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RA 7942
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Republic Act No. 7942
AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,DEVELOPMENT, UTILIZATION, AND CONSERVATION
DENR AO 96-40
Revised Implementing Rules and Regulations of Republic Act No. 7942 Otherwise Known as the
“Philippine Mining Act of 1995”
Declaration of Policy
All minerals are owned by the StateTo promote rational exploration,
development, utilization and conservation
Role of government and private sectorTo enhance national growth that
effectively safeguards the environment and protect the rights of affected communities
Governing principle per DAO 96-40
Sustainable developmentImproving the total quality of lifePrinciple of sustainable miningPro-environment and pro-people miningMining is temporary land useOptimum land useProgressive and engineered mine
rehabilitation
Governing principle per DAO 96-40
Current best practicesWealth-generating opportunitiesEnvironment-responsible endeavoursMining activities must be in accord with
state policies
Important Concepts
Ancestral landsBlock / meridional blockCarrying capacityContiguous zoneContract areaContractorCo-production agreement
Important Concepts
Ecological profile / eco-profileEnvironmental compliance certificate
(ECC)Environment impact assessment (EIA)Environmental impact statement (EIS)Exclusive economic zone (ECZ)Existing mining / quarrying rightExploration
Important Concepts
Financial or technical assistance agreement
Foreign-owned corporationGross outputIndigenous cultural communities (ICC)Joint venture agreementMinerals
Important Concepts
Mineral agreementMineral landMineral resourceMining areaMining operationOffshore v. onshorePermittee
Important Concepts
Pollution control and infrastructure devices
Private landQualified personQuarryingQuarry permitQuarry resources
Important features
1. non-impairment of existing mining / quarrying rights
2. recognition of valid and existing mining claims and lease / quarry applications
Government Management
Ownership of mineral resources in rel. with jura regalia doctrine and §2, Art. 12 of the Constitution
Modes of exploration, development utilization and processing (EDUP) of mineral resources
1. direct
2. mineral contracts with contractors
Government Management
Mineral reservations
1. reservation of strategic raw materials
2. reservation for scientific, cultural or ecological value
3. submerged lands within the Contiguous Zone (CZ) or Exclusive Economic Zone (EEZ)
Government Management
4. others when national interests so requires
Periodic review of mineral reservations by the Secretary
State recognition of rights of the IPs/ICCs to their ancestral lands (Free and prior consent rule)
Scope of Application of EDUP of minerals
Areas Open to Mining Operations
1. Public lands
2. Private lands
3. Timberlands
4. Forestlands
5. Ancestral lands
Scope of Application of EDUP of minerals
Areas closed to mining operations
1. military and other government reservations
2. Near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or
Scope of Application of EDUP of minerals
private works including plantations or valuable crops
3. those covered by valid and existing rights
4. areas expressly prohibited by law
5. areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners
Scope of Application of EDUP of minerals
6. 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
Scope of Application of EDUP of minerals
the National Integrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws
Exploration Permit
Concept of exploration permitWho grantsTerms and conditionsRights and obligations of a permittee
1. right to enter, occupy and explore the area
2. obligation to discuss with parties to be
Exploration Permit
affected as to the extent, necessity and manner of entry, occupation and exploration
3. obligation to submit any conflict to a panel of arbitrators
4. obligation to undertake exploration work on the area per permit based on an approved work program
Exploration Permit
5. 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:
Exploration Permit
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.
Exploration Permit
Declaration of Mining Project Feasibility
1. must be made during the term of the permit
2. must be filed with the Bureau
3. accompanied with a work program for development
Effects of approval of mining project feasibility
Exploration Permit
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
MINERAL AGREEMENTS
MINERAL PRODUCTION SHARING AGREEMENT
Government
exclusive right to conduct mining
operations within a CONTRACT AREA
FINANCING MANAGEMENT
TECHNOLOGY PERSONNEL
GROSS OUTPUT
Co-Production Sharing Agreement
Joint Venture Agreement
Joint Venture Agreement
Joint Venture Agreement
Who are eligible to enter into any of the modes of contract
Any QUALIFIED PERSONIf the applicant is in the mining industry,
has a satisfactory environment track record
Filing and Approval of Mining Agreements
Assignment / Transfer of Mineral Agreements
Not prohibitedSubject to the approval of the SENRDoes not cover an FTAAApproval through inaction of the SENR
Withdrawal from Mineral Agreements
1. during the subsistence of the agreement
2. due notice3. operations no longer feasible or viable4. SENR’s decision within thirty (30)
days5. contractor met the financial, fiscal and
legal obligations
Term
1? 20??30???
50??????
Financial or Technical Assistance Agreement (FTAA)
Eligibility1. any QUALIFIED person2. technical or financial capability to
undertake large-scale EDU
Terms and conditions of an FTAA
1. SWORN STATEMENT containing a firm commitment 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
Terms and conditions of an FTAA
2. financial guarantee bond in favor of the Government equivalent to the expenditure obligation of the applicant for any year
3. proof of technical competence, e.g., track record in mineral resource EDU; details of technology to be employed in the proposed operation; details of technical personnel to undertake the operation
Terms and conditions of an FTAA
4. Representations and warranties that the applicant has all the qualifications and none of the disqualifications for entering into the agreement
5. Representations and warranties that the contractor has, or has access to all the financing, managerial and technical expertise, the technology required to promptly and effectively carry out the
Terms and conditions of an FTAA
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 years, extendible for another two years but subject to annual review by the
Terms and conditions of an FTAA
Secretary in accordance with the implementing rules and regulations of this Act, and further, subject to the relinquishment obligations
5. 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
Terms and conditions of an FTAA
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
Terms and conditions of an FTAA
7. mining operations shall be conducted in accordance with the provisions of RA 7942 and its IRR
8. Work programs and minimum expenditures commitments;
9. Preferential use of local goods and services to the maximum extent practicable
Terms and conditions of an FTAA
10. preference to Filipinos in all types of mining employment for which they are qualified and that technology shall be transferred to the Filipinos
11. effectively use of 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
Terms and conditions of an FTAA
12. undertaking that the contractors shall furnish the Government records of geologic, accounting, and other relevant data for its mining operations,
13. undertaking that book of accounts and records shall be open for inspection by the government;
Terms and conditions of an FTAA
14. undertaking that the proponent will dispose of the minerals and buy products produced at the highest price and more advantageous terms and conditions
15. Provide for consultation and arbitration with respect to the interpretation and implementation of the terms and conditions of the agreements
Terms and conditions of an FTAA
Such other terms and conditions consistent with the Constitution and with RA 7946 as the SENR may deem to be for the best interest of the State and the welfare of the Filipino people
FTAA
Negotiations
1. who?
