try to avoid paying local taxes, Leo Jasareno, head of the Mines
and Geoscience Bureau (MGB), told Reuters.
"Smuggling activity could still be prevalent," he said, adding
many small-scale miners also operate without proper permits.
By law, all gold produced by small-scale miners must be sold to
the Philippine central bank.
Data from the MGB showed gold sold by small-scale miners
and traders to the central bank in 2014 was worth only 180
million pesos ($4 million) based on current foreign exchange
rates, compared with $25 million in 2013, $47 million in 2012,
$764 million in 2011 and $962 million in 2010.
"Gold production (by small miners) in 2014 was about 18
tonnes, down from about 30 tonnes before the BIR started
collecting taxes from small miners," Jasareno said, referring to
the Bureau of Internal Revenue, which in 2012 ordered the
imposition of a 2-percent excise tax and 5-percent withholding
tax on gold purchases.
The government will attempt to closely monitor operations in
what was previously a loosely regulated industry.
Small-scale mining of metallic minerals, which is rampant in
many provinces, will be limited to gold, silver and chromite, and
will be confined to certain areas, Jasareno said.
Provincial or city mining regulatory boards will be set up to
govern small-scale mining contractors who will be required to
pay a so-called "government share" on top of the usual taxes,
he said.
Big miners support the government's move to clamp down on
illegal small-scale miners, but oppose other reforms such as a
proposal to increase the state's share of mining revenues.
($1 = 44.6 pesos)
(Reporting by Erik dela Cruz; Editing by Joseph Radford)

Sitting on a Gold Mine: Will Mining Make or

Break the Philippines?
The Philippine government believes bolstering extractive industries will drive growth. But religious leaders
and environmentalists wonder about the cost
By Catherine TraywickSept. 13, 2012
 Follow @TIMEWorld

In Compostela Valley, in the southern Philippines, a river streaked many shades of brown cuts through farmland
and jungle brush to release its muck into the sea. The slurry swells around the coastline, muddying the emerald
waters. The source of the blight is an eroded mountainside peppered with blue tarps and tiny shacks, a gold mine
nestled among green hills. About 600 families reside on its steep slope, eking out a living by half-grams of gold.

They are, technically, squatters. An American company, St. Augustine Gold & Copper, holds the rights to this
mountain and those surrounding it. In their place, the company wants to build massive pits to get at
the estimated 962 million tons of precious metals beneath. They also promise to clean the river, plant trees and
create jobs. It is a massive undertaking that will dramatically alter the landscape and displace the thousands of
workers who have been mining in the area, and fueling the local economy, since the 1980s.

The Philippine government, for its part, is rooting for the American firm, grounded in the belief that large-scale
mining can be a golden engine of economic growth. Corporate mining permits have multiplied under President
Benigno Aquino III, and new mining rules filed by his administration this week will place new restrictions on where
and what small-scale miners can mine. But many Filipinos, especially those from mining communities, are wary of
his plans. They want an overhaul of current mining laws. They also want a bigger piece of the profit.

(MORE: 10 Questions for Benigno ‘Noynoy’ Aquino III)

What’s happening in the Philippines is echoing across a region where fast-growing economies are weighing the costs
and benefits of extractive industries. Indonesia this year imposed a whopping 20% tax on mineral exports and, in an
effort to foster domestic downstream industries, now limits shipments of raw materials. Mining companies are,
naturally, critical of the turn, saying it discourages foreign investment. What good are high taxes, after all, if there
are no investors to pay them? There’s a flip side to that: What good are investors if there is nothing to mine?

The Philippines, of course, has plenty to mine. Loaded with mineral wealth (worth about $840 billion), it boasts
some of the largest untapped gold and copper deposits in the region. Unfortunately, it has not always been the
friendliest place to do this kind of business. In Mindanao, which holds more than a third of the country’s gold and
houses all its insurgencies, mining operations are susceptible to attacks and extortion from rebel groups.
Noncomplying companies have lost millions of dollars’ worth of equipment to vandalism and arson. The government
has long offered generous incentives — extremely low taxes, state-funded security, low accountability — to entice
foreign investment.

With adequate taxation, big mining could indeed fuel the economic growth the country needs. But
environmentalists, local leaders and even the influential Catholic Bishops’ Conference of the Philippines have taken
a stand against large-scale mineral extraction. Besides obvious environmental concerns, they fear that big mining
will displace indigenous tribes and squelch the small-scale industry that has historically contributed the bulk of
mining tax revenues. On top of that, they argue, bureaucratic inefficiencies — and likely graft and corruption —
prevents what little mining revenue is collected from making its way back to communities. As a result, at least 20
governors have banned some form of large-scale mining in their provinces.

(MORE: Asia to Lead the World’s ‘Rich List’)

The tension unfolding around St. Augustine’s Compostela Valley project underscores what’s at stake nationally. Just
1½ years old, the project has received endorsements from every level of government, a requirement under
the 1995 mining law. It stands to be the largest single mining operation in the country’s history (if a mining ban
halting the nearby Tampakan Gold-Copper Project holds up). Its executives say it’s setting a new standard of socially
responsible mining: hiring from the local population, planning postmine rehabilitation and promoting reforestation.
It also spends about $20,000 per month on community-development efforts, according to Clyde Gillespie, the
company’s environmental and permitting director, who also pointed out that no law requires them to do so. “What
we’re doing now in the community is totally voluntary,” he says. “We think it’s the right thing to do.”

But local leaders from affected barangays, or villages, remain skeptical. “I have 100% doubts,” says Captain
Ferdinand Dultra, a leader of Barangay Magnaga, which endorsed the project after the company reportedly donated
500,000 pesos to the construction of a barangay hall. (Officials say the donation did not affect their decision.) While
several leaders said that they appreciate the company’s investment in the community, they also point out that
mining reform might secure similar community benefits while guaranteeing corporate accountability. “It is very
risky for us to support large-scale mining,” says Elvie Baliar, a local leader from Barangay Tambangon who also
endorsed the company’s exploration bid. “Six hundred households will be affected. They are in the area since 1987.”

Under the 1995 law, small miners with a historical claim to an area can petition for Minahang Bayan, or “People’s
Mining,” permits. The miners from this area began applying for such permits in the 1980s, without success. Then, in
1992, the Mines and Geosciences Bureau (MGB) granted a permit to Nationwide Development Corp., a Philippine
logging company that is now partnered with St. Augustine. From that point on, every miner on the mountain has
been “illegal.”

(MORE: Dynastic Duel: It’s Arroyo Vs. Aquino in the Philippines’ Latest Political Battle)

Alexander Josol is one of those miners. He used to be a farmer, but now operates his own tunnel, for which he pays
royalties to the local indigenous council. The work is more dangerous than farming (a mining-related landslide in
January killed 40 people), but the pay is decent. With his experience, he’s the sort of miner that St. Augustine might
hire. But Josol says he doesn’t have the mechanical skill to work in an open-pit and would also earn less as an
employee than as an independent miner, as the latter pays by the gold gram rather than by the hour. He is working
with about two dozen small-scale-mining leaders to oppose St. Augustine’s project and secure the right to remain on
the mountain. They want the government to back off of large-scale projects and instead invest in the small-scale
industry, helping artisanal miners work more safely and efficiently.

Others just want better regulation of big mines. Under the 1995 mining law, foreign companies typically pay no
income tax, no export tax and just 2% excise tax — which is in large part why mining takes up less than 2% of the
country’s GDP. That taxes are determined by self-reported production figures presents another obvious problem:
underreporting of production. From 2000 to 2008, reported mineral production was between 17% and 45% lower
than actual mineral exports, according to a 2010 study commissioned by Action for Economic Reforms. The lack of
oversight behind such a discrepancy is a major criticism of the existing mining law. Father Edwin Gariguez, who won
the 2012 Goldman Prize, a prestigious international environmental award, for his work on mining, argues that
Aquino gives too much weight to the regulatory power of government agencies. He says most agencies don’t have the
capacity or the will to enforce the law.

The IMF, which once called for the cheap privatization of the country’s natural resources, now recommends that the
Philippines revise its mining tax scheme. Executives at St. Augustine acknowledge that the Philippines’ liberal
mining laws and low taxation are part of what attracted the company to the region, but Gillespie argues that stricter
regulation and “reasonably” higher taxes wouldn’t necessarily turn them off. The payoff is too huge. “If you can get
in here and get established, you’ll be in pretty good shape in the long term,” says St. Augustine chief operating officer
Tom Henderson, of the country’s mineral potential.

The President, who has long promised to reform the industry, this week filed the implementing rules for his new
executive order on mining. They do not include provisions on revenue sharing, protected habitats or ecotourism
zones. Other stakeholders have taken matters into their own hands, introducing three alternative mining bills at the
Philippine Congress (House bills 4379, 6342 and 4315), each more radical than the next in their attempt to reform
the industry. These alternatives are supported by the Catholic Bishops’ Conference, environmental groups and
indigenous rights organizations, who feel that any one of these measures would add teeth to the President’s plan.

Whether Aquino will respond favorably to the popular call, or uphold the decades-long status quo, remains to be
seen. But what happens in the Philippines could set a new standard for extractive industries in other parts of the
world.