2. who approves?
3. notification requirement to the Congress
Term of FTAAOption to covert into MPSA – conditions
FTAA
Assignment / Transfer – not prohibited, conditions
Withdrawal - conditions
QUARRYING ACTIVITIES
QUARRY PERMIT
1. any QUALIFIED PERSON
2. with the MINING REGULATORY BOARD
3. area – PUBLIC or PRIVATE lands
4. for building or construction materials
5. if large-scale – permittee may enter into a mineral agreements with the State
6. Term – 5 years, max. of 25 years
7. Prohibited areas
QUARRYING ACTIVITIES
Quarry fees and taxesGrounds for cancellation of quarry
permitsKinds of quarry permits
1. commercial sand and gravel
2. industrial sand and gravel
3. exclusive sand and gravel
4. government gratuitous
QUARRYING ACTIVITIES
4. Private gratuitous
5. Guano
6. Gemstone gathering
TRANSPORT, SALE AND PROCESSING OF MINERALS
Ore transport permit Mineral trading registration – registered
with the DTI, accredited by the DENR, registration cc the MGB
Mineral processing agreement – secure from SENR, term – 5 years, max. of 25 years, FOCC not prohibited
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
Social aspect of miningTraining and development of Filipino
manpower in all aspects of the mining activities
No absolute prohibition in the employment of qualified foreign individuals on highly technical and specialized mining operations
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
Preferential use of indigenous goods, services and technologies
Donations / turnover of facilities
1. prior to cessation of mining activities
2. due to abandonment / withdrawal of operations
3. on public lands only
4. one year from cessation, remove the
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
facilities; if not, the same 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
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY
Preferential employment of Filipinos
SAFETY AND ENVIRONMENTAL PROTECTION
All contractors and permittees shall strictly comply with all the mines safety rules and regulations concerning the safe and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development
SAFETY AND ENVIRONMENTAL PROTECTION
No person under 16 years of age shall be employed in any phase of mining operations and no person under 18 years of age shall be employed underground in a mine
SAFETY AND ENVIRONMENTAL PROTECTION
Powers of the Regional Director
1. conduct mines inspection
2. issue orders requiring the contractor to remedy any practice connected with mining or quarrying operations which is not in accordance with safety and anti-pollution laws and regulations
3. power to summarily suspend the mining or quarrying operations in case of imminent danger to life or property
SAFETY AND 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.
Contents of the Work Program
1. plans relative to mining operations2. rehabilitation, regeneration, revegetation
and reforestation of mineralized areas3. slope stabilization of mined-out and
tailings covered areas, aquaculture, watershed development and water conservation; and,
4. socioeconomic development
SAFETY AND ENVIRONMENTAL PROTECTION
Need to procure an ECC, after submission of an EIA, except during the exploration period of a mineral agreement or FTAA
SAFETY AND ENVIRONMENTAL PROTECTION
Requirement of rehabilitation
AUXILIARY MINING RIGHTS
Timber rightsWater rightsRight to possess explosivesEasement rightsEntry into Private Lands and Concession
Areas
Governmental share
1. in MPSA 2. in other mineral agreements – fair and
equitable sharing, compensation for its contribution, 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
Governmental share
3. in FTAA - 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 (subject to tax holiday privileges)
GROUND FOR CANCELLATION, REVOCATION, AND TERMINATION
1. late or non-filing of requirements2. violation of the terms and conditions of
permits or agreements3. non-payment of taxes and fees4. suspension or cancellation of tax
incentives and credits5. falsehood or omission of facts in the
statement
SETTLEMENT OF CONFLICTS
Panel of Arbitrators
1. each regional office of the DENR
2. composition – 2 from the bar and 1 mining engineer or a related profession
3. original and exclusive jurisdiction
3.1. Disputes involving rights to mining areas;
3.2. Disputes involving mineral agreements or permits;
3.3. Disputes involving surface owners, occupants and claimholders/concessionaires; and,
3.4. Disputes pending before the Bureau and the Department at the date of the effectivity of this Act.
SETTLEMENT OF CONFLICTS
Mines Adjudication Board
1. composition – 3 members
SETTLEMENT OF CONFLICTS
Supreme Court
Rule 45
Court of Appeals
Rule 43 Mines Adjudication Board 3 members powers
within 15 days from receipt of decision
Panel of Arbitrators 3 members original and exclusive juris.
PUNISHABLE ACTS
1. false statements2. illegal exploration3. theft of minerals4. destruction of mining structures5. mines arson6. willful damage to a mine7. illegal obstruction to permittees or
contractors
PUNISHABLE ACTS
8. violations of the terms and conditions of the ECC
9. illegal obstruction to government officials
10. other violations
(pp. 249-250 of sourcebook)
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