Beyond Responsible Mining in

the Philippines
Dr. Cielo Magno
Posted at Jul 06 2016 04:48 AM | Updated as of Jul 06 2016 05:00 AM
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(Editor's note: Cielo Magno, Ph.D. is an assistant professor at the University of the
Philippines School of Economics. She is a member of the board of trustees of several
national and international organizations, including the global EITI and Action for Economic
Reforms. She gave permission to news.abs-cbn.com to publish her article.)
The appointment of Ms. Gina Lopez, an environmentalist and an anti-mining advocate
worries the business sector. Cynics have been claiming that her appointment could spell
the end of mining in the Philippines. This may be an exaggeration. So long as there is
demand for raw minerals there will be mining, legal or illegal. It will take more than the
appointment of Ms. Gina Lopez in the Department of Environment and Natural Resources
(DENR) to stop mining.
President Rodrigo Duterte has called for “responsible mining.” It is a good call for the
companies to be proactive to address the damages caused by mining to the environment
and communities.
With around $800 billion worth of potential minerals, “responsible mining” as a policy
framework, however, is insufficient. There are several reforms we must consider to ensure
that mining contributes to sustainable development.
Responsible mining as a policy framework...is insufficient.
Strengthening Oversight
The mining sector is poorly regulated and monitored. Mines and Geosciences Bureau
(MGB) Director Leo Jasareno recently said that half of the 44 metal mines frequently
violate environmental rules, and some have been slapped with suspension orders,
although he refuses to identify these companies. This indicates ineffective government
regulation and corruption.
The reality is that despite violations of environmental rules, companies are allowed to ship
the ore they extract. They continue to profit from our minerals. An example is the case of
Shenzou Mining Group Corp. operating in Claver, Surigao del Norte. The company used
the seashore as a waste pond. The company’s operation was suspended, but it was still
allowed to ship the P174 million worth of minerals to China. There is clearly no
disincentive for violating environmental regulations. The state should have seized the ore
in its favor. After all, we are the beneficial owners of these resources and the company
violated laws in extracting these minerals.
...despite violations of environmental rules, companies are allowed to ship the ore they
extract.
Why does MGB refuse to publicly disclose the identities of these violators? Either because
it does not want to affirm what the communities and anti-mining groups are saying all
along that the MGB has allowed these companies to destroy the environment, or the
regulator has been captured.
The Mining Act of 1995 provides for multi-stakeholder approach in monitoring mining
operations. The law requires the formation of mining monitoring teams (MMT) and Mining
Rehabilitation Fund Committees (MRFC) to monitor the environmental programs of large-
scale mining companies. The selection of the members of the committees, particularly civil
society representatives, was never transparent. In fact, the mining companies, aside from
funding these committees, can influence the selection of the civil society representatives.
While the idea behind the multi-stakeholder monitoring teams is a noble one, conflicts of
interest hobble the implementation.
Civil society should have independent and transparent mechanisms for selecting their
representatives. The committees should disclose how they were funded by the companies
and how they spent the money. Committee reports should be publicly available and
accessible in a timely manner. Capacity building should be provided so that the members
of the monitoring teams will have the technical capacity in fulfilling their duties.
The DENR should strictly implement the 'no-go' zone areas.
The government has also identified “no-go” zones that should not be open to mining such
as areas critical for other economic activities like agriculture and tourism, biodiversity,
island ecosystems, and protected areas. DENR-MGB has released the maps of these “no-
go” zones on the Internet. But according to MGB, these maps cannot be used for litigation
or referenced for decision-making by local government officials because they are not
“officially released” yet. The DENR should strictly implement the “no-go” zone areas.
Applications for exploration permits and mining agreements over these areas should be
rejected.
The monitoring of the mining production should be improved. The MGB currently relies on
reports of companies. Independent validation of reports should be pursued.
For example, we have examined 16 large-scale nickel mining companies, using the 2012
data available from the MGB web site. Their total production is 254,741 metric tons.
Multiplying this figure with the lowest possible price of nickel for that year based on MGB
reports yields a value of about P169 billion. However, based on their 2012 excise tax
payment, which is two percent of the gross value of minerals, the gross value of their
production is only about P33 billion.
...companies are underdeclaring their exports, or have stockpiles of ore that are not sold
that year, or are selling minerals at very low prices, way below the market rate, which
indicates transfer pricing.
What can explain the discrepancy? The companies are under-declaring their exports, or
have stockpiles of ore that are not sold that year, or are selling the minerals at very low
prices, way below the market rate, which indicates transfer pricing. We cannot say for
certain what the cause of discrepancy is because of limited information available to pursue
further research. Each company will have its excuse.
But does MGB know this? The MGB should have an independent monitoring and
validation of production and sales figures of companies. It should publicly disclose in real
time the ore transport permits of companies, showing the amount of minerals they sold, to
whom they sell them to and the amount of payments. The MGB should also publicly
disclose the monitoring reports on the inventory of stockpiles of companies.
Non-disclosure of information regarding auxiliary rights awarded to companies is the
practice. Auxiliary rights include timber rights, water rights, right to possess explosives,
easement right, and right to entry into private lands, and concession areas. This
information should be made public for proper monitoring. Feasibility studies,
environmental impact assessments, and maps and coordinates of proposed mine sites
should be readily available online so that communities that are directly affected by the
proposed operations can make informed decisions.
The MGB and the DENR can significantly improve access to information by publishing
disaggregated data in a timely manner in a form that is usable for further analysis. Public
disclosure of information will strengthen the accountability of both the MGB and the
companies.
Impact Assessments
Had disaster risks such as these been diligently accounted for, mining-affected
communities would not be suffering the brunt of the double-whammy effects of both man-
made and natural disasters exacerbated by climate change.
Mining companies should also be required to incorporate the impact of their operations on
the vulnerabilities of the area to climate change and include this in their risk reduction
strategies. The people of Sta. Cruz, Zambales living near mining operations witnessed
horrendous flooding after tropical cyclone Koppu hit Luzon in 2015. In 2012, typhoons
Ferdie and Gener hit Benguet. Philex Mining’s decades-old tailings dam released the
biggest mine spill in Philippine history that affected the people living along Balog Creek
and Agno River in northern Philippines. Had disaster risks such as these been diligently
accounted for, mining-affected communities would not be suffering the brunt of the
double-whammy effects of both man-made and natural disasters exacerbated by climate
change.
Extractive Industries Transparency Initiative (EITI)
President Duterte stated that companies should be held to international standards. One
international standard that is currently being implemented by a multi-stakeholder group is
the Extractive Industries Transparency Initiative (EITI). It is an international initiative to
improve the governance of the extractive sector by disclosing important information and
requiring companies and governments to account the payments of industries to the
government.
Additional disclosure includes contracts, beneficial owners of mining operations, social
contributions and other pertinent documents that the multi-stakeholder group identifies as
important. It is an international commitment of the Philippine government, implemented
through Executive Order No. 147. Some companies refuse to participate in this initiative,
but non-participation has never been a ground for their suspension.
In addition, the confidentiality clause of our tax code limits the capacity of the Bureau of
Internal Revenue to disclose tax payments. In other cases, some government agencies
refuse to disclose or share information. Companies that refuse to participate are not
penalized, but there is reputational damage to the country if we are not able to meet the
international standards.
The Duterte administration should legislate EITI, amend the confidentiality provision of the
tax code and suspend companies that refuse to participate in EITI.
The Filipino people own the mineral resources. Unfortunately, the current law does not
provide for payment for these resources.
Fair Share from Mining
The Filipino people own the mineral resources. Unfortunately, the current law does not
provide for payment for these resources. Mining companies are required to pay taxes, just
like any other business operating in the Philippines. Some companies are required to pay
royalties, but only if they are operating in mineral reservation areas.
The royalty is the unique payment for the mineral resources. Because some companies
are not paying royalties, we are not compensated for the mineral resources we own.
Based on our estimate, the amount of royalty we received in 2013 is only 1.21% of the
estimated revenue of the industry in 2013. Clearly, this is not a fair payment of our mineral
resource considering the negative social and environmental impacts of mining to the
country.
...mining contributes little to the economy. Mining is not a huge employment generator.
Furthermore, mining contributes little to the economy. Mining is not a huge employment
generator. MGB data show that the total employment contribution of mining is only at
234,000 in 2015 or 0.6% of total employment in the country.
To increase the benefit of mining, the government should collect royalties from all mining
operations and ensure that the rate of the royalty will guarantee fair share to the Filipino
people as owner of the resource. The fair share we receive from the mining industry
should also take into account the social and environmental costs of extraction.
Incentives awarded to companies should also be rationalized. In 2013 alone, the
government lost around P3 billion due to income tax holidays granted to seven mining
companies. The awarding of these fiscal incentives is not even linked to the performance
of the companies.
The government should formulate policies that will maximize the economic benefits of its
minerals. Indonesia banned the export of raw ore and imposed a stiff tax if raw ore is
exported to encourage companies to process the minerals in Indonesia and develop its
downstream sector. Bulk of our minerals is exported as raw ore. We do not have an
established downstream sector. We can further maximize the value of our minerals if we
link mining to manufacturing and require the processing of raw ore in the country.
Unfortunately, local governments do not get their share from mining in a timely manner.
In addition to the issue of fair share is the share of local governments from the extraction
of resources in their area. According to the Code, local governments get 40% of the
proceeds from the utilization of national wealth. Unfortunately, local governments do not
get their share from mining in a timely manner. Local governments also have no
mechanism to monitor if they are receiving what is actually due them. The concerned
government agencies have reviewed this, hopefully, the new administration will be able to
ensure that share from national wealth will be released in a timely manner and that LGUs
will have mechanisms to monitor the release of their share.
Resource Funds and Strategic Spending of Proceeds
Another important question is how the extraction of non-renewable resources will benefit
future generations. Other countries have established a resource fund to manage the
proceeds from mining and ensure that their utilization benefits not only the present but
future generations as well. The closest we have to a resource fund is the Malampaya
fund. However, because of lack of transparency and accountability, the fund was abused.
It also has very limited features.
Countries usually set up an independent board to manage the resource fund. Only a
portion of the proceeds from extractives is used for the annual budget. The significant
portion of the proceeds is invested so that the money will grow and will benefit future
generation. A popular version of the resource fund is the Sovereign Wealth Fund of
Norway.
The challenge for the current administration is to champion and institutionalize the
genuine reforms in the mining sector.
We also have very limited monitoring of how the proceeds from mining are being spent. In
other countries like Botswana, proceeds from the extractive sector are invested in
 education. Our Local Government Code (LGC) requires LGUs to invest their share from
national wealth to local development, livelihood projects, and lowering the cost of
electricity in the LGU. The Commission on Audit (CoA) Memorandum in 2014 stated that it
will audit the LGUs regarding how they spend their share from national wealth according
to the LGC. This is a welcome development, but I have yet to see a CoA report that has
implemented this.
In addition, money allocated to LGUs should be disaggregated so that communities can
participate in the budgeting and monitoring processes to ensure that money is properly
spent.
By itself, responsible mining, which can mean many things to different stakeholders, will
just be hollow rhetoric. The reality is that natural resource management in the country is
characterized by corruption, poor governance, and agency capture. There are serious
governance reforms that we have to consider in ensuring that mining benefits the people.
The challenge for the current administration is to champion and institutionalize the
genuine reforms in the mining sector.

DENR to audit mining

companies
Trishia Billones, ABS-CBN News
Posted at Jul 01 2016 07:21 PM

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The Department of Environment and Natural Resources (DENR), while not taking a
completely anti-mining stance, will audit mining companies for compliance, the
presidential spokesperson said.
"I think at the end of the day, what is truly important is to make sure that all the companies
are compliant. I think what was agreed upon is that there should be an audit. There will be
an audit," Spokesperson Ernesto Abella told ANC's Headstart on Friday.
He reiterated that President Rodrigo Duterte has made it public that he is not totally anti-
miningdespite giving the environment portfolio to anti-mining advocate Gina Lopez.
Lopez herself explained that her opposition stems from the oppression it causes the
community.
Duterte said Abella, is "aware of the revenue coming in" from the mining industry in the
Philippines, and would like to keep the industry rosy, while still protecting people.
 "[Duterte] is aware of the revenue coming in. So he does want that to keep the growing
economy. He's very aware of that. He wants it to stay healthy. But making sure that
people are not hurt," said Abella.
One of the criticisms of the Philippine mining industry, however, is that the minerals that
the country exports are still raw and not yet processed.
Abella said the possibility of opening a processing plant for these mining products in the
Philippines "will have to be a process," but the priority of the Duterte government is "to
make sure that the people are no longer hurt and will not get hurt."
He added, the coal plants that are in the pipeline left by the administration of former
President Benigno Aquino III will be reviewed, despite Duterte's promise not to touch
penned contracts with the government.
Abella clarified, Duterte's statement means "no changing to favor certain people."
"Regarding existing things, these are going to be under study…[They will be reviewed] as
everything else, I’m sure. Everything’s going to be looked at with fresh eyes," said Abella.

Environment chief Lopez sets

audit of mining firms
ABS-CBN News
Posted at Jul 05 2016 12:00 PM

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MANILA – Environment Secretary Gina Lopez said Tuesday she would audit all mining
companies for compliance with safety standards.
Only 13 of the 40 metallic mines have complied with international standards, Lopez said.
Non-compliance, she said, might result in suspension of the mines' environmental
compliance certificate or ECC and non-issuance of ore transport permits.
“I’m just gonna follow the law. That’s what (President) Duterte said, follow the law,” Lopez
told ANC.
Lopez said she did not agree with extending Semirara’s coal mine operations because it
was destroying the island’s mangroves, a source of livelihood for seaweed farmers.
“I was told that they’re extending Semirara. I don’t agree at all. You fix this. You can’t
damage the lives of the fishermen and affect the future of our seaweed farmers,” she said
 List of mines in the Philippines
From Wikipedia, the free encyclopedia

The following list of mines in the Philippines is subsidiary to the Lists of mines in Asia article and Lists of
mines articles. This list contains working, defunct and future mines in the country and is organised by the primary
mineral output(s) and province. For practical purposes stone, marble and other quarries may be included in this list.
Operational mines are demarcated by bold typeface, future mines are demarcated in italics.
This list is incomplete; you can help by expanding it.

Contents
[hide]

 1Coal
 2Copper
 3Gold
 4Nickel

Coal[edit]
 Malangas Coal Reservation - Malangas, Zamboanga Sibugay
 Panian Open Pit Mine - Semirara Island, Caluya, Antique

Copper[edit]
 Boyongan mine
 Canatuan mine
 Tampakan mine

Gold[edit]
 Canatuan mine

Nickel[edit]
 Rio Tuba mine

[hide]

 v

 t

 e
Mines in the Philippines
 Coal
 Malangas Coal Reservation

 Boyongan
Copper
 Canatuan

 Tampakan

Gold
 Canatuan

Nickel
 Rio Tuba

 Category

 Commons

Categories:
 Lists of mines by country
 Mines in the Philippines

9 things you need to know

about mining in Philippines
The mining industry in the Philippines is controversial again as the Aquino government issues
a policy and pursue legislation on a potentially economically rewarding extractive business
but a flashpoint for environmental and other stakeholder groups

Leilani Chavez
Published 3:34 PM, September 07, 2012

Updated 3:34 PM, September 19, 2012

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MANILA, Philippines - The mining industry in the Philippines is controversial again as the
Aquino government issues a policy and pursue legislation on a potentially economically
rewarding extractive business but a flashpoint for environmental and other stakeholder
groups.

Below is a list of 9 key things to know the mining industry in the Philippines:

1. The Philippines is the fifth most mineral-rich country in the world for gold, nickel, copper,
and chromite. It is home to the largest copper-gold deposit in the world. The Mines and
Geosciences Bureau has estimated that the country has an estimated $840 billion worth of
untapped mineral wealth.

2. All the regions (except NCR and ARMM) in the country allow mining operations. ARMM
ceased issuing permits due to the on-going peace process between the Moro Islamic
Liberation Front and the national government.

3. About 30 million hectares of land areas in the Philippines is deemed as possible areas for
metallic minerals. Of these, only a small percentage has been covered by present mining
permits.

4. The Philippines metal deposit is estimated at 21.5 billion metric tons and non- metallic
minerals are at 19.3 billion metric tons.

5. Labor department statistics show that mining in the Philippines has created 211,000 jobs in
2011 alone. The figures have doubled since 2006.

6. The mining industry's gross production value has consistently increased through the years.
In 2010, the mining industry reached $3.2 billion.

7. The Mining Act of 1995 allows for foreign ownership of mining assets and exploration
permits. The Supreme Court upheld the constitutionality of the foreign investors' participation
in mining activities in 2004.

8. Mining tax is low at 2% for metallic and non-metallic minerals. The current Aquino
administration, however, wants to increase revenues through an additional 5% royalty tax for
mining permits within mining reservation areas and increase the filing fee charges.

9. There are a total of 1,828 mining applications in the country, which will be directly affected
by the Executive Order from the Aquino administration that does not allow new mining
permits. - Rappler.com
For more about mining debates, view Rappler's #WhyMining microsite.
For the existing mining contracts in the Philippines, view this #WhyMining map.

How does mining affect you? Are you pro or against mining? Engage, discuss & take a
stand! Visit Rappler's #WhyMining microsite for the latest stories on issues affecting the
mining sector. Join the conversation by emailing whymining@rappler.com your views on the
issue.

Correcting lies and

disinformation
I presented at the Mining Forum to correct lies, disinformation and also ignorance

Gerard H. Brimo
Published 7:07 PM, March 08, 2012

Updated 5:59 PM, September 19, 2012

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GERARDO H. BRIMO. President of Nickel Asia Corporation and the Director of the Chamber of Mines of the
Philippines

I presented at the Mining Forum to correct lies (yes, lies!), disinformation, and also ignorance
(I left that out in the title).
If you think that the mining industry in our country can affect food security, biodiversity,
Palawan, and if you think that nothing good can come out of it, read on!

The attack by the Save Palawan Movement that was started by Gina Lopez and allied
organizations is on the large-scale metallic industry. There is never any mention of small
scale-scale mining.

This is the face of it.

I do not begrudge small-scale miners. They are driven by poverty, the same kind of poverty
that drives people to do dynamite fishing or ‘slash and burn’ farming which is rampant all over
the country.
Nevertheless, it is destructive to the environment and can seriously affect the safety and
health of the small-scale miners. In fact, mercury is still being used by this sector. Why is
there no mention of this in Gina’s presentation? Is she not concerned about the environment?

It is a big "industry." In 2010, P42.9-B in gold was sold to the Bangko Sentral ng Pilipinas on a
“no-names” basis, much larger than the gold output of the large-scale sector.

This is counted as output from the minerals sector, but since there are no taxes being paid on
this portion, it distorts the ratio of taxes paid by the industry vis-à-vis its total output.

On to large-scale mining, the map on the left hand side of the slide is from the Mines and
Geosciences Bureau (MGB), and the yellow dots indicate applications for exploration permits
all over the country.

This has been badly misinterpreted by Gina and others to mean that the country will be mined
out! Who can blame them, though, for that is what the map indicates at first glance, but is it
enough to stop at first glance and not get to the bottom of things?

When one files for an exploration permit, no matter where the application lies, the application
gets plotted on a ‘control’ map. That is why there are so many dots.
Later on the MGB will process the application, determine if it is in an area that is open to
exploration (and mining) and if so, approve. If not, the application is disapproved and the dot
is taken out of the map. Many of the yellow dots in the map will not be approved.

The red dots in the map on the right shows the large-scale metallic mines, occupying only
60,000 hectares or 0.2% of the country’s entire landmass. That’s all.

Why so many exploration permit applications and only so few operating large-scale metallic
mines? Because the odds of finding a commercially viable mineral deposit are very low. See
the global statistics on mining on the left of the slide below.

The odds might be better in the Philippines, which is well mineralized, but even if we assume
a doubling of the large-scale mines, it would occupy only 0.4% of the country’s entire
landmass.

One need not be a scientist to figure out that such small area of the total country’s landmass
cannot possibly affect food security, and one would indeed be correct!

This is apart from the fact that mineralized lands are simply not conducive to agriculture.
Mining and agriculture are not mutually exclusive. It’s never been the case and any attempt to
link the two is simply tantamount to scare tactics, to make you believe that if mining were to
grow in the country, we would run out of food! That is preposterous!

Well, let’s not mince words. It is a lie!

The same mistake was made in the case of Palawan. The map on the left shows the many
applications for exploration permits, many of them in protected or no-go areas for mining, and
they will not be approved.

Again, the map has been badly misinterpreted to mean that Palawan will be mined out!

The map on the right (above) shows that there are only 3 large-scale nickel mines in
Palawan, all in the southern portion of the province, far from the Underground River and the
UNESCO heritage sites.
Right in the middle of the map is a large protected area under the National Integrated
Protected Areas Systems (NIPAS), a no-go zone for mining or even agriculture. So what is
the fuss all about?

If the fear that Palawan would be all mined-out was based on the left hand map, that fear was
unfounded and was a serious mistake!

There are in fact many areas closed to mining, as the illustration below indicates.

It is interesting to note that Palawan has its own environmental law that specifies no-go zones
for mining or other activities.

So there you have it. Three laws “protect” Palawan – the Mining Act itself, the Strategic
Environmental Plan for Palawan and the NIPAS. So what is the fuss all about?

These pictures below show the mining areas in Rio Tuba in Bataraza, Palawan.

That is a 1970s photo that shows the surface of the lateritic nickel deposit as it looked like
before mine development started.

Laterite is a type of soil full of iron (beyond 40% in some cases) and, in the case of the
Philippines, some nickel.

It is not an agricultural area (you can’t grow rice there!), much less bio-diverse.

The picture in the middle shows Berong Nickel, also in Palawan, tertiary grown with stunted
trees because of the lateritic condition of the soil.

On its right, an aerial photo of the mountains in Surigao Norte, within the Surigao Mineral
Reservation. The laterite here goes all the way to the surface – scratch the surface and you
get red-looking soil, iron oxide.

No forest, no agriculture within the lateritic area and prone to erosion and siltation when the
rains come, discoloring coastal waters quite visibly because of the color of the soil.

The next photos show, on the left, Philex Mining in Benguet province and, on the right,
Tampakan area in South Cotabato.

Philex Mining in Benguet has steep terrain, logged out in the 1950s and no agriculture.
Tampakan area in South Cotabato was logged out for the most part or subject to “slash and
burn” farming as what the photo (right, above) shows. There is still a small primary forest in
the area that won’t be touched (by law it cannot be) should mine development proceed.

Are these areas bio-diverse or agricultural areas? I think by now you know the answer.

The pictures above show the lateritic nickel mine operation of Rio Tuba in Bataraza,
Palawan.

Again, it is not an agricultural area and the vegetation is mostly shrubs and stunted trees.

There are 4 things to note here.

First, this is an industrial area, not an area suitable for picnics eco-tourism. There are other
areas for that.

Second, minerals are God-given and we can’t live without them. I should have told Gina that
God willing, her arteries would remain clean and she would not need a cardiovascular or
coronary stent. It is partially made of nickel due to its non-corrosive properties.

If she did, it is nickel, possibly from Rio Tuba or the other nickel mines in the Philippines,
which would save her life! What a supreme irony!

Third, lateritic nickel mines are shallow, no more than 20 meters deep on the average, and
therefore not difficult to rehabilitate.

Fourth, mine rehabilitation is a requirement of the 1995 Mining Act and we all have to set
aside funds for this.

Any discussion on un-rehabilitated mines of the past, the so-called legacy mines, is irrelevant
to the discussion on mining today. It’s that simple.

Because Rio Tuba has been going on for some time now, there are mined out areas that
have already been rehabilitated. It’s what is called progressive rehabilitation. Here’s how one
such area looks like.
Rio Tuba has rehabilitated about a fourth of its total mining area, planting over half a million
trees (hardwood species) in the process. In one year (2011), it spent close to P60 million in
environmental expenses, including rehabilitation.

And here’s what it looks like inside a rehabilitated mine area.

We’ve created a forest where none existed before. Those are hardwood trees grown in the
Rio Tuba nursery, interspersed with some fruit trees to encourage wildlife to populate the
area.

I could have shown slide after slide of the wildlife that is eventually found in the rehabilitated
areas since we track each and every one of them, but I only had 15 minutes to present.

Talking about wildlife, I showed this slide.

That croc was captured in, of all places, Rio Tuba, and on its way to the Palawan Crocodile
Farm.

If the waters of Rio Tuba were toxic, (they like to say that) they would not be there, or grow to
that size! Therefore, the banner in the ‘no to mining in palawan’ website that I show on top of
the picture is a bunch of crock! Well, another lie!

I covered a portion of that banner on this slide, but that will be uncovered below. Read on!

The pictures below show a Philex project in Zamboanga del Norte that has been almost fully
rehabilitated.

Below are parts of the Taganito mine site in Surigao del Norte.

Don’t freak out with the picture on the left. It is a mining area within the Surigao Mineral
Reservation and not suitable for anything else. It is a lateritic nickel mine, so the top 20
meters is mined, not the entire mountain, and it is then rehabilitated.

And reforestation….
Here’s a little known fact. The mining industry (note: large-scale) has planted 15 million trees
in the past 10 years.

If you don’t believe me, please, be kind enough to check with the DENR. They have the
figures. Every year we compete with each other to see who plants the most trees and awards
are given.

Time now to go to what I call mining and building human capital.

We are all required to now spend 1.5% of our operating costs to social development
programs, and this is done in consultation with the host communities.

The funds go to sustainable projects such as infrastructure, livelihood programs, water

projects, cooperatives, training, medical care, and schools…

Yes, dear reader, the mining industry educates thousands of kids every year, and these are
good schools!

And now to mining and Indigenous Peoples (IPs), one of my favorite topics.

There’s a law in place called the Indigenous Peoples Rights Act of 1997. If you want to do
anything in their ancestral lands, mining or anything else for that matter, you need to get their
consent and compensate them. And so we have.

In 2010 the members of the Chamber of Mines (note: not all operating mines are members)
paid close to P300 million in royalties to IPs, undoubtedly the most marginalized sector of our
society.

Some of them, for the first time in their lives, have some money in their pockets, and it comes
from the mining industry!

Here’s another little known fact. In Rio Tuba there are about 13,000 members of the Palaw’an
tribe, but they don’t have ancestral land title.

Nevertheless, Rio Tuba treats them as if they do and provides a number of services. One of
them is housing. See the picture on the top left – that’s where they live.
We offered them housing in coordination with the Gawad Kalinga Foundation, on a voluntary
basis of course, and they have accepted. Since then, 6 clusters with a total of 210 housing
units have been built and we have committed to building up to 1,000 houses to accommodate
them all. But there is more.

They get free medical care in the company hospital, a number of livelihood projects and an
Indigenous Learning System, accredited by the Dep Ed, which educates about 800 IP
children and adults!

Who does all this? Government? NGOs? Gina? No, it’s a mining company for crying out loud!
And they want to stop this??

So now let’s go back to the ‘no to mining in Palawan website’ and show the rest of the
banner.

Oh, so now we’re killing indigenous people? That’s slander, no? Here we are, housing them,
taking care of their medical needs, educating and giving them livelihood projects…. and a lie
like this is being spread? Shame on the Save Palawan Movement!

And they use them as well, at least those that they can grab (bribe?). The lady that you see in
the slide, a member of the Palaw’an tribe, receives all of what is listed on the slide as a
beneficiary of our social development programs, but allows herself to be used by the anti-
mining groups in their propaganda.

Let’s move on to the issue of mining and poverty.

Sorry, a lot of info on this slide, but I only had 15 minutes to present. What this shows are
statements being made about mining not contributing to the economic development of mining
areas, citing the Caraga region and particularly Bataraza, the host municipality of Rio Tuba,
as examples.

It then proceeds to link the catastrophe of Sendong with the industry in a Business
Mirror article quoting Christian Monsod.

Let’s deal with the latter first. There are no large-scale mines anywhere near Cagayan do Oro
or Iligan city. Mr. Monsod could have easily have gotten this information from the MGB, but it
appears he chose not to.

On the issue of poverty in the Caraga region, the mining companies there pay a total of about
P1.1-B in excise taxes and royalties. The local government units in Caraga are entitled to
40% of that (over P400 million).
Can you imagine what the region would be like without this source of income?

Let’s now address the issue of Bataraza. Take a look at the pictures below.

Is that a poor municipality? If it is, I hate to think what the other 22 municipalities in Palawan
are like!

It is not difficult to understand why it is actually a prosperous municipality.

The municipality is host to the Rio Tuba mine and the Coral Bay nickel processing plant, the
first of its kind in our country, with combined personnel of 4,200 (including contractors).

Apply the multiplier effect (easily 5 times) and the average family size in our country, and
that’s a lot of people! That’s a lot of mouths to feed, and that spurs agriculture, fishing, a
whole bunch of services for them and so on.
Consider the combined payroll of close to P600 million in one year, combined social
expenses of close to P200-M spent in Bataraza alone, and combined Palawan-based taxes
and fees of P160-M in 2010.

Consider that the employees get free housing and utilities, free medical care, free education
for their kids up to high school, yearly bonuses and so on. Apart from food, their salaries are
largely disposable income, spent in Bataraza and other parts of Palawan.

Do you get my point? (By the way, we’re looking for mechanics, engineers, geologists,
medical technicians, pharmacists, environmentalists – go to the Nickel Asia website and
apply! It does not get any better than this!).

Do you not agree that a poor country such as ours requires all feasible forms of economic
activity to spur development and make a dent on poverty? These activities are not mutually
exclusive.

And so I ended with this slide, and I hope that by now you realize why.

I’d be happy to answer any questions on this. Post on Rappler and you will get a reply.
Thank you for reading this far! - Rappler.com

How can mining work for

Philippines?
We have a choice between fear and faith, but our task is to find the common ground of reason

Manuel V. Pangilinan
Published 12:32 PM, March 04, 2012

Updated 7:24 AM, August 23, 2013

Manuel V. Pangilinan delivered this speech during a mining forum in Makati

Manuel V. Pangilinan
City on Friday, March 2 before an audience of anti- and pro-mining
advocates in a packed hotel ballroom. Pangilinan heads the country's
largest gold producer, Philex Mining Corp, as well as 2 diversified conglomerates that control
the leading telecommunications firm Philippine Long Distance Telephone Co. (PLDT) and top
power distributor Manila Electric Co. (Meralco).

Who of you does not have a cellphone? Do you know that an average cellphone contains
about 24 mgs of gold, 250 mgs of silver, 3,800 mgs of cobalt, and 9 mgs of palladium?

As with cellphones, mining touches most aspects of our daily life – when you build your home,
use your laptops, take your car to work, or even protest against mining.

Clearly, we cannot live without mining.

Why invest in mining

You may ask – why did we invest in mining? The answer is simple.

Rapid economic development in emerging markets has led to rising demand for resources –
fuel, food, minerals, even water.

According to McKinsey, we have never before seen growth in income of such speed and
magnitude: China and India are doubling their per capita income at about 10 times the pace
which England achieved during the Industrial Revolution.

Both countries are adding floor space every year at 3.5x the entire residential and commercial
square footage of Chicago. And in the coming decades, up to 3 billion people – and their
spending power – will be added to the global middle class.

The world is indeed entering an era of sustained resource demand, and high resource prices.

So the questions for us must be – Does the Philippines have the capacity to supply some of
these resources? Is it reasonable to stop developing our resources, knowing the world and
the country need them?

The answer to the first question is, yes, we do. The Philippines is the 5th most mineralized
country in the world and, in terms of defined resource, 2nd in gold and 3rd in copper. We
have the potential to develop world-class mines.

On the second question – if we choose not to participate in the global supply chain for
minerals – either by outright ban or a moratorium - our need for mining products will not stop.

Our only recourse would be to import. We would then pay for the foreign exporter’s cost of
production and profit – and the cost of protecting his environment.

This is not common sense. Why should we pay somebody else to do the job we ought to be
doing?

Alternatives to mining

What are the alternatives to the use of mineral land? Tourism is certainly an option to
consider. However, most mining sites are not ideal for tourism. Our mines in Padcal and
Surigao are hardly suitable for tourism simply because they don’t have the features of an
attractive tourist site.

And even if tourism were possible, we must ask: Are the expected returns from tourism
comparable to the benefits which mining can provide?

Another suggested land use is agriculture. I’m a believer in the potential and need for
agriculture in this country. I consider the imperative of feeding ourselves as an urgent national
priority.

But again, most mines are situated in areas that are inhospitable to agriculture.

The land is often too steep, too arid or too mineralized for agriculture to prosper.

Related to this, there’s an attempt to introduce the new concept of “total economic value” or
TEV in assessing mining opportunities. The thrust of TEV is to measure environmental
hazards and social costs in calculating gains and losses from mining projects. The goal is
commendable.

But the calculus of the value is intangible, elusive, and extremely subjective. How does one
quantify and test the value attached to the beauty of a sunset, the feel of early morning mist,
or the music of water rippling through a stream?
Please don’t get me wrong. I value the beauty of nature as much as you do. All I ask is for
some objective and tangible standard by which any proposed economic activity in a locality –
be it tourism, agriculture, or mining – can be evaluated. For mining, that standard is already in
place.

Mining projects require an environmental compliance certificate (ECC) and a feasibility study
– which together quantify the potential benefits to all stakeholders, especially the community
and the government, along with the environment impact.

Addressing the problems of mining

Our country has enough laws to address concerns in most areas of our lives. This is true
insofar as environmental protection and social welfare in the mining industry are concerned.

The problem has always been enforcement and implementation of such laws.

I admit that our industry is not perfect, and could benefit from improvements.

Unfortunate accidents have happened, even to large mines, which lead to a perception that
mining is dangerous and destructive.

But the mistakes of a few should not be construed that the whole is wrong – anymore than
one car accident or one oil spill should shutdown an entire industry.

Let me briefly discuss some of our thoughts:

First, health-related and safety concerns, exploitation of women and child workers, the
absence of livelihood plans and post-mining rehabilitation are issues brought about, in large
part, by small-scale and illegal miners.

These miners operate freely and thrive without being subjected to the regulation and
sanctions imposed on large-scale mining.

The solution is to subject small-scale miners to the same regulations and sanctions for large-
scale mining.

Correlatively, national and local policies on mining need to be harmonized, and the
cooperation of LGUs in their enforcement must be procured.

Second, the capacity and competence of our regulators must be improved, particularly in
regard to equipment and quantity and quality of regulatory staff.

For example, in Surigao del Norte, there are only 9 mining engineers and one geologist to
oversee mining activities – which include 3 major mining projects, several exploration
projects, 18 approved small scale mining permits and more than a thousand illegal small-
scale miners.

The private sector should help government raise its supervisory capabilities through funding
of scholarships and training here and abroad, procurement of equipment, and hiring of
requisite personnel. Part of the funding could come by way of a fee on mining companies,
akin to the supervisory and regulatory fee payable by telecoms companies to the NTC
(National Telecommunications Commission).

Our industry must learn to accept that proper regulatory attention will provide the comfort to
all stakeholders – and critics – that responsible mining is possible in our country – as it has
been, and still is, in other countries like Australia, South Africa, Canada, Sweden, and even
Indonesia.

Third, creating an independent environmental commission responsible for supervising and

enforcing environmental concerns. At present, both the EMB (Environmental Management
Bureau) and MGB (Mines and Geosciences Bureau) are agencies under the DENR
(Department of Environment and Natural Resources).

MGB is charged with the promotion, development, and supervision of mining. EMB’s mandate
is to enforce environmental laws.

These apparently conflicting goals can, at times, place the DENR in a policy dilemma. Our
suggestion therefore is to spin off the EMB into a separate and independent body, similar to
the environmental protection agency in the U.S.

Profit-sharing scheme

Fourth, the private sector should be open to a profit-sharing scheme, which will assure the
government of a more appropriate share in the benefits derived from the resources it owns.

Frankly, I’m not suggesting something new. Profit sharing is standard in the oil and gas
industry in most parts of the world, as indeed it exists in our FTAA (Financial or Technical
Assistance Agreement) regime.

In the case of Philex, despite operating under an MPSA, we paid P2.3 billion in national and
local taxes, representing 37% of our pre-tax income for 2011.

Finally, the mining benefits between host LGUs and the national government should be
shared more equitably.

Further, the national government must ensure the timely remittance of taxes due lgu’s. After
all, mining is location-specific, and I sympathize with LGUs’ desire to realize the fruits of the
resources situated in their communities.

Economies of scale

If we continue to stifle mining, the criticism that it promises much and delivers little could be
self-fulfilling.

Yet when we look elsewhere, mining has been a driver of economic development. Mining in
Australia contributes US$142 billion each year; in Canada, $37.5 billion; in the US, $1.9
trillion, and in Brazil, $24 billion.

The challenge is precisely to grow mining so that it creates more value-added for all of us.
Only a larger and healthier industry can enable us to achieve forward linkages in downstream
processing plants.

We can’t have more refineries and smelters simply because there are no economies of scale
to make them commercially feasible.

Only an operation as large as Tampakan or Far Southeast or Silangan can generate the
volume which could justify processing in the Philippines. I understand Tampakan will cost $6
billion to develop.

In our (Philex) case, Silangan will require an investment of more than $1 billion.

Conclusion

Let me close by saying that mining is not the enemy. Poverty is.

The lack of means, the lack of the most basic necessities, the lack of opportunities, the lack of
choices – for far too long, in far too many places – these pernicious inadequacies have
plagued our people.

Yet the supreme irony is that, in the midst of all this poverty, lie some of the world’s richest
natural resources, a gift of providence for our people to make use of – not abuse.

It really is as simple as this – where poverty persists, small scale mining continues.

Poverty for us is not just some utopian notion. Its stark imperatives go beyond the poetry of
blue skies and tangerine sunsets. You and I in this hall are not ordinary folks who worry about
the next meal, the next rent, the next Meralco or PLDT bill – who do not have a 2nd home
somewhere in the foothills of Mount Makiling.

This isn’t a contest between those of us who would protect the environment and those who
would favor development.

We should be neither one nor the other.

In the end, it all comes down to a very basic choice that we have to make for our future. Other
peoples – Australians, Indonesians, Canadians, Brazilians – have already made their choice.
If they can do it and succeed, so can we.

We have a choice between fear and faith, between hardship and hope, between division and
unity.

Our task is to find the common ground of reason, through patient dialogue and constructive
suggestions – and from there, move forward to the more prosperous future our people
deserve. - Rappler.com
CORRECTING A MISTAKE
By Jose Bayani Baylon

July 29, 2016

BEFORE I begin let me state this risk I take: the messages I have written below could get me fired from my regular job.

But I feel that they are messages that have to be made, and if no one will make them then I will.

The key message is this, and it is meant for President Duterte: Mr. President, I think you made a big mistake when you chose as
Secretary of the DENR a woman who was tiring you out with her presentations. The sub-message is this: because of that mistake,
millions of ordinary people will suffer — the very millions who trusted you with your vote and who have been hoping that you would
bring even better days ahead for them.

You don’t know me, Mr. President. But two, or three members of your Cabinet do. I knew your Executive Secretary in the 1980s when
he was with the PECABAR law firm and I was the legislative assistant of Assemblyman Renato Cayetano. I got to know your Peace
adviser when he was chairman of the Philippine Press Institute and I was helping find supporters for his programs. And I have known
your Health Secretary for almost fifty years, since we were toddlers at the UP Elementary School and she was playing the role of the
Virgin Mary and I was St. Joseph in a kindergarten Christmas nativity scene.

If you are interested, they can tell you a little about me, and about my passions, and about what drives me. But let me tell you why your
choice of DENR secretary drives me up the wall.

I resigned in 2012 after fourteen years after working at Coca-Cola and found myself with a mining organization, walking through a newly
planted forest in what used to be a mined-out pit. And my surprise stemmed from years of hearing the same criticism of mining that the
anti-mining forces generate: mining brings poverty, mining damages the environment, mining does not contribute to the national wealth.
All these messages were contrary to what I was seeing: a community that grew out of nothing into a barangay of over 17,000 people
whose lives have been transformed for the better because of a nickel mining operation in Rio Tuba almost at the southernmost tip of
Palawan. A community that had the benefit of a hospital to provide first response before, if necessary, being transported nearly five
hours by road north to the more complete hospitals in Puerto Princesa. A community that had the benefit of a La Salle-run school
equipped with an all-iMac computer laboratory that many schools even in Metro Manila could not duplicate. A community that benefited
from the huge disposable income of mine workers who did not have to worry about rent or education or health costs because these
were all provided for.

And, as I mentioned earlier, a community that transformed mined-out pits into forests with indigenous species that, after two years,
attract fauna with such diversity that you wouldn’t think there was a forest there just three years prior.

Walking through the forest at Rio Tuba I immediately realized the stark contrast between what we used to do at Coke and what they do
at responsible mining organizations: every time we built a public school.

At Coke, we took out full-page ads to tell the world. Why? Because we sold you soft drinks and hope you’d buy our products because
you’d see a public school behind every can. Every time a responsible mining organization planted a forest, built a hospital or equipped
a school they didn’t tell anyone, because they didn’t have to: they were not selling anything to the public and to spend hundreds of
millions for advertising was impractical.

But whenever there was an incident at a mining site – and incidents, as we would say at Coke, are inevitable – the media and the anti-
mining network of civil society did a good job at making it a case against the whole industry in general so much so that soon enough the
industry was demonized whether or not you were a responsible mining operator.

Your choice as DENR Secretary has consistently held on to that mindset: that there is NO responsible mining operation in the country
and all must be closed down. I will bet that if you scratch deep enough, you will see that this is still her strong belief despite public
statements to the contrary since she took office one month ago.
Note, for example, that while she is DENR secretary, since July 1, has she gone after any illegal loggers? Or illegal fishpond operators?
No. But why not, when the bureaucracy that oversees forests is separate and distinct from that which oversees mining and so she could
have launched parallel but separate campaigns against ills in both sectors?

I believe this is the case because she has been single-mindedly focused on demonizing the mining industry (and the coal industry) on
the basis of pseudo-ideological rather than practical or scientific knowledge. And one proof is her avowed opposition to open pit mining
– a process that is far easier to monitor than mining tunnels and shafts for environmental compliance by the simple use of drones, and
which is a globally accepted process for mining certain minerals that can only be found on the surface of the earth and thus can only be
mined in this manner.

And by the way, will this opposition to open pits apply to cement production, which requires quarrying for limestone in exactly the same
process?

Which means that under your Administration we will be importing cement soon?

Your choice for DENR secretary tries to wrap herself around the cloak of fighting for the poor and putting an end to suffering. But
because she doesn’t apparently understand that she has bitten more than she could chew, she is on the verge of actually creating more
hardship and suffering.

I know this personally because right after Yolanda my bosses dispatched me with a planeload of PGH doctors and medicines to assist
the residents of Manicani island and of Guiuan, Eastern Samar - the first LGU on which SuperTyphoon Yolanda made landfall. That
was November 12 – four days after Yolanda, and for almost every other month since then I have returned to Guiuan and to Manicani
and I have seen how the island residents have had their damaged houses replaced by transitional homes, how three of the four
barangays now have covered courts that serve as social halls, how the barangays have water systems.

More importantly, I have seen how more than 450 islanders now earn about P6 million a month from loading waste ore stockpile – an
amount of money that they will definitely never ever earn from agriculture in the poor soil of the island, or from fishing in the over-
dynamited waters around the Leyte Gulf.

What replacement income will be provided these individuals, residents who themselves have chosen to have loading from their island
under the important principle of subsidiarity? Mr. President, unless a real alternative is provided them, it would appear to me that
informal settlers have even better “rights” than these individuals legally at work because we have a principle that no informal settler will
see his house demolished unless he is guaranteed relocation!

Despite her claims, Mr. President, your DENR secretary does not understand how the poor live or what challenges they face because,
let us admit it, she never for a day lived the life of someone who has had to worry about tomorrow. And this shows in the way she
throws around slogans and ejaculations while her actions cause pain and suffering.

Oh, and Mr. President: if she were to tell you – as she tries to tell the world – that mining will “destroy” the island, here is a fact that
proves she does know of what she speaks: as the DENR as early as 2003 has made clear, of the 1,200 hectares of the island, only 33
hectares of the island is to be mined.

That’s less than 3% of the island.

That’s the DENR secretary we, who toil daily to try to institutionalize responsible mining in the country, now labor under. That’s the
DENR secretary who now threatens the future of the residents of the island of Manicani who have no other options left but to work for a
responsible mining operation.

In fact, Mr. President, may I ask this of you: to convey to your DENR secretary this dare. You see, by the time I joined Nickel Asia in
2012, your Environment secretary had been at work at the Pasig River Rehab commission for two years, having been appointed there
in August 2010. She claims that mining damages the environment; I claim that she doesn’t deserve her “promotion” from Pasig River
rehab chair to DENR secretary because she hasn’t accomplished her job. And this is my dare:
I will take a glass of water from the Rio Tuba river into which the effluents of our mining operations flow and will drink from it, if your
DENR Secretary will take a glass of water from the Pasig River and drink from it.

If she declines my dare, Mr. President, then I think you have all the reason to tell her that maybe she should first return to the Pasig
River and get that job done before taking on the DENR role which is far more than running after the industry she has long loved to
demonize in sweeping statements that are unsubstantiated, unfair, and yes, even unChristian.

Thank you for your time, Mr. President. I am done with this piece and now let me spruce up my CV.

